CENTERSPACE 10-Q

Item 2. 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 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. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Forward-looking statements are typically identified by the use of terms such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “assumes,” “may,” “projects,” “outlook,” “future,” and variations of those words and similar expressions. 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. Any statements contained herein that are not statements of historical fact should be deemed forward-looking statements. As a result, reliance should not be placed on these forward-looking statements, as these statements are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from actual results and performance. The following factors, among others, could cause our future results to differ materially from those expressed in the forward-looking statements: • inflation and price volatility in the global economy; • uncertain global macro-economic and political conditions, the impact of conflicts in Ukraine and the Middle East, including sanctions imposed by the U.S. and other countries, on inflation, trade, and general economic conditions; • deteriorating economic conditions, including rising unemployment rates, energy costs, and inflation, in the markets where we own apartment communities or in which we may invest in the future; • rental conditions in our markets, including occupancy levels and rental rates, our potential inability to renew residents or obtain new residents upon expiration of existing leases, our ability to identify and consummate attractive acquisitions and dispositions on favorable terms, our ability to reinvest sales proceeds successfully, our inability to accommodate any significant decline in the market value of real estate serving as collateral for our debt and mortgage obligations; changes in tax and housing laws, including rent control laws, or other factors; • timely access to material and labor required to renovate and maintain apartment communities; • pandemics or epidemics and any effects on our employees, residents and commercial tenants, third party vendors and suppliers, and apartment communities, as well as our cash flow, business, financial condition, and results of operations; • reliance on a single asset class (multifamily) and certain geographic areas (Midwest and Mountain West regions) of the U.S.; • inability to expand our operations into new or existing markets successfully; • failure of new acquisitions to achieve anticipated results or be efficiently integrated; • 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 distribution and/or tax protection payments; 28 Table of Contents • inability to fund capital expenditures out of cash flow; • inability to pay, or need to reduce, distributions on our common shares; • inability to raise additional equity capital, if needed; • financing risks, including our potential inability to meet existing covenants in existing credit facilities or to obtain new debt or equity financing on favorable terms, or at all; • level and volatility of interest or capitalization rates or capital market conditions; • loss contingencies and the availability and cost of casualty insurance for losses; • uninsured losses due to insurance deductibles, uninsured claims or casualties or losses in excess of applicable coverage; • inability to continue to satisfy complex tax rules in order to maintain our status as a REIT for federal income tax purposes, inability of the Operating Partnership to satisfy the rules to maintain its status as a partnership for tax purposes, and the risk of changes in laws affecting REITs; • inability to attract and retain qualified personnel; • cyber liability or potential liability for breaches of our privacy or information security systems; • recent developments in artificial intelligence, including software used to price rent in apartment communities; • inability to address catastrophic weather, natural events, and climate change; • inability to comply with laws and regulations, including those related to the environment, applicable to our business and any related investigations or litigation; and • other risks identified in this Report, in our other SEC reports, or in other documents that we publicly disseminate. New factors may also arise from time to time that could have an adverse effect on our business and results of operations. Except as otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statements to reflect events, circumstances, or changes in expectations after the date on which this Report is filed. Readers also should review the risks and uncertainties detailed from time to time in filings with the SEC, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2024 and “Risk Factors” contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. Executive Summary We are a real estate investment trust, or REIT, that owns, manages, acquires, redevelops, and develops apartment communities. 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 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. We strive to maximize resident satisfaction and retention by investing in high-quality assets in desirable locations and creating vibrant apartment communities through resident-centered operations. We believe that delivering superior resident experiences will enhance resident satisfaction while also driving profitability for our business and shareholders. We have paid quarterly distributions continuously since our first distribution in 1971. 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. 29 Table of Contents • 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. Results of Operations 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 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. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance. We have provided certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or stabilized for substantially all of the periods being compared and, in the case of newly-acquired or constructed communities, have achieved a target level of physical occupancy of 90%, or re-positioned communities when they have achieved stabilized operations. We define re-positioned communities as having significant development and construction activity on existing buildings pursuant to an authorized plan, which has an impact on current operating results, occupancy and the ability to lease space with the intended result of improved community cash flow and competitive position through extensive unit and amenity upgrades. We categorize a re-positioned community as same-store when the development and construction activity has been completed, and operations have stabilized. This is typically reaching an overall occupancy of 90%. Not all communities undergoing value add are considered a re-positioned community. Non-same-store communities are communities not owned or stabilized as of the beginning of the previous year, including re-positioned communities, and excluding communities held for sale and the non-multifamily components of mixed-use properties. On the first day of each calendar year, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate the performance of existing apartment communities and their contribution to net income (loss). We believe that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of communities are performing year-over-year. We use this measure to assess whether or not we have been successful in increasing NOI, raising average rental revenue, renewing the leases with existing residents, controlling operating costs, and making prudent capital improvements. 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 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 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. 30 Table of Contents 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 September 30, Nine Months Ended September 30, 2025 2024 $ Change % Change 2025 2024 $ Change % Change Operating income $ 77,210 $ 6,350 $ 70,860 * $ 75,160 $ 17,617 $ 57,543 * Adjustments: Property management expenses 2,489 2,242 247 11.0 % 7,315 6,794 521 7.7 % Casualty loss (gain) 127 (412) 539 (130.8) % 1,058 918 140 15.3 % Depreciation and amortization 29,056 26,084 2,972 11.4 % 83,807 78,810 4,997 6.3 % Impairment of real estate investments 8,676 — 8,676 N/A 23,219 — 23,219 N/A General and administrative expenses 4,997 4,102 895 21.8 % 14,376 12,941 1,435 11.1 % (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 % * Not a meaningful percentage. 31 Table of Contents 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 September 30, Nine Months Ended September 30, 2025 2024 $ Change % Change 2025 2024 $ Change % Change Revenue Same-store (1) $ 58,061 $ 56,707 $ 1,354 2.4 % $ 173,552 $ 168,745 $ 4,807 2.8 % Non-same-store (1) 5,760 1,189 4,571 * 10,447 3,693 6,754 * Other properties (1) 899 538 361 67.1 % 2,507 1,690 817 48.3 % Held for sale and dispositions (1) 6,679 6,591 88 * 20,535 20,446 89 * Total 71,399 65,025 6,374 9.8 % 207,041 194,574 12,467 6.4 % Property operating expenses, including real estate taxes Same-store (1) 22,530 22,709 (179) (0.8) % 66,567 64,898 1,669 2.6 % Non-same-store (1) 2,494 572 1,922 * 4,732 1,683 3,049 * Other properties (1) 287 221 66 29.9 % 860 625 235 37.6 % Held for sale and dispositions (1) 3,064 3,157 (93) * 9,478 9,711 (233) * Total 28,375 26,659 1,716 6.4 % 81,637 76,917 4,720 6.1 % Net operating income Same-store (1) 35,531 33,998 1,533 4.5 % 106,985 103,847 3,138 3.0 % Non-same-store (1) 3,266 617 2,649 * 5,715 2,010 3,705 * Other properties (1) 612 317 295 93.1 % 1,647 1,065 582 54.6 % Held for sale and dispositions (1) 3,615 3,434 181 * 11,057 10,735 322 * Total $ 43,024 $ 38,366 $ 4,658 12.1 % $ 125,404 $ 117,657 $ 7,747 6.6 % Property management expenses (2,489) (2,242) 247 11.0 % (7,315) (6,794) 521 7.7 % Casualty (loss) gain (127) 412 539 (130.8) % (1,058) (918) 140 15.3 % Depreciation and amortization (29,056) (26,084) 2,972 11.4 % (83,807) (78,810) 4,997 6.3 % Impairment of real estate investments (8,676) — 8,676 N/A (23,219) — 23,219 N/A General and administrative expenses (4,997) (4,102) 895 21.8 % (14,376) (12,941) 1,435 11.1 % 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 * 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) % Net income attributable to noncontrolling interests – consolidated real estate entities (2,319) (32) (2,287) * (2,408) (98) (2,310) * Net income (loss) attributable to controlling interests 53,783 (1,048) 54,831 * 35,534 (6,249) 41,783 * 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) % (1) This is a non-GAAP financial measure which is a component of NOI (non-GAAP), as defined above. Refer to the Reconciliation of Operating Income (Loss) to Net Operating Income above. Non-GAAP financial measures should not be considered an alternative to net income (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance. * Not a meaningful percentage. 32 Table of Contents Three Months Ended September 30, Nine Months Ended September 30, Weighted Average Occupancy (1) 2025 2024 2025 2024 Same-store 95.8 % 95.6 % 95.9 % 95.3 % Non-same-store 87.5 % 91.5 % 87.3 % 93.4 % Total (2) 95.0 % 95.5 % 95.4 % 95.2 % (1) Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rental revenue. Scheduled rental revenue represents the value of all apartment homes, with occupied homes valued at contractual rental rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes. Centerspace believes that weighted average occupancy is a meaningful measure of occupancy because it considers the value of each vacant unit at its estimated market rate. Weighted average occupancy may not completely reflect short-term trends in physical occupancy, and the calculation of weighted average occupancy may not be comparable to that disclosed by other REITs and other real estate companies. (2) Excludes apartment communities classified as held for sale. Number of Apartment Homes as of September 30, 2025 as of September 30, 2024 Same-store 11,084 11,084 Non-same-store 1,178 288 Held for sale and dispositions 679 1,511 Total 12,941 12,883 Same-store analysis. 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 $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 $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 $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 33 Table of Contents 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 $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. NOI at other properties increased by $295,000, compared to the same period in the prior year. 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 $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. NOI at other properties increased by $582,000, compared to the same period in the prior year. 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. Held for sale and dispositions analysis. 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, 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, 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. Property management expenses . 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 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 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 $1.1 million in the nine months ended September 30, 2025, compared to $918,000 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. Depreciation and amortization. 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. 34 Table of Contents 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 $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 $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 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 $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 35 Table of Contents 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. (“Nareit”). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding: • depreciation and amortization related to real estate; • gains and losses from the sale of certain real estate assets; • gains and losses from change in control; • impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity; and • similar adjustments for partially owned consolidated real estate entities. The exclusion in Nareit’s definition of FFO of gains and losses from the sale of real estate assets and impairment write-downs helps to identify the operating results of the long-term assets that form the base of investments and assists management and investors in comparing those operating results between periods. Due to limitations of the Nareit FFO definition, we have made certain interpretations in applying this definition. We believe that all such interpretations not specifically provided for in the Nareit definition are consistent with this definition. Nareit’s FFO White Paper 2018 Restatement clarified that impairment write-downs of land related to a REIT’s main business are excluded from FFO and a REIT has the option to exclude impairment write-downs of assets that are incidental to the main business. While FFO is widely used by us as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO the same way. Accordingly, FFO presented here is not necessarily comparable to FFO presented by other real estate companies. FFO should not be considered as an alternative to net income (loss) or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash needs, including our ability to service indebtedness or make distributions to shareholders. Core Funds from Operations (“Core FFO”), a non-GAAP measure, is FFO adjusted for non-routine items or items not considered core to business operations. By further adjusting for items that are not considered part of core business operations, we believe that Core FFO provides investors with additional information to compare core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income (loss) or as any other GAAP measurement of performance, but rather should be considered an additional supplemental measure. Core FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash flow needs, including the ability to service indebtedness or make distributions to shareholders. 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 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%. 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. 36 Table of Contents 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Funds from Operations: Net income (loss) available to common shareholders $ 53,783 $ (6,166) $ 35,534 $ (14,581) Adjustments: Noncontrolling interests – Operating Partnership and Series E preferred units 9,197 (1,095) 6,071 (2,735) Depreciation and amortization 29,056 26,084 83,807 78,810 Less depreciation – non real estate (85) (81) (252) (248) Less depreciation – partially owned entities — (25) (43) (74) Impairment of real estate investments 8,676 — 23,219 — (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 (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) (455) (61) (503) (35) Core FFO applicable to common shares and Units $ 23,360 $ 21,969 $ 72,636 $ 66,817 FFO applicable to common shares and Units $ 23,347 $ 18,717 $ 71,056 $ 61,749 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 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 income (loss) per common share - diluted (2) $ 3.19 $ (0.40) $ 2.12 $ (0.96) FFO per share and Unit - diluted $ 1.19 $ 1.01 $ 3.60 $ 3.40 Core FFO per share and Unit - diluted $ 1.19 $ 1.18 $ 3.68 $ 3.68 Weighted average shares - basic for net income (loss) 16,726 15,528 16,731 15,143 Effect of operating partnership Units for net income, FFO and Core FFO 966 818 972 836 Effect of Series D preferred units for net income, FFO and Core FFO 155 228 204 228 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 net income, FFO and Core FFO 26 49 25 32 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 income (loss) per share. Acquisitions and Dispositions 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. 37 Table of Contents Distributions Declared 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 Overview We strive to maintain a strong balance sheet and preserve financial flexibility, which we believe should enhance our ability to capitalize on appropriate investment opportunities as they may arise. We intend to continue to focus on core fundamentals, which include generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. 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 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. Although we believe that our financial condition and liquidity are sufficient to meet our reasonably anticipated liquidity demands, factors that could increase or decrease our future liquidity include, but are not limited to, changes in interest rates or sources of financing, general volatility in capital and credit markets, changes in minimum REIT dividend requirements, and our ability to access the capital markets on favorable terms, or at all. As a result of the foregoing conditions or general economic conditions in our markets that affect our ability to attract and retain residents, we may not generate sufficient cash flow from operations. 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 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. Debt 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 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. The line of credit is utilized to refinance existing indebtedness, to finance property acquisitions, to finance capital expenditures, and for general corporate purposes. 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. 38 Table of Contents 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. 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 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 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) Amount Maturity Date Fixed Interest Rate Series A $ 75,000 September 13, 2029 3.84 % Series B $ 50,000 September 30, 2028 3.69 % Series C $ 50,000 June 6, 2030 2.70 % Series 2021-A $ 35,000 September 17, 2030 2.50 % Series 2021-B $ 50,000 September 17, 2031 2.62 % Series 2021-C $ 25,000 September 17, 2032 2.68 % Series 2021-D $ 15,000 September 17, 2034 2.78 % We have a $198.9 million Fannie Mae Credit Facility Agreement (the “FMCF”). The FMCF is currently secured by mortgages on 11 apartment communities. The notes are interest-only, with varying maturity dates of 7, 10, and 12 years, and a blended, weighted average fixed interest rate of 2.78%. 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 $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 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. Equity 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 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. 39 Table of Contents (in thousands, except per share amounts) Three Months Ended September 30, Number of Common Shares Net Consideration (1)(2) Average Net Price Per Share 2024 1,477 $ 105,052 $ 71.12 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 September 30, Number of Common Shares Aggregate Cost (1) Average Price Per Share (1) 2025 63 $ 3,454 $ 54.86 2024 — — — 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 September 30, 2025 and December 31, 2024. Each Series E preferred unit has a par value of $100. The Series E preferred unit holders receive a preferred distribution at the rate of 3.875% per year. Each Series E preferred unit is convertible, at the holder’s option, into 1.20482 Units. 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 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. 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 $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 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. 40 Table of Contents 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; and • 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; • Repaying $41.0 million of mortgage principal; • Redeeming 106,200 Series D preferred units for $10.6 million; • Repurchasing approximately 63,000 common shares for $3.5 million; and • Paying distributions on common shares, Series E preferred units, and Units of $45.0 million. Contractual Obligations and Other Commitments 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 in this report for additional details. There have been no material changes to our contractual obligations and other commitments since that report was filed. Inflation and Supply Chain 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. High inflation could have a negative impact on our residents and their ability to absorb rent increases. We also continue to monitor pressures surrounding supply chain challenges. Supply chain and inflationary pressures are likely to result in increased operating expenses, specifically, increases in energy costs, labor related costs, and construction materials for repairs and maintenance or capital projects. A worsening of the current environment could contribute to delays in obtaining construction materials and result in higher than anticipated costs, which could prevent us from obtaining expected returns on value add projects. We continue to have access to the financial markets; however, a prolonged disruption of the markets or a decline in credit and financing conditions could negatively affect our ability to access capital necessary to fund our operations or refinance maturing debt in the future. Additionally, rising interest rates could negatively impact our borrowing costs for any variable rate borrowings or refinancing activity. Off-Balance Sheet Arrangements 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 In preparing the Condensed Consolidated Financial Statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. 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 nine months ended September 30, 2025. 41 Table of Contents