EX-99.1 2 centerspace06302021ex991.htm EX-99.1 Document

Exhibit 99.1
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Earnings Release
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Centerspace Reports Strong Second Quarter 2021 Financial Results; Improved Financial Outlook
MINNEAPOLIS, MN, August 2, 2021 – Centerspace (NYSE: CSR) announced today its financial and operating results for the three and six months ended June 30, 2021. The tables below show Net Income, Funds from Operations (“FFO”)1, and Core FFO1, all on a per share basis, for the three and six months ended June 30, 2021; Same-Store Revenues, Expenses, and Net Operating Income (“NOI”)1 over comparable periods; and Same-Store Weighted-Average Occupancy for each of the three months ended June 30, 2021, March 31, 2021, and June 30, 2020.
 Three Months Ended June 30,Six Months Ended June 30,
Per Share2021202020212020
Net Income - diluted$1.48 $(0.44)$1.02 $(1.13)
FFO - diluted$0.95 $0.93 $1.87 $1.58 
Core FFO - diluted$0.98 $0.91 $1.93 $1.81 
 Year-Over-Year
Comparison		Sequential
Comparison		YTD Comparison
Same-Store ResultsQ2 2021 vs. Q2 2020Q2 2021 vs. Q1 20212021 vs. 2020
Revenues3.2 %1.3 %1.9 %
Expenses6.2 %0.9 %2.1 %
NOI1.2 %1.6 %1.7 %
Three months ended
Same-Store ResultsJune 30, 2021March 31, 2021June 30, 2020
Weighted Average Occupancy94.9 %94.9 %94.5 %
(1)NOI, FFO, Core FFO, and same-store results are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to “Non-GAAP Financial Measures and Reconciliations” below.
Highlights
•Net Income was $1.48 per diluted share for the second quarter of 2021, compared to Net Loss of $(0.44) per diluted share for the same period of 2020;
•Core FFO increased 7.7% to $0.98 per diluted share for the three months ended June 30, 2021, compared to $0.91 for the three months ended June 30, 2020 and 6.6% to $1.93 per diluted share for the six months ended June 30, 2021, compared to $1.81 for the six months ended June 30, 2020;
•Same-store revenues increased by 3.2% for the second quarter of 2021 compared to the second quarter of 2020;
•Same-store new lease over lease rates were 10.0% for the second quarter of 2021, compared to a decline of (1.2)% in the same period of the prior year. Same-store renewal lease over lease rates were 5.6% for the second quarter of 2021, compared to 3.2% for the same period the prior year;
•Increased the mid-point of the earnings per share outlook by 123% and the mid-point of Core FFO by 7%;
•Entered into Contribution Agreements with entities managed by KMS Management, Inc. ("KMS"), to acquire a portfolio of 17 communities funded through the issuance of up to $197.3 million Convertible Preferred Operating Partnerships Units and approximately $126.5 million in mortgage liabilities; and
•Continued to strengthen the balance sheet by issuing 731,000 common shares under the 2019 ATM program for net proceeds of $54.6 million.
1

Acquisitions and Dispositions
During the quarter, Centerspace entered into Contribution Agreements with entities managed by KMS. Upon closing, Centerspace will acquire a portfolio of 17 communities. Centerspace will fully fund the transaction through the issuance of up to $197.3 million, which will be paid in the form of Convertible Preferred Operating Partnership units that pay a 3.875% dividend and are convertible, at the holder's option, into common units at an exchange rate of 1.2048 common units per Convertible Preferred Operating Units representing a conversion price of $83.00 per unit. The KMS partners will have the ability to receive up to an aggregate of $16.2 million in cash in lieu of Convertible Preferred Operating Partnership Units. The Company will acquire real property assets subject to approximately $126.5 million in liabilities, a portion of which the company intends to refinance upon consummation of the transactions. The transaction is expected to close during the third quarter.
During the quarter, Centerspace disposed of 589 apartment homes in Rochester, Minnesota for an aggregate sale price of $60.0 million.
Balance Sheet
At the end of the second quarter, Centerspace had $168.2 million of total liquidity on its balance sheet, consisting of $163.0 million available under the line of credit and cash and cash equivalents of $5.2 million.
Improved 2021 Financial Outlook
Centerspace revised its 2021 financial outlook, which includes the anticipated acquisition of KMS during the third quarter. For additional information, see S-16 of the Supplemental Financial and Operating Data for the quarter ended June 30, 2021 included at the end of this release. These ranges should be considered in their entirety. The revised outlook is:
Previous Outlook for 2021Updated Outlook for 2021
LowHighLowHigh
Earnings per Share – diluted$0.10 $0.50 $0.58 $0.76 
Same-Store Revenue0.0 %3.0 %2.0 %3.5 %
Same-Store Expenses3.0 %5.0 %4.0 %6.0 %
Same-Store NOI(1.5)%1.5 %0.5 %2.0 %
FFO per Share – diluted$3.38 $3.62 $3.64 $3.83 
Core FFO per Share – diluted$3.48 $3.72 $3.78 $3.94 
COVID-19 Developments
The COVID-19 pandemic, including the associated economic disruptions, has continued to impact business and operations since March 2020. The company continues to prioritize the health and well-being of its residents, team members, and the communities it serves.
A discussion of the ongoing and potential effects of the COVID-19 pandemic on financial condition, results of operations, and cash flows can be found in "Management's Discussion and Analysis of Financial Conditions and Results of Operations" presented in the company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 22, 2021. For a more detailed description of the risks and uncertainties affecting business, see the risk factors presented in Item 1A in the company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 22, 2021.
Upcoming Events
Centerspace is scheduled to participate in the BMO 2021 Real Estate Conference, which will be held in New York City on September 14, 2021.
Centerspace is scheduled to participate in the Bank of America 2021 Global Real Estate Conference, which will be held virtually on September 21-23, 2021.
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Earnings Call
Live webcast and replay:  https://ir.centerspacehomes.com
  
Live Conference CallConference Call Replay
Tuesday, August 3, 2021, at 10:00 AM ETReplay available until August 17, 2021
USA Toll Free Number1-877-509-9785USA Toll Free Number1-877-344-7529
International Toll Free Number1-412-902-4132International Toll Free Number1-412-317-0088
Canada Toll Free Number1-855-669-9657Canada Toll Free Number1-855-669-9658
  Conference Number10157697
Supplemental Information
Supplemental Operating and Financial Data for the quarter ended June 30, 2021 included herein (“Supplemental Information”), is available in the Investors section on Centerspace’s website at www.centerspacehomes.com or by calling Investor Relations at 701-837-7104. Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined and reconciled in the Supplemental Financial and Operating Data, which accompanies this earnings release.  
About Centerspace
Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of June 30, 2021, Centerspace owned 62 apartment communities consisting of 11,579 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for 2021 by the Minneapolis Star Tribune. For more information, please visit www.centerspacehomes.com.
Forward-Looking Statements
Certain statements in this press release and the accompanying Supplemental Operating and Financial Data are based on the company's current expectations and assumptions, and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial conditions, or plans expressed or implied by the forward-looking statements. Although the company believes the expectations reflected in its forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be achieved. Such risks, uncertainties, and other factors that might cause such differences include, but are not limited to those risks and uncertainties detailed from time to time in Centerspace's filings with the Securities and Exchange Commission, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” contained in its Annual Report on Form 10-K for the year ended December 31, 2020, in its subsequent quarterly reports on Form 10-Q, and in other public reports. The company assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.
Contact Information
Investor Relations
Emily Miller
Phone: 701-837-7104
IR@centerspacehomes.com
Marketing & Media
Kelly Weber
Phone: 701-837-7104
kweber@centerspacehomes.com
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Supplemental Financial and Operating Data
Table of Contents
June 30, 2021


Common Share Data (NYSE: CSR)
 2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
 20212021202020202020
High closing price$79.71 $73.42 $74.55 $73.53 $76.82 
Low closing price$67.28 $68.00 $65.79 $61.87 $44.36 
Average closing price$71.99 $71.37 $70.30 $70.15 $63.91 
Closing price at end of quarter$78.90 $68.00 $70.64 $65.17 $70.49 
Common share distributions – annualized$2.80 $2.80 $2.80 $2.80 $2.80 
Closing dividend yield – annualized3.6 %4.1 %4.0 %4.3 %4.0 %
Closing common shares outstanding (thousands)
14,045 13,220 13,027 12,976 12,827 
Closing limited partnership units outstanding (thousands)
881 950 977 1,018 1,022 
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)
$1,177,661 $963,560 $989,243 $911,989 $976,216 

S-1


CENTERSPACE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands)
 Three Months Ended
 6/30/20213/31/202112/31/20209/30/20206/30/2020
REVENUE$46,656 $46,648 $45,540 $44,138 $43,910 
EXPENSES
Property operating expenses, excluding real estate taxes13,018 13,449 12,668 13,129 12,360 
Real estate taxes5,742 5,792 5,256 5,402 5,410 
Property management expense2,085 1,767 1,460 1,442 1,345 
Casualty (gain) loss(27)101 331 91 913 
Depreciation/amortization19,308 19,992 20,282 18,995 18,156 
General and administrative expenses3,797 3,906 3,733 3,077 3,202 
TOTAL EXPENSES$43,923 $45,007 $43,730 $42,136 $41,386 
Operating income2,733 1,641 1,810 2,002 2,524 
Interest expense(7,089)(7,231)(6,903)(6,771)(6,940)
Interest and other income (loss)619 431 404 277 521 
Income (loss) before gain (loss) on sale of real estate and other investments, and gain (loss) on litigation settlement(3,737)(5,159)(4,689)(4,492)(3,895)
Gain (loss) on sale of real estate and other investments26,840 — 17 25,676 (190)
Net income (loss)$23,103 $(5,159)$(4,672)$21,184 $(4,085)
Dividends to preferred unitholders(160)(160)(160)(160)(160)
Net (income) loss attributable to noncontrolling interest – Operating Partnership(1,386)469 460 (1,387)447 
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities(19)(17)(6)(8)(5)
Net income (loss) attributable to controlling interests21,538 (4,867)(4,378)19,629 (3,803)
Dividends to preferred shareholders(1,607)(1,607)(1,607)(1,607)(1,609)
Discount (premium) on redemption of preferred shares— — — (1)25 
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS$19,931 $(6,474)$(5,985)$18,021 $(5,387)
Per Share Data - Basic
Net earnings (loss) per common share – basic$1.49 $(0.49)$(0.46)$1.40 $(0.44)
Per Share Data - Diluted
Net earnings (loss) per common share – diluted$1.48 $(0.49)$(0.46)$1.38 $(0.44)
S-2

CENTERSPACE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)
6/30/20213/31/202112/31/20209/30/20206/30/2020
ASSETS
Real estate investments
Property owned$1,838,837 $1,883,407 $1,812,557 $1,805,390 $1,694,033 
Less accumulated depreciation(407,400)(408,014)(399,249)(380,392)(383,917)
1,431,437 1,475,393 1,413,308 1,424,998 1,310,116 
Mortgage loans receivable37,457 30,107 24,661 17,986 10,961 
Total real estate investments1,468,894 1,505,500 1,437,969 1,442,984 1,321,077 
Cash and cash equivalents5,194 10,816 392 16,804 52,714 
Restricted cash8,444 1,610 6,918 2,199 2,535 
Other assets17,218 18,427 18,904 16,947 16,484 
TOTAL ASSETS$1,499,750 $1,536,353 $1,464,183 $1,478,934 $1,392,810 
LIABILITIES, MEZZANINE EQUITY, AND EQUITY
LIABILITIES
Accounts payable and accrued expenses$52,413 $53,852 $55,609 $58,596 $54,883 
Revolving line of credit87,000 181,544 152,871 135,000 63,000 
Notes payable, net of loan costs319,286 319,236 269,246 269,202 269,155 
Mortgages payable, net of loan costs287,143 293,709 297,074 313,065 323,705 
TOTAL LIABILITIES$745,842 $848,341 $774,800 $775,863 $710,743 
SERIES D PREFERRED UNITS$18,022 $16,560 $16,560 $16,560 $16,560 
EQUITY
Series C Preferred Shares of Beneficial Interest93,530 93,530 93,530 93,530 93,579 
Common Shares of Beneficial Interest1,033,940 980,453 968,263 968,436 958,292 
Accumulated distributions in excess of net income(433,310)(443,409)(427,681)(412,577)(421,515)
Accumulated other comprehensive income (loss)(12,064)(12,798)(15,905)(17,256)(18,139)
Total shareholders’ equity$682,096 $617,776 $618,207 $632,133 $612,217 
Noncontrolling interests – Operating Partnership53,133 53,007 53,930 53,669 52,558 
Noncontrolling interests – consolidated real estate entities657 669 686 709 732 
Total equity$735,886 $671,452 $672,823 $686,511 $665,507 
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY$1,499,750 $1,536,353 $1,464,183 $1,478,934 $1,392,810 
S-3

CENTERSPACE
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (unaudited)

This release contains certain non-GAAP financial measures. The non-GAAP financial measures should not be considered a substitute for operating results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The definitions and calculations of these non-GAAP financial measures, as calculated by us, may not be comparable to non-GAAP financial measures reported by other REITs that do not define each of the non-GAAP financial measures exactly as Centerspace does.
The company provides certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or in service for substantially all of the periods being compared, and, in the case of newly-constructed properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, Centerspace determines the composition of its same-store pool for that year as well as adjusts the previous year, which allows us to evaluate full period-over-period operating comparisons for existing apartment communities and their contribution to net income. The company believes that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of its communities are performing year-over-year. Centerspace uses this measure to assess whether or not the company has been successful in increasing NOI, renewing the leases on existing residents, controlling operating costs, and making prudent capital improvements.
Reconciliation of Operating Income to Net Operating Income
Net operating income, or NOI, is a non-GAAP financial measure which the company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes 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, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.
 (in thousands, except percentages)
 Three Months EndedSequentialYear-Over-Year
 6/30/20213/31/20216/30/2020$ Change% Change$ Change% Change
Operating income$2,733 $1,641 $2,524 $1,092 66.5 %$209 8.3 %
Adjustments:
Property management expenses2,085 1,767 1,345 318 18.0 %740 55.0 %
Casualty (gain) loss(27)101 913 (128)(126.7)%(940)(103.0)%
Depreciation and amortization19,308 19,992 18,156 (684)(3.4)%1,152 6.3 %
General and administrative expenses3,797 3,906 3,202 (109)(2.8)%595 18.6 %
Net operating income$27,896 $27,407 $26,140 $489 1.8 %$1,756 6.7 %
Revenue
Same-store$40,521 $40,000 $39,282 $521 1.3 %$1,239 3.2 %
Non-same-store4,436 4,241 931 195 4.6 %3,505 376.5 %
Other properties646 650 402 (4)(0.6)%244 60.7 %
Dispositions1,053 1,757 3,295 (704)(40.1)%(2,242)(68.0)%
Total46,656 46,648 43,910 8 — 2,746 6.3 %
Property operating expenses, including real estate taxes
Same-store16,528 16,378 15,567 150 0.9 %961 6.2 %
Non-same-store1,439 1,496 385 (57)(3.8)%1,054 273.8 %
Other properties268 289 252 (21)(7.3)%16 6.3 %
Dispositions525 1,078 1,566 (553)(51.3)%(1,041)(66.5)%
Total18,760 19,241 17,770 (481)(2.5)%990 5.6 %
Net operating income
Same-store23,993 23,622 23,715 371 1.6 %278 1.2 %
Non-same-store2,997 2,745 546 252 9.2 %2,451 448.9 %
Other properties378 361 150 17 4.7 %228 152.0 %
Dispositions528 679 1,729 (151)(100.0)%(1,201)(69.5)%
Total$27,896 $27,407 $26,140 $489 1.8 %$1,756 6.7 %
S-4

(in thousands, except percentages)
Six Months Ended June 30,
20212020$ Change% Change
Operating income$4,374 $4,528 $(154)(3.4)%
Adjustments:
Property management expenses3,852 2,899 953 32.9 %
Casualty (gain) loss74 1,240 (1,166)(94.0)%
Depreciation and amortization39,300 36,316 2,984 8.2 %
General and administrative expenses7,703 6,630 1,073 16.2 %
Net operating income$55,303 $51,613 $3,690 7.1 %
Revenue
Same-store$80,521 $79,056 $1,465 1.9 %
Non-same-store8,677 1,202 7,475 621.9 %
Other properties1,296 1,375 (79)(5.7)%
Dispositions2,810 6,683 (3,873)(58.0)%
Total93,304 88,316 4,988 5.6 %
Property operating expenses, including real estate taxes
Same-store32,906 32,222 684 2.1 %
Non-same-store2,935 504 2,431 482.3 %
Other properties557 530 27 5.1 %
Dispositions1,603 3,447 (1,844)(53.5)%
Total38,001 36,703 1,298 3.5 %
Net operating income
Same-store47,615 46,834 781 1.7 %
Non-same-store5,742 698 5,044 722.6 %
Other properties739 845 (106)(12.5)%
Dispositions1,207 3,236 (2,029)(62.7)%
Total$55,303 $51,613 $3,690 7.1 %
S-5

Reconciliation of Same-Store Controllable Expenses to Total Property Operating Expenses, Including Real Estate Taxes
Same-store controllable expenses exclude real estate taxes and insurance, in order to provide a measure of expenses that are within management's control, and is used for the purposes of budgeting, business planning, and performance evaluation. This is a non-GAAP financial measure and should not be considered an alternative to total expenses or total property operating expenses.
 (in thousands, except percentages)
 Three Months Ended June 30,Six Months Ended June 30,
 20212020$ Change% Change20212020$ Change% Change
Controllable expenses
On-site compensation(1)
$4,427 $4,089 $338 8.3 %$8,694 $8,545 $149 1.7 %
Repairs and maintenance2,405 2,435 (30)(1.2)%4,497 4,665 (168)(3.6)%
Utilities2,367 2,174 193 8.9 %5,298 5,080 218 4.3 %
Administrative and marketing885 876 9 1.0 %1,746 1,742 4 0.2 %
Total$10,084 $9,574 $510 5.3 %$20,235 $20,032 $203 1.0 %
Non-controllable expenses
Real estate taxes$4,929 $4,784 $145 3.0 %$9,853 $9,719 $134 1.4 %
Insurance1,515 1,209 306 25.3 %2,818 2,471 347 14.0 %
Total$6,444 $5,993 $451 7.5 %$12,671 $12,190 $481 3.9 %
Property operating expenses, including real estate taxes - non-same-store$1,439 $385 $1,054 273.8 %$2,935 $504 $2,431 482.3 %
Property operating expenses, including real estate taxes - other properties268 252 16 6.3 %557 530 27 5.1 %
Property operating expenses, including real estate taxes - dispositions525 1,566 (1,041)(66.5)%1,603 3,447 (1,844)(53.5)%
Total property operating expenses, including real estate taxes$18,760 $17,770 $990 5.6 %$38,001 $36,703 $1,298 3.5 %
(1)On-site compensation for administration, leasing, and maintenance personnel.
Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations
Centerspace believes that FFO, which is a non-GAAP financial measure used as a standard supplemental measure for equity real estate investment trusts, is helpful to investors in understanding its operating performance, primarily because its calculation does not assume that the value of real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation.
Centerspace uses the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding:
•depreciation and amortization related to real estate;
•gains and losses from the sale of certain real estate assets; and
•impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.
The exclusion in Nareit’s definition of FFO of impairment write-downs and gains and losses from the sale of real estate assets helps to identify the operating results of the long-term assets that form the base of the company's investments, and assists management and investors in comparing those operating results between periods.
Due to the limitations of the Nareit FFO definition, Centerspace has made certain interpretations in applying this definition. The company believes that all such interpretations not specifically identified in the Nareit definition are consistent with this definition. Nareit’s FFO White Paper 2018 Restatement clarified that impairment write-downs of land related to a REIT’'s main business are excluded from FFO and a REIT has the option to exclude impairment write-downs of assets that are incidental to its main business.
While FFO is widely used by Centerspace as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO in the same way. Accordingly, FFO presented here is not necessarily comparable to FFO
S-6

presented by other real estate companies. FFO should not be considered as an alternative to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash flow needs, including the ability to service indebtedness or make distributions to shareholders.
Core Funds from Operations (“Core FFO”) is FFO as adjusted for non-routine items or items not considered core to business operations. By further adjusting for items that are not considered part of core business operations, the company believes that Core FFO provides investors with additional information to compare core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income, or any other GAAP measurement of performance, but rather should be considered an additional supplemental measure. Core FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund the company's cash needs, including its ability to service indebtedness or make distributions to shareholders. Core FFO is a non-GAAP and non-standardized financial measure that may be calculated differently by other REITs and should not be considered a substitute for operating results determined in accordance with GAAP.
(in thousands, except per share amounts)
Three Months EndedSix Months Ended
6/30/20213/31/202112/31/20209/30/20206/30/20206/30/20216/30/2020
Funds From Operations     
Net income (loss) available to common shareholders$19,931 $(6,474)$(5,985)$18,021 $(5,387)$13,457 $(13,826)
Adjustments:
Noncontrolling interests – Operating Partnership1,386 (469)(460)1,387 (447)917 (1,139)
Depreciation and amortization19,308 19,992 20,282 18,995 18,156 39,300 36,316 
Less depreciation – non real estate(87)(98)(87)(85)(88)(185)(181)
Less depreciation – partially owned entities(24)(24)(33)(31)(33)(48)(315)
(Gain) loss on sale of real estate(26,840)— (17)(25,676)190 (26,840)190 
FFO applicable to common shares and Units$13,674 $12,927 $13,700 $12,611 $12,391 $26,601 $21,045 
Adjustments to Core FFO:
Casualty (gain) loss— — 204 545 — — — 
Loss on extinguishment of debt3 — 2 4 17 3 17 
Rebranding costs— — 402 — — — — 
Technology implementation costs447 413 — — — 860 — 
(Gain) loss on marketable securities— — — — (175)— 3,378 
(Discount) premium on redemption of preferred shares— — — 1 (25)— (298)
Core FFO applicable to common shares and Units$14,124 $13,340 $14,308 $13,161 $12,208 $27,464 $24,142 
Funds from operations applicable to common shares and Units$13,674 $12,927 $13,700 $12,611 $12,391 $26,601 $21,045 
Dividends to preferred unitholders160 160 160 160 160 320 320 
Funds from operations applicable to common shares and Units - diluted$13,834 $13,087 $13,860 $12,771 $12,551 $26,921 $21,365 
Core funds from operations applicable to common shares and Units$14,124 $13,340 $14,308 $13,161 $12,208 $27,464 $24,142 
Dividends to preferred unitholders160 160 160 160 160 320 320 
Core funds from operations applicable to common shares and Units - diluted$14,284 $13,500 $14,468 $13,321 $12,368 $27,784 $24,462 
Per Share Data
Earnings (loss) per share and Unit - diluted$1.48 $(0.49)$(0.46)$1.38 $(0.44)$1.02 $(1.13)
FFO per share and Unit - diluted$0.95 $0.92 $0.97 $0.90 $0.93 $1.87 $1.58 
Core FFO per share and Unit - diluted$0.98 $0.95 $1.02 $0.94 $0.91 $1.93 $1.81 
Weighted average shares and Units - diluted14,514 14,282 14,222 14,143 13,558 14,402 13,482 
S-7

Reconciliation of Net Income (Loss) Available to Common Shareholders to Adjusted EBITDA
Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain/loss on sale of real estate and other investments, impairment of real estate investments, gain/loss on extinguishment of debt, gain/loss from involuntary conversion; and other non-routine items or items not considered core to business operations. The company considers Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, the cost of debt, or non-operating gains and losses. Adjusted EBITDA is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP.
(in thousands)
Three Months EndedSix Months Ended
6/30/20213/31/202112/31/20209/30/20206/30/20206/30/20216/30/2020
Adjusted EBITDA
Net income (loss) available to common shareholders$21,538 $(4,867)$(4,378)$19,629 $(3,803)$16,671 $(10,810)
Adjustments: 
Dividends to preferred unitholders160 160 160 160 160 320 320 
Noncontrolling interests – Operating Partnership1,386 (469)(460)1,387 (447)917 (1,139)
Income (loss) before noncontrolling interests – Operating Partnership$23,084 $(5,176)$(4,678)$21,176 $(4,090)$17,908 $(11,629)
Adjustments:  
Interest expense7,075 7,216 6,888 6,756 6,926 14,291 13,690 
Loss on extinguishment of debt3 — 2 4 17 3 17 
Depreciation/amortization related to real estate investments19,284 19,969 20,250 18,964 18,123 39,253 36,001 
Casualty (gain) loss — — 204 545 — — — 
Interest income(583)(407)(328)(256)(331)(990)(928)
(Gain) loss on sale of real estate and other investments(26,840)— (17)(25,676)190 (26,840)190 
Technology implementation costs447 413 — — — 860 — 
(Gain) loss on marketable securities— — — — (175)— 3,378 
Adjusted EBITDA$22,470 $22,015 $22,321 $21,513 $20,660 $44,485 $40,719 

S-8


CENTERSPACE
DEBT ANALYSIS
(in thousands)
Debt Maturity Schedule
Annual Expirations
Future Maturities of Debt
Secured Fixed
Debt
Unsecured Fixed
Debt(1)
Unsecured Variable DebtTotal
Debt		% of
Total Debt
Weighted
Average Interest Rate(2)
2021 (remainder)$12,814 $— $— $12,814 1.8 %5.73 %
202233,028 50,000 37,000 120,028 17.3 %3.14 %
202343,163 — — 43,163 6.2 %4.02 %
2024— 70,000 — 70,000 10.1 %3.66 %
202532,518 75,000 — 107,518 15.5 %4.34 %
Thereafter166,840 175,000 — 341,840 49.1 %3.58 %
Total debt$288,363 $370,000 $37,000 $695,363 100.0 %3.70 %
(1)Term loans have variable interest rates that are fixed with interest rate swaps and $50.0 million of the variable interest, line of credit is fixed with an interest rate swap.
(2)Weighted average interest rate of debt that matures during the year, including the effect of interest rate swaps on the term loans and line of credit.

6/30/20213/31/202112/31/20209/30/20206/30/2020
Debt Balances Outstanding     
Secured fixed rate$288,363 $295,001 $298,445 $314,511 $325,230 
Unsecured fixed rate line of credit(1)
50,000 50,000 50,000 50,000 50,000 
Unsecured variable rate line of credit37,000 131,544 102,871 85,000 13,000 
Unsecured term loans145,000 145,000 145,000 145,000 145,000 
Unsecured senior notes175,000 175,000 125,000 125,000 125,000 
Debt total$695,363 $796,545 $721,316 $719,511 $658,230 
Mortgage debt weighted average interest rate3.90 %3.92 %3.93 %3.99 %4.01 %
Lines of credit rate (rate with swap)2.24 %2.18 %2.35 %3.35 %2.97 %
Term loan rate (rate with swap)4.19 %4.11 %4.18 %4.18 %4.12 %
Senior notes rate3.47 %3.47 %3.78 %3.78 %3.78 %
Total debt3.70 %3.37 %3.62 %3.68 %3.87 %
(1)A portion of the primary line of credit is fixed through an interest rate swap.
S-9

CENTERSPACE 
CAPITAL ANALYSIS 
(in thousands, except per share and unit amounts)
Three Months Ended
6/30/20213/31/202112/31/20209/30/20206/30/2020
Equity Capitalization
Common shares outstanding14,045 13,220 13,027 12,976 12,827 
Operating partnership units outstanding881 950 977 1,018 1,022 
Total common shares and units outstanding14,926 14,170 14,004 13,994 13,849 
Market price per common share (closing price at end of period)$78.90 $68.00 $70.64 $65.17 $70.49 
Equity capitalization-common shares and units$1,177,661 $963,560 $989,243 $911,989 $976,216 
Recorded book value of preferred shares$93,530 $93,530 $93,530 $93,530 $93,579 
Total equity capitalization$1,271,191 $1,057,090 $1,082,773 $1,005,519 $1,069,795 
Series D Preferred Units$18,022 $16,560 $16,560 $16,560 $16,560 
Debt Capitalization
Total debt$695,363 $796,545 $721,317 $719,511 $658,230 
Total capitalization$1,984,576 $1,870,195 $1,820,650 $1,741,590 $1,744,585 
Total debt to total capitalization(1)
35 %43.1 %39.6 %41.3 %37.7 %
(1)Total debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet, market value of common shares and operating partnership units, and book value of Series C preferred shares and Series D preferred units outstanding at the end of the period.

Three Months EndedSix Months Ended
6/30/20213/31/202112/31/20209/30/20206/30/20206/30/20216/30/2020
Debt service coverage ratio(1)
2.62  x2.53  x2.73  x2.65  x2.48  x2.58  x2.45  x
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization2.21  x2.14  x2.28  x2.21  x2.05  x2.17  x2.01  x
Net debt/Adjusted EBITDA(2)
7.68  x8.92  x8.07  x7.97  x7.33  x7.76  x7.44  x
Net debt and preferred equity/Adjusted EBITDA(2)
8.92  x10.17  x9.31  x9.25  x8.66  x9.01  x8.79  x
Distribution Data
Common shares and Units outstanding at record date14,926 14,171 14,004 13,994 13,849 14,926 13,849 
Total common distribution declared
$10,448 $9,919 $9,803 $9,796 $9,694 $20,367 $18,939 
Common distribution per share and Unit
$0.70 $0.70 $0.70 $0.70 $0.70 $1.40 $1.40 
Payout ratio (Core FFO per diluted share and unit basis)(3)
71.4 %73.7 %68.6 %74.5 %76.9 %72.5 %77.3 %
(1)Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization. This term is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.
(2)Net debt is the total debt balance less cash and cash equivalents and net tax deferred exchange proceeds (included within restricted cash). Adjusted EBITDA is annualized for periods less than one year. Net debt and adjusted EBITDA are non-GAAP financial measures and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.
(3)Payout ratio (Core FFO per diluted share and unit basis) is the ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual Core FFO per diluted share and unit. This term is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP.
S-10



CENTERSPACE
SAME-STORE SECOND QUARTER COMPARISONS
(in thousands, except property data amounts and percentages)

 Apartment Homes IncludedRevenuesExpensesNOI
RegionsQ2 2021Q2 2020% ChangeQ2 2021Q2 2020% ChangeQ2 2021Q2 2020% Change
Denver, CO992 $5,486 $5,287 3.8 %$1,837 $1,612 14.0 %$3,649 $3,675 (0.7)%
Minneapolis, MN2,355 10,538 10,708 (1.6)%4,649 4,097 13.5 %5,889 6,611 (10.9)%
North Dakota2,422 8,078 7,768 4.0 %3,199 3,158 1.3 %4,879 4,610 5.8 %
Omaha, NE1,370 4,037 3,838 5.2 %1,885 1,783 5.7 %2,152 2,055 4.7 %
Rochester, MN1,122 4,709 4,594 2.5 %1,937 1,921 0.8 %2,772 2,673 3.7 %
St. Cloud, MN1,192 3,634 3,546 2.5 %1,582 1,524 3.8 %2,052 2,022 1.5 %
Other Mountain West1,223 4,039 3,541 14.1 %1,439 1,472 (2.2)%2,600 2,069 25.7 %
Same-Store Total10,676 $40,521 $39,282 3.2 %$16,528 $15,567 6.2 %$23,993 $23,715 1.2 %


 % of NOI Contribution
Weighted Average Occupancy (1)
Average Monthly
Rental Rate (2)
Average Monthly
Revenue per Occupied Home (3)
RegionsQ2 2021Q2 2020GrowthQ2 2021Q2 2020% ChangeQ2 2021Q2 2020% Change
Denver, CO15.2 %94.2 %93.1 %1.1 %$1,727 $1,774 (2.6)%$1,957 $1,908 2.7 %
Minneapolis, MN24.5 %94.2 %93.9 %0.3 %1,510 1,496 0.9 %1,584 1,615 (1.9)%
North Dakota20.3 %95.9 %95.9 %— 1,078 1,044 3.3 %1,159 1,114 4.0 %
Omaha, NE9.0 %95.5 %94.9 %0.6 %927 904 2.5 %1,029 984 4.6 %
Rochester, MN11.6 %94.5 %95.4 %(0.9)%1,403 1,386 1.2 %1,480 1,431 3.4 %
St. Cloud, MN8.6 %92.7 %93.7 %(1.0)%1,005 953 5.5 %1,097 1,059 3.5 %
Other Mountain West10.8 %98.1 %94.4 %3.7 %1,014 952 6.5 %1,122 1,023 9.7 %
Same-Store Total100.0 %94.9 %94.5 %0.4 %$1,233 $1,209 2.0 %$1,333 $1,298 2.8 %
(1)Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rent. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.
(2)Average monthly rental rate is scheduled rent divided by the total number of apartment homes.
(3)Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.
S-11


CENTERSPACE
SAME-STORE SEQUENTIAL QUARTER COMPARISONS
(in thousands, except property data amounts and percentages)

Apartment Homes IncludedRevenuesExpensesNOI
RegionsQ2 2021Q1 2021% ChangeQ2 2021Q1 2021% ChangeQ2 2021Q1 2021% Change
Denver, CO992 $5,486 $5,407 1.4 %$1,837 $1,868 (1.7)%$3,649 $3,539 3.1 %
Minneapolis, MN2,355 10,538 10,466 0.7 %4,649 4,431 4.9 %5,889 6,035 (2.4)%
North Dakota2,422 8,078 7,949 1.6 %3,199 3,271 (2.2)%4,879 4,678 4.3 %
Omaha, NE1,370 4,037 4,026 0.3 %1,885 1,762 7.0 %2,152 2,264 (4.9)%
Rochester, MN1,122 4,709 4,643 1.4 %1,937 1,986 (2.5)%2,772 2,657 4.3 %
St. Cloud, MN1,192 3,634 3,656 (0.6)%1,582 1,635 (3.2)%2,052 2,021 1.5 %
Other Mountain West1,223 4,039 3,853 4.8 %1,439 1,425 1.0 %2,600 2,428 7.1 %
Same-Store Total10,676 $40,521 $40,000 1.3 %$16,528 $16,378 0.9 %$23,993 $23,622 1.6 %

% of NOI ContributionWeighted Average OccupancyAverage Monthly
Rental Rate		Average Monthly
Revenue per Occupied Home
RegionsQ2 2021Q1 2021GrowthQ2 2021Q1 2021% ChangeQ2 2021Q1 2021% Change
Denver, CO15.2 %94.2 %94.5 %(0.3)%$1,727 $1,715 0.7 %$1,957 $1,922 1.7 %
Minneapolis, MN24.5 %94.2 %92.9 %1.3 %1,510 1,494 1.1 %1,584 1,595 (0.6)%
North Dakota20.3 %95.9 %96.2 %(0.3)%1,078 1,061 1.6 %1,159 1,138 1.9 %
Omaha, NE9.0 %95.5 %95.1 %0.4 %927 912 1.6 %1,029 1,030 (0.1)%
Rochester, MN11.6 %94.5 %95.5 %(1.0)%1,403 1,374 2.1 %1,480 1,444 2.4 %
St. Cloud, MN8.6 %92.7 %94.6 %(1.9)%1,005 970 3.6 %1,097 1,081 1.3 %
Other Mountain West10.8 %98.1 %97.7 %0.4 %1,014 985 2.9 %1,122 1,075 4.4 %
Same-Store Total100.0 %94.9 %94.9 %— $1,233 $1,212 1.7 %$1,333 $1,316 1.3 %


S-12


CENTERSPACE
SAME-STORE YEAR-TO-DATE COMPARISONS
(in thousands, except property data amounts and percentages)

Apartment Homes IncludedRevenuesExpensesNOI
Regions20212020% Change20212020% Change20212020% Change
Denver, CO992 $10,893 $10,798 0.9 %$3,704 $3,416 8.4 %$7,189 $7,382 (2.6)%
Minneapolis, MN2,355 21,004 21,477 (2.2)%9,080 8,663 4.8 %11,924 12,814 (6.9)%
North Dakota2,422 16,027 15,479 3.5 %6,470 6,645 (2.6)%9,557 8,834 8.2 %
Omaha, NE1,370 8,063 7,652 5.4 %3,647 3,409 7.0 %4,416 4,243 4.1 %
Rochester, MN1,122 9,353 9,333 0.2 %3,923 3,858 1.7 %5,430 5,475 (0.8)%
St. Cloud, MN1,192 7,289 7,157 1.8 3,217 3,281 (2.0)%4,072 3,876 5.1 %
Other Mountain West1,223 7,892 7,160 10.2 %2,865 2,950 (2.9)%5,027 4,210 19.4 %
Same-Store Total10,676 $80,521 $79,056 1.9 %$32,906 $32,222 2.1 %$47,615 $46,834 1.7 %

% of NOI ContributionWeighted Average Occupancy Average Monthly
Rental Rate		Average Monthly
Revenue per Occupied Home
Regions20212020Growth20212020% Change20212020% Change
Denver, CO15.1 %94.4 %93.7 %0.7 %$1,721 $1,783 (3.5)%$1,940 $1,937 0.2 %
Minneapolis, MN24.9 %93.5 %94.1 %(0.6)%1,502 1,490 0.8 %1,589 1,616 (1.6)%
North Dakota20.1 %96.0 %96.0 %— 1,069 1,040 2.8 %1,148 1,109 3.5 %
Omaha, NE9.3 %95.3 %94.6 %0.7 %919 898 2.3 %1,029 984 4.7 %
Rochester, MN11.4 %95.0 %96.3 %(1.3)%1,389 1,382 0.5 %1,462 1,439 1.5 %
St. Cloud, MN8.6 %93.6 %94.3 %(0.7)%988 948 4.2 %1,089 1,061 2.5 %
Other Mountain West10.6 %97.9 %95.3 %2.6 %999 947 5.5 %1,099 1,024 7.6 %
Same-Store Total100.0 %94.9 %94.9 %— $1,223 $1,205 1.5 %$1,325 $1,301 1.9 %
S-13

CENTERSPACE
PORTFOLIO SUMMARY(1)
Three Months Ended
6/30/20213/31/202112/31/20209/30/20206/30/2020
Number of Apartment Homes at Period End
Same-Store10,676 11,265 10,567 10,567 11,257 
Non-Same-Store903 903 1,343 1,343 878 
All Communities11,579 12,168 11,910 11,910 12,135 
Average Monthly Rental Rate(2)
Same-Store$1,233 $1,200 $1,177 $1,178 $1,142 
Non-Same-Store1,617 1,584 1,599 1,597 1,594 
All Communities$1,263 $1,229 $1,225 $1,210 $1,175 
Average Monthly Revenue per Occupied Apartment Home(3)
Same-Store$1,333 $1,302 $1,282 $1,271 $1,232 
Non-Same-Store1,739 1,705 1,708 1,729 1,681 
All Communities$1,365 $1,332 $1,330 $1,307 $1,264 
Weighted Average Occupancy(4)
Same-Store94.9 %94.9 %95.0 %94.4 %94.6 %
Non-Same-Store94.2 %91.8 %92.3 %93.9 %93.9 %
All Communities94.8 %94.6 %94.6 %94.3 %94.5 %
Operating Expenses as a % of Scheduled Rent
Same-Store41.9 %42.9 %41.2 %43.4 %41.5 %
Non-Same-Store32.9 %34.9 %35.3 %39.7 %36.1 %
All Communities41.0 %42.1 %40.3 %43.0 %41.0 %
Capital Expenditures
Total Capital Expenditures per Apartment Home – Same-Store
$159 $131 $326 $293 $262 
(1)Previously reported amounts are not revised for changes in the composition of the same-store properties pool.
(2)Average monthly rental rate is scheduled rent divided by the total number of apartment homes. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.
(3)Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.
(4)Weighted average occupancy is the percentage resulting from dividing actual rental revenue by scheduled rent. The company believes that weighted average occupancy is a meaningful measure of occupancy because it considers the value of each vacant unit at its estimated market rate. Weighted average occupancy may not completely reflect short-term trends in physical occupancy and the calculation of weighted average occupancy may not be comparable to that disclosed by other REITs.
S-14

CENTERSPACE
CAPITAL EXPENDITURES
($ in thousands, except per home amounts)
Three Months EndedSix Months Ended
6/30/20216/30/20206/30/20216/30/2020
Total Same-Store Apartment Homes10,676 10,676 10,676 10,676 
Building - Exterior$416 $582 $900 $761 
Building - Interior50 58 107 193 
Mechanical, Electrical, & Plumbing260 1,087 405 1,346 
Furniture & Equipment33 117 63 218 
Landscaping & Grounds87 356 
Turnover850 864 1,383 1,481 
Capital Expenditures - Same-Store$1,696 $3,064 $3,017 $4,451 
Capital Expenditures per Apartment Home - Same-Store$159 $287 $283 $417 
Value Add$4,543 $4,121 $7,175 $6,155 
Total Capital Spend - Same-Store$6,239 $7,185 $10,192 $10,606 
Total Capital Spend per Apartment Home - Same-Store$584 $673 $955 $993 
All Properties - Weighted Average Apartment Homes11,775 11,445 11,971 11,384 
Capital Expenditures$1,791 $3,373 $3,346 $5,183 
Capital Expenditures per Apartment Home$152 $295 $280 $455 
Value Add4,557 4,165 7,188 6,196 
Acquisition Capital403 (943)961 535 
Total Capital Spend6,751 6,595 11,495 11,914 
Total Capital Spend per Apartment Home$573 $576 $960 $1,047 
Value Add Capital Expenditures
Interior - Units
Same-Store$3,107 $1,561 $4,799 $2,347 
Non-Same-Store9 17 8 13 
Total Interior Units$3,116 $1,578 $4,807 $2,360 
Expected Year 1 Annual ROI16.4 %17.0 %16.6 %16.7 %
Common Areas and Exteriors
Same-Store$1,436 $2,560 $2,376 $3,808 
Non-Same-Store5 27 5 28 
Total Common Areas and Exteriors$1,441 $2,587 $2,381 $3,836 
Expected Year 1 Annual ROI8.1 %11.9 %8.1 %11.8 %
Total Value-Add Capital Expenditures
Same-Store$4,543 $4,121 $7,175 $6,155 
Non-Same-Store14 44 13 41 
Total Portfolio Value-Add$4,557 $4,165 $7,188 $6,196 
Expected Year 1 Annual ROI13.8 %13.8 %13.8 %13.7 %

S-15

CENTERSPACE
2021 Financial Outlook
(in thousands, except per share and per home amounts)
Centerspace revised its outlook for 2021, which includes the anticipated acquisition of KMS during the third quarter, in the table below.
Six Months Ended2021 Previous Outlook Range2021 Revised Outlook Range
June 30, 2021LowHighLowHigh
YTD ActualAmountAmountAmountAmount
Same-store growth
Revenue$80,521 0.0 %3.0 %2.0 %3.5 %
Controllable expenses$20,235 3.5 %4.5 %3.0 %5.0 %
Non-controllable expenses$12,671 2.5 %6.0 %5.5 %7.5 %
Total Expenses$32,906 3.0 %5.0 %4.0 %6.0 %
Same-store NOI$47,615 (1.5)%1.5 %0.5 %2.0 %
Components of NOI
Same-store NOI$47,615 $96,500 $99,200 $95,100 $96,300 
Non-same-store NOI$5,742 $11,400 $11,600 $11,800 $12,000 
Other Commercial NOI$739 $1,700 $1,800 $1,800 $1,900 
Other Sold NOI$1,207 — — $1,200 $1,200 
Total NOI$55,303 $109,600 $112,600 $109,900 $111,400 
Accretion (dilution) from investments and capital market activity, excluding impact from change in share count(1)
$— (800)(1,100)4,350 4,500 
Interest expense$(14,320)(29,800)(31,100)(28,700)(28,500)
Preferred dividends$(3,214)(6,430)(6,430)(6,430)(6,430)
Recurring income and expenses
Interest and other income$1,002 2,580 2,580 2,580 2,580 
General and administrative and property management$(11,555)(23,300)(22,500)(23,500)(23,000)
Casualty losses$(74)(1,750)(1,250)(1,245)(755)
Non-real estate depreciation and amortization$(185)(280)(280)(280)(280)
Non-controlling interest$(36)(65)(70)(70)(65)
Total recurring income and expenses$(10,848)(22,815)$(21,520)(22,515)$(21,520)
FFO$26,921 $49,755 $52,450 $56,605 $59,450 
Non-core income and expenses
Casualty loss$— $480 $420 $280 $120 
Technology implementation costs860 1,090 990 1,800 1,600 
Loss on extinguishment of debt3 — — — — 
Total non-core income and expenses$863 $1,570 $1,410 $2,080 $1,720 
Core FFO$27,784 $51,325 $53,860 $58,685 $61,170 
EPS - Diluted$1.02 $0.10 $0.50 $0.58 $0.76 
FFO per diluted share$1.87 $3.38 $3.62 $3.64 $3.83 
Core FFO per diluted share$1.93 $3.48 $3.72 $3.78 $3.94 
Weighted average shares outstanding - diluted14,402 14,731 14,472 15,541 15,541 
Additional Assumptions
Same-store capital expenditures (per home)$283 $912 $1,012 $875 $925 
Value-add expenditures$7,188 $15,000 $20,000 $15,000 $20,000 
Investments$76,900 $145,000 $170,000 $400,000 $400,000 
Dispositions$60,000 $55,000 $75,000 $60,000 $60,000 
Equity issuance proceeds$66,495 $50,000 $70,000 $66,500 $66,500 
(1)Represents net accretion from anticipated KMS acquisition

S-16

Reconciliation of Net Income (Loss) Available to Common Shareholders to FFO and Core FFO
The following table presents reconciliations of Net income (loss) available to common shareholders to FFO and Core FFO, which are non-GAAP financial measures described in greater detail under “Non-GAAP Financial Measures and Reconciliations.” They should not be considered as alternatives to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO and Core FFO also do not represent cash generated from operating activities in accordance with GAAP, nor are they indicative of funds available to fund all cash needs, including the ability to service indebtedness or make distributions to shareholders. The outlook and projections provided below are based on current expectations and are forward-looking.
Previous OutlookRevised Outlook
Six Months Ended12 Months Ended12 Months Ended
June 30, 2021December 31, 2021December 31, 2021
ActualLowHighLowHigh
Net income (loss) available to common shareholders$13,457 $2,929 $8,692 $10,479 $13,324 
Noncontrolling interests - Operating Partnership917 (1,456)(1,456)(1,456)(1,456)
Depreciation and amortization39,300 72,391 72,323 74,157 74,157 
Less depreciation - non real estate(185)(280)(280)(280)(280)
Less depreciation - partially owned entities(48)(95)(95)(95)(95)
(Gain) loss on sale of real estate(26,840)(24,374)(27,374)(26,840)(26,840)
Dividends to preferred unitholders320 640 640 640 640 
FFO applicable to common shares and Units$26,921 $49,755 $52,450 $56,605 $59,450 
Adjustments to Core FFO:
Casualty loss write off— 480 420 280 120 
Loss on extinguishment of debt3 — — — — 
Technology implementation costs860 1,090 990 1,800 1,600 
Core FFO applicable to common shares and Units$27,784 $51,325 $53,860 $58,685 $61,170 
Earnings per share - diluted$1.02 $0.10 $0.50 $0.58 $0.76 
FFO per share - diluted$1.87 $3.38 $3.62 $3.64 $3.83 
Core FFO per share - diluted$1.93 $3.48 $3.72 $3.78 $3.94 
Reconciliation of Operating Income to Net Operating Income
Net operating income, or NOI, is a non-GAAP financial measure which the company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes 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, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.
Previous OutlookRevised Outlook
Six Months Ended12 Months Ended12 Months Ended
June 30, 2021December 31, 2021December 31, 2021
ActualLowHighLowHigh
Operating income$4,374 $12,159 $16,527 $10,998 $13,488 
Adjustments:
General and administrative and property management expenses11,555 23,300 22,500 23,500 23,000 
Casualty loss74 1,750 1,250 1,245 755 
Depreciation and amortization39,300 72,391 72,323 74,157 74,157 
Net operating income$55,303 $109,600 $112,600 $109,900 $111,400 
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