What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-03 compared with 2025-08-04 · 176 added, 156 removed, 296 unchanged (53% of the section changed)

Management’s Discussion and Analysis of Financial Conditions and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (the “Report”), the audited financial statements for the year ended December 31, 2024, which are included in our Annual Report on Form 10-K filed with the SEC on February 18, 2025, and the risk factors in Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2024.

The following discussion and analysis should be read in conjunction with the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (the “Report”), the audited financial statements for the year ended December 31, 2024, which are included in our Annual Report on Form 10-K filed with the SEC on February 18, 2025, and the risk factors in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2024 and in Part II, Item 1A, “Risk Factors,” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 1, 2025.

This discussion and analysis and other sections of this Report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the expectations for future periods.

2 unchanged sentences

These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial condition, or plans expressed or implied by the forward-looking statements.

Although we believe the expectations reflected in these forward-looking statements are based upon reasonable assumptions, we can give no assurance that our

expectations will be achieved.

Although we believe the expectations reflected in these forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be achieved.

Any statements contained herein that are not statements of historical fact should be deemed forward-looking statements.

13 unchanged sentences

• inability to complete lease-up of our projects on schedule and on budget;

• failure to reinvest proceeds from sales of properties into tax-deferred exchanges, which could necessitate special dividend and/or tax protection payments;

• failure to reinvest proceeds from sales of properties into tax-deferred exchanges, which could necessitate special distribution and/or tax protection payments;

• inability to fund capital expenditures out of cash flow;

• inability to pay, or need to reduce, dividends on our common shares;

• inability to pay, or need to reduce, distributions on our common shares;

• inability to raise additional equity capital, if needed;

16 unchanged sentences

We primarily focus on investing in markets characterized by stable and growing economies, strong employment, and an attractive quality of life that we believe, in combination, lead to higher demand for apartment homes and retention of our residents.

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

Property owned, as presented in our Condensed Consolidated Balance Sheets at historical cost and excluding assets held for sale, was $2.4 billion at June 30, 2025 and $2.5 billion December 31, 2024.

As of September 30, 2025, we owned interests in 68 apartment communities consisting of 12,941 apartment homes.

Property owned, as presented in our Condensed Consolidated Balance Sheets at historical cost and excluding assets held for sale, was $2.5 billion at September 30, 2025 and December 31, 2024.

Renting apartment homes is our primary source of revenue, and our business objective is to provide great homes.

2 unchanged sentences

We have paid quarterly distributions continuously since our first distribution in 1971.

Overview of the Three Months Ended June 30, 2025

• Acquired Sugarmont, our first apartment community in Salt Lake City, Utah, consisting of 341 homes for an aggregate purchase price of $149.0 million

• For the three months ended June 30, 2025, revenue increased by $3.5 million or 5.4% to $68.5 million, compared to $65.0 million for the three months ended June 30, 2024, primarily due to increased revenue from same-store and non-same-store communities.

• Same-store revenues increased by 2.7% for the three months ended June 30, 2025, compared to the same period of the prior year, driving a 2.9% increase in same-store NOI compared to the same period of the prior year.

• Net loss was $0.87 per diluted share for the three months ended June 30, 2025, compared to net loss of $0.19 per diluted share for the same period of the prior year.

• Non-GAAP Core Funds from Operations (“Core FFO”) per diluted share increased to $1.28 for the three months ended June 30, 2025, compared to $1.27 for the three months ended June 30, 2024.

See the description of Core FFO on pages 33 and 34 and the reconciliation of net loss available to common shareholders to FFO and Core FFO on page 35.

This increase was primarily due to dividends to preferred shareholders that occurred in the prior year that did not occur in the same period of the current year along with increased NOI, offset by increased interest expense.

Overview of the Three Months Ended September 30, 2025

• Acquired Railway Flats in Loveland, Colorado, consisting of 420 homes for an aggregate purchase price of $132.2 million, which includes the assumption of $76.5 million in mortgage debt.

• Sold five apartment communities in St.

Cloud, Minnesota for an aggregate sale price of $124.0 million.

• For the three months ended September 30, 2025, revenue increased by $6.4 million or 9.8% to $71.4 million, compared to $65.0 million for the three months ended September 30, 2024, primarily due to increased revenue from same-store and non-same-store communities.

• Same-store revenues increased by 2.4% for the three months ended September 30, 2025, compared to the same period of the prior year, driving a 4.5% increase in same-store NOI compared to the same period of the prior year.

• Net income was $3.19 per diluted share for the three months ended September 30, 2025, compared to net loss of $0.40 per diluted share for the same period of the prior year.

• Non-GAAP Core Funds from Operations (“Core FFO”) per diluted share increased to $1.19 for the three months ended September 30, 2025, compared to $1.18 for the three months ended September 30, 2024.

See the description of Core FFO on pages 35 and 36 and the reconciliation of net income (loss) available to common shareholders to FFO and Core FFO on page 37.

This increase was primarily due to increased NOI along with distributions to preferred shareholders that occurred in the prior year that did not occur in the same period of the current year, offset by increased interest expense and general and administrative expense.

The drivers of these changes are discussed in more detail in the “Results of Operations” section below.

1 unchanged sentence

GAAP and Non-GAAP Financial Measures

Net operating income (“NOI”) is a non-GAAP financial measure, which we define as total real estate revenues less property operating expenses, including real estate taxes and is reconciled to operating income (loss) below.

We believe that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by sales of real estate and other investments, impairment, depreciation, amortization, financing costs, property management expenses, casualty gains (losses), loss on litigation settlement, and general and administrative expenses.

11 unchanged sentences

The discussion below focuses on the main factors affecting real estate revenue and real estate expenses from same-store apartment communities because changes from one year to another in real estate revenue and expenses from non-same-store communities are generally due to the addition of those communities to our real estate portfolio, and accordingly provide less useful information for evaluating the ongoing operational performance of our real estate portfolio.

For the comparison of the six months ended June 30, 2025 and 2024, three apartment communities and one apartment community, respectively, were non-same-store.

For the comparison of the nine months ended September 30, 2025 and 2024, four apartment communities and one apartment community, respectively, were non-same-store.

Sold communities and communities designated as held for sale are included in “Held for sale and dispositions,” for all periods presented, while “Other properties” includes non-multifamily properties and the non-multifamily components of mixed-use properties.

For the six months ended June 30, 2025 and 2024, 12 apartment communities were designated as held for sale and included in “Held for sale and dispositions.” During the six months ended June 30, 2024, we disposed of two apartment communities, consisting of 205 apartment homes.

Reconciliation of Operating Income (Loss) to Net Operating Income (non-GAAP)

The following table provides a reconciliation of operating income (loss) to NOI (non-GAAP), which is defined above.

For the nine months ended September 30, 2025 and 2024, seven apartment communities were designated as held for sale and included in “Held for sale and dispositions.” During the three and nine months ended September 30, 2025, we disposed of five apartment communities, consisting of 832 apartment homes.

During the nine months ended September 30, 2024, we disposed of two apartment communities, consisting of 205 apartment homes.

Reconciliation of Operating Income to Net Operating Income (non-GAAP)

The following table provides a reconciliation of operating income to NOI (non-GAAP), which is defined above.

(in thousands, except percentages)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 $ Change % Change 2025 2024 $ Change % Change

Operating income (loss)

Operating income

$ 77,210 $ 6,350 $ 70,860 * $ 75,160 $ 17,617 $ 57,543 *

Property management expenses 2,489 2,242 247 11.0 % 7,315 6,794 521 7.7 %

Casualty loss

Casualty loss (gain)

127 (412) 539 (130.8) % 1,058 918 140 15.3 %

2 unchanged sentences

General and administrative expenses 4,997 4,102 895 21.8 % 14,376 12,941 1,435 11.1 %

Loss on sale of real estate and other investments

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

(79,531) — (79,531) N/A (79,531) 577 (80,108) *

Net operating income $ 43,024 $ 38,366 $ 4,658 12.1 % $ 125,404 $ 117,657 $ 7,747 6.6 %

The following consolidated results of operations, including GAAP and non-GAAP metrics, cover the three and six months ended June 30, 2025 and 2024.

* Not a meaningful percentage.

The following consolidated results of operations, including GAAP and non-GAAP metrics, cover the three and nine months ended September 30, 2025 and 2024.

(in thousands, except percentages)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 $ Change % Change 2025 2024 $ Change % Change

29 unchanged sentences

Property management expenses (2,489) (2,242) 247 11.0 % (7,315) (6,794) 521 7.7 %

Casualty loss

Casualty (loss) gain

(127) 412 539 (130.8) % (1,058) (918) 140 15.3 %

2 unchanged sentences

General and administrative expenses (4,997) (4,102) 895 21.8 % (14,376) (12,941) 1,435 11.1 %

Loss on sale of real estate and other investments

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

79,531 — 79,531 N/A 79,531 (577) 80,108 *

Interest expense (12,989) (8,946) 4,043 45.2 % (33,348) (27,485) 5,863 21.3 %

Loss on extinguishment of debt (3) — 3 N/A (3) — 3 N/A

Interest and other income

1,190 645 545 84.5 % 2,633 1,462 1,171 80.1 %

NET INCOME (LOSS)

$ 65,408 $ (1,951) $ 67,359 * $ 44,442 $ (8,406) $ 52,848 *

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

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

Distributions to Series D preferred unitholders (109) (160) 51 (31.9) % (429) (480) 51 (10.6) %

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

(9,197) 1,095 (10,292) * (6,071) 2,735 (8,806) (322.0) %

1 unchanged sentence

(2,319) (32) (2,287) * (2,408) (98) (2,310) *

Net loss attributable to controlling interests

Net income (loss) attributable to controlling interests

53,783 (1,048) 54,831 * 35,534 (6,249) 41,783 *

Dividends to preferred shareholders — (1,607) 1,607 (100.0) % — (3,214) 3,214 (100.0) %

NET LOSS AVAILABLE TO COMMON SHAREHOLDERS

Distributions to preferred shareholders — (1,607) 1,607 (100.0) % — (4,821) 4,821 (100.0) %

Redemption of Preferred Shares — (3,511) 3,511 (100.0) % — (3,511) 3,511 (100.0) %

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS

$ 53,783 $ (6,166) $ 59,949 (972.3) % $ 35,534 $ (14,581) $ 50,115 (343.7) %

3 unchanged sentences

* Not a meaningful percentage.

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

Three Months Ended September 30, Nine Months Ended September 30,

Weighted Average Occupancy (1)

10 unchanged sentences

(2) Excludes apartment communities classified as held for sale.

Number of Apartment Homes as of June 30, 2025 as of June 30, 2024

Number of Apartment Homes as of September 30, 2025 as of September 30, 2024

Same-store 11,084 11,084

3 unchanged sentences

Same-store analysis.

Revenue from same-store communities increased 2.7%, or $1.5 million, in the three months ended June 30, 2025, compared to the same period in the prior year.

The increase was attributable to 2.1% growth in average monthly revenue per occupied home for the three months ended June 30, 2025 and an increase of 0.6% in occupancy as weighted average occupancy increased from 95.5% for the three months ended June 30, 2024 to 96.1% for the three months ended June 30, 2025.

Property operating expenses, including real estate taxes, at same-store communities increased by 2.4% or $517,000 in the three months ended June 30, 2025, compared to the same period in the prior year.

At same-store communities, controllable expenses (which exclude insurance and real estate taxes) increased by $418,000, primarily due to an increase in compensation and utilities.

Revenue from same-store communities increased 2.4%, or $1.4 million, in the three months ended September 30, 2025, compared to the same period in the prior year.

The increase was attributable to 2.2% growth in average monthly revenue per occupied home for the three months ended September 30, 2025 and an increase of 0.2% in occupancy as weighted average occupancy increased from 95.6% for the three months ended September 30, 2024 to 95.8% for the three months ended September 30, 2025.

Property operating expenses, including real estate taxes, at same-store communities decreased by 0.8% or $179,000 in the three months ended September 30, 2025, compared to the same period in the prior year.

At same-store communities, controllable expenses (which exclude insurance and real estate taxes) increased by $477,000, primarily due to an increase in repairs and maintenance, compensation, and utilities.

Non-controllable expenses at same-store communities decreased by $656,000, due to real estate taxes and insurance-related costs.

Same-store NOI increased by $1.5 million to $35.5 million for the three months ended September 30, 2025, compared to $34.0 million in the same period of the prior year.

Revenue from same-store communities increased 2.8%, or $4.8 million, in the nine months ended September 30, 2025, compared to the same period in the prior year.

The increase was attributable to 2.2% growth in average monthly revenue per occupied home for the nine months ended September 30, 2025 and an increase of 0.6% in occupancy as weighted average occupancy increased from 95.3% for the nine months ended September 30, 2024 to 95.9% for the nine months ended September 30, 2025.

Property operating expenses, including real estate taxes, at same-store communities increased by 2.6% or $1.7 million in the nine months ended September 30, 2025, compared to the same period in the prior year.

At same-store communities, controllable expenses (which exclude insurance and real estate taxes) increased by $1.2 million, primarily due to an increase in utilities and compensation.

Non-controllable expenses at same-store communities increased by $483,000, due to real estate taxes and offset by a decrease in insurance-related costs.

Same-store NOI increased by $1.0 million to $36.2 million for the three months ended June 30, 2025, compared to $35.2 million in the same period of the prior year.

Revenue from same-store communities increased 3.1%, or $3.5 million, in the six months ended June 30, 2025, compared to the same period in the prior year.

The increase was attributable to 2.2% growth in average monthly revenue per occupied home for the six months ended June 30, 2025 and an increase of 0.9% in occupancy as weighted average occupancy increased from 95.1% for the six months ended June 30, 2024 to 96.0% for the six months ended June 30, 2025.

Property operating expenses, including real estate taxes, at same-store communities increased by 4.4% or $1.8 million in the six months ended June 30, 2025, compared to the same period in the prior year.

At same-store communities, controllable expenses (which exclude insurance and real estate taxes) increased by $706,000, primarily due to an increase in utilities and compensation.

Non-controllable expenses at same-store communities increased by $1.1 million, due to real estate taxes and offset by a decrease in insurance-related costs.

Same-store NOI increased by $1.6 million to $71.5 million for the six months ended June 30, 2025, compared to $69.8 million in the same period of the prior year.

Same-store NOI increased by $3.1 million to $107.0 million for the nine months ended September 30, 2025, compared to $103.8 million in the same period of the prior year.

Non-same-store analysis.

Revenue from non-same-store communities increased by $1.4 million in the three months ended June 30, 2025, compared to the same period in the prior year.

Property operating expenses, including real estate taxes at non-same-store communities increased by $676,000.

NOI at non-same-store communities increased by $763,000 for the three months ended June 30, 2025, compared to the same period of the prior year.

The increase in revenue, property operating expenses, and NOI from non-same-store communities is due to the addition of two apartment communities, one during the fourth quarter of the prior year and the second during the second quarter of the current year, offset by a $214,000 decrease in NOI from repositioning a community by making full unit upgrades, resulting in lower occupancy and requiring relocation of residents.

Revenue from non-same-store communities increased by $2.2 million in the six months ended June 30, 2025, compared to the same period in the prior year.

Revenue from non-same-store communities increased by $4.6 million in the three months ended September 30, 2025, compared to the same period in the prior year.

Property operating expenses, including real estate taxes at non-same-store communities increased by $1.9 million.

NOI at non-same-store communities increased by $1.1 million for the six months ended June 30, 2025, compared to the same period of the prior year.

The increase in revenue, property operating expenses, and NOI from non-same-store communities is due to the addition of two apartment communities, one during the fourth quarter of the prior year and the second during the second quarter of the current year, offset by a $318,000 decrease in NOI from repositioning a community by making full unit upgrades, resulting in lower occupancy and requiring relocation of residents.

NOI at non-same-store communities increased by $2.6 million for the three months ended September 30, 2025, compared to the same period of the prior year.

The increase in revenue, property operating expenses, and NOI from non-same-store communities is due to the addition of three apartment communities, one during the fourth quarter of the prior year, one during the second quarter of the current year, and one in the third quarter of the current year, offset by a $334,000 decrease in NOI from repositioning a community by making full unit upgrades, resulting in lower occupancy and requiring relocation of residents.

Revenue from non-same-store communities increased by $6.8 million in the nine months ended September 30, 2025, compared to the same period in the prior year.

Property operating expenses, including real estate taxes at non-same-store communities increased by $3.0 million.

NOI at non-same-store communities increased by $3.7 million for the nine months ended September 30, 2025, compared to the same period of the prior year.

The increase in revenue, property operating expenses, and NOI from non-same-store communities is due to the addition of three apartment communities, one during the fourth quarter of

the prior year, one during the second quarter of the current year, and one during the third quarter of the current year, offset by a $651,000 decrease in NOI from repositioning a community by making full unit upgrades, resulting in lower occupancy and requiring relocation of residents.

Other properties analysis.

Revenue from other properties, which encompasses our commercial and mixed-use activity, increased by $246,000 in the three months ended June 30, 2025, compared to the same period in the prior year.

Revenue from other properties, which encompasses our commercial and mixed-use activity, increased by $361,000 in the three months ended September 30, 2025, compared to the same period in the prior year.

Property operating expenses, including real estate taxes, at other properties increased by $66,000, compared to the same period in the prior year.

1 unchanged sentence

The increase in revenue, property operating expense, and NOI on other properties is due to the addition of an apartment community with commercial space during the fourth quarter of the prior year.

Revenue from other properties, which encompasses our commercial and mixed-use activity, increased by $456,000 in the six months ended June 30, 2025, compared to the same period in the prior year.

Revenue from other properties, which encompasses our commercial and mixed-use activity, increased by $817,000 in the nine months ended September 30, 2025, compared to the same period in the prior year.

Property operating expenses, including real estate taxes, at other properties increased by $235,000, compared to the same period in the prior year.

2 unchanged sentences

Held for sale and dispositions analysis.

Revenue from held for sale and dispositions increased by $282,000 in the three months ended June 30, 2025, compared to the same period in the prior year.

Property operating expenses, including real estate taxes, increased by $136,000 on held for sale and dispositions, compared to the same period in the prior year.

Revenue from held for sale and dispositions increased by $88,000 in the three months ended September 30, 2025, compared to the same period in the prior year.

Property operating expenses, including real estate taxes, decreased by $93,000 on held for sale and dispositions, compared to the same period in the prior year.

NOI on held for sale and dispositions increased $181,000, compared to the same period in the prior year.

We disposed of two apartment communities in the first quarter of 2024 and classified 12 properties as held for sale during the second quarter of 2025.

Revenue from held for sale and dispositions increased by $1,000 in the six months ended June 30, 2025, compared to the same period in the prior year.

We disposed of two apartment communities in the first quarter of 2024, disposed of five apartment communities during the third quarter of 2025, and had seven apartment communities classified as held for sale as of September 30, 2025.

Revenue from held for sale and dispositions increased by $89,000 in the nine months ended September 30, 2025, compared to the same period in the prior year.

Property operating expenses, including real estate taxes, on held for sale and dispositions decreased by $233,000, compared to the same period in the prior year.

NOI on held for sale and dispositions increased $322,000, compared to the same period in the prior year.

We disposed of two apartment communities in the first quarter of 2024 and classified 12 properties as held for sale during the second quarter of 2025.

Property management expenses .

Property management expenses, consisting of property management overhead and property management fees paid to third parties, increased by 7.7% to $2.4 million in the three months ended June 30, 2025, compared to $2.2 million in the same period of the prior year.

Property management expenses, consisting of property management overhead and property management fees paid to third parties, increased by 11.0% to $2.5 million in the three months ended September 30, 2025, compared to $2.2 million in the same period of the prior year.

The increase was primarily due to higher compensation related costs compared to the same period of the prior year and fees paid to third parties for management of an apartment community we acquired in the second quarter of 2025.

Property management expense, consisting of property management overhead and property management fees paid to third parties, increased by 6.0% to $4.8 million in the six months ended June 30, 2025, compared to $4.6 million in the same period of the prior year.

Property management expense, consisting of property management overhead and property management fees paid to third parties, increased by 7.7% to $7.3 million in the nine months ended September 30, 2025, compared to $6.8 million in the same period of the prior year.

The increase was primarily due to higher compensation costs resulting from new positions and increased pay rates compared to the same period of the prior year, along with fees paid to third parties for management of an apartment community we acquired in the second quarter of 2025.

Casualty loss.

Casualty loss was $399,000 in the three months ended June 30, 2025, compared to $510,000 in the same period of the prior year.

The decrease is primarily due to fewer large loss claims activity in the current period compared to the same period of the prior year.

Casualty gain (loss).

Casualty loss was $127,000 in the three months ended September 30, 2025, compared to a gain of $412,000 in the same period of the prior year.

The increase is primarily due to claim activity in the prior year with losses in excess of our deductibles resulting in estimated recoveries compared to fewer large loss claims in excess of our deductibles and fewer recoveries in the current period.

See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.

Casualty loss was $931,000 in the six months ended June 30, 2025, compared to $1.3 million in the same period of the prior year.

The decrease is primarily due to fewer large loss claims activity in the current period compared to the same period of the prior year.

Casualty loss was $1.1 million in the nine months ended September 30, 2025, compared to $918,000 in the same period of the prior year.

See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.

Depreciation and amortization.

Depreciation and amortization increased by 5.4% to $27.1 million in the three months ended June 30, 2025, compared to $25.7 million in the same period of the prior year, primarily attributable to an increase in depreciation on apartment communities driven by the addition of two apartment communities, one in the fourth quarter of the prior year and one in the second quarter on the current year, along with value add and acquisition capital projects and amortization of in-place leases.

Depreciation and amortization increased by 3.8% to $54.8 million in the six months ended June 30, 2025, compared to $52.7 million in the same period of the prior year, primarily attributable to an increase in depreciation on apartment communities driven by the addition of two apartment communities, one in the fourth quarter of the prior year and one in the second quarter of the current year, along with value add and acquisition capital projects.

Depreciation and amortization increased by 11.4% to $29.1 million in the three months ended September 30, 2025, compared to $26.1 million in the same period of the prior year, primarily attributable to an increase in depreciation on apartment communities driven by the addition of three apartment communities, one in the fourth quarter of the prior year, one during the second quarter of the current year, and one in the third quarter of the current year, along with value add and acquisition capital projects and amortization of in-place leases, offset by a decrease in depreciation from held for sale and sold communities.

Depreciation and amortization increased by 6.3% to $83.8 million in the nine months ended September 30, 2025, compared to $78.8 million in the same period of the prior year, primarily attributable to an increase in depreciation on apartment communities driven by the addition of three apartment communities, one in the fourth quarter of the prior year, one during the second quarter of the current year, and one in the third quarter of the current year, along with value add and acquisition capital projects, offset by a decrease in depreciation from held for sale and sold communities.

Impairment of real estate investments .

Impairment of real estate investments was $14.5 million in the three and six months ended June 30, 2025.

The impairment was the result of five apartment communities that were written down to estimated fair value in connection with their reclassification to assets held for sale.

Impairment of real estate investments was $8.7 million and $23.2 million in the three and nine months ended September 30, 2025, respectively.

The impairment was the result of six apartment communities that were written down to estimated fair value in connection with updated market offers on these held for sale assets.

General and administrative expenses.

General and administrative expenses increased by $166,000 to $4.4 million in the three months ended June 30, 2025, compared to $4.2 million in the same period of the prior year.

The increase was primarily due to increased compensation costs from higher share-based compensation and other compensation related costs and legal fees, offset by a decrease in consulting fees in the three months ended June 30, 2025, compared to the same period of the prior year.

General and administrative expenses increased by $540,000 to $9.4 million in the six months ended June 30, 2025, compared to $8.8 million in the same period of the prior year.

The increase was primarily due to increased compensation costs from higher share-based compensation and other compensation related costs along with professional fees and administrative and office expenses in the six months ended June 30, 2025, compared to the same period of the prior year.

Loss on sale of real estate and other investments.

There was no gain or loss on the sale of real estate and other investments in the six months ended June 30, 2025, compared to a loss of $577,000 in the same period of the prior year.

General and administrative expenses increased by $895,000 to $5.0 million in the three months ended September 30, 2025, compared to $4.1 million in the same period of the prior year.

The increase was primarily due to increased compensation costs from higher share-based compensation and other compensation related costs and increased professional fees in the three months ended September 30, 2025, compared to the same period of the prior year.

General and administrative expenses increased by $1.4 million to $14.4 million in the nine months ended September 30, 2025, compared to $12.9 million in the same period of the prior year.

The increase was primarily due to increased compensation costs from higher share-based compensation and other compensation related costs along with professional fees and administrative and office expenses in the nine months ended September 30, 2025, compared to the same period of the prior year.

Gain on sale of real estate and other investments.

Gain on sale of real estate and other investments was $79.5 million for the three months ended September 30, 2025, compared to no gain or loss in the same period of the prior year.

Refer to Note 8 in the Condensed Consolidated Financial Statements for more information.

Gain on sale of real estate and other investments was $79.5 million for the nine months ended September 30, 2025, compared to a loss of $577,000 in the same period of the prior year.

Refer to Note 8 in the Condensed Consolidated Financial Statements for more information.

Interest expense.

Interest expense increased by 14.9% to $10.7 million in the three months ended June 30, 2025, compared to $9.3 million in the same period of the prior year, primarily due to a higher outstanding balance on our lines of credit resulting from the acquisition of an apartment community in the second quarter of the current year along with higher mortgage interest and amortization of debt discount resulting from the assumption of a mortgage in connection with an acquisition in the fourth quarter of the prior year.

Interest expense increased by 9.8% to $20.4 million in the six months ended June 30, 2025, compared to $18.5 million in the same period of the prior year, primarily due to a higher outstanding balance on our lines of credit resulting from the acquisition of an apartment community in the second quarter of the current year along with higher mortgage interest and amortization of debt discount resulting from the assumption of a mortgage in connection with an acquisition in the fourth quarter of the prior year.

Interest expense increased by 45.2% to $13.0 million in the three months ended September 30, 2025, compared to $8.9 million in the same period of the prior year, primarily due to a higher outstanding balance on our lines of credit resulting from the acquisitions of two apartment communities, one in the second quarter and one in the third quarter of the current year, along with higher mortgage interest and amortization of debt discount resulting from the assumption of mortgages in connection with an acquisition in the fourth quarter of the prior year and an acquisition in the third quarter of the current year.

Interest expense increased by 21.3% to $33.3 million in the nine months ended September 30, 2025, compared to $27.5 million in the same period of the prior year, primarily due to a higher outstanding balance on our lines of credit resulting from the acquisitions of two apartment communities, one in the second quarter and one in the third quarter of the current year, along with higher mortgage interest and amortization of debt discount resulting from the assumption of mortgages in connection with an acquisition in the fourth quarter of the prior year and an acquisition in the third quarter of the current year.

Interest and other income.

Interest and other income increased to $735,000 in the three months ended June 30, 2025, compared to $477,000 in the same period of the prior year.

The increase was primarily due to interest income on a real estate related note receivable in the current period that was not fully funded by the end of second quarter of 2024 and a note receivable acquired in the fourth quarter of 2024.

Interest and other income increased to $1.4 million in the six months ended June 30, 2025, compared to $817,000 in the same period of the prior year.

Net loss available to common shareholders.

Net loss available to common shareholders was $14.5 million for the three months ended June 30, 2025, compared to a net loss of $2.9 million in the three months ended June 30, 2024.

Net loss available to common shareholders was $18.2 million for the six months ended June 30, 2025, compared to a net loss of $8.4 million in the six months ended June 30, 2024.

Interest and other income increased to $1.2 million in the three months ended September 30, 2025, compared to $645,000 in the same period of the prior year.

The increase was primarily due to a real estate related note receivable which has a higher principal balance in the current period compared to the same period of the prior year and a note receivable acquired in the fourth quarter of 2024.

Interest and other income increased to $2.6 million in the nine months ended September 30, 2025, compared to $1.5 million in the same period of the prior year.

The increase was primarily due to a real estate related note receivable which has a higher principal balance in the current period compared to the same period of the prior year, a note receivable acquired in the fourth quarter of 2024, and a larger gain on investments in the current period compared to the same period of the prior year.

Net income (loss) available to common shareholders.

Net income available to common shareholders was $53.8 million for the three months ended September 30, 2025, compared to a net loss of $6.2 million in the three months ended September 30, 2024.

Net income available to common shareholders was $35.5 million for the nine months ended September 30, 2025, compared to a net loss of $14.6 million in the nine months ended September 30, 2024.

Funds from Operations and Core Funds from Operations .

We believe that Funds from Operations (“FFO”), which is a non-GAAP financial measure used as a standard supplemental measure for equity real estate investment trusts, is helpful to investors in understanding operating performance, primarily because its calculation does not assume the value of real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation and amortization.

because its calculation does not assume the value of real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation and amortization.

We use the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc.

18 unchanged sentences

Core FFO is a non-GAAP and non-standardized financial measure that may be calculated differently by other REITs and that should not be considered a substitute for operating results determined in accordance with GAAP.

Net loss available to common shareholders for the three months ended June 30, 2025, was $14.5 million compared to net loss of $2.9 million for the same period of the prior year.

FFO applicable to common shares and Units for the three months ended June 30, 2025, increased to $24.5 million compared to $22.1 million for the comparable period of the prior year, representing an increase of 10.8%.

This FFO increase was primarily due to increased NOI along with dividends to preferred shareholders that occurred in the prior year that did not occur in the same period of the current year, offset by increased interest expense.

Net loss available to common shareholders for the six months ended June 30, 2025, was $18.2 million compared to net loss of $8.4 million for the same period of the prior year.

FFO applicable to common shares and Units for the six months ended June 30, 2025, increased to $47.7 million compared to $43.0 million for the comparable period of the prior year, representing an increase of 10.9%.

Net income available to common shareholders for the three months ended September 30, 2025, was $53.8 million compared to net loss of $6.2 million for the same period of the prior year.

FFO applicable to common shares and Units for the three months ended September 30, 2025, increased to $23.3 million compared to $18.7 million for the comparable period of the prior year, representing an increase of 24.7%.

This FFO increase was primarily due to increased NOI along with distributions to preferred shareholders that occurred in the prior year that did not occur in the same period of the current year, offset by increased interest expense and general and administrative expense.

Net income available to common shareholders for the nine months ended September 30, 2025, was $35.5 million compared to net loss of $14.6 million for the same period of the prior year.

FFO applicable to common shares and Units for the nine months ended September 30, 2025, increased to $71.1 million compared to $61.7 million for the comparable period of the prior year, representing an increase of 15.1%.

Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds from Operations and Core Funds from Operations

(in thousands, except per share and unit amounts)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Funds from Operations:

Net loss available to common shareholders

Net income (loss) available to common shareholders

$ 53,783 $ (6,166) $ 35,534 $ (14,581)

4 unchanged sentences

Impairment of real estate investments 8,676 — 23,219 —

Loss on sale of real estate

(Gain) loss on sale of real estate

(79,531) — (79,531) 577

Less gain on sale of real estate - partially owned entities 2,251 — 2,251 —

FFO applicable to common shares and Units $ 23,347 $ 18,717 $ 71,056 $ 61,749

Adjustments to Core FFO:

Non-cash casualty loss

Non-cash casualty (recovery) loss

(123) (632) 308 261

Loss on extinguishment of debt 3 — 3 —

Interest rate swap amortization 58 171 407 542

Amortization of assumed debt 530 263 1,365 789

Redemption of preferred shares — 3,511 — 3,511

Other miscellaneous items (1)

2 unchanged sentences

FFO applicable to common shares and Units $ 23,347 $ 18,717 $ 71,056 $ 61,749

Dividends to Series D preferred unitholders 160 160 320 320

Distributions to Series D preferred unitholders 109 160 429 480

FFO applicable to common shares and Units - diluted $ 23,456 $ 18,877 $ 71,485 $ 62,229

Core FFO applicable to common shares and Units $ 23,360 $ 21,969 $ 72,636 $ 66,817

Dividends to Series D preferred unitholders 160 160 320 320

Distributions to Series D preferred unitholders 109 160 429 480

Core FFO applicable to common shares and Units - diluted $ 23,469 $ 22,129 $ 73,065 $ 67,297

Per Share Data

Net loss per common share - basic and diluted (2)

Net income (loss) per common share - diluted (2)

$ 3.19 $ (0.40) $ 2.12 $ (0.96)

1 unchanged sentence

Core FFO per share and Unit - diluted $ 1.19 $ 1.18 $ 3.68 $ 3.68

Weighted average shares - basic and diluted for net loss

Weighted average shares - basic for net income (loss)

16,726 15,528 16,731 15,143

Effect of redeemable operating partnership Units for FFO and Core FFO

Effect of operating partnership Units for net income, FFO and Core FFO

966 818 972 836

Effect of Series D preferred units for FFO and Core FFO

Effect of Series D preferred units for net income, FFO and Core FFO

155 228 204 228

Effect of Series E preferred units for FFO and Core FFO

Effect of Series E preferred units for net income, FFO and Core FFO

1,898 2,053 1,903 2,064

Effect of dilutive restricted stock units and stock options for FFO and Core FFO

Weighted average shares and Units for FFO and CFFO - diluted 19,870 18,129 19,868 18,116

Effect of dilutive restricted stock units and stock options for net income, FFO and Core FFO

Weighted average shares and Units for net income, FFO and Core FFO - diluted 19,771 18,676 19,835 18,303

(1) Consists of (gain) loss on investments and one-time professional fees.

(2) Refer to Note 3 of the Notes to the Condensed Consolidated Financial Statements for additional details on net loss per share.

(2) Refer to Note 3 of the Notes to the Condensed Consolidated Financial Statements for additional details on net income (loss) per share.

Acquisitions and Dispositions

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

We had no dispositions during the six months ended June 30, 2025.

We acquired $281.2 million of new real estate during the nine months ended September 30, 2025.

We disposed of five apartment communities in one transaction for an aggregate sales price of $124.0 million during the nine months ended September 30, 2025.

Refer to Note 8 in the Condensed Consolidated Financial Statements for more information.

Distributions Declared

Distributions of $0.77 and $0.75 per common share and Unit were declared during the three months ended June 30, 2025 and 2024, respectively.

Distributions of $1.54 and $1.50 per common share and Unit were declared during the six months ended June 30, 2025 and 2024, respectively.

Distributions of $0.4140625 and $0.828125 per Series C preferred share were declared during the three and six months ended June 30, 2024, respectively.

Distributions of $0.9655 per Series D preferred unit were declared during the three months ended June 30, 2025 and 2024 and $1.931 per Series D preferred unit for the six months ended June 30, 2025 and 2024.

Distributions of $0.96875 per Series E preferred unit were declared during the three months ended June 30, 2025 and 2024 and $1.9375 per Series E preferred unit for the six months ended June 30, 2025 and 2024.

Distributions of $0.77 and $0.75 per common share and Unit were declared during the three months ended September 30, 2025 and 2024, respectively.

Distributions of $2.31 and $2.25 per common share and Unit were declared during the nine months ended September 30, 2025 and 2024, respectively.

Distributions of $0.4140625 and $1.242188 per Series C preferred share were declared during the three and nine months ended September 30, 2024, respectively.

Distributions of $0.9655 per Series D preferred unit were declared during the three months ended September 30, 2025 and 2024 and $2.8965 per Series D preferred unit for the nine months ended September 30, 2025 and 2024.

Distributions of $0.96875 per Series E preferred unit were declared during the three months ended September 30, 2025 and 2024 and $2.90625 per Series E preferred unit for the nine months ended September 30, 2025 and 2024.

Liquidity and Capital Resources

2 unchanged sentences

Our primary sources of liquidity are cash and cash equivalents on hand and cash flows generated from operations.

Other sources include availability under our unsecured lines of credit, proceeds from property dispositions, including restricted cash related to real estate deposits, offerings of preferred and common shares under our shelf registration statement, including offerings of common shares under our ATM Program, and long-term unsecured debt and secured mortgages.

Other sources include availability under our unsecured lines of credit, proceeds from property dispositions, including restricted cash related to net tax deferred proceeds, real estate deposits, offerings of preferred and common shares under our shelf registration statement, including offerings of common shares under our ATM Program, and long-term unsecured debt and secured mortgages.

Our primary liquidity demands are normally-recurring operating and overhead expenses, debt service and repayments, capital improvements to our communities, distributions to the holders of our common shares, Series D and Series E preferred units, and Units, value-add redevelopment, common and preferred share buybacks and Unit redemptions, funding of mezzanine loans or real estate related notes, and acquisitions of additional communities.

2 unchanged sentences

If we are unable to obtain capital from other sources, we may not be able to pay the distribution required to maintain our status as a REIT, make required principal and interest payments, make strategic acquisitions or make necessary routine capital improvements or undertake value add renovation opportunities with respect to our existing portfolio of operating assets.

As of June 30, 2025, we had total liquidity of approximately $206.3 million, which included $194.0 million available on the lines of credit based on the value of unencumbered properties and $12.4 million of cash and cash equivalents.

As of September 30, 2025, we had total liquidity of approximately $200.4 million, which included $187.5 million available on the lines of credit based on the value of unencumbered properties and $12.9 million of cash and cash equivalents.

As of December 31, 2024, we had total liquidity of approximately $224.6 million, which included $212.6 million available on the lines of credit based on the value of unencumbered properties and $12.0 million of cash and cash equivalents.

As of June 30, 2025, we had a multibank, revolving line of credit with total commitments and borrowing capacity of $400.0 million, based on the value of unencumbered properties, (the “Unsecured Credit Facility” or “Facility”).

As of September 30, 2025, we had a multibank, revolving line of credit with total commitments and borrowing capacity of $400.0 million, based on the value of unencumbered properties, (the “Unsecured Credit Facility” or “Facility”).

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, there was $215.8 million outstanding on this line of credit and additional borrowing availability was $184.2 million.

As of September 30, 2025, there was $222.5 million outstanding on this line of credit and additional borrowing availability was $177.5 million.

At December 31, 2024, the line of credit borrowing capacity was $250.0 million based on the value of unencumbered properties, of which $44.0 million was outstanding and additional borrowing availability was $206.0 million.

3 unchanged sentences

As amended, the interest rates on the line of credit are based on the consolidated leverage ratio, at our option, on either the lender’s base rate plus a margin, ranging from 20-80 basis points, or the daily or term Secured Overnight Financing Rate (“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.

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

We have 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 2026 and is designed to enhance treasury management activities and more effectively manage cash balances.

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

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

As of September 30, 2025 there was no outstanding balance on this line of credit compared to $3.4 million outstanding as of December 31, 2024.

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

(collectively, “PGIM”) under which we have 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 we may borrow money to October 2027 and to increase the borrowing capacity to $300.0 million.

We also had 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 June 30, 2025 and December 31, 2024.

We also issued $125.0 million of senior unsecured promissory notes (the “Unsecured Club Notes”, and collectively with the Unsecured Shelf Notes, the “unsecured senior notes”), under a separate private note purchase agreement with PGIM and certain other lenders.

The following table shows the notes issued under both agreements as of September 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 June 30, 2025 and December 31, 2024, the FMCF had a balance of $198.9 million.

As of September 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.

Mortgage loan indebtedness, excluding unamortized premiums and discounts and the FMCF, was $406.4 million on 14 apartment communities at June 30, 2025 and $420.4 million on 15 apartment communities at December 31, 2024.

Mortgage loan indebtedness, excluding unamortized premiums and discounts and the FMCF, was $455.9 million on 13 apartment communities at September 30, 2025 and $420.4 million on 15 apartment communities at December 31, 2024.

All of our mortgage debt is collateralized by apartment communities and is non-recourse at fixed rates of interest, with staggered maturities.

This reduces the exposure to changes in interest rates, which minimizes the effect of interest rate fluctuations on our results of operations and cash flows.

As of June 30, 2025 and December 31, 2024, the weighted average interest rate on mortgage debt was 4.03% and 4.02%, respectively.

As of September 30, 2025 and December 31, 2024, the weighted average interest rate on mortgage debt was 3.87% and 4.02%, respectively.

Further information can be found in Note 5 - Debt in the Condensed Consolidated notes.

We amended our equity distribution agreement in connection with the at the market offering (“ATM Program”) through which we 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.

We had an equity distribution agreement in connection with our at the market offering (“ATM Program”) through which we 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 was $500.0 million.

Under the ATM Program, we 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 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.

There were no sales of common shares under the ATM program during the three and nine months ended September 30, 2025.

The table below provides details on the sale of common shares during the three and nine months ended September 30, 2024 under the ATM Program.

As of September 30, 2025, common shares having an aggregate offering price of up to $262.9 million remained available under the ATM Program.

Further information can be found in Note 4 - Mezzanine Equity and Equity in the Condensed Consolidated notes.

(in thousands, except per share amounts)

Three and Six Months Ended June 30,

Number of Common Shares

Three Months Ended September 30, Number of Common Shares

Net Consideration (1)(2)

1 unchanged sentence

2024 1,477 $ 105,052 $ 71.12

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

We had a share repurchase program (the “Share Repurchase Program”), providing for the repurchase of up to an aggregate of $50.0 million of our outstanding common shares which expired on March 10, 2025.

Under the Share Repurchase Program, we were 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 and Exchange Act of 1934, as amended.

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 and six months ended June 30, 2025.

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

Nine Months Ended September 30,

2024 1,587 $ 112,613 $ 71.66

(1) Includes 869,000 shares sold on a forward basis for $62.7 million which were physically settled during the three months ended September 30, 2024.

(2) Total consideration is net of $1.0 million and $1.1 million in commissions during the three and nine months ended September 30, 2024, respectively.

We had a share repurchase program, providing for the repurchase of up to an aggregate of $50.0 million of our outstanding common shares which expired on March 10, 2025.

Effective July 31, 2025, the Board of Trustees authorized a new share purchase program (the “Share Repurchase Program”), providing for the repurchase of up to an aggregate of $100.0 million of our outstanding common shares.

This Share Repurchase Program is valid for one year.

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

The specific timing and amount of repurchases may 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 common shares repurchased under these programs during the three and nine months ended September 30, 2025 and 2024.

As of September 30, 2025, the Company had $96.5 million remaining authorized for purchase under the Share Repurchase Program.

(in thousands, except per share amounts)

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

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

Average Price Per Share (1)

Six Months Ended June 30,

2025 63 $ 3,454 $ 54.86

Nine Months Ended September 30,

2025 63 $ 3,454 $ 54.86

2024 88 $ 4,703 $ 53.62

(1) Amount includes commissions.

We had 1.6 million Series E preferred units (noncontrolling interests) outstanding on June 30, 2025 and December 31, 2024.

We had 1.6 million Series E preferred units (noncontrolling interests) outstanding on September 30, 2025 and December 31, 2024.

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

1 unchanged sentence

Each Series E preferred unit is convertible, at the holder’s option, into 1.20482 Units.

The Series E preferred units have an aggregate liquidation preference of $157.5 million.

The Series E preferred units had an aggregate liquidation preference of $157.2 million and $158.2 million as of September 30, 2025 and December 31, 2024, respectively.

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

We had 113,100 and 165,600 Series D preferred units outstanding on June 30, 2025 and December 31, 2024, respectively.

We had 59,400 and 165,600 Series D preferred units outstanding on September 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, we redeemed 52,500 Series D preferred units for an aggregate redemption price of $5.3 million.

During the three and nine months ended September 30, 2025, we redeemed 53,700 and 106,200 Series D preferred units, respectively, for an aggregate redemption price of $5.4 million and $10.6 million, respectively.

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

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.

The Series D preferred units had an aggregate liquidation value of $5.9 million and $16.6 million at September 30, 2025 and December 31, 2024, respectively.

Changes in Cash, Cash Equivalents, and Restricted Cash

As of June 30, 2025, we had cash and cash equivalents of $12.4 million and restricted cash consisting of $5.8 million of real estate deposits and escrows held by lenders for real estate taxes, insurance, and capital additions.

As of September 30, 2025, we had cash and cash equivalents of $12.9 million and restricted cash consisting of $52.9 million of net tax deferred proceeds, real estate deposits, security deposits, and escrows held by lenders for real estate taxes, insurance, and capital additions.

As of December 31, 2024, we had cash and cash equivalents of $12.0 million and restricted cash consisting of $1.1 million of escrows held by lenders for real estate taxes, insurance, and capital additions.

The following discussion relates to changes in consolidated cash, cash equivalents, and restricted cash which are presented in the Condensed Consolidated Statements of Cash Flows in Part I, Item 1 above.

In addition to cash flows from operations of $50.7 million, during the six months ended June 30, 2025, we generated capital from various activities, including:

In addition to cash flows from operations of $85.7 million, during the nine months ended September 30, 2025, we generated capital from various activities, including:

• Receiving $175.1 million in net draws on the lines of credit;

During the six months ended June 30, 2025, we used capital for various activities, including:

• Acquiring an apartment community in Salt Lake City, Utah for $150.1 million in cash, including transaction costs;

• Receiving $122.4 million in net proceeds from the sale of five communities.

During the nine months ended September 30, 2025, we used capital for various activities, including:

• Acquiring two apartment communities for $206.2 million in cash, including transaction costs;

• Funding capital improvements for apartment communities of approximately $24.1 million;

1 unchanged sentence

• Redeeming 106,200 Series D preferred units for $10.6 million;

• Repurchasing approximately 63,000 common shares for $3.5 million;

• Paying distributions on common shares, Series E preferred units, and Units of $45.0 million.

1 unchanged sentence

Contractual obligations and other commitments were disclosed in our Form 10-K for the year ended December 31, 2024.

Refer to Note 10 of the Notes to the Condensed Consolidated Financial Statements for additional details.

Refer to Note 10 of the Notes to the Condensed Consolidated Financial Statements in this report for additional details.

There have been no material changes to our contractual obligations and other commitments since that report was filed.

1 unchanged sentence

Our apartment leases generally have terms of one year or less, which means that, in an inflationary environment, we would have the ability, subject to market conditions, to increase rents upon the commencement of new leases or renewal of existing leases to manage the impact of inflation on our business.

However, the cost to operate and maintain communities could increase

at a rate greater than our ability to increase rents, which could adversely affect our results of operations.

However, the cost to operate and maintain communities could increase at a rate greater than our ability to increase rents, which could adversely affect our results of operations.

High inflation could have a negative impact on our residents and their ability to absorb rent increases.

6 unchanged sentences

Off-Balance Sheet Arrangements

As of June 30, 2025, we had no significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

As of September 30, 2025, we had no significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Critical Accounting Policies

2 unchanged sentences

A summary of critical accounting policies is included in our Form 10-K for the year ended December 31, 2024, filed with the SEC on February 18, 2025, under the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Refer to Note 2 of the Notes to Condensed Consolidated Financial Statements in this report for additional information.

There have been no other significant changes to the critical accounting policies during the six months ended June 30, 2025.

There have been no other significant changes to the critical accounting policies during the nine months ended September 30, 2025.

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 2. Management’s Discussion and Analysis