What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-20 compared with 2023-02-21 · 522 added, 473 removed, 824 unchanged (55% of the section changed)

18 unchanged sentences

Other Information

During the fiscal quarter ended December 31, 2023, none of our trustees or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

70 unchanged sentences

10.25 Term Loan Agreement, dated as of November 22, 2022, among Centerspace, LP, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and PNC Bank, National Association, as Administrative Agent (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 28, 2022).

Employment Agreement, effective March 31, 2023, by and between the Company and Anne Olson (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on March 23, 2023).

Form of Change in Control Severance Agreement (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on March 23, 2023).

Separation Agreement, effective as of March 31, 2023, by and between the Company and Mark Decker, Jr.

(incorporated herein by reference to Exhibit 10.3 of the Company’s Current Report o n Form 8-K filed with the Commission on March 23, 2023).

Promissory Note, dated April 26, 2023, by CSR - PARKHOUSE, LLC in favor of State Farm Life Insurance Company (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2023).

Deed of Trust, Security Agreement and Fixture Filing with Assignment of Leases and Rents, dated April 26, 2023, by CSR - PARKHOUSE, LLC, in favor of the Public Trustee of the County (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2023).

Guaranty Agreement, dated April 26, 2023, by Centerspace in favor of State Farm Life (incorporated herein by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2023).

First Amendment to Third Amended and Restated Credit Agreement, dated as of May 31, 2023, among Centerspace, LP, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, KeyBank, National Association and PNC Bank, National Association, as Syndicated Agents, and Bank of Montreal, as Administrative Agent (incorporated herein by reference to E xhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on June 2, 2023).

I nsider Trading Policy

Subsidiaries of Centerspace

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Section 906 Certification of the Chief Financial Officer

The following materials from our Annual Report on Form 10-K for the twelve-months ended December 31, 2022 formatted in Inline eXtensible Business Reporting Language ("iXBRL"):

Clawback Policy

The following materials from our Annual Report on Form 10-K for the twelve-months ended December 31, 2023 formatted in Inline eXtensible Business Reporting Language (“XBRL”):

(i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Statements of Cash Flows, (v) notes to these Consolidated Financial Statements, and (vi) the Cover Page to our Annual Report on From 10-K.

4 unchanged sentences

February 20, 2024 Centerspace

/s/ Anne Olson

President & Chief Executive Officer

2 unchanged sentences

Schissel Trustee & Chairman February 20, 2024

/s/ Anne Olson

President & Chief Executive Officer

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(Principal Financial and Accounting Officer) February 20, 2024

/s/ Michael T.

Dance Trustee February 21, 2023

/s/ Emily Nagle Green

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Rodney Jones-Tyson Trustee February 20, 2024

Trustee February 20, 2024

CENTERSPACE AND SUBSIDIARIES

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Schedule III - Real Estate and Accumulated Depreciation

Schedules other than those listed above are omitted since they are not required or are not applicable, or the required information is shown in the consolidated financial statements or notes thereon.

Schedules other than those listed above are omitted since they are not required or are not applicable, or the required information is shown in the Consolidated F inancial Statements or notes thereon.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Less accumulated depreciation ( 530,703 ) ( 535,401 )

1,998,723 1,827,578

Mortgage loans receivable — 43,276

Total real estate investments 1,889,443 1,998,723

14 unchanged sentences

$ 16,560 $ 16,560

Series C Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 3,881 shares issued and outstanding at December 31, 2022 and 2021, aggregate liquidation preference of $ 97,036 )

Series C Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, $ 25 per share liquidation preference, 3,881 shares issued and outstanding at December 31, 2023 and 2022, aggregate liquidation preference of $ 97,036 )

93,530 93,530

2 unchanged sentences

Accumulated distributions in excess of net income ( 548,273 ) ( 539,422 )

Accumulated other comprehensive income (loss) ( 2,055 ) ( 4,435 )

Accumulated other comprehensive loss ( 1,119 ) ( 2,055 )

Total shareholders’ equity $ 709,832 $ 729,537

15 unchanged sentences

Depreciation and amortization 101,678 105,257 92,165

Impairment of real estate investments 5,218 — —

General and administrative expenses 20,080 17,516 16,213

TOTAL EXPENSES 244,236 242,896 199,331

Gain (loss) on sale of real estate and other investments 41 27,518 25,503

Operating income (loss) 13,861 29,892 33,843

Gain on sale of real estate and other investments

71,244 41 27,518

Loss on litigation settlement ( 3,864 ) — —

Operating income

84,453 13,861 29,892

Interest expense ( 36,429 ) ( 32,750 ) ( 29,078 )

Interest and other income (loss)

1,207 1,248 ( 2,915 )

NET INCOME (LOSS) 49,231 ( 17,641 ) ( 2,101 )

Dividends to preferred unitholders ( 640 ) ( 640 ) ( 640 )

Dividends to Series D preferred unitholders ( 640 ) ( 640 ) ( 640 )

Net (income) loss attributable to noncontrolling interests – Operating Partnership and Series E preferred units ( 7,141 ) 4,299 2,806

Net (income) loss attributable to noncontrolling interests – consolidated real estate entities ( 127 ) ( 94 ) 126

Net income attributable to noncontrolling interests – consolidated real estate entities

( 125 ) ( 127 ) ( 94 )

Net income (loss) attributable to controlling interests

41,325 ( 14,109 ) ( 29 )

Dividends to preferred shareholders ( 6,428 ) ( 6,428 ) ( 6,428 )

Redemption of preferred shares — — 297

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ 34,897 $ ( 20,537 ) $ ( 6,457 )

NET EARNINGS (LOSS) PER COMMON SHARE – BASIC AND DILUTED $ ( 1.35 ) $ ( 0.47 ) $ ( 0.15 )

NET INCOME (LOSS) PER COMMON SHARE – BASIC $ 2.33 $ ( 1.35 ) $ ( 0.47 )

NET INCOME (LOSS) PER COMMON SHARE – DILUTED $ 2.32 $ ( 1.35 ) $ ( 0.47 )

Weighted average shares - basic 14,994 15,216 13,803

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Other comprehensive income (loss):

Unrealized gain (loss) from derivative instrument 1,581 2,383 ( 11,068 )

(Gain) loss on derivative instrument reclassified into earnings 799 9,087 2,770

Unrealized gain from derivative instrument

— 1,581 2,383

Loss on derivative instrument reclassified into earnings

936 799 9,087

Total comprehensive income (loss) $ 50,167 $ ( 15,261 ) $ 9,369

Net comprehensive (income) loss attributable to noncontrolling interests – Operating Partnership and Series E preferred units ( 6,985 ) 4,708 4,407

Net comprehensive (income) loss attributable to noncontrolling interests – consolidated real estate entities ( 127 ) ( 94 ) 126

Net comprehensive income attributable to noncontrolling interests – consolidated real estate entities

( 125 ) ( 127 ) ( 94 )

Comprehensive income (loss) attributable to controlling interests $ 43,057 $ ( 10,680 ) $ 13,682

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PREFERRED COMMON COMMON IN EXCESS OF COMPREHENSIVE NONCONTROLLING TOTAL

SHARES SHARES SHARES NET INCOME INCOME INTERESTS EQUITY

SHARES SHARES SHARES NET INCOME LOSS

INTERESTS EQUITY

Balance at December 31, 2020 $ 93,530 13,027 $ 968,263 $ ( 427,681 ) $ ( 15,905 ) $ 54,616 $ 672,823

Net income (loss) attributable to controlling interest and noncontrolling interests 4,441 ( 338 ) 4,103

Change in fair value of derivatives ( 8,298 ) ( 8,298 )

Net loss attributable to controlling interest and noncontrolling interests ( 29 ) ( 2,712 ) ( 2,741 )

Change in fair value of derivatives and amortization of swap settlements 11,470 11,470

Distributions – common shares and Units ($ 2.84 per share and Unit)

2 unchanged sentences

( 6,428 ) ( 6,428 )

Distributions – Series E preferred units ($ 1.291667 per unit)

( 2,343 ) ( 2,343 )

Share-based compensation, net of forfeitures 28 2,689 2,689

Sale of common shares, net 1,817 156,038 156,038

Issuance of Series E preferred units

44,905 172,608 217,513

Redemption of Units for common shares 144 ( 4,714 ) 4,714 —

Shares repurchased ( 5,926 ) 297 ( 5,629 )

Acquisition of redeemable noncontrolling interests ( 7,584 ) ( 4,637 ) ( 12,221 )

Change in value of Series D preferred units ( 8,771 ) ( 8,771 )

Other — ( 1,155 ) ( 146 ) ( 1,301 )

Balance at December 31, 2021 $ 93,530 15,016 $ 1,157,255 $ ( 474,318 ) $ ( 4,435 ) $ 224,248 $ 996,280

Net income (loss) attributable to controlling interests and noncontrolling interests ( 29 ) ( 2,712 ) ( 2,741 )

Net loss attributable to controlling interests and noncontrolling interests ( 14,109 ) ( 4,172 ) ( 18,281 )

Change in fair value of derivatives and amortization of swap settlements 2,380 2,380

7 unchanged sentences

Sale of common shares, net 321 31,439 31,439

Issuance of Series E preferred units 44,905 172,608 217,513

Issuance of units 13,023 9,859 22,882

Redemption of Units for common shares 24 ( 1,353 ) 1,353 —

Redemption of Units for cash ( 4,141 ) ( 4,141 )

Redemption of Series E preferred units for common shares

67 ( 3,667 ) 3,667 —

Shares repurchased ( 432 ) ( 29,059 ) ( 29,059 )

Change in value of Series D preferred units — 8,771 8,771

Shares withheld for taxes ( 1,284 ) ( 1,284 )

Other ( 1 ) ( 256 ) ( 148 ) ( 404 )

Balance at December 31, 2022 $ 93,530 15,020 $ 1,177,484 $ ( 539,422 ) $ ( 2,055 ) $ 220,759 $ 950,296

Net income (loss) attributable to controlling interests and noncontrolling interests ( 14,109 ) ( 4,172 ) ( 18,281 )

Change in fair value of derivatives and amortization of swap settlements 2,380 2,380

Net income attributable to controlling interests and noncontrolling interests 41,325 7,266 48,591

Amortization of swap settlements 936 936

Distributions – common shares and Units ($ 2.92 per share and Unit)

5 unchanged sentences

Share-based compensation, net of forfeitures 20 3,295 3,295

Sale of common shares, net 321 31,439 31,439

Issuance of units 13,023 9,859 22,882

Redemption of Units for common shares 109 ( 1,910 ) 1,910 —

Redemption of Units for cash ( 4,141 ) ( 4,141 )

Redemption of Series E preferred units for common shares 31 ( 1,390 ) 1,390 —

Shares repurchased ( 216 ) ( 11,539 ) ( 11,539 )

Change in value of Series D preferred units — 8,771 8,771

Shares withheld for taxes ( 1,284 ) ( 1,284 )

Other ( 1 ) ( 246 ) ( 682 ) ( 928 )

9 unchanged sentences

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 106,208 93,110 76,596

(Gain) loss on sale of real estate, land, and other investments ( 41 ) ( 27,518 ) ( 25,503 )

Realized (gain) loss on marketable securities — — 3,378

Depreciation and amortization, including amortization of capitalized loan costs 103,172 106,208 93,110

Gain on sale of real estate, land, and other investments

( 71,240 ) ( 41 ) ( 27,518 )

Share-based compensation expense 3,295 2,615 2,689

Impairment of real estate investments 5,218 — —

(Gain) loss on interest rate swap termination, amortization, and mark-to-market 936 ( 118 ) 4,931

4 unchanged sentences

Accounts payable and accrued expenses ( 2,108 ) 650 15,750

Net cash provided (used) by operating activities $ 91,991 $ 84,028 $ 61,228

Net cash provided by operating activities

$ 89,520 $ 91,991 $ 84,028

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from repayment of mortgage loans receivable — — 10,020

Proceeds from sale of marketable securities — — 3,856

Increase in mortgages and notes receivable — ( 18,614 ) ( 24,862 )

Proceeds from sale of real estate and other investments 41 61,334 43,686

Increase in mortgages and real estate related notes receivable ( 1,579 ) — ( 18,614 )

Net proceeds from sale of real estate and other investments 223,259 41 61,334

Payments for acquisitions of real estate assets ( 42,226 ) ( 104,666 ) ( 273,566 )

2 unchanged sentences

Other investing activities ( 420 ) 1,221 ( 3,812 )

Net cash provided (used) by investing activities $ ( 160,094 ) $ ( 267,225 ) $ ( 164,965 )

Net cash provided by (used by) investing activities

$ 120,209 $ ( 160,094 ) $ ( 267,225 )

CASH FLOWS FROM FINANCING ACTIVITIES

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Proceeds from sale of common shares, net of issuance costs — 31,439 156,038

Payments for acquisition of noncontrolling interests – consolidated real estate entities — — ( 12,221 )

Repurchase of common shares ( 11,539 ) ( 29,059 ) —

Repurchase of preferred shares — — ( 5,629 )

Repurchase of partnership units ( 38 ) ( 4,141 ) —

4 unchanged sentences

Other financing activities ( 185 ) ( 404 ) ( 367 )

Net cash provided (used) by financing activities $ 41,369 $ 214,512 $ 64,930

Net cash provided by (used by) financing activities

$ ( 212,351 ) $ 41,369 $ 214,512

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 2,622 ) ( 26,734 ) 31,315

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Retirement of shares withheld for taxes 190 1,284 933

Loss on litigation settlement 1,000 — —

Involuntary conversion of assets ( 4,224 ) — —

Real estate assets acquired through assumption of debt 52,723 41,623 20,000

18 unchanged sentences

NOTE 1 • ORGANIZATION

Centerspace (“Centerspace,” “we,” “our,” or “us”) is a real estate investment trust (“REIT”) focused on the ownership, management, acquisition, redevelopment and development of apartment communities.

As of December 31, 2022, we held for investment 84 apartment communities with 15,065 homes.

We conduct a majority of our business activities through our consolidated operating partnership, Centerspace, LP, (the “Operating Partnership”), as well as through a number of other subsidiary entities.

All references to Centerspace, we, our, or us refer to Centerspace and its consolidated subsidiaries.

Centerspace, collectively with its consolidated subsidiaries (“Centerspace,” “the Company,” “we,” “us,” or “our”) is a North Dakota real estate investment trust (“REIT”) focused on the ownership, management, acquisition, redevelopment and development of apartment communities.

As of December 31, 2023, Centerspace owned interests in 72 apartment communities consisting of 13,088 apartment homes.

NOTE 2 • BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements include our accounts and the accounts of all our subsidiaries in which we maintain a controlling interest, including the Operating Partnership, and have been prepared in accordance with U.S.

Centerspace conducts a majority of its business activities through a consolidated operating partnership, Centerspace, LP, a North Dakota limited partnership (the “Operating Partnership”), as well as through a number of other consolidated subsidiary entities.

The accompanying Consolidated Financial Statements include the Company’s accounts and the accounts of all its subsidiaries in which it maintains a controlling interest, including the Operating Partnership, and have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

All intercompany balances and transactions are eliminated in consolidation.

Our interest in the Operating Partnership as of December 31, 2022 and 2021 was 82.9 % and 83.3 %, respectively, of the limited partnership units of the Operating Partnership (“Units”), which includes 100 % of the general partnership interest.

The consolidated financial statements also reflect the ownership by the Operating Partnership of certain joint venture entities in which the Operating Partnership has a general partner’s or controlling interest.

These entities are consolidated into our other operations with noncontrolling interests reflecting the noncontrolling partners’ share of ownership, income, and expenses.

The Company’s interest in the Operating Partnership as of December 31, 2023 and 2022 was 83.6 % and 82.9 %, respectively, of the limited partnership units of the Operating Partnership (“Units”), which includes 100 % of the general partnership interest.

The Consolidated Financial Statements also reflect the Operating Partnership’s ownership of a joint venture entity in which the Operating Partnership has a general partner or controlling interest.

This entity is consolidated into the Company’s operations with noncontrolling interests reflecting the noncontrolling partners’ share of ownership, income, and expenses.

USE OF ESTIMATES

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Certain previously reported amounts have been reclassified to conform to the current financial statement presentation.

These reclassifications had no impact on net income as reported in the consolidated statement of operations, total assets, liabilities or equity as reported in the consolidated balance sheets and total shareholder’s equity.

We reclassified certain items within cash flows from investing activities on the Consolidated Statements of Cash Flows.

These reclassifications had no impact on net income as reported in the Consolidated Statement of Operations, total assets, liabilities or equity as reported in the Consolidated Balance Sheets and the classifications within the Consolidated Statements of Cash Flows.

Centerspace reclassified certain items within the disaggregated revenue table included in Note 2.

RECENT ACCOUNTING PRONOUNCEMENTS

The following table provides a brief description of Financial Accounting Standards Board (“FASB”) recent accounting standards updates (“ASU”).

Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters

ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures

This ASU is intended to improve reportable segment disclosure requirements and address requests from investors for more detailed information about significant segment expenses.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The ASU will not have a material impact on the Consolidated Financial Statements.

REAL ESTATE INVESTMENTS

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Property, consisting primarily of real estate investments, totaled $ 1.9 billion and $ 2.0 billion as of December 31, 2023 and 2022, respectively.

Upon acquisitions of real estate, we assess the fair value of acquired tangible assets (including land, buildings and personal property), which is determined by valuing the property as if it were vacant, and consider whether there were significant intangible assets acquired (for example, above- and below-market leases, the value of acquired in-place leases and resident relationships) and assumed liabilities, and allocate the purchase price based on these assessments.

The as-if-vacant value is allocated to land, buildings, and personal property based on our determination of the relative fair values of these assets.

Upon acquisitions of real estate, the Company assesses the fair value of acquired tangible assets (including land, buildings and personal property), which is determined by valuing the property as if it were vacant, and consider whether there were significant intangible assets acquired (for example, above- and below-market leases, the value of acquired in-place leases and resident relationships) and assumed liabilities, and allocate the purchase price based on these assessments.

The as-if-vacant value is allocated to land, buildings, and personal property based on the Company’s determination of the relative fair values of these assets.

The estimated fair value of the property is the amount that would be recoverable upon the disposition of the property.

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Land value is assigned based on the purchase price if land is acquired separately or based on a relative fair value allocation if acquired in a portfolio acquisition.

Other intangible assets acquired include amounts for in-place lease values that are based upon our evaluation of the specific characteristics of the leases.

Factors considered in the fair value analysis include an estimate of carrying costs and foregone rental income during hypothetical expected lease-up periods, considering current market conditions, and costs to execute similar

We also consider information about each property obtained during pre-acquisition due diligence, marketing, and leasing activities in estimating the relative fair value of the tangible and intangible assets acquired.

Other intangible assets acquired include amounts for in-place lease values that are based upon the Company’s evaluation of the specific characteristics of the leases.

The Company also considers information about each property obtained during pre-acquisition due diligence, marketing, and leasing activities in estimating the relative fair value of the tangible and intangible assets acquired.

Acquired above- and below-market lease values are recorded as the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market value lease rates for the corresponding in-place leases.

1 unchanged sentence

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets.

We use a 10 - 37 year estimated life for buildings and improvements and a 5 - 10 year estimated life for furniture, fixtures, and equipment.

The Company uses a 10 - 37 year estimated life for buildings and improvements and a 5 - 10 year estimated life for furniture, fixtures, and equipment.

Land is not depreciated.

We follow the real estate project costs guidance in ASC 970, Real Estate – General, in accounting for the costs of development and redevelopment projects.

The Company follows the real estate project costs guidance in ASC 970, Real Estate – General, in accounting for the costs of development and redevelopment projects.

As real estate is undergoing development or redevelopment, all project costs directly associated with and attributable to the development and construction of a project, including interest expense and real estate tax expense, are capitalized to the cost of the real property.

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General and administrative costs are expensed as incurred.

We did no t capitalize interest during the years ended December 31, 2022, 2021, and 2020.

The Company did no t capitalize interest during the years ended December 31, 2023, 2022, and 2021.

Expenditures for ordinary maintenance and repairs are expensed to operations as incurred.

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Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.

During the years ended December 31, 2022, 2021, and 2020 we did not record a loss for impairment on real estate.

We classify properties as held for sale when they meet the GAAP criteria, which include:

During the year ended December 31, 2023, the Company incurred a loss of $ 5.2 million for the impairment of two apartment communities.

The Company recognized impairments of $ 3.0 million on one apartment community in Richfield, MN and $ 2.2 million on one apartment community in New Hope, MN.

These properties were written-down to estimated fair value based on receipt of market offers to purchase the apartment communities.

During the years ended December 31, 2022 and 2021, the Company did not record a loss for impairment on real estate.

The Company classifies properties as held for sale when they meet the GAAP criteria, which include:

(a) management commits to and initiates a plan to sell the asset;

1 unchanged sentence

and (c) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

We generally consider these criteria met when the transaction has been approved by our Board of Trustees, there are no known significant contingencies related to the sale, and management believes it is probable that the sale will be completed within one year .

We had no properties classified as held for sale at December 31, 2022 and 2021.

The Company generally considers these criteria met when the transaction has been approved by its Board of Trustees, there are no known significant contingencies related to the sale, and management believes it is probable that the sale will be completed within one year .

The Company had no properties classified as held for sale at December 31, 2023 and 2022.

Real estate held for sale is stated at the lower of its carrying amount or estimated fair value less disposal costs.

Our determination of fair value is based on inputs management believes are consistent with those that market participants would use.

The Company’s determination of fair value is based on inputs management believes are consistent with those that market participants would use.

Estimates are significantly impacted by estimates of sales price, selling velocity, and other factors.

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Cash and cash equivalents include all cash and highly liquid investments purchased with maturities of three months or less.

Cash and cash equivalents consist of our bank deposits and our deposits in a money market mutual fund.

We are potentially exposed to credit risk for cash deposited with FDIC-insured financial institutions in accounts which, at times, may exceed federally insured limits.

We have not experienced any losses in such accounts.

As of December 31, 2022 restricted cash consisted of $ 1.4 million in escrows held by lenders.

As of December 31, 2021, restricted cash consisted $ 5.0 million of real estate deposits for property acquisitions and $ 2.4 million in escrows held by lenders.

Cash and cash equivalents consist of bank deposits and deposits in a money market mutual fund.

The Company is potentially exposed to credit risk for cash deposited with FDIC-insured financial institutions in accounts which, at times, may exceed federally insured limits.

Although past bank failures have increased the risk of loss in such accounts, the Company has not experienced any losses in such accounts.

As of December 31, 2023 and 2022, restricted cash consisted of $ 639,000 and $ 1.4 million, respectively, in escrows held by lenders.

Escrows include funds deposited with a lender for payment of real estate taxes and insurance and reserves to be used for replacement of structural elements and mechanical equipment at certain communities.

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Disbursements are made after supplying written documentation to the lender .

As a lessor, we primarily lease multifamily apartment homes which qualify as operating leases with terms that are generally one year or less.

Rental revenues are recognized in accordance with ASC 842, Leases, using a method that represents a straight-line basis over the term of the lease.

For the years ended December 31, 2022, 2021, and 2020, rental income represents approximately 97.9 %, 98.2 %, and 98.4 %, respectively, of our total revenues and includes gross market rent less adjustments for concessions, vacancy loss, and bad debt.

For the years ended December 31, 2022, 2021, and 2020, other property revenues represent the remaining 2.1 %, 1.8 %, and 1.6 %, respectively, of our total revenues and are primarily driven by other fee income, which is typically recognized when earned, at a point in time.

Some of our apartment communities have commercial spaces available for lease.

As a lessor, Centerspace primarily leases multifamily apartment homes which qualify as operating leases with terms that are generally one year or less.

Rental revenues are recognized in accordance with FASB Accounting Standards Codification (“ASC”) 842, Leases , using a method that represents a straight-line basis over the term of the lease.

For the years ended December 31, 2023, 2022, and 2021, rental income represents approximately 98.1 %, 97.7 %, and 98.2 %, respectively, of total revenues and includes gross market rent less adjustments for gain or loss to lease, concessions, vacancy loss, and bad debt.

For the years ended December 31, 2023, 2022, and 2021, other property revenues represent the remaining 1.9 %, 2.3 %, and 1.8 %, respectively, of total revenues and are primarily driven by other fee income, which is typically recognized when earned, at a point in time.

Some of the Company’s apartment communities have commercial spaces available for lease.

Lease terms for these spaces typically range from three to fifteen years .

The leases for commercial spaces generally include options to extend the lease for additional terms.

Many of our leases contain non-lease components for utility reimbursement from our residents.

We have elected the practical expedient to combine lease and non-lease components for all asset classes.

Many of the leases contain non-lease components for utility reimbursement from residents and common area maintenance from commercial tenants.

Centerspace has elected the practical expedient to combine lease and non-lease components.

The combined components are included in lease income and are accounted for under ASC 842.

The aggregate amount of future scheduled lease income on our operating leases for commercial spaces, excluding any variable lease income and non-lease components, as of December 31, 2022, was as follows:

The aggregate amount of future scheduled lease income on commercial operating leases, excluding any variable lease income and non-lease components, as of December 31, 2023, was as follows:

(in thousands)

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REVENUES AND GAINS ON SALE OF REAL ESTATE

Revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration the company expects to be entitled for those goods and services.

Revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration to which the Company expects to be entitled for those goods and services.

Revenue streams that are included in revenues from contracts with customers include other property revenues such as application fees and other miscellaneous items.

We recognize revenue for these rental related items not included as a component of a lease as earned.

The following table presents the disaggregation of revenue streams of our rental income for the years ended December 31, 2022, 2021, and 2020:

Centerspace recognizes revenue for these rental related items not included as a component of a lease as earned.

The following table presents the disaggregation of revenue streams for the years ended December 31, 2023, 2022, and 2021:

(in thousands)

5 unchanged sentences

Total revenue $ 261,309 $ 256,716 $ 201,705

In addition to lease income and other property revenue, we recognize gains or losses on the sale of real estate when the criteria for derecognition of an asset are met, including when (1) a contract exists and (2) the buyer obtained control of the nonfinancial asset that was sold.

In addition to lease income and other property revenue, the Company recognizes gains or losses on the sale of real estate and other investments when the criteria for derecognition of an asset are met, including when (1) a contract exists and (2) the buyer obtained control of the nonfinancial asset that was sold.

For the years ended December 31, 2023, 2022, and 2021, the Company recognized $ 71.2 million, $ 41,000 , and $ 27.5 million, respectively, as a gain on the sale of real estate and other investments.

Any gain or loss on real estate dispositions is net of certain closing and other costs associated with the disposition.

MARKET CONCENTRATION RISK

We are subject to increased exposure from economic and other competitive factors specific to markets where we hold a significant percentage of the carrying value of our real estate portfolio.

As of December 31, 2022, we held more than 10% of the carrying value of our real estate portfolio in the Minneapolis, Minnesota and Denver, Colorado markets.

We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856-860 of the Code.

The Company is subject to increased exposure from economic and other competitive factors specific to markets where it holds a significant percentage of the carrying value of its real estate portfolio.

As of December 31, 2023, Centerspace held more than 10% of the carrying value of its real estate portfolio in the Minneapolis, Minnesota and Denver, Colorado markets.

The Company operates in a manner intended to enable it to continue to qualify as a REIT under Sections 856-860 of the Internal Revenue Code.

Under those sections, a REIT which distributes at least 90 % of its REIT taxable income, excluding capital gains, as a dividend to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to shareholders.

For the years ended December 31, 2022, 2021, and 2020, we distributed in excess of 90 % of our taxable income and realized capital gains from property dispositions within the prescribed time limits.

For the years ended December 31, 2023, 2022, and 2021, the Company distributed in excess of 90 % of its taxable income and realized capital gains from property dispositions within the prescribed time limits.

Accordingly, no provision has been made for federal income taxes in the accompanying Consolidated Financial Statements.

If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years.

Even as a REIT, we may be subject to certain state and local income and property taxes, and to federal income and excise taxes on undistributed taxable income.

In general, however, if we qualify as a REIT, no provisions for federal income taxes are necessary except for taxes on undistributed REIT taxable income and taxes on the income generated by a taxable REIT subsidiary (TRS).

We have one TRS, which is subject to corporate federal and state income taxes on its taxable income at regular statutory rates.

There were no income tax provisions or material deferred income tax items including any valuation allowances for our TRS for the years ended December 31, 2022, 2021, and 2020.

We conduct our business activity as an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) through our Operating Partnership.

If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years.

Even as a REIT, the Company may be subject to certain state and local income and property taxes, and to federal income and excise taxes on undistributed taxable income.

In general, however, if the Company qualifies as a REIT, no provisions for federal income taxes are necessary except for taxes on undistributed REIT taxable income and taxes on the income generated by a taxable REIT subsidiary (TRS).

The Company has one TRS, which is subject to corporate federal and state income taxes on its taxable income at regular statutory rates.

There were no income tax provisions or material deferred income tax items including any valuation allowances for the TRS for the years ended December 31, 2023, 2022, and 2021.

The Company conducts its business activity as an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) through its Operating Partnership.

UPREIT status allows us to accept the contribution of real estate in exchange for Units.

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VARIABLE INTEREST ENTITY

We have determined that our Operating Partnership and each of our less-than-wholly owned real estate partnerships is a variable interest entity (“VIE”), as the limited partners or the functional equivalent of limited partners lack substantive kick-out rights and substantive participating rights.

We are the primary beneficiary of the VIEs, and the VIEs are required to be consolidated on our balance sheet because we have a controlling financial interest in the VIEs and have both the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs as well as the obligation to absorb losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs.

Because our Operating Partnership is a VIE, all of our assets and liabilities are held through a VIE.

Centerspace has determined that its Operating Partnership and each of its less-than-wholly owned real estate partnerships are variable interest entities (each, a “VIE”), as the limited partners or the functional equivalent of limited partners lack substantive kick-out rights and substantive participating rights.

The Company is the primary beneficiary of the VIEs, and the VIEs are required to be consolidated on the balance sheet because the Company has a controlling financial interest in the VIEs and has both the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs as well as the obligation to absorb losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs.

Because the Operating Partnership is a VIE, all of the Company’s assets and liabilities are held through a VIE.

As of December 31, 2023 and 2022, other assets consisted of the following amounts:

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Accounts receivable, net of allowance

Real estate related loans receivable 5,871 6,208

Prepaid and other assets 8,474 9,693

Real estate related notes receivable 7,039 5,871

Prepaid assets 7,828 6,520

Other assets (1)

Intangible assets, net of accumulated amortization

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Total Other Assets $ 27,649 $ 22,687

(1) See Involuntary Conversion of Assets discussion below for additional information on insurance receivable included here.

Intangible Assets.

Intangible assets consist of in-place leases valued at the time of acquisition.

For the years ended December 31, 2022, 2021, and 2020, we recognized $ 12.3 million, $ 13.5 million, and $ 3.1 million, respectively, of amortization expense related to these intangibles, included within depreciation and amortization in the Consolidated Statements of Operations.

For the years ended December 31, 2023, 2022, and 2021, the Company recognized $ 2.6 million, $ 12.3 million, and $ 13.5 million, respectively, of amortization expense related to these intangibles, included within depreciation and amortization in the Consolidated Statements of Operations.

The intangible assets remaining at December 31, 2023 will be fully amortized in 2024.

Property and equipment.

Property and equipment consists primarily of office equipment located at our corporate offices in Minot, North Dakota and in Minneapolis, Minnesota.

The consolidated balance sheets reflects these assets at cost, net of accumulated depreciation, and are included within Other Assets.

Property and equipment consists primarily of office equipment located at the Company’s corporate offices in Minot, North Dakota and in Minneapolis, Minnesota.

As of December 31, 2023 and 2022, property and equipment cost was $ 4.6 million and $ 4.9 million, respectively.

Accumulated depreciation was $ 1.8 million and $ 1.4 million as of December 31, 2022 and 2021, respectively, and are included within other assets in the consolidated balance sheets.

MORTGAGE LOANS RECEIVABLE AND REAL ESTATE RELATED NOTES RECEIVABLE

In connection with our acquisition of Ironwood, an apartment community in New Hope, Minnesota, we acquired a tax increment financing note receivable (“TIF”) with an initial principal balance of $ 6.6 million.

As of December 31, 2022 and 2021, the principal balance was $ 6.1 million and $ 6.4 million, respectively, which appears within Other Assets in our Consolidated Balance Sheets at fair value.

The Consolidated Balance Sheets reflect these assets at cost, net of accumulated depreciation of $ 1.8 million as of December 31, 2023 and 2022, and are included within other assets.

Real estate related notes receivable.

In connection with the acquisition of Ironwood, an apartment community in New Hope, Minnesota, the Company acquired a tax increment financing note receivable (“TIF”) with an initial principal balance of $ 6.6 million.

As of December 31, 2023 and 2022, the principal balance was $ 5.7 million and $ 6.1 million, respectively, which appears within other assets in the Consolidated Balance Sheets at fair value.

The note bears an interest rate of 4.5 % with payments due in February and August of each year.

In 2019, we originated a $ 29.9 million construction loan and a $ 15.3 million mezzanine loan for the development of a multifamily development located in Minneapolis, Minnesota.

The construction and mezzanine loans bore and accrued interest at 4.5 % and 11.5 %, respectively.

During the year ended December 31, 2022, we exercised our option to purchase the apartment community in exchange for the loans and cash.

As of December 31, 2022, the loans had no remaining balance.

As of December 31, 2021, we had fully funded the $ 29.9 million construction loan and $ 13.4 million of the mezzanine loan, both of which appear within mortgage loans receivable in our Consolidated Balance Sheets.

In 2023, the Company originated a $ 15.1 million mezzanine loan for the development of an apartment community located in Inver Grove Heights, Minnesota.

The mezzanine loan bears interest at 10.0 % per annum.

As of December 31, 2023, the Company had funded $ 1.6 million of the mezzanine loan, which appears within other assets in the Consolidated Balance Sheets.

The loan matures in December 2027 unless extended to December 2028 in accordance with the terms of the mezzanine loan agreement.

The loan is secured by a pledge of and first priority security interest against 100% of the membership interests in the mezzanine borrower and the agreement provides the Company with an option to purchase the development.

The loan represents an investment in an unconsolidated variable interest entity.

The Company is not the primary beneficiary of the VIE as Centerspace does not have the power to direct the activities which most significantly impact the entity’s economic

performance nor does Centerspace have significant influence over the entity.

As of December 31, 2023, the note receivable appears within other assets in the Consolidated Balance Sheets at fair value.

ADVERTISING COSTS

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During the years ended December 31, 2023, 2022, and 2021 total advertising expense was $ 3.2 million, $ 3.2 million, and $ 2.5 million, respectively.

MARKETABLE SECURITIES

Marketable securities consisted of equity securities.

We report equity securities at fair value based on quoted market prices (Level 1 inputs).

Gains or losses are included in interest and other income (loss) on the consolidated statements of operations.

During the year ended December 31, 2020, we had a realized loss of $ 3.4 million arising from marketable securities which were disposed during the year ended December 31, 2020.

As of December 31, 2022 and 2021, we had no marketable securities.

NOTE 3 • EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period.

We have issued restricted stock units (“RSUs”) and incentive stock

options (“ISOs”) under our 2015 Incentive Plan, Series D Convertible Preferred Units (“Series D preferred units”), and Series E Convertible Preferred Units (“Series E preferred units”), which could have a dilutive effect on our earnings per share upon exercise of the RSUs, ISOs, or upon conversion of the Series D or Series E preferred units (refer to Note 4 for further discussion of the preferred units).

Other than the issuance of RSUs, ISOs, Series D preferred units, and Series E preferred units, we have no outstanding options, warrants, convertible stock, or other contractual obligations requiring issuance of additional common shares that would result in a dilution of earnings.

SEVERANCE AND TRANSITION

On March 23, 2023, the Company entered into a Separation and General Release Agreement (the “Separation Agreement”) in connection with the departure of former CEO, Mark Decker, Jr.

During the year ended December 31, 2023, the Company incurred total severance costs of $ 2.2 million for the cash severance and benefits for Mr.

Decker, $ 737,000 in share-based compensation expense for the acceleration of certain equity awards, and $ 306,000 in other CEO transition related expenses.

These expenses are included within general and administrative expenses in the Consolidated Statements of Operations.

Refer to Note 13 for additional information on the share-based compensation expense.

INVOLUNTARY CONVERSION OF ASSETS

In April 2023, a portion of an apartment community was destroyed by fire.

The Company recorded a write-down of the apartment community asset, in accordance with ASC 610-30 on involuntary conversion of non-monetary assets, totaling $ 1.3 million with an offsetting insurance receivable recorded within other assets on the Consolidated Balance Sheets.

As of December 31, 2023, the estimated insurance claim was $ 1.9 million.

Any amounts received in excess of the write-down will be recognized when received.

During the year ended December 31, 2023, Centerspace recorded $ 2.0 million in write-downs to three apartment community assets due to separate insurance events with offsetting insurance receivables totaling $ 1.2 million recorded within other assets on the Consolidated Balance Sheets in accordance with ASC 610-30.

LITIGATION SETTLEMENT

During the year ended December 31, 2023, the Company recorded a loss on litigation settlement of $ 3.9 million due to a trial judgment entered against Centerspace for property damage, resulting in monetary losses.

Centerspace was the named defendant in a lawsuit where the owner of a neighboring property claimed a retaining wall at one of the Company’s properties was causing water damage to the neighboring property.

The original judgment was ordered on October 9, 2023 for $ 2.9 million which the Company immediately paid.

In November 2023, the claimant filed motions requesting additional interest on the judgment and trial costs.

Subsequent to December 31, 2023, the claimant was awarded an additional $ 1.0 million in judgment related interest and costs.

The Company paid the additional amount and recorded the loss on litigation for the year ended December 31, 2023.

The Company cannot, with any level of certainty, predict or estimate if there will be additional costs incurred as a result of the lawsuit as the matter is still ongoing.

NOTE 3 • NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares of beneficial interest (“common shares”) outstanding during the period.

Centerspace has issued restricted stock units (“RSUs”) and incentive stock options (“ISOs”) under its 2015 Incentive Plan, Series D Convertible Preferred Units (“Series D preferred units”), and Series E Convertible Preferred Units (“Series E preferred units”), which could have a dilutive effect on net income (loss) per share upon exercise of the RSUs, ISOs, or upon conversion of the Series D or Series E preferred units (refer to Note 4 for further discussion of the preferred units).

Other than the issuance of RSUs, ISOs, Series D preferred units, and Series E preferred units, there are no outstanding options, warrants, convertible stock, or other contractual obligations requiring issuance of additional common shares that would result in a dilution of net income (loss).

Under the terms of the Operating Partnership’s Agreement of Limited Partnership, limited partners have the right to require the Operating Partnership to redeem their limited partnership units (“Units”) any time following the first anniversary of the date they acquired such Units (“Exchange Right”).

Upon the exercise of Exchange Rights, and in our sole discretion, we may issue common shares in exchange for Units on a one -for-one-basis.

For the year ended December 31, 2022, Units of 978,000 , Series E preferred units of 2.2 million, as converted, Series D preferred units of 228,000 , as converted, stock options of 28,000 , time-based RSUs of 10,000 , and performance-based restricted stock awards of 30,000 were excluded from the calculation of diluted earnings per share because they were anti-dilutive.

Including these items would have improved earnings per share.

For the year ended December 31, 2021, Units of 899,000 , Series E preferred units of 729,000 , as converted, Series D preferred units of 228,000 , as converted, stock options of 30,000 , time-based RSUs of 15,000 , and performance-based restricted stock awards of 32,000 , were excluded from the calculation of diluted earnings per share because they were anti-dilutive.

Including these items would have improved earnings per share.

For the year ended December 31, 2020, Units of 1.0 million, Series D preferred Units of 228,000 , as converted, stock options of 86,000 , time-based RSUs of 13,000 , and performance-based restricted stock awards of 27,000 were excluded from the calculation of diluted earnings per share because they were anti-dilutive.

Including these items would have improved earnings per share.

The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted earnings per share reported in the consolidated financial statements for the years ended December 31, 2022, 2021, and 2020:

Upon the exercise of Exchange Rights, and in Centerspace’s sole discretion, it may issue common shares in exchange for Units on a one -for-one-basis.

The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted net income (loss) per share reported in the Consolidated Financial Statements for the years ended December 31, 2023, 2022, and 2021:

(in thousands, except per share data)

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Dividends to preferred shareholders ( 6,428 ) ( 6,428 ) ( 6,428 )

Redemption of preferred shares — — 297

Numerator for basic earnings per share – net income (loss) available to common shareholders ( 20,537 ) ( 6,457 ) ( 1,790 )

Numerator for basic income per share – net income (loss) available to common shareholders 34,897 ( 20,537 ) ( 6,457 )

Noncontrolling interests – Operating Partnership and Series E preferred units 4,877 ( 4,299 ) ( 2,806 )

Dividends to preferred unitholders (1)

Numerator for diluted earnings (loss) per share $ ( 24,196 ) $ ( 8,623 ) $ ( 1,362 )

Denominator for basic earnings (loss) per share weighted average shares 15,216 13,803 12,564

Denominator for diluted earnings (loss) per share 15,216 13,803 12,564

NET EARNINGS (LOSS) PER COMMON SHARE – BASIC AND DILUTED $ ( 1.35 ) $ ( 0.47 ) $ ( 0.15 )

Numerator for diluted income (loss) per share $ 39,774 $ ( 24,196 ) $ ( 8,623 )

Denominator for basic income (loss) per share weighted average shares 14,994 15,216 13,803

Effect of Series E preferred units 2,100 — —

Effect of diluted restricted stock awards and restricted stock units 24 — —

Denominator for diluted income (loss) per share 17,118 15,216 13,803

NET INCOME (LOSS) PER COMMON SHARE – BASIC $ 2.33 $ ( 1.35 ) $ ( 0.47 )

NET INCOME (LOSS) PER COMMON SHARE – DILUTED $ 2.32 $ ( 1.35 ) $ ( 0.47 )

(1) For the year ended December 31, 2023 , dividends to preferred unitholders of $ 640,000 were excluded from the calculation of diluted net income (loss) per share because they were anti-dilutive.

For the year ended December 31, 2023, Units of 925,000 and Series D preferred units of 228,000 , as converted, were excluded from the calculation of diluted net income (loss) per share because they were anti-dilutive.

Including these items would have improved net income (loss) per share.

For the year ended December 31, 2022, Units of 978,000 , Series E preferred units of 2.2 million, as converted, Series D preferred units of 228,000 , as converted, stock options of 28,000 , time-based RSUs of 10,000 , and performance-based restricted stock awards of 30,000 , were excluded from the calculation of diluted net income (loss) per share because they were anti-dilutive.

Including these items would have improved net income (loss) per share.

For the year ended December 31, 2021, Units of 899,000 , Series E preferred units of 729,000 , as converted, Series D preferred Units of 228,000 , as converted, stock options of 30,000 , time-based RSUs of 15,000 , and performance-based restricted stock awards of 32,000 were excluded from the calculation of diluted net income (loss) per share because they were anti-dilutive.

Including these items would have improved net income (loss) per share.

NOTE 4 • EQUITY AND MEZZANINE EQUITY

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Outstanding Units in the Operating Partnership were 861,000 Units at December 31, 2023 and 971,000 Units at December 31, 2022.

During the year ended December 31, 2022, we issued 209,000 Units as partial consideration for the acquisition of three apartment communities located in Minneapolis, Minnesota.

During the year ended December 31, 2022, Centerspace issued 209,000 Units as partial consideration for the acquisition of three apartment communities located in Minneapolis, Minnesota.

Exchange Rights.

We redeemed Units in exchange for common shares in connection with Unitholders exercising their exchange rights during the years ended December 31, 2022 and 2021 as detailed in the table below.

Centerspace redeemed Units in exchange for common shares in connection with Unitholders exercising their exchange rights during the years ended December 31, 2023 and 2022 as detailed in the table below.

(in thousands)

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Year ended December 31, 2022 24 $ ( 1,353 )

We redeemed Units for cash in connection with Unitholders exercising their exchange rights during the years ended December 31, 2022 and 2021 as detailed in the table below.

Pursuant to the exercise of exchange rights, the Company redeemed Units for cash during the years ended December 31, 2023 and 2022 as detailed in the table below.

(in thousands, except per Unit data)

Number of Aggregate Average Price

Units Cost Per Unit

Units Redeemed

Cost Per Unit

Year ended December 31, 2023 2 $ 130 $ 54.05

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Series E Preferred Units (Noncontrolling interest).

On September 1, 2021, we issued 1.8 million Series E preferred units with a par value of $ 100 per Series E preferred unit as partial consideration for the acquisition of 17 apartment communities.

Centerspace had 1.7 million and 1.8 million Series E preferred units outstanding as of December 31, 2023 and 2022, respectively.

Each Series E preferred unit has a par value of $ 100 .

The Series E preferred unit holders receive a preferred distribution at the rate of 3.875 % per year.

Each Series E preferred unit is convertible, at the holder’s option, into 1.2048 Units.

We have the option, at our sole election, to convert Series E preferred units into Units if our stock has traded at or above $ 83 per share for 15 of 30 consecutive trading days and we have made at least three consecutive quarters of distributions with a rate of at least $ 0.804 per Unit.

Centerspace has the option, at its sole election, to convert Series E preferred units into Units if its stock has traded at or above $ 83 per share for 15 of 30 consecutive trading days and it has made at least three consecutive quarters of distributions with a rate of at least $ 0.804 per Unit.

The Series E preferred units have an aggregate liquidation preference of $ 172.5 million at December 31, 2023.

The holders of the Series E preferred units do not have voting rights.

We redeemed Series E preferred units in exchange for common shares in connection with Series E unitholders exercising their exchange rights during the year ended December 31, 2022 as detailed below.

The Company redeemed Series E preferred units in exchange for common shares in connection with Series E unitholders exercising their exchange rights during the years ended December 31, 2023 and 2022 as detailed below.

(in thousands)

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Year ended December 31, 2023 26 31 $ 1,390

Year ended December 31, 2022 56 67 $ 3,667

The Company redeemed Series E preferred units in exchange for cash in connection with Series E unitholders exercising their exchange rights during the year ended December 31, 2023 as detailed below.

(in thousands)

Number of Series E Aggregate

Average Price

Preferred Units Redeemed Cost

Per Series E Unit (1)

Year ended December 31, 2023 7 $ 447 $ 52.45

(1) Average price per Series E unit factoring in conversion rate of 1.2048 Units for each Series E preferred unit

Common Shares and Equity Awards .

Common shares outstanding on December 31, 2023 and 2022, totaled 15.0 million.

During the years ended December 31, 2022 and 2021, we issued approximately 24,613 and 27,351 common shares, respectively, with a total grant-date value of $ 1.3 million and $ 1.0 million, respectively, under our 2015 Incentive Plan, as share-based compensation for employees and trustees.

During the years ended December 31, 2023 and 2022, Centerspace issued approximately 19,606 and 24,613 common shares, respectively, with a total grant-date value of $ 1.8 million and $ 1.3 million, respectively, under its 2015 Incentive Plan, as share-based compensation for employees and trustees.

These shares vested based on performance and service criteria.

Refer to Note 13 for additional details on share-based compensation.

During the years ended December 31, 2023 and 2022, approximately 15,000 and 2,000 common shares were forfeited under the 2015 Incentive Plan, respectively.

Equity Distribution Agreement.

In September 2021, we entered into an equity distribution agreement in connection with a new at-the-market offering program (“2021 ATM Program”), replacing our prior at-the-market offering program (“2019 ATM Program”).

Under the 2021 ATM Program, we may offer and sell common shares having an aggregate sales price of up to $ 250.0 million, in amounts and at times determined by management.

Under the 2021 ATM Program, we may enter into separate forward sale agreements.

Centerspace has an equity distribution agreement in connection with an at-the-market offering (“2021 ATM Program”) through which it may offer and sell common shares having an aggregate sales price of up to $ 250.0 million, in amounts and at times determined by management.

Under the 2021 ATM Program, the Company may enter into separate forward sale agreements.

The proceeds from the sale of common shares under the 2021 ATM Program may be used for general corporate purposes, including the funding of acquisitions, construction or mezzanine loans, community renovations, and the repayment of indebtedness.

As of December 31, 2022, we had common shares having an aggregate offering price of up to $ 126.6 million remaining available under the 2021 ATM Program.

The table below provides details on the sale of common shares under the 2021 ATM Program and the 2019 ATM Program during the years ended December 31, 2022 and 2021.

As of December 31, 2023, common shares having an aggregate offering price of up to $ 126.6 million remained available under the 2021 ATM Program.

The table below provides details on the sale of common shares under the 2021 ATM Program during the years ended December 31, 2023 and 2022.

(in thousands, except per share amounts)

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Year ended December 31, 2022 321 $ 31,732 $ 98.89

(1) Total consideration is net of $ 338,000 and $ 2.1 million in commissions for the years ended December 31, 2022 and 2021, respectively.

(1) Total consideration is net of $ 338,000 in commissions for the year ended December 31, 2022.

Share Repurchase Program .

On March 10, 2022, the Board of Trustees approved a share repurchase program (the “ Share Repurchase Program”), providing for the repurchase of up to an aggregate of $ 50 million of our outstanding common shares.

Under the Share Repurchase Program, we are authorized to repurchase common shares through open-market purchases, privately-negotiated transactions, block trades, or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

repurchases have no time limit and may be suspended or discontinued completely at any time.

Under the Share Repurchase Program, the Company is authorized to repurchase common shares through open-market purchases, privately-negotiated transactions, block trades, or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

The repurchases have no time limit and may be suspended or discontinued completely at any time.

The specific timing and amount of repurchases will vary based on available capital resources or other financial and operational performance, market conditions, securities law limitations, and other factors.

The table below provides details on the shares repurchased during the year ended December 31, 2022.

As of December 31, 2022, we had $ 21.0 million remaining authorized for purchase under this program.

The table below provides details on the shares repurchased during the

years ended December 31, 2023 and 2022.

As of December 31, 2023, the Company had $ 9.4 million remaining authorized for purchase under this program.

(in thousands, except per share amounts)

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Year ended December 31, 2023 216 $ 11,539 $ 53.44

Year ended December 31, 2022 432 $ 29,059 $ 67.23

(1) Amount includes commissions.

Issuance of Series C Preferred Shares .

On October 2, 2017, we issued 4.1 million shares of our 6.625 % Series C Cumulative Redeemable Preferred Shares (“Series C preferred shares”).

As of December 31, 2022 and 2021, we had 3.9 million Series C preferred shares outstanding.

The Series C preferred shares are nonvoting and redeemable for cash at $ 25.00 per share at our option on or after October 2, 2022.

Series C Preferred Shares .

As of December 31, 2023 and 2022, the Company had 3.9 million Series C preferred shares outstanding.

The Series C preferred shares are nonvoting and redeemable for cash at $ 25.00 per share at Centerspace’s option.

Holders of these shares are entitled to cumulative distributions, payable quarterly (as and if declared by the Board of Trustees).

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The Series D preferred units have a par value of $ 100 per preferred unit.

The Series D preferred unit holders receive a preferred distribution at the rate of 3.862 % per year.

The Series D preferred units have a put option which allows the holder to redeem any or all of the Series D preferred units for cash equal to the issue price.

The Series D preferred unit holders receive a preferred distribution at the rate of 3.862 % per year and have a put option which allows the holder to redeem any or all of the Series D preferred units for cash equal to the issue price.

Each Series D preferred unit is convertible, at the holder’s option, into 1.37931 Units.

The Series D preferred units have an aggregate liquidation value of $ 16.6 million.

Changes in the redemption value are based on changes in the trading value of our common shares and are charged to common shares on our Consolidated Balance Sheets each quarter.

Changes in the redemption value are based on changes in the trading value of common shares and are charged to common shares on the Consolidated Balance Sheets each quarter.

The holders of the Series D preferred units do not have any voting rights.

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Capital contributions, distributions, and profits and losses are allocated to noncontrolling interests in accordance with the terms of the Operating Partnership’s Agreement of Limited Partnership.

We reflect noncontrolling interests in consolidated real estate entities on the Balance Sheet for the portion of properties consolidated by us that are not wholly owned by us.

Centerspace reflects noncontrolling interests in consolidated real estate entities on the Balance Sheet for the portion of properties consolidated by us that are not wholly owned by us.

The earnings or losses from these properties attributable to the noncontrolling interests are reflected as net income attributable to noncontrolling interests – consolidated real estate entities in the Consolidated Statements of Operations.

During the year ended December 31, 2020, we acquired the 47.4 % noncontrolling interests in the real estate partnership that owns 71 France for $ 12.2 million.

Our noncontrolling interests – consolidated real estate entities at December 31, 2022 and 2021 were as follows:

The Company’s noncontrolling interests – consolidated real estate entities at December 31, 2023 and 2022 were as follows:

(in thousands)

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IRET - Cypress Court Apartments, LLC $ 649 $ 627

Noncontrolling interests – consolidated real estate entities $ 649 $ 627

NOTE 6 • DEBT

The following table summarizes our indebtedness, excluding deferred financing costs:

The following table summarizes the Company’s indebtedness, excluding deferred financing costs and premiums or discounts:

(in thousands)

December 31, 2022 December 31, 2021 Weighted Average Maturity in Years

December 31, 2023 December 31, 2022

Carrying Amount

Interest Rate

Carrying Amount

Interest Rate

Weighted Average Maturity in Years at December 31, 2023

Lines of credit (1)

$ 30,000 6.74 % $ 113,500 5.61 % 1.75

Term loans (2)

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Mortgages payable - Fannie Mae credit facility (5)

198,850 2.78 % 198,850 2.78 % 7.56

Mortgages payable - other (3)(5)

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Total debt (4)

Annual Weighted Average Interest Rates

Lines of credit (rate with swap) (3)

$ 919,990 3.54 % $ 1,011,777 3.62 % 6.30

Term loan 5.57 % —

Unsecured senior notes 3.12 % 3.12 %

Mortgages payable - Fannie Mae credit facility 2.78 % 2.78 %

Mortgages payable - other 3.85 % 3.81 %

Total debt 3.62 % 3.26 %

(1) Included within notes payable on our Consolidated Balance Sheets.

(2) Net of fair value adjustments on acquisition of mortgage.

(3) The interest rate swap was terminated in February 2022.

Refer to Note 7 - Derivative Instruments for more information.

As of December 31, 2022, 53 apartment communities were not encumbered by mortgages and are available to provide credit support for our unsecured borrowings.

Our primary unsecured credit facility (“unsecured credit facility”) is a revolving, multi-bank line of credit, with Bank of Montreal serving as administrative agent.

Our line of credit has total commitments and borrowing capacity of $ 250.0 million, based on the value of unencumbered properties.

As of December 31, 2022, we had additional borrowing availability of $ 136.5 million beyond the $ 113.5 million drawn, priced at an interest rate of 4.12 %.

At December 31, 2021, the $ 250.0 million line of credit had borrowing capacity of $ 173.5 million based on the value of unencumbered properties, of which $ 76.0 million was drawn on the line.

This credit facility was amended on September 30, 2021 to extend the maturity date to September 2025 and has an accordion option to increase borrowing capacity up to $ 400.0 million.

The interest rate on the line of credit is based, at our option, on the lender's base rate plus a margin, ranging from 25 - 80 basis points, or the London Interbank Offered Rate (“LIBOR”), plus a margin that ranges from 125 - 180 basis points based on our consolidated leverage, as defined under the Third Amended and Restated Credit Agreement.

The terms of our unsecured credit facility allow for the transition to an alternate benchmark interest rate, including the secured overnight financing rate (“SOFR”), to replace any outstanding LIBOR borrowings at the time LIBOR is no longer published.

Our unsecured credit facility and unsecured senior notes are subject to customary financial covenants and limitations.

We believe that we are in compliance with all such financial covenants and limitations as of December 31, 2022.

We also have a $ 6.0 million unsecured operating line of credit.

(1) Interest rates on lines of credit are variable and exclude any unused facility fees and amounts reclassified from accumulated other comprehensive income into interest expense from terminated interest rate swaps.

(2) Included within notes payable on the Consolidated Balance Sheets.

(3) Represents apartment communities encumbered by mortgages;

14 at December 31, 2023 and 15 at December 31, 2022.

(4) Excludes deferred financing costs and premiums or discounts.

(5) Interest rate is fixed.

As of December 31, 2023, 46 apartment communities were not encumbered by mortgages and were available to provide credit support for the unsecured borrowings.

The Company’s primary unsecured credit facility (the “Unsecured Credit Facility”) is a revolving, multi-bank line of credit, with Bank of Montreal serving as administrative agent.

The line of credit has total commitments and borrowing capacity of $ 250.0 million, based on the value of unencumbered properties.

As of December 31, 2023, the Company had additional borrowing availability of $ 220.0 million beyond the $ 30.0 million drawn, priced at an interest rate of 7.82 %.

As of December 31, 2022, the Company had additional borrowing availability of $ 136.5 million beyond the $ 113.5 million drawn, priced at an interest rate of 5.61 %.

This Unsecured Credit Facility was amended on September 30, 2021 to extend the maturity date to September 2025 and to provide an accordion option to increase borrowing capacity up to $ 400.0 million.

On May 31, 2023, the Unsecured Credit Facility was amended to replace the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”) as the benchmark alternative reference rate under the Facility.

The interest rates on the line of credit are based on the consolidated leverage ratio, at the Company’s option, on either the lender’s base rate plus a margin, ranging from 25 - 80 basis points, or daily or term SOFR, plus a margin that ranges from 125 - 180 basis points with the consolidated leverage ratio described under the Third Amended and Restated Credit Agreement, as amended.

Prior to the amendment, interest rates on the line of credit were based on the consolidated leverage ratio applying the same margins to LIBOR.

The Unsecured Credit Facility and unsecured senior notes are subject to customary financial covenants and limitations.

The Company believes that it was in compliance with all such financial covenants and limitations as of December 31, 2023.

Centerspace also has a $ 6.0 million operating line of credit.

As of December 31, 2023 and 2022, there was no outstanding balance on this line of credit.

This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances.

This operating line matures on August 31, 2024, with pricing based on SOFR.

In January 2021, we amended and expanded our private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc.

(collectively, “PGIM”) to increase the aggregate amount available for issuance of unsecured senior promissory notes (“unsecured senior notes”) to $ 225.0 million.

In September 2021, we entered into a note purchase agreement for the issuance of $ 125.0 million senior unsecured promissory notes, of which $ 25.0 million was issued under the private shelf agreement with PGIM.

Under the private shelf agreement with PGIM, we issued $ 200.0 million unsecured senior notes with $ 25.0 million remaining available as of December 31, 2022.

The following table shows the notes issued under both agreements.

This operating line matures on September 30, 2024, with pricing based on SOFR.

Centerspace has a private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc.

(collectively, “PGIM”) under which the Company has issued $ 200.0 million in unsecured senior promissory notes (“unsecured senior notes”).

The Company also has a separate note purchase agreement for the issuance of $ 125.0 million senior unsecured promissory notes, of which $ 25.0 million was issued under the private shelf agreement with PGIM.

The following table shows the notes issued under both agreements as of December 31, 2023 and 2022.

(in thousands)

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Series 2021-D $ 15,000 September 17, 2034 2.78 %

In November 2022, we entered into a $ 100.0 million term loan agreement (“Term Loan”) with PNC Bank, National Association as administrative agent.

The interest rate on the Term Loan is based on SOFR, plus a margin that ranges from 120 to 175 basis points based on our consolidated leverage ratio.

The Term Loan has a 364 -day term but may be extended, at our option and subject to certain conditions, for one additional 364-day term.

We have a $ 198.9 million Fannie Mae Credit Facility Agreement (“FMCF”).

The FMCF is currently secured by mortgages on 16 apartment communities.

In November 2022, the Company entered into a $ 100.0 million term loan agreement (“Term Loan”) with PNC Bank, National Association as administrative agent.

The interest rate on the Term Loan was based on SOFR, plus a margin that ranged from 120 to 175 basis points based on the Company’s consolidated leverage ratio.

The Term Loan had a 364 -day term with an option for an additional 364-day term.

As of December 31, 2023, the Term Loan was paid in full.

As of December 31, 2022, the Term Loan had a balance of $ 100.0 million.

Centerspace has a $ 198.9 million Fannie Mae Credit Facility Agreement (“FMCF”).

The FMCF is secured by mortgages on 12 apartment communities.

The notes are interest-only, with varying maturity dates of 7 , 10 , and 12 years, and a blended weighted average fixed interest rate of 2.78 %.

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The FMCF is included within mortgages payable on the Consolidated Balance Sheets.

As of December 31, 2022, we owned 15 apartment communities that served as collateral for mortgage loans, in addition to the apartment communities secured by the FMCF.

All of these mortgage loans were non-recourse to us other than for standard carve-out obligations.

Interest rates on mortgage loans range from 3.47 % to 4.57 %, and the mortgage loans have varying maturity dates from May 1, 2023, through September 1, 2031.

As of December 31, 2022, we believe there are no material defaults or instances of material noncompliance in regards to any of these mortgage loans.

As of December 31, 2023, Centerspace owned 14 apartment communities that served as collateral for mortgage loans, in addition to the apartment communities secured by the FMCF.

All of these mortgage loans were non-recourse to the Company other than for standard carve-out obligations.

Interest rates on mortgage loans range from 3.45 % to 5.04 %, and the mortgage loans have varying maturity dates from May 1, 2025, through May 1, 2035.

As of December 31, 2023, the Company believes there are no material defaults or instances of material noncompliance in regard to any of these mortgage loans.

The aggregate amount of required future principal payments on lines of credit, notes payable, and mortgages payable, as of December 31, 2023 is as follows:

(in thousands)

2023 $ 145,988

Thereafter 580,689

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NOTE 7 • DERIVATIVE INSTRUMENTS

We used interest rate derivatives to stabilize interest expense and to manage our exposure to interest rate fluctuations.

To accomplish this objective, we primarily used interest rate swap contracts to fix variable rate interest debt.

Centerspace used interest rate derivatives to stabilize interest expense and manage its exposure to interest rate fluctuations.

To accomplish this objective, the Company primarily used interest rate swap contracts to fix variable rate interest debt.

Changes in the fair value of derivatives designated and that qualify as cash flow hedges were recorded in accumulated other comprehensive income (loss) (“OCI”) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings.

Amounts reported in accumulated other comprehensive income (loss) will be reclassified to interest expense as interest payments are made on our variable rate debt.

During the next 12 months, we estimate an additional $ 936,000 will be reclassified as an increase to interest expense.

Derivatives not designated as hedges were not speculative and were used to manage our exposure to interest rate movements and other identified risks but did not meet the strict hedge accounting requirements.

Amounts reported in accumulated other comprehensive income (loss) will be reclassified to interest expense in the periods in which interest payments are incurred on variable rate debt.

During the next 12 months, the Company estimates an additional $ 713,000 will be reclassified as an increase to interest expense.

In February 2022, the Company paid $ 3.2 million to terminate its $ 75.0 million interest rate swap and its $ 70.0 million forward swap.

As of December 31, 2023 and 2022, the Company had no remaining interest rate swaps.

Derivatives not designated as hedges were not speculative and were used to manage the Company’s exposure to interest rate movements and other identified risks but did not meet the strict hedge accounting requirements.

Changes in fair value of derivatives not designated in hedging relationships were recorded directly into earnings within other income (loss) in the Consolidated Statements of Operations.

For the years ended December 31, 2022 and 2021, we recorded a gain of $ 582,000 and $ 419,000 , respectively, related to the interest rate swap not designated in a hedging relationship prior to its termination.

In February 2022, we paid $ 3.2 million to terminate our $ 75.0 million interest rate swap and our $ 70.0 million forward swap.

As of December 31, 2022, we had no remaining interest rate swaps.

At December 31, 2021, we had one interest rate swap contract designated as a cash flow hedge of interest rate risk with a total notional amount of $ 75.0 million to fix the interest rate on the line of credit.

We also had one interest rate swap with a notional

amount of $ 70.0 million that was not effective until January 31, 2023 and was not designated as a hedge in a qualifying hedging relationship.

In September 2021, we paid $ 3.8 million to terminate our $ 50.0 million interest rate swap and our $ 70.0 million interest rate swap in connection with the pay down of our term loans (see Note 6 - Debt for additional details).

We accelerated the reclassification of a $ 5.4 million loss from OCI into other income loss in Consolidated Statements of Operations as a result of the hedged transactions becoming probable not to occur.

The fair value of the derivative financial instruments as well as their classification on our Consolidated Balance Sheets as of December 31, 2022 and 2021 is detailed below.

(in thousands)

December 31, 2022 December 31, 2021

Balance Sheet Location Fair Value Fair Value

Total derivative instruments designated as hedging instruments - interest rate swaps Accounts Payable and Accrued Expenses $ — $ 4,610

Total derivative instruments not designated as hedging instruments - interest rate swaps Accounts Payable and Accrued Expenses $ — $ 1,097

For the year ended December 31, 2022, the Company recorded a gain of $ 582,000 related to the interest rate swap not designated in a hedging relationship, prior to its termination.

In September 2021, the Company paid $ 3.8 million to terminate its $ 50.0 million interest rate swap and its $ 70.0 million interest rate swap in connection with the pay down of its term loans.

The Company accelerated the reclassification of a $ 5.4 million loss from OCI into other income loss in Consolidated Statements of Operations as a result of the hedged transactions becoming probable not to occur.

The effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations as of December 31, 2023, 2022, and 2021 is detailed below.

(in thousands)

Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Income Gain (Loss) Reclassified from Accumulated OCI into Net Income (Loss)

Gain Recognized in OCI Location of Loss Reclassified from Accumulated OCI into Income Loss Reclassified from Accumulated OCI into Net Income (Loss)

Year Ended December 31, Year Ended December 31,

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NOTE 8 • FAIR VALUE MEASUREMENTS

Cash and cash equivalents, restricted cash, accounts payable, and accrued expenses are carried at amounts that reasonably approximate their fair value due to their short-term nature.

For variable rate line of credit debt and notes payable that re-prices frequently, fair values are based on carrying values.

In determining the fair value of other financial instruments, we apply Financial Accounting Standard Board ASC 820, Fair Value Measurement and Disclosures .

Fair value hierarchy under ASC 820 distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (Levels 1 and 2) and the reporting entity’s own assumptions about market participant assumptions (Level 3).

Cash and cash equivalents, restricted cash, accounts payable, accrued expenses, and other liabilities are carried at amounts that reasonably approximate their fair value due to their short-term nature.

For variable rate line of credit debt and notes payable that re-price frequently, fair values are based on carrying values.

In determining the fair value of other financial instruments, Centerspace applies Financial Accounting Standard Board ASC 820, “ Fair Value Measurement and Disclosures” .

Fair value estimates may differ from the amounts that may ultimately be realized upon sale or disposition of the assets and liabilities.

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December 31, 2023

Notes receivable Other assets $ 5,871 $ — $ — $ 5,871

Real estate related notes receivable Other assets $ 7,039 $ — $ — $ 7,039

December 31, 2022

Mortgages and notes receivable Mortgages receivable $ 49,484 $ — $ — $ 49,484

Derivative instruments - interest rate swaps Accounts payable and accrued expenses $ 5,707 $ — $ — $ 5,707

The fair value of our interest rate swaps was determined using the market standard methodology of netting discounted expected variable cash payments and receipts.

The variable cash payments and receipts are based on an expectation of future interest

rates (a forward curve) derived from observable market interest rate curves.

We consider both our own nonperformance risk and the counterparty’s nonperformance risk in the fair value measurement (Level 3).

We utilize an income approach with Level 3 inputs based on expected future cash flows to value these instruments.

Real estate related notes receivable Other assets $ 5,871 $ — $ — $ 5,871

Centerspace utilizes an income approach with Level 3 inputs based on expected future cash flows to value the notes receivable.

The unobservable inputs include market transactions for similar instruments, management estimates of comparable interest rates (range of 5.00 % to 9.00 %), and instrument specific credit risk (range of 0.5 % to 1.0 %).

Changes in fair value of these receivables from period to period are reported in interest and other income on our Consolidated Statements of Operations.

Changes in fair value of these receivables from period to period are reported in interest and other income on the Consolidated Statements of Operations.

(in thousands)

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Year ended December 31, 2023

Real estate related notes receivable $ 7,039 $ 19 $ 272 $ 291

Year ended December 31, 2022

As of December 31, 2022 and 2021, we had investments totaling $ 1.6 million and $ 903,000 , respectively, in real estate technology venture funds consisting of privately held entities that develop technology related to the real estate industry.

These investments appear within other assets on our Consolidated Balance Sheets The investments are measured at net asset value (“NAV”) as a practical expedient under ASC 820.

As of December 31, 2022, we had unfunded commitments of $ 1.4 million.

Real estate related notes receivable $ 5,871 $ 16 $ 669 $ 685

As of December 31, 2023 and 2022, Centerspace had investments totaling $ 2.1 million and $ 1.6 million, respectively, in real estate technology venture funds consisting of privately held entities that develop technology related to the real estate industry.

These investments appear within other assets on the Consolidated Balance Sheets.

The investments are measured at net asset value (“NAV”) as a practical expedient under ASC 820.

As of December 31, 2023, the Company had unfunded commitments of $ 1.0 million.

Fair Value Measurements on a Nonrecurring Basis

There were no non-financial assets measured at fair value on a nonrecurring basis at December 31, 2022 and 2021.

Non-financial assets measured at fair value on a nonrecurring basis at December 31, 2023 consisted of real estate investments that were written-down to estimated fair value during the year ended December 31, 2023.

There were no non-financial assets or liabilities measured at fair value on a nonrecurring basis at December 31, 2022.

(in thousands)

Balance Sheet Location Total Level 1 Level 2 Level 3

December 31, 2023

Real estate investments measured at fair value Real estate investments

$ 19,250 $ — $ 19,250 $ —

As of December 31, 2023, the Company estimated the fair value of real estate investments using market offers to purchase and other market data.

Financial Assets and Liabilities Not Measured at Fair Value

The fair value of mortgages payable and unsecured senior notes is estimated based on the discounted cash flows of the loans using market research and management estimates of comparable interest rates (Level 3).

The estimated fair values of our financial instruments as of December 31, 2022 and 2021 are as follows:

The estimated fair values of the Company’s financial instruments as of December 31, 2023 and 2022 are as follows:

(in thousands)

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FINANCIAL LIABILITIES

Revolving lines of credit (1)

Revolving lines of credit 113,500 113,500 76,000 76,000

Revolving lines of credit Revolving lines of credit 30,000 30,000 113,500 113,500

Notes payable — — 100,000 100,000

2 unchanged sentences

Mortgages payable - other Mortgages payable 391,140 367,080 299,427 274,029

(1) Excluding the effect of the interest rate swap agreement at December 31, 2021.

NOTE 9 • ACQUISITIONS AND DISPOSITIONS

We acquired $ 211.9 million and $ 499.8 million of new real estate during the years ended December 31, 2022 and 2021, respectively.

Our acquisitions during the years ended December 31, 2022 and 2021 are detailed below.

Centerspace acquired $ 94.5 million and $ 211.9 million of new real estate during the years ended December 31, 2023 and 2022, respectively.

The Company’s acquisitions during the years ended December 31, 2023 and 2022 are detailed below.

Year Ended December 31, 2023

3 unchanged sentences

Land Building Intangible

Assets Other (4)

303 homes - Lake Vista Apartment Homes - Loveland, CO

October 11, 2023 $ 94,500 $ 41,777 $ — $ 52,723 $ 6,618 $ 80,737 $ 3,221 $ 3,924

Total Acquisitions $ 94,500 $ 41,777 $ — $ 52,723 $ 6,618 $ 80,737 $ 3,221 $ 3,924

(1) Excludes $ 405,000 in capitalized transaction cost.

(2) Fair value of operating partnership units issued on acquisition.

(3) Assumption of seller's debt upon closing.

(4) Intangible assets consist of in-place leases valued at the time of acquisition.

(5) Debt premium on assumed mortgage.

Year Ended December 31, 2022

Acquired (in thousands)

Form of Consideration Investment Allocation

Acquisitions Cash Units (2)

Land Building Intangible

191 homes - Martin Blu - Minneapolis, MN

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Mezzanine and construction loans, financed by Centerspace, exchanged as partial consideration for the acquisition of Noko Apartments.

(4) Debt discount on assumed mortgage.

Year Ended December 31, 2021

(in thousands)

Total Form of Consideration Investment Allocation

Date Acquisition Intangible

Acquisitions Acquired Cost (1)

Cash Units (2)

Land Building Assets Other (4)

256 homes - Union Pointe Apartment Homes - Longmont, CO

January 6, 2021 $ 76,900 $ 76,900 $ — $ — $ 5,727 $ 69,966 $ 1,207 $ —

120 homes - Bayberry Place - Minneapolis, MN

September 1, 2021 16,673 898 9,855 5,920 1,807 14,113 753 —

251 homes - Burgundy & Hillsboro Court - Minneapolis, MN

September 1, 2021 35,569 2,092 22,542 10,935 2,834 31,148 1,587 —

97 homes - Venue on Knox - Minneapolis, MN

September 1, 2021 18,896 500 11,375 7,021 3,438 14,743 715 —

120 homes - Gatewood - St.

September 1, 2021 7,781 378 3,388 4,015 327 6,858 596 —

84 homes - Grove Ridge - Minneapolis, MN

September 1, 2021 12,060 121 8,579 3,360 1,250 10,271 539 —

119 homes - The Legacy - St.

September 1, 2021 10,560 229 5,714 4,617 412 9,556 592 —

151 homes - New Hope Garden & Village - Minneapolis, MN

September 1, 2021 15,006 1,435 10,812 2,759 1,603 12,578 825 —

330 homes - Palisades - Minneapolis, MN

September 1, 2021 53,354 2,884 30,470 20,000 6,919 46,577 2,211 ( 2,353 )

96 homes - Plymouth Pointe - Minneapolis, MN

September 1, 2021 14,450 370 9,061 5,019 1,042 12,809 599 —

93 homes - Pointe West - St.

September 1, 2021 7,558 91 3,605 3,862 246 6,849 463 —

301 homes - River Pointe - Minneapolis MN

September 1, 2021 38,348 2,249 21,653 14,446 3,346 33,117 1,885 —

70 homes - Southdale Parc - Minneapolis, MN

September 1, 2021 9,670 165 7,907 1,598 1,569 7,740 361 —

62 homes - Portage - Minneapolis, MN

September 1, 2021 9,171 323 5,588 3,260 2,133 6,685 353 —

200 homes - Windsor Gates - Minneapolis, MN

September 1, 2021 22,231 1,122 12,080 9,029 2,140 18,943 1,148 —

136 homes - Wingate - Minneapolis, MN

September 1, 2021 15,784 723 10,246 4,815 1,480 13,530 774 —

178 homes - Woodhaven - Minneapolis, MN

September 1, 2021 25,009 1,682 15,200 8,127 3,940 20,080 989 —

288 homes - Woodland Pointe - Minneapolis, MN

September 1, 2021 47,796 437 29,438 17,921 5,367 40,422 2,007 —

176 homes - Civic Lofts - Denver, CO

December 21, 2021 63,000 63,000 — — 6,166 55,204 1,630 —

Total Acquisitions $ 499,816 $ 155,599 $ 217,513 $ 126,704 $ 51,746 $ 431,189 $ 19,234 $ ( 2,353 )

(1) Includes $ 36.1 million for additional fair value of Series E preferred units and excludes $ 9.1 million in capitalized transaction costs for the September 1, 2021 portfolio acquisition.

(2) Fair value of Series E preferred units at the acquisition date.

(3) Payoff of debt or assumption of seller's debt upon closing.

(4) Intangible assets consist of in-place leases valued at the time of acquisition.

(5) Debt discount on assumed mortgage.

We had no dispositions during the year ended December 31, 2022 compared to dispositions of $ 62.3 million during the year ended December 31, 2021.

The dispositions for the years ended December 31, 2021 are detailed below.

During the year ended December 31, 2023, Centerspace disposed of 13 apartment communities and associated commercial space in five transactions for an aggregate sales price of $ 226.8 million.

Centerspace did not dispose of any real estate during the year ended December 31, 2022.

The dispositions for the year ended December 31, 2023 are detailed below.

Year Ended December 31, 2023

2 unchanged sentences

Dispositions Disposed Sales Price and Sale Cost Gain/(Loss)

76 homes - Crystal Bay-Rochester, MN

May 25, 2021 $ 13,650 $ 10,255 $ 3,395

40 homes - French Creek-Rochester, MN

May 25, 2021 6,700 4,474 2,226

182 homes - Heritage Manor-Rochester, MN

May 25, 2021 14,125 4,892 9,233

140 homes - Olympik Village-Rochester, MN

May 25, 2021 10,725 6,529 4,196

151 homes - Winchester/Village Green-Rochester, MN

May 25, 2021 14,800 7,010 7,790

$ 60,000 $ 33,160 $ 26,840

Minot IPS October 18, 2021 $ 2,250 $ 1,573 $ 677

115 homes - Boulder Court - Eagan, MN

March 8, 2023 $ 14,605 $ 4,971 $ 9,634

498 homes - 2 Nebraska apartment communities

March 14, 2023 48,500 15,025 33,475

892 homes - 5 Minnesota apartment communities

March 15, 2023 74,500 55,186 19,314

62 homes - Portage - Minneapolis, MN

March 15, 2023 6,650 9,098 ( 2,448 )

712 homes - 4 North Dakota apartment communities

September 14, 2023 82,500 71,235 11,265

Total Dispositions $ 226,755 $ 155,515 $ 71,240

NOTE 10 • SEGMENTS

We operate in a single reportable segment which includes the ownership, management, development, redevelopment, and acquisition of apartment communities.

Each of our operating properties is considered a separate operating segment because each property earns revenues, incurs expenses, and has discrete financial information.

Our chief operating decision-makers evaluate each property’s operating results to make decisions about resources to be allocated and to assess performance.

We do not group our operations based on geography, size, or type.

Our apartment communities have similar long-term economic characteristics and provide similar products and services to our residents.

Centerspace operates in a single reportable segment which includes the ownership, management, development, redevelopment, and acquisition of apartment communities.

Each of the operating properties is considered a separate operating segment because each property earns revenues, incurs expenses, and has discrete financial information.

The chief operating decision-makers evaluate each property’s operating results to make decisions about resources to be allocated and to assess performance and do not group the properties based on geography, size, or type for this purpose.

The apartment communities have similar long-term economic characteristics and provide similar products and services to residents.

No apartment community comprises more than 10% of consolidated revenues, profits, or assets.

Accordingly, our apartment communities are aggregated into a single reportable segment.

“All other” is composed of non-multifamily properties, non-multifamily components of mixed use properties, and properties disposed or designated as held for sale.

Our executive management team comprises our chief operating decision-makers.

This team measures the performance of our reportable segment based on net operating income (“NOI”), which we define as total real estate revenues less property operating expenses, including real estate taxes.

We believe that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, and general and administrative expense.

NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.

The following tables present NOI for the years ended December 31, 2022, 2021, and 2020 from our reportable segment and reconcile net operating income to net income as reported in the consolidated financial statements.

Accordingly, the apartment communities are aggregated into a single reportable segment.

“All other” is composed of non-multifamily properties, non-multifamily components of mixed-use properties and apartment communities the Company has disposed or designated as held for sale.

During the year ended December 31, 2023, 13 sold apartment communities were reclassified from the multifamily segment to all other for all periods presented.

The chief executive officer and chief financial officer are the chief operating decision-makers.

This team measures the performance of the reportable segment based on net operating income (“NOI”), a non-GAAP measure, which the Company defines as total real estate revenues less property operating expenses, including real estate taxes.

Centerspace believes that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that excludes gain (loss) on the sale of real estate and other assets, impairment, depreciation, amortization, financing, property

management overhead, loss on litigation, casualty losses, and general and administrative expense.

NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance.

The following tables present NOI for the years ended December 31, 2023, 2022, and 2021, respectively, along with reconciliations to net income as reported in the Consolidated Financial Statements.

Segment assets are also reconciled to total assets as reported in the Consolidated Financial Statements.

7 unchanged sentences

Depreciation and amortization ( 101,678 )

Impairment of real estate investments ( 5,218 )

General and administrative expenses ( 20,080 )

Gain (loss) on sale of real estate and other investments 41

Gain on sale of real estate and other investments 71,244

Loss on litigation settlement ( 3,864 )

Interest expense ( 36,429 )

Interest and other income (loss) 1,248

Net income (loss) $ ( 17,641 )

Interest and other income 1,207

Net income $ 49,231

(in thousands)

7 unchanged sentences

General and administrative expenses ( 17,516 )

Gain (loss) on sale of real estate and other investments 27,518

Gain on sale of real estate and other investments 41

Interest expense ( 32,750 )

Interest and other income 1,248

Net income (loss) $ ( 2,101 )

Net loss $ ( 17,641 )

(in thousands)

7 unchanged sentences

General and administrative expenses ( 16,213 )

Gain (loss) on sale of real estate and other investments 25,503

Gain on sale of real estate and other investments 27,518

Interest expense ( 29,078 )

Interest and other income ( 1,575 )

Net income (loss) $ 4,743

Interest income and other loss ( 2,915 )

Net loss $ ( 2,101 )

Segment Assets and Accumulated Depreciation

4 unchanged sentences

Less accumulated depreciation ( 526,565 ) ( 4,138 ) ( 530,703 )

Total property owned $ 1,980,249 $ 18,474 $ 1,998,723

Total real estate investments $ 1,875,979 $ 13,464 $ 1,889,443

Cash and cash equivalents 8,630

7 unchanged sentences

Less accumulated depreciation ( 443,828 ) ( 91,573 ) ( 535,401 )

Total property owned $ 1,808,246 $ 19,332 $ 1,827,578

Total real estate investments $ 1,830,374 $ 168,349 $ 1,998,723

Cash and cash equivalents 10,458

1 unchanged sentence

Other assets 22,687

Mortgage loans receivable 43,276

Total Assets $ 2,033,301

NOTE 11 • RETIREMENT PLANS

We sponsor a defined contribution 401(k) plan to provide retirement benefits for employees that meet minimum employment criteria.

We currently match, dollar for dollar, employee contributions to the 401(k) plan in an amount equal to up to 5.0 % of the eligible wages of each participating employee.

Centerspace sponsors a defined contribution 401(k) plan to provide retirement benefits for employees that meet minimum employment criteria.

Centerspace currently matches, dollar for dollar, employee contributions to the 401(k) plan in an amount equal to up to 5.0 % of the eligible wages of each participating employee.

Matching contributions are fully vested when made.

We recognized expense of approximately $ 1.3 million, $ 1.0 million, and $ 875,000 in the years ended December 31, 2022, 2021, and 2020, respectively.

Centerspace recognized expense of approximately $ 1.3 million, $ 1.3 million, and $ 1.0 million in the years ended December 31, 2023, 2022, and 2021, respectively.

NOTE 12 • COMMITMENTS AND CONTINGENCIES

Legal Proceedings .

We are currently the named defendant in a lawsuit where the owner of a neighboring property claims a retaining wall at one of our properties is causing water damage to the neighboring property.

The claim is for damage to the property and monetary losses.

We cannot, with any level of certainty, predict the outcome of the lawsuit or provide an estimate for any potential settlement.

We are involved in various lawsuits arising in the normal course of business and believe that such matters will not have a material adverse effect on our consolidated financial statements.

Centerspace was the named defendant in a lawsuit where the owner of a neighboring property claims a retaining wall at one of its properties is causing water damage to the neighboring property.

The claim was for damage to the property and monetary losses.

The Company recorded a loss on litigation settlement of $ 3.9 million due to a trial judgment against Centerspace.

The original judgment was ordered on October 9, 2023 for $ 2.9 million which the Company immediately paid.

In November 2023, the claimant filed motions requesting additional interest on the judgment and trial costs.

Subsequent to December 31, 2023, the claimant was awarded an additional $ 1.0 million in judgment related interest and costs.

The Company paid the additional amount and recorded the loss on litigation for the year ended December 31, 2023.

The Company cannot, with any level of certainty, predict or estimate if there will be additional costs incurred as a result of the lawsuit as the matter is ongoing.

Centerspace is involved in various lawsuits arising in the normal course of business and believes that such matters will not have a material adverse effect on the Consolidated Financial Statements.

Environmental Matters .

It is generally our policy to obtain a Phase I environmental assessment of each property that we seek to acquire.

Such assessments have not revealed, nor are we aware of, any environmental liabilities that we believe would have a material adverse effect on our financial position or results of operations.

We own properties that contain or potentially contain (based on the age of the property) asbestos, lead, or underground storage tanks.

For certain of these properties, we estimated the fair value of the conditional asset retirement obligation and chose not to book a liability because the amounts involved were immaterial.

With respect to certain other properties, we have not recorded any related asset retirement obligation as the fair value of the liability cannot be reasonably estimated due to insufficient information.

We believe we do not have sufficient information to estimate the fair value of the asset retirement obligations for these properties because a settlement date or range of potential settlement dates has not been specified by others.

It is generally the Company’s policy to obtain a Phase I environmental assessment of each property that it seeks to acquire.

Such assessments have not revealed, nor is the Company aware of, any environmental liabilities that it believes would have a material adverse effect on its financial position or results of operations.

Centerspace owns properties that contain or potentially contain (based on the age of the property) asbestos, lead, or underground storage tanks.

For certain of these properties, the Company estimated the fair value of the conditional asset retirement obligation and chose not to book a liability because the amounts involved were immaterial.

With respect to certain other properties, Centerspace has not recorded any related asset retirement obligation as the fair value of the liability cannot be reasonably estimated due to insufficient information.

The Company believes it does not have sufficient information to estimate the fair value of the asset retirement obligations for these properties because a settlement date or range of potential settlement dates has not been specified by others.

These properties are expected to be maintained by repairs and maintenance activities that would not involve the removal of the asbestos, lead, and/or underground storage tanks.

Under various federal, state, and local laws, ordinances, and regulations, a current or previous owner or operator of real estate may be liable for the costs of removal of, or remediation of, certain hazardous or toxic substances in, on, around, or under the property.

While the Company currently has no knowledge of any material violation of environmental laws, ordinances, or regulations at any of the properties, there can be no assurance that areas of contamination will not be identified at any of its properties or that changes in environmental laws, regulations, or cleanup requirements would not result in material costs.

We carry insurance coverage on our properties in amounts and types that we believe are customarily obtained by owners of similar properties and are sufficient to achieve our risk management objectives.

Restrictions on Taxable Dispositions.

Thirty-seven of our apartment communities, consisting of approximately 6,758 homes, are subject to restrictions on taxable dispositions under agreements entered into with some of the sellers or contributors of the properties and are effective for varying periods.

We do not believe that the agreements materially affect the conduct of our business or our decisions whether to dispose of restricted properties during the restriction period because we generally hold these and our other properties for investment purposes rather than for sale.

Where we deem it to be in our shareholders’ best interests to dispose of such properties, we generally seek to structure sales of such properties as tax deferred transactions under Section 1031 of the Code.

Otherwise, we may be required to provide tax indemnification payments to the parties to these agreements.

While the Company currently has no knowledge of any material violation of environmental laws, ordinances, or

regulations at any of the properties, there can be no assurance that areas of contamination will not be identified at any of its properties or that changes in environmental laws, regulations, or cleanup requirements would not result in material costs.

Centerspace carries insurance coverage on its properties in amounts and types that it believes are customarily obtained by owners of similar properties and are sufficient to achieve its risk management objectives.

Limitations on Taxable Dispositions.

Twenty-eight apartment communities, consisting of approximately 4,935 homes, are subject to limitations on taxable dispositions under agreements entered into with certain sellers or contributors of the properties and are effective for varying periods.

Centerspace does not believe that the agreements materially affect the conduct of its business or its decisions whether to dispose of these properties during the limitation period because it generally holds these and other properties for investment purposes rather than for sale.

In addition, where the Company deems it to be in the shareholders’ best interests to dispose of such properties, it generally seeks to structure sales of such properties as tax-deferred transactions under Section 1031 of the Internal Revenue Code.

Otherwise, the Company may be required to provide tax indemnification payments to the parties to these agreements.

Redemption Value of Units .

Pursuant to a Unitholder’s exercise of its Exchange Rights, we have the right, in our sole discretion, to acquire such Units by either making a cash payment or acquiring the Units for our common shares, on a one -for-one basis.

Pursuant to a Unitholder’s exercise of its Exchange Rights, the Company has the right, in its sole discretion, to acquire such Units by either making a cash payment or exchanging the Units for its common shares, on a one -for-one basis.

All Units receive the same per Unit cash distributions as the per share dividends paid on common shares.

Units are redeemable for an amount of cash per Unit equal to the average of the daily market price of our common shares for the ten consecutive trading days immediately preceding the date of valuation of the Unit.

As of December 31, 2022 and 2021, the aggregate redemption value of the then-outstanding Units owned by limited partners, as determined by the ten-day average market price for our common shares, was approximately $ 58.0 million and $ 90.9 million, respectively.

Units are redeemable for an amount of cash per Unit equal to the average of the daily market price of common shares for the ten consecutive trading days immediately preceding the date of valuation of the Unit.

As of December 31, 2023 and 2022, the aggregate redemption value of the then-outstanding Units owned by limited partners, as determined by the ten-day average market price for the common shares, was approximately $ 50.4 million and $ 58.0 million, respectively.

Unfunded Commitments.

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NOTE 13 • SHARE-BASED COMPENSATION

Share-based awards are provided to officers, non-officer employees, and trustees under our 2015 Incentive Plan approved by shareholders on September 15, 2015, as amended and restated on May 18, 2021 which allows for awards in the form of cash, unrestricted, and restricted common shares, stock options, stock appreciation rights, and restricted stock units (“RSUs”) up to an aggregate of 775,000 shares over the ten-year period in which the plan will be in effect.

Under our 2015 Incentive Plan,

officers and non-officer employees may earn share awards under a long-term incentive plan (“LTIP”), which is a forward-looking program that measures long-term performance over the stated performance period.

Share-based awards are provided to officers, non-officer employees, and trustees under the 2015 Incentive Plan approved by shareholders on September 15, 2015, as amended and restated on May 18, 2021 (the “2015 Incentive Plan”), which allows for awards in the form of cash, unrestricted and restricted common shares, stock options, stock appreciation rights, and restricted stock units (“RSUs”) up to an aggregate of 775,000 shares over the ten-year period in which the plan is in effect.

Under the 2015 Incentive Plan, officers and non-officer employees may earn share awards under a long-term incentive plan (“LTIP”), which is a forward-looking program that measures long-term performance over the stated performance period.

These awards are payable to the extent deemed earned in shares.

The terms of the long-term incentive awards granted under the program may vary from year to year.

The terms of the long-term incentive awards granted under the revised program may vary from year to year.

Through December 31, 2023, awards under the 2015 Incentive Plan consisted of restricted and unrestricted common shares, RSUs, and stock options.

We account for forfeitures of restricted and unrestricted common shares, RSUs, and stock options when they occur instead of estimating the forfeitures.

The Company accounts for forfeitures of restricted and unrestricted common shares, RSUs, and stock options when they occur instead of estimating the forfeitures.

Year Ended December 31, 2023 LTIP Awards

Awards granted to employees on January 1, 2022, consist of an aggregate of 5,849 time-based RSU awards, 13,407 performance based RSUs based on total shareholder return (“TSR”), and 30,002 stock options.

Awards granted to employees on January 1, 2023 consisted of an aggregate of 14,256 time-based RSU awards, 20,497 performance RSUs based on total shareholder return (“TSR”), and 45,955 stock options.

The time-based RSUs vest as to one-third of the shares on each of January 1, 2024, January 1, 2025, and January 1, 2026.

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Dividend yield 4.977 %

The TSR performance RSUs are earned based on the Company’s TSR as compared to the FTSE Nareit Apartment Index over a forward looking three-year period.

The performance RSUs are earned based on the Company’s TSR as compared to the FTSE Nareit Equity Index over a forward looking three-year period.

The maximum number of RSUs eligible to be earned is 40,994 RSUs, which is 200 % of the RSUs granted.

1 unchanged sentence

These awards have market conditions in addition to service conditions that must be met for the awards to vest.

Compensation expense is recognized ratably based on the grant date fair value, as determined using the Monte Carlo valuation model, regardless of whether the market conditions are achieved and the awards ultimately vest.

Compensation expense is recognized ratably based on the grant date fair value, as determined using the Monte Carlo valuation model, regardless of whether the market

conditions are achieved and the awards ultimately vest.

Therefore, previously recorded compensation expense is not adjusted in the event that the market conditions are not achieved.

The Company based the expected volatility on a weighted average of the historical volatility of the Company’s daily closing share price and a select peer average volatility, the risk-free interest rate on the interest rates on U.S.

The Company based the expected volatility on a weighted average of the historical volatility of the Company’s daily closing share price, the risk-free interest rate on the interest rates on U.S.

treasury bonds with a maturity equal to the remaining performance period of the award, and the expected term on the performance period of the award.

1 unchanged sentence

The share price at the grant date, January 1, 2023, was $ 58.67 per share.

Awards granted to employees on February 1, 2022, consist of an aggregate of 1,295 time-based RSU awards which vest as to one-third of the RSUs on each of February 1, 2023, February 1, 2024, and February 1, 2025.

Awards granted to trustees on May 17, 2022 consisted of 6,563 RSUs with a one-year vesting period.

All of these awards are classified as equity awards.

We recognize compensation expense associated with the time-based awards ratably over the requisite service period.

The fair value of share awards at grant date for non-employee trustees was approximately $ 618,000 , $ 425,000 , and $ 533,000 for the years ended December 31, 2022, 2021, and 2020, respectively.

On March 31, 2023, in connection with her appointment to President and Chief Executive Officer, Anne Olson received a one-time stock award of 5,492 RSUs, which will vest in full on March 31, 2026.

On March 31, 2023, in connection with the change in executive management, Bhairav Patel, CFO, received a one-time stock award of 2,746 RSUs.

One-third of the RSUs will vest on March 31, 2025 and the remaining two-thirds will vest on March 31, 2026.

Share-Based Compensation Expense

4 unchanged sentences

Share-based compensation expense $ 3,295 $ 2,615 $ 2,689

On March 31, 2023, the Company accelerated the vesting of all unvested time-based RSUs and stock options in connection with the Separation Agreement with Mr.

This resulted in the acceleration of share-based compensation expense for those awards resulting in an additional $ 737,000 in expense during the year ended December 31, 2023.

Any performance-based RSUs were prorated, in accordance with the award agreement, and will vest at the end of performance period based on actual performance.

The remaining performance-based RSUs were forfeited.

Decker exercised stock options prior to their expiration on June 30, 2023 in a cashless exercise with a net 425 shares issued.

Restricted Stock Units

During the year ended December 31, 2022, we issued 8,203 time-based RSUs to employees and 7,156 to trustees.

During the year ended December 31, 2023, the Company issued 22,799 time-based RSUs to employees and 9,200 to trustees.

The RSUs to employees generally vest over a three-year period and the RSUs to trustees generally vest over a one-year period.

The fair value of the time-based RSUs granted during the year ended December 31, 2022 was $ 1.5 million.

The total compensation cost

related to non-vested time-based RSUs not yet recognized is $ 646,000 , which we expect to recognize over a weighted average period of 1.3 years.

The unamortized value of RSUs with market conditions as of December 31, 2022, 2021, and 2020, was approximately $ 1.7 million, $ 1.1 million, and $ 487,000 , respectively.

The activity for the years ended December 31, 2022, 2021, and 2020, related to our RSUs was as follows:

The fair value of the time-based RSUs granted during the years ended December 31, 2023, 2022, and 2021 was $ 1.8 million, $ 1.5 million, and $ 1.0 million, respectively.

The fair value of share awards at grant date for non-employee trustees was approximately $ 545,000 , $ 618,000 , and $ 425,000 for the years ended December 31, 2023, 2022, and 2021, respectively.

All of these awards are classified as equity awards.

We recognize compensation expense associated with the time-based awards ratably over the requisite service period.

The total compensation cost related to non-vested time-based RSUs not yet recognized is $ 798,000 , which the Company expects to recognize over a weighted average period of 1.6 years.

The unamortized value of RSUs with market conditions as of December 31, 2023, 2022, and 2021 was approximately $ 1.0 million, $ 1.7 million, and $ 1.1 million, respectively.

The activity for the years ended December 31, 2023, 2022, and 2021 related to RSUs was as follows:

RSUs with Service Conditions RSUs with Market Conditions

9 unchanged sentences

Vested ( 13,357 ) 69.24 — —

Change in awards (1)

Forfeited ( 1,562 ) 76.49 ( 2,741 ) 87.04

6 unchanged sentences

Stock Options

During the year ended December 31, 2022, we issued 30,245 stock options to employees.

During the year ended December 31, 2023, Centerspace issued 45,955 stock options to employees.

The stock options vest over a four-year period.

The weighted average grant date fair value of the stock options granted during the year ended December 31, 2023 was $ 11.086 per share.

The total compensation costs related to non-vested stock options not yet recognized is $ 363,000 , which we expect to recognize over a weighted average period of 2.53 years.

The total compensation costs related to non-vested stock options not yet recognized is $ 203,000 , which the Company expects to recognize over a weighted average period of 2.65 years.

The stock option activity for the years ended December 31, 2023, 2022, and 2021 was as follows:

1 unchanged sentence

Outstanding at December 31, 2020 139,048 $ 66.36

Exercisable at December 31, 2020 — —

Granted 43,629 70.64

10 unchanged sentences

Exercised ( 20,061 ) 58.67

Expired ( 103,768 ) 73.03

Forfeited ( 1,739 ) 80.66

4 unchanged sentences

NOTE 14 • SUBSEQUENT EVENTS

Subsequent to December 31, 2022, we entered into definitive purchase and sale agreements for nine communities and believe they will close in the first quarter.The closing of pending transactions is subject to certain conditions and restrictions;

Subsequent to December 31, 2023, Centerspace entered into definitive purchase and sale agreements for two communities with expected gross proceeds of $ 18.9 million.

The Company believes the sales will close in the first quarter.

The closing of pending transactions is subject to certain conditions and restrictions;

therefore, there can be no assurance that the transactions will be consummated or that the final terms will not differ in material respects .

Subsequent to December 31, 2023, Centerspace repurchased 87,722 common shares for total consideration of $ 4.7 million and an average price of $ 53.62 per share.

CENTERSPACE AND SUBSIDIARIES

3 unchanged sentences

Initial Cost to Company Close of Period Depreciation in

Costs Capitalized Date of Latest Income

Buildings & Subsequent to Buildings & Accumulated Construction Statement is

Costs Capitalized Latest Income

Buildings & Subsequent to Land &

Buildings & Accumulated Date of Date of

Description Encumbrances (1)

Land Improvements Acquisition Land Improvements Total Depreciation or Acquisition Computed

71 France - Edina, MN $ 50,933 $ 4,721 $ 61,762 $ 781 $ 4,801 $ 62,463 $ 67,264 $ ( 19,278 ) 2016 30 - 37

Alps Park Apartments - Rapid City, SD — 287 5,551 731 336 6,233 6,569 ( 2,053 ) 2013 30 - 37

Land Improvements Acquisition Improvements

Improvements Total Depreciation Construction (2)

Acquisition (3)

71 France - Edina, MN $ 49,675 $ 4,721 $ 61,762 $ 1,653 $ 4,801 $ 63,335 $ 68,136 $ ( 21,322 ) 2014 2014 Up to 37

Alps Park Apartments - Rapid City, SD — 287 5,551 671 336 6,173 6,509 ( 2,162 ) 1995 2013 Up to 37

Arcata Apartments - Golden Valley, MN

— 2,088 31,036 576 2,128 31,572 33,700 ( 10,664 ) 2015 30 - 37

Ashland Apartment Homes - Grand Forks, ND — 741 7,569 402 823 7,889 8,712 ( 2,981 ) 2012 30 - 37

Avalon Cove Townhomes - Rochester, MN — 1,616 34,074 1,880 1,808 35,762 37,570 ( 8,751 ) 2016 30 - 37

Boulder Court Apartment Homes - Eagan, MN — 1,067 5,498 3,179 1,576 8,168 9,744 ( 4,980 ) 2003 30 - 37

Canyon Lake Apartments - Rapid City, SD — 305 3,958 2,471 420 6,314 6,734 ( 3,645 ) 2001 30 - 37

Cardinal Point Apartments - Grand Forks, ND — 1,600 33,400 540 1,727 33,813 35,540 ( 5,318 ) 2013 30 - 37

Cascade Shores Townhomes + Flats - Rochester, MN 45,100 6,588 67,072 9,623 6,776 76,507 83,283 ( 19,922 ) 2015-2016 30 - 37

Castlerock Apartment Homes - Billings, MT — 736 4,864 2,441 1,045 6,996 8,041 ( 4,917 ) 1998 30 - 37

Chateau Apartment Homes - Minot, ND — 301 20,058 1,256 326 21,289 21,615 ( 7,659 ) 2013 30 - 37

Cimarron Hills Apartments - Omaha, NE 8,700 706 9,588 5,256 1,639 13,911 15,550 ( 8,665 ) 2001 30 - 37

Commons and Landing at Southgate - Minot, ND — 5,945 47,512 2,793 6,424 49,826 56,250 ( 17,451 ) 2015 30 - 37

Connelly on Eleven - Burnsville, MN — 2,401 11,515 17,012 3,206 27,722 30,928 ( 16,356 ) 2003 30 - 37

Cottonwood Apartment Homes - Bismarck, ND — 1,056 17,372 6,308 1,962 22,774 24,736 ( 13,762 ) 1997 30 - 37

Country Meadows Apartment Homes - Billings, MT — 491 7,809 1,742 599 9,443 10,042 ( 6,184 ) 1995 30 - 37

— 2,088 31,036 781 2,128 31,777 33,905 ( 11,660 ) 2013 2013 Up to 37

Ashland Apartment Homes - Grand Forks, ND — 741 7,569 285 823 7,772 8,595 ( 3,120 ) 2010 2012 Up to 37

Avalon Cove Townhomes - Rochester, MN — 1,616 34,074 4,984 1,808 38,866 40,674 ( 10,222 ) 2001 2016 Up to 37

Bayberry Place - Eagan, MN 11,048 1,807 14,113 1,637 1,865 15,692 17,557 ( 1,347 ) 1995 2021 30 years

Burgundy & Hillsboro - New Hope, MN 23,570 2,834 31,149 2,132 2,913 33,202 36,115 ( 3,066 ) 1968 2021 30 years

Canyon Lake Apartments - Rapid City, SD — 305 3,958 2,335 420 6,178 6,598 ( 3,591 ) 1972 2001 Up to 37

Cardinal Point Apartments - Grand Forks, ND — 1,600 33,400 ( 111 ) 1,727 33,162 34,889 ( 6,287 ) 2013 2013 Up to 37

Cascade Shores Townhomes + Flats - Rochester, MN 43,835 6,588 67,072 10,705 6,776 77,589 84,365 ( 23,733 ) 2010 2015 Up to 37

Castlerock Apartment Homes - Billings, MT — 736 4,864 2,075 1,045 6,630 7,675 ( 4,782 ) 1979 1998 Up to 37

Civic Lofts - Denver, CO — 6,166 55,182 597 6,171 55,774 61,945 ( 4,525 ) 2019 2021 30 years

Connelly on Eleven - Burnsville, MN — 2,401 11,515 16,844 3,206 27,554 30,760 ( 18,022 ) 1970 2003 Up to 37

Cottonwood Apartment Homes - Bismarck, ND — 1,056 17,372 6,823 1,962 23,289 25,251 ( 14,117 ) 1998 1997 Up to 37

Country Meadows Apartment Homes - Billings, MT — 491 7,809 1,437 599 9,138 9,737 ( 6,079 ) 1997 1995 Up to 37

Cypress Court Apartments - St.

Cloud, MN 11,023 1,583 18,879 666 1,625 19,503 21,128 ( 6,593 ) 2012 30 - 37

Deer Ridge Apartment Homes - Jamestown, ND — 711 24,129 459 785 24,514 25,299 ( 8,119 ) 2013 30 - 37

Donovan Apartment Homes - Lincoln, NE — 1,515 15,730 6,822 1,817 22,250 24,067 ( 7,838 ) 2012 30 - 37

Cloud, MN 10,697 1,583 18,879 1,074 1,625 19,911 21,536 ( 7,089 ) 2014 2012 Up to 37

Deer Ridge Apartment Homes - Jamestown, ND — 711 24,129 814 785 24,869 25,654 ( 8,883 ) 2016 2013 Up to 37

Donovan Apartment Homes - Lincoln, NE — 1,515 15,730 8,263 1,817 23,691 25,508 ( 8,980 ) 1992 2012 Up to 37

Dylan at RiNo - Denver, CO — 12,155 77,215 1,376 12,241 78,505 90,746 ( 16,307 ) 2016 2017 30 years

Evergreen Apartment Homes - Isanti, MN — 1,129 5,524 713 1,159 6,207 7,366 ( 2,550 ) 2008 30 - 37

Evergreen Apartment Homes - Isanti, MN — 1,129 5,524 753 1,159 6,247 7,406 ( 2,666 ) 2006 2008 Up to 37

FreightYard Townhomes & Flats - Minneapolis, MN — 1,889 23,616 1,447 1,745 25,207 26,952 ( 4,006 ) 1900 2019 30 years

Gardens Apartments - Grand Forks, ND — 518 8,702 160 535 8,845 9,380 ( 2,441 ) 2015 30 - 37

Gardens Apartments - Grand Forks, ND — 518 8,702 152 535 8,837 9,372 ( 2,761 ) 2015 2015 Up to 37

Grand Gateway Apartment Homes - St.

Cloud, MN — 814 7,086 2,388 970 9,318 10,288 ( 4,316 ) 2012 30 - 37

Greenfield - Omaha, NE — 578 4,122 3,241 876 7,065 7,941 ( 3,324 ) 2007 30 - 37

Homestead Garden Apartments - Rapid City, SD — 655 14,139 1,547 792 15,549 16,341 ( 4,560 ) 2015 30 - 37

Cloud, MN — 814 7,086 3,336 970 10,266 11,236 ( 4,460 ) 2002 2012 Up to 37

Greenfield - Omaha, NE — 578 4,122 3,147 876 6,971 7,847 ( 3,653 ) 1992 2007 Up to 37

Grove Ridge - Cottage Grove, MN 7,992 1,250 10,271 790 1,293 11,018 12,311 ( 981 ) 1973 2021 30 years

Homestead Garden Apartments - Rapid City, SD — 655 14,139 1,783 792 15,785 16,577 ( 5,006 ) 2004 2014 Up to 37

Ironwood - New Hope, MN — 2,165 36,874 764 2,167 37,636 39,803 ( 5,435 ) 2018 2020 30 years

Lakeside Village Apartment Homes - Lincoln, NE — 1,215 15,837 5,069 1,476 20,645 22,121 ( 7,156 ) 2012 30 - 37

Legacy Apartments - Grand Forks, ND — 1,362 21,727 11,036 2,474 31,651 34,125 ( 20,814 ) 1995-2005 30 - 37

Lakeside Village Apartment Homes - Lincoln, NE — 1,215 15,837 5,945 1,476 21,521 22,997 ( 8,013 ) 2000 2012 Up to 37

Legacy Apartments - Grand Forks, ND — 1,362 21,727 11,075 2,474 31,690 34,164 ( 21,434 ) 1996 1995 Up to 37

Legacy Heights Apartment Homes - Bismarck, ND

— 1,207 13,742 399 1,142 14,206 15,348 ( 3,592 ) 2015 30 - 37

— 1,207 13,742 300 1,142 14,107 15,249 ( 3,961 ) 2015 2015 Up to 37

Lugano at Cherry Creek - Denver, CO — 7,679 87,766 8,410 7,679 96,176 103,855 ( 15,386 ) 2010 2019 30 years

Meadows Apartments - Jamestown, ND — 590 4,519 2,103 730 6,482 7,212 ( 4,287 ) 1998 30 - 37

Meadows Apartments - Jamestown, ND — 590 4,519 1,992 730 6,371 7,101 ( 4,133 ) 1999 1998 Up to 37

Monticello Crossings - Monticello, MN

— 1,734 30,136 631 1,951 30,550 32,501 ( 7,538 ) 2017 30 - 37

Monticello Village - Monticello, MN — 490 3,756 1,263 655 4,854 5,509 ( 2,865 ) 2004 30 - 37

Northridge Apartments - Bismarck, ND — 884 7,515 266 1,048 7,617 8,665 ( 2,182 ) 2015 30 - 37

Olympic Village Apartments - Billings, MT — 1,164 10,441 4,464 1,885 14,184 16,069 ( 9,160 ) 2000 30 - 37

— 1,734 30,136 556 1,951 30,475 32,426 ( 8,329 ) 2017 2014 Up to 37

Monticello Village - Monticello, MN — 490 3,756 1,206 655 4,797 5,452 ( 2,924 ) 2001 2004 Up to 37

New Hope Garden & Village - New Hope, MN 9,943 1,603 12,578 1,393 1,651 13,923 15,574 ( 1,419 ) 1969 2021 30 years

Northridge Apartments - Bismarck, ND — 884 7,515 280 1,048 7,631 8,679 ( 2,412 ) 2014 2014 Up to 37

Olympic Village Apartments - Billings, MT — 1,164 10,441 4,174 1,885 13,894 15,779 ( 9,224 ) 2000 2000 Up to 37

Oxbo Urban Rentals - St Paul, MN — 5,809 51,586 711 5,822 52,284 58,106 ( 11,861 ) 2016 2017 30 years

Park Meadows Apartment Homes - Waite Park, MN — 1,143 9,099 10,149 2,140 18,251 20,391 ( 13,904 ) 1997 30 - 37

Palisades - Roseville, MN 21,622 6,919 46,577 4,806 6,959 51,343 58,302 ( 4,233 ) 1973 2021 30 years

Park Place Apartments - Plymouth, MN — 10,609 80,781 20,098 10,819 100,669 111,488 ( 26,469 ) 1985 2017 30 years

Parkhouse Apartment Homes - Thornton, CO — 10,474 132,105 1,583 10,484 133,678 144,162 ( 12,245 ) 2020 30 years

CENTERSPACE AND SUBSIDIARIES

3 unchanged sentences

Initial Cost to Company Close of Period Depreciation in

Costs Capitalized Date of Latest Income

Buildings & Subsequent to Buildings & Accumulated Construction Statement is

Costs Capitalized Latest Income

Buildings & Subsequent to Land &

Buildings & Accumulated Date of Date of

Description Encumbrances (1)

Land Improvements Acquisition Land Improvements Total Depreciation or Acquisition Computed

Plaza Apartments - Minot, ND — 867 12,784 3,160 1,011 15,800 16,811 ( 6,823 ) 2009 30 - 37

Pointe West Apartments - Rapid City, SD — 240 3,538 2,299 463 5,614 6,077 ( 4,303 ) 1994 30 - 37

Ponds at Heritage Place - Sartell, MN — 395 4,564 566 419 5,106 5,525 ( 1,993 ) 2012 30 - 37

Prosper West - Waite Park, MN 16,425 939 10,167 17,243 1,912 26,437 28,349 ( 14,646 ) 1995 30 - 37

Quarry Ridge Apartments - Rochester, MN 22,733 2,254 30,024 8,777 2,412 38,643 41,055 ( 14,145 ) 2006 30 - 37

Red 20 Apartments - Minneapolis, MN 20,256 1,900 24,116 758 1,908 24,866 26,774 ( 8,313 ) 2015 30 - 37

Land Improvements Acquisition Improvements

Improvements Total Depreciation Construction (2)

Acquisition (3)

Parkhouse Apartment Homes - Thornton, CO 89,239 10,474 132,105 3,074 10,484 135,169 145,653 ( 17,666 ) 2016 2020 30 years

Plymouth Pointe - Plymouth, MN 9,575 1,042 12,810 340 1,073 13,119 14,192 ( 1,261 ) 1968 2021 30 years

Pointe West Apartments - Rapid City, SD — 240 3,538 2,075 463 5,390 5,853 ( 4,267 ) 1985 1994 Up to 37

Ponds at Heritage Place - Sartell, MN — 395 4,564 510 419 5,050 5,469 ( 2,059 ) 2008 2012 Up to 37

Prosper West - Waite Park, MN 16,425 939 10,167 17,929 1,912 27,123 29,035 ( 16,762 ) 1989 1995 Up to 37

Quarry Ridge Apartments - Rochester, MN — 2,254 30,024 9,493 2,412 39,359 41,771 ( 16,051 ) 2001 2006 Up to 37

Red 20 Apartments - Minneapolis, MN 19,718 1,900 24,116 809 1,908 24,917 26,825 ( 9,063 ) 2013 2013 Up to 37

Regency Park Estates - St.

Cloud, MN 6,923 702 10,198 8,040 1,179 17,761 18,940 ( 6,476 ) 2011 30 - 37

Rimrock West Apartments - Billings, MT — 330 3,489 2,102 568 5,353 5,921 ( 3,623 ) 1999 30 - 37

River Ridge Apartment Homes - Bismarck, ND — 576 24,670 1,214 922 25,538 26,460 ( 9,992 ) 2008 30 - 37

Rocky Meadows Apartments - Billings, MT — 656 5,726 1,732 840 7,274 8,114 ( 5,084 ) 1995 30 - 37

Cloud, MN 6,669 702 10,198 8,683 1,179 18,404 19,583 ( 7,676 ) 1994 2011 Up to 37

Rimrock West Apartments - Billings, MT — 330 3,489 1,883 568 5,134 5,702 ( 3,588 ) 1975 1999 Up to 37

River Pointe - Fridley, MN 25,412 3,346 33,118 5,515 3,426 38,553 41,979 ( 3,750 ) 1971 2021 30 years

River Ridge Apartment Homes - Bismarck, ND — 576 24,670 1,432 922 25,756 26,678 ( 10,811 ) 2013 2008 Up to 37

Rocky Meadows Apartments - Billings, MT — 656 5,726 1,511 840 7,053 7,893 ( 5,019 ) 1996 1995 Up to 37

Rum River Apartments - Isanti, MN

— 843 4,823 542 870 5,338 6,208 ( 2,591 ) 2007 30 - 37

— 843 4,823 533 870 5,329 6,199 ( 2,632 ) 2005 2007 Up to 37

Silver Springs Apartment Homes - Rapid City, SD

— 215 3,007 1,116 273 4,065 4,338 ( 1,319 ) 2015 30 - 37

South Pointe Apartment Homes - Minot, ND — 550 9,548 6,374 1,489 14,983 16,472 ( 11,368 ) 1995 30 - 37

— 215 3,007 1,046 273 3,995 4,268 ( 1,376 ) 1985 2014 Up to 37

Southdale Parc - Richfield, MN (5)

5,301 1,569 7,740 ( 2,205 ) 1,618 5,486 7,104 ( 780 ) 1962 2021 30 years

SouthFork Townhomes + Flats - Lakeville, MN 21,675 3,502 40,153 11,288 3,583 51,360 54,943 ( 12,684 ) 1988 2019 30 years

Southpoint Apartments - Grand Forks, ND — 576 9,893 444 663 10,250 10,913 ( 3,098 ) 2013 30 - 37

Sunset Trail Apartment Homes - Rochester, MN — 336 12,814 3,621 826 15,945 16,771 ( 10,109 ) 1999 30 - 37

Thomasbrook Apartment - Lincoln, NE 13,100 600 10,306 6,391 1,710 15,587 17,297 ( 9,677 ) 1999 30 - 37

Southpoint Apartments - Grand Forks, ND — 576 9,893 409 663 10,215 10,878 ( 3,432 ) 2013 2013 Up to 37

Sunset Trail Apartment Homes - Rochester, MN — 336 12,814 5,961 826 18,285 19,111 ( 10,340 ) 2000 1999 Up to 37

Union Pointe - Longmont, CO — 5,727 69,966 678 5,736 70,635 76,371 ( 8,307 ) 2019 2021 30 years

Venue on Knox - Minneapolis, MN 11,660 3,438 14,743 5,997 3,530 20,648 24,178 ( 2,074 ) 1959 2021 30 years

Westend - Denver, CO — 25,525 102,180 1,578 25,532 103,751 129,283 ( 20,846 ) 2015 2018 30 years

Whispering Ridge - Omaha, NE 18,691 2,139 25,424 5,780 2,551 30,792 33,343 ( 10,636 ) 2012 30 - 37

Woodridge on Second - Rochester, MN — 370 6,028 6,373 761 12,010 12,771 ( 7,328 ) 1997 30 - 37

Whispering Ridge - Omaha, NE 21,800 2,139 25,424 5,595 2,551 30,607 33,158 ( 11,771 ) 2010 2013 Up to 37

Wingate - New Hope, MN (5)

10,459 1,480 13,530 ( 1,032 ) 1,526 12,452 13,978 ( 1,422 ) 1967 2021 30 years

Woodhaven - Minneapolis, MN 14,408 3,940 20,080 1,891 4,040 21,871 25,911 ( 1,849 ) 1974 2021 30 years

Woodland Pointe - Woodbury, MN 31,673 5,367 40,422 15,422 5,449 55,762 61,211 ( 5,160 ) 1974 2021 30 years

Woodridge on Second - Rochester, MN — 370 6,028 6,062 761 11,699 12,460 ( 7,746 ) 1990 1997 Up to 37

Total Same-Store $ 462,396 $ 177,545 $ 1,685,002 $ 243,970 $ 189,440 $ 1,917,077 $ 2,106,517 $ ( 512,452 )

Non-Same-Store

Bayberry Place - Eagan, MN 11,048 1,807 14,113 801 1,865 14,856 16,721 ( 736 ) 2021 30 years

Burgundy & Hillsboro - New Hope, MN 23,570 2,834 31,149 1,816 2,913 32,886 35,799 ( 1,686 ) 2021 30 years

Civic Lofts - Denver, CO — 6,166 55,182 172 6,171 55,349 61,520 ( 2,318 ) 2021 30 years

Elements of Linden Hills - Minneapolis, MN 5,842 941 7,853 290 949 8,135 9,084 ( 686 ) 2015 2022 30 years

Gatewood - Waite Park, MN 5,156 327 6,858 808 342 7,651 7,993 ( 428 ) 2021 30 years

Grove Ridge - Cottage Grove, MN 7,992 1,250 10,271 551 1,293 10,779 12,072 ( 546 ) 2021 30 years

Legacy Waite Park - Waite Park, MN 6,923 412 9,556 1,008 426 10,550 10,976 ( 580 ) 2021 30 years

Lake Vista Apartments Homes - Loveland, CO 49,033 6,618 80,737 434 6,649 81,140 87,789 ( 885 ) 2011 2023 30 years

Lyra Apartments - Centennial, CO 37,809 6,473 86,149 423 6,481 86,564 93,045 ( 4,500 ) 2022 2022 30 years

Martin Blu - Eden Prairie, MN 27,193 3,547 45,212 866 3,560 46,065 49,625 ( 3,756 ) 2015 2022 30 years

New Hope Garden & Village - New Hope, MN 9,943 1,603 12,578 1,032 1,651 13,562 15,213 ( 742 ) 2021 30 years

Noko Apartments - Minneapolis, MN — 1,915 42,636 295 1,918 42,928 44,846 ( 3,401 ) 2021 2022 30 years

Palisades - Roseville, MN 22,048 6,919 46,577 1,010 6,959 47,547 54,506 ( 2,360 ) 2021 30 years

Plymouth Pointe - Plymouth, MN 9,575 1,042 12,810 801 1,073 13,580 14,653 ( 723 ) 2021 30 years

Pointe West - St.

Cloud, MN 5,008 246 6,850 765 260 7,601 7,861 ( 422 ) 2021 30 years

Portage - Minneapolis, MN 5,991 2,133 6,685 535 2,226 7,127 9,353 ( 348 ) 2021 30 years

River Pointe - Fridley, MN 25,412 3,346 33,118 2,144 3,426 35,182 38,608 ( 1,764 ) 2021 30 years

Southdale Parc - Richfield, MN 5,301 1,569 7,740 466 1,618 8,157 9,775 ( 401 ) 2021 30 years

Union Pointe - Longmont, CO — 5,727 69,966 624 5,736 70,581 76,317 ( 5,495 ) 2021 30 years

Venue on Knox - Minneapolis, MN 11,660 3,438 14,743 2,514 3,530 17,165 20,695 ( 815 ) 2021 30 years

Zest - Minneapolis, MN 7,717 936 10,209 493 946 10,692 11,638 ( 885 ) 2016 2022 30 years

Total Non-Same-Store $ 127,594 $ 20,430 $ 272,796 $ 2,801 $ 20,503 $ 275,524 $ 296,027 $ ( 14,113 )

Total Multifamily $ 589,990 $ 197,975 $ 1,957,798 $ 246,771 $ 209,943 $ 2,192,601 $ 2,402,544 $ ( 526,565 )

Other - Mixed Use

71 France - Edina, MN (4)

— $ — $ 5,879 $ 616 $ — $ 6,495 $ 6,495 $ ( 1,665 ) 2014 2014 Up to 37

CENTERSPACE AND SUBSIDIARIES

3 unchanged sentences

Initial Cost to Company Close of Period Depreciation in

Costs Capitalized Date of Latest Income

Buildings & Subsequent to Buildings & Accumulated Construction Statement is

Costs Capitalized Latest Income

Buildings & Subsequent to Land &

Buildings & Accumulated Date of Date of

Description Encumbrances (1)

Land Improvements Acquisition Land Improvements Total Depreciation or Acquisition Computed

Windsor Gates - Brooklyn Park, MN 14,731 2,140 18,943 1,850 2,204 20,729 22,933 ( 1,065 ) 2021 30 years

Wingate - New Hope, MN 10,459 1,480 13,530 1,018 1,526 14,502 16,028 ( 766 ) 2021 30 years

Woodhaven - Minneapolis, MN 14,408 3,940 20,080 1,223 4,040 21,203 25,243 ( 1,036 ) 2021 30 years

Woodland Pointe - Woodbury, MN 31,675 5,367 40,422 3,932 5,449 44,272 49,721 ( 2,217 ) 2021 30 years

Zest - Minneapolis, MN 7,910 936 10,209 284 946 10,483 11,429 ( 421 ) 2022 30 years

Total Non-Same-Store $ 262,718 $ 65,558 $ 623,230 $ 24,116 $ 66,562 $ 646,342 $ 712,904 $ ( 29,868 )

Total Multifamily $ 498,277 $ 207,794 $ 2,050,346 $ 249,308 $ 225,217 $ 2,282,231 $ 2,507,448 $ ( 527,199 )

Other - Mixed Use

71 France - Edina, MN (2)

— $ — $ 5,879 $ 518 $ — $ 6,397 $ 6,397 $ ( 1,457 ) 2016 30 - 37

Land Improvements Acquisition Improvements

Improvements Total Depreciation Construction (2)

Acquisition (3)

Civic Lofts - Denver, CO — — — — — — — — 2019 2021 30 years

2 unchanged sentences

Oxbo Urban Rentals- St Paul, MN — — 3,472 54 — 3,526 3,526 ( 728 ) 2016 2017 30 years

Plaza Apartments - Minot, ND — 389 5,444 3,467 607 8,693 9,300 ( 4,683 ) 2009 30 - 37

Red 20 Apartments - Minneapolis, MN (4)

— — 2,525 434 — 2,959 2,959 ( 892 ) 2015 30 - 37

— — 2,525 434 — 2,959 2,959 ( 997 ) 2013 2013 Up to 37

Zest - Minneapolis, MN (4)

7 unchanged sentences

These amounts do not include amounts owing under the Company’s multi-bank line of credit, term loan, or unsecured senior notes.

(2) Date of construction represents the date the Company constructed the property or the date it was constructed from purchase records.

(3) Date of acquisition represents the date the Company acquired the property through purchase or acquisition.

(4) Encumbrances are listed with the multifamily property description.

(5) Costs capitalized subsequent to acquisition includes impairment charges.

CENTERSPACE AND SUBSIDIARIES

12 unchanged sentences

Cost of real estate sold ( 243,889 ) — ( 57,698 )

Impairment charge (1)

( 5,218 ) — —

( 14,745 ) ( 872 ) ( 9,764 )

Balance at close of year $ 2,420,146 $ 2,534,124 $ 2,271,170

12 unchanged sentences

$ 1,889,443 $ 1,998,723 $ 1,827,578

(1) During the year ended December 31, 2023, Centerspace recognized impairment on two apartment communities.

(2) Consists of the write off of fully depreciated assets and accumulated amortization and miscellaneous disposed assets.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures