What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2026-02-17 compared with 2025-02-18 · 97 added, 79 removed, 369 unchanged (32% of the section changed)

3 unchanged sentences

Our business, financial condition, cash flows, results of operations, value of our real estate assets and/or the value of an investment in our stock or Units are subject to various risks and uncertainties, including those set forth below, any of which could cause our actual operating results to vary materially from our recent results or from our anticipated future results.

Risks Related to Our Strategic Alternatives Review Process

Our Review of Strategic Alternatives May Not Result in an Executed or Consummated Transaction or Transactions, and the Process of Reviewing Strategic Alternatives or its Conclusion Could Adversely Affect our Business and Our Shareholders.

On November 11, 2025, we confirmed that our Board of Trustees had initiated a review of the Company’s strategic alternatives, and that the Board of Trustees is actively considering a wide range of options including, among other things, a sale, merger and other business combinations, as well as continuing to execute on our independent business strategy.

We are actively working with our financial and legal advisors in connection with our strategic alternatives review process.

We may not be able to identify or consummate a suitable transaction or transactions and do not currently have any commitments relating to any transactions.

We may not be able to successfully implement a strategic transaction we pursue, and even if we determine to pursue one or more strategic transactions, we may be unable to do so on acceptable financial terms and any such transaction or transactions may not improve the market price of our common stock.

Pursuing strategic alternatives is subject to risks, including those outlined herein, and if we are unsuccessful in consummating a strategic transaction or transactions, our business could be materially adversely affected.

We have and will continue to incur substantial expenses associated with identifying, evaluating and negotiating potential strategic alternatives.

In addition, the process could negatively impact our ability to recruit and retain qualified personnel, business partners and other stakeholders important to our success.

Further, the process may be time consuming and disruptive to our business operations, could divert the attention of management and our Board of Trustees from our business and could expose us to potential litigation in connection with this process or any resulting transaction or transactions.

Risks Related to Our Properties and Operations

We depend on residents for rental payments, which accounts for most of our revenue, and low occupancy rates or lease terminations could reduce our revenues from rents.

We depend on residents for rental payments, which account for most of our revenue, and low occupancy rates or lease terminations could reduce our revenues from rents.

The value of our properties and our ability to make distributions depend on the ability of our residents to generate enough income to pay their rents on time.

4 unchanged sentences

Our apartment leases are generally for a term of 12 months or less.

The short-term nature of these leases generally serves to reduce our risk to adverse effects of inflation, as our leases allow for adjustments in the rental rate at the time of renewal, which may enable us to seek increases.

The short-term nature of these leases generally serves to reduce our risk to adverse effects of inflation and increases in operating costs, as our leases allow for adjustments in the rental rate at the time of renewal, which may enable us to seek increases.

However, because these leases generally allow residents to leave at the expiration of the lease term without penalty, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms.

Furthermore, we may be unable to increase rents, whether due to market conditions or applicable law, at a rate consistent with inflation.

Furthermore, we may be unable to increase rents, whether due to market conditions or applicable law, at a rate consistent with inflation or our increased operating costs.

In addition, we may be unable to sell a property with low occupancy without incurring a loss.

2 unchanged sentences

Our results of operations are materially affected by economic and political conditions in the United States and internationally, including inflation, deflation, interest rates, recession, availability of capital, and the effects of governmental initiatives to manage economic conditions.

The current conflicts in Ukraine and the Middle East, resulting sanctions and related countermeasures by the United States and other countries, could lead to market disruptions, including significant volatility in the credit and capital markets and the economy in general, which could weaken our operations and financial performance.

Actual or threatened wars or other international conflicts, such as those in Ukraine, the Middle East, and South America, resulting sanctions and related countermeasures by the United States and other countries, could lead to market disruptions, including significant volatility in the credit and capital markets and the economy in general, which could weaken our operations and financial performance.

Any development or escalation of these conflicts, or any new conflicts, including those resulting from the policies of the U.S.

2 unchanged sentences

There is also substantial uncertainty surrounding tariffs and international trade relations, and it is difficult for us to predict future trade measures and the impact they will have on our business and operations.

In early 2025, the new Administration imposed and threatened additional tariffs on imports from various countries.

In response, some of these countries imposed and threatened additional tariffs on imports from the U.S.

How long current tariffs will remain in place, and whether the new Administration will enact the threatened tariffs or impose entirely new ones is uncertain.

The new tariffs, along with any additional tariffs or trade restrictions that may be implemented by the U.S.

New or existing tariffs, along with any additional tariffs or trade restrictions that may be implemented by the U.S.

or retaliatory trade measures or tariffs implemented by other countries, could result in reduced economic activity, increased costs in operating our business, reduced spending on housing, limits on trade with the U.S.

or other potentially adverse economic outcomes.

In addition, there may be political crises, civil unrest, or another outbreak or escalation of hostilities among various actors in the markets in which we operate, including Minneapolis, which could threaten the safety of our residents, subject our communities to increased risk of damage and could worsen the long-term attractiveness of our communities if they persist.

The occurrence of any of these could cause current or potential residents to delay or decrease spending on housing as their budgets are impacted by economic or political conditions.

2 unchanged sentences

Our financial performance is subject to risks associated with the real estate industry and ownership of apartment communities.

Our financial performance risks include, but are not limited to, the following:

These risks include, but are not limited to, the following:

• downturns in national, regional, and local economic conditions (particularly increases in unemployment);

• competition from other apartment communities;

• competition from other apartment communities and alternative housing;

• local real estate market conditions, including an oversupply of apartments or other housing, or a reduction in demand for apartment communities;

5 unchanged sentences

• increases in compensation costs due to the tight labor market in many markets in which we operate;

• technological changes, such as artificial intelligence;

• our ability to provide adequate maintenance for our apartment communities;

12 unchanged sentences

Acquiring or developing new properties and expanding into new markets introduces several risks, including, but not limited to, the following:

• we may be unable to identify suitable properties or other assets that meet our acquisition or development criteria or in consummating acquisitions or developments on satisfactory terms, or at all;

• we may be unable to identify suitable properties or other assets that meet our acquisition or development criteria or consummate acquisitions or developments on satisfactory terms, or at all;

• we may be unable to maintain consistent standards, controls, policies, and procedures, or realize the anticipated benefits of the acquisitions within our expected time frame, or at all;

• development and redevelopment activities associated with new properties are subject to a number of risks, including risks associated with construction work, cost overruns, project delays, or other factors that may increase the expected costs of a project;

• acquisitions and divestitures could divert our attention from our existing properties and could cause us to lose key employees or be unable to attract highly qualified new employees;

6 unchanged sentences

As a result, we are subject to risks inherent in investments in a single asset class.

A downturn or slowdown in the demand for multifamily housing may have more pronounced effects on our business and results of operations or on the value of our assets than if we were more diversified in our investments into more than one asset class.

A downturn or slowdown in the demand for multifamily housing may have more pronounced effects on our business and results of operations or on the value of our assets than if our investments were diversified into more than one asset class.

Our operations are concentrated in certain regions of the United States, and we are subject to general economic conditions in the regions in which we operate.

15 unchanged sentences

We may also be limited by law in our ability to increase rents.

See “Multifamily residential properties may be subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts.

” See “Adverse changes in taxes and other laws may affect our liabilities relating to our properties and operations.”

See “Multifamily residential properties may be

subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts.

” See “Adverse changes in tax laws and other laws may affect our liabilities relating to our properties and operations.”

Catastrophic weather, natural events, and climate change could adversely affect our business .

Some of our apartment communities are located in areas that may experience catastrophic weather and other natural events from time to time, including snow or ice storms, flooding, tornadoes, or other severe or inclement weather.

Some of our apartment communities are located in areas that may experience catastrophic weather and other natural events from time to time, including snow or ice storms, fires, flooding, tornadoes, or other severe or inclement weather.

These natural events could cause damage or losses that may be greater than insured levels.

9 unchanged sentences

In most cases, we have to renew our insurance policies annually and negotiate acceptable terms for coverage, exposing us to the volatility of the insurance markets, including the possibility of rate increases.

In addition, a reduction of the number of insurance providers or the unwillingness of existing insurance providers to write insurance for multifamily properties may reduce the potential availability

and cost for obtaining insurance on our properties.

In addition, a reduction of the number of insurance providers or the unwillingness of existing insurance providers to write insurance for multifamily properties may reduce the potential availability and increase the cost for obtaining insurance on our properties.

Any material increases in insurance rates or decrease in available coverage in the future could adversely affect our results of operations.

3 unchanged sentences

The effect of climate change also may increase the cost of, or make unavailable, property insurance or other hazard insurance on terms we find acceptable or necessary to adequately protect our properties.

Multifamily residential properties may be subject to rent stabilization regulations and other restritctions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts.

Multifamily residential properties may be subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts.

Rent control or rent stabilization laws and other regulatory restrictions may limit our ability to increase rents and otherwise charge residents fees and pass through new or increased operating costs to our residents.

There has been a recent increase in municipalities and other local governments, including those in which we own properties, considering or being urged by advocacy groups to consider rent control or rent stabilization laws and regulations or take other actions which could limit our ability to raise rents based solely on market conditions.

There has been a recent increase in municipalities and other local governments, including those in locations where we own properties, considering or being urged by advocacy groups to consider rent control or rent stabilization laws and regulations or take other actions which could limit our ability to raise rents based solely on market conditions.

In addition, the multifamily housing industry has faced increased scrutiny over fees charged to residents.

3 unchanged sentences

Expenses associated with our investment in these multifamily properties, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances reduce rental income from the community.

Furthermore, such regulations may impair our ability to attract higher-paying residents to such multifamily properties.

Furthermore, such regulations may impair our ability to attract higher-paying residents to our properties.

We may face opposition from governmental authorities or third parties alleging that our activities are anti-competitive.

The residential real estate industry has recently faced increased scrutiny from regulators claiming that certain market tools employed by property owners to evaluate market rents leads to anti-competitive behavior.

The residential real estate industry has recently faced increased scrutiny from regulators claiming that certain market tools employed

by property owners to evaluate market rents leads to anti-competitive behavior.

In January 2025, the U.S.

12 unchanged sentences

Because real estate investments are relatively illiquid and various other factors limit our ability to dispose of assets, we may be unable to sell properties when appropriate.

We may have limited ability to change our portfolio of properties quickly in response to our strategic plan and changes in economic or other conditions, the prohibitions under the federal income tax laws on REITs holding property for sale, and related regulations may affect our ability to sell properties.

We may have limited ability to change our portfolio by selling properties quickly in response to our strategic plan and changes in economic or other conditions, the prohibitions under the federal income tax laws on REITs holding property for sale, and related regulations.

In some cases, the Code imposes penalties on a REIT that sells property held for less than two years and limits the number of properties it can sell in a given year.

Our ability to dispose of assets also may be limited by constraints on our ability to use disposition proceeds to make acquisitions on financially attractive terms.

Some of our properties were acquired using limited partnership Units of

Centerspace, LP, our operating partnership, and are subject to certain tax-protection agreements that restrict our ability to sell these properties in transactions that would create current taxable income to the former owners.

Some of our properties were acquired using limited partnership Units of Centerspace, LP, our operating partnership, and are subject to certain tax-protection agreements that restrict our ability to sell these properties in transactions that would create current taxable income to the former owners.

As a result, we are motivated to structure the sale of these assets as tax-free exchanges, the requirements of which are technical and may be difficult to achieve.

6 unchanged sentences

We may be unable to maintain similar rates of growth in the future or manage our growth effectively.

Adverse changes in taxes and other laws may affect our liabilities relating to our properties and operations.

Adverse changes in tax laws and other laws may affect our liabilities relating to our properties and operations.

Increases in real estate taxes, including recent property tax increases in several of the markets in which we operate, and service and transfer taxes may adversely affect our cash available for distributions and our ability to service our debt.

2 unchanged sentences

See “ Multifamily residential properties may be subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts.

” The Inflation Reduction Act of 2022 may also increase our tax burden.

See “ Legislative or regulatory actions affecting REITs could have an adverse effect on us or our shareholders .”

We may be unable to retain or attract qualified management.

We depend on our senior officers for essentially all aspects of our business operations.

Our senior officers have experience in the real estate industry, and the loss of them would likely have a significant adverse effect on our operations and could adversely impact our relationships with lenders and industry personnel.

Our senior officers have experience in the real estate industry, and the loss of any one of them would likely have a significant adverse effect on our operations and could adversely impact our relationships with lenders and industry personnel.

Except for our Chief Executive Officer and Chief Financial Officer, we do not have employment contracts with any of our senior officers.

As a result, any senior officer may terminate his or her relationship with us at any time, without providing advance notice.

The employment contracts require between 30 and 60 days’ advance notice before termination by our Chief Executive Officer or Chief Financial Officer.

Any other senior officer may terminate his or her relationship with us at any time, without providing advance notice.

If we fail to effectively manage a transition to new personnel, or if we fail to attract and retain qualified and experienced personnel on acceptable terms, it could adversely affect our business.

We may be unable to attract and retain qualified employees .

Strong economic growth in recent years has created a tight labor market in many markets in which we operate, and we depend on employees at our apartment communities to provide attractive homes for our residents.

Further, inflation may necessitate increasing employee wages and salaries to retain our employees.

We face tight labor markets in many markets in which we operate, and we depend on employees at our apartment communities to provide attractive homes for our residents.

inflation may necessitate increasing employee wages and salaries to retain our employees.

The loss of key personnel at these apartment communities, or the inability or cost of replacing such personnel at such communities, could hurt our business and results of operations.

The failure of third-party management companies to properly manage our properties could adversely affect our results of operations.

We rely on property management companies to manage some of our properties.

These management companies are responsible for, among other things, leasing and marketing rental units, evaluating and selecting tenants, collecting rent, paying certain operating expenses and maintaining our properties.

If these property management companies do not perform their duties properly, the occupancy rates and rental rates at the properties managed by such property managers may decline and the expenses at such properties may increase.

In addition, the loss of our property managers could result in a decrease in occupancy rates, rental rates or both or an increase in expenses.

In addition, we may be unable to terminate an underperforming management company.

If we are unable to terminate an underperforming property manager on a timely basis, our occupancy and rental rates may decrease and our expenses may increase.

We face risks associated with cyber-attacks, cyber intrusions, or otherwise, which could pose a risk to our systems, networks, and services .

6 unchanged sentences

Accordingly, we and our service providers may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, thereby making it impossible to entirely mitigate this risk.

The risk of a breach or security failure, particularly through cyber-attacks or cyber-intrusion, has generally increased because of the rise in new technologies and the increased sophistication and activities of the perpetrators of attempted attacks and intrusions.

The risk of a breach or security failure, particularly through cyber-attacks or cyber-intrusion, has generally increased because of the rise in new technologies, including artificial intelligence, and the increased sophistication and activities of the perpetrators of attempted attacks and intrusions.

A security breach or other significant disruption involving computer networks and related systems could cause substantial costs and other negative effects, including litigation, remediation costs, costs to deploy additional protection strategies, compromising of confidential information, and reputational damage adversely affecting investor confidence.

11 unchanged sentences

Any such breach could compromise our networks, and the information stored there could be accessed, publicly disclosed, lost or stolen.

Any such access, disclosure, or other loss of information could lead to legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption to our operations and the services we provide to customers or damage our reputation.

services we provide to customers or damage our reputation.

In addition, a security breach could require that we expend significant additional resources to repair and enhance our information security systems.

Furthermore, we could experience material harm to our financial condition, cash flows, and the market price of our common shares, misappropriation of assets, compromise or corruption of confidential information collected in the course of conducting our business, liability for stolen information or assets, increased cybersecurity protection and insurance costs, regulatory enforcement, litigation, and damage to our stakeholder relationships.

The development and use of artificial intelligence in the workplace presents risks and challenges that may adversely impact our business and operating results.

We have begun leveraging artificial intelligence for certain of our operations.

Failure to invest adequately in artificial intelligence may result in us lagging behind our competitors in terms of improving operational efficiency and achieving superior outcomes for our business and our residents.

As we embark on these initiatives, we may encounter challenges such as a shortage of appropriate data to train internal artificial intelligence models, a lack of skilled talent to effectively execute our strategy of leveraging artificial intelligence internally, or the possibility that the tools we use may not deliver the intended value.

Use of third-party artificial intelligence tools can also bring information security, data privacy and legal risks.

Failure to successfully implement and manage artificial intelligence could negatively impact our business and operating results.

We may be responsible for potential liabilities under environmental laws.

3 unchanged sentences

In arranging for the disposal or treatment of hazardous or toxic substances, we also may be liable for the costs of removal or remediation of these substances at that disposal or treatment facility, whether or not we own or operate the facility.

In connection with our current or former ownership (direct or indirect), operation, management, development, and control of real properties, we may be potentially liable for removal or remediation costs for hazardous or toxic substances at those properties, as well as certain other costs, including governmental fines and claims for injuries to persons and property.

In connection with our current or former ownership (direct or indirect), operation, management, development, and control of real properties, we may be liable for removal or remediation costs for hazardous or toxic substances at those properties, as well as certain other costs, including governmental fines and claims for injuries to persons and property.

Although we are unaware of any such claims associated with our existing properties that would have a significant adverse effect on our business, potential future costs, and damage claims may be substantial and could exceed any insurance coverage we may have for such events or such coverage may not exist.

5 unchanged sentences

Indoor air quality issues may also require special investigation and remediation.

These air quality issues can result from inadequate ventilation, chemical contaminants from indoor or outdoor sources, or biological contaminants such as molds, pollen, viruses, and bacteria.

These air quality issues can result from inadequate ventilation, chemical contaminants from indoor or outdoor sources, or natural or biological contaminants such as radon, molds, pollen, viruses, and bacteria.

Asbestos or air quality remediation programs could be costly, necessitate the temporary relocation of some or all of the property’s residents, or require rehabilitation of an affected property.

It is generally our policy to obtain a Phase I environmental study on each property that we seek to acquire.

A Phase I environmental study generally includes a visual inspection of the property and the surrounding areas, an examination of current

and historical uses of the property and the surrounding areas, and a review of relevant state and federal documents but does not involve invasive techniques such as soil and ground water sampling.

A Phase I environmental study generally includes a visual inspection of the property and the surrounding areas, an examination of current and historical uses of the property and the surrounding areas, and a review of relevant state and federal documents but does not involve invasive techniques such as soil and ground water sampling.

If the Phase I indicates any possible environmental problems, our policy is to order a Phase II study, which involves testing the soil and ground water for actual hazardous substances.

28 unchanged sentences

The costs of complying with these laws and regulations may be substantial, and limits or restrictions on construction, or the completion of required renovations, may limit the implementation of our investment strategy or reduce overall returns on our investments.

Risks related to joint ventures may adversely affect our financial performance and results of operations.

We have entered into, and may continue to enter into, partnerships or joint ventures with other persons or entities.

Joint venture investments involve risks that may not be present with other methods of ownership, based on the financial condition and business interests of our partners, which are beyond our control and which may conflict with our interests.

Sometimes, we and our partner have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner’s interest, at a time when we otherwise would not have initiated such a transaction.

Our ability to acquire our partner’s interest may be limited if we lack sufficient cash, available borrowing capacity, or other capital resources.

In such event, we may have to sell our interest in the joint venture when we would otherwise prefer to retain it.

Joint ventures may

require us to share decision-making authority with our partners, which could limit our ability to control the properties in the joint ventures.

Even when we have a controlling interest, certain major decisions may require partner approval, such as the sale, acquisition, or financing of a property.

These risks may hinder our ability to operate in accordance with our strategic plan, which could harm our results of operations.

The COVID-19 pandemic affected our business in the past, and the potential future outbreak of other highly infectious or contagious diseases may materially and adversely impact and disrupt our business, income, cash flow, results of operations, financial condition, liquidity, prospects, and ability to service our debt obligations, and our ability to pay dividends and other distributions to our equityholders.

A potential future pandemic or other outbreak of a highly infectious or contagious diseases may materially and adversely impact and disrupt our business, income, cash flow, results of operations, financial condition, liquidity, prospects, and ability to service our debt obligations, and our ability to pay dividends and other distributions to our equityholders.

The COVID-19 pandemic had, and any future pandemic may have, an impact on our financial condition, results of operations, and cash flows, as well as an adverse effect our residents and commercial tenants, the real estate market, and the global economy and financial markets generally.

6 unchanged sentences

We are subject to the normal risks associated with debt financing, including the risks that:

• our cash flow will be insufficient to meet required payments of principal and interest, particularly if net operating income is reduced significantly due to the effects of the uncertain global macroeconomic and political conditions including inflation, price volatility and the COVID-19 pandemic;

• we will not be able to renew, refinance, or repay our indebtedness when due;

10 unchanged sentences

Restrictive covenants in our debt agreements may limit our operating and financial flexibility, and our inability to comply with these covenants could have significant implications .

Our indebtedness, which at December 31, 2024 totaled outstanding borrowings of approximately $966.6 million, contains significant restrictions and covenants.

Our indebtedness, which at December 31, 2025 totaled outstanding borrowings of approximately $1.1 billion, contains significant restrictions and covenants.

These restrictions and covenants include financial covenants relating to fixed charge coverage ratios, maximum secured debt, maintenance of unencumbered asset value, and total debt to total asset value, among others and certain non-financial covenants.

5 unchanged sentences

As of December 31, 2025, 17 of our properties were encumbered by mortgages.

Incurring mortgage and other secured debt obligations increases our risk of property losses because defaults on

indebtedness secured by property may prompt foreclosure actions initiated by lenders and ultimately our loss of the property securing any loans for which we are in default.

Incurring mortgage and other secured debt obligations increases our risk of property losses because defaults on indebtedness secured by property may prompt foreclosure actions initiated by lenders and ultimately our loss of the property securing any loans for which we are in default.

Any foreclosure on a mortgaged property or group of properties could adversely affect the overall value of our portfolio of properties.

13 unchanged sentences

Financial and real estate market disruptions could adversely affect the multifamily property sector’s ability to obtain financing from Fannie Mae and Freddie Mac, which could adversely impact us.

The Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) are major sources of financing for the multifamily housing sector, and both have historically experienced losses due to credit-related expenses, securities impairments, and fair value losses.

The Federal National Mortgage Association

(“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) are major sources of financing for the multifamily housing sector, and both have historically experienced losses due to credit-related expenses, securities impairments, and fair value losses.

government regulations (i) heighten Fannie Mae’s and Freddie Mac’s underwriting standards, (ii) adversely affect interest rates, or (iii) reduce the amount of capital they can make available to the multifamily sector, we could lose, in part or completely, a vital resource for multifamily financing.

35 unchanged sentences

• unanticipated costs, capital requirements, or cash requirements;

• annual distribution requirements under the REIT provisions of the Code;

• a conclusion that the payment of distributions would cause us to breach the terms of certain agreements or contracts, such as financial ratio covenants in our debt financing documents;

9 unchanged sentences

Our future growth depends on, among other things, our ability to raise equity capital, including through our ATM Program, and issue limited partnership Units of our Operating Partnership.

Sales of substantial amounts of our common or preferred shares in the public market, or the perception that such sales or issuances might occur, may dilute the interests of the current common shareholders and could adversely affect the market price of our common shares.

Sales of substantial amounts of our common or preferred shares, or the perception that such sales or issuances might occur, may dilute the interests of the current common shareholders and could adversely affect the market price of our common shares.

In addition, as a REIT, we are required to make distributions to holders of our equity securities of at least 90% of our REIT taxable income, determined before a deduction for dividends paid and excluding any net capital gain.

5 unchanged sentences

We have a shelf registration statement that enables us to sell an undetermined number of equity and other securities listed in the prospectus.

Future sales of preferred shares or other securities may adversely affect the rights on common shareholders and have an adverse impact on the market price of our common shares.

Future sales of preferred shares or other securities may adversely affect the rights of common shareholders and have an adverse impact on the market price of our common shares.

Certain provisions of our Declaration of Trust may delay, limit, or prevent a change in control and deter a takeover.

5 unchanged sentences

The Trust’s Declaration of Trust also forbids a person from owning in excess of the ownership limit of 9.8%, in number or value, of the Trust’s outstanding shares, although the Board of Trustees retains the ability to make exceptions to this ownership threshold.

This ownership limit as well as other restrictions on ownership and transfer of our stock in our charter may discourage a tender offer or other transactions or a change in management or of control or result in transferring shares acquired in excess of the restrictions to a charitable trust.

This ownership limit as well as other restrictions on ownership and transfer of our stock in our charter may discourage a tender offer, takeover, or other transaction in which holders of our common shares might receive a premium for their shares over the then prevailing market price or which holders might believe to be otherwise in their best interests.

Risks Related to Tax Matters

16 unchanged sentences

This treatment would reduce funds available for investment or distributions to the holders of our securities due to the added tax liability to us for the year or years involved, and we would no longer be able to deduct, and would not need to make, distributions to our shareholders.

If distributions to the holders of our securities had been

made in anticipation of qualifying as a REIT, we may need short-term debt or long-term debt or proceeds from asset sales or sales of common shares to fund required distributions as a result of differences in timing between the actual receipt of income and the recognition of income for federal income tax purposes, or the effect of non-deductible capital expenditures, the creation of reserves or required debt or amortization payments.

If distributions to the holders of our securities had been made in anticipation of qualifying as a REIT, we may need short-term debt or long-term debt or proceeds from asset sales or sales of common shares to fund required distributions as a result of differences in timing between the actual receipt of income and the recognition of income for federal income tax purposes, or the effect of non-deductible capital expenditures, the creation of reserves or required debt or amortization payments.

The inability of our cash flows to cover our distribution requirements could have an adverse impact on our ability to raise short and long-term debt or sell equity securities to fund distributions required to maintain our REIT status.

Failure of our operating partnership to qualify as a partnership would lead to corporate taxation and significantly reduce the amount of cash available for distribution.

We believe that Centerspace, LP, our operating partnership, qualifies as a partnership for federal income tax purposes.

Failure of the Operating Partnership to qualify as a partnership would lead to corporate taxation and significantly reduce the amount of cash available for distribution.

We believe that the Operating Partnership, qualifies as a partnership for federal income tax purposes.

However, we can provide no assurance that the IRS will not challenge its status as a partnership for federal income tax purposes or that a court would not sustain such a challenge.

If the IRS were to treat Centerspace, LP as an entity taxable as a corporation (such as a publicly traded partnership taxable as a corporation), we would no longer qualify as a REIT because the value of our ownership interest in Centerspace, LP would exceed 5% of our assets and because we would be considered to hold more than 10% of the voting securities and value of the outstanding securities of another corporation.

The imposition of a corporate tax on Centerspace, LP would significantly reduce the amount of cash available for distribution.

If the IRS were to treat the Operating Partnership as an entity taxable as a corporation (such as a publicly traded partnership taxable as a corporation), we would no longer qualify as a REIT because the value of our ownership interest in the Operating Partnership would exceed 5% of our assets and because we would be considered to hold more than 10% of the voting securities and value of the outstanding securities of another corporation.

The imposition of a corporate tax on the Operating Partnership would significantly reduce the amount of cash available for distribution.

Partnership tax audit rules could have a material adverse effect on us.

Under the rules applicable to U.S.

federal income tax audits of partnerships, subject to certain exceptions, any audit adjustment to items of income, gain, loss, deduction or credit of a partnership (and a partner's allocable share thereof) is determined, and taxes, interest, and penalties attributable thereto are assessed and collected, at the partnership level.

Unless the partnership makes an election or takes certain steps to require the partners to pay their tax on their allocable shares of the adjustment, it is possible that partnerships in which we directly or indirectly invest, including the Operating Partnership, would be required to pay additional taxes, interest and penalties as a result of an audit adjustment.

We, as a direct or indirect partner of the Operating Partnership and other partnerships, could be required to bear the economic burden of those taxes, interest and penalties even though as a REIT, we may not otherwise have

been required to pay additional corporate-level tax.

These rules are significant for collecting tax in partnership audits and there can be no assurance that these rules will not have a material adverse effect on us.

Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations, which could reduce the net cash received by our shareholders and may harm our ability to raise additional funds through any future sale of our stock.

1 unchanged sentence

shareholders that are individuals, trusts, or estates are generally not eligible for the reduced tax rate applicable to qualified dividends received from non-REIT corporations.

For taxable year beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S.

For taxable years beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S.

federal income tax rate of 29.6% on such income.

3 unchanged sentences

tax consequences of an investment in our stock or Units.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law.

The OBBBA made significant changes to the U.S.

federal income tax laws in various areas.

Among the notable changes, the OBBBA permanently extended certain provisions that were enacted in the Tax Cuts and Jobs Act of 2017, most of which were set to expire after December 31, 2025.

As a result of such extensions, individuals and other non-corporate taxpayers will continue to be entitled to a 20% deduction for certain "qualified REIT dividends" for taxable years after 2025, subject to certain requirements, and the maximum U.S.

federal income tax rate on ordinary income for individuals and other non-corporate taxpayers will continue to be 37% after 2025 (before application of the 3.8% Medicare tax on "net investment income").

In addition, the OBBBA also increased the percentage limit under the REIT asset test applicable to securities of one or more taxable REIT subsidiaries from 20% to 25% for 2026 and subsequent taxable years.

You are urged to consult with your own tax advisor to determine the effects of the OBBBA and the ownership and disposition of our securities or debt securities of the Operating Partnership on your individual tax situation, including any state, local, or non-U.S.

tax consequences.

We may face risks in connection with Section 1031 exchanges .

2 unchanged sentences

If we cannot meet the technical requirements of a desired Section 1031 exchange, we may have to make a special dividend payment to our shareholders if we cannot mitigate the taxable gains realized.

The failure to reinvest proceeds from sales of properties into tax-deferred exchanges could necessitate payments to unitholders with tax protection agreements.

We have tax protection agreements in place on twenty-eight properties.

The failure to reinvest proceeds from sales of properties into tax-deferred exchanges could necessitate payments to certain Operating Partnership unitholders with tax protection agreements.

We have tax protection agreements in place on 21 properties.

If these properties are sold in a taxable transaction, we must make the unitholders associated with these particular properties whole through the payment of their related tax.

We dispose of properties in transactions intended to qualify as “like-kind exchanges” under Section 1031 of the Code whenever possible.

If we cannot satisfy all of the technical requirements of Section 1031, or if Section 1031 is repealed, selling a property with a tax protection agreement could trigger a material obligation to make the associated unitholders whole.

Complying with REIT requirements may force us to forgo otherwise attractive opportunities or liquidate otherwise attractive investments.

8 unchanged sentences

The tax imposed on REITs engaging in prohibited transactions and our agreements entered into with certain contributors of our properties may limit our ability to engage in transactions that would be treated as sales for federal income tax purposes.

The federal income tax provisions applicable to REITs provide that any gain realized by a REIT on the sale of property held as

inventory or other property held primarily for sale to customers in the ordinary course of business is treated as income from a “prohibited transaction” that is subject to a 100% penalty tax.

Under current law, unless a sale of real property qualifies for a safe harbor, whether the sale of a property constitutes the sale of property held primarily for sale to customers is generally a question of the facts and circumstances regarding a particular transaction.

The federal income tax provisions applicable to REITs provide that any gain realized by a REIT on the sale of property held as inventory or other property held primarily for sale to customers in the ordinary course of business is treated as income from a “prohibited transaction” that is subject to a 100% penalty tax.

Under current law, unless a sale of real property qualifies for a

safe harbor, whether the sale of a property constitutes the sale of property held primarily for sale to customers is generally a question of the facts and circumstances regarding a particular transaction.

We may make sales that do not satisfy the requirements of the safe harbors, or the IRS may successfully assert that one or more of our sales are prohibited transactions and, as a result, we may be required to pay a penalty tax.

10 unchanged sentences

We scrutinize transactions with our TRS to ensure that they are entered into on arm’s-length terms to avoid incurring the 100% excise tax described above.

Legislative or regulatory actions affecting REITs could have an adverse effect on us or our shareholders.

Changes to tax laws or regulations may adversely impact our shareholders and our business and financial results.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was introduced.

The IRA includes numerous tax provisions that impact corporations, including the implementation of a corporate alternative minimum tax as well as a 1% federal excise tax on certain stock repurchases and economically similar transactions.

REITs are excluded from the definition of an “applicable corporation” and therefore are not subject to the corporate alternative minimum tax.

Additionally, the 1% excise tax specifically does not apply to stock repurchases by REITs.

However, our taxable REIT subsidiaries operate as standalone corporations and therefore could be adversely affected by the IRA.

We will continue to analyze and monitor the application of the IRA to our business;

however, the effect of these changes on the value of our assets, shares of our common stock or market conditions generally, is uncertain.

Federal, state and foreign income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions affecting REITs could have a negative effect on us.

The REIT rules are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S.

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors