SEGMENT REPORTING

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING 

Centerspace operates in a single reportable segment which includes the ownership, management, development, redevelopment, and acquisition of apartment communities. Each of the operating properties is considered a separate operating segment because each property earns revenues, incurs expenses, and has discrete financial information. The chief operating decision-makers evaluate each property’s operating results to make decisions about resources to be allocated and to assess performance and do not group the properties based on geography, size, or type for this purpose. The apartment communities have similar long-term economic characteristics and provide similar products and services to residents. No apartment community comprises more than 10% of consolidated revenues, profits, or assets. Accordingly, the apartment communities are aggregated into a single reportable segment. “All other” includes non-multifamily components of mixed-use properties and apartment communities the Company has sold.

The executive management team comprises the chief operating decision-makers. This team measures the performance of the reportable segment based on net operating income (“NOI”), 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 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.

The following tables present NOI for the three and nine months ended September 30, 2021 and 2020, respectively, along with reconciliations to net income in the Condensed Consolidated Financial Statements. Segment assets are also reconciled to total assets as reported in the Condensed Consolidated Financial Statements.

	(in thousands)
Three Months Ended September 30, 2021	Multifamily		All Other		Total
Revenue	$	49,248	$	1,165	$	50,413
Property operating expenses, including real estate taxes	20,066		284		20,350
Net operating income	$	29,182	$	881	$	30,063
Property management					(2,203)
Casualty gain (loss)					10
Depreciation and amortization					(22,447)
General and administrative expenses					(4,279)
Interest expense					(7,302)
Interest and other income					(5,082)
Net income (loss)					$	(11,240)

	(in thousands)
Three Months Ended September 30, 2020	Multifamily		All Other		Total
Revenue	$	40,688	$	3,450	$	44,138
Property operating expenses, including real estate taxes	16,900		1,631		18,531
Net operating income	$	23,788	$	1,819	$	25,607
Property management					(1,442)
Casualty gain (loss)					(91)
Depreciation and amortization					(18,995)
General and administrative expenses					(3,077)
Interest expense					(6,771)
Interest and other income					277
Income (loss) before gain (loss) on sale of real estate and other investments					(4,492)
Gain (loss) on sale of real estate and other investments					25,676
Net income (loss)					$	21,184

	(in thousands)
Nine Months Ended September 30, 2021	Multifamily		All Other		Total
Revenue	$	138,447	$	5,270	$	143,717
Property operating expenses, including real estate taxes	55,907		2,444		58,351
Net operating income	$	82,540	$	2,826	$	85,366
Property management expenses					(6,055)
Casualty gain (loss)					(64)
Depreciation and amortization					(61,747)
General and administrative expenses					(11,982)
Interest expense					(21,622)
Interest and other income					(4,032)
Income (loss) before gain (loss) on sale of real estate and other investments					(20,136)
Gain (loss) on sale of real estate and other investments					26,840
Net income (loss)					$	6,704

	(in thousands)
Nine Months Ended September 30, 2020	Multifamily		All Other		Total
Revenue	$	120,946	$	11,508	$	132,454
Property operating expenses, including real estate taxes	49,626		5,608		55,234
Net operating income	$	71,320	$	5,900	$	77,220
Property management expenses					(4,341)
Casualty gain (loss)					(1,331)
Depreciation and amortization					(55,311)
General and administrative expenses					(9,707)
Interest expense					(20,622)
Interest and other income					(1,979)
Income (loss) before gain (loss) on sale of real estate and other investments					(16,071)
Gain (loss) on sale of real estate and other investments					25,486
Net income (loss)					$	9,415

Segment Assets and Accumulated Depreciation

Segment assets are summarized as follows as of September 30, 2021, and December 31, 2020, respectively, along with reconciliations to the Condensed Consolidated Financial Statements:

	(in thousands)
As of September 30, 2021	Multifamily		All Other		Total
Segment assets
Property owned	$	2,170,321	$	33,285	$	2,203,606
Less accumulated depreciation	(414,829)		(12,097)		(426,926)
Total property owned	$	1,755,492	$	21,188	$	1,776,680
Mortgage loans receivable					42,160
Cash and cash equivalents					20,816
Restricted cash					2,376
Other assets					34,919
Total Assets					$	1,876,951

	(in thousands)
As of December 31, 2020	Multifamily		All Other		Total
Segment assets
Property owned	$	1,727,229	$	85,328	$	1,812,557
Less accumulated depreciation	(368,717)		(30,532)		(399,249)
Total property owned	$	1,358,512	$	54,796	$	1,413,308
Mortgage loans receivable					24,661
Cash and cash equivalents					392
Restricted cash					6,918
Other assets					18,904
Total Assets					$	1,464,183