3 unchanged sentences
(in thousands, except per share data)
−Removed: June 30, 2024 December 31, 2023
+Added: September 30, 2024 December 31, 2023
ASSETS (Unaudited)
16 unchanged sentences
COMMITMENTS AND CONTINGENCIES (NOTE 10)
−Removed: SERIES D PREFERRED UNITS (Cumulative convertible preferred units, $ 100 par value, 166 units issued and outstanding at June 30, 2024 and December 31, 2023, aggregate liquidation preference of $ 16,560 )
−Removed: $ 16,560 $ 16,560
−Removed: 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 June 30, 2024 and December 31, 2023, aggregate liquidation preference of $ 97,036 )
+Added: SERIES D PREFERRED UNITS (Cumulative convertible preferred units, $ 100 par value, 166 units issued and outstanding at September 30, 2024 and December 31, 2023, aggregate liquidation preference of $ 16,560 )
$ 16,560 $ 16,560
−Removed: Common Shares of Beneficial Interest (Unlimited authorization, no par value, 15,057 shares issued and outstanding at June 30, 2024 and 14,963 shares issued and outstanding at December 31, 2023)
+Added: Series C Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, $ 25 per share liquidation preference, no shares issued and outstanding at September 30, 2024 and 3,881 shares issued and outstanding December 31, 2023
+Added: Common Shares of Beneficial Interest (Unlimited authorization, no par value, 16,568 shares issued and outstanding at September 30, 2024 and 14,963 shares issued and outstanding at December 31, 2023)
1,270,752 1,165,694
10 unchanged sentences
(in thousands, except per share data)
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
3 unchanged sentences
Property management expense 2,242 2,197 6,794 7,012
−Removed: Casualty loss
+Added: Casualty (gain) loss
( 412 ) 937 918 1,242
20 unchanged sentences
Dividends to preferred shareholders ( 1,607 ) ( 1,607 ) ( 4,821 ) ( 4,821 )
+Added: Redemption of preferred shares ( 3,511 ) — ( 3,511 ) —
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
10 unchanged sentences
(in thousands)
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
16 unchanged sentences
(in thousands, except per share data)
−Removed: Six Months Ended June 30, 2023 PREFERRED
+Added: Nine Months Ended September 30, 2023 PREFERRED
SHARES NUMBER
21 unchanged sentences
Other ( 1 ) ( 56 ) ( 162 ) ( 218 )
−Removed: Balance at June 30, 2023 $ 93,530 14,949 $ 1,169,501 $ ( 522,796 ) $ ( 1,758 ) $ 226,931 $ 965,408
−Removed: Six Months Ended June 30, 2024
+Added: Balance at September 30, 2023 $ 93,530 15,052 $ 1,169,025 $ ( 527,586 ) $ ( 1,434 ) $ 226,824 $ 960,359
+Added: Nine Months Ended September 30, 2024
Balance at December 31, 2023 $ 93,530 14,963 $ 1,165,694 $ ( 548,273 ) $ ( 1,119 ) $ 221,193 $ 931,025
15 unchanged sentences
Other ( 30 ) ( 66 ) ( 96 )
−Removed: Balance at June 30, 2024 $ 93,530 15,057 $ 1,167,055 $ ( 579,139 ) $ ( 749 ) $ 217,600 $ 898,297
+Added: Balance at September 30, 2024 $ — 16,568 $ 1,270,752 $ ( 597,720 ) $ ( 578 ) $ 216,125 $ 888,579
See accompanying Notes to Condensed Consolidated Financial Statements.
2 unchanged sentences
(in thousands, except per share data)
−Removed: Three Months Ended June 30, 2023 PREFERRED
+Added: Three Months Ended September 30, 2023 PREFERRED
SHARES NUMBER
5 unchanged sentences
INTERESTS TOTAL
−Removed: Balance at March 31, 2023 $ 93,530 15,032 $ 1,176,059 $ ( 508,420 ) $ ( 1,917 ) $ 228,553 $ 987,805
−Removed: Net loss attributable to controlling interests and noncontrolling interests
+Added: Balance at June 30, 2023 $ 93,530 14,949 $ 1,169,501 $ ( 522,796 ) $ ( 1,758 ) $ 226,931 $ 965,408
+Added: Net income attributable to controlling interests and noncontrolling interests
7,774 1,235 9,009
9 unchanged sentences
Redemption of Series E preferred units from common shares 6 ( 176 ) 176 —
−Removed: Shares repurchased ( 105 ) ( 5,696 ) ( 5,696 )
Other ( 4 ) ( 76 ) ( 80 )
+Added: Balance at September 30, 2023 $ 93,530 15,052 $ 1,169,025 $ ( 527,586 ) $ ( 1,434 ) $ 226,824 $ 960,359
+Added: Three Months Ended September 30, 2024
Balance at June 30, 2024 $ 93,530 15,057 $ 1,167,055 $ ( 579,139 ) $ ( 749 ) $ 217,600 $ 898,297
−Removed: Three Months Ended June 30, 2024
−Removed: Balance at March 31, 2024 $ 93,530 14,912 $ 1,160,492 $ ( 564,951 ) $ ( 922 ) $ 218,936 $ 907,085
Net loss attributable to controlling interests and noncontrolling interests
11 unchanged sentences
Redemption of Series E preferred units for common shares 15 ( 1,051 ) 1,051 —
+Added: Shares repurchased ( 93,530 ) — — ( 3,511 ) ( 97,041 )
Other ( 1 ) ( 2 ) ( 50 ) ( 52 )
−Removed: Balance at June 30, 2024 $ 93,530 15,057 $ 1,167,055 $ ( 579,139 ) $ ( 749 ) $ 217,600 $ 898,297
+Added: Balance at September 30, 2024 $ — 16,568 $ 1,270,752 $ ( 597,720 ) $ ( 578 ) $ 216,125 $ 888,579
See accompanying Notes to Condensed Consolidated Financial Statements.
2 unchanged sentences
(in thousands)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES
7 unchanged sentences
Share-based compensation expense 2,245 2,712
+Added: Loss on interest rate swap settlement amortization
+Added: Casualty loss write off 2,034 752
Other, net 1,411 50
5 unchanged sentences
CASH FLOWS FROM INVESTING ACTIVITIES
+Added: Proceeds from repayment of mortgage loans and notes receivable 450 430
Increase in mortgages and real estate related notes receivable ( 13,557 ) —
14 unchanged sentences
Repurchase of common shares ( 4,703 ) ( 6,718 )
+Added: Redemption of Series C preferred shares ( 97,041 ) —
Distributions paid to common shareholders ( 33,374 ) ( 32,785 )
5 unchanged sentences
$ ( 31,145 ) $ ( 222,485 )
−Removed: NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
−Removed: 6,143 ( 1,580 )
+Added: NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD 9,269 11,891
11 unchanged sentences
Cash paid for interest $ 24,794 $ 26,190
+Added: See accompanying Notes to Condensed Consolidated Financial Statements.
+Added: CENTERSPACE AND SUBSIDIARIES
+Added: CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands)
−Removed: Balance sheet description June 30, 2024 December 31, 2023 June 30, 2023
+Added: Balance sheet description September 30, 2024 December 31, 2023 September 30, 2023
Cash and cash equivalents $ 14,453 $ 8,630 $ 29,701
4 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
−Removed: June 30, 2024
+Added: September 30, 2024
NOTE 1 • ORGANIZATION
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.
−Removed: As of June 30, 2024, Centerspace owned interests in 70 apartment communities consisting of 12,883 apartment homes.
+Added: As of September 30, 2024, Centerspace owned interests in 70 apartment communities consisting of 12,883 apartment homes.
NOTE 2 • BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
18 unchanged sentences
These reclassifications had no impact on net income (loss) as reported in the Condensed Consolidated Statements of Operations, total assets, liabilities or equity as reported in the Condensed Consolidated Balance Sheets and the classifications within the Condensed Consolidated Statements of Cash Flows.
−Removed: Centerspace reclassified certain items within the disaggregated revenue table included in Note 2.
+Added: Centerspace reclassified certain items within the disaggregated revenue table included in Note 2 to conform to the current year presentation.
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
4 unchanged sentences
Although past bank failures have increased the risk of loss in such accounts, the Company has not experienced any losses in such accounts.
−Removed: As of June 30, 2024 and December 31, 2023, restricted cash consisted of $ 1.1 million and $ 639,000 , respectively, in escrows held by lenders.
+Added: As of September 30, 2024 and December 31, 2023, restricted cash consisted of $ 2.8 million and $ 639,000 , respectively, for real estate deposits and 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.
3 unchanged sentences
Rental revenues are recognized in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 842, Leases , using a method that represents a straight-line basis over the term of the lease.
−Removed: For the three months ended June 30, 2024 and 2023, rental income represented approximately 98.3 % and 98.1 % of total revenues, respectively, and included gross market rent less adjustments for gain or loss to lease, concessions, vacancy loss, and bad debt.
−Removed: For the three months ended June 30, 2024 and 2023, other property revenues represented the remaining 1.7 % and 1.9 % of total revenues, respectively, and were primarily driven by other fee income, which is typically recognized when earned, at a point in time.
−Removed: For the six months ended June 30, 2024 and 2023, rental income represented approximately 98.2 % and 98.1 % of total revenues, respectively.
−Removed: For the six months ended June 30, 2024 and 2023, other property revenues represented the remaining 1.8 % and 1.9 % of total revenues, respectively.
+Added: For the three months ended September 30, 2024 and 2023, rental income represented approximately 98.1 % and 97.9 % of total revenues, respectively, and included gross market rent less adjustments for gain or loss to lease, concessions, vacancy loss, and bad debt.
+Added: For the three months ended September 30, 2024 and 2023, other property revenues represented the remaining 1.9 % and 2.1 % of total revenues, respectively, and were primarily driven by other fee income, which is typically recognized when earned, at a point in time.
+Added: For the nine months ended September 30, 2024 and 2023, rental income represented approximately 98.2 % and 98.1 % of total revenues, respectively.
+Added: For the nine months ended September 30, 2024 and 2023, other property revenues represented the remaining 1.8 % and 1.9 % of total revenues, respectively.
Some of the Company’s apartment communities have commercial spaces available for lease.
4 unchanged sentences
The combined components are included in lease income and are accounted for under ASC 842.
−Removed: The aggregate amount of future scheduled lease income on commercial operating leases, excluding any variable lease income and non-lease components, as of June 30, 2024, was as follows:
+Added: The aggregate amount of future scheduled lease income on commercial operating leases, excluding any variable lease income and non-lease components, as of September 30, 2024, was as follows:
(in thousands)
6 unchanged sentences
Centerspace recognizes revenue, for rental related items not included as a component of a lease, as earned.
−Removed: The following table presents the disaggregation of revenue streams for the three and six months ended June 30, 2024 and 2023:
+Added: The following table presents the disaggregation of revenue streams for the three and nine months ended September 30, 2024 and 2023:
(in thousands)
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
Revenue Stream Applicable Standard 2024 2023 2024 2023
3 unchanged sentences
Total revenue $ 65,025 $ 64,568 $ 194,574 $ 197,241
−Removed: In addition to lease income and other property revenue, the Company recognizes 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
−Removed: nonfinancial asset that was sold.
−Removed: During the three months ended June 30, 2024, the Company did not recognize a gain or loss on the sale of real estate and other investments, compared to a loss of $ 67,000 during the three months ended June 30, 2023.
−Removed: During the six months ended June 30, 2024, the Company recognized a loss of $ 577,000 on the sale of real estate and other investments, compared to a gain of $ 60.1 million during the six months ended June 30, 2023.
+Added: In addition to lease income and other property revenue, the Company recognizes 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.
+Added: During the three months ended September 30, 2024, the Company did not recognize a gain or loss on the sale of real estate and other investments, compared to a gain of $ 11.2 million during the three months ended September 30, 2023.
+Added: During the nine months ended September 30, 2024, the Company recognized a loss of $ 577,000 on the sale of real estate and other investments, compared to a gain of $ 71.3 million during the nine months ended September 30, 2023.
Any gain or loss on real estate dispositions is net of certain closing and other costs associated with the disposition.
2 unchanged sentences
The amortization periods reflects the average remaining term of in-place leases acquired, which are generally less than one year.
−Removed: During the three months ended June 30, 2024 and 2023, the Company recognized $ 37,000 and $ 49,000 , respectively, of amortization expense related to intangibles.
−Removed: During the six months ended June 30, 2024 and 2023, the Company recognized $ 1.7 million and $ 893,000 , respectively, of amortization expense related to intangibles, included within depreciation and amortization in the Condensed Consolidated Statements of Operations.
+Added: During the three months ended September 30, 2024 and 2023, the Company recognized $ 37,000 and $ 48,000 , respectively, of amortization expense related to intangibles.
+Added: During the nine months ended September 30, 2024 and 2023, the Company recognized $ 1.7 million and $ 941,000 , respectively, of amortization expense related to intangibles, included within depreciation and amortization in the Condensed Consolidated Statements of Operations.
MARKET CONCENTRATION RISK
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.
−Removed: As of June 30, 2024, Centerspace held more than 10% of the carrying value of its real estate portfolio in the Minneapolis, Minnesota and Denver, Colorado markets.
+Added: As of September 30, 2024, Centerspace held more than 10% of the carrying value of its real estate portfolio in each of the Minneapolis, Minnesota and Denver, Colorado markets.
IMPAIRMENT OF LONG-LIVED ASSETS
6 unchanged sentences
Plans to hold properties over longer periods decreases the likelihood of recording impairment losses.
−Removed: During the three and six months ended June 30, 2024 and 2023, the Company recorded no impairment charges.
+Added: During the three and nine months ended September 30, 2024 and 2023, the Company recorded no impairment charges.
VARIABLE INTEREST ENTITIES
3 unchanged sentences
REAL ESTATE RELATED NOTES RECEIVABLE
−Removed: The Company has a tax increment financing note receivable (“TIF”) with a principal balance of $ 5.4 million and $ 5.7 million at June 30, 2024 and December 31, 2023, respectively, which appears within other assets in the Condensed Consolidated Balance Sheets at fair value.
+Added: The Company has a tax increment financing note receivable (“TIF”) with a principal balance of $ 5.2 million and $ 5.7 million at September 30, 2024 and December 31, 2023, respectively, which appears within other assets in the Condensed 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.
+Added: The note matures February 1, 2039 and may be prepaid in whole or in part at any time.
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.
−Removed: As of June 30, 2024 and December 31, 2023, the Company had funded $ 14.7 million and $ 1.6 million of the mezzanine loan, respectively.
+Added: As of September 30, 2024 and December 31, 2023, the Company had funded $ 15.1 million and $ 1.6 million of the mezzanine loan, respectively.
The loan matures in December 2027 unless extended to December 2028 in accordance with the terms of the mezzanine loan agreement.
5 unchanged sentences
Advertising costs are expensed as incurred and reported on the Condensed Consolidated Statements of Operations within the property operating expenses, excluding real estate taxes line item.
−Removed: During the three months ended June 30, 2024 and 2023, total advertising expense was $ 742,000 and $ 744,000 , respectively.
−Removed: During the six months ended June 30, 2024 and 2023, total advertising expense was $ 1.5 million and $ 1.4 million, respectively.
+Added: During the three months ended September 30, 2024 and 2023, total advertising expense was $ 899,000 and $ 878,000 , respectively.
+Added: During the nine months ended September 30, 2024 and 2023, total advertising expense was $ 2.4 million and $ 2.3 million, respectively.
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.
−Removed: During the six months ended June 30, 2023, the Company incurred total severance costs of $ 2.2 million for the cash severance and benefits for Mr.
+Added: During the nine months ended September 30, 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.
INVOLUNTARY CONVERSION OF ASSETS
−Removed: During the three and six months ended June 30, 2024, Centerspace recognized $ 137,000 and $ 755,000 , respectively, in additional casualty loss resulting from updated loss estimates from six separate insurance events at apartment communities.
−Removed: Any insurance funds received will be recognized when received in accordance with ASC 610-30.
+Added: During the three and nine months ended September 30, 2024, Centerspace recorded a $ 981,000 write-down of an apartment community asset along with an insurance receivable of $ 2.1 million within other assets on the Condensed Consolidated Balance Sheets due to storm damage at one apartment community.
+Added: During the three months ended September 30, 2024, Centerspace also recognized casualty losses of $ 546,000 resulting from two new insurance events and updated loss estimates on six previously reported events.
+Added: During the nine months ended September 30, 2024, Centerspace recognized $ 1.3 million in casualty losses from two new insurance events and updated loss estimates on six previously reported events, excluding the storm damage claim discussed above.
+Added: Any business interruption insurance proceeds will be recognized when received in accordance with ASC 610-30.
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 Condensed Consolidated Balance Sheets.
−Removed: During the six months ended June 30, 2024, the claim was settled for $ 1.6 million, including remediation and other operating expenses.
+Added: During the nine months ended September 30, 2024, the claim was settled for $ 1.6 million, including remediation and other operating expenses.
NOTE 3 • NET INCOME (LOSS) PER SHARE
5 unchanged sentences
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.
−Removed: 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 Condensed Consolidated Financial Statements for the three and six months ended June 30, 2024 and 2023.
+Added: 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 Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2024 and 2023.
(in thousands, except per share data)
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
2 unchanged sentences
Dividends to preferred shareholders ( 1,607 ) ( 1,607 ) ( 4,821 ) ( 4,821 )
+Added: Redemption of preferred shares ( 3,511 ) — ( 3,511 ) —
Numerator for basic income (loss) per share – net income (loss) available to common shareholders
1 unchanged sentence
Noncontrolling interests – Operating Partnership and Series E preferred units (1)
+Added: — 1,204 — 6,233
Dividends to Series D preferred unitholders (2)
11 unchanged sentences
$ ( 0.40 ) $ 0.41 $ ( 0.96 ) $ 2.96
−Removed: (1) For the three and six months ended June 30, 2024 and the three months ended June 30, 2023, the impact of Units and Series E preferred units was excluded from the calculation of net income (loss) per common share - diluted as they were anti-dilutive.
−Removed: (2) For the three and six months ended June 30, 2024 and the three months ended June 30, 2023, dividends to preferred unitholders are excluded from the calculation of net income (loss) per common share - diluted as they were anti-dilutive.
−Removed: For the three months ended June 30, 2024, operating partnership units of 835,000 , Series D preferred units of 228,000 , as converted, Series E preferred units of 2.1 million, as converted, time-based RSUs of 32,000 , and performance-based RSUs of 41,000 were excluded from the calculation of diluted net income (loss) per share because they were anti-dilutive as including these items would have improved net loss per share.
−Removed: For the three months ended June 30, 2023, operating partnership units of 965,000 , Series D preferred units of 228,000 , as converted, Series E preferred units of 2.1 million, as converted, time-based RSUs and stock options of 24,000 , and performance-based RSUs of 26,000 were excluded from the calculation of diluted income (loss) per share because they were anti-dilutive as including these items would have improved net loss per share.
−Removed: For the six months ended June 30, 2024, operating partnership units of 845,000 , Series D preferred units of 228,000 , as converted, Series E preferred units of 2.1 million, as converted, time-based RSUs of 26,000 , and performance-based RSUs of 41,000 were excluded from the calculation of diluted net income (loss) per share because they were anti-dilutive as including these items would have improved net loss per share.
−Removed: For the six months ended June 30, 2023, performance-based RSUs of 26,000 were excluded from the calculation of diluted net income per share because they were anti-dilutive as including these items would have improved net income per share.
+Added: (1) For the three and nine months ended September 30, 2024, the impact of Units and Series E preferred units was excluded from the calculation of net income (loss) per common share - diluted as they were anti-dilutive.
+Added: (2) For the three and nine months ended September 30, 2024 and the three months ended September 30, 2023, dividends to preferred unitholders are excluded from the calculation of net income (loss) per common share - diluted as they were anti-dilutive.
+Added: For the three months ended September 30, 2024, operating partnership units of 818,000 , Series D preferred units of 228,000 , as converted, Series E preferred units of 2.1 million, as converted, time-based RSUs and options of 49,000 , and performance-based RSUs of 41,000 were excluded from the calculation of diluted net income (loss) per share because they were anti-dilutive as including these items would have improved net loss per share.
+Added: For the three months ended September 30, 2023, Series D preferred units of 228,000 , as converted and performance-based RSUs of 26,000 were excluded from the calculation of diluted income (loss) per share because they were anti-dilutive as including these items would have improved net income per share.
+Added: For the nine months ended September 30, 2024, operating partnership units of 836,000 , Series D preferred units of 228,000 , as converted, Series E preferred units of 2.1 million, as converted, time-based RSUs and options of 32,000 , and performance-based RSUs of 41,000 were excluded from the calculation of diluted net income (loss) per share because they were anti-dilutive as including these items would have improved net loss per share.
+Added: For the nine months ended September 30, 2023, operating partnership units of 943,000 and performance-based RSUs of 26,000 were excluded from the calculation of diluted net income per share because they were anti-dilutive as including these items would have improved net income per share.
NOTE 4 • EQUITY AND MEZZANINE EQUITY
+Added: Series D Preferred Units (Mezzanine Equity).
+Added: Series D preferred units outstanding were 165,600 preferred units at September 30, 2024 and December 31, 2023.
+Added: The Series D preferred units have a par value price of $ 100 per preferred unit.
+Added: The Series D preferred unit holders receive a preferred distribution at the rate of 3.862 % per year.
+Added: 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 issuance price.
+Added: Each Series D preferred unit is convertible, at the holder’s option, into 1.37931 Units.
+Added: The Series D preferred units have an aggregate liquidation value of $ 16.6 million.
+Added: Changes in the redemption value are based on changes in the trading value of common shares and are charged to common shares on the Condensed Consolidated Balance Sheets each quarter.
+Added: The holders of the Series D preferred units do not have voting rights.
+Added: Distributions to Series D unitholders are presented in the Condensed Consolidated Statements of Equity within net income (loss) attributable to controlling interests and noncontrolling interests.
+Added: Series C Preferred Shares.
+Added: On August 21, 2024, our Board of Trustees authorized the redemption of all of the Series C preferred shares.
+Added: On August 30, 2024, we delivered notice to holders of the Series C preferred shares that we intended to redeem all 3.9 million Series C preferred shares at a redemption price equal to $ 25 per share plus any accrued but unpaid distributions per share up to and including the redemption date of September 30, 2024.
+Added: On September 30, 2024, the Company completed the redemption of all the outstanding Series C preferred shares for an aggregate redemption price of $ 97.0 million, excluding distributions, which was $ 3.5 million in excess of the carrying value and is included in redemption of preferred shares on the Condense Consolidated Statement of Operations.
+Added: Such shares were no longer outstanding as of September 30, 2024.
+Added: Series C preferred shares outstanding were 3.9 million shares at December 31, 2023.
+Added: The Series C preferred shares were nonvoting and redeemable for cash at $ 25 per share at Centerspace’s option.
+Added: Holders of these shares were entitled to cumulative distributions, payable quarterly (as and if declared by the Board of Trustees).
+Added: Distributions accrued at an annual rate of $ 1.65625 per share, which is equal to 6.625 % of the $ 25 per share liquidation preference.
Operating Partnership Units.
−Removed: The Operating Partnership had 828,000 and 861,000 outstanding Units at June 30, 2024 and December 31, 2023, respectively.
+Added: The Operating Partnership had 809,000 and 861,000 outstanding Units at September 30, 2024 and December 31, 2023, respectively.
Exchange Rights .
−Removed: Centerspace redeemed Units in exchange for common shares in connection with Unitholders exercising their exchange rights during the three and six months ended June 30, 2024 and 2023 as detailed in the table below.
+Added: Centerspace redeemed Units in exchange for common shares in connection with Unitholders exercising their exchange rights during the three and nine months ended September 30, 2024 and 2023 as detailed in the table below.
(in thousands)
−Removed: Three Months Ended June 30, Number of Units Net Book Basis
+Added: Three Months Ended September 30, Number of Units Net Book Basis
2024 19 $ 845
−Removed: Six Months Ended June 30,
2023 97 $ 898
+Added: Nine Months Ended September 30,
2024 52 $ 2,212
+Added: 2023 107 $ 1,919
Series E Preferred Units (Noncontrolling Interests).
−Removed: Centerspace had 1.7 million Series E preferred units outstanding on June 30, 2024 and December 31, 2023.
+Added: Centerspace had 1.7 million Series E preferred units outstanding on September 30, 2024 and December 31, 2023.
Each Series E preferred unit has a par value of $ 100 .
2 unchanged sentences
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.
−Removed: The Series E preferred units have an aggregate liquidation preference of $ 170.4 million as of June 30, 2024.
+Added: The Series E preferred units have an aggregate liquidation preference of $ 169.1 million as of September 30, 2024.
The holders of the Series E preferred units do not have voting rights.
1 unchanged sentence
Number of Series E Number of Total
−Removed: Three Months Ended June 30, Preferred Units Redeemed Common Shares Issued Value
+Added: Three Months Ended September 30, Preferred Units Redeemed Common Shares Issued Value
2024 12 15 $ 1,051
2023 5 6 $ 176
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
2024 33 40 $ 2,271
1 unchanged sentence
Common Shares and Equity Awards .
−Removed: Common shares outstanding on June 30, 2024 and December 31, 2023, totaled 15.1 million and 15.0 million, respectively.
−Removed: During the three and six months ended June 30, 2024, Centerspace issued approximately 9,723 and 13,465 common shares, respectively, with a total grant-date fair value of $ 584,000 and $ 1.0 million, respectively, as share-based compensation for employees and trustees under its 2015 Incentive Plan.
−Removed: During the three and six months ended June 30, 2023, Centerspace issued approximately 7,073 and 18,950 common shares, respectively, with a total grant-date fair value of $ 778,000 and $ 1.7 million, respectively, as share-based compensation for employees and trustees under its 2015 Incentive Plan.
+Added: Common shares outstanding on September 30, 2024 and December 31, 2023, totaled 16.6 million and 15.0 million, respectively.
+Added: During the three and nine months ended September 30, 2024, Centerspace issued approximately 46 and 13,511 common shares, respectively, with a total grant-date fair value of $ 4,000 and $ 1.0 million, respectively, as share-based compensation for employees and trustees under its 2015 Incentive Plan.
+Added: During the three and nine months ended September 30, 2023, Centerspace issued approximately 64 and 19,014 common shares, respectively, with a total grant-date fair value of $ 5,000 and $ 1.7 million, respectively, as share-based compensation for employees and trustees under its 2015 Incentive Plan.
These shares vested based on performance and service criteria.
1 unchanged sentence
Equity Distribution Agreement.
−Removed: Centerspace has an equity distribution agreement in connection with an at-the-market offering (“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.
+Added: On September 9, 2024 Centerspace amended its equity distribution agreement in connection with the at-the-market offering (“ATM Program”) through which it may offer and sell common shares in amounts and at times determined by management.
+Added: The amendment increased the maximum aggregate offering price of common shares available for offer and sale thereunder from $ 250.0 million to $ 500.0 million.
Under the ATM Program, the Company may enter into separate forward sale agreements.
The proceeds from the sale of common shares under the 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.
−Removed: The table below provides details on the sale of common shares during the three and six months ended June 30, 2024 under the ATM Program.
−Removed: There were no sales of common shares under the ATM Program during the three and six months ended June 30, 2023.
−Removed: As of June 30, 2024, common shares having an aggregate offering price of up to $ 118.9 million remained available under the ATM Program.
+Added: The table below provides details on the sale of common shares during the three and nine months ended September 30, 2024 under the ATM Program.
+Added: There were no sales of common shares under the ATM Program during the three and nine months ended September 30, 2023.
+Added: As of September 30, 2024, common shares having an aggregate offering price of up to $ 262.9 million remained available under the ATM Program.
(in thousands, except per share amounts)
−Removed: Three and Six Months Ended June 30,
−Removed: Number of Common Shares
+Added: Three Months Ended September 30, Number of Common Shares
Net Consideration (1)
1 unchanged sentence
2024 1,477 $ 105,052 $ 71.12
−Removed: (1) Total consideration is net of $ 115,000 in commissions during the three and six months ended June 30, 2024.
+Added: Nine Months Ended September 30,
+Added: 2024 1,587 $ 112,613 $ 71.66
+Added: (1) Includes 869,000 shares sold on a forward basis for $ 62.7 million which were physically settled during the three months ended September 30, 2024.
+Added: (2) Total consideration is net of $ 1.0 million and $ 1.1 million in commissions during the three and nine months ended September 30, 2024, respectively.
Share Repurchase Program.
2 unchanged sentences
The repurchases have no time limit and may be suspended or discontinued completely at any time.
−Removed: 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.
−Removed: The table below provides details on the shares repurchased during the three and six months ended June 30, 2024 and 2023.
−Removed: As of June 30, 2024, the Company had $ 4.7 million remaining authorized for purchase under this program.
+Added: 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.
+Added: There were no common shares repurchased during the three months ended September 30, 2024 and 2023.
+Added: The table below provides details on the shares repurchased during the nine months ended September 30, 2024 and 2023.
+Added: As of September 30, 2024, the Company had $ 4.7 million remaining authorized for purchase under this program.
(in thousands, except per share amounts)
−Removed: Three Months Ended June 30, Number of Common Shares Aggregate Cost (1)
+Added: Nine Months Ended September 30, Number of Common Shares Aggregate Cost (1)
Average Price Per Share (1)
1 unchanged sentence
2023 124 $ 6,718 $ 54.19
−Removed: Six Months Ended June 30,
−Removed: 2024 88 $ 4,703 $ 53.62
−Removed: 2023 124 $ 6,718 $ 54.19
(1) Amount includes commissions.
−Removed: Series C Preferred Shares.
−Removed: Series C preferred shares outstanding were 3.9 million shares at June 30, 2024 and December 31, 2023.
−Removed: The Series C preferred shares are nonvoting and redeemable for cash at $ 25.00 per share at Centerspace’s option.
−Removed: Holders of these shares are entitled to cumulative distributions, payable quarterly (as and if declared by the Board of Trustees).
−Removed: Distributions accrue at an annual rate of $ 1.65625 per share, which is equal to 6.625 % of the $ 25.00 per share liquidation preference ($ 97.0 million liquidation preference in the aggregate).
−Removed: Series D Preferred Units (Mezzanine Equity).
−Removed: Series D preferred units outstanding were 165,600 preferred units at June 30, 2024 and December 31, 2023.
−Removed: The Series D preferred units have a par value price of $ 100 per preferred unit.
−Removed: The Series D preferred unit holders receive a preferred distribution at the rate of 3.862 % per year.
−Removed: 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 issuance price.
−Removed: Each Series D preferred unit is convertible, at the holder’s option, into 1.37931 Units.
−Removed: The Series D preferred units have an aggregate liquidation value of $ 16.6 million.
−Removed: Changes in the redemption value are based on changes in the trading value of common shares and are charged to common shares on the Condensed Consolidated Balance Sheets each quarter.
−Removed: The holders of the Series D preferred units do not have voting rights.
−Removed: Distributions to Series D unitholders are presented in the Condensed Consolidated Statements of Equity within net income (loss) attributable to controlling interests and noncontrolling interests.
NOTE 5 • DEBT
−Removed: The following table summarizes the Company’s secured and unsecured debt at June 30, 2024 and December 31, 2023.
+Added: The following table summarizes the Company’s secured and unsecured debt at September 30, 2024 and December 31, 2023.
(in thousands)
−Removed: June 30, 2024 December 31, 2023
−Removed: Carrying Amount Weighted Average Interest Rate Carrying Amount Weighted Average Interest Rate Weighted Average Maturity in Years at June 30, 2024
+Added: September 30, 2024 December 31, 2023
+Added: Carrying Amount Weighted Average Interest Rate Carrying Amount Weighted Average Interest Rate Weighted Average Maturity in Years at September 30, 2024
Lines of credit (1)
15 unchanged sentences
(3) Represents apartment communities encumbered by mortgages;
−Removed: 14 at June 30, 2024 and December 31, 2023.
+Added: 14 at September 30, 2024 and December 31, 2023.
(4) Interest rate is fixed.
−Removed: As of June 30, 2024, 45 apartment communities were not encumbered by mortgages and were available to provide credit support for the unsecured borrowings.
+Added: As of September 30, 2024, 45 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 (“Unsecured Credit Facility” or “Facility”) is a revolving, multi-bank line of credit, with the 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.
−Removed: June 30, 2024, there was $ 48.0 million outstanding on this line of credit, therefore the additional borrowing availability was $ 202.0 million.
−Removed: This unsecured credit facility matures in September 2025, with an option to extend maturity for up to two additional six-month periods and has an accordion option to increase borrowing capacity up to $ 400.0 million.
+Added: As of September 30, 2024, there was $ 39.0 million outstanding on this line of credit.
+Added: Therefore the additional borrowing availability was $ 211.0 million.
+Added: On July 26, 2024, the Unsecured Credit Facility was amended to extend maturity and to modify the leverage-based margin ratios applicable to borrowings.
+Added: As amended, this credit facility matures in July 2028, with an option to extend maturity for up to two additional six-month periods and has an accordion option to increase borrowing capacity up to $ 400.0 million.
The Secured Overnight Financing Rate (“SOFR”) is the benchmark alternative reference rate under the Facility.
2 unchanged sentences
The Unsecured Credit Facility and unsecured senior notes are subject to customary financial covenants and limitations.
−Removed: The Company believes that it was in compliance with all such financial covenants and limitations as of June 30, 2024.
−Removed: Centerspace also has a $ 6.0 million operating line of credit.
−Removed: As of June 30, 2024 and December 31, 2023, there was no outstanding balance on this line of credit.
−Removed: This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances.
−Removed: This operating line matures on September 30, 2024, with pricing based on SOFR.
+Added: The Company believes that it was in compliance with all such financial covenants and limitations as of September 30, 2024.
+Added: In September 2024, Centerspace entered into a line of credit agreement with borrowing capacity of up to $ 10.0 million and pricing based on SOFR.
+Added: This operating line of credit terminates in September 2025 and is designed to enhance treasury management activities and more effectively manage cash balances.
+Added: Centerspace had a $ 6.0 million operating line of credit with pricing based on SOFR that matured on August 31, 2024.
+Added: As of September 30, 2024 and December 31, 2023, there was no outstanding balance on these lines of credit.
Centerspace had a private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc.
−Removed: (collectively, “PGIM”) under which the Company issued $ 200.0 million in unsecured senior promissory notes (“unsecured senior notes”).
−Removed: 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.
−Removed: The following table shows the notes issued under both agreements as of June 30, 2024 and December 31, 2023.
+Added: (collectively, “PGIM”) under which the Company issued $ 175.0 million in unsecured senior promissory notes (“Unsecured Shelf Notes”).
+Added: On October 28, 2024, the shelf agreement was amended to extend the period of time during which Centerspace may borrow money to October 2027 and to increase the borrowing capacity to $ 300.0 million.
+Added: The Company also has a separate private note purchase agreement with PGIM and certain other lenders for the issuance of $ 125.0 million of senior unsecured promissory notes (“Unsecured Club Notes”, and, collectively with the Unsecured Shelf Notes, the “unsecured senior notes”), of which all $ 125.0 million was issued in September 2021.
+Added: The following table shows the notes issued under both agreements as of September 30, 2024 and December 31, 2023.
(in thousands)
10 unchanged sentences
The notes are interest-only, with varying maturity dates of 7 , 10 , and 12 years, and a blended, weighted average interest rate of 2.78 %.
−Removed: As of June 30, 2024 and December 31, 2023, the FMCF had a balance of $ 198.9 million.
+Added: As of September 30, 2024 and December 31, 2023, the FMCF had a balance of $ 198.9 million.
The FMCF is included within mortgages payable on the Condensed Consolidated Balance Sheets.
−Removed: As of June 30, 2024, Centerspace owned 14 apartment communities that served as collateral for mortgage loans, in addition to the apartment communities secured by the FMCF.
+Added: As of September 30, 2024, 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.
−Removed: As of June 30, 2024, the Company believes that there were no material defaults or instances of material noncompliance in regard to any of these mortgage loans.
−Removed: As of June 30, 2024 and December 31, 2023, the mortgage loans had a balance of $ 389.1 million and $ 392.3 million, respectively, excluding unamortized premiums and discounts.
+Added: As of September 30, 2024, the Company believes that there were no material defaults or instances of material noncompliance in regard to any of these mortgage loans.
+Added: As of September 30, 2024 and December 31, 2023, the mortgage loans had a balance of $ 387.3 million and $ 392.3 million, respectively, excluding unamortized premiums and discounts.
The mortgage loans are included within mortgages payable on the Condensed Consolidated Balance Sheets.
−Removed: The aggregate amount of required future principal payments on lines of credit, notes payable, and mortgages payable as of June 30, 2024, was as follows:
+Added: The aggregate amount of required future principal payments on lines of credit, notes payable, and mortgages payable as of September 30, 2024, was as follows:
(in thousands)
5 unchanged sentences
NOTE 6 • DERIVATIVE INSTRUMENTS
−Removed: Centerspace used interest rate derivatives to stabilize interest expense and to manage its exposure to interest rate fluctuations.
+Added: Centerspace had, in the past, used interest rate derivatives to stabilize interest expense and to manage its exposure to interest rate fluctuations.
To accomplish this objective, the Company primarily used interest rate swap contracts to fix variable interest rate debt.
2 unchanged sentences
During the next twelve months, the Company estimates an additional $ 578,000 will be reclassified as an increase to interest expense.
−Removed: As of June 30, 2024 and December 31, 2023 the Company had no remaining interest rate swaps.
−Removed: The table below presents the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations as of June 30, 2024 and 2023.
+Added: As of September 30, 2024 and December 31, 2023 the Company had no remaining interest rate swaps.
+Added: The table below presents the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations as of September 30, 2024 and 2023.
(in thousands)
Gain Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Income Loss Reclassified from Accumulated OCI into Income (Loss)
−Removed: Three months ended June 30, 2024 2023 2024 2023
+Added: Three months ended September 30, 2024 2023 2024 2023
Total derivatives in cash flow hedging relationships - Interest rate contracts $ — $ — Interest expense $ ( 171 ) $ ( 324 )
−Removed: Six months ended June 30,
+Added: Nine months ended September 30,
Total derivatives in cash flow hedging relationships - Interest rate contracts $ — $ — Interest expense $ ( 541 ) $ ( 621 )
8 unchanged sentences
Balance Sheet Location Total Level 1 Level 2 Level 3
−Removed: June 30, 2024
+Added: September 30, 2024
Real estate related notes receivable Other assets $ 20,878 — — $ 20,878
6 unchanged sentences
Fair Value Measurement Other Gains Interest Income Total Changes in Fair Value Included in Current-Period Earnings
−Removed: Six months ended June 30, 2024
+Added: Nine months ended September 30, 2024
Real estate related notes receivable $ 20,878 $ 14 $ 1,022 $ 1,036
−Removed: Six months ended June 30, 2023
+Added: Nine months ended September 30, 2023
Real estate related notes receivable $ 5,455 $ 14 $ 197 $ 211
−Removed: As of June 30, 2024 and December 31, 2023, Centerspace had investments totaling $ 2.1 million in real estate technology venture funds consisting of privately held entities that develop technology related to the real estate industry.
+Added: As of September 30, 2024 and December 31, 2023, Centerspace had investments totaling $ 2.2 million and $ 2.1 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 our Condensed Consolidated Balance Sheets.
The investments are measured at net asset value (“NAV”) as a practical expedient under ASC 820.
−Removed: As of June 30, 2024, the Company had total unfunded commitments of $ 950,000 .
+Added: As of September 30, 2024, the Company had further unfunded commitments of $ 950,000 .
Fair Value Measurements on a Nonrecurring Basis
−Removed: There were no non-financial assets or liabilities measured at fair value on a nonrecurring basis at June 30, 2024.
+Added: There were no non-financial assets or liabilities measured at fair value on a nonrecurring basis at September 30, 2024.
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.
7 unchanged sentences
The fair value of unsecured senior notes and mortgages payable are estimated based on the discounted cash flows of the loans using market research and management estimates of comparable interest rates, excluding any prepayment penalties (Level 3).
−Removed: The estimated fair values of the Company’s financial instruments as of June 30, 2024 and December 31, 2023, respectively, are as follows:
+Added: The estimated fair values of the Company’s financial instruments as of September 30, 2024 and December 31, 2023, respectively, are as follows:
(in thousands)
−Removed: June 30, 2024 December 31, 2023
+Added: September 30, 2024 December 31, 2023
Balance Sheet Location Carrying Amount Fair Value Carrying Amount Fair Value
8 unchanged sentences
NOTE 8 • ACQUISITIONS AND DISPOSITIONS
−Removed: Centerspace did not acquire new real estate during the three and six months ended June 30, 2024 and 2023.
−Removed: Centerspace did not dispose of any real estate during the three months ended June 30, 2024 and 2023.
−Removed: During the six months ended June 30, 2024, Centerspace disposed of two apartment communities in two exchange transactions for an aggregate sales price of $ 19.0 million.
−Removed: During the six months ended June 30, 2023, Centerspace disposed of nine apartment communities, in four exchange transactions for an aggregate sales price of $ 144.3 million.
−Removed: The dispositions for the six months ended June 30, 2024 and 2023 are detailed below.
−Removed: Six Months Ended June 30, 2024
+Added: Centerspace did not acquire new real estate during the three and nine months ended September 30, 2024 and 2023.
+Added: Centerspace did not dispose of any real estate during the three months ended September 30, 2024.
+Added: During the three months ended September 30, 2023, Centerspace disposed of four apartment communities and associated commercial space, in one transaction for an aggregate sales price of $ 82.5 million.
+Added: During the nine months ended September 30, 2024, Centerspace disposed of two apartment communities in two exchange transactions for an aggregate sales price of $ 19.0 million.
+Added: During the nine months ended September 30, 2023, Centerspace disposed of 13 apartment communities and associated commercial space, in five transactions for an aggregate sales price of $ 226.8 million.
+Added: The dispositions for the nine months ended September 30, 2024 and 2023 are detailed below.
+Added: Nine Months Ended September 30, 2024
(in thousands)
6 unchanged sentences
Total Dispositions $ 19,000 $ 19,577 $ ( 577 )
−Removed: Six Months Ended June 30, 2023
+Added: Nine Months Ended September 30, 2023
(in thousands)
9 unchanged sentences
March 15, 2023 $ 6,650 $ 9,098 $ ( 2,448 )
+Added: 712 homes - 4 North Dakota apartment communities
+Added: September 14, 2023 $ 82,500 $ 71,218 $ 11,282
Total Dispositions $ 226,755 $ 155,314 $ 71,441
7 unchanged sentences
“All other” includes non-multifamily components of mixed-use properties and apartment communities the Company has disposed or designated as held for sale.
−Removed: For the six months ended June 30, 2024, two sold apartment communities were reclassified from the multifamily segment to all other for all periods presented.
−Removed: For the six months ended June 30, 2023, nine sold apartment communities were reclassified from the multifamily segment to all other for all periods presented.
+Added: For the nine months ended September 30, 2024, two sold apartment communities were reclassified from the multifamily segment to “all other” for all periods presented.
+Added: For the nine months ended September 30, 2023, thirteen sold apartment communities were reclassified from the multifamily segment to “all other” for all periods presented.
The members of the executive management team 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.
−Removed: 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 costs, property management overhead, casualty losses, loss on litigation settlement, and general and administrative expense.
+Added: 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 costs, property management overhead, casualty gains (losses), loss on litigation settlement, 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.
−Removed: The following tables present NOI for the three and six months ended June 30, 2024 and 2023, respectively, along with reconciliations to net income (loss) in the Condensed Consolidated Financial Statements.
+Added: The following tables present NOI for the three and nine months ended September 30, 2024 and 2023, respectively, along with reconciliations to net income (loss) in the Condensed Consolidated Financial Statements.
Segment assets are also reconciled to total assets as reported in the Condensed Consolidated Financial Statements.
(in thousands)
−Removed: Three Months Ended June 30, 2024 Multifamily All Other Total
+Added: Three Months Ended September 30, 2024 Multifamily All Other Total
Revenue $ 64,457 $ 568 $ 65,025
2 unchanged sentences
Property management expense ( 2,242 )
−Removed: Casualty loss
+Added: Casualty gain
Depreciation and amortization ( 26,084 )
3 unchanged sentences
(in thousands)
−Removed: Three Months Ended June 30, 2023 Multifamily All Other Total
+Added: Three Months Ended September 30, 2023 Multifamily All Other Total
Revenue $ 60,789 $ 3,779 $ 64,568
5 unchanged sentences
General and administrative expenses ( 3,832 )
−Removed: Loss on sale of real estate and other investments
−Removed: Loss on litigation settlement ( 2,864 )
+Added: Gain on sale of real estate and other investments
Interest expense ( 8,556 )
1 unchanged sentence
(in thousands)
−Removed: Six Months Ended June 30, 2024 Multifamily All Other Total
+Added: Nine Months Ended September 30, 2024 Multifamily All Other Total
Revenue $ 192,262 $ 2,312 $ 194,574
9 unchanged sentences
(in thousands)
−Removed: Six Months Ended June 30, 2023 Multifamily All Other Total
+Added: Nine Months Ended September 30, 2023 Multifamily All Other Total
Revenue $ 180,759 $ 16,482 $ 197,241
10 unchanged sentences
Segment Assets and Accumulated Depreciation
−Removed: Segment assets are summarized as follows as of June 30, 2024, and December 31, 2023, respectively, along with reconciliations to the Condensed Consolidated Financial Statements:
+Added: Segment assets are summarized as follows as of September 30, 2024, and December 31, 2023, respectively, along with reconciliations to the Condensed Consolidated Financial Statements:
(in thousands)
−Removed: As of June 30, 2024 Multifamily All Other Total
+Added: As of September 30, 2024 Multifamily All Other Total
Segment assets
18 unchanged sentences
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 condensed consolidated financial statements.
−Removed: Centerspace was the named defendant in a lawsuit where the owner of a neighboring property claimed a retaining wall at one of its properties is causing water damage to the neighboring property.
+Added: Centerspace was the named defendant in a lawsuit where the owner of a neighboring property claimed a retaining wall at one of its properties was causing water damage to the neighboring property.
The claim was for damage to the property and monetary losses.
−Removed: During the three and six months ended June 30, 2023, the Company recorded a loss on litigation settlement of $ 2.9 million due to a trial judgement entered against the Centerspace.
+Added: During the nine months ended September 30, 2023, the Company recorded a loss on litigation settlement of $ 2.9 million due to a trial judgement entered against the Centerspace.
In November 2023, the claimant filed motions requesting additional interest on the judgment and trial costs.
−Removed: The claimant was awarded an additional $ 1.0 million in a judgment related interest and costs.
+Added: The claimant was awarded an additional $ 1.0 million in judgment related interest and costs.
The additional $ 1.0 million was a recognizable subsequent event for the year ended December 31, 2023 so was recorded as a loss during the year ended December 31, 2023.
13 unchanged sentences
NOTE 11 • SHARE-BASED COMPENSATION
−Removed: 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 RSUs up to an aggregate of 775,000 shares over the ten-year period in which the plan is in effect.
+Added: 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
+Added: awards in the form of cash, unrestricted and restricted common shares, stock options, stock appreciation rights, and 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.
1 unchanged sentence
The terms of the long-term incentive awards granted under the revised program may vary from year to year.
−Removed: Through June 30, 2024, awards under the 2015 Incentive Plan consisted of restricted and unrestricted common shares, RSUs, and stock options.
+Added: Through September 30, 2024, awards under the 2015 Incentive Plan consisted of restricted and unrestricted common shares, RSUs, and stock options.
The Company accounts for forfeitures of restricted and unrestricted common shares, RSUs, and stock options when they occur instead of estimating the forfeitures.
9 unchanged sentences
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 U.S.
−Removed: treasury bond rates with a maturity equal to the remaining performance period of the award,
−Removed: and the expected term on the performance period of the award.
+Added: treasury bond rates with a maturity equal to the remaining performance period of the award, and the expected term on the performance period of the award.
The assumptions used to value the TSR performance RSUs were an expected volatility of 27.21 %, a risk-free interest rate of 4.01 %, and an expected life of 3 years.
3 unchanged sentences
Share-Based Compensation Expense
−Removed: Share-based compensation expense recognized in the Condensed Consolidated Financial Statements for all outstanding share-based awards was $ 733,000 and $ 590,000 for the three months ended June 30, 2024 and 2023, respectively, and $ 1.5 million and $ 2.1 million for the six months ended June 30, 2024 and 2023, respectively.
+Added: Share-based compensation expense recognized in the Condensed Consolidated Financial Statements for all outstanding share-based awards was $ 764,000 and $ 602,000 for the three months ended September 30, 2024 and 2023, respectively, and $ 2.2 million and $ 2.7 million for the nine months ended September 30, 2024 and 2023, respectively.
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.
−Removed: This resulted in the acceleration of share-based compensation expense for those awards resulting in an additional $ 737,000 in expense for the six months ended June 30, 2023.
+Added: This resulted in the acceleration of share-based compensation expense for those awards resulting in an additional $ 737,000 in expense for the nine months ended September 30, 2023.
NOTE 12 • SUBSEQUENT EVENTS
−Removed: Through July 29, 2024, Centerspace issued approximately 431,000 common shares under its ATM Program 10b5-1 trading arrangement at an average net price per share of $ 68.50 , totaling $ 29.6 million, net of commissions.
−Removed: On July 26, 2024, Centerspace amended its Unsecured Credit Facility to extend the maturity date to July 26, 2028.
−Removed: The borrowing capacity remained at $ 250.0 million.
+Added: On October 1, 2024, Centerspace closed on the acquisition of The Lydian in Denver, CO, for total consideration of $ 54.0 million.
+Added: The Lydian is a 129 -home apartment community that also includes 23,000 square feet of fully leased office and street-level retail space.
+Added: The acquisition was financed through the assumption of mortgage debt, issuance of common operating partnership units, and cash.
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.