CENTERSPACE 10-K

Item 9A. Controls and Procedures Disclosure Controls and Procedures : As of December 31, 2020, the end of the period covered by this Report, our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Changes in Internal Control Over Financial Reporting : There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fourth quarter of the year to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2020. Our internal control over financial reporting is a process designed under the supervision of our principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. As of December 31, 2020, management conducted an assessment of the effectiveness of our internal control over financial reporting, based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management has determined that our internal control over financial reporting as of December 31, 2020, was effective. Our internal control over financial reporting includes policies and procedures that: • pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions, acquisitions and dispositions of assets; 39 Table of Contents • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and the trustees; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions or deterioration in the degree of compliance with the policies or procedures. Our internal control over financial reporting as of December 31, 2020 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report on page F-4 of our consolidated financial statements contained in our Annual Report on Form 10-K, which expresses an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2020. Item 9B. Other Information None. PART III Item 10. Trustees, Executive Officers and Corporate Governance The information required by this Item regarding Trustees is incorporated by reference to the information under “Election of Trustees,” “Information About Our Executive Officers,” “Code of Conduct and Code of Ethics for Senior Financial Officers,” and “Board Committees” in our definitive proxy statement for our 2021 Annual Meeting of Shareholders to be filed with the SEC no later than 120 days after the end of the year covered by this Report. Item 11. Executive Compensation The information required by this Item is incorporated by reference to the information under “Trustee Compensation,” “Compensation Discussion and Analysis” and “Executive Officer Compensation Tables” in our definitive proxy statement for our 2021 Annual Meeting of Shareholders to be filed with the SEC no later than 120 days after the end of the year covered by this Report. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters The information required by this Item is incorporated by reference to the information under “Securities Authorized for Issuance Under Equity Compensation Plans” and “Security Ownership of Certain Beneficial Owners and Management” in our definitive proxy statement for our 2021 Annual Meeting of Shareholders to be filed with the SEC no later than 120 days after the end of the year covered by this Report. Item 13. Certain Relationships and Related Transactions, and Trustee Independence The information required by this Item is incorporated by reference to the information under “Relationships and Related Party Transactions” and “Corporate Governance and Board Matters” in our definitive proxy statement for our 2021 Annual Meeting of Shareholders to be filed with the SEC no later than 120 days after the end of the year covered by this Report. Item 14. Principal Accounting Fees and Services The information required by this Item is incorporated by reference to the information under “Accounting and Audit Committee Matters” in our definitive proxy statement for our 2021 Annual Meeting of Shareholders to be filed with the SEC no later than 120 days after the end of the year covered by this Report. PART IV Item 15. Exhibits, Financial Statement Schedules The following documents are filed as part of this report : 40 Table of Contents 1. Financial Statements See the “Table of Contents” to our consolidated financial statements on page F-1 of this Report. 2. Financial Statement Schedules See the “Table of Contents” to our consolidated financial statements on page F-1 of this Report. The following financial statement schedules should be read in conjunction with the financial statements referenced in Part II, Item 8 of this Report: Schedule III Real Estate and Accumulated Depreciation 3. Exhibits See the Exhibit Index set forth in part (b) below. The Exhibit Index below lists the exhibits to this Report. We will furnish a printed copy of any exhibit listed below to any security holder who requests it upon payment of a fee of 15 cents per page. All Exhibits are either contained in this Report or are incorporated by reference as indicated below. Item 16. 10-K Summary None. 41 Table of Contents EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 1.1 Equity Distribution Agreement dated November 7, 2019 between the Company and BMO Capital Markets Corp., BTIG, LLC, Jefferies LLC, Raymond James & Associates, Inc. and Robert W. Baird & Co. Incorporated (incorporated herein by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 7, 2019). 3.1. Articles of Amendment and Third Restated Declaration of Trust of Investors Real Estate Trust adopted on September 23, 2003, as amended on September 18, 2007 (incorporated herein by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed with the Commission on June 30, 2014). 3.2 Seventh Restated Trustee’s Regulations (Bylaws) of Investors Real Estate Trust, adopted on April 27, 2020 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 1, 2020). 3.3 Articles Supplementary to the Company’s Articles of Amendment and Third Restated Declaration of Trust designating the Company’s 6.625% Series C Cumulative Redeemable Preferred Shares, no par value per share (incorporated by reference to Exhibit 3. 2 of the Company’s Registration Statement on Form 8-A filed with the SEC on September 28, 2017). 4.1 Note Purchase and Private Shelf Agreement, dated as of September 13, 2019, by and among IRET Properties, a North Dakota Limited Partnership, as the Issuer, Investors Real Estate Trust, as the Parent, IRET, Inc., as the General Partner, certain subsidiaries of the Parent, PGIM, Inc., an affiliate of Prudential Financial, Inc., certain affiliates of PGIM, Inc., and the Purchasers of the Series A Notes (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 17, 2019). 4.2 Form of Series A Senior Note under the Note Agreement (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 17, 2019). 4.3 Form of Series B Notes under the Note Agreement (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K dated October 1, 2019). 4.4 Form of Guaranty Agreement under the Note Agreement (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 17, 2019). 4.5 Description of Securities (incorporated by reference to Exhibit 4.5 to the Company 's Annual Report on Form 10-K filed wi th the Commission on February 19, 2020) . 4.6 Amendment to Note Purchase and Private Shelf Agreement, dated as of September 13, 2019, by and among Centerspace, LP, a North Dakota Limited Partnership, as the Issuer, Investors Real Estate, as the Parent, Centerspace, Inc., as the General Partner, certain subsidiaries of the Parent, PGIM Inc., an affiliate of Prudential Financial, Inc., certain affiliates of PGIM, Inc., and the Purchasers of the Series A Notes (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Commission on January 7, 2021). 4.7 Form of Series C Notes under Note Agreement (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the Commission on January 7, 2021). 10.1** 2015 Incentive Plan dated June 23, 2015 (incorporated herein by reference to Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the Commission on August 3, 2015). 10.2** Amendment to 2015 Incentive Plan dated April 19, 2016 (incorporated herein by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K filed with the Commission on June 29, 2016). 10.3** Amendment to 2015 Incentive Plan dated March 13, 2020 (incorporated herein by reference to Appendix B to the Company's Proxy Statement on Schedule 14A filed with the Commission on April 6, 2020). 10.4** Form of Trustee Stock Award Agreement under the 2015 Incentive Plan dated June 22, 2016 (incorporated herein by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K filed with the Commission on June 29, 2016). 10.5** Form of Performance Stock Award Agreement under the 2015 Incentive Plan dated June 22, 2016 (incorporated herein by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed with the Commission on June 29, 2016). 10.6** Form of Stock Award Agreement under the 2015 Incentive Plan dated June 22, 2016 (incorporated herein by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K filed with the Commission on June 29, 2016). 10.7** Form of Stock Award Agreement (one-year measurement period) under the 2015 Incentive Plan dated September 16, 2015 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015). 42 Table of Contents EXHIBIT NO. DESCRIPTION 10.8** Form of Stock Award Agreement (two-year measurement period) under the 2015 Incentive Plan dated September 16, 2015 (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015). 10.9** Form of Stock Award Agreement (three-year measurement period) under the 2015 Incentive Plan dated September 16, 2015 (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015). 10.10** Form of Change in Control Severance Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 7, 2015). 10.11** Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015). 10.12 Second Amended and Restated Credit Agreement and related Annex I attached thereto, dated as of August 31, 2018, by and among IRET Properties, a North Dakota Limited Partnership, as the Borrower, the Guarantors party thereto, the several financial institutions party thereto, as Lenders, and the Bank of Montreal, as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on September 6, 2018). 10.13 First Amendment to Second Amended and Restated Credit Agreement and related Annex I attached thereto, by and among IRET Properties, a North Dakota Limited Partnership, as the Borrower, the Guarantors party thereto, the several financial institutions party thereto, as Lenders, and the Bank of Montreal, as Administrative Agent (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on From 10-K filed with the Commission on February 19, 2020). 10.14 Second Amendment to Second Amended and Restated Credit Agreement and related Annex I attached thereto, by and among IRET Properties, a North Dakota Limited Partnership, as the Borrower, the Guarantors party thereto, the several financial institutions party thereto, as Lenders, and the Bank of Montreal, as Administrative Agent (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on September 17, 2019). 10.15 Amended and Restated Agreement of Limited Partnership of IRET Properties, A North Dakota Limited Partnership (as amended and restated through February 27, 2019) (incorporated by reference to Exhibit 10.30 to the Company's Transition Report on Form 10-K filed with the Commission on February 27, 2019). 10.16 Third Amendment to the Amended and Restated Agreement of Limited Partnership of IRET Properties, A North Dakota Limited Partnership (incorporated herein by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed on October 2, 2017). 10.17 Fourth Amendment to the Amended and Restated Agreement of Limited Partnership of IRET Properties, A North Dakota Limited Partnership, dated as of February 26, 2019 (incorporated by reference to Exhibit 10.32 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on February 27, 2019). 21.1 † Subsidiaries of Centerspace 23.1 † Consent of Independent Registered Public Accounting Firm 24.1 † Power of Attorney (included on the signature page to this Annual Report on Form 10-K and incorporated by reference herein). 31.1 † Section 302 Certification of President and Chief Executive Officer 31.2 † Section 302 Certification of Chief Financial Officer 32.1 † Section 906 Certification of the President and Chief Executive Officer 32.2 † Section 906 Certification of the Chief Financial Officer 101 † The following materials from our Annual Report on Form 10-K for the twelve-months ended December 31, 2020 formatted in Inline eXtensible Business Reporting Language ("iXBRL"): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Statements of Cash Flows, (v) notes to these consolidated financial statements, and (vi) the Cover Page to our Annual Report on From 10-K. 104 Cover Page Interactive Data File (formatted as Inline iXBRL and contained in Exhibit 101) † Filed herewith ** Indicates management compensatory plan, contract or arrangement. 43 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: February 22, 2021 Investors Real Estate Trust dba Centerspace By: /s/ Mark O. Decker, Jr. Mark O. Decker, Jr. President & Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Signature Title Date /s/ Jeffrey P. Caira Jeffrey P. Caira Trustee & Chairman February 22, 2021 /s/ Mark O. Decker, Jr. Mark O. Decker, Jr. President & Chief Executive Officer (Principal Executive Officer); Trustee February 22, 2021 /s/ John A. Kirchmann John A. Kirchmann Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) February 22, 2021 /s/ Michael T. Dance Michael T. Dance Trustee February 22, 2021 /s/ Emily Nagle Green Emily Nagle Green Trustee February 22, 2021 /s/ Linda J. Hall Linda J. Hall Trustee February 22, 2021 /s/ Terrance P. Maxwell Terrance P. Maxwell Trustee February 22, 2021 /s/ John A. Schissel John A. Schissel Trustee February 22, 2021 /s/ Mary J. Twinem Mary J. Twinem Trustee February 22, 2021 44 Table of Contents CENTERSPACE AND SUBSIDIARIES TABLE OF CONTENTS PAGE REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F- 2 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheets F- 4 Consolidated Statements of Operations F- 5 Consolidated Statements of Comprehensive Income F- 6 Consolidated Statements of Equity F- 7 Consolidated Statements of Cash Flows F- 9 Notes to Consolidated Financial Statements F- 11 ADDITIONAL INFORMATION Schedule III - Real Estate and Accumulated Depreciation F- 35 Schedules other than those listed above are omitted since they are not required or are not applicable, or the required information is shown in the consolidated financial statements or notes thereon. F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Trustees and Shareholders Investors Real Estate Trust Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Investors Real Estate Trust (a North Dakota real estate investment trust) and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for the years ended December 31, 2020 and 2019, eight month period ended December 31, 2018, and the year ended April 30, 2018, and the related notes and financial statement schedule included under Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years ended December 31, 2020 and 2019, eight month period ended December 31, 2018, and the year ended April 30, 2018, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 22, 2021 expressed an unqualified opinion Basis for opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB . We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2013. Minneapolis, Minnesota February 22, 2021 F-2 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Trustees and Shareholders Investors Real Estate Trust Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Investors Real Estate Trust (a North Dakota real estate investment trust) and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2020, and our report dated February 22, 2021 expressed an unqualified opinion on those financial statements. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP Minneapolis, Minnesota February 22, 2021 F-3 Table of Contents CENTERSPACE AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) December 31, 2020 December 31, 2019 ASSETS Real estate investments Property owned $ 1,812,557 $ 1,643,078 Less accumulated depreciation ( 399,249 ) ( 349,122 ) 1,413,308 1,293,956 Unimproved land — 1,376 Mortgage loans receivable 24,661 16,140 Total real estate investments 1,437,969 1,311,472 Cash and cash equivalents 392 26,579 Restricted cash 6,918 19,538 Other assets 18,904 34,829 TOTAL ASSETS $ 1,464,183 $ 1,392,418 LIABILITIES, MEZZANINE EQUITY, AND EQUITY LIABILITIES Accounts payable and accrued expenses $ 55,609 $ 47,155 Revolving lines of credit 152,871 50,079 Notes payable, net of unamortized loan costs of $ 754 and $ 942 , respectively 269,246 269,058 Mortgages payable, net of unamortized loan costs of $ 1,371 and $ 1,712 , respectively 297,074 329,664 TOTAL LIABILITIES $ 774,800 $ 695,956 COMMITMENTS AND CONTINGENCIES (NOTE 14) SERIES D PREFERRED UNITS (Cumulative convertible preferred units, $ 100 par value, 165,600 units issued and outstanding at December 31, 2020 and December 31, 2019, aggregate liquidation preference of $ 16,560,000 ) $ 16,560 $ 16,560 EQUITY Series C Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 3,881,453 shares issued and outstanding at December 31, 2020, aggregate liquidation preference of $ 97,036,325 and 4,118,460 shares issued and outstanding at December 31, 2019, aggregate liquidation preference of $ 102,971,475 ) 93,530 99,456 Common Shares of Beneficial Interest (Unlimited authorization, no par value, 13,027,172 shares issued and outstanding at December 31, 2020 and 12,098,379 shares issued and outstanding at December 31, 2019) 968,263 917,400 Accumulated distributions in excess of net income ( 427,681 ) ( 390,196 ) Accumulated other comprehensive income (loss) ( 15,905 ) ( 7,607 ) Total shareholders’ equity $ 618,207 $ 619,053 Noncontrolling interests – Operating Partnership ( 976,516 units at December 31, 2020 and 1,058,142 units at December 31, 2019) 53,930 55,284 Noncontrolling interests – consolidated real estate entities 686 5,565 TOTAL EQUITY $ 672,823 $ 679,902 TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY $ 1,464,183 $ 1,392,418 See Notes to Consolidated Financial Statements. F-4 Table of Contents CENTERSPACE AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ( in thousands, except per share data) Year Ended December 31, Eight Months Ended December 31, Fiscal Year Ended April 30, 2020 2019 2018 2018 REVENUE $ 177,994 $ 185,755 $ 121,871 $ 169,745 EXPENSES Property operating expenses, excluding real estate taxes 51,625 57,249 37,198 54,292 Real estate taxes 21,533 21,066 13,521 18,742 Property management expense 5,801 6,186 3,663 5,526 Casualty loss 1,662 1,116 915 500 Depreciation and amortization 75,593 74,271 50,456 82,070 Impairment of real estate investments — — 1,221 18,065 General and administrative expenses 13,440 14,450 9,812 14,254 TOTAL EXPENSES 169,654 174,338 116,786 193,449 Operating income (loss) 8,340 11,417 5,085 ( 23,704 ) Interest expense ( 27,525 ) ( 30,537 ) ( 21,359 ) ( 34,178 ) Loss on extinguishment of debt ( 23 ) ( 2,360 ) ( 556 ) ( 940 ) Interest and other income (loss) ( 1,552 ) 2,092 1,233 1,508 Income (loss) before gain (loss) on sale of real estate and other investments, gain (loss) on litigation settlement, and income (loss) from discontinued operations ( 20,760 ) ( 19,388 ) ( 15,597 ) ( 57,314 ) Gain (loss) on sale of real estate and other investments 25,503 97,624 9,707 20,120 Gain (loss) on litigation settlement — 6,586 — — Income (loss) from continuing operations 4,743 84,822 ( 5,890 ) ( 37,194 ) Income (loss) from discontinued operations — — 570 164,823 NET INCOME (LOSS) 4,743 84,822 ( 5,320 ) 127,629 Dividends to preferred unitholders ( 640 ) ( 537 ) — — Net (income) loss attributable to noncontrolling interests – Operating Partnership 212 ( 6,752 ) 1,032 ( 12,702 ) Net (income) loss attributable to noncontrolling interests – consolidated real estate entities 126 1,136 ( 110 ) 1,861 Net income (loss) attributable to controlling interests 4,441 78,669 ( 4,398 ) 116,788 Dividends to preferred shareholders ( 6,528 ) ( 6,821 ) ( 4,547 ) ( 8,569 ) Redemption of preferred shares 297 — — ( 3,657 ) NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ ( 1,790 ) $ 71,848 $ ( 8,945 ) $ 104,562 BASIC Earnings (loss) per common share from continuing operations – basic $ ( 0.15 ) $ 6.06 $ ( 0.79 ) $ ( 3.54 ) Earnings (loss) per common share from discontinued operations – basic — — $ 0.04 $ 12.25 NET EARNINGS (LOSS) PER COMMON SHARE – BASIC $ ( 0.15 ) $ 6.06 $ ( 0.75 ) $ 8.71 DILUTED Earnings (loss) per common share from continuing operations – diluted $ ( 0.15 ) $ 6.00 $ ( 0.79 ) $ ( 3.54 ) Earnings (loss) per common share from discontinued operations – diluted — — $ 0.04 $ 12.25 NET EARNINGS (LOSS) PER COMMON SHARE – DILUTED $ ( 0.15 ) $ 6.00 $ ( 0.75 ) $ 8.71 See Notes to Consolidated Financial Statements. F-5 Table of Contents CENTERSPACE AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Year Ended December 31, Eight Months Ended December 31, Fiscal Year Ended April 30, 2020 2019 2018 2018 NET INCOME (LOSS) $ 4,743 $ 84,822 $ ( 5,320 ) $ 127,629 Other comprehensive income: Unrealized gain (loss) from derivative instrument ( 11,068 ) ( 7,040 ) ( 2,794 ) 1,627 (Gain) loss on derivative instrument reclassified into earnings 2,770 289 159 152 Total comprehensive income (loss) $ ( 3,555 ) $ 78,071 $ ( 7,955 ) $ 129,408 Net comprehensive (income) loss attributable to noncontrolling interests – Operating Partnership 882 ( 6,058 ) 1,032 ( 12,888 ) Net comprehensive (income) loss attributable to noncontrolling interests – consolidated real estate entities 126 1,136 ( 110 ) 1,861 Comprehensive income (loss) attributable to controlling interests $ ( 2,547 ) $ 73,149 $ ( 7,033 ) $ 118,381 See Notes to Consolidated Financial Statements. F-6 Table of Contents CENTERSPACE AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (in thousands, except per share amounts) NUMBER ACCUMULATED ACCUMULATED OF DISTRIBUTIONS OTHER NONREDEEMABLE PREFERRED COMMON COMMON IN EXCESS OF COMPREHENSIVE NONCONTROLLING TOTAL SHARES SHARES SHARES NET INCOME INCOME INTERESTS EQUITY Balance at April 30, 2017 $ 111,357 12,120 $ 908,905 $ ( 466,541 ) — $ 82,437 $ 636,158 Net income (loss) attributable to controlling interest and noncontrolling interests 116,788 11,582 128,370 Change in fair value of derivatives 1,779 1,779 Distributions – common shares and Units ($ 2.80 per share and Unit) ( 33,689 ) ( 4,096 ) ( 37,785 ) Distributions – Series B preferred shares ($ 0.9938 per Series B share) ( 4,571 ) ( 4,571 ) Distributions – Series C preferred shares ($ 1.65625 per Series C share) ( 3,999 ) ( 3,999 ) Share-based compensation, net of forfeitures 10 1,663 1,663 Issuance of Series C preferred shares 99,456 99,456 Redemption of Units for common shares 3 34 ( 34 ) — Redemption of Units for cash ( 8,775 ) ( 8,775 ) Shares repurchased ( 111,357 ) ( 178 ) ( 9,935 ) ( 3,657 ) ( 124,949 ) Contributions from nonredeemable noncontrolling interests – consolidated real estate entities 619 619 Other ( 2 ) ( 570 ) 167 ( 403 ) Balance at April 30, 2018 $ 99,456 11,953 $ 900,097 $ ( 395,669 ) $ 1,779 $ 81,900 $ 687,563 Cumulative adjustment upon adoption of ASC 606 and ASC 610-20 627 627 Balance on May 1, 2018 99,456 11,953 900,097 ( 395,042 ) 1,779 81,900 688,190 Net income (loss) attributable to controlling interests and noncontrolling interests ( 4,398 ) ( 480 ) ( 4,878 ) Change in fair value of derivatives ( 2,635 ) ( 2,635 ) Distributions – common shares and Units ($ 2.10 per share and Unit) ( 25,060 ) ( 2,917 ) ( 27,977 ) Distributions – Series C preferred shares ($ 1.2422 per Series C share) ( 4,548 ) ( 4,548 ) Share-based compensation, net of forfeitures 3 1,042 1,042 Redemption of Units for common shares 33 649 ( 649 ) — Redemption of Units for cash ( 498 ) ( 498 ) Shares repurchased ( 42 ) ( 2,172 ) ( 2,172 ) Distributions to nonredeemable noncontrolling interests - consolidated real estate entities ( 2,432 ) ( 2,432 ) Conversion to equity of notes receivable from nonredeemable noncontrolling interests – consolidated real estate entities ( 392 ) ( 392 ) Acquisition of nonredeemable noncontrolling interests – consolidated real estate entities ( 175 ) 131 ( 44 ) Other ( 5 ) ( 207 ) ( 207 ) Balance at December 31, 2018 $ 99,456 11,942 $ 899,234 $ ( 429,048 ) ( 856 ) $ 74,663 $ 643,449 See Notes to Consolidated Financial Statements. F-7 Table of Contents CENTERSPACE AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (continued) (in thousands, except per share amounts) NUMBER ACCUMULATED ACCUMULATED OF DISTRIBUTIONS OTHER NONREDEEMABLE PREFERRED COMMON COMMON IN EXCESS OF COMPREHENSIVE NONCONTROLLING TOTAL SHARES SHARES SHARES NET INCOME INCOME INTERESTS EQUITY Balance at December 31, 2018 $ 99,456 11,942 $ 899,234 $ ( 429,048 ) $ ( 856 ) $ 74,663 $ 643,449 Net income (loss) attributable to controlling interests and noncontrolling interests 78,669 5,790 84,459 Change in fair value of derivatives ( 6,751 ) ( 6,751 ) Distributions – common shares and Units ($ 2.10 per share and Unit) ( 32,996 ) ( 3,414 ) ( 36,410 ) Distributions – Series C preferred shares ($ 1.2422 per Series C share) ( 6,821 ) ( 6,821 ) Share-based compensation, net of forfeitures 11 1,905 1,905 Sale of common shares, net 308 22,019 22,019 Redemption of Units for common shares 173 7,823 ( 7,823 ) — Redemption of Units for cash ( 8,147 ) ( 8,147 ) Shares repurchased ( 329 ) ( 18,023 ) ( 18,023 ) Acquisition of redeemable noncontrolling interests 4,529 4,529 Distributions to nonredeemable noncontrolling interests - consolidated real estate entities ( 220 ) ( 220 ) Other ( 7 ) ( 87 ) ( 87 ) Balance at December 31, 2019 $ 99,456 12,098 $ 917,400 $ ( 390,196 ) $ ( 7,607 ) $ 60,849 $ 679,902 Net income (loss) attributable to controlling interests and noncontrolling interests 4,441 ( 338 ) 4,103 Change in fair value of derivatives ( 8,298 ) ( 8,298 ) Distributions – common shares and Units ($ 2.80 per common share and Unit) ( 35,695 ) ( 2,842 ) ( 38,537 ) Distributions – Series C preferred shares ($ 1.65625 per Series C share) ( 6,528 ) ( 6,528 ) Share-based compensation, net of forfeitures 20 2,106 2,106 Sale of common shares, net 829 58,852 58,852 Redemption of Units for common shares 81 ( 1,750 ) 1,750 — Redemption of Units for cash ( 50 ) ( 50 ) Shares repurchased ( 5,926 ) — — 297 ( 5,629 ) Acquisition of noncontrolling interests - consolidated real estate entities ( 7,584 ) ( 4,637 ) ( 12,221 ) Other ( 1 ) ( 761 ) ( 116 ) ( 877 ) Balance at December 31, 2020 $ 93,530 13,027 $ 968,263 $ ( 427,681 ) $ ( 15,905 ) $ 54,616 $ 672,823 See Notes to Consolidated Financial Statements. F-8 Table of Contents CENTERSPACE AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, Eight Months Ended December 31, Fiscal Year Ended April 30, 2020 2019 2018 2018 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 4,743 $ 84,822 $ ( 5,320 ) $ 127,629 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 76,596 75,408 51,394 83,276 Depreciation and amortization from discontinued operations — — — 8,526 (Gain) loss on sale of real estate, land, other investments and discontinued operations ( 25,503 ) ( 97,624 ) ( 10,277 ) ( 183,687 ) Realized (gain) loss on marketable securities 3,378 — — — (Gain) loss on extinguishment of debt and discontinued operations 23 2,360 482 6,839 (Gain) loss on litigation settlement — ( 1,349 ) — — Share-based compensation expense 2,106 1,905 845 1,587 Impairment of real estate investments — — 1,221 18,065 Bad debt expense 2,332 1,050 592 1,423 Other, net 1,310 46 37 34 Changes in other assets and liabilities: Other assets ( 4,818 ) 1,076 ( 1,145 ) ( 646 ) Accounts payable and accrued expenses 1,061 1,930 2,205 ( 7,851 ) Net cash provided (used) by operating activities $ 61,228 $ 69,624 $ 40,034 $ 55,195 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from repayment of mortgage loans receivable 10,020 — — — Proceeds from sale of marketable securities 3,856 — — — Increase in mortgages and notes receivable ( 24,862 ) ( 6,279 ) ( 918 ) ( 15,480 ) Purchase of marketable securities ( 179 ) ( 6,942 ) — — Proceeds from sale of discontinued operations — — — 426,131 Proceeds from sale of real estate and other investments 43,686 199,282 62,695 64,639 Payments for acquisitions of real estate assets ( 168,696 ) ( 158,466 ) ( 977 ) ( 374,081 ) Payments for improvements of real estate assets ( 30,315 ) ( 20,954 ) ( 11,518 ) ( 17,980 ) Other investing activities 1,525 366 1,889 ( 3,117 ) Net cash provided (used) by investing activities $ ( 164,965 ) $ 7,007 $ 51,171 $ 80,112 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from mortgages payable — 59,900 — — Principal payments on mortgages payable ( 33,422 ) ( 177,743 ) ( 67,016 ) ( 205,159 ) Proceeds from revolving lines of credit 155,028 245,397 53,017 370,350 Principal payments on revolving lines of credit ( 52,235 ) ( 252,818 ) ( 119,517 ) ( 303,400 ) Proceeds from notes payable and other debt — 124,878 74,352 72,714 Principal payments on notes payable and other debt — — — ( 21,689 ) Payoff of financing liability — — — ( 7,900 ) Proceeds from sale of common shares, net of issuance costs 58,852 22,019 — — Payments for acquisition of noncontrolling interests – consolidated real estate entities ( 12,221 ) ( 1,260 ) — — Proceeds from sale of preferred shares — — — 99,467 Repurchase of common shares — ( 18,023 ) ( 2,172 ) ( 9,935 ) Repurchase of preferred shares ( 5,629 ) — — ( 115,017 ) Repurchase of partnership units ( 50 ) ( 8,147 ) ( 498 ) ( 8,775 ) Distributions paid to common shareholders ( 35,045 ) ( 32,891 ) ( 16,724 ) ( 33,689 ) Distributions paid to preferred shareholders ( 6,528 ) ( 6,821 ) ( 5,116 ) ( 8,763 ) Distributions paid to noncontrolling interests – Unitholders of the Operating Partnership ( 2,900 ) ( 3,630 ) ( 1,959 ) ( 4,096 ) Distributions paid to noncontrolling interests – consolidated real estate entities ( 116 ) ( 220 ) ( 2,432 ) ( 99 ) Distributions paid to preferred unitholders ( 640 ) ( 377 ) — — Other financing activities ( 164 ) ( 34 ) — — Net cash provided (used) by financing activities $ 64,930 $ ( 49,770 ) $ ( 88,065 ) $ ( 175,991 ) NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 38,807 ) 26,861 3,140 ( 40,684 ) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF YEAR 46,117 19,256 16,116 56,800 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF YEAR $ 7,310 $ 46,117 $ 19,256 $ 16,116 F-9 Table of Contents CENTERSPACE AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) Year Ended December 31, Eight Months Ended December 31, Fiscal Year Ended April 30, 2020 2019 2018 2018 SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Accrued capital expenditures $ ( 1,420 ) $ 1,273 $ ( 329 ) $ ( 3,415 ) Distributions declared but not paid 9,802 9,210 — — Property acquired through issuance of Series D preferred units — 16,560 — — Real estate assets acquired through exchange of note receivable 17,663 — — — Note receivable exchanged through real estate acquisition ( 17,663 ) — — — Conversion to equity of notes receivable from noncontrolling interests - consolidated real estate entities — — 670 — Construction debt reclassified to mortgages payable — — — 23,300 Increase in mortgage notes receivable due to sale of real estate — — — 10,329 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for interest, net of amounts capitalized of $ 0 , $ 0 , $ 0 and $ 431 , respectively 26,051 28,679 24,135 35,758 (in thousands) Balance sheet description December 31, 2020 December 31, 2019 December 31, 2018 April 30, 2018 Cash and cash equivalents $ 392 $ 26,579 $ 13,792 $ 11,891 Restricted cash 6,918 19,538 5,464 4,225 Total cash, cash equivalents and restricted cash $ 7,310 $ 46,117 $ 19,256 $ 16,116 See Notes to Consolidated Financial Statements. F-10 Table of Contents CENTERSPACE AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020, 2019, 2018, and April 30, 2018 NOTE 1 • ORGANIZATION Investors Real Estate Trust doing business as Centerspace (“Centerspace,” “we,” “our,” or “us”) is a real estate investment trust (“REIT”) focused on the ownership, management, acquisition, redevelopment and development of apartment communities. As of December 31, 2020, we held for investment 67 apartment communities with 11,910 homes. We conduct a majority of our business activities through our consolidated operating partnership, Centerspace, LP, (the “Operating Partnership”), as well as through a number of other subsidiary entities. All references to Centerspace, we, or us refer to Centerspace and its consolidated subsidiaries. NOTE 2 • BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying consolidated financial statements include our accounts and the accounts of all our subsidiaries in which we maintain a controlling interest, including the Operating Partnership. All intercompany balances and transactions are eliminated in consolidation. On September 20, 2018, our Board of Trustees approved a change in our fiscal year-end from April 30 to December 31, effective as of January 1, 2019. As a result of this change, we filed a transition report on Form 10-KT for the eight-month transition period ended December 31, 2018, in accordance with SEC rules and regulations. The references in these notes to the consolidated financial statements to the terms listed below reflect the respective periods presented in the consolidated financial statements: Term Financial Reporting Period Year ended December 31, 2020 January 1, 2020 through December 31, 2020 Year ended December 31, 2019 January 1, 2019 through December 31, 2019 Transition period ended December 31, 2018 May 1, 2018 through December 31, 2018 Fiscal year ended April 30, 2018 May 1, 2017 through April 30, 2018 Our interest in the Operating Partnership as of December 31, 2020 and 2019 was 93.0 % and 92.0 %, respectively, of the limited partnership units of the Operating Partnership (“Units”), which includes 100 % of the general partnership interest. The consolidated financial statements also reflect the ownership by the Operating Partnership of certain joint venture entities in which the Operating Partnership has a general partner’s or controlling interest. These entities are consolidated into our other operations with noncontrolling interests reflecting the noncontrolling partners’ share of ownership, income, and expenses. SIGNIFICANT RISKS AND UNCERTAINTIES The COVID-19 pandemic is a source of significant risk and uncertainty that could have an adverse impact on our business. the COVID-19 pandemic has adversely impacted the global economy and financial markets, and multifamily residents and commercial tenants have experienced financial hardship or closure. The extent to which the COVID-19 pandemic could have an adverse effect on our financial condition, results of operations, and cash flows is uncertain and will depend on future developments. The COVID-19 pandemic has not had a material adverse impact on our financial condition, results of operations, and cash flows for the year ended December 31, 2020; however, we continue to monitor the impact on all aspects of our business and cannot predict the impact it may have on our financial condition, results of operations, and cash flows in the future. USE OF ESTIMATES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial F-11 Table of Contents statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. RECENT ACCOUNTING PRONOUNCEMENTS The following table provides a brief description of recent GAAP accounting standards updates (“ASUs”). Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments; ASU 2018-19, Codification Improvements to Topic 326; ASU 2019-05, Financial Instruments - Credit Losses - Targeted Transition Relief; ASU 2019-11, Codification improvements to Topic 326, Financial Instruments - Credit Losses These ASUs require entities to estimate a lifetime expected credit loss for most financial assets, such as loans and other financial instruments, and to present the net amount expected to be collected. In 2018, another ASU was issued to amend ASU 2016-13 which clarifies that it does not apply to operating lease receivables. In 2019, an additional ASU was issued to provide transition relief in which an entity is allowed to elect the fair value option on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. These ASUs are effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We elected the fair value option for all of our mortgages and notes receivable at January 1, 2020, as allowed by ASU 2019-05. As a result, we do not have any receivables or other financial instruments to which we are applying this standard. ASU 2018-13, Fair Value Measurements (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirement for Fair Value Measurements This ASU eliminates certain disclosure requirements affecting all levels of measurement, and modifies and adds new disclosure requirements for Level 3 measurements. This ASU is effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. The new standard did not have a material impact on our consolidated financial statements. ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. This ASU is optional and may be elected over time. We are currently evaluating the practical expedients and the impact they may have on our consolidated financial statements. ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entitiy's Own Equity This ASU simplifies accounting for convertible instruments and removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. This ASU also simplifies the diluted earnings per share calculation in certain areas and provide updated disclosure requirements. This ASU is effective for annual reporting periods beginning after December 31, 2021. Early adoption is permitted. We are currently evaluating the ASU and the impact it may have on our consolidated financial statements. RECLASSIFICATIONS Certain previously reported amounts have been reclassified to conform to the current financial statement presentation. These reclassifications had no impact on net income as reported in the consolidated statement of operations, total assets, liabilities or equity as reported in the consolidated balance sheets and total shareholder’s equity. We report in discontinued operations the results of operations and the related gains or losses of properties that have either been disposed or classified as held for sale and for which the disposition represents a strategic shift that has or will have a major effect on our operations and financial results. REAL ESTATE INVESTMENTS Real estate investments are recorded at cost less accumulated depreciation and an adjustment for impairment, if any. Property, consisting primarily of real estate investments, totaled $ 1.4 billion and $ 1.3 billion as of December 31, 2020 and 2019, respectively. Upon acquisitions of real estate, we assess the fair value of acquired tangible assets (including land, buildings and personal property), which is determined by valuing the property as if it were vacant, and consider whether there were significant intangible assets acquired (for example, above- and below-market leases, the value of acquired in-place leases and resident relationships) and assumed liabilities, and allocate the purchase price based on these assessments. The as-if-vacant value is allocated to land, buildings, and personal property based on our determination of the relative fair values of these assets. The estimated fair value of the property is the amount that would be recoverable upon the disposition of the property. Techniques used to estimate fair value include discounted cash flow analysis and reference to recent sales of comparable F-12 Table of Contents properties. Estimates of future cash flows are based on a number of factors, including the historical operating results, known trends, and market/economic conditions that may affect the property. Land value is assigned based on the purchase price if land is acquired separately or based on a relative fair value allocation if acquired in a portfolio acquisition. Other intangible assets acquired include amounts for in-place lease values that are based upon our evaluation of the specific characteristics of the leases. Factors considered in the fair value analysis include an estimate of carrying costs and foregone rental income during hypothetical expected lease-up periods, considering current market conditions, and costs to execute similar leases. We also consider information about each property obtained during pre-acquisition due diligence, marketing, and leasing activities in estimating the relative fair value of the tangible and intangible assets acquired. Acquired above- and below-market lease values are recorded as the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market value lease rates for the corresponding in-place leases. The capitalized above- and below-market lease values are amortized as adjustments to rental revenue over the remaining terms of the respective leases. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. We use a 10 - 37 year estimated life for buildings and improvements and a 5 - 10 year estimated life for furniture, fixtures, and equipment. We follow the real estate project costs guidance in ASC 970, Real Estate – General, in accounting for the costs of development and redevelopment projects. As real estate is undergoing development or redevelopment, all project costs directly associated with and attributable to the development and construction of a project, including interest expense and real estate tax expense, are capitalized to the cost of the real property. The capitalization period begins when development activities and expenditures begin and are identifiable to a specific property and ends upon completion, which is when the asset is ready for its intended use. Generally, rental property is considered substantially complete upon issuance of a certificate of occupancy. General and administrative costs are expensed as incurred. Interest of approximately $ 4,000 was capitalized in continuing and discontinued operations for the fiscal year ended April 30, 2018. We did not capitalize interest during the years ended December 31, 2020 and 2019, or the transition period ended December 31, 2018. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred. Renovations and improvements that improve and/or extend the useful life of the asset are capitalized and depreciated over their estimated useful life, generally five to twenty years . Property sales or dispositions are recorded when control of the assets transfers to the buyer and we have no significant continuing involvement with the property sold. We periodically evaluate our long-lived assets, including real estate investments, for impairment indicators. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, expected holding period of each property, and legal and environmental concerns. If indicators exist, we compare the expected future undiscounted cash flows for the property against the carrying amount of that property. If the sum of the estimated undiscounted cash flows is less than the carrying amount, an impairment loss is recorded for the difference between the estimated fair value and the carrying amount. If our anticipated holding period for properties, the estimated fair value of properties or other factors change based on market conditions or otherwise, our evaluation of impairment charges may be different and such differences could be material to our consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future physical occupancy, rental rates, and capital requirements that could differ materially from actual results. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses. During the years ended December 31, 2020 and 2019, we did not incur a loss for impairment on real estate. During the transition period ended December 31, 2018, we incurred a loss of $ 1.2 million due to impairment of a parcel of land in Bismarck, North Dakota. The parcel was written-down to estimated fair value based on receipt of a market offer to purchase and our intent to dispose of the property. During the fiscal year ended April 30, 2018, we incurred a loss of $ 18.1 million due to impairment of one apartment community, three other commercial properties, and four parcels of land. We recognized impairments of $ 12.2 million on one apartment community in Grand Forks, North Dakota; $ 1.4 million on an industrial property in Bloomington, Minnesota; $ 922,000 on an industrial property in Woodbury, Minnesota; and $ 630,000 on a retail property in Minot, North Dakota. These properties were written-down to estimated fair value based on independent appraisals and market data or, in the case of the retail property, receipt of a market offer to purchase and our intent to dispose of the property. We recognized impairments of $ 428,000 on a parcel of land in Williston, North Dakota; $ 1.5 million on a parcel of land in Grand Forks, North Dakota; and F-13 Table of Contents $ 256,000 and $ 709,000 on two parcels of land in Bismarck, North Dakota. These parcels were written down to estimated fair value based on independent appraisals and market data. CHANGE IN DEPRECIABLE LIVES OF REAL ESTATE ASSETS Effective May 1, 2017, we changed the estimated useful lives of our real estate assets to better reflect the estimated periods during which they would be of economic benefit. Generally, the estimated lives of buildings and improvements that previously were 20 - 40 years were decreased to 10 - 37 years, while those that were previously nine years were changed to 5 - 10 years. The effect of this change in estimate for the fiscal year ended April 30, 2018, was to increase depreciation expense by approximately $ 29.3 million, decrease net income by $ 29.3 million, and decrease earnings per share by $ 0.22 . REAL ESTATE HELD FOR SALE Real estate held for sale is stated at the lower of its carrying amount or estimated fair value less disposal costs. Our determination of fair value is based on inputs management believes are consistent with those that market participants would use. Estimates are significantly impacted by estimates of sales price, selling velocity, and other factors. Due to uncertainties in the estimation process, actual results could differ from such estimates. Depreciation is not recorded on assets classified as held for sale. We classify properties as held for sale when they meet the GAAP criteria, which include: (a) management commits to and initiates a plan to sell the asset; (b) the sale is probable and expected to be completed within one year under terms that are usual and customary for sales of such assets; and (c) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. We generally consider these criteria met when the transaction has been approved by our Board of Trustees, there are no known significant contingencies related to the sale, and management believes it is probable that the sale will be completed within one year . We had no properties classified as held for sale at December 31, 2020 and 2019. We report in discontinued operations the results of operations and the related gains or losses on the sales of properties that have either been disposed of or classified as held for sale and meet the classification of a discontinued operation as described in ASC 205 - Presentation of Financial Statements and ASC 360 - Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity . Under these standards, a disposal (or classification as held for sale) of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH Cash and cash equivalents include all cash and highly liquid investments purchased with maturities of three months or less. Cash and cash equivalents consist of our bank deposits, short-term investment certificates acquired subject to repurchase agreements, and our deposits in a money market mutual fund. We are potentially exposed to credit risk for cash deposited with FDIC-insured financial institutions in accounts which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts. As of December 31, 2020 restricted cash consisted of $ 5.0 million of real estate deposits for property acquisitions and $ 1.9 million in escrows held by lenders. As of December 31, 2019, restricted cash consisted primarily of net tax-deferred exchange proceeds remaining from a portion of our dispositions and escrows held by lenders. Escrows include funds deposited with a lender for payment of real estate taxes and insurance, and reserves to be used for replacement of structural elements and mechanical equipment at certain communities. The funds are under the control of the lender. Disbursements are made after supplying written documentation to the lender . LEASES Effective January 1, 2019, we adopted ASUs 2016-02, 2018-10, 2018-11, 2018-20, and 2019-01 related to leases using the modified retrospective approach. We elected to adopt the package of practical expedients permitted under the transition guidance, which permits us to not reassess prior conclusions about lease identification, classification, and initial direct costs under the new standard, and the practical expedient related to land easements, which allows us to not evaluate existing or expired land easements that were not previously accounted for under ASC 840. We made an accounting policy election to exclude leases in which we are a lessee with a term of 12 months or less from the balance sheet. F-14 Table of Contents As a lessor, we primarily lease multifamily apartment homes which qualify as operating leases with terms that are generally one year or less. Rental revenues are recognized in accordance with ASC 842, Leases, using a method that represents a straight-line basis over the term of the lease. Rental income represents approximately 98.4 % of our total revenues and includes gross market rent less adjustments for concessions, vacancy loss, and bad debt. Other property revenues represent the remaining 1.6 % of our total revenues and are primarily driven by other fee income, which is typically recognized when earned, at a point in time. Some of our apartment communities have commercial spaces available for lease. Lease terms for these spaces typically range from three to fifteen years. The leases for commercial spaces generally include options to extend the lease for additional terms. Beginning in April 2020, we offered multifamily residents suffering from financial hardship related to the COVID-19 pandemic the option to apply for a rent deferral. We elected to account for these accommodations as though enforceable rights and obligations for the accommodations existed without evaluating if such a right or obligation existed under the lease agreement, as allowed by the FASB Q&A released on April 10, 2020 related to lease modification guidance under ASC 842. The accommodations were recognized as variable lease payments. As of December 31, 2020, approximately $ 99,600 remained outstanding under the rent deferral agreements offered to multifamily residents. We also abated rent, common area maintenance, and real estate taxes for commercial tenants that experienced government-mandated interruptions or closures of their businesses. The accommodations were recognized as variable lease payments, as allowed by the FASB Q&A released on April 10, 2020. During the year ended December 31, 2020, we recognized a reduction in revenue of $ 656,000 due to the abatement of amounts due from our commercial tenants. Many of our leases contain non-lease components for utility reimbursement from our residents. We have elected the practical expedient to combine lease and non-lease components for all asset classes. The combined components are included in lease income and are accounted for under ASC 842. The aggregate amount of future scheduled lease income on our operating leases for commercial spaces, excluding any variable lease income and non-lease components, as of December 31, 2020, was as follows: (in thousands) 2021 $ 2,216 2022 2,214 2023 2,208 2024 2,194 2025 2,166 Thereafter 2,373 Total scheduled lease income - operating leases $ 13,371 REVENUE We adopted ASU 2014-09, Revenue from Contracts with Customers, as of May 1, 2018, using the modified retrospective approach. We elected to apply the new standard to contracts that were not complete as of May 1, 2018. Under the new standard, revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration the company expects to be entitled for those goods and services. Revenue streams that are included in ASU 2014-09 include: • Other property revenues: We recognize revenue for rental related income not included as a component of a lease, such as other application fees, as earned, and have concluded that this is appropriate under the new standard. • Gains or losses on sales of real estate: Subsequent to the adoption of the new standard, a gain or loss is recognized when the criteria for derecognition of an asset are met, including when (1) a contract exists and (2) the buyer obtained control of the nonfinancial asset that was sold. As a result, we may recognize a gain on real estate disposition transactions that previously did not qualify as a sale or for full profit recognition under the previous accounting standard. Any gain or loss on real estate dispositions is net of certain closing and other costs associated with the disposition. We concluded that the adoption of the new standard required a cumulative adjustment of $ 627,000 to the opening balance of retained earnings as of May 1, 2018, due to the sale of a group of properties in the prior fiscal year. The sale of properties was previously accounted for using the installment method. Under the installment method, we recorded a mortgage receivable net of the deferred gain on sale, which was to be recognized as payments were received. The gain on sale under the new revenue standard is recognized when control of the assets is transferred to the buyer. As a result of our adoption of the new standard, we F-15 Table of Contents recorded a cumulative adjustment to retained earnings and increased the mortgage receivable by $ 627,000 to recognize the previously deferred gain on sale. The following table presents the disaggregation of revenue streams of our rental income for the years ended December 31, 2020 and 2019, and the transition period ended December 31, 2018: (in thousands) Year ended December 31, Transition period ended Revenue Stream Applicable Standard 2020 2019 December 31, 2018 Fixed lease income - operating leases Leases $ 168,119 $ 176,706 $ 114,047 Variable lease income - operating leases Leases 7,068 5,586 3,528 Other property revenue Revenue from contracts with customers 2,807 3,463 4,296 Total revenue $ 177,994 $ 185,755 $ 121,871 INCOME TAXES We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended. Under those sections, a REIT which distributes at least 90 % of its REIT taxable income, excluding capital gains, as a dividend to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to shareholders. For the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018 and the fiscal year ended April 30, 2018, we distributed in excess of 90 % of our taxable income and realized capital gains from property dispositions within the prescribed time limits. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even as a REIT, we may be subject to certain state and local income and property taxes, and to federal income and excise taxes on undistributed taxable income. In general, however, if we qualify as a REIT, no provisions for federal income taxes are necessary except for taxes on undistributed REIT taxable income and taxes on the income generated by a taxable REIT subsidiary (TRS). We have one TRS, which is subject to corporate federal and state income taxes on its taxable income at regular statutory rates. There were no income tax provisions or material deferred income tax items for our TRS for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018. We conduct our business activity as an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) through our Operating Partnership. UPREIT status allows us to accept the contribution of real estate in exchange for Units. Generally, such a contribution to a limited partnership allows for the deferral of gain by an owner of appreciated real estate. The following table indicates how distributions were characterized for federal income tax purposes for the years ended December 31, 2020, December 31, 2019, and December 31, 2018: CALENDAR YEAR 2020 2019 2018 Tax status of distributions Capital gain 13.62 % 38.53 % 100.00 % Ordinary income 7.91 % 23.43 % — Return of capital 78.47 % 38.04 % — VARIABLE INTEREST ENTITY We have determined that our Operating Partnership and each of our less-than-wholly owned real estate partnerships is a variable interest entity (“VIE”), as the limited partners or the functional equivalent of limited partners lack substantive kick-out rights and substantive participating rights. We are the primary beneficiary of the VIEs, and the VIEs are required to be consolidated on our balance sheet because we have a controlling financial interest in the VIEs and have both the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs as well as the obligation to absorb losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. Because our Operating Partnership is a VIE, all of our assets and liabilities are held through a VIE. F-16 Table of Contents OTHER ASSETS As of December 31, 2020 and 2019, other assets consisted of the following amounts: in thousands December 31, 2020 December 31, 2019 Receivable arising from straight line rents $ 336 $ 785 Accounts receivable, net of allowance 523 154 Real estate related loans receivable 6,332 16,557 Marketable securities — 7,055 Prepaid and other assets 5,702 4,866 Intangible assets, net of accumulated amortization 1,150 1,212 Property and equipment, net of accumulated depreciation 2,674 1,277 Goodwill 986 1,086 Deferred charges and leasing costs 1,201 1,837 Total Other Assets $ 18,904 $ 34,829 PROPERTY AND EQUIPMENT Property and equipment consists primarily of office equipment located at our corporate offices in Minot, North Dakota and in Minneapolis, Minnesota. The consolidated balance sheets reflects these assets at cost, net of accumulated depreciation, and are included within Other Assets. As of December 31, 2020 and 2019, property and equipment cost was $ 4.7 million and $ 2.9 million, respectively. Accumulated depreciation was $ 2.0 million and $ 1.7 million as of December 31, 2020 and 2019, respectively, and are included within other assets in the consolidated balance sheets. MORTGAGE LOANS RECEIVABLE AND NOTES RECEIVABLE I n March 2020, in connection with our acquisition of Ironwood, an apartment community in New Hope, Minnesota, we acquired a tax increment financing note receivable (“TIF”) with a principal balance of $ 6.6 million, which appears within Other Assets in our consolidated balance sheets. The note bears an interest rate of 4.5 % with payments due in February and August of each year. I n December 2019, we originated a $ 29.9 million construction loan and a $ 15.3 million mezzanine loan for the development of a multifamily development located in Minneapolis, Minnesota. The construction and mezzanine loans bear interest at 4.5 % and 11.5 %, respectively. As of December 31, 2020 and 2019, we had funded $ 24.7 million and $ 6.2 million, respectively, of the construction loan, which appears within mortgages receivable in our consolidated balance sheets. The loans are secured by mortgages and mature on December 31, 2023, and the agreement provides us with an option to purchase the development. The loans represent an investment in an unconsolidated variable interest entity. We are not the primary beneficiary of the VIE as we do not have the power to direct the activities which most significantly impact the entity’s economic performance nor do we have significant influence over the entity. In August 2017, we sold 13 apartment communities in exchange for cash and an $ 11.0 million note secured by a mortgage on the assets. As of December 31, 2020, the note was paid in full. As of December 31, 2019 the remaining balance on the mortgage was $ 10.0 million. The note had an interest rate of 5.5 %. Monthly payments were interest-only, with the principal balance payable at maturity. We received and recognized approximately $ 279,000 , $ 570,000 , $ 448,000 , and $ 372,000 of interest income during the years ended December 31, 2020 and 2019, the transition period ended December 31, 2019, and the fiscal year ended April 30, 2018, respectively. In July 2017, we originated a $ 16.2 million loan in a multifamily development located in New Hope, Minnesota, a Minneapolis suburb. We funded an additional $ 341,000 upon satisfaction of certain conditions set forth in the loan agreement. The note had an interest rate of 6 %. During the year ended December 31, 2020, we executed the purchase option for the apartment community (refer to Note 9 for details on acquisition). The note was paid in full as part of our acquisition of this apartment community. MARKETABLE SECURITIES Marketable securities consisted of equity securities. We report equity securities at fair value based on quoted market prices (Level 1 inputs). Any unrealized gains or losses are included in interest and other income (loss) on the consolidated statements F-17 Table of Contents of operations. As of December 31, 2020, we had no marketable securities. As of December 31, 2019, the cost basis of marketable securities was $ 6.9 million, the gross unrealized gain was $ 113,000 , and the carrying value was $ 7.1 million. During the year ended December 31, 2020, we had a realized loss of $ 3.4 million arising from the disposal of such securities. GAIN ON LITIGATION SETTLEMENT During the year ended December 31, 2019, we recorded a gain on litigation settlement of $ 6.6 million from the settlement on a construction defect claim. The gain consisted of $ 5.2 million of cash received and $ 1.4 million of liabilities waived under the terms of the settlement. NOTE 3 • EARNINGS PER SHARE Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. We have issued restricted stock units (“RSUs”) and incentive stock options (“ISOs”) under our 2015 Incentive Plan and Series D Convertible Preferred Units (“Series D preferred units”), which could have a dilutive effect on our earnings per share upon exercise of the RSUs, ISOs, or upon conversion of the Series D preferred units (refer to Note 4 for further discussion of the preferred units). Other than the issuance of RSUs, ISOs, and Series D preferred units, we have no outstanding options, warrants, convertible stock, or other contractual obligations requiring issuance of additional common shares that would result in a dilution of earnings. Under the terms of the Operating Partnership’s Agreement of Limited Partnership, limited partners have the right to require the Operating Partnership to redeem their limited partnership units (“Units”) any time following the first anniversary of the date they acquired such Units (“Exchange Right”). Upon the exercise of Exchange Rights, and in our sole discretion, we may issue common shares in exchange for Units on a one -for-one-basis. For the years ended December 31, 2020 and 2019, and the transition period ended December 31, 2018, performance-based restricted stock awards of 26,994 , 37,822 , and 25,300 were excluded from the calculation of diluted earnings per share because the assumed proceeds per share plus the average unearned compensation were greater than the average market price of the common shares for the periods presented and, therefore, were anti-dilutive. Refer to Note 16 - Share-Based Compensation for discussion of the terms for these awards. For the year ended December 31, 2020, Series D preferred units of 228,000 and time-based RSUs of 13,000 were excluded from the calculation of diluted earnings per shares because they were anti-dilutive because including these items would have improved earnings per share. For the year ended December 31, 2020, weighted average stock options of 86,000 were excluded from the calculation of diluted earnings per share because the assumed proceeds per share plus the average unearned compensation were greater than the average market price of common shares for the period and were, therefore, anti-dilutive. The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted earnings per share reported in the consolidated financial statements for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018: F-18 Table of Contents (in thousands, except per share data) Year Ended December 31, Period Ended Fiscal Year Ended 2020 2019 December 31, 2018 April 30, 2018 NUMERATOR Income (loss) from continuing operations – controlling interests $ 4,441 $ 78,669 $ ( 4,908 ) $ ( 30,266 ) Income (loss) from discontinued operations – controlling interests — — 510 147,054 Net income (loss) attributable to controlling interests 4,441 78,669 ( 4,398 ) 116,788 Dividends to preferred shareholders ( 6,528 ) ( 6,821 ) ( 4,547 ) ( 8,569 ) Redemption of preferred shares 297 — — ( 3,657 ) Numerator for basic earnings per share – net income (loss) available to common shareholders ( 1,790 ) 71,848 ( 8,945 ) 104,562 Noncontrolling interests – Operating Partnership ( 212 ) 6,752 ( 1,032 ) 12,702 Dividends to preferred unitholders 640 537 — — Numerator for diluted earnings (loss) per share $ ( 1,362 ) $ 79,137 $ ( 9,977 ) $ 117,264 DENOMINATOR Denominator for basic earnings per share weighted average shares 12,564 11,744 11,937 11,998 Effect of redeemable operating partnership units 1,030 1,237 1,387 1,462 Effect of Series D preferred units — 193 — — Effect of diluted restricted stock awards and restricted stock units — 8 — — Denominator for diluted earnings per share 13,594 13,182 13,324 13,460 Earnings (loss) per common share from continuing operations – basic $ ( 0.15 ) $ 6.06 $ ( 0.79 ) $ ( 3.54 ) Earnings (loss) per common share from discontinued operations – basic — — 0.04 12.25 NET EARNINGS (LOSS) PER COMMON SHARE – BASIC $ ( 0.15 ) $ 6.06 $ ( 0.75 ) $ 8.71 Earnings (loss) per common share from continuing operations – diluted $ ( 0.15 ) $ 6.00 $ ( 0.79 ) $ ( 3.54 ) Earnings (loss) per common share from discontinued operations – diluted — — 0.04 12.25 NET EARNINGS (LOSS) PER COMMON SHARE – DILUTED $ ( 0.15 ) $ 6.00 $ ( 0.75 ) $ 8.71 NOTE 4 • EQUITY AND MEZZANINE EQUITY Operating Partnership Units. Outstanding Units in the Operating Partnership were 1.0 million Units at December 31, 2020 and 1.1 million Units at December 31, 2019. Exchange Rights. Pursuant to the exercise of Exchange Rights, we redeemed Units for cash during the years ended December 31, 2020 and 2019 as detailed in the table below. (in thousands, except per Unit amounts) Number of Aggregate Average Price Units Cost Per Unit Year Ended December 31, 2020 1 $ 50 $ 70.10 Year Ended December 31, 2019 136 $ 8,142 $ 60.02 F-19 Table of Contents We also redeemed Units in exchange for common shares during the years ended December 31, 2020 and 2019 as detailed in the table below. (in thousands) Number of Total Book Units Value Year Ended December 31, 2020 81 $ ( 1,750 ) Year Ended December 31, 2019 174 $ 7,823 Common Shares and Equity Awards . Common shares outstanding on December 31, 2020 and 2019, totaled 13.0 million and 12.1 million, respectively. During the years ended December 31, 2020 and 2019, we issued approximately 21,000 and 18,000 common shares, respectively, with a total grant-date value of $ 1.0 million and $ 1.1 million, respectively, under our 2015 Incentive Plan, as share-based compensation for employees and trustees. During the years ended December 31, 2020 and 2019, approximately 2,400 and 3,300 common shares were forfeited under the 2015 Incentive Plan, respectively. Equity Distribution Agreement. In November 2019, we entered into an equity distribution agreement in connection with an at-the-market offering ("2019 ATM Program") through which we may offer and sell common shares having an aggregate sales price of up to $ 150.0 million, in amounts and at times as we determine. The proceeds from the sale of common shares under the 2019 ATM Program are intended to be used for general corporate purposes, which may include the funding of future acquisitions, community renovations, and the repayment of indebtedness. As of December 31, 2020, we had common shares having an aggregate offering price of up to $ 68.5 million remaining available under the 2019 ATM Program. The table below provides details on the sale of common shares during the years ended December 31, 2020 and 2019. (in thousands, except per share amounts) Number of Common Shares Total Consideration (1) Average Price Per Share (1) Year ended December 31, 2020 829 $ 59,187 $ 71.39 Year ended December 31, 2019 308 $ 22,019 $ 72.29 (1) Total consideration is net of $ 901,000 and $ 310,000 in commissions for the years ended December 31, 2020 and 2019, respectively. Share Repurchase Program . On December 7, 2016, our Board of Trustees authorized a share repurchase program to repurchase up to $ 50 million of our common shares over a one year period. This program was reauthorized for two additional one year periods. On December 5, 2019, our Board of Trustees terminated this share repurchase program and authorized a new share purchase program to repurchase up to $ 50 million of our common or preferred shares over a one-year period. Under this new repurchase program, we could repurchase common or preferred shares in open-market purchases, including pursuant to Rule 10b5-1 and Rule 10b-18 plans, as determined by management and in accordance with the requirements of the SEC. This program expired on December 5, 2020. Shares repurchased during the years ended December 31, 2020 and 2019 are detailed in the table below. (in thousands, except per share amounts) Number of Common Shares Number of Preferred Shares Aggregate Cost (1) Average Price Per Share (1) Year ended December 31, 2020 — 237 $ 5,629 $ 23.75 Year ended December 31, 2019 (2) 329 — $ 18,023 $ 54.69 (1) Amount includes commissions. (2) Repurchases during the year were under the prior repurchase program. Issuance of Series C Preferred Shares . In the fiscal year ended April 30, 2018, we issued 4.1 million shares of our 6.625 % Series C Cumulative Redeemable Preferred Shares ("Series C preferred shares"). As of December 31, 2020 and 2019, we had 3.9 million and 4.1 million Series C preferred shares outstanding, respectively. The Series C preferred shares are nonvoting and redeemable for cash at $ 25.00 per share at our option on or after October 2, 2022. Holders of these shares are entitled to cumulative distributions, payable quarterly (as and if declared by the Board of Trustees). Distributions accrue at an annual rate of $ 1.65625 per share, which is equal to 6.625 % of the $ 25.00 per share liquidation preference ($ 97.0 million and $ 103.0 million liquidation preference in the aggregate, as of December 31, 2020 and 2019, respectively). Series D Preferred Units (Mezzanine Equity). On February 26, 2019, we issued 165,600 newly created Series D preferred units at an issuance price of $ 100 per preferred unit as partial consideration for the acquisition of SouthFork Townhomes. The Series D preferred unit holders receive a preferred distribution at the rate of 3.862 % per year. The Series D preferred units have a put F-20 Table of Contents option which allows the holder to redeem any or all of the Series D preferred units for cash equal to the issue price. Each Series D preferred unit is convertible, at the holder's option, into 1.37931 Units, representing a conversion exchange rate of $ 72.50 per unit. Changes in the redemption value are charged to common shares on our consolidated balance sheets from period to period. The holders of the Series D preferred units do not have any voting rights. Distributions to Series D unitholders are presented in the consolidated statements of equity within net income (loss) attributable to controlling interests and noncontrolling interests. Redeemable Noncontrolling Interests (Mezzanine Equity). Redeemable noncontrolling interests on our consolidated balance sheets represent the noncontrolling interest in a joint venture in which our unaffiliated partner, at its election, could require us to buy its interest at a purchase price to be determined by an appraisal conducted in accordance with the terms of the agreement, or at a negotiated price. Redeemable noncontrolling interests are presented at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to common shares on our consolidated balance sheets. During the year ended December 31, 2019, we acquired the remaining 34.5 % noncontrolling interests in the real estate partnership that owns Commons and Landing at Southgate for $ 1.3 million. Activity of the redeemable noncontrolling interests is detailed in the table below. (in thousands) Year ended December 31, 2019 Balance at beginning of fiscal year $ 5,968 Contributions — Net (loss) income ( 174 ) Acquisition of redeemable noncontrolling interests ( 5,794 ) Balance at close of fiscal year $ — NOTE 5 • NONCONTROLLING INTERESTS Interests in the Operating Partnership held by limited partners are represented by Units. The Operating Partnership’s income is allocated to holders of Units based upon the ratio of their holdings to the total Units outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to noncontrolling interests in accordance with the terms of the Operating Partnership’s Agreement of Limited Partnership. We reflect noncontrolling interests in consolidated real estate entities on the Balance Sheet for the portion of properties consolidated by us that are not wholly owned by us. The earnings or losses from these properties attributable to the noncontrolling interests are reflected as net income attributable to noncontrolling interests – consolidated real estate entities in the consolidated statements of operations. During the year ended December 31, 2020, we acquired the 47.4 % noncontrolling interests in the real estate partnership that owns 71 France for $ 12.2 million. Our noncontrolling interests – consolidated real estate entities at December 31, 2020 and 2019 were as follows: (in thousands) December 31, 2020 December 31, 2019 IRET - 71 France, LLC $ — $ 4,817 IRET - Cypress Court Apartments, LLC 686 748 Noncontrolling interests – consolidated real estate entities $ 686 $ 5,565 F-21 Table of Contents NOTE 6 • DEBT As of December 31, 2020, 47 of our apartment communities were not encumbered by mortgages, with 34 of those apartment communities providing credit support for our unsecured borrowings. Our primary unsecured credit facility (“unsecured credit facility”) is a revolving, multi-bank line of credit, with the Bank of Montreal serving as administrative agent. Our line of credit has total commitments and borrowing capacity of $ 250.0 million, based on the value of properties contained in the unencumbered asset pool (“UAP”). As of December 31, 2020, we had additional borrowing availability of $ 97.1 million beyond the $ 152.9 million drawn, including the balance on our operating line of credit (discussed below), priced at an interest rate of 2.85 %, including the impact of our interest rate swap. This credit facility matures on August 31, 2022, with one 12 -month option to extend the maturity date at our election. At December 31, 2019, the line of credit borrowing capacity was $ 250.0 million based on the UAP, of which $ 50.1 million was drawn on the line. Under our unsecured credit facility, we also have unsecured term loans of $ 70.0 million and $ 75.0 million, included within notes payable on the consolidated balance sheets, which mature on January 15, 2024 and August 31, 2025, respectively. The interest rates on the line of credit and term loans are based, at our option, on the lender's base rate plus a margin, ranging from 35 - 85 basis points, or the London Interbank Offered Rate (“LIBOR”), plus a margin that ranges from 135 - 190 basis points based on our consolidated leverage. Our unsecured credit facility and unsecured senior notes are subject to customary financial covenants and limitations. We believe that we are in compliance with all such financial covenants and limitations as of December 31, 2020. We have a private shelf agreement for the issuance of up to $ 150.0 million of unsecured senior promissory notes (“unsecured senior notes”). Under this agreement, we issued $ 75.0 million of Series A notes due September 13, 2029, bearing interest at a rate of 3.84 % annually, and $ 50.0 million of Series B notes due September 30, 2028, bearing interest at a rate of 3.69 % annually. We have $ 25.0 million remaining available under the private shelf agreement. As of December 31, 2020, we owned 20 apartment communities that served as collateral for mortgage loans. All of these mortgage loans were non-recourse to us other than for standard carve-out obligations. Interest rates on mortgage loans range from 3.47 % to 5.73 %, and the mortgage loans have varying maturity dates from June 1, 2021, through September 1, 2031. As of December 31, 2020, we believe there are no material defaults or instances of material noncompliance in regards to any of these mortgage loans. We also have a $ 6.0 million operating line of credit. This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances. This operating line has a one-year term, with pricing based on a market spread plus the one-month LIBOR index rate. The following table summarizes our indebtedness: (in thousands) December 31, 2020 December 31, 2019 Weighted Average Maturity in Years Lines of credit $ 152,871 $ 50,079 1.62 Term loans (1) 145,000 145,000 3.88 Unsecured senior notes (1) 125,000 125,000 8.33 Unsecured debt 422,871 320,079 4.38 Mortgages payable - fixed 298,445 331,376 5.23 Total debt $ 721,316 $ 651,455 4.73 Annual Weighted Average Interest Rates Lines of credit (rate with swap) 2.85 % 3.81 % Term loans (rate with swaps) 4.15 % 4.11 % Unsecured senior notes 3.78 % 3.78 % Mortgages payable 3.93 % 4.02 % Total debt 3.62 % 3.97 % (1) Included within notes payable on our consolidated balance sheets. F-22 Table of Contents The aggregate amount of required future principal payments on mortgages payable and notes payable as of December 31, 2020 is as follows: (in thousands) 2021 $ 25,665 2022 37,219 2023 45,068 2024 3,777 2025 102,505 Thereafter 354,211 Total payments $ 568,445 NOTE 7 • DERIVATIVE INSTRUMENTS Our objective in using interest rate derivatives is to add stability to interest expense and to manage our exposure to interest rate fluctuations. To accomplish this objective, we primarily use interest rate swap contracts to fix the variable rate interest on our term loans and a portion of our primary line of credit. The interest rate swap contracts qualify as cash flow hedges. The ineffective portion of a hedging instrument is not recognized currently in earnings or disclosed. Changes in the fair value of cash flow hedges are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income for our interest rate swap will be reclassified to interest expense as interest payments are made on our term loan and line of credit. During the next 12 months, we estimate an additional $ 4.4 million will be reclassified as an increase to interest expense. At December 31, 2020, we had three interest rate swap contracts in effect with a notional amount of $ 195.0 million and one additional interest rate swap that becomes effective on January 31, 2023 with a notional amount of $ 70.0 million. The fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets as of December 31, 2020 and 2019 is detailed below. (in thousands) December 31, 2020 December 31, 2019 Balance Sheet Location Fair Value Fair Value Total derivative instruments designated at hedging instruments - interest rate swaps Accounts Payable and Accrued Expenses $ 15,905 $ 7,607 The effect of the Company's derivative financial instruments on the consolidated statements of operations as of December 31, 2020, December 31, 2019, December 31, 2018, and April 30, 2018 is detailed below. (in thousands) Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Income Gain (Loss) Reclassified from Accumulated OCI into Income Year Ended December 31, Transition Period Ended December 31, Fiscal Year Ended April 30, Year Ended December 31, Transition Period Ended December 31, Fiscal Year Ended April 30, 2020 2019 2018 2018 2020 2019 2018 2018 Total derivatives in cash flow hedging relationships - interest rate swaps $ ( 11,068 ) $ ( 7,040 ) $ ( 2,794 ) $ 1,627 Interest expense $ ( 2,770 ) $ ( 289 ) $ ( 159 ) $ ( 152 ) NOTE 8 • FAIR VALUE MEASUREMENTS Cash and cash equivalents, restricted cash, accounts payable, accrued expenses, and other liabilities are carried at amounts that reasonably approximate their fair value due to their short-term nature. For variable rate line of credit debt that re-prices frequently, fair values are based on carrying values. F-23 Table of Contents In determining the fair value of other financial instruments, we apply Financial Accounting Standard Board ASC 820, Fair Value Measurement and Disclosures . Fair value hierarchy under ASC 820 distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (Levels 1 and 2) and the reporting entity’s own assumptions about market participant assumptions (Level 3). Fair value estimates may differ from the amounts that may ultimately be realized upon sale or disposition of the assets and liabilities. Fair Value Measurements on a Recurring Basis (in thousands) Total Level 1 Level 2 Level 3 December 31, 2020 Assets Mortgages and notes receivable $ 30,994 $ — $ — $ 30,994 Liabilities Derivative instruments - interest rate swaps $ 15,905 $ — $ — $ 15,905 December 31, 2019 Liabilities Derivative instruments - interest rate swaps $ 7,607 $ — $ — $ 7,607 The fair value of our interest rate swaps is determined using the market standard methodology of netting discounted expected variable cash payments and receipts. The variable cash payments and receipts are based on an expectation of future interest rates (a forward curve) derived from observable market interest rate curves. We consider both our own nonperformance risk and the counterparty’s nonperformance risk in the fair value measurement. Effective January 1, 2020, we elected the fair value option for our mortgage loans receivable and notes receivable, as allowed under ASU 2019-05 which provided transition relief upon adoption of ASU 2016-13, "Financial Instruments - Credit Losses." We utilize an income approach with level 3 inputs based on expected future cash flows to value these instruments. The inputs include market transactions for similar instruments, management estimates of comparable interest rates (range of 3.75 % to 5.00 %), and instrument specific credit risk (range of 0.5 % to 1.0 %). Changes in fair value of these receivables from period to period are reported in interest and other income on our consolidated statements of operations. (in thousands) Fair Value Measurement Other Gains (Losses) Interest Income Total Changes in Fair Value Included in Current Period Earnings Year ended December 31, 2020 $ 30,994 $ 12 $ 1,442 $ 1,454 Fair Value Measurements on a Nonrecurring Basis There were no non-financial assets measured at fair value on a nonrecurring basis at December 31, 2020 and 2019. Financial Assets and Liabilities Not Measured at Fair Value The fair value of mortgages payable and unsecured senior notes is estimated based on the discounted cash flows of the loans using market research and management estimates of comparable interest rates (Level 3). F-24 Table of Contents The estimated fair values of our financial instruments as of December 31, 2020 and 2019 are as follows: (in thousands) December 31, 2020 December 31, 2019 Amount Fair Value Amount Fair Value FINANCIAL ASSETS Cash and cash equivalents $ 392 $ 392 $ 26,579 $ 26,579 Restricted cash 6,918 6,918 19,538 19,538 Mortgage and note receivables (1) — — 32,810 32,810 FINANCIAL LIABILITIES Revolving lines of credit (2) 152,871 152,871 50,079 50,079 Term loans (2) 145,000 145,000 145,000 145,000 Unsecured senior notes 125,000 133,181 125,000 126,816 Mortgages payable 298,445 308,855 331,376 332,471 (1) As of January 1, 2020, we elected the fair value option, as allowed under ASU 2019-05. Fair value for these instruments is discussed within the Fair Value Measurements on a Recurring Basis section above. (2) Excluding the effect of the interest rate swap agreement. NOTE 9 • ACQUISITIONS AND DISPOSITIONS ACQUISITIONS We acquired $ 191.0 million and $ 171.4 million of new real estate during the years ended December 31, 2020 and 2019, respectively. Our acquisitions during the years ended December 31, 2020 and 2019 are detailed below. Year Ended December 31, 2020 (in thousands) Total Form of Consideration Investment Allocation Date Acquisition Intangible Acquisitions Acquired Cost Cash Other (1) Land Building Assets Other (2) 182 homes - Ironwood Apartments - New Hope, MN March 5, 2020 $ 46,263 $ 28,600 $ 17,663 $ 2,165 $ 36,869 $ 824 $ 6,405 465 homes - Parkhouse Apartments - Thornton, CO September 22, 2020 144,750 144,750 — 10,474 132,105 2,171 — Total Acquisitions $ 191,013 $ 173,350 $ 17,663 $ 12,639 $ 168,974 $ 2,995 $ 6,405 (1) Payoff of note receivable and accrued interest by seller at closing. (2) Consists of TIF note acquired. Refer to Note 2 for further discussion. F-25 Table of Contents Year Ended December 31, 2019 (in thousands) Total Form of Consideration Investment Allocation Date Acquisition Intangible Acquisitions Acquired Cost Cash Units (1) Land Building Assets Multifamily 272 homes - SouthFork Townhomes - Lakeville, MN February 26, 2019 $ 44,000 $ 27,440 $ 16,560 $ 3,502 $ 39,950 $ 548 96 homes - FreightYard Townhomes and Flats - Minneapolis, MN September 6, 2019 26,000 26,000 — 1,889 23,615 496 328 homes - Lugano at Cherry Creek - Denver, CO (3) September 26, 2019 99,250 99,250 — 7,679 89,365 1,781 $ 169,250 $ 152,690 $ 16,560 $ 13,070 $ 152,930 $ 2,825 Other Minot 3100 10th St SW - Minot, ND (2) May 23, 2019 $ 2,112 $ 2,112 — $ 246 $ 1,866 — Total Acquisitions $ 171.362 $ 154,802 $ 16,560 $ 13,316 $ 154,796 $ 2,825 (1) Value of Series D preferred units at the acquisition date. (2) Acquired for use as our Minot corporate office building after renovations have been completed. (3) Investment allocation excludes a $ 425 acquisition credit related to retail space lease-up. DISPOSITIONS During the year ended December 31, 2020, we continued our portfolio transformation by disposing of four apartment communities, one commercial property and one parcel of unimproved land for a total sales price of $ 44.3 million. T he dispositions for the years ended December 31, 2020 and 2019 are detailed below. Year Ended December 31, 2020 (in thousands) Date Book Value Dispositions Disposed Sales Price and Sale Cost Gain/(Loss) Multifamily 268 homes - Forest Park - Grand Forks, ND August 18, 2020 $ 19,625 $ 6,884 $ 12,741 90 homes - Landmark - Grand Forks, ND August 18, 2020 3,725 1,348 2,377 164 homes - Southwind - Grand Forks, ND August 18, 2020 10,850 4,573 6,277 168 homes - Valley Park - Grand Forks, ND August 18, 2020 8,300 4,059 4,241 $ 42,500 $ 16,864 $ 25,636 Other Dakota West August 7, 2020 $ 500 $ 474 $ 26 Unimproved Land Rapid City Land - Rapid City, SD June 29, 2020 $ 1,300 $ 1,490 $ ( 190 ) Total Dispositions $ 44,300 $ 18,828 $ 25,472 F-26 Table of Contents Year Ended December 31, 2019 (in thousands) Date Book Value Dispositions Disposed Sales Price and Sale Cost Gain/(Loss) Multifamily 21 homes - Pinehurst - Billings, MT July 26, 2019 $ 1,675 $ 961 $ 714 160 homes - Brookfield Village - Topeka, KS September 24, 2019 10,350 5,853 4,497 220 homes - Crown Colony - Topeka, KS September 24, 2019 17,200 7,876 9,324 54 homes - Mariposa - Topeka, KS September 24, 2019 6,100 4,290 1,810 300 homes - Sherwood - Topeka, KS September 24, 2019 26,150 11,536 14,614 308 homes - Villa West - Topeka, KS September 24, 2019 22,950 15,165 7,785 152 homes - Crestview - Bismarck, ND October 29, 2019 8,250 2,681 5,569 73 homes - North Pointe - Bismarck, ND October 29, 2019 5,225 3,179 2,046 108 homes - Kirkwood - Bismarck, ND October 29, 2019 5,400 2,518 2,882 65 homes - Westwood Park - Bismarck, ND October 29, 2019 4,250 1,931 2,319 16 homes - Pebble Springs - Bismarck, ND October 29, 2019 875 573 302 192 homes - Arbors - Sioux City, IA December 11, 2019 16,200 6,110 10,090 120 homes - Indian Hills - Sioux City, IA December 11, 2019 8,100 5,302 2,798 132 homes - Ridge Oaks - Sioux City, IA December 11, 2019 7,700 4,006 3,694 50 homes - Cottage West - Sioux Falls, SD December 12, 2019 6,991 4,391 2,600 24 homes - Gables - Sioux Falls, SD December 12, 2019 2,515 2,052 463 79 homes - Oakmont - Sioux Falls, SD December 12, 2019 7,010 3,917 3,093 160 homes - Oakwood - Sioux Falls, SD December 12, 2019 12,090 3,056 9,034 120 homes - Oxbow Park - Sioux Falls, SD December 12, 2019 10,452 2,713 7,739 48 homes - Prairie Winds - Sioux Falls, SD December 12, 2019 3,763 1,112 2,651 44 homes - Sierra Vista - Sioux Falls, SD December 12, 2019 3,178 2,292 886 $ 186,424 $ 91,514 $ 94,910 Other Minot 1400 31st Ave SW - Minot, ND May 23, 2019 $ 6,530 $ 6,048 $ 482 Woodbury 1865 Woodland - Woodbury, MN November 1, 2019 5,765 4,079 1,686 $ 12,295 $ 10,127 $ 2,168 Unimproved Land Creekside Crossing - Bismarck, ND March 1, 2019 $ 3,049 $ 3,205 $ ( 156 ) Minot 1525 24th Ave SW - Minot, ND April 3, 2019 725 593 132 Weston - Weston, WI July 31, 2019 600 427 173 $ 4,374 $ 4,225 $ 149 Total Dispositions $ 203,093 $ 105,866 $ 97,227 NOTE 10 • DISCONTINUED OPERATIONS We report in discontinued operations the results of operations and the related gains or losses on the sales of properties that have either been disposed of or classified as held for sale and meet the classification of a discontinued operation as described in ASC 205 - Presentation of Financial Statements and ASC 360 - Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under this standard, a disposal (or classification as held for sale) of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. We determined that our strategic decision to exit our healthcare segment met the criteria for discontinued operations, and we consequently classified 27 property dispositions as discontinued operations during the fiscal year ended April 30, 2018. We classified no dispositions as discontinued operations during the years ended December 31, 2020 and 2019, and the transition period ended December 31, 2018. We had no gains or losses from the sale of properties classified as discontinued operations for the years ended December 31, 2020 and 2019. The following information shows the effect on net income and the gains or losses from the sale of properties classified as discontinued operations for the transition period ended December 31, 2018 and the fiscal year ended April 30, 2018. F-27 Table of Contents (in thousands) Transition Period Ended Fiscal Year Ended December 31, 2018 April 30, 2018 REVENUE Real estate rentals $ — $ 19,744 Tenant reimbursement — 11,650 TOTAL REVENUE — 31,394 EXPENSES Property operating expenses, excluding real estate taxes — 6,350 Real estate taxes — 5,191 Property management expense — 206 Depreciation and amortization — 8,445 TOTAL EXPENSES — 20,192 Operating income (loss) — 11,202 Interest expense (1) — ( 4,172 ) Gain (loss) on extinguishment of debt (1) — ( 6,508 ) Interest income — 661 Other income — 73 Income (loss) from discontinued operations before gain on sale — 1,256 Gain (loss) on sale of discontinued operations 570 163,567 INCOME (LOSS) FROM DISCONTINUED OPERATIONS $ 570 $ 164,823 Segment Data All other $ 570 $ 164,823 Total $ 570 $ 164,823 (in thousands) Transition Period Ended Fiscal Year Ended December 31, 2018 April 30, 2018 Property Sale Data Sales price $ — $ 437,652 Net book value and sales costs — ( 274,085 ) Gain on sale of discontinued operations $ — $ 163,567 As of December 31, 2020 and 2019, we had no assets or liabilities classified as held for sale. NOTE 11 • SEGMENTS We operate in a single reportable segment which includes the ownership, management, development, redevelopment, and acquisition of apartment communities. Each of our operating properties is considered a separate operating segment because each property earns revenues, incurs expenses, and has discrete financial information. Our chief operating decision-makers evaluate each property’s operating results to make decisions about resources to be allocated and to assess performance. We do not group our operations based on geography, size, or type. Our apartment communities have similar long-term economic characteristics and provide similar products and services to our residents. No apartment community comprises more than 10% of consolidated revenues, profits, or assets. Accordingly, our apartment communities are aggregated into a single reportable segment. “All other” is composed of non-multifamily properties, non-multifamily components of mixed use properties, and properties disposed or designated as held for sale. Prior to the third quarter of fiscal year 2018, we reported our results in two reportable segments: multifamily and healthcare. We sold substantially all of our healthcare portfolio during the third quarter of fiscal year 2018 and classified it as discontinued operations, at which point healthcare no longer met the quantitative thresholds for reporting as a separate reportable segment. Our executive management team comprises our chief operating decision-makers. This team measures the performance of our reportable segment based on net operating income (“NOI”), which we define as total real estate revenues less property operating expenses, including real estate taxes. 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 depreciation, amortization, financing, property management overhead, and general and administrative expense. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance. F-28 Table of Contents The following tables present NOI for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018 from our reportable segment and reconcile net operating income to net income as reported in the consolidated financial statements. Segment assets are also reconciled to total assets as reported in the consolidated financial statements. (in thousands) Year ended December 31, 2020 Multifamily All Other Total Revenue $ 171,231 $ 6,763 $ 177,994 Property operating expenses, including real estate taxes 70,044 3,114 73,158 Net operating income $ 101,187 $ 3,649 $ 104,836 Property management expenses ( 5,801 ) Casualty loss ( 1,662 ) Depreciation and amortization ( 75,593 ) General and administrative expenses ( 13,440 ) Interest expense ( 27,525 ) Loss on debt extinguishment ( 23 ) Interest and other income (loss) ( 1,552 ) Income (loss) before gain (loss) on sale of real estate and other investments ( 20,760 ) Gain (loss) on sale of real estate and other investments 25,503 Net income (loss) $ 4,743 (in thousands) Year ended December 31, 2019 Multifamily All Other Total Revenue $ 155,635 $ 30,120 $ 185,755 Property operating expenses, including real estate taxes 63,909 14,406 78,315 Net operating income $ 91,726 $ 15,714 $ 107,440 Property management expenses ( 6,186 ) Casualty loss ( 1,116 ) Depreciation and amortization ( 74,271 ) General and administrative expenses ( 14,450 ) Interest expense ( 30,537 ) Loss on debt extinguishment ( 2,360 ) Interest and other income 2,092 Income (loss) before gain on sale of real estate and other investments and gain (loss) on litigation settlement ( 19,388 ) Gain (loss) on sale of real estate and other investments 97,624 Gain (loss) on litigation settlement 6,586 Net income (loss) $ 84,822 (in thousands) Transition period ended December 31, 2018 Multifamily All Other Total Revenue $ 96,234 $ 25,637 $ 121,871 Property operating expenses, including real estate taxes 39,360 11,359 50,719 Net operating income $ 56,874 $ 14,278 $ 71,152 Property management expenses ( 3,663 ) Casualty loss ( 915 ) Depreciation and amortization ( 50,456 ) Impairment of real estate investments ( 1,221 ) General and administrative expenses ( 9,812 ) Interest expense ( 21,359 ) Loss on debt extinguishment ( 556 ) Interest and other income 1,233 Income (loss) before gain on sale of real estate and other investments ( 15,597 ) Gain (loss) on sale of real estate and other investments 9,707 Income (loss) from continuing operations ( 5,890 ) Income (loss) from discontinued operations 570 Net income (loss) $ ( 5,320 ) F-29 Table of Contents (in thousands) Fiscal Year ended April 30, 2018 Multifamily (1) All Other (1) Total Revenue $ 159,983 $ 9,762 $ 169,745 Property operating expenses, including real estate taxes 70,460 2,574 73,034 Net operating income $ 89,523 $ 7,188 $ 96,711 Property management expenses ( 5,526 ) Casualty loss ( 500 ) Depreciation and amortization ( 82,070 ) Impairment of real estate investments ( 18,065 ) General and administrative expenses ( 14,203 ) Acquisition and investment related costs ( 51 ) Interest expense ( 34,178 ) Loss on debt extinguishment ( 940 ) Interest and other income 1,508 Income (loss) before loss on sale of real estate and other investments and income (loss) from discontinued operations ( 57,314 ) Gain (loss) on sale of real estate and other investments 20,120 Income (loss) from continuing operations ( 37,194 ) Income (loss) from discontinued operations 164,823 Net income (loss) $ 127,629 (1) Revenue, property operating expenses, including real estate taxes, and net operating income for the year ended April 30, 2018 have not been updated for properties sold during the years ended December 31, 2020 and 2019. Segment Assets and Accumulated Depreciation (in thousands) As of December 31, 2020 Multifamily All Other Total Segment assets Property owned $ 1,779,378 $ 33,179 $ 1,812,557 Less accumulated depreciation ( 387,989 ) ( 11,260 ) ( 399,249 ) Total property owned $ 1,391,389 $ 21,919 $ 1,413,308 Cash and cash equivalents 392 Restricted cash 6,918 Other assets 18,904 Mortgage loans receivable 24,661 Total Assets $ 1,464,183 (in thousands) As of December 31, 2019 Multifamily All Other Total Segment assets Property owned $ 1,572,529 $ 70,549 $ 1,643,078 Less accumulated depreciation ( 319,318 ) ( 29,804 ) ( 349,122 ) Total property owned $ 1,253,211 $ 40,745 $ 1,293,956 Cash and cash equivalents 26,579 Restricted cash 19,538 Other assets 34,829 Unimproved land 1,376 Mortgage loans receivable 16,140 Total Assets $ 1,392,418 NOTE 12 • RETIREMENT PLANS We sponsor a defined contribution 401(k) plan to provide retirement benefits for employees that meet minimum employment criteria. We currently match, dollar for dollar, employee contributions to the 401(k) plan in an amount equal to up to 5.0 % of the eligible wages of each participating employee. 401(k) matching contributions are fully vested when made. We recognized expense of approximately $ 875,000 , $ 738,000 , $ 476,000 , and $ 838,000 in the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018, respectively. F-30 Table of Contents NOTE 13 • TRANSACTIONS WITH RELATED PARTIES Transactions with BMO Capital Markets We have an historical and ongoing relationship with BMO Capital Markets (“BMO”). On July 17, 2017, we engaged BMO to provide financial advisory services in connection with the proposed disposition of our healthcare property portfolio. A family member of Mark O. Decker, Jr., our President and Chief Executive Officer, is an employee of BMO and could have an indirect material interest in any such engagement and related transaction(s). The Board pre-approved the engagement of BMO. During the fiscal year ended April 30, 2018, we completed the disposition of 27 of our 28 healthcare properties and paid BMO a transaction fee of $ 1.8 million in connection with this engagement. NOTE 14 • COMMITMENTS AND CONTINGENCIES Legal Proceedings . We are involved in various lawsuits arising in the normal course of business. We believe that such matters will not have a material adverse effect on our consolidated financial statements. Environmental Matters . It is generally our policy to obtain a Phase I environmental assessment of each property that we seek to acquire. Such assessments have not revealed, nor are we aware of, any environmental liabilities that we believe would have a material adverse effect on our financial position or results of operations. We own properties that contain or potentially contain (based on the age of the property) asbestos or lead. For certain of these properties, we estimated the fair value of the conditional asset retirement obligation and chose not to book a liability because the amounts involved were immaterial. With respect to certain other properties, we have not recorded any related asset retirement obligation as the fair value of the liability cannot be reasonably estimated due to insufficient information. We believe we do not have sufficient information to estimate the fair value of the asset retirement obligations for these properties because a settlement date or range of potential settlement dates has not been specified by others and, additionally, there are currently no plans or expectation of plans to demolish these properties or to undertake major renovations that would require removal of the asbestos, lead and/or underground storage tanks. These properties are expected to be maintained by repairs and maintenance activities that would not involve the removal of the asbestos, lead and/or underground storage tanks. Also, a need for renovations caused by resident changes, technology changes or other factors has not been identified. Insurance. We carry insurance coverage on our properties in amounts and types that we believe are customarily obtained by owners of similar properties and are sufficient to achieve our risk management objectives. Restrictions on Taxable Dispositions. Twenty of our apartment communities, consisting of approximately 4,032 homes, are subject to restrictions on taxable dispositions under agreements entered into with some of the sellers or contributors of the properties and are effective for varying periods. We do not believe that the agreements materially affect the conduct of our business or our decisions whether to dispose of restricted properties during the restriction period because we generally hold these and our other properties for investment purposes rather than for sale. Where we deem it to be in our shareholders’ best interests to dispose of such properties, we generally seek to structure sales of such properties as tax deferred transactions under Section 1031 of the Internal Revenue Code. Otherwise, we may be required to provide tax indemnification payments to the parties to these agreements. Redemption Value of Units . Pursuant to a Unitholder’s exercise of its Exchange Rights, we have the right, in our sole discretion, to acquire such Units by either making a cash payment or acquiring the Units for our common shares, on a one -for-one basis. All Units receive the same per Unit cash distributions as the per share dividends paid on common shares. Units are redeemable for an amount of cash per Unit equal to the average of the daily market price of our common shares for the ten consecutive trading days immediately preceding the date of valuation of the Unit. As of December 31, 2020 and 2019, the aggregate redemption value of the then-outstanding Units owned by limited partners, as determined by the ten-day average market price for our common shares, was approximately $ 69.0 million and $ 76.6 million, respectively. F-31 Table of Contents NOTE 15 • QUARTERLY RESULTS OF CONSOLIDATED OPERATIONS (unaudited) (in thousands, except per share data) QUARTER ENDED March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 Revenues $ 44,406 $ 43,910 $ 44,138 $ 45,540 Net income (loss) attributable to controlling interests $ ( 7,007 ) $ ( 3,803 ) $ 19,629 $ ( 4,378 ) Net income (loss) available to common shareholders $ ( 8,439 ) $ ( 5,387 ) $ 18,021 $ ( 5,985 ) Net income (loss) per common share - basic $ ( 0.69 ) $ ( 0.44 ) $ 1.40 $ ( 0.46 ) Net income (loss) per common share - diluted $ ( 0.67 ) $ ( 0.44 ) $ 1.38 $ ( 0.46 ) (in thousands, except per share data) QUARTER ENDED March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Revenues $ 45,608 $ 46,934 $ 47,436 $ 45,777 Net income (loss) attributable to controlling interests $ ( 4,698 ) $ 3,113 $ 31,596 $ 48,658 Net income (loss) available to common shareholders $ ( 6,403 ) $ 1,407 $ 29,891 $ 46,953 Net income (loss) per common share - basic $ ( 0.54 ) $ 0.11 $ 2.57 $ 3.95 Net income (loss) per common share - diluted $ ( 0.54 ) $ 0.11 $ 2.54 $ 3.89 The above financial information is unaudited. In the opinion of management, all adjustments (which are of a normal recurring nature) have been included for a fair presentation. NOTE 16 • SHARE BASED COMPENSATION Share-based awards are provided to officers, non-officer employees, and trustees under our 2015 Incentive Plan approved by shareholders on September 15, 2015, as amended and restated on May 19, 2020 which allows for awards in the form of cash, unrestricted, and restricted common shares, stock options, stock appreciation rights, and restricted stock units ("RSUs") up to an aggregate of 425,000 shares over the ten-year period in which the plan will be in effect. Under our 2015 Incentive Plan, officers and non-officer employees may earn share awards under a long-term incentive plan, which is a forward-looking program that measures long-term performance over the stated performance period. These awards are payable to the extent deemed earned in shares. The terms of the long-term incentive awards granted under the program may vary from year to year. Through December 31, 2020, awards under the 2015 Incentive Plan consisted of restricted and unrestricted common shares, RSUs, and stock options. We account for forfeitures of restricted and unrestricted common shares and RSUs when they occur instead of estimating the forfeitures. Year Ended December 31, 2020 LTIP Awards Awards granted to trustees on May 19, 2020 consisted of 8,272 RSUs, which vest on May 19, 2021. All of these awards are classified as equity awards. We recognize compensation expense associated with the time-based awards ratably over the requisite service period. The fair value of share awards at grant date for non-employee trustees was approximately $ 533,000 , $ 505,000 , $ 348,000 , and $ 389,000 for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018, respectively. Awards granted to employees on March 13, 2020, consist of an aggregate of 8,806 time-based RSU awards. The time-based RSUs vest as to one-third of the shares on each of March 13, 2021, March 13, 2022, and March 13, 2023. Awards granted to employees on August 12, 2020 consist of 480 time-based RSUs, which vest on August 12, 2021. Awards granted to employees on November 19, 2020 and November 30, 2020 consist of 281 and 142 time-based RSUs, respectively. These awards vest as to 50% on each the first and second anniversary of the grant date. These awards are classified as equity awards. Awards granted to employees on May 21, 2020, consist of 141,000 stock options which vest as to 25 % on each of May 21, 2021, January 1, 2022, January 1, 2023 and January 1, 2024 and expire 10 years after grant date. The fair value of stock options was $ 7.255 per share and was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: Exercise price $ 66.36 Risk-free rate 0.978 % Expected term 6.25 years Expected volatility 21.08 % Dividend Yield 3.974 % F-32 Table of Contents Share-Based Compensation Expense Total share-based compensation expense recognized in the consolidated financial statements for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018, for all share-based awards was as follows: (in thousands) Year Ended December 31, Transition Period Ended Fiscal Year Ended April 30, 2020 2019 December 31, 2018 2018 Share based compensation expense $ 2,106 $ 1,905 $ 845 $ 1,587 Restricted Share Awards The total fair value of time-based share grants vested during the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018 was $ 136,000 , $ 310,000 , $ 147,000 , and $ 1.1 million, respectively. The activity for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018, related to our restricted share awards was as follows: Awards with Service Conditions Wtd Avg Grant- Shares Date Fair Value Unvested at April 30, 2017 19,511 Granted 9,136 $ 57.55 Vested ( 18,545 ) $ 59.89 Forfeited ( 202 ) $ 62.40 Unvested at April 30, 2018 9,900 Granted — Vested ( 2,709 ) $ 63.21 Forfeited — Unvested at December 31, 2018 7,191 Granted — Vested ( 4,999 ) $ 61.06 Forfeited — Unvested at December 31, 2019 2,192 59.20 Granted — Vested ( 2,192 ) $ 59.20 Forfeited — Unvested at December 31, 2020 — Restricted Stock Units During the year ended December 31, 2020, we issued 9,709 time-based RSUs to employees and 8,272 to trustees. The RSUs to employees generally vest over a three-year period and the RSUs to trustees generally vest over a one-year period. The fair value of the time-based RSUs granted during the year ended December 31, 2020 was $ 1,227,000 . The total compensation cost related to non-vested time-based RSUs not yet recognized is $ 644,000 , which we expect to recognize over a weighted average period of 1.4 years. The unamortized value of awards and RSUs with market conditions as of December 31, 2020, December 31, 2019, December 31, 2018, and April 30 2018, was approximately $ 487,000 , $ 1.3 million, $ 1.1 million, and $ 448,000 respectively. The activity for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018, related to our RSUs was as follows: F-33 Table of Contents RSUs with Service Conditions RSUs with Market Conditions Wtd Avg Grant- Wtd Avg Grant- Shares Date Fair Value Shares Date Fair Value Unvested at April 30, 2017 — — — — Granted 6,994 $ 60.54 11,538 $ 70.90 Vested ( 207 ) $ 50.30 — — Forfeited — — — — Unvested at April 30, 2018 6,787 $ 60.85 11,538 $ 70.90 Granted 14,878 $ 53.60 15,461 $ 57.70 Vested ( 2,943 ) $ 60.83 — — Forfeited ( 462 ) $ 53.60 ( 1,680 ) $ 70.90 Unvested at December 31, 2018 18,260 $ 55.13 25,319 $ 62.84 Granted 16,084 $ 59.76 12,978 $ 79.49 Vested ( 11,633 ) $ 55.35 — — Forfeited ( 365 ) $ 51.73 ( 475 ) $ 57.70 Unvested at December 31, 2019 22,346 $ 58.41 37,822 $ 68.62 Granted 17,981 $ 68.25 — $ — Vested ( 14,991 ) $ 59.10 ( 13,357 ) $ 74.68 Change in awards (1) — — 4,436 — Forfeited ( 508 ) $ 62.99 ( 1,907 ) $ 63.92 Unvested at December 31, 2020 24,828 $ 65.03 26,994 $ 67.87 (1) Represents the change in the number of restricted stock units earned at the end of the measurement period. Stock Options During the year ended December 31, 2020, we issued 141,000 stock options to employees. The stock options vest over a four -year period. The fair value of the stock options granted during the year ended December 31, 2020 was $ 7.255 per share. The total compensation costs related to non-vested stock options not yet recognized is $ 629,000 , which we expect to recognize over a weighted average period of 3.0 years. The stock option activity for the year ended December 31, 2020 was as follows: Number of Shares Weighted Average Exercise Price Outstanding at beginning of year — — Granted 141,000 $ 66.36 Exercised — — Forfeited ( 1,952 ) $ 66.36 Outstanding at end of year 139,048 $ 66.36 Exercisable at end of year — — The intrinsic value of a stock option represents the amount by which the current price of the underlying stock exceeds the exercise price of the option. As of December 31, 2020, stock options outstanding had an aggregate intrinsic value of $ 595,000 with a weighted average remaining contractual term of 9.39 years. NOTE 17 • SUBSEQUENT EVENTS On January 6, 2021, we acquired Union Pointe Apartment Homes, a 256 home apartment community located in Longmont, Colorado, for an aggregate purchase price of $ 76.9 million. On January 6, 2021, we also issued $ 50.0 million of 2.7 % unsecured Series C notes due on June 6, 2030. In concert with the issuance, we amended and expanded our Note Purchase Private Shelf Agreement (the “Agreement”) with Prudential to increase the aggregate amount available under the agreement from $ 150.0 million to $ 225.0 million. After the close of the Series C Notes, we have $ 175.0 million outstanding with an additional $ 50.0 million of capacity remaining under the Agreement. F-34 Table of Contents CENTERSPACE AND SUBSIDIARIES December 31, 2020 Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands) Gross amount at which carried at Life on which Initial Cost to Company close of period depreciation in Costs capitalized Date of latest income Buildings & subsequent to Buildings & Accumulated Construction statement is Description Encumbrances (1) Land Improvements acquisition Land Improvements Total Depreciation or Acquisition computed Same-Store 71 France - Edina, MN $ 53,324 $ 4,721 $ 61,762 $ 446 $ 4,801 $ 62,128 $ 66,929 $ ( 14,312 ) 2016 30 - 37 years Alps Park - Rapid City, SD — 287 5,551 425 336 5,927 6,263 ( 1,589 ) 2013 30 - 37 years Arcata - Golden Valley, MN — 2,088 31,036 356 2,128 31,352 33,480 ( 8,600 ) 2015 30 - 37 years Ashland - Grand Forks, ND 4,866 741 7,569 346 823 7,833 8,656 ( 2,323 ) 2012 30 - 37 years Avalon Cove - Rochester, MN — 1,616 34,074 646 1,808 34,528 36,336 ( 5,927 ) 2016 30 - 37 years Boulder Court - Eagan, MN — 1,067 5,498 3,305 1,576 8,294 9,870 ( 4,429 ) 2003 30 - 37 years Canyon Lake - Rapid City, SD 2,508 305 3,958 2,266 420 6,109 6,529 ( 3,208 ) 2001 30 - 37 years Cardinal Point - Grand Forks, ND — 1,600 33,400 288 1,727 33,561 35,288 ( 2,971 ) 2013 30 - 37 years Cascade Shores - Rochester, MN 11,400 1,585 16,710 149 1,587 16,857 18,444 ( 2,967 ) 2016 30 - 37 years Castlerock - Billings, MT — 736 4,864 2,538 1,045 7,093 8,138 ( 4,549 ) 1998 30 - 37 years Chateau - Minot, ND — 301 20,058 1,094 326 21,127 21,453 ( 6,119 ) 2013 30 - 37 years Cimarron Hills - Omaha, NE 8,700 706 9,588 5,214 1,639 13,869 15,508 ( 7,858 ) 2001 30 - 37 years Colonial Villa - Burnsville, MN — 2,401 11,515 15,595 3,206 26,305 29,511 ( 12,940 ) 2003 30 - 37 years Colony - Lincoln, NE 11,610 1,515 15,730 3,131 1,817 18,559 20,376 ( 5,412 ) 2012 30 - 37 years Commons and Landing at Southgate - Minot, ND — 5,945 47,512 2,059 6,424 49,092 55,516 ( 14,012 ) 2015 30 - 37 years Cottonwood - Bismarck, ND — 1,056 17,372 6,053 1,962 22,519 24,481 ( 12,455 ) 1997 30 - 37 years Country Meadows - Billings, MT — 491 7,809 1,845 599 9,546 10,145 ( 5,858 ) 1995 30 - 37 years Crystal Bay - Rochester, MN — 433 11,425 360 479 11,739 12,218 ( 1,984 ) 2016 30 - 37 years Cypress Court - St. Cloud, MN 11,641 1,583 18,879 474 1,625 19,311 20,936 ( 5,409 ) 2012 30 - 37 years Deer Ridge - Jamestown, ND — 711 24,129 322 785 24,377 25,162 ( 6,224 ) 2013 30 - 37 years Dylan - Denver, CO — 12,155 77,215 1,030 12,241 78,159 90,400 ( 8,205 ) 2018 30 years Evergreen - Isanti, MN — 1,129 5,524 569 1,159 6,063 7,222 ( 2,041 ) 2008 30 - 37 years French Creek - Rochester, MN — 201 4,735 256 212 4,980 5,192 ( 809 ) 2016 30 - 37 years Gardens - Grand Forks, ND — 518 8,702 132 535 8,817 9,352 ( 1,759 ) 2015 30 - 37 years Grand Gateway - St. Cloud, MN — 814 7,086 2,064 970 8,994 9,964 ( 3,480 ) 2012 30 - 37 years GrandeVille at Cascade Lake - Rochester, MN 36,000 5,003 50,363 2,089 5,188 52,267 57,455 ( 10,304 ) 2015 30 - 37 years Greenfield - Omaha, NE — 578 4,122 2,652 876 6,476 7,352 ( 2,425 ) 2007 30 - 37 years Heritage Manor - Rochester, MN — 403 6,968 3,741 790 10,322 11,112 ( 6,243 ) 1998 30 - 37 years Homestead Garden - Rapid City, SD — 655 14,139 540 792 14,542 15,334 ( 3,427 ) 2015 30 - 37 years Lakeside Village - Lincoln, NE 11,489 1,215 15,837 1,850 1,476 17,426 18,902 ( 5,230 ) 2012 30 - 37 years Legacy - Grand Forks, ND 13,072 1,362 21,727 11,044 2,474 31,659 34,133 ( 18,730 ) 1995-2005 30 - 37 years Legacy Heights - Bismarck, ND — 1,207 13,742 257 1,142 14,064 15,206 ( 2,604 ) 2015 30 - 37 years Meadows - Jamestown, ND — 590 4,519 2,087 730 6,466 7,196 ( 3,788 ) 1998 30 - 37 years Monticello Crossings - Monticello, MN — 1,734 30,136 376 1,951 30,295 32,246 ( 5,407 ) 2017 30 - 37 years Monticello Village - Monticello, MN — 490 3,756 1,234 655 4,825 5,480 ( 2,434 ) 2004 30 - 37 years F-35 Table of Contents CENTERSPACE AND SUBSIDIARIES December 31, 2020 Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands) Gross amount at which carried at Life on which Initial Cost to Company close of period depreciation in Costs capitalized Date of latest income Buildings & subsequent to Buildings & Accumulated Construction statement is Description Encumbrances (1) Land Improvements acquisition Land Improvements Total Depreciation or Acquisition computed Northridge - Bismarck, ND $ — $ 884 $ 7,515 $ 278 $ 1,048 $ 7,629 $ 8,677 $ ( 1,641 ) 2015 30 - 37 years Olympic Village - Billings, MT — 1,164 10,441 4,175 1,885 13,895 15,780 ( 8,287 ) 2000 30 - 37 years Olympik Village - Rochester, MN — 1,034 6,109 3,459 1,450 9,152 10,602 ( 4,136 ) 2005 30 - 37 years Oxbo - St Paul, MN — 5,809 51,586 214 5,822 51,787 57,609 ( 7,107 ) 2018 30 years Park Meadows - Waite Park, MN — 1,143 9,099 10,277 2,140 18,379 20,519 ( 12,605 ) 1997 30 - 37 years Park Place - Plymouth, MN — 10,609 80,781 10,433 10,819 91,004 101,823 ( 11,303 ) 2018 30 years Plaza - Minot, ND — 867 12,784 3,128 1,011 15,768 16,779 ( 5,734 ) 2009 30 - 37 years Pointe West - Rapid City, SD — 240 3,538 2,185 463 5,500 5,963 ( 3,865 ) 1994 30 - 37 years Ponds at Heritage Place - Sartell, MN — 395 4,564 510 419 5,050 5,469 ( 1,539 ) 2012 30 - 37 years Quarry Ridge - Rochester, MN 24,057 2,254 30,024 2,356 2,412 32,222 34,634 ( 10,969 ) 2006 30 - 37 years Red 20 - Minneapolis, MN 21,274 1,900 24,116 397 1,908 24,505 26,413 ( 6,829 ) 2015 30 - 37 years Regency Park Estates - St. Cloud, MN 7,400 702 10,198 3,337 1,179 13,058 14,237 ( 4,394 ) 2011 30 - 37 years Rimrock West - Billings, MT — 330 3,489 2,157 568 5,408 5,976 ( 3,250 ) 1999 30 - 37 years River Ridge - Bismarck, ND — 576 24,670 1,092 922 25,416 26,338 ( 8,025 ) 2008 30 - 37 years Rocky Meadows - Billings, MT — 656 5,726 1,745 840 7,287 8,127 ( 4,687 ) 1995 30 - 37 years Rum River - Isanti, MN 3,041 843 4,823 544 870 5,340 6,210 ( 2,162 ) 2007 30 - 37 years Silver Springs - Rapid City, SD 1,997 215 3,007 890 273 3,839 4,112 ( 958 ) 2015 30 - 37 years South Pointe - Minot, ND — 550 9,548 5,990 1,489 14,599 16,088 ( 10,311 ) 1995 30 - 37 years Southpoint - Grand Forks, ND — 576 9,893 236 663 10,042 10,705 ( 2,293 ) 2013 30 - 37 years Sunset Trail - Rochester, MN — 336 12,814 3,560 826 15,884 16,710 ( 9,024 ) 1999 30 - 37 years Thomasbrook - Lincoln, NE 13,100 600 10,306 5,686 1,710 14,882 16,592 ( 8,563 ) 1999 30 - 37 years Village Green - Rochester, MN — 234 2,296 1,083 361 3,252 3,613 ( 1,682 ) 2003 30 - 37 years West Stonehill - Waite Park, MN 16,425 939 10,167 8,171 1,912 17,365 19,277 ( 12,060 ) 1995 30 - 37 years Westend - Denver, CO — 25,525 102,180 605 25,532 102,778 128,310 ( 9,952 ) 2018 30 years Whispering Ridge - Omaha, NE 19,664 2,139 25,424 2,992 2,551 28,004 30,555 ( 7,850 ) 2012 30 - 37 years Winchester - Rochester, MN — 748 5,622 3,040 1,112 8,298 9,410 ( 4,418 ) 2003 30 - 37 years Woodridge - Rochester, MN 5,202 370 6,028 5,498 761 11,135 11,896 ( 6,266 ) 1997 30 - 37 years Total Same-Store $ 276,770 $ 119,580 $ 1,143,758 $ 160,871 $ 137,250 $ 1,286,959 $ 1,424,209 $ ( 375,942 ) Non-Same-Store FreightYard Townhomes & Flats - Minneapolis, MN — 1,889 23,616 877 1,895 24,487 26,382 ( 1,171 ) 2019 30 years Ironwood - Minneapolis, MN — 2,165 36,874 84 2,167 36,956 39,123 ( 1,187 ) 2020 30 years Lugano at Cherry Creek - Denver, CO — 7,679 87,766 635 7,679 88,401 96,080 ( 4,330 ) 2019 30 years Parkhouse - Thornton, CO — 10,474 132,105 228 10,484 132,323 142,807 ( 1,722 ) 2020 30 years SouthFork Townhomes - Lakeville, MN 21,675 3,502 40,153 7,122 3,583 47,194 50,777 ( 3,638 ) 2019 30 years Total Non-Same-Store $ 21,675 $ 25,709 $ 320,514 $ 8,946 $ 25,808 $ 329,361 $ 355,169 $ ( 12,048 ) Total Multifamily $ 298,445 $ 145,289 $ 1,464,272 $ 169,817 $ 163,058 $ 1,616,320 $ 1,779,378 $ ( 387,990 ) F-36 Table of Contents CENTERSPACE AND SUBSIDIARIES December 31, 2020 Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands) Gross amount at which carried at Life on which Initial Cost to Company close of period depreciation in Costs capitalized Date of latest income Buildings & subsequent to Buildings & Accumulated Construction statement is Description Encumbrances (1) Land Improvements acquisition Land Improvements Total Depreciation or Acquisition computed Other - Mixed Use 71 France - Edina, MN — $ — $ 5,879 $ 867 $ — $ 6,746 $ 6,746 $ ( 1,151 ) 2016 30 - 37 years Lugano at Cherry Creek - Denver, CO — — 1,600 206 — 1,806 1,806 ( 72 ) 2019 30 years Oxbo - St Paul, MN — — 3,472 54 — 3,526 3,526 ( 436 ) 2015 30 years Plaza - Minot, ND — 389 5,444 3,845 607 9,071 9,678 ( 4,305 ) 2009 30 - 37 years Red 20 - Minneapolis, MN — — 2,525 419 — 2,944 2,944 ( 683 ) 2015 30 - 37 years Total Other - Mixed Use — $ 389 $ 18,920 $ 5,391 $ 607 $ 24,093 $ 24,700 $ ( 6,647 ) Other - Commercial 3100 10th St SW - Minot, ND — $ 246 $ 1,866 $ ( 1 ) $ 246 $ 1,865 $ 2,111 $ ( 103 ) 2019 30 years Minot IPS - Minot, ND — 416 5,952 — 416 5,952 6,368 ( 4,509 ) 2012 30 - 37 years Total Other - Commercial — $ 662 $ 7,818 $ ( 1 ) $ 662 $ 7,817 $ 8,479 $ ( 4,612 ) Total $ 298,445 $ 146,340 $ 1,491,010 $ 175,207 $ 164,327 $ 1,648,230 $ 1,812,557 $ ( 399,249 ) (1) Amounts in this column are the mortgages payable balance as of December 31, 2020. These amounts do not include amounts owing under the Company's multi-bank line of credit, term loans, or unsecured senior notes. F-37 Table of Contents CENTERSPACE AND SUBSIDIARIES December 31, 2020 and 2019 Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands) Reconciliations of the carrying value of total property owned for the years ended December 31, 2020 and 2019 are as follows: (in thousands) Year Ended December 31, 2020 2019 Balance at beginning of year $ 1,643,078 $ 1,627,636 Additions during year Multifamily and Other 181,771 168,504 Improvements and Other 27,460 21,868 1,852,309 1,818,008 Deductions during year Cost of real estate sold ( 38,111 ) ( 171,112 ) Other (1) ( 1,641 ) ( 3,818 ) Balance at close of year $ 1,812,557 $ 1,643,078 Reconciliations of accumulated depreciation/amortization for the years ended December 31, 2020 and 2019 are as follows: (in thousands) Year Ended December 31, 2020 2019 Balance at beginning of year $ 349,122 $ 353,871 Additions during year Provisions for depreciation 72,051 71,787 Deductions during year Accumulated depreciation on real estate sold or classified as held for sale ( 21,440 ) ( 72,758 ) Write down of asset and accumulated depreciation on impaired assets — — Other (1) ( 484 ) ( 3,778 ) Balance at close of year $ 399,249 $ 349,122 F-38 Table of Contents CENTERSPACE AND SUBSIDIARIES December 31, 2020 and 2019 Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands) Reconciliations of unimproved land for the years ended December 31, 2020 and 2019 are as follows: (in thousands) Year Ended December 31, 2020 2019 Balance at beginning of year $ 1,376 $ 5,301 Deductions during year Cost of real estate sold ( 1,376 ) ( 3,925 ) Balance at close of year — 1,376 Total real estate investments, excluding mortgage notes receivable (2) $ 1,413,308 $ 1,295,332 (1) Consists of miscellaneous disposed assets. (2) The net basis, including held for sale properties, for Federal Income Tax purposes was $ 1.4 billion and $ 1.3 billion at December 31, 2020 and December 31, 2019, respectively. F-39