What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-18 compared with 2024-02-20 · 275 added, 240 removed, 1106 unchanged (32% of the section changed)

46 unchanged sentences

3.2 Seventh Restated Trustee’s Regulations (Bylaws) of Investors Real Estate Trust, adopted on April 27, 2020 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 1, 2020).

3.3 Articles Supplementary to the Company’s Articles of Amendment and Third Restated Declaration of Trust designating the Company’s 6.625% Series C Cumulative Redeemable Preferred Shares, no par value per share (incorporated by reference to Exhibit 3.

2 of the Company’s Registration Statement on Form 8-A filed with the SEC on September 28, 2017).

4.1 Note Purchase and Private Shelf Agreement, dated as of September 13, 2019, by and among IRET Properties, a North Dakota Limited Partnership, as the Issuer, Investors Real Estate Trust, as the Parent, IRET, Inc., as the General Partner, certain subsidiaries of the Parent, PGIM, Inc., an affiliate of Prudential Financial, Inc., certain affiliates of PGIM, Inc., and the Purchasers of the Series A Notes (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 17, 2019).

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10.6** Form of Stock Award Agreement under the 2015 Incentive Plan dated June 22, 2016 (incorporated herein by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K filed with the Commission on June 29, 2016).

10.7** Form of Stock Award Agreement (one-year measurement period) under the 2015 Incentive Plan dated September 16, 2015 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015).

10.8** Form of Stock Award Agreement (two-year measurement period) under the 2015 Incentive Plan dated September 16, 2015 (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015).

10.9** Form of Stock Award Agreement (three-year measurement period) under the 2015 Incentive Plan dated September 16, 2015 (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015).

Form of Change in Control Severance Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 7, 2015).

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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).

(incorporated herein by reference to Exhibit 10.3 of the Company’s Current Report on 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).

1 unchanged sentence

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

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 Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on June 2, 2023).

Employment Agreement, effective February 20, 2024, by and between Centerspace and Bhairav Patel (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on February 20, 2024).

Amendment No.

1, dated May 9, 2024, to Equity Distribution Agreement dated September 10, 2021 between the Company and BMO Capital Markets Corp., BTIG, LLC, Jefferies LLC, Raymond James & Associates, Inc., BofA Securities, Inc., UBS Securities LLC, Piper Sandler & Co., and certain of their affiliates and agents (incorporated herein by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 9, 2024).

Third Amendment to Second Amended and Restated Credit Agreement and related Annex I attached thereto, by and among IRET Properties, a North Dakota Limited Partnership, as the Borrower, the Guarantors party thereto, the several financial institutions party thereto, as Lenders, and the Bank of Montreal, as Administrative Agent (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Commission on July 29, 2024).

Amendment No.

2, dated July 29, 2024, to Equity Distribution Agreement, dated September 10, 2021, as amended by Amendment No.

1 to the Equity Distribution Agreement, effective as of May 9, 2024, between the Company and BMO Capital Markets Corp., Robert W.

Incorporated, BofA Securities, Inc., BTIG LLC, Jefferies LLC, Piper Sandler & Co., Raymond James & Associates, Inc., RBC Capital Markets, LLC and UBS Securities LLC and certain of their affiliates and agents ( incorporated by refere nce to Exhibit 10.1 to the Company ’ s Quarterly Report on Form 10-Q filed with the Commission on October 28, 2024) .

Amendment No.

3, dated September 9, 2024, to Equity Distribution Agreement, dated September 10, 2021, as amended by Amendment No.

1 to the Equity Distribution Agreement, effective as of May 9, 2024 and Amendment No.

2 to the Equity Distribution Agreement, effective as of July 29, 2024, between the Company and BMO Capital Markets Corp., Robert W.

Incorporated, BofA Securities, Inc., BTIG, LLC, Colliers Securities LLC, Janney Montgomery Scott LLC, Jefferies LLC, Piper Sandler & Co., Raymond James & Associates, Inc., RBC Capital Markets, LLC and UBS Securities LLC and certain of their affiliates and agents (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 9, 2024).

Amendment No.

4 to Note Purchase and Private Shelf Agreement, dated October 28, 2024, by and among Centerspace, LP, Centerspace, Centerspace, Inc., PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc.

(incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on October 28, 2024.)

Insider Trading Policy (incorporated by reference to the Company’s Annual Report on Form 10-K filed with the Commission on February 20, 2024).

Subsidiaries of Centerspace

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Section 302 Certification of President and Chief Executive Officer

Section 302 Certification of Chief Financial Officer

Section 302 Certification of Executive Vice President and Chief Financial Officer

Section 906 Certification of the President and Chief Executive Officer

Section 906 Certification of the Chief Financial Officer

Clawback Policy

Section 906 Certification of the Executive Vice President and Chief Financial Officer

97.1 Clawback Policy (incorporated by reference to the Company’s Annual Report on Form 10-K filed with the C ommission on February 20, 2024).

The following materials from our Annual Report on Form 10-K for the twelve-months ended December 31, 2024 formatted in Inline eXtensible Business Reporting Language (“XBRL”):

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Emily Nagle Green Trustee February 18, 2025

Hall Trustee February 20, 2024

/s/ Jeffrey P.

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Rodney Jones-Tyson Trustee February 18, 2025

/s/ Ola Oyinsan Hixon

Ola Oyinsan Hixon

Trustee February 18, 2025

CENTERSPACE AND SUBSIDIARIES

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Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Centerspace (a North Dakota real estate investment trust) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Centerspace (a North Dakota real estate investment trust) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 18, 2025 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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$ 16,560 $ 16,560

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

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 December 31, 2024 and 3,881 shares issued and outstanding at December 31, 2023)

Common Shares of Beneficial Interest (Unlimited authorization, no par value, 16,719 shares issued and outstanding at December 31, 2024 and 14,963 shares issued and outstanding at December 31, 2023)

22 unchanged sentences

TOTAL EXPENSES 239,931 244,236 242,896

Gain on sale of real estate and other investments

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

( 577 ) 71,244 41

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Interest expense ( 37,280 ) ( 36,429 ) ( 32,750 )

Interest and other income (loss)

Interest and other income

2,613 1,207 1,248

7 unchanged sentences

Dividends to preferred shareholders ( 4,821 ) ( 6,428 ) ( 6,428 )

Redemption of preferred shares ( 3,511 ) — —

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ ( 19,660 ) $ 34,897 $ ( 20,537 )

12 unchanged sentences

Unrealized gain from derivative instrument

— 1,581 2,383

Loss on derivative instrument reclassified into earnings

936 799 9,087

Total comprehensive income (loss) $ ( 13,480 ) $ 50,167 $ ( 15,261 )

8 unchanged sentences

NUMBER ACCUMULATED ACCUMULATED

OF DISTRIBUTIONS OTHER NONREDEEMABLE

OF DISTRIBUTIONS OTHER

PREFERRED COMMON COMMON IN EXCESS OF COMPREHENSIVE NONCONTROLLING TOTAL

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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 )

1 unchanged sentence

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

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

Amortization of swap settlements 936 936

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

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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

1 unchanged sentence

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

Share-based compensation, net of forfeitures 14 3,014 3,014

Sale of common shares, net 1,587 112,003 112,003

Issuance of Units 5,296 8,579 13,875

Redemption of Units for common shares 71 ( 2,663 ) 2,663 —

13 unchanged sentences

Depreciation and amortization, including amortization of capitalized loan costs 107,648 103,172 106,208

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

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

577 ( 71,240 ) ( 41 )

1 unchanged sentence

Impairment of real estate investments — 5,218 —

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

(Gain) loss on interest rate swap termination, mark-to-market, and amortization 712 936 ( 118 )

Provision for bad debt 945 340 1,355

Non-cash casualty loss 2,389 1,350 254

Other, net 611 86 ( 646 )

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Net proceeds from sale of real estate and other investments 18,251 223,259 41

Proceeds from insurance 1,949 328 1,668

Payments for acquisitions of real estate assets ( 1,030 ) ( 42,226 ) ( 104,666 )

Payments for improvements of real estate assets ( 56,654 ) ( 58,825 ) ( 56,568 )

Payments for non-real estate assets — ( 122 ) ( 1,264 )

Other investing activities 325 ( 748 ) ( 569 )

11 unchanged sentences

Repurchase of common shares ( 4,703 ) ( 11,539 ) ( 29,059 )

Redemption of Series C preferred shares ( 97,041 ) — —

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

2 unchanged sentences

Distributions paid to noncontrolling interests – Operating Partnership and Series E preferred units ( 9,111 ) ( 9,530 ) ( 9,797 )

Distributions paid to preferred unitholders ( 640 ) ( 640 ) ( 640 )

Distributions paid to Series D preferred unitholders ( 640 ) ( 640 ) ( 640 )

Other financing activities ( 137 ) ( 185 ) ( 404 )

17 unchanged sentences

Real estate assets acquired through assumption of debt 39,000 52,723 41,623

Real estate assets acquired through issuance of operating partnership units — 22,882 —

Real estate assets and related notes receivable acquired through issuance of operating partnership units 13,875 — 22,882

Fair value adjustment to debt ( 7,568 ) ( 3,924 ) 1,224

Series E preferred units converted to common shares ( 8,938 ) ( 1,390 ) ( 3,667 )

Non-cash interest income 1,354 — —

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

1 unchanged sentence

Note receivable exchanged through real estate acquisition — — ( 43,276 )

Real estate acquired through issuance of Series E preferred units — — 217,513

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

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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 the classifications within the Consolidated Statements of Cash Flows.

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

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

RECENT ACCOUNTING PRONOUNCEMENTS

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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 intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This ASU is effective and was adopted during the current year ended December 31, 2024.

The ASU required additional disclosure but did not have a material impact on the Consolidated Financial Statements.

ASU 2024-03, Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses

This ASU is intended to improve financial reporting by requiring public companies disclose additional information about specific expense categories in the notes to the financial statements.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

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

The ASU will require additional disclosure but is not expected to have a material impact on the Consolidated Financial Statements.

REAL ESTATE INVESTMENTS

Real estate investments are recorded at cost less accumulated depreciation and an adjustment for impairment, if any.

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

Property, consisting primarily of real estate investments, totaled $ 1.9 billion as of December 31, 2024 and 2023, respectively.

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.

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Land is not depreciated.

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.

The Company follows the real estate project costs guidance in Accounting Standards Codification (“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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Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.

During the years ended December 31, 2024 and 2022, the Company did not record a loss for impairment on real estate.

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

1 unchanged sentence

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:

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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.

As of December 31, 2024 and 2023, restricted cash consisted of $ 1.1 million and $ 639,000 , 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.

2 unchanged sentences

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.

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

For the years ended December 31, 2024, 2023, and 2022, rental income represents approximately 98.3 %, 98.1 %, and 97.7 %, respectively, of total revenues and includes gross market rent less adjustments for gain or loss to lease, concessions, vacancy loss, and bad debt.

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Total scheduled lease income - operating leases $ 17,152

REVENUES AND GAINS ON SALE OF REAL ESTATE

REVENUES AND GAINS OR LOSSES 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 to which the Company expects to be entitled for those goods and services.

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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.

For the years ended December 31, 2024, 2023, and 2022, the Company recognized a loss of $ 577,000 , gain of $ 71.2 million, and gain of $ 41,000 , respectively, 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.

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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.

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

As of December 31, 2024 and 2023, other assets consisted of the following amounts:

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(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, 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 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.

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 The Lydian, an apartment community in Denver, Colorado, the Company acquired a tax increment financing note receivable (“TIF”) with an initial principal balance of $ 4.1 million.

As of December 31, 2024, the principal balance was $ 4.1 million, which appears within other assets in the Consolidated Balance Sheets at fair value.

The note bears an interest rate of 6.0 % with payments due periodically each year.

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.

1 unchanged sentence

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

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.

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 mezzanine loan bears interest at 10.0 % per annum which accrues interest that is added to the principal balance and is payable at maturity.

As of December 31, 2024 and 2023, the Company had funded $ 15.1 million and $ 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.

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.

The note receivable appears within other assets in the Consolidated Balance Sheets at fair value.

Property and equipment.

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, 2024 and 2023, property and equipment cost was $ 4.0 million and $ 4.6 million, respectively.

The Consolidated Balance Sheets reflect these assets at cost, net of accumulated depreciation of $ 1.5 million and $ 1.8 million as of December 31, 2024 and 2023, respectively, and are included within other assets.

Intangible Assets.

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

The amortization period reflects the average remaining term of in-place leases acquired, which are generally less than one year for multifamily apartment homes.

For the years ended December 31, 2024, 2023, and 2022, the Company recognized $ 2.8 million, $ 2.6 million, and $ 12.3 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, 2024 related to in-place leases of multifamily apartment homes will be fully amortized in 2025, while in-place leases related to commercial spaces at certain apartment communities will be fully amortized by 2036.

ADVERTISING COSTS

Advertising costs are expensed as incurred and reported on the Consolidated Statement of Operations within the Property operating expenses, excluding real estate taxes line item.

Advertising costs are expensed as incurred and reported on the Consolidated Statements of Operations within the Property operating expenses, excluding real estate taxes line item.

During the years ended December 31, 2024, 2023, and 2022 total advertising expense was $ 3.3 million, $ 3.2 million, and $ 3.2 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.

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.

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

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

During the year ended December 31, 2024, the Company had no severance and transition costs.

INVOLUNTARY CONVERSION OF ASSETS

During the year ended December 31, 2024, Centerspace recognized $ 2.8 million in casualty losses resulting from six new insurance events and updated estimates on four previously reported events.

The Company also recorded $ 566,000 in offsetting insurance receivables for new insurance events which are recorded within other assets on the Consolidated Balance sheets.

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 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.

During the year ended December 31, 2024, the claim was settled for $ 1.6 million, including remediation and other operating expenses.

During the year ended December 31, 2023, Centerspace recorded $ 2.0 million in additional 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.

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.

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 apartment communities 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.

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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.

After the additional judgment, the claimant’s appeal was dismissed.

The Company believes this matter is settled.

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).

The Company calculates diluted net income (loss) per share using the treasury stock method for RSUs and ISOs and the if converted method for Series D preferred units and Series E 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).

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Dividends to preferred shareholders ( 4,821 ) ( 6,428 ) ( 6,428 )

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

Redemption of preferred shares ( 3,511 ) — —

Numerator for basic income (loss) per share – net income (loss) available to common shareholders ( 19,660 ) 34,897 ( 20,537 )

Noncontrolling interests – Operating Partnership and Series E preferred units (1)

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NET INCOME (LOSS) PER COMMON SHARE – DILUTED $ ( 1.27 ) $ 2.32 $ ( 1.35 )

(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

(1) For the years ended December 31, 2024 and 2022 , 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.

(2) For the years ended December 31, 2024, 2023, and 2022, dividends to preferred unitholders were excluded from the calculation of net income (loss) per common share - diluted as they were anti-dilutive.

For the year ended December 31, 2024, operating partnership units of 870,000 , 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 24,000 , and performance-

based RSUs of 31,000 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.

For the year ended December 31, 2023, operating partnership 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 as including these items would have improved net income per share.

For the year ended December 31, 2022, operating partnership 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 as including these items would have improved net loss per share.

NOTE 4 • MEZZANINE EQUITY AND EQUITY

Series D Preferred Units (Mezzanine Equity).

Series D preferred units outstanding were 165,600 preferred units as of December 31, 2024 and 2023.

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 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 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 voting rights.

Distributions to Series D unitholders are presented in the Consolidated Statements of Equity within net income (loss) attributable to controlling interests and noncontrolling interests.

Series C Preferred Shares .

On August 30, 2024, we delivered notice to holders of our 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.

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 were $ 3.5 million in excess of the carrying value and are included in redemption of preferred shares on the Consolidated Statements of Operations.

Such shares were no longer outstanding as of December 31, 2024.

Series C preferred shares outstanding were 3.9 million at December 31, 2023.

The Series C preferred shares were nonvoting and redeemable for cash at $ 25 per share at Centerspace’s option.

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

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.

Outstanding Units in the Operating Partnership were 980,000 Units at December 31, 2024 and 861,000 Units at December 31, 2023.

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.

During the year ended December 31, 2024, Centerspace issued 190,000 Units as partial consideration for the acquisition of one apartment community located in Denver, Colorado.

Exchange Rights.

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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.

Each Series E preferred unit is convertible,

at the holder’s option, into 1.20482 Units.

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.

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

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.

The Company redeemed Series E preferred units in exchange for cash in connection with Series E unitholders exercising their exchange rights during the years ended December 31, 2024 and 2023 as detailed below.

(in thousands)

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Year ended December 31, 2024 — $ — $ —

Year ended December 31, 2023 7 $ 447 $ 52.45

(1) Average price per Series E unit factoring in conversion rate of 1.20482 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.

Common shares outstanding on December 31, 2024 and 2023 totaled 16.7 million and 15.0 million, respectively.

During the years ended December 31, 2024 and 2023, Centerspace issued approximately 13,524 and 19,606 common shares, respectively, with a total grant-date value of $ 1.0 million and $ 1.8 million, respectively, under its 2015 Incentive Plan, as share-based compensation for employees and trustees.

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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.

During the year ended December 31, 2024, approximately 200 common shares were forfeited under the 2015 Incentive Plan compared to 15,000 common shares forfeited during the year ended December 31, 2023.

Equity Distribution Agreement.

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.

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.

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.

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Year ended December 31, 2024 (2)

1,587 $ 112,613 $ 71.66

Year ended December 31, 2023 — $ — $ —

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

(1) Total consideration is net of $ 1.1 million in commissions for the year ended December 31, 2024.

(2) Includes 869,000 shares sold on a forward basis for $ 62.7 million which were physically settled during the year ended December 31, 2024.

Share Repurchase Program .

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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

years ended December 31, 2023 and 2022.

The table below provides details on the shares repurchased during the years ended December 31, 2024 and 2023.

As of December 31, 2024, the Company had $ 4.7 million remaining authorized for purchase under this program.

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(1) Amount includes commissions.

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).

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, as of December 31, 2023 and 2022).

Series D Preferred Units (Mezzanine Equity).

Series D preferred units outstanding were 165,600 preferred units as of December 31, 2023 and 2022.

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

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 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.

Distributions to Series D unitholders are presented in the Consolidated Statements of Equity within net income (loss) attributable to controlling interests and noncontrolling interests.

NOTE 5 • NONCONTROLLING INTERESTS

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NOTE 6 • DEBT

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

The following table summarizes the Company’s secured and unsecured debt at December 31, 2024 and December 31, 2023:

(in thousands)

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$ 47,359 5.86 % $ 30,000 6.74 % 3.37

Term loans (2)

— — 100,000 5.57 % —

Unsecured senior notes (2)(4)

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420,414 4.02 % 392,274 4.05 % 5.39

Secured debt $ 619,264 $ 591,124 5.76

Subtotal $ 966,623 3.58 % $ 921,124 3.54 % 5.60

Premiums and discounts, net $ ( 7,496 ) $ ( 1,134 )

Deferred financing costs, net $ ( 3,742 ) $ ( 3,968 )

Total debt $ 955,385 $ 916,022

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

(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.

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

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

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15 at December 31, 2024 and 14 at December 31, 2023.

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

(4) Interest rate is fixed.

As of December 31, 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 (the “Unsecured Credit Facility”) is a revolving, multi-bank line of credit, with Bank of Montreal serving as administrative agent.

The Company’s primary unsecured credit facility (the “Unsecured Credit Facility” or “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.

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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 %.

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.

On July 26, 2024, the Unsecured Credit Facility was amended to extend maturity and to modify the leverage-based margin ratios applicable to borrowings.

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.

As amended, 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 20 - 80 basis points, or daily or term SOFR, plus a margin that ranges from 120 - 180 basis points with the consolidated leverage ratio described under the Third Amended and Restated Credit Agreement, as amended.

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, 2024.

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 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.

In September 2024, Centerspace entered into an operating line of credit agreement with US Bank, N.A.

which has a borrowing capacity of up to $ 10.0 million and pricing based on SOFR.

This operating line of credit terminates in September 2025 and is designed to enhance treasury management activities and more effectively manage cash balances.

As of December 31, 2024 there was $ 3.4 million outstanding on this line of credit.

Centerspace had a $ 6.0 million operating line of credit with Wells Fargo Bank, N.A.

with pricing based on SOFR that matured on August 31, 2024.

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

Centerspace had 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 had issued $ 175.0 million in unsecured senior promissory notes (“Unsecured Shelf Notes”).

On October 28, 2024, the shelf agreement was amended to extend the period of time during which the Company may borrow money to October 2027 and to increase the borrowing capacity to $ 300.0 million.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.

The following table shows the notes issued under both agreements as of December 31, 2024 and 2023.

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

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”).

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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.

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 February 1, 2037.

As of December 31, 2024 and 2023, the mortgage loans had a balance of $ 420.4 million and $ 392.3 million, respectively, excluding unamortized premiums and discounts.

As of December 31, 2024, the Company believes there are no material defaults or instances of material noncompliance in regard to any of these mortgage loans.

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(in thousands)

2025 $ 39,649

Thereafter 510,701

Total payments $ 966,623

Premiums and discounts, net ( 7,496 )

Deferred financing costs, net ( 3,742 )

Total 955,385

NOTE 7 • DERIVATIVE INSTRUMENTS

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

Centerspace had, in the past, 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.

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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, 2024, 2023, and 2022 is detailed below.

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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” .

In determining the fair value of other financial instruments, Centerspace applies FASB 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 data (Level 3).

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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.

As of December 31, 2024, the Company had unfunded commitments of $ 950,000 .

Fair Value Measurements on a Nonrecurring Basis

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, 2024.

(in thousands)

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December 31, 2023

Real estate investments measured at fair value Real estate investments

Real estate investments measured at fair value Property owned

$ 19,250 $ — $ 19,250 $ —

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Revolving lines of credit Revolving lines of credit 47,359 47,359 30,000 30,000

Notes payable — — 100,000 100,000

Unsecured senior notes Notes payable 300,000 253,808 300,000 252,108

Mortgages payable - Fannie Mae credit facility Mortgages payable 198,850 166,679 198,850 168,555

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

Mortgages payable - other (1)

Mortgages payable 420,414 383,213 392,274 367,080

(1) Excludes debt premiums and discounts

NOTE 9 • ACQUISITIONS AND DISPOSITIONS

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Land Building Intangible

303 homes - Lake Vista Apartment Homes - Loveland, CO

129 homes - The Lydian - Denver, CO

October 1, 2024 $ 53,359 $ 484 $ 13,875 $ 39,000 $ 4,804 $ 34,997 $ 2,263 $ 11,295

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(1) Excludes $ 546,000 in capitalized transaction cost.

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

(2) Fair value of operating partnership units issued on acquisition, including a $ 641,000 fair value adjustment.

(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.

(5) Debt premium on assumed mortgage and TIF note acquired.

Refer to Note 2 for further TIF note discussion.

Year Ended December 31, 2023

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Form of Consideration Investment Allocation

Acquisitions Cash Units (2)

Acquisitions Cash Other (2)

Land Building Intangible

191 homes - Martin Blu - Minneapolis, MN

January 4, 2022 $ 49,825 $ 3,031 $ 18,885 $ 27,909 $ 3,547 $ 45,212 $ 1,813 $ ( 747 )

31 homes - Elements - Minneapolis, MN

January 4, 2022 9,066 1,290 1,748 6,028 941 7,853 335 ( 63 )

45 homes - Zest - Minneapolis, MN

January 4, 2022 11,364 1,429 2,249 7,686 936 10,261 574 ( 407 )

130 homes - Noko Apartments - Minneapolis, MN

January 26, 2022 46,619 3,343 — 43,276 1,915 42,754 1,950 —

215 homes - Lyra Apartments - Centennial, CO

September 30, 2022 95,000 95,000 — — 6,473 86,149 2,378 —

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 for Martin Blu, Zest, and Elements.

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

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

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

(5) Debt discount on assumed mortgage.

(4) Debt premium on assumed mortgage.

During the year ended December 31, 2024, Centerspace disposed of two apartment communities in two exchange transactions for an aggregate sales price of $ 19.0 million.

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.

The dispositions for the years ended December 31, 2024 and 2023 are detailed below.

Year Ended December 31, 2024

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

69 homes - Southdale Parc - Richfield, MN

February 29, 2024 $ 6,200 $ 6,497 $ ( 297 )

136 homes - Wingate - New Hope, MN

February 29, 2024 12,800 13,080 ( 280 )

Total Dispositions $ 19,000 $ 19,577 $ ( 577 )

Year Ended December 31, 2023

(in thousands)

Date Book Value

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

115 homes - Boulder Court - Eagan, MN

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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, 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.

The CODMs evaluate each property’s operating results using net operating income (“NOI”) to make decisions about resources to be allocated, to assess property performance, and do not group the properties based on geography, size, or type for this purpose.

The Company defines NOI as total real estate revenues less property operating expenses, including real estate taxes.

Centerspace believes that NOI is an important 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, including interest income and interest expense, property management expenses, loss on litigation settlement, casualty losses, and general and administrative expense.

The apartment communities have similar long-term economic characteristics and similar operating characteristics, such as type and length of lease, services offered to residents, and property management practices.

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

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

“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, which did not meet the aggregation criteria.

During the year ended December 31, 2024, two sold apartment communities were reclassified from the multifamily segment to all other for all periods presented.

The following tables present NOI for the years ended December 31, 2024, 2023, and 2022, respectively, along with reconciliations to net income (loss) as reported in the Consolidated Financial Statements.

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

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Revenue $ 257,865 $ 3,118 $ 260,983

Property operating expenses, including real estate taxes 98,762 7,050 105,812

Property operating expenses

On-site compensation (1)

27,060 86 27,146

Repairs and maintenance (2)

15,142 259 15,401

Utilities 15,300 224 15,524

Administrative and marketing 7,147 36 7,183

Insurance 10,983 101 11,084

Real estate taxes 26,317 589 26,906

Net operating income $ 155,916 $ 1,823 $ 157,739

2 unchanged sentences

Depreciation and amortization ( 106,450 )

Impairment of real estate investments ( 5,218 )

General and administrative expenses ( 17,802 )

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

Loss on litigation settlement ( 3,864 )

Loss on sale of real estate and other investments

Interest expense ( 37,280 )

Interest and other income 2,613

Net income $ 49,231

(1) On-site compensation for administration, leasing, and maintenance personnel.

(2) Includes turnover expense.

(in thousands)

1 unchanged sentence

Revenue $ 243,515 $ 17,794 $ 261,309

Property operating expenses, including real estate taxes 92,327 16,310 108,637

Property operating expenses

On-site compensation (1)

25,934 1,969 27,903

Repairs and maintenance (2)

13,953 1,727 15,680

Utilities 15,421 1,598 17,019

Administrative and marketing 5,804 425 6,229

Insurance 9,399 823 10,222

Real estate taxes 26,722 2,037 28,759

Net operating income $ 146,282 $ 9,215 $ 155,497

2 unchanged sentences

Depreciation and amortization ( 101,678 )

Impairment of real estate investments ( 5,218 )

General and administrative expenses ( 20,080 )

2 unchanged sentences

Interest and other income 1,207

Net loss $ ( 17,641 )

Loss on litigation settlement ( 3,864 )

(1) On-site compensation for administration, leasing, and maintenance personnel.

(2) Includes turnover expense.

(in thousands)

1 unchanged sentence

Revenue $ 221,836 $ 34,880 $ 256,716

Property operating expenses, including real estate taxes 68,618 13,239 81,857

Property operating expenses

On-site compensation (1)

23,038 4,306 27,344

Repairs and maintenance (2)

14,300 3,396 17,696

Utilities 15,845 3,527 19,372

Administrative and marketing 5,130 784 5,914

Insurance 8,007 1,737 9,744

Real estate taxes 24,524 4,043 28,567

Net operating income $ 130,992 $ 17,087 $ 148,079

6 unchanged sentences

Interest income and other loss 1,248

Net loss $ ( 2,101 )

(1) On-site compensation for administration, leasing, and maintenance personnel.

(2) Includes turnover expense.

Segment Assets and Accumulated Depreciation

Segment assets are summarized as follows as of December 31, 2024 and 2023, respectively, along with reconciliations to the Consolidated Financial Statements:

(in thousands)

22 unchanged sentences

Matching contributions are fully vested when made.

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.

Centerspace recognized expense of approximately $ 1.3 million during each of the years ended December 31, 2024, 2023, and 2022.

NOTE 12 • COMMITMENTS AND CONTINGENCIES

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.

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.

Centerspace was the named defendant in a lawsuit where the owner of a neighboring property claims a retaining wall at one of its apartment communities 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.

During the year ended December 31, 2023, 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.

2 unchanged sentences

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.

After the additional judgment, the claimant’s appeal was dismissed.

The Company believes this matter is settled.

Environmental Matters .

7 unchanged sentences

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.

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.

Twenty-eight properties, consisting of approximately 5,162 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.

7 unchanged sentences

Unfunded Commitments.

Centerspace has unfunded commitments of $ 1.0 million in two real estate technology venture funds.

Centerspace has unfunded commitments of $ 950,000 in two real estate technology venture funds.

Refer to Note 8 - Fair Value Measurements for additional information regarding these investments.

1 unchanged sentence

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.

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.

3 unchanged sentences

Year Ended December 31, 2024 LTIP Awards

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.

Awards granted to employees on January 1, 2024 consisted of an aggregate of 21,059 time-based RSU awards and 18,876 performance RSUs based on total shareholder return (“TSR”).

The time-based RSUs vest as to one-third of the shares on each of January 1, 2025, January 1, 2026, and January 1, 2027.

The stock options vest as to 25 % on each of January 1, 2024, January 1, 2025, January 1, 2026, and January 1, 2027 and expire 10 years after grant date.

The fair value of stock options was $ 11.086 per share and was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

Exercise price $ 58.67

Risk-free rate 3.97 %

Expected term 6.25 years

Expected volatility 28.7 %

Dividend yield 4.977 %

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.

2 unchanged sentences

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.

3 unchanged sentences

The share price at the grant date, January 1, 2024, was $ 58.20 per share.

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 $ 3,014 $ 3,295 $ 2,615

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.

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 our former CEO.

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.

1 unchanged sentence

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.

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

Restricted Stock Units

4 unchanged sentences

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 Company recognizes 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 $ 966,000 , which the Company expects to recognize over a weighted average period of 1.4 years.

7 unchanged sentences

Vested ( 13,357 ) 69.24 — —

Change in awards (1)

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

8 unchanged sentences

Unvested at December 31, 2024 46,493 $ 61.16 31,171 $ 81.40

(1) Represents the change in the number of restricted stock units earned at the end of the measurement period.

Stock Options

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.

During the year ended December 31, 2024, Centerspace did not issue any stock options to employees.

Previously issued stock options vest over a four-year period.

The total compensation costs related to non-vested stock options not yet recognized is $ 77,000 , which the Company expects to recognize over a weighted average period of 1.78 years.

10 unchanged sentences

Exercised ( 20,061 ) 58.67

Expired ( 103,768 ) 73.03

Forfeited ( 1,739 ) 80.66

1 unchanged sentence

Exercisable at December 31, 2023 59,477 70.06

Granted 45,955 58.67

Exercised ( 20,061 ) 58.67

Expired ( 103,768 ) 73.03

Forfeited ( 1,739 ) 80.66

Outstanding at December 31, 2024 117,010 $ 71.41

1 unchanged sentence

The intrinsic value of a stock option represents the amount by which the current price of the underlying stock exceeds the exercise price of the option.

As of December 31, 2023, stock options outstanding had no aggregate intrinsic value with a weighted average remaining contractual term of 5.61 years.

NOTE 14 • SUBSEQUENT EVENTS

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.

As of December 31, 2024, stock options outstanding had $ 48,000 aggregate intrinsic value with a weighted average remaining contractual term of 5.2 years years.

CENTERSPACE AND SUBSIDIARIES

31 unchanged sentences

Dylan at RiNo - Denver, CO — 12,155 77,215 1,699 12,241 78,828 91,069 ( 19,023 ) 2016 2017 30 years

Elements of Linden Hills - Minneapolis, MN 5,676 941 7,853 275 949 8,120 9,069 ( 1,045 ) 2015 2022 30 years

Evergreen Apartment Homes - Isanti, MN — 1,129 5,524 761 1,159 6,255 7,414 ( 2,953 ) 2006 2008 Up to 37

12 unchanged sentences

Lugano at Cherry Creek - Denver, CO — 7,679 87,766 9,722 7,679 97,488 105,167 ( 20,144 ) 2010 2019 30 years

Lyra Apartments - Centennial, CO 37,809 6,473 86,149 1,166 6,481 87,307 93,788 ( 7,972 ) 2022 2022 30 years

Martin Blu - Eden Prairie, MN 25,909 3,547 45,212 1,418 3,560 46,617 50,177 ( 5,754 ) 2015 2022 30 years

Meadows Apartments - Jamestown, ND — 590 4,519 2,059 733 6,435 7,168 ( 4,340 ) 1999 1998 Up to 37

3 unchanged sentences

New Hope Garden & Village - New Hope, MN 9,943 1,603 12,578 1,631 1,651 14,161 15,812 ( 2,132 ) 1969 2021 30 years

Noko Apartments - Minneapolis, MN — 1,915 42,636 622 1,918 43,255 45,173 ( 5,152 ) 2021 2022 30 years

Northridge Apartments - Bismarck, ND — 884 7,515 306 1,057 7,648 8,705 ( 2,689 ) 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

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

CENTERSPACE AND SUBSIDIARIES

10 unchanged sentences

Acquisition (3)

Olympic Village Apartments - Billings, MT — 1,164 10,441 4,216 1,976 13,845 15,821 ( 9,478 ) 2000 2000 Up to 37

Oxbo Urban Rentals - St Paul, MN 15,760 5,809 51,586 971 5,822 52,544 58,366 ( 13,293 ) 2016 2017 30 years

Palisades - Roseville, MN 19,723 6,919 46,577 12,115 6,959 58,652 65,611 ( 6,646 ) 1973 2021 30 years

Park Place Apartments - Plymouth, MN — 10,609 80,781 21,392 10,819 101,963 112,782 ( 31,841 ) 1985 2017 30 years

Parkhouse Apartment Homes - Thornton, CO 87,881 10,474 132,105 6,740 10,484 138,835 149,319 ( 23,403 ) 2016 2020 30 years

15 unchanged sentences

— 215 3,007 1,093 273 4,042 4,315 ( 1,557 ) 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 11,915 3,583 51,987 55,570 ( 15,973 ) 1988 2019 30 years

1 unchanged sentence

Sunset Trail Apartment Homes - Rochester, MN — 336 12,814 6,840 826 19,164 19,990 ( 11,246 ) 2000 1999 Up to 37

The Bosk - Woodbury, MN 31,673 5,367 40,422 18,580 5,449 58,920 64,369 ( 8,834 ) 1974 2021 30 years

Union Pointe - Longmont, CO — 5,727 69,966 1,341 5,736 71,298 77,034 ( 11,212 ) 2019 2021 30 years

2 unchanged sentences

Whispering Ridge - Omaha, NE 21,800 2,139 25,424 4,942 2,551 29,954 32,505 ( 12,710 ) 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 2,335 4,040 22,315 26,355 ( 2,963 ) 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 6,340 761 11,977 12,738 ( 8,561 ) 1990 1997 Up to 37

Zest - Minneapolis, MN 7,277 936 10,209 542 946 10,741 11,687 ( 1,360 ) 2016 2022 30 years

Total Same-Store $ 532,032 $ 188,308 $ 1,855,791 $ 289,819 $ 200,389 $ 2,133,529 $ 2,333,918 $ ( 616,574 )

Non-Same-Store

Elements of Linden Hills - Minneapolis, MN 5,842 941 7,853 290 949 8,135 9,084 ( 686 ) 2015 2022 30 years

Lake Vista Apartments Homes - Loveland, CO $ 52,232 $ 6,618 $ 80,737 $ 1,930 $ 6,649 $ 82,636 $ 89,285 $ ( 4,529 ) 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

Noko Apartments - Minneapolis, MN — 1,915 42,636 295 1,918 42,928 44,846 ( 3,401 ) 2021 2022 30 years

Zest - Minneapolis, MN 7,717 936 10,209 493 946 10,692 11,638 ( 885 ) 2016 2022 30 years

Lydian - Denver, CO 35,000 4,852 34,680 26 4,852 34,706 39,558 ( 342 ) 2018 2024 30 years

Total Non-Same-Store $ 87,232 $ 11,470 $ 115,417 $ 1,956 $ 11,501 $ 117,342 $ 128,843 $ ( 4,871 )

3 unchanged sentences

— $ — $ 5,879 $ 316 $ — $ 6,195 $ 6,195 $ ( 1,636 ) 2014 2014 Up to 37

Civic Lofts - Denver, CO — — — — — — — — 2019 2021 30 years

CENTERSPACE AND SUBSIDIARIES

10 unchanged sentences

Acquisition (3)

Civic Lofts - Denver, CO — — — — — — — — 2019 2021 30 years

Lugano at Cherry Creek - Denver, CO — — 1,600 863 — 2,463 2,463 ( 466 ) 2010 2019 30 years

Lydian - Denver, CO (4)

— — 668 4 — 672 672 ( 28 ) 2018 2024 30 years

Noko Apartments - Minneapolis, MN — — 118 — — 118 118 ( 25 ) 2021 2022 30 years

Oxbo Urban Rentals- St Paul, MN — — 3,472 54 — 3,526 3,526 ( 728 ) 2016 2017 30 years

Oxbo Urban Rentals- St Paul, MN (4)

— — 3,472 54 — 3,526 3,526 ( 825 ) 2016 2017 30 years

Red 20 Apartments - Minneapolis, MN (4)

8 unchanged sentences

(1) Amounts in this column are the mortgages payable balance as of December 31, 2024.

These amounts do not include amounts owing under the Company’s multi-bank line of credit, term loan, or unsecured senior notes.

These amounts do not include amounts owing under the Company’s multi-bank line of credit 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.

1 unchanged sentence

(4) Encumbrances are listed with the multifamily property description.

(5) Costs capitalized subsequent to acquisition includes impairment charges.

(5) Costs capitalized subsequent to acquisition includes impairment charges, if any.

CENTERSPACE AND SUBSIDIARIES

31 unchanged sentences

(2) Consists of the write off of fully depreciated assets and accumulated amortization and miscellaneous disposed assets.

(3) The estimated net basis, including held for sale properties, for Federal Income Tax purposes was $ 1.4 billion and $ 1.5 billion at December 31, 2023 and December 31, 2022, respectively.

(3) The estimated net basis, including held for sale properties, for Federal Income Tax purposes was $ 1.4 billion at December 31, 2024 and December 31, 2023.

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