What changed in this filing

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Item 1. Financial Statements

2025-08-04 compared with 2025-05-01 · 397 added, 108 removed, 530 unchanged (49% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

ASSETS (Unaudited)

6 unchanged sentences

Other assets 48,072 45,817

Assets held for sale, net 137,366 —

TOTAL ASSETS $ 2,013,239 $ 1,913,707

3 unchanged sentences

Notes payable, net 299,550 299,520

299,535 299,520

Mortgages payable, net 595,668 608,506

607,184 608,506

Liabilities held for sale, net 1,029 —

TOTAL LIABILITIES $ 1,168,347 $ 1,014,704

COMMITMENTS AND CONTINGENCIES (NOTE 10)

SERIES D PREFERRED UNITS (Cumulative convertible preferred units, $ 100 par value, 166 units issued and outstanding at March 31, 2025 and December 31, 2024, aggregate liquidation preference of $ 16,560 )

SERIES D PREFERRED UNITS (Cumulative convertible preferred units, $ 100 par value, 113 units issued and outstanding at June 30, 2025 and 166 units issued and outstanding at December 31, 2024, aggregate liquidation preference of $ 11,310 at June 30, 2025)

$ 11,310 $ 16,560

Common Shares of Beneficial Interest (Unlimited authorization, no par value, 16,735 shares issued and outstanding at March 31, 2025 and 16,719 shares issued and outstanding at December 31, 2024)

Common Shares of Beneficial Interest (Unlimited authorization, no par value, 16,757 shares issued and outstanding at June 30, 2025 and 16,719 shares issued and outstanding at December 31, 2024)

1,369,376 1,367,637

3 unchanged sentences

Noncontrolling interests – Operating Partnership and Series E preferred units

121,439 129,782

Noncontrolling interests – consolidated real estate entities 2,091 673

5 unchanged sentences

(in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

REVENUE $ 68,549 $ 65,043 $ 135,642 $ 129,549

3 unchanged sentences

Casualty loss

399 510 931 1,330

Depreciation and amortization 27,097 25,714 54,751 52,726

Impairment of real estate investments 14,543 — 14,543 —

General and administrative expenses 4,382 4,216 9,379 8,839

1 unchanged sentence

Loss on sale of real estate and other investments

Operating income

— — — ( 577 )

Operating income (loss)

( 6,796 ) 7,192 ( 2,050 ) 11,267

Interest expense ( 10,724 ) ( 9,332 ) ( 20,359 ) ( 18,539 )

1 unchanged sentence

735 477 1,443 817

$ ( 16,785 ) $ ( 1,663 ) $ ( 20,966 ) $ ( 6,455 )

Dividends to Series D preferred unitholders ( 160 ) ( 160 ) ( 320 ) ( 320 )

Net loss attributable to noncontrolling interests – Operating Partnership and Series E preferred units

2,483 561 3,126 1,640

Net income attributable to noncontrolling interests – consolidated real estate entities

8 unchanged sentences

Loss on derivative instrument reclassified into earnings

174 173 349 370

TOTAL COMPREHENSIVE LOSS

1 unchanged sentence

Net comprehensive loss attributable to noncontrolling interests – Operating Partnership and Series E preferred units

2,508 588 3,177 1,700

Net income attributable to noncontrolling interests – consolidated real estate entities

10 unchanged sentences

(in thousands, except per share data)

Three Months Ended March 31, 2024 PREFERRED

Six Months Ended June 30, 2024 PREFERRED

SHARES NUMBER

6 unchanged sentences

Balance at December 31, 2023

$ 93,530 14,963 $ 1,249,440 $ ( 548,273 ) $ ( 1,119 ) $ 137,447 $ 931,025

Net loss attributable to controlling interests and noncontrolling interests

8 unchanged sentences

Share-based compensation, net of forfeitures 13 1,481 1,481

Sale of common shares, net 110 7,320 7,320

Redemption of Units for common shares 33 1,534 ( 1,534 ) —

Redemption of Series E preferred units for common shares 25 1,150 ( 1,150 ) —

Equity rebalancing ( 673 ) 673 —

Shares repurchased ( 88 ) ( 4,703 ) ( 4,703 )

1 unchanged sentence

Other 1 ( 29 ) ( 16 ) ( 45 )

Balance at March 31, 2024 $ 93,530 14,912 $ 1,160,492 $ ( 564,951 ) $ ( 922 ) $ 218,936 $ 907,085

Three Months Ended March 31, 2025

Balance at June 30, 2024

$ 93,530 15,057 $ 1,255,399 $ ( 579,139 ) $ ( 749 ) $ 129,256 $ 898,297

Six Months Ended June 30, 2025

Balance at December 31, 2024

$ — 16,719 $ 1,367,637 $ ( 615,242 ) $ ( 407 ) $ 130,455 $ 882,443

Net loss attributable to controlling interests and noncontrolling interests

8 unchanged sentences

Redemption of Series E preferred units for common shares 8 338 ( 338 ) —

Equity rebalancing ( 223 ) 223 —

Contribution to noncontrolling interests - consolidated real estate entities 1,428 1,428

Shares withheld for taxes ( 296 ) ( 296 )

Other — ( 306 ) ( 101 ) ( 407 )

Balance at June 30, 2025

$ — 16,757 $ 1,369,376 $ ( 659,266 ) $ ( 58 ) $ 123,530 $ 833,582

See accompanying Notes to Condensed Consolidated Financial Statements.

CENTERSPACE AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited)

(in thousands, except per share data)

Three Months Ended June 30, 2024 PREFERRED

SHARES NUMBER

SHARES COMMON

SHARES ACCUMULATED

DISTRIBUTIONS

NET INCOME (LOSS) ACCUMULATED OTHER COMPREHENSIVE LOSS

NONCONTROLLING

INTERESTS TOTAL

Balance at March 31, 2024

$ 93,530 14,912 $ 1,246,741 $ ( 564,951 ) $ ( 922 ) $ 132,687 $ 907,085

Net loss attributable to controlling interests and noncontrolling interests

( 1,296 ) ( 527 ) ( 1,823 )

Amortization of swap settlements 173 173

Distributions - common shares and Units ($ 0.75 per share and unit)

( 11,285 ) ( 622 ) ( 11,907 )

Distributions - Series C preferred shares ($ 0.4140625 per Series C share)

( 1,607 ) ( 1,607 )

Distributions - Series E preferred units ($ 0.96875 per unit)

( 1,658 ) ( 1,658 )

Share-based compensation, net of forfeitures 10 733 733

Sale of common shares, net 110 7,320 7,320

Redemption of Units for common shares 16 737 ( 737 ) —

Redemption of Series E preferred units from common shares 9 422 ( 422 ) —

Equity rebalancing ( 551 ) 551 —

Other ( 3 ) ( 16 ) ( 19 )

Balance at June 30, 2024

$ 93,530 15,057 $ 1,255,399 $ ( 579,139 ) $ ( 749 ) $ 129,256 $ 898,297

Three Months Ended June 30, 2025

Balance at March 31, 2025

$ — 16,735 $ 1,368,276 $ ( 631,855 ) $ ( 232 ) $ 127,251 $ 863,440

Net loss attributable to controlling interests and noncontrolling interests

( 14,515 ) ( 2,430 ) ( 16,945 )

Amortization of swap settlements 174 174

Distributions - common shares and Units ($ 0.77 per share and unit)

( 12,896 ) ( 746 ) ( 13,642 )

Distributions - Series E preferred units ($ 0.96875 per unit)

( 1,533 ) ( 1,533 )

Share-based compensation, net of forfeitures 10 833 833

Redemption of Units for common shares 5 201 ( 201 ) —

Redemption of Series E preferred units for common shares 8 323 ( 323 ) —

Equity rebalancing ( 129 ) 129 —

Contribution to noncontrolling interests - consolidated real estate entities 1,428 1,428

Shares withheld for taxes ( 4 ) ( 4 )

Other ( 1 ) ( 124 ) ( 45 ) ( 169 )

Balance at June 30, 2025

$ — 16,757 $ 1,369,376 $ ( 659,266 ) $ ( 58 ) $ 123,530 $ 833,582

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

4 unchanged sentences

Share-based compensation expense 1,691 1,481

Impairment of real estate investments 14,543 —

Amortization of debt premiums and discounts 817 516

8 unchanged sentences

Net proceeds from sale of real estate and other investments

Payments for acquisitions of real estate investments ( 150,076 ) —

Proceeds from insurance 503 1,949

7 unchanged sentences

Principal payments on revolving lines of credit ( 69,236 ) ( 40,556 )

Net proceeds from issuance of common shares — 7,388

Repurchase of common shares — ( 4,703 )

Redemption of Series D preferred units ( 5,250 ) —

Distributions paid to common shareholders ( 25,322 ) ( 22,090 )

3 unchanged sentences

Other financing activities ( 386 ) ( 45 )

Net cash used by financing activities

Net cash provided by (used by) financing activities

$ 118,838 $ ( 12,705 )

10 unchanged sentences

Non-cash interest income 842 336

Unrealized gain (loss) on investment ( 48 ) 11

Contribution to noncontrolling interests - consolidated real estate entities through issuance of note receivable 1,428 —

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

1 unchanged sentence

(in thousands)

Balance sheet description March 31, 2025 December 31, 2024 March 31, 2024

Balance sheet description June 30, 2025 December 31, 2024 June 30, 2024

Cash and cash equivalents $ 12,378 $ 12,030 $ 14,328

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

March 31, 2025

June 30, 2025

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.

As of March 31, 2025, Centerspace owned interests in 71 apartment communities consisting of 13,012 apartment homes.

As of June 30, 2025, Centerspace owned interests in 72 apartment communities consisting of 13,353 apartment homes.

NOTE 2 • BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

17 unchanged sentences

Certain previously reported amounts within net cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows have been reclassified to conform to the current financial statement presentation.

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.

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

IMMATERIAL CORRECTION OF PRIOR PERIOD ERROR

The Company identified immaterial prior period errors in the consolidated financial statements related to the balance of common shares and noncontrolling interest within Total Equity on the consolidated balance sheets and condensed consolidated balance sheets.

The errors related to the equity amount allocated between common shares and noncontrolling interest based on ownership percentage, and did not impact the amount of Total Equity.

The Company assessed the materiality of this change on prior period consolidated financial statements in accordance with SEC Staff Accounting Bulletin No.

99, “Materiality,” (ASC

Topic 250, Accounting for Changes and Error Corrections).

Based on this assessment, the Company concluded that these error corrections are not material to any previously presented consolidated financial statements.

Accordingly, the Company corrected the previously reported immaterial errors as of and for the years ended December 31, 2023 and 2024, the three months ended March 31, 2024, the three and six months ended June 30, 2024, the three and nine months ended September 30, 2024, and the three months ended March 31, 2025 in this Quarterly Report on Form 10-Q.

The financial reporting periods affected by this error include the Company’s previously reported audited consolidated financial statements as of and for the years ended December 31, 2023 and 2024 and the Company’s previously reported interim unaudited condensed consolidated financial statements for the three months ended, March 31, 2024, the three and six months ended June 30, 2024, the three and nine months ended September 30, 2024, and the three months ended March 31, 2025.

In addition, the Company expects to present the corrected interim 2024 amounts in its 2025 condensed consolidated interim financial statements upon the filing of each of its Quarterly Reports on Form 10-Q on a year-to-date basis as a correction to applicable 2024 periods.

A summary of the immaterial corrections to the Company’s previously reported audited and unaudited consolidated financial statements follows.

Corrected Consolidated Balance Sheet as of December 31, 2024 (in thousands)

December 31, 2024

Previously Reported Corrections As Corrected

Common Shares of Beneficial Interest $ 1,269,549 $ 98,088 $ 1,367,637

Total shareholders’ equity 653,900 98,088 751,988

Noncontrolling interests – Operating Partnership and Series E preferred units 227,870 ( 98,088 ) 129,782

Corrected Consolidated Statements of Cash Flows (in thousands)

Three Months Ended March 31, 2025

SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Previously Reported Corrections As Corrected

Operating partnership units converted to common shares $ ( 1,002 ) $ 1,337 $ 335

Series E preferred units converted to common shares ( 43 ) 57 14

Nine Months Ended September 30, 2024

SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Previously Reported Corrections As Corrected

Operating partnership units converted to common shares $ ( 2,212 ) $ 4,558 $ 2,346

Series E preferred units converted to common shares ( 2,271 ) 4,081 1,810

Six Months Ended June 30, 2024

SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Previously Reported Corrections As Corrected

Operating partnership units converted to common shares $ ( 1,367 ) $ 2,901 $ 1,534

Series E preferred units converted to common shares ( 1,220 ) 2,370 1,150

Year Ended December 31, 2024

SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Previously Reported Corrections As Corrected

Operating partnership units converted to common shares $ ( 2,663 ) $ 5,881 $ 3,218

Series E preferred units converted to common shares ( 8,938 ) 16,722 7,784

Year Ended December 31, 2023

SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Previously Reported Corrections As Corrected

Operating partnership units converted to common shares $ ( 1,910 ) $ 7,134 $ 5,224

Series E preferred units converted to common shares ( 1,390 ) 2,947 1,557

Corrected Consolidated Statements of Equity (in thousands)

Previously Reported COMMON SHARES Corrections As Corrected COMMON SHARES Previously Reported NONCONTROLLING INTERESTS Corrections As Corrected NONCONTROLLING INTERESTS

Balance at December 31, 2022 $ 1,177,484 $ 74,658 $ 1,252,142 $ 220,759 $ ( 74,658 ) $ 146,101

Redemption of Units for common shares ( 1,910 ) 7,134 5,224 1,910 ( 7,134 ) ( 5,224 )

Redemption of Series E preferred units for common shares ( 1,390 ) 2,947 1,557 1,390 ( 2,947 ) ( 1,557 )

Equity rebalancing — ( 933 ) ( 933 ) — 933 933

Other ( 246 ) ( 60 ) ( 306 ) ( 682 ) 60 ( 622 )

Balance at December 31, 2023 $ 1,165,694 $ 83,746 $ 1,249,440 $ 221,193 $ ( 83,746 ) $ 137,447

Issuance of Units 5,296 ( 911 ) 4,385 8,579 911 9,490

Redemption of Units for common shares ( 2,663 ) 5,881 3,218 2,663 ( 5,881 ) ( 3,218 )

Redemption of Series E preferred units for common shares ( 8,938 ) 16,722 7,784 8,938 ( 16,722 ) ( 7,784 )

Equity rebalancing — ( 7,350 ) ( 7,350 ) — 7,350 7,350

Balance at December 31, 2024 $ 1,269,549 $ 98,088 $ 1,367,637 $ 228,543 $ ( 98,088 ) $ 130,455

Three Months Ended March 31, 2025

Redemption of Units for common shares ( 1,002 ) 1,337 335 1,002 ( 1,337 ) ( 335 )

Redemption of Series E preferred units for common shares ( 43 ) 57 14 43 ( 57 ) ( 14 )

Equity rebalancing — ( 94 ) ( 94 ) — 94 94

Balance at March 31, 2025 $ 1,268,888 $ 99,388 $ 1,368,276 $ 226,639 $ ( 99,388 ) $ 127,251

Three Months Ended

Previously Reported COMMON SHARES Corrections As Corrected COMMON SHARES Previously Reported NONCONTROLLING INTERESTS Corrections As Corrected NONCONTROLLING INTERESTS

Balance at December 31, 2023 $ 1,165,694 $ 83,746 $ 1,249,440 $ 221,193 $ ( 83,746 ) $ 137,447

Redemption of Units for common shares ( 398 ) 1,195 797 398 ( 1,195 ) ( 797 )

Redemption of Series E preferred units for common shares ( 702 ) 1,430 728 702 ( 1,430 ) ( 728 )

Equity rebalancing — ( 122 ) ( 122 ) — 122 122

Balance at March 31, 2024 $ 1,160,492 $ 86,249 $ 1,246,741 $ 218,936 $ ( 86,249 ) $ 132,687

Redemption of Units for common shares ( 969 ) 1,706 737 969 ( 1,706 ) ( 737 )

Redemption of Series E preferred units for common shares ( 518 ) 940 422 518 ( 940 ) ( 422 )

Equity rebalancing — ( 551 ) ( 551 ) — 551 551

Balance at June 30, 2024 $ 1,167,055 $ 88,344 $ 1,255,399 $ 217,600 $ ( 88,344 ) $ 129,256

Redemption of Units for common shares ( 845 ) 1,657 812 845 ( 1,657 ) ( 812 )

Redemption of Series E preferred units for common shares ( 1,051 ) 1,711 660 1,051 ( 1,711 ) ( 660 )

Equity rebalancing — ( 6,451 ) ( 6,451 ) — 6,451 6,451

Balance at September 30, 2024 $ 1,270,752 $ 85,261 $ 1,356,013 $ 216,125 $ ( 85,261 ) $ 130,864

Six Months Ended June 30, 2024 Previously Reported COMMON SHARES Corrections As Corrected COMMON SHARES Previously Reported NONCONTROLLING INTERESTS Corrections As Corrected NONCONTROLLING INTERESTS

Balance at December 31, 2023 $ 1,165,694 $ 83,746 $ 1,249,440 $ 221,193 $ ( 83,746 ) $ 137,447

Redemption of Units for common shares ( 1,367 ) 2,901 1,534 1,367 ( 2,901 ) ( 1,534 )

Redemption of Series E preferred units for common shares ( 1,220 ) 2,370 1,150 1,220 ( 2,370 ) ( 1,150 )

Equity rebalancing — ( 673 ) ( 673 ) — 673 673

Balance at June 30, 2024 $ 1,167,055 $ 88,344 $ 1,255,399 $ 217,600 $ ( 88,344 ) $ 129,256

Nine Months Ended September 30, 2024 Previously Reported COMMON SHARES Corrections As Corrected COMMON SHARES Previously Reported NONCONTROLLING INTERESTS Corrections As Corrected NONCONTROLLING INTERESTS

Balance at Balance at December 31, 2023 $ 1,165,694 $ 83,746 $ 1,249,440 $ 221,193 $ ( 83,746 ) $ 137,447

Redemption of Units for common shares ( 2,212 ) 4,558 2,346 2,212 ( 4,558 ) ( 2,346 )

Redemption of Series E preferred units for common shares ( 2,271 ) 4,081 1,810 2,271 ( 4,081 ) ( 1,810 )

Equity rebalancing — ( 7,124 ) ( 7,124 ) — 7,124 7,124

Balance at Balance at September 30, 2024 $ 1,270,752 $ 85,261 $ 1,356,013 $ 216,125 $ ( 85,261 ) $ 130,864

RECENT ACCOUNTING PRONOUNCEMENTS

13 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.

As of March 31, 2025 and December 31, 2024, restricted cash consisted of $ 6.1 million and $ 1.1 million, respectively, for real estate deposits and escrows held by lenders.

As of June 30, 2025 and December 31, 2024, restricted cash consisted of $ 5.8 million and $ 1.1 million, 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 FASB Accounting Standards Codification (“ASC”) 842, Leases , using a method that represents a straight-line basis over the term of the lease.

For the three months ended March 31, 2025 and 2024, rental income represents approximately 98.4 % and 98.2 % of total revenues, respectively, and includes gross market rent less adjustments for gain or loss to lease, concessions, vacancy loss, and bad debt.

For the three months ended March 31, 2025 and 2024, other property revenues represent the remaining 1.6 % and 1.8 % of total revenues, respectively, and are primarily driven by other fee income, which is typically recognized when earned, at a point in time.

For the three months ended June 30, 2025 and 2024, rental income represented approximately 98.2 % and 98.3 % of total revenues, respectively, and included gross market rent less adjustments for gain or loss to lease, concessions, vacancy loss, and bad debt.

For the three months ended June 30, 2025 and 2024, other property revenues represented the remaining 1.8 % and 1.7 % of total revenues, respectively, and re primarily driven by other fee income, which is typically recognized when earned, at a point in time.

For the six months ended June 30, 2025 and 2024, rental income represented approximately 98.3 % and 98.2 % of total revenues, respectively.

For the six months ended June 30, 2025 and 2024, other property revenues represented the remaining 1.7 % and 1.8 % 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.

The aggregate amount of future scheduled lease income on commercial operating leases, excluding any variable lease income and non-lease components, as of March 31, 2025, was as follows:

The aggregate amount of future scheduled lease income on commercial operating leases, excluding any variable lease income and non-lease components, as of June 30, 2025, was as follows:

(in thousands)

6 unchanged sentences

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

The following table presents the disaggregation of revenue streams for the three months ended March 31, 2025 and 2024:

The following table presents the disaggregation of revenue streams for the three and six months ended June 30, 2025 and 2024:

(in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Revenue Stream Applicable Standard 2025 2024 2025 2024

4 unchanged sentences

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.

During the three months ended March 31, 2025, the Company did not recognize a gain or loss on the sale of real estate and other investments, compared to a loss of $ 577,000 during the three months ended March 31, 2024.

During the three months ended June 30, 2025 and 2024, the Company did not recognize any gain or loss on the sale of real estate and other investments.

During the six months ended June 30, 2025, the Company did not recognize any gain or loss on the sale of real estate and other investments, compared to a loss of $ 577,000 during the six months ended June 30, 2024.

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

1 unchanged sentence

The Company records in-place lease assets at the time of acquisition.

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

During the three months ended March 31, 2025 and 2024, the Company recognized $ 1.1 million and $ 1.7 million, respectively, of amortization expense related to intangibles, included within depreciation and amortization in the Condensed Consolidated Statements of Operations.

The amortization periods reflects the average remaining term of in-place leases acquired, which are generally less than one year for multifamily apartment homes and average lease term for the commercial component of mixed use properties.

During the three months ended June 30, 2025 and 2024, the Company recognized $ 95,000 and $ 37,000 , respectively, of amortization expense related to intangibles.

During the six months ended June 30, 2025 and 2024, the Company recognized $ 1.2 million and $ 1.7 million, respectively, of amortization expense related to intangibles, included within depreciation and amortization in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

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.

As of March 31, 2025, Centerspace held more than 10% of the carrying value of its real estate portfolio in the Minneapolis, Minnesota and Denver, Colorado markets.

As of June 30, 2025, Centerspace held more than 10% of the carrying value of its real estate portfolio in the Minneapolis, Minnesota and Denver, Colorado markets.

HELD FOR SALE

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

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

(b) the sale is probable and expected to be completed within one year under terms that are usual and customary for sales of such assets;

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

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

The Company presents the assets and liabilities of any properties held for sale separately in the Condensed Consolidated Balance Sheets.

Held for sale properties are reported at the lower of their carrying amount or estimated fair value less costs to sell.

Both the real estate assets and corresponding liabilities are presented separately in the accompanying Condensed Consolidated Balance Sheets.

Upon the classification of an asset as held for sale, no further depreciation is recorded.

Disposals representing a strategic shift in operations (e.g., a disposal of a major geographic area, a major line of business or a major equity method investment) will be presented as discontinued operations.

The Company had 12 apartment communities classified as held for sale at June 30, 2025.

During the three months ended June 30, 2025, the Company’s Board of Trustees approved a plan to sell a specific list of apartment communities.

The Company determined these apartment communities met the criteria to be classified as held for sale as of June 30, 2025.

The Company did not have any apartment communities classified as held for sale at December 31, 2024.

The table below presents the major components of assets and liabilities for apartment communities held for sale as of June 30, 2025:

(in thousands)

June 30, 2025

Total real estate investments $ 137,366

Assets held for sale, net $ 137,366

Accounts payable and accrued expenses

Liabilities held for sale, net

IMPAIRMENT OF LONG-LIVED ASSETS

6 unchanged sentences

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

During the three months ended March 31, 2025 and 2024, the Company did not record a loss for impairment on real estate.

During the three and six months ended June 30, 2025, the Company incurred a loss of $ 14.5 million for the impairment of five apartment communities.

These apartment communities were written-down to estimated fair value in connection with the communities classification as held for sale.

During the three and six months ended June 30, 2024 the Company did not record a loss for impairment on real estate.

VARIABLE INTEREST ENTITIES

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

The Company is the primary beneficiary of the VIEs, and the VIEs are required to be consolidated on the balance sheet because the Company has a controlling financial interest in the VIEs and has

both the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs as well as the obligation to absorb losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs.

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.

REAL ESTATE RELATED NOTES RECEIVABLE

During the three months ended June 30, 2025, the Company entered into a note receivable with the limited partner of its joint venture.

As of June 30, 2025, the Company had a $ 1.4 million variable rate note receivable with the limited partner of its consolidated joint venture.

The note matures on April 30, 2026 and bears interest at a rate equal to 1.55 % above the adjusted secured overnight financing rate (“SOFR”).

The note is secured by a pledge of all equity interests in the joint venture held by the limited partner.

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

As of March 31, 2025 and December 31, 2024, the principal balance was $ 4.1 million, which appears within other assets in the Condensed 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 has a tax increment financing note receivable (“TIF”) with a principal balance of $ 5.1 million and $ 5.2 million at March 31, 2025 and December 31, 2024, respectively, which appears within other assets in the Condensed Consolidated Balance Sheets at fair value.

As of June 30, 2025 and December 31, 2024, the principal balance was $ 4.0 million and $ 4.1 million, respectively, which appears within other assets in the Condensed Consolidated Balance Sheets at fair value.

The note bears an interest rate of 6.0 % with payments due in March and July of each year.

In connection with the acquisition of Ironwood, an apartment community in New Hope, Minnesota, the Company has a TIF note receivable with a principal balance of $ 5.1 million and $ 5.2 million as of June 30, 2025 and December 31, 2024, 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.

2 unchanged sentences

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 March 31, 2025 and December 31, 2024, the Company had funded $ 15.1 million of the mezzanine loan.

As of June 30, 2025 and December 31, 2024, the Company had funded $ 15.1 million of the mezzanine loan.

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

4 unchanged sentences

ADVERTISING COSTS

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.

During the three months ended March 31, 2025 and 2024, total advertising expense was $ 623,000 and $ 738,000 , respectively.

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

During the three months ended June 30, 2025 and 2024, total advertising expense was $ 676,000 and $ 742,000 , respectively.

During the six months ended June 30, 2025 and 2024, total advertising expense was $ 1.3 million and $ 1.5 million, respectively.

INVOLUNTARY CONVERSION OF ASSETS

During the three months ended March 31, 2025, Centerspace recorded $ 512,000 in casualty losses resulting from two new insurance events and updated loss estimates on two previously reported events.

During the three months ended June 30, 2025, Centerspace recorded $ 254,000 in casualty losses resulting from updated loss estimates on three previously reported events.

During the six months ended June 30, 2025, the Company recorded $ 776,000 in casualty losses resulting from two new insurance events and updated loss estimates from three previously reported events.

Any business interruption insurance proceeds will be recognized when received in accordance with ASC 610-30.

During the three months ended March 31, 2024, Centerspace recognized $ 618,000 in casualty loss resulting from updated loss estimates from four separate insurance events at apartment communities.

During the three and six months ended June 30, 2024, Centerspace recognized $ 137,000 and $ 755,000 , respectively in casualty losses resulting from updated loss estimates from six separate insurance events at apartment communities.

Any business interruption insurance proceeds will be recognized when received in accordance with ASC 610-30.

1 unchanged sentence

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.

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

During the six months ended June 30, 2024, the claim was settled for $ 1.6 million, including remediation and other operating expenses.

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 vesting of the RSUs, upon exercising of ISOs, or upon conversion of the Series D or Series E preferred units (refer to Note 4 for further discussion of the Series D and the Series E preferred units).

Centerspace has issued restricted stock units (“RSUs”) and incentive stock options (“ISOs”) under its 2015 Incentive Plan, RSUs under its 2025 Incentive Plan (as defined below), 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 vesting of the RSUs, upon exercising of ISOs, or upon conversion of the Series D or Series E preferred units (refer to Note 4 for further discussion of the Series D and the Series E 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.

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

The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted net income (loss) per share reported in the Condensed Consolidated Financial Statements for the three months ended March 31, 2025 and 2024.

(in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net loss attributable to controlling interests

7 unchanged sentences

$ ( 0.87 ) $ ( 0.19 ) $ ( 1.09 ) $ ( 0.56 )

(1) For the three months ended March 31, 2025 and 2024, dividends to preferred unitholders and the impact of Units and Series E preferred units are excluded from the calculation of net income (loss) per common share - diluted as they were anti-dilutive.

For the three months ended March 31, 2025, operating partnership units of 980,000 , Series D preferred units of 228,000 , as converted, Series E preferred units of 1.9 million, as converted, time-based RSUs and options of 35,000 , and performance-based RSUs of 43,000 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 three months ended March 31, 2024, operating partnership units of 854,000 , Series D preferred units of 228,000 , as converted, Series E preferred units of 2.1 million, as converted, time-based RSUs of 20,000 , 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.

For the three months ended June 30, 2025, operating partnership units of 971,000 , Series D preferred units of 228,000 , as converted, Series E preferred units of 1.9 million, as converted, time-based RSUs and options of 25,000 , and performance-based RSUs of 43,000 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 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.

For the six months ended June 30, 2025, operating partnership units of 975,000 , Series D preferred units of 228,000 , as converted, Series E preferred units of 1.9 million, as converted, time-based RSUs of 25,000 , and performance-based RSUs of 43,000 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 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.

NOTE 4 • MEZZANINE EQUITY AND EQUITY

Series D Preferred Units (Mezzanine Equity).

Series D preferred units outstanding were 165,600 preferred units at March 31, 2025 and December 31, 2024.

Series D preferred units outstanding were 113,100 and 165,600 preferred units at June 30, 2025 and December 31, 2024, respectively.

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 issuance price.

On June 30, 2025, the Company redeemed 52,500 Series D preferred units for an aggregate redemption price of $ 5.3 million.

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.

The Series D preferred units had an aggregate liquidation value of $ 11.3 million and $ 16.6 million at June 30, 2025 and December 31, 2024, respectively.

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.

4 unchanged sentences

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.

Such shares were no longer outstanding as of March 31, 2025 and December 31, 2024.

Such shares were no longer outstanding as of June 30, 2025 and December 31, 2024.

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

2 unchanged sentences

Operating Partnership Units.

The Operating Partnership had 972,000 and 980,000 outstanding Units at March 31, 2025 and December 31, 2024, respectively.

The Operating Partnership had 968,000 and 980,000 outstanding Units at June 30, 2025 and December 31, 2024, respectively.

Exchange Rights .

Centerspace redeemed Units in exchange for common shares in connection with Unitholders exercising their exchange rights during the three months ended March 31, 2025 and 2024 as detailed in the table below.

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, 2025 and 2024 as detailed in the table below.

(in thousands)

Three Months Ended March 31, Number of Units Net Book Basis

Three Months Ended June 30, Number of Units Net Book Basis

2024 16 $ 737

Six Months Ended June 30,

2025 12 $ 535

2024 33 $ 1,534

Series E Preferred Units (Noncontrolling Interests).

Centerspace had 1.6 million Series E preferred units outstanding as of March 31, 2025 and December 31, 2024.

Centerspace had 1.6 million Series E preferred units outstanding as of June 30, 2025 and December 31, 2024.

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.

The Series E preferred units have an aggregate liquidation preference of $ 158.2 million as of March 31, 2025 and December 31, 2024.

The Series E preferred units receive an allocation of net income (loss) based upon their participation in earnings or loss of the Company.

The Series E preferred units have an aggregate liquidation preference of $ 157.5 million and $ 158.2 million as of June 30, 2025 and December 31, 2024, respectively.

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

The Company redeemed Series E preferred units in exchange for common shares in connection with Series E unitholders exercising their exchange rights during the three months ended March 31, 2025 and 2024 as detailed below.

The Company redeemed Series E preferred units in exchange for common shares in connection with Series E unitholders exercising their exchange rights during the three and six months ended June 30, 2025 and 2024 as detailed below.

(in thousands)

Three Months Ended March 31, Number of Series E Preferred Units Redeemed

Three Months Ended June 30, Number of Series E Preferred Units Redeemed

Number of Common Shares Issued

1 unchanged sentence

2024 8 9 $ 422

Six Months Ended June 30,

2025 6 8 $ 338

2024 21 25 $ 1,150

Common Shares and Equity Awards .

Common shares outstanding as of March 31, 2025 and December 31, 2024, totaled 16.7 million.

During the three months ended March 31, 2025 and 2024, Centerspace issued 7,818 and 3,742 common shares, respectively, with a total grant-date fair value of $ 786,000 and $ 445,000 , respectively, as share-based compensation for employees and trustees under its 2015 Incentive Plan.

Common shares outstanding as of June 30, 2025 and December 31, 2024, totaled 16.8 million and 16.7 million, respectively.

During the three and six months ended June 30, 2025, Centerspace issued 9,835 and 17,653 common shares, respectively, with a total grant-date fair value of $ 677,000 and $ 1.5 million, respectively, as share-based compensation for employees and trustees under its Amended 2015 Incentive Plan.

During the three and six months ended June 30, 2024, Centerspace issued 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.

These shares vested based on performance and service criteria.

1 unchanged sentence

Equity Distribution Agreement.

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.

Centerspace has entered into an 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 maximum aggregate offering price of common shares available for offer and sale thereunder is $ 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.

There were no sales of common shares under the ATM Program during the three months ended March 31, 2025 and 2024.

As of March 31, 2025, common shares having an aggregate offering price of up to $ 262.9 million remained available under the ATM Program.

There were no sales of common shares under the ATM Program during the three and six months ended June 30, 2025.

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.

As of June 30, 2025, 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)

Three and Six Months Ended June 30,

Number of Common Shares

Net Consideration (1)

Average Net Price Per Share

2024 110 7,561 $ 68.77

(1) Total consideration is net of $ 115,000 in commissions during the three and six months ended June 30, 2024.

Share Repurchase Program.

1 unchanged sentence

This program expired on March 10, 2025.

Under the Share Repurchase Program, the Company was 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

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

There were no common shares repurchased during the three months ended March 31, 2025.

The table below provides details on the shares repurchased during the three months ended March 31, 2024.

There were no common shares repurchased during the three and six months ended June 30, 2025.

The table below provides details on the shares repurchased during the three and six months ended June 30, 2024.

(in thousands, except per share amounts)

Three Months Ended March 31, Number of Common Shares Aggregate Cost (1)

Three Months Ended June 30, Number of Common Shares Aggregate Cost (1)

Average Price Per Share (1)

2024 — $ — $ —

Six Months Ended June 30,

2024 88 $ 4,703 $ 53.62

(1) Amount includes commissions.

NOTE 5 • DEBT

The following table summarizes the Company’s secured and unsecured debt at March 31, 2025 and December 31, 2024.

The following table summarizes the Company’s secured and unsecured debt at June 30, 2025 and December 31, 2024.

(in thousands)

March 31, 2025 December 31, 2024

Carrying Amount Weighted Average Interest Rate Carrying Amount Weighted Average Interest Rate Weighted Average Maturity in Years at March 31, 2025

June 30, 2025 December 31, 2024

Carrying Amount Weighted Average Interest Rate Carrying Amount Weighted Average Interest Rate Weighted Average Maturity in Years at June 30, 2025

Lines of credit (1)

15 unchanged sentences

(3) Represents apartment communities encumbered by mortgages;

15 at March 31, 2025 and December 31, 2024.

14 at June 30, 2025 and 15 at December 31, 2024.

(4) Interest rate is fixed.

As of March 31, 2025, 45 apartment communities were not encumbered by mortgages and were available to provide credit support for the unsecured borrowings.

(5) Includes mortgages payable of $ 19.1 million as of June 30, 2025, associated with apartment communities classified as held for sale.

As of June 30, 2025, 47 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” 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 up to $ 250.0 million, based on the value of unencumbered properties.

As of March 31, 2025, the Company had additional borrowing availability of $ 204.0 million beyond the $ 46.0 million drawn under the Facility, priced at an interest rate of 5.71 %.

In May 2025, the Company exercised the accordion feature of the Facility, expanding the borrowing capacity by $ 150.0 million to $ 400.0 million.

Prior to the exercise of the accordion feature, the line of credit had total commitments and borrowing capacity of up to $ 250.0 million, based on the value of unencumbered properties.

As of June 30, 2025, the Company had additional borrowing availability of $ 184.2 million beyond the $ 215.8 million drawn under the Facility, priced at an interest rate of 5.75 %.

As of December 31, 2024, the Company had additional borrowing availability of $ 206.0 million beyond the $ 44.0 million drawn under the Facility, priced at an interest rate of 5.81 %.

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 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.

As amended, this Facility matures in July 2028, with an option to extend maturity for up to two additional six-month periods.

The Secured Overnight Financing Rate (“SOFR”) is the benchmark alternative reference rate under the Facility.

1 unchanged sentence

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 March 31, 2025.

The Company believes that it was in compliance with all such financial covenants and limitations as of June 30, 2025.

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

1 unchanged sentence

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 March 31, 2025 and December 31, 2024, there was $ 2.7 million and $ 3.4 million outstanding on this line of credit, respectively.

As of June 30, 2025 and December 31, 2024, there was $ 194,000 and $ 3.4 million outstanding on this line of credit, respectively.

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

2 unchanged sentences

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 March 31, 2025 and December 31, 2024.

The following table shows the notes issued under both agreements as of June 30, 2025 and December 31, 2024.

(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 fixed interest rate of 2.78 %.

As of March 31, 2025 and December 31, 2024, the FMCF had a balance of $ 198.9 million.

As of June 30, 2025 and December 31, 2024, the FMCF had a balance of $ 198.9 million.

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

As of March 31, 2025, Centerspace owned 15 apartment communities that served as collateral for mortgage loans, in addition to the apartment communities secured by the FMCF.

As of June 30, 2025, 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.

As of March 31, 2025, the Company believes that there were no material defaults or instances of material noncompliance in regard to any of these mortgage loans.

As of March 31, 2025 and December 31, 2024, the mortgage loans had a balance of $ 418.5 million and $ 420.4 million, respectively, excluding unamortized premiums and discounts.

As of June 30, 2025, the Company believes that there were no material defaults or instances of material noncompliance in regard to any of these mortgage loans.

As of June 30, 2025 and December 31, 2024, the mortgage loans had a balance of $ 406.4 million and $ 420.4 million, respectively, excluding unamortized premiums and discounts.

The mortgage loans are included within mortgages payable on the Condensed Consolidated Balance Sheets.

The aggregate amount of required future principal payments on outstanding debt as of March 31, 2025, was as follows:

The aggregate amount of required future principal payments on outstanding debt as of June 30, 2025, was as follows:

(in thousands)

4 unchanged sentences

Deferred financing costs on notes payable, net ( 450 )

(1) Includes mortgages payable associated with apartment communities classified as held for sale.

NOTE 6 • DERIVATIVE INSTRUMENTS

4 unchanged sentences

During the next twelve months, the Company estimates an additional $ 58,000 will be reclassified as an increase to interest expense.

As of March 31, 2025 and December 31, 2024 the Company had no remaining interest rate swaps.

The table below presents the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations as of March 31, 2025 and 2024.

As of June 30, 2025 and December 31, 2024 the Company had no remaining interest rate swaps.

The table below presents the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations and Comprehensive Loss as of June 30, 2025 and 2024.

(in thousands)

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

Three months ended March 31, 2025 2024 2025 2024

Three months ended June 30, 2025 2024 2025 2024

Total derivatives in cash flow hedging relationships - Interest rate contracts $ — $ — Interest expense $ ( 174 ) $ ( 173 )

Six months ended June 30,

Total derivatives in cash flow hedging relationships - Interest rate contracts $ — $ — Interest expense $ ( 349 ) $ ( 370 )

NOTE 7 • FAIR VALUE MEASUREMENTS

7 unchanged sentences

Balance Sheet Location Total Level 1 Level 2 Level 3

March 31, 2025

June 30, 2025

Real estate related notes receivable Other assets $ 27,238 — — $ 27,238

3 unchanged sentences

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

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

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

(in thousands)

Fair Value Measurement Other Gains Interest Income Total Changes in Fair Value Included in Current-Period Earnings

Three months ended March 31, 2025

Six months ended June 30, 2025

Real estate related notes receivable $ 27,238 $ 18 $ 1,092 $ 1,110

Three months ended March 31, 2024

Six months ended June 30, 2024

Real estate related notes receivable $ 20,311 $ 10 $ 563 $ 573

As of March 31, 2025 and December 31, 2024, Centerspace had investments totaling $ 2.9 million and $ 2.7 million, respectively, in real estate technology venture funds consisting of privately held entities that develop technology related to the real estate industry.

As of June 30, 2025 and December 31, 2024, Centerspace had investments totaling $ 3.0 million and $ 2.7 million, respectively, in real estate technology venture funds consisting of privately held entities that develop technology related to the real estate industry.

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

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

As of March 31, 2025, the Company had unfunded commitments of $ 850,000 .

As of June 30, 2025, the Company had unfunded commitments of $ 750,000 .

Fair Value Measurements on a Nonrecurring Basis

There were no non-financial assets or liabilities measured at fair value on a nonrecurring basis at March 31, 2025 and December 31, 2024.

Non-financial assets measured at fair value on a nonrecurring basis at June 30, 2025 consisted of real estate investments that were written-down to estimated fair value in connection with the impairment recorded on five apartment communities during the six months ended June 30, 2025.

There were no non-financial assets or liabilities measured at fair value on a nonrecurring basis at December 31, 2024.

The Company’s determination of fair value is based on broker opinions of value net of estimated costs to sell and includes inputs management believes are consistent with those that market participants would use.

Due to uncertainties in the estimation process, actual results could differ from such estimates.

(in thousands)

Balance Sheet Location Total Level 1 Level 2 Level 3

June 30, 2025

Real estate investments measured at fair value Assets held for sale, net $ 61,375 — 61,375 $ —

Financial Assets and Liabilities Not Measured at Fair Value

The fair value of unsecured senior notes and mortgages payable is 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).

The estimated fair values of the Company’s financial instruments as of March 31, 2025 and December 31, 2024, respectively, are as follows:

The estimated fair values of the Company’s financial instruments as of June 30, 2025 and December 31, 2024, respectively, are as follows:

(in thousands)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Balance Sheet Location Amount

12 unchanged sentences

NOTE 8 • ACQUISITIONS AND DISPOSITIONS

Centerspace did not acquire new real estate during the three months ended March 31, 2025 and 2024.

Centerspace did not dispose of any real estate during the three months ended March 31, 2025.

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

The dispositions for the three months ended March 31, 2024 are detailed below.

Three Months Ended March 31, 2024

Centerspace acquired $ 149.0 million of new real estate during the three and six months ended June 30, 2025.

Centerspace did not acquire new real estate during the three and six months ended June 30, 2024.

The acquisitions for the six months ended June 30, 2025 are detailed below.

(in thousands)

Form of Consideration

Investment Allocation

Building & Improvements

Intangible Assets (2)

341 homes - Sugarmont - Salt Lake City, UT

May 30, 2025 $ 149,000 $ 20,086 $ 124,649 $ 4,265

Total Acquisitions

$ 149,000 $ 20,086 $ 124,649 $ 4,265

(1) Excludes $ 1.1 million in capitalized transaction cost.

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

Centerspace did not dispose of any real estate during the three and six months ended June 30, 2025 and the three months ended June 30, 2024.

During the six months ended June 30, 2024, Centerspace disposed of two apartment communities in two transactions for an aggregate sales price of $ 19.0 million.

The dispositions for the six months ended June 30, 2024 are detailed below.

Six Months Ended June 30, 2024

(in thousands)

Dispositions Date

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“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.

The following tables present NOI for the three months ended March 31, 2025 and 2024, respectively, along with reconciliations to net income (loss) as reported in the Condensed Consolidated Financial Statements.

For the three and six months ended June 30, 2025 and 2024, 12 apartment communities designated as held for sale were included in “all other”.

The following tables present NOI for the three and six months ended June 30, 2025 and 2024, respectively, along with reconciliations to net income (loss) as reported in the Condensed Consolidated Financial Statements.

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

(in thousands)

Three Months Ended March 31, 2025 Multifamily All Other Total

Three Months Ended June 30, 2025 Multifamily All Other Total

Revenue $ 60,774 $ 7,775 $ 68,549

12 unchanged sentences

Depreciation and amortization ( 27,097 )

Impairment of real estate investments ( 14,543 )

General and administrative expenses ( 4,382 )

4 unchanged sentences

(in thousands)

Three Months Ended March 31, 2024 Multifamily All Other Total

Three Months Ended June 30, 2024 Multifamily All Other Total

Revenue $ 57,796 $ 7,247 $ 65,043

13 unchanged sentences

General and administrative expenses ( 4,216 )

Interest expense ( 9,332 )

Interest and other income

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

(2) Includes turnover expense.

(in thousands)

Six Months Ended June 30, 2025 Multifamily All Other Total

Revenue $ 120,177 $ 15,465 $ 135,642

Property operating expenses

On-site compensation (1)

12,220 1,740 13,960

Repairs and maintenance (2)

6,078 1,026 7,104

Utilities 7,326 1,295 8,621

Administrative and marketing 2,907 449 3,356

Insurance 4,210 670 4,880

Real estate taxes 13,534 1,807 15,341

Net operating income $ 73,902 $ 8,478 $ 82,380

Property management expense ( 4,826 )

Casualty loss

Depreciation and amortization ( 54,751 )

Impairment of real estate investments ( 14,543 )

General and administrative expenses ( 9,379 )

Interest expense ( 20,359 )

Interest and other income 1,443

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

(2) Includes turnover expense.

(in thousands)

Six Months Ended June 30, 2024 Multifamily All Other Total

Revenue $ 114,541 $ 15,008 $ 129,549

Property operating expenses

On-site compensation (1)

11,665 1,778 13,443

Repairs and maintenance (2)

6,021 1,073 7,094

Utilities 6,580 1,170 7,750

Administrative and marketing 2,753 535 3,288

Insurance 4,548 749 5,297

Real estate taxes 11,735 1,651 13,386

Net operating income $ 71,239 $ 8,052 $ 79,291

Property management expense ( 4,552 )

Casualty loss

Depreciation and amortization ( 52,726 )

General and administrative expenses ( 8,839 )

Loss on sale of real estate and other investments

4 unchanged sentences

Segment Assets and Accumulated Depreciation

Segment assets are summarized as follows as of March 31, 2025, and December 31, 2024, respectively, along with reconciliations to the Condensed Consolidated Financial Statements:

Segment assets are summarized as follows as of June 30, 2025, and December 31, 2024, respectively, along with reconciliations to the Condensed Consolidated Financial Statements:

(in thousands)

As of March 31, 2025 Multifamily All Other Total

As of June 30, 2025 Multifamily All Other Total

Segment assets

5 unchanged sentences

Other assets 48,072

Assets held for sale, net 137,366

Total Assets $ 2,013,239

(in thousands)

As of December 31, 2024 Multifamily All Other Total

As of December 31, 2024 Multifamily All Other (1)

Segment assets

6 unchanged sentences

Total Assets $ 1,913,707

(1) Includes the assets for the 12 apartment communities designated as held for sale.

NOTE 10 • COMMITMENTS AND CONTINGENCIES

9 unchanged sentences

Unfunded Commitments.

As of March 31, 2025, Centerspace had unfunded commitments of $ 850,000 in two real estate technology venture funds.

As of June 30, 2025, Centerspace had unfunded commitments of $ 750,000 in two real estate technology venture funds.

Refer to Note 7 - Fair Value Measurements for additional information regarding these investments.

NOTE 11 • SHARE-BASED COMPENSATION

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.

Share-based awards are provided to officers, non-officer employees, and trustees under the 2025 Incentive Plan approved by shareholders on May 14, 2025 (the “2025 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 650,000 shares over the ten-year period in which the plan is in effect.

Under the 2025 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.

Through March 31, 2025, awards under the 2015 Incentive Plan consisted of restricted and unrestricted common shares, RSUs, and stock options.

Through June 30, 2025, awards under the 2025

Incentive Plan consisted of RSUs.

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

Prior to the approval of the 2025 Incentive Plan, share based awards were 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 allowed 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 was in effect.

Through June 30, 2025, awards under the 2015 Incentive Plan consisted of restricted and unrestricted common shares, RSUs, and stock options.

2025 LTIP Awards

Awards granted to employees on January 1, 2025, consisted of an aggregate of 25,121 time-based RSU awards and 11,870 performance RSUs based on total shareholder return (“TSR”).

Awards granted to employees on January 1, 2025, under the 2015 Incentive Plan, consisted of an aggregate of 25,121 time-based RSU awards and 11,870 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, 2026, January 1, 2027, and January 1, 2028.

9 unchanged sentences

The share price at the grant date, January 1, 2025, was $ 66.15 per share.

Awards granted to trustees on June 1, 2025, under the 2025 Incentive Plan, consist of 9,527 time-based RSUs, which vest on June 1, 2026.

These awards are classified as equity awards.

Share-Based Compensation Expense

Total share-based compensation expense recognized in the Condensed Consolidated Financial Statements for all outstanding share-based awards was $ 858,000 and $ 749,000 for the three months ended March 31, 2025 and 2024, respectively.

Total share-based compensation expense recognized in the Condensed Consolidated Financial Statements for all outstanding share-based awards was $ 833,000 and $ 733,000 for the three months ended June 30, 2025 and 2024, respectively, and $ 1.7 million and $ 1.5 million for the six months ended June 30, 2025 and 2024, respectively.

NOTE 12 • SUBSEQUENT EVENTS

On July 29, 2025, Centerspace closed on the acquisition of Railway Flats a 420 home apartment community located in Loveland, CO, for $ 132.2 million which includes the assumption of $ 76.5 million mortgage debt.

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-Q

Item 1. Financial Statements