EX-99.1 2 centerspace12312021ex991.htm EX-99.1 Document

Exhibit 99.1
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Earnings Release
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Centerspace Announces Financial and Operating Results for the Year Ended
December 31, 2021 and Provides 2022 Financial Outlook; Dividend Increase
MINNEAPOLIS, MN, February 28, 2022 – Centerspace (NYSE: CSR) announced today its financial and operating results for the year ended December 31, 2021. The tables below show Net Income (Loss), Funds from Operations (“FFO”)1, and Core FFO1, all on a per share basis, for the year ended December 31, 2021; Same-Store Revenues, Expenses, and Net Operating Income ("NOI")1 over comparable periods; and Same-Store Weighted Average Occupancy for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020 and the twelve months ended December 31, 2021 and 2020.
 Three Months Ended December 31,Twelve Months Ended December 31,
Per Share2021202020212020
Earnings (loss) per share - diluted$(0.61)$(0.46)$(0.47)$(0.15)
FFO - diluted1.07 0.97 3.54 3.47 
Core FFO - diluted1.08 1.02 3.99 3.78 
 Year-Over-Year ComparisonSequential
Comparison		YTD
Comparison
Same-Store Results4Q21 vs 4Q204Q21 vs. 3Q21CY21 vs. CY20
Revenues9.2 %4.1 %4.8 %
Expenses10.9 %0.9 %4.8 %
Net Operating Income (“NOI”)8.1 %6.4 %4.8 %
Three months endedTwelve months ended
Same-Store ResultsDecember 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Weighted Average Occupancy93.4 %94.3 %94.8 %94.4 %94.7 %
(1)Net operating income, Funds from Operations, and Core FFO 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" in the Supplemental Financial and Operating Data below.
Highlights for the Year Ended December 31, 2021
•Net Loss was $(0.47) per diluted share for the year ended December 31, 2021, compared to Net Income of $(0.15) per diluted share for the year ended December 31, 2020;
•Core FFO increased to $3.99 or 5.8% per diluted share compared to $3.78 for the year ended December 31, 2020;
•Same-store revenue increased 4.8% driven by 5.1% growth in rental revenue and offset by a decrease of 0.3% in occupancy;
•Same-store operating expenses increased 4.8% year-over-year with a increase of 3.7% in same-store controllable expenses, and a increase of 6.7% in same-store non-controllable expenses;
•Same-store NOI growth of 4.8% for the year ended December 31, 2021;
•Same-store NOI growth of 6.4% from the third quarter of 2021;
•Continued to grow the portfolio through a strategic acquisition of 14 communities in Minneapolis, Minnesota and three communities in St. Cloud, Minnesota totaling 2,696 apartment homes for an aggregate purchase price of $359.9 million. Acquired two new apartment communities in Denver, Colorado consisting of 432 homes for an aggregate purchase price of $139.9 million;
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•Sold five apartment communities consisting of 589 apartment homes in Rochester, Minnesota for an aggregate sale price of $60.0 million;
•Amended and expanded the Note Purchase Private Shelf Agreement to increase the aggregate amount under the agreement from $150.0 million to $225.0 million and issued $50.0 million of 2.7% unsecured Series C Notes due June 6, 2030;
•Issued $125.0 million of unsecured notes with a weighted average interest rate of 2.6% and weighted average maturity of 10.5 years;
•Improved and extended $250.0 million revolving credit facility with an accordion feature for up to $400.0 million which matures in September 2025; and
•Continued to strengthen the balance sheet by issuing 1.8 million common shares at an average price of $86.13 per share for total consideration, net of commissions and issuance costs, of approximately $156.4 million in the year ended December 31, 2021.
Subsequent Events
Subsequent to December 31, 2021, Centerspace acquired a portfolio of three communities in the Minneapolis, Minnesota region totaling 267 apartment homes for an aggregate purchase price of $68.1 million. The company also acquired Noko Apartments in Minneapolis for an aggregate purchase price of $46.4 million. The company previously financed the construction and mezzanine loan.
On February 23, 2022 the company paid $3.3 million to terminate a $75.0 million interest rate swap and a $70.0 million forward swap.
Dividend Distributions
Centerspace's Board of Trustees announced a regular quarterly distribution of $0.73 per share/unit, payable on April 11, 2022, to common shareholders and unitholders of record at the close of business on March 31, 2022, which represents a $0.01 increase over the prior distribution.
The Board of Trustees also declared a distribution of $0.4140625 per share on the 6.625% Series C Cumulative Redeemable Preferred Shares (NYSE: CSR PRC), payable on March 31, 2022, to holders of record at the close of business on March 15, 2022. Series C preferred share distributions are cumulative and payable quarterly in arrears at an annual rate of $1.65625 per share.

Balance Sheet
At December 31, 2021, Centerspace had $204.8 million of total liquidity on its balance sheet, including $173.5 million available on its lines of credit.
2022 Financial Overview
Centerspace is providing the following guidance for its 2022 performance.
2022 Calendar Year Financial Outlook
Range for 2022
2021 ActualLowHigh
Earnings per Share - diluted$(0.47)$(0.41)$(0.16)
FFO per Share - diluted$3.54 $4.25 $4.50 
Core FFO per Share - diluted$3.99 $4.33 $4.57 
Additional assumptions:
•Same-store capital expenditures of $925 per home to $975 per home
•Value-add expenditures of $21.0 million to $24.0 million
•Investments of $114.5 million due to the January 2021 acquisitions of four communities in Minneapolis, Minnesota
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FFO and Core FFO are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, please refer to "2021 Financial Outlook" in the Supplemental Financial and Operating Data below.
Earnings Call
Live webcast and replay:  https://www.ir.centerspacehomes.com
  
Live Conference CallConference Call Replay
Tuesday, March 1, 2022 at 10:00 AM ETReplay available until March 15, 2022
USA Toll Free Number1-844-200-6205USA Toll Free Number1-866-813-9403
International Toll Free Number1-929-526-1599International Toll Free Number44-204-525-0658
Canada Toll Free Number1-833-950-0062Canada Toll Free Number1-226-828-7578
Conference Number130830Conference Number848822
Supplemental Information
Supplemental Operating and Financial Data for the year ended December 31, 2021, is available in the Investors section on Centerspace’s website at https://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 December 31, 2021, Centerspace owned 79 apartment communities consisting of 14,441 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 are based on the company's current expectations and assumptions, and are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Forward-looking statements are typically identified by the use of terms such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “assumes,” “may,” “projects,” “outlook,” “future,” and variations of such words and similar expressions. Forward-looking statements include the impact of a public health crisis, including the COVID-19 pandemic, and the governmental and third-party response to such a crisis, which may affect our key personnel, our tenants, and the costs of operating our assets; the impact of social distancing, shelter-in-place, travel restrictions, remote work requirements, and similar governmental and private measures taken to combat the spread of a public health crisis on our operations and our tenants. 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. Any statements contained herein that are not statements of historical fact should be deemed forward-looking statements. As a result, reliance should not be placed on these forward-looking statements, as these statements are subject to known and unknown risks, uncertainties, and other factors beyond the company's control and could differ materially from actual results and performance. Such risks and uncertainties are detailed from time to time in filings with the SEC, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” contained in the company's Annual Report on Form 10-K, in quarterly reports on Form 10-Q, and in other reports the company files with the SEC from time to time. 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
E-mail: IR@centerspacehomes.com
Marketing & Media
Kelly Weber
Phone: 701-837-7104
E-mail: kweber@centerspacehomes.com

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Supplemental Financial and Operating Data
Table of Contents
December 31, 2021



Common Share Data (NYSE: CSR)
 Three Months Ended
 December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020
High closing price$111.26 $105.42 $79.71 $73.42 $74.55 
Low closing price$96.58 $78.42 $67.28 $68.00 $65.79 
Average closing price$103.29 $94.10 $71.99 $71.37 $70.30 
Closing price at end of quarter$110.90 $94.50 $78.90 $68.00 $70.64 
Common share distributions—annualized$2.88 $2.88 $2.80 $2.80 $2.80 
Closing price dividend yield - annualized2.6 %3.1 %3.6 %4.1 %4.0 %
Closing common shares outstanding (thousands)15,016 14,281 14,045 13,220 13,027 
Closing limited partnership units outstanding (thousands)832 845 881 950 977 
Closing Series E preferred units, as converted (thousands)2,186 2,186 — — — 
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)$1,999,971 $1,635,984 $1,177,661 $963,560 $989,243 

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CENTERSPACE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share amounts)
 Three Months EndedTwelve months ended
12/31/20219/30/20216/30/20213/31/202112/31/202012/31/202112/31/2020
REVENUE$57,988 $50,413 $46,656 $46,648 $45,540 $201,705 $177,994 
EXPENSES
Property operating expenses, excluding real estate taxes16,852 14,434 13,018 13,449 12,668 57,753 51,625 
Real estate taxes6,654 5,916 5,742 5,792 5,256 24,104 21,533 
Property management expenses2,697 2,203 2,085 1,767 1,460 8,752 5,801 
Casualty loss280 (10)(27)101 331 344 1,662 
Depreciation/amortization30,418 22,447 19,308 19,992 20,282 92,165 75,593 
General and administrative expenses4,231 4,279 3,797 3,906 3,733 16,213 13,440 
TOTAL EXPENSES$61,132 $49,269 $43,923 $45,007 $43,730 $199,331 $169,654 
Gain (loss) on sale of real estate and other investments678 — 26,840 — 17 27,518 25,503 
Operating income (loss)(2,466)1,144 29,573 1,641 1,827 29,892 33,843 
Interest expense(7,456)(7,302)(7,089)(7,231)(6,903)(29,078)(27,525)
Interest and other income (loss)1,117 (5,082)619 431 404 (2,915)(1,575)
Net income (loss)$(8,805)$(11,240)$23,103 $(5,159)$(4,672)$(2,101)$4,743 
Dividends to Series D preferred unitholders(160)(160)(160)(160)(160)(640)(640)
Net (income) loss attributable to noncontrolling interest – Operating Partnership and Series E preferred units1,793 1,930 (1,386)469 460 2,806 212 
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities(36)(22)(19)(17)(6)(94)126 
Net income (loss) attributable to controlling interests(7,208)(9,492)21,538 (4,867)(4,378)(29)4,441 
Dividends to preferred shareholders(1,607)(1,607)(1,607)(1,607)(1,607)(6,428)(6,528)
Discount (premium) on redemption of preferred shares— — — — — — 297 
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS$(8,815)$(11,099)$19,931 $(6,474)$(5,985)$(6,457)$(1,790)
Per Share Data - Basic       
Net earnings (loss) per common share – basic$(0.61)$(0.79)$1.49 $(0.49)$(0.46)$(0.47)$(0.15)
Per Share Data - Diluted
Net earnings (loss) per common share – diluted$(0.61)$(0.81)$1.48 $(0.49)$(0.46)$(0.47)$(0.15)
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CENTERSPACE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)
 12/31/20219/30/20216/30/20213/31/202112/31/2020
ASSETS     
Real estate investments     
Property owned$2,271,170 $2,203,606 $1,838,837 $1,883,407 $1,812,557 
Less accumulated depreciation(443,592)(426,926)(407,400)(408,014)(399,249)
 1,827,578 1,776,680 1,431,437 1,475,393 1,413,308 
Mortgage loans receivable43,276 42,160 37,457 30,107 24,661 
Total real estate investments1,870,854 1,818,840 1,468,894 1,505,500 1,437,969 
Cash and cash equivalents31,267 20,816 5,194 10,816 392 
Restricted cash7,358 2,376 8,444 1,610 6,918 
Other assets30,582 34,919 17,218 18,427 18,904 
TOTAL ASSETS$1,940,061 $1,876,951 $1,499,750 $1,536,353 $1,464,183 
LIABILITIES, MEZZANINE EQUITY, AND EQUITY     
LIABILITIES     
Accounts payable and accrued expenses$62,403 $58,092 $52,413 $53,852 $55,609 
Revolving line of credit76,000 57,000 87,000 181,544 152,871 
Notes payable, net of loan costs299,344 299,454 319,286 319,236 269,246 
Mortgages payable, net of loan costs480,703 489,140 287,143 293,709 297,074 
TOTAL LIABILITIES$918,450 $903,686 $745,842 $848,341 $774,800 
SERIES D PREFERRED UNITS$25,331 $21,585 $18,022 $16,560 $16,560 
EQUITY     
Series C Preferred Shares of Beneficial Interest93,530 93,530 93,530 93,530 93,530 
Common Shares of Beneficial Interest1,157,255 1,092,130 1,033,940 980,453 968,263 
Accumulated distributions in excess of net income(474,318)(454,691)(433,310)(443,409)(427,681)
Accumulated other comprehensive income (loss)(4,435)(5,784)(12,064)(12,798)(15,905)
Total shareholders’ equity$772,032 $725,185 $682,096 $617,776 $618,207 
Noncontrolling interests – Operating Partnership and Series E preferred units223,600 225,850 53,133 53,007 53,930 
Noncontrolling interests – consolidated real estate entities648 645 657 669 686 
TOTAL EQUITY$996,280 $951,680 $735,886 $671,452 $672,823 
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY$1,940,061 $1,876,951 $1,499,750 $1,536,353 $1,464,183 
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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 the company may not be comparable to non-GAAP 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 development properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, Centerspace determines the composition of the same-store pool for that year and adjusts the previous year, to evaluate full period-over-period operating comparisons for existing apartment communities and their contribution to net operating income. Measuring performance on a same-store basis allows investors to evaluate how a fixed pool of communities are performing year-over-year. Centerspace uses this measure to assess success in increasing NOI, renewing leases on existing residents, controlling operating costs, and making prudent capital improvements.
Reconciliation of Operating Income (Loss) 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 and amortization, financing costs, property management expenses, 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.
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 (dollars in thousands)
 Three Months EndedSequentialYear-Over-Year
12/31/20219/30/202112/31/2020$ Change% Change$ Change% Change
Operating income (loss)$(2,466)$1,144 $1,827 $(3,610)(315.6)%$(4,293)(235.0)%
Adjustments:
Property management expenses2,697 2,203 1,460 494 22.4 %1,237 84.7 %
Casualty loss280 (10)331 290 (2,900.0)%(51)(15.4)%
Depreciation and amortization30,418 22,447 20,282 7,971 35.5 %10,136 50.0 %
General and administrative expenses4,231 4,279 3,733 (48)(1.1)%498 13.3 %
Gain (loss) on sale of real estate and other investments$(678)— $(17)$(678)100.0 %$(661)3,888.2 %
Net operating income$34,482 $30,063 $27,616 $4,419 14.7 %$6,866 24.9 %
Revenue
Same-store$43,771 $42,034 $40,075 $1,737 4.1 %$3,696 9.2 %
Non-same-store13,407 7,214 3,105 6,193 85.8 %10,302 331.8 %
Other810 1,120 413 (310)(27.7)%397 96.1 %
Dispositions— 45 1,947 (45)(100.0)%(1,947)(100.0)%
Total57,988 50,413 45,540 7,575 15.0 %12,448 27.3 %
Property operating expenses, including real estate taxes
Same-store17,275 17,126 15,573 149 0.9 %1,702 10.9 %
Non-same-store5,914 2,940 1,157 2,974 101.2 %4,757 411.1 %
Other312 317 249 (5)(1.6)%63 25.3 %
Dispositions5 (33)945 38 (115.2)%(940)(99.5)%
Total23,506 20,350 17,924 3,156 15.5 %5,582 31.1 %
Net operating income
Same-store26,496 24,908 24,502 1,588 6.4 %1,994 8.1 %
Non-same-store7,493 4,274 1,948 3,219 75.3 %5,545 284.7 %
Other498 803 164 (305)(38.0)%334 203.7 %
Dispositions(5)78 1,002 (83)(106.4)%(1,007)(100.5)%
Total$34,482 $30,063 $27,616 $4,419 14.7 %$6,866 24.9 %
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(dollars in thousands)
Twelve Months Ended December 31,
20212020$ Change% Change
Operating income (loss)$29,892 $33,843 $(3,951)(11.7)%
Adjustments:
Property management expenses8,752 5,801 2,951 50.9 %
Casualty loss344 1,662 (1,318)(79.3)%
Depreciation and amortization92,165 75,593 16,572 21.9 %
General and administrative expenses16,213 13,440 2,773 20.6 %
Gain (loss) on sale of real estate and other investments(27,518)(25,503)(2,015)7.9 %
Net operating income$119,848 $104,836 $15,012 14.3 %
Revenue
Same-store$166,326 $158,702 $7,624 4.8 %
Non-same-store29,298 5,424 23,874 440.2 %
Other2,831 2,147 684 31.9 %
Dispositions3,250 11,721 (8,471)(72.3)%
Total201,705 177,994 23,711 13.3 %
Property operating expenses, including real estate taxes
Same-store67,306 64,204 3,102 4.8 %
Non-same-store11,790 2,152 9,638 447.9 %
Other1,120 1,008 112 11.1 %
Dispositions1,641 5,794 (4,153)(71.7)%
Total81,857 73,158 8,699 11.9 %
Net operating income
Same-store99,020 94,498 4,522 4.8 %
Non-same-store17,508 3,272 14,236 435.1 %
Other1,711 1,139 572 50.2 %
Dispositions1,609 5,927 (4,318)(72.9)%
Total$119,848 $104,836 $15,012 14.3 %
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Reconciliation of Same-Store Controllable Expenses to Property Operating Expenses, Including Real Estate Taxes
Same-store controllable expenses exclude real estate taxes and insurance, in order to provide a measure of expenses that are within management's control, and is used for the purposes of budgeting, business planning, and performance evaluation. This is a non-GAAP financial measure and should not be considered an alternative to total expenses or total property operating expenses and real estate taxes.
 (dollars in thousands)
 Three Months Ended December 31,Twelve Months Ended December 31,
 20212020$ Change% Change20212020$ Change% Change
Controllable expenses
On-site compensation (1)
$4,419 $4,412 $7 0.2 %$17,602 $17,319 $283 1.6 %
Repairs and maintenance2,725 2,037 688 33.8 %9,785 9,507 278 2.9 %
Utilities2,736 2,597 139 5.4 %10,975 10,286 689 6.7 %
Administrative and marketing942 781 161 20.6 %3,643 3,376 267 7.9 %
Total$10,822 $9,827 $995 10.1 %$42,005 $40,488 $1,517 3.7 %
Non-controllable expenses
Real estate taxes$4,839 $4,513 $326 7.2 %$19,503 $19,026 $477 2.5 %
Insurance1,614 1,233 381 30.9 %5,798 4,690 1,108 23.6 %
Total$6,453 $5,746 $707 12.3 %$25,301 $23,716 $1,585 6.7 %
Property operating expenses, including real estate taxes - non-same-store$5,914 $1,157 $4,757 411.1 %$11,790 $2,152 $9,638 447.9 %
Property operating expenses, including real estate taxes - other312 249 63 25.3 %1,120 1,008 112 11.1 %
Property operating expenses, including real estate taxes - dispositions5 945 (940)(99.5)%1,641 5,794 (4,153)(71.7)%
Total property operating expenses, including real estate taxes$23,506 $17,924 $5,582 31.1 %$81,857 $73,158 $8,699 11.9 %
(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 measurement used as a supplemental measure for equity real estate investment trusts, is helpful to investors in understanding 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 the definition. The company believes that all such interpretations not specifically provided for in the Nareit definition are consistent with the definition. Nareit's FFO White Paper - 2018 Restatement clarified that impairment write-downs of land related to a REIT's main business are excluded from FFO, and a REIT has the option to exclude impairment write-downs of assets that are incidental to the main business.
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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 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 needs, including the ability to service indebtedness or make distributions to shareholders.
Core Funds from Operations ("Core FFO"), a non-GAAP measure, is FFO adjusted for non-routine items or items not considered core to business operations. By further adjusting for items that are not considered part of core business operations, 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 as any other GAAP measurement of performance, but rather should be considered an additional supplemental measure. Core FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash needs, including the ability to service indebtedness or make distributions to shareholders. Core FFO is a non-GAAP and non-standardized financial measure that may be calculated differently by other REITs and that should not be considered a substitute for operating results determined in accordance with GAAP.
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(in thousands, except per share amounts)
 Three Months EndedTwelve Months Ended
 12/31/20219/30/20216/30/20213/31/202112/31/202012/31/202112/31/2020
Net (loss) income available to common shareholders$(8,815)$(11,099)$19,931 $(6,474)$(5,985)$(6,457)$(1,790)
Adjustments:       
Noncontrolling interests - Operating Partnership and Series E preferred units(1,793)(1,930)1,386 (469)(460)(2,806)(212)
Depreciation and amortization30,418 22,447 19,308 19,992 20,282 92,165 75,593 
Less depreciation - non real estate(101)(80)(87)(98)(87)(366)(353)
Less depreciation - partially owned entities(21)(24)(24)(24)(33)(93)(379)
Gain on sale of real estate (678)— (26,840)— (17)(27,518)(25,503)
FFO applicable to common shares and Units$19,010 $9,314 $13,674 $12,927 $13,700 $54,925 $47,356 
Adjustments to Core FFO:       
Casualty loss (recovery)— — — — 204 — 749 
Loss on extinguishment of debt2 530 3 — 2 535 23 
Rebranding costs— — — — 402 — 402 
Technology implementation costs535 625 447 413 — 2,020 — 
(Gain) loss on marketable securities— — — — — — 3,378 
(Discount) premium on redemption of preferred shares— — — — — — (297)
Commercial lease termination proceeds— (450)— — — (450)— 
Acquisition related costs90 140 — — — 230 — 
Interest rate swap termination, amortization, and mark-to-market(411)5,353 — — — 4,942 — 
Amortization of assumed debt(26)(27)— — — (53)— 
Other miscellaneous items(61)(3)— — — (64)— 
Core FFO applicable to common shares and Units$19,139 $15,482 $14,124 $13,340 $14,308 $62,085 $51,611 
FFO applicable to common shares and Units$19,010 $9,314 $13,674 $12,927 $13,700 $54,925 $47,356 
Dividends to preferred unitholders160 160 160 160 160 640 537 
FFO applicable to common shares and Units - diluted$19,170 $9,474 $13,834 $13,087 $13,860 $55,565 $47,893 
Core FFO applicable to common shares and Units$19,139 $15,482 $14,124 $13,340 $14,308 $62,085 $51,611 
Dividends to preferred unitholders160 160 160 160 160 640 537 
Core FFO applicable to common shares and Units - diluted$19,299 $15,642 $14,284 $13,500 $14,468 $62,725 $52,148 
Per Share Data
Earnings (loss) per share and unit - diluted$(0.61)$(0.81)$1.48 $(0.49)$(0.46)$(0.47)$(0.15)
FFO per share and unit - diluted$1.07 $0.60 $0.95 $0.92 $0.97 $3.54 $3.47 
Core FFO per share and unit - diluted$1.08 $0.98 $0.98 $0.95 $1.02 $3.99 $3.78 
Weighted average shares and units - diluted17,868 15,922 14,514 14,282 14,222 15,704 13,835 
S-9

Reconciliation of Net Income (Loss) Available to Common Shareholders to Adjusted EBITDA
Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain or loss on sale of real estate and other investments, impairment of real estate investments, gain or loss on extinguishment of debt, gain on litigation settlement, and gain/loss from involuntary conversion. Adjusted EBITDA is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP. 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, financing costs, or non-operating gains and losses.
(in thousands)
 Three Months EndedTwelve Months Ended
 12/31/20219/30/20216/30/20213/31/202112/31/202012/31/202112/31/2020
Net income (loss) attributable to controlling interests$(7,208)$(9,492)$21,538 $(4,867)$(4,378)$(29)$4,441 
Adjustments:
Dividends to preferred unitholders160 160 160 160 160 640 640 
Noncontrolling interests – Operating Partnership and Series E preferred units(1,793)(1,930)1,386 (469)(460)(2,806)(212)
Income (loss) before noncontrolling interests – Operating Partnership(8,841)(11,262)23,084 (5,176)(4,678)(2,195)4,869 
Adjustments:       
Interest expense7,440 7,287 7,075 7,216 6,888 29,018 27,334 
Loss on extinguishment of debt2 530 3 — 2 535 23 
Depreciation/amortization related to real estate investments30,397 22,423 19,284 19,969 20,250 92,073 75,215 
Casualty loss (recovery)— — — — 204 — 749 
Interest income(644)(769)(583)(407)(328)(2,403)(1,512)
Gain (loss) on sale of real estate and other investments(678)— (26,840)— (17)(27,518)(25,503)
Technology implementation costs534 625 447 413 — 2,020 — 
(Gain) loss on marketable securities— — — — — — 3,378 
Commercial lease termination proceeds— (450)— — — (450)— 
Acquisition related costs90 140 — — — 230 — 
Interest rate swap termination and mark-to-market(359)5,361 — — — 5,002 — 
Other miscellaneous items(61)(3)— — — (64)— 
Adjusted EBITDA$27,880 $23,882 $22,470 $22,015 $22,321 $96,248 $84,553 


S-10


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)
2022$22,429 $— $— $22,429 2.6 %3.92 %
202342,596 — — 42,596 5.0 %4.02 %
2024— — — — — — 
202532,112 75,000 1,000 108,112 12.6 %3.18 %
202653,487 — — 53,487 6.2 %3.74 %
Thereafter333,160 300,000 — 633,160 73.6 %3.15 %
Total debt$483,784 $375,000 $1,000 $859,784 100.0 %3.26 %
(1)The line of credit was fixed through an interest rate swap with a $75.0 million notional as of December 31, 2021. The interest rate swap was terminated in February 2022.
(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.
12/31/20219/30/20216/30/20213/31/202112/31/2020
Debt Balances Outstanding
Secured fixed rate - other mortgages$284,934 $293,547$288,363$295,001$298,445
Secured fixed rate - Fannie Mae credit facility
198,850 198,850———
Unsecured fixed rate line of credit(1)
75,000 57,00050,00050,00050,000
Unsecured variable rate line of credit1,000 —37,000131,544102,871
Unsecured term loans— —145,000145,000145,000
Unsecured senior notes300,000 300,000175,000175,000125,000
Debt total$859,784 $849,397$695,363$796,545$721,316
Quarterly Weighted Average Interest Rates
Other mortgages rate3.81 %3.83 %3.90 %3.92 %3.93 %
Fannie Mae Credit Facility rate2.78 %2.78 %— — — 
Lines of credit rate (rate with swap)4.22 %2.79 %2.24 %2.18 %2.35 %
Term loan rate (rate with swap)— — 4.19 %4.11 %4.18 %
Senior notes rate3.12 %3.12 %3.47 %3.47 %3.78 %
Total debt3.26 %3.23 %3.70 %3.37 %3.62 %
(1)The current rate on our line of credit was LIBOR plus 150 basis points. The LIBOR exposure on the line of credit as of December 31, 2021 was hedged using an interest rate swap with a notional of $75.0 million and a fixed rate of 2.81%. The interest rate swap was terminated in February 2022.


Debt Maturity by Quarter for the Next Two Years
YearFirst QuarterSecond QuarterThird QuarterFourth QuarterTotal
2022$— $— $22,429 $— $22,429 
2023— 19,187 — 23,409 42,596 
$65,025 

S-11

CENTERSPACE
CAPITAL ANALYSIS 
(in thousands, except per share and unit amounts)
 12/31/20219/30/20216/30/20213/31/202112/31/2020
Equity Capitalization     
Common shares outstanding15,016 14,281 14,045 13,220 13,027 
Operating partnership units outstanding832 845 881 950 977 
Series E preferred units (as converted)2,186 2,186 — — — 
Total common shares and units outstanding18,034 17,312 14,926 14,170 14,004 
Market price per common share (closing price at end of period)$110.90 $94.50 $78.90 $68.00 $70.64 
Equity capitalization-common shares and units$1,999,971 $1,635,984 $1,177,661 $963,560 $989,243 
Recorded book value of preferred shares$93,530 $93,530 $93,530 $93,530 $93,530 
Total equity capitalization$2,093,501 $1,729,514 $1,271,191 $1,057,090 $1,082,773 
Series D preferred units$25,331 $21,585 $18,022 $16,560 16,560 
Debt capitalization    
Total debt859,784 849,397 695,363 796,545 721,317 
Total capitalization$2,978,616 $2,600,496 $1,984,576 $1,870,195 $1,820,650 
Total debt to total capitalization(1)
28.9 %33.1 %35.0 %43.1 %39.6 %
(1)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 EndedTwelve Months Ended
12/31/20219/30/20216/30/20213/31/202112/31/202012/31/202112/31/2020
Debt service coverage ratio(1)
3.17 x2.75  x2.62 x2.53  x2.73  x2.77 x2.57 x
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization
2.68  x2.32  x2.21  x2.14  x2.28  x2.34  x2.13  x
Net debt/Adjusted EBITDA(2)
7.43  x8.67  x7.68  x8.92  x8.07  x8.61  x8.53  x
Net debt and preferred equity/Adjusted EBITDA(2)
8.50  x9.88  x8.92  x10.17  x9.31  x9.84  x9.83  x
Distribution Data
Common shares and units outstanding at record date15,848 15,126 14,926 14,171 14,004 15,848 14,004 
Total common distribution declared
$11,411 $10,890 $10,448 $9,919 $9,803 $42,669 $38,538 
Common distribution per share and unit
$0.72 $0.72 $0.70 $0.70 $0.70 $2.84 $2.80 
Payout ratio (Core FFO per diluted share and unit basis)(3)
66.7 %73.5 %71.4 %73.7 %68.6 %71.2 %74.1 %
(1)Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization.
(2)Net debt is the total debt balance less cash and cash equivalents and net tax deferred exchange proceeds (included within restricted cash). For the quarterly period presented, adjusted EBITDA is annualized. Net debt and adjusted EBITDA are non-GAAP 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 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 measure and should not be considered a substitute for operating results determined in accordance with GAAP.

S-12


CENTERSPACE
SAME-STORE FOURTH QUARTER COMPARISONS
(dollars in thousands)
Homes IncludedRevenuesExpensesNOI
RegionsQ42021Q42020% ChangeQ42021Q42020% ChangeQ42021Q42020% Change
Denver, CO992 $5,817 $5,400 7.7 %$1,990 $1,634 21.8 %$3,827 $3,766 1.6 %
Minneapolis, MN2,355 11,709 10,604 10.4 %4,651 4,488 3.6 %7,058 6,116 15.4 %
North Dakota2,421 8,155 8,011 1.8 %3,273 3,070 6.6 %4,882 4,941 (1.2)%
Omaha, NE1,370 4,222 3,891 8.5 %1,888 1,648 14.6 %2,334 2,243 4.1 %
Rochester, MN1,121 4,996 4,601 8.6 %2,174 1,860 16.9 %2,822 2,741 3.0 %
St. Cloud, MN1,192 4,576 3,656 25.2 %1,820 1,602 13.6 %2,756 2,054 34.2 %
Other Mountain West(1)
1,221 4,296 3,912 9.8 %1,479 1,271 16.4 %2,817 2,641 6.7 %
Same-Store Total10,672 $43,771 $40,075 9.2 %$17,275 $15,573 10.9 %$26,496 $24,502 8.1 %


% of NOI
Weighted Average Occupancy (2)
Average Monthly
Rental Rate (3)
Average Monthly
Revenue per Occupied Home (4)
RegionsQ42021Q42020GrowthQ42021Q42020% ChangeQ42021Q42020% Change
Denver, CO14.5 %93.6 %94.3 %(0.7)%$1,855 $1,727 7.4 %$2,089 $1,924 8.6 %
Minneapolis, MN26.6 %92.8 %93.2 %(0.4)%1,586 1,502 5.6 %1,786 1,611 10.9 %
North Dakota18.4 %95.3 %95.8 %(0.5)%1,107 1,062 4.2 %1,178 1,151 2.3 %
Omaha, NE8.8 %93.9 %93.8 %0.1 %996 912 9.2 %1,094 1,010 8.3 %
Rochester, MN10.7 %91.7 %95.5 %(3.8)%1,515 1,371 10.5 %1,620 1,429 13.4 %
St. Cloud, MN10.4 %91.9 %94.6 %(2.7)%1,106 971 13.9 %1,392 1,080 28.9 %
Other Mountain West(1)
10.6 %94.5 %98.1 %(3.6)%1,133 981 15.5 %1,241 1,088 14.1 %
Same-Store Total100.0 %93.4 %94.8 %(1.4)%$1,314 $1,215 8.1 %$1,463 $1,321 10.6 %
(1)Includes apartment communities in Billings, Montana and Rapid City, South Dakota.
(2)Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rent. Scheduled rent 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 rental rate is scheduled rent divided by the total number of apartment homes.
(4)Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.

S-13

CENTERSPACE
SAME-STORE SEQUENTIAL QUARTER COMPARISONS(1)
(dollars in thousands)
Homes IncludedRevenuesExpensesNOI
RegionsQ42021Q32021% ChangeQ42021Q32021% ChangeQ42021Q32021% Change
Denver, CO992 $5,817 $5,565 4.5 %$1,990 $1,899 4.8 %$3,827 $3,666 4.4 %
Minneapolis, MN2,355 11,709 11,361 3.1 %4,651 4,548 2.3 %7,058 6,813 3.6 %
North Dakota2,421 8,155 8,183 (0.3)%3,273 3,378 (3.1)%4,882 4,805 1.6 %
Omaha, NE1,370 4,222 4,166 1.3 %1,888 1,933 (2.3)%2,334 2,233 4.5 %
Rochester, MN1,121 4,996 4,874 2.5 %2,174 1,924 13.0 %2,822 2,950 (4.3)%
St. Cloud, MN1,192 4,576 3,683 24.2 %1,820 1,750 4.0 %2,756 1,933 42.6 %
Other Mountain West1,221 4,296 4,202 2.2 %1,479 1,694 (12.7)%2,817 2,508 12.3 %
Same-Store Total10,672 $43,771 $42,034 4.1 %$17,275 $17,126 0.9 %$26,496 $24,908 6.4 %


% of NOI		Weighted Average OccupancyAverage Monthly
Rental Rate		Average Monthly
Revenue per Occupied Home
RegionsQ42021Q32021GrowthQ42021Q32021% ChangeQ42021Q32021% Change
Denver, CO14.5 %93.6 %94.5 %(1.0)%$1,855 $1,779 4.3 %$2,089 $1,978 5.6 %
Minneapolis, MN26.6 %92.8 %94.6 %(1.9)%1,586 1,558 1.8 %1,786 1,699 5.1 %
North Dakota18.4 %95.3 %94.2 %1.2 %1,107 1,107 — 1,178 1,196 (1.5)%
Omaha, NE8.8 %93.9 %94.6 %(0.7)%996 962 3.5 %1,094 1,072 2.1 %
Rochester, MN10.7 %91.7 %93.2 %(1.6)%1,515 1,459 3.8 %1,620 1,552 4.4 %
St. Cloud, MN10.4 %91.9 %91.5 %0.4 %1,106 1,063 4.0 %1,392 1,125 23.7 %
Other Mountain West10.6 %94.5 %96.6 %(2.2)%1,133 1,082 4.7 %1,241 1,187 4.5 %
Same-Store Total100.0 %93.4 %94.3 %(1.0)%$1,314 $1,280 2.7 %$1,463 $1,392 5.1 %
(1)Refer to footnotes on page S-13.
S-14

CENTERSPACE
SAME-STORE YEAR-TO-DATE COMPARISONS(1)
(dollars in thousands)
Homes IncludedRevenuesExpensesNOI
Regions20212020% Change20212020% Change20212020% Change
Denver, CO992 $22,276 $21,568 3.3 %$7,592 $6,968 9.0 %$14,684 $14,600 0.6 %
Minneapolis, MN2,355 44,073 42,628 3.4 %18,279 17,613 3.8 %25,794 25,015 3.1 %
North Dakota2,421 32,365 31,342 3.3 %13,121 12,861 2.0 %19,244 18,481 4.1 %
Omaha, NE1,370 16,451 15,427 6.6 %7,468 6,846 9.1 %8,983 8,581 4.7 %
Rochester, MN1,121 19,223 18,512 3.8 %8,021 7,782 3.1 %11,202 10,730 4.4 %
St. Cloud, MN1,192 15,548 14,362 8.3 %6,788 6,485 4.7 %8,760 7,877 11.2 %
Other Mountain West1,221 16,390 14,863 10.3 %6,037 5,649 6.9 %10,353 9,214 12.4 %
Same-Store Total10,672 $166,326 $158,702 4.8 %$67,306 $64,204 4.8 %$99,020 $94,498 4.8 %


% of NOI		Weighted Average OccupancyAverage Monthly
Rental Rate		Average Monthly
Revenue per Occupied Home
Regions20212020Growth20212020% Change20212020% Change
Denver, CO14.9 %94.2 %93.8 %0.4 %$1,769 $1,761 0.5 %$1,987 $1,932 2.8 %
Minneapolis, MN26.0 %93.6 %93.6 %— %1,537 1,497 2.7 %1,666 1,611 3.4 %
North Dakota19.4 %95.4 %95.9 %(0.5)%1,088 1,049 3.7 %1,168 1,125 3.7 %
Omaha, NE9.1 %94.7 %94.2 %0.5 %949 905 4.8 %1,056 996 6.1 %
Rochester, MN11.3 %93.7 %95.5 %(1.8)%1,439 1,378 4.2 %1,526 1,438 5.6 %
St. Cloud, MN8.8 %92.6 %94.4 %(1.8)%1,036 958 8.2 %1,174 1,064 10.0 %
Other Mountain West10.5 %96.7 %96.5 %0.2 %1,054 962 9.5 %1,157 1,052 10.1 %
Same-Store Total100.0 %94.4 %94.7 %(0.3)%$1,260 $1,210 4.1 %$1,376 $1,308 5.1 %
(1)Refer to footnotes on page S-13.
S-15

CENTERSPACE
PORTFOLIO SUMMARY (1)
 Three Months Ended
 12/31/20219/30/20216/30/20213/31/202112/31/2020
Number of Apartment Homes at Period End     
Same-Store10,672 10,676 10,676 11,265 10,567 
Non-Same-Store3,769 3,599 903 903 1,343 
All Communities14,441 14,275 11,579 12,168 11,910 
Average Monthly Rental Rate(2)
 
Same-Store$1,314 $1,279 $1,233 $1,200 $1,177 
Non-Same-Store1,225 1,506 1,617 1,584 1,599 
All Communities$1,291 $1,293 $1,263 $1,229 $1,225 
Average Monthly Revenue per Occupied Apartment Home(3)
 
Same-Store$1,463 $1,392 $1,333 $1,302 $1,282 
Non-Same-Store1,306 1,606 1,739 1,705 1,708 
All Communities$1,423 $1,397 $1,365 $1,332 $1,330 
Weighted Average Occupancy(4)
 
Same-Store93.4 %94.3 %94.9 %94.9 %95.0 %
Non-Same-Store94.7 %95.1 %94.2 %91.8 %92.3 %
All Communities93.7 %94.4 %94.8 %94.6 %94.6 %
Operating Expenses as a % of Scheduled Rent 
Same-Store39.5 %41.8 %41.9 %42.9 %41.2 %
Non-Same-Store44.1 %39.9 %32.9 %34.9 %35.3 %
All Communities40.6 %41.6 %41.0 %42.1 %40.3 %
Capital Expenditures 
Total Capital Expenditures per Apartment Home – Same-Store$369 $255 $159 $131 $326 
(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 rent 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 apartment 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 apartment 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 calculation of weighted average occupancy may not be comparable to that disclosed by other real estate companies.
S-16

CENTERSPACE
CAPITAL EXPENDITURES
(dollars in thousands, except per home amounts)
Three Months EndedTwelve Months Ended
12/31/202112/31/202012/31/202112/31/2020
Total Same-Store Apartment Homes10,672 10,672 10,672 10,672 
Building - Exterior$997 $1,561 $3,131 $3,053 
Building - Interior1,325 29 1,560 230 
Mechanical, Electrical, & Plumbing274 427 826 1,900 
Furniture & Equipment82 118 163 343 
Landscaping & Grounds347 267 712 1,446 
Turnover909 388 3,281 2,940 
Capital Expenditures - Same-Store$3,934 $2,790 $9,673 $9,912 
Capital Expenditures per Apartment Home - Same-Store$369 $261 $906 $929 
Value Add$4,356 $3,483 $18,366 $13,762 
Total Capital Spend - Same-Store$8,290 $6,273 $28,039 $23,674 
Total Capital Spend per Apartment Home - Same Store $777 $588 $2,627 $2,218 
All Properties - Weighted Average Homes14,326 11,322 12,489 10,982 
Capital Expenditures$4,337 $2,822 $10,278 $9,954 
Capital Expenditures per Apartment Home$303 $249 $823 $906 
Value Add4,356 3,483 18,378 13,762 
Acquisition Capital1,523 $302 2,818 1,567 
Total Capital Spend$10,216 $6,607 $31,474 $25,283 
Total Capital Spend per Apartment Home$713 $584 $2,520 $2,302 
Value Add Capital Expenditures
Interior - Units
Same-Store$1,941 $1,171 $11,340 $5,752 
Non-Same-Store— — 8 — 
Total Interior Units$1,941 $1,171 $11,348 $5,752 
Common Areas and Exteriors
Same-Store$2,415 $2,312 $7,027 $8,009 
Non-Same-Store— — 3 — 
Total Common Areas and Exteriors$2,415 $2,312 $7,030 $8,009 
Total Value-Add Capital Expenditures
Same-Store$4,356 $3,483 $18,367 $13,761 
Non-Same-Store— — 11 — 
Total Portfolio Value-Add$4,356 $3,483 $18,378 $13,761 

S-17

CENTERSPACE
2022 Financial Outlook
(in thousands, except per share amounts)
Centerspace is providing guidance for 2022.
12 Months Ended2022 Full-Year Guidance Range
December 31, 2021LowHigh
ActualAmountAmount
Same-store growth (1)
Revenue$179,348 6.00 %8.00 %
Controllable expenses$44,693 3.75 %5.25 %
Non-controllable expenses$27,317 3.00 %4.50 %
Total Expenses$72,010 3.50 %5.00 %
Same-store NOI (1)
$107,338 8.00 %10.00 %
Components of NOI
Same-store NOI (1)
$107,338 $115,600 $118,100 
Non-same-store NOI (1)
$9,190 $30,800 $31,300 
Other Commercial NOI$1,475 $1,300 $1,400 
Other Sold NOI$1,845 — — 
Total NOI$119,848 $147,700 $150,800 
Accretion from investments and capital market activity, excluding impact from change in share count$— — — 
Interest expense$(29,078)(32,200)(31,700)
Preferred dividends$(6,428)(6,400)(6,400)
Recurring income and expenses
Interest and other income (loss)$(3,008)660 700 
General and administrative and property management$(24,965)(27,800)(27,100)
Casualty losses$(344)(2,000)(1,700)
Non-real estate depreciation and amortization$(366)(430)(390)
Non-controlling interest$(94)(70)(90)
Total recurring income and expenses$(28,777)(29,640)(28,580)
FFO$55,565 $79,460 $84,120 
FFO per diluted share$3.54 $4.25 $4.50 
Non-core income and expenses
Casualty loss$— $600 $500 
Technology implementation costs2,020 990 890 
Interest rate swap termination, amortization, and mark-to-market4,942 — — 
Other miscellaneous items198 — — 
Total non-core income and expenses$7,160 $1,590 $1,390 
Core FFO$62,725 $81,050 $85,510 
Core FFO per diluted share$3.99 $4.33 $4.57 
EPS - Diluted$(0.47)$(0.41)$(0.16)
Weighted average shares outstanding - diluted15,704 18,700 18,700 
(1)Amounts for the year ended December 31, 2021 reflect the 2022 same-store pool.
Additional assumptions:
•Same-store capital expenditures of $925 per home to $975 per home
•Value-add expenditures of $21.0 million to $24.0 million
•Investments of $114.5 million due to the January 2022 acquisitions of four communities in the Minneapolis, Minnesota region
S-18

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.
Outlook
12 Months Ended12 Months Ended
December 31, 2021December 31, 2022
AmountLowHigh
Net income (loss) available to common shareholders$(6,457)$282 $4,922 
Noncontrolling interests - Operating Partnership and Series E preferred units(2,806)(7,885)(7,885)
Depreciation and amortization92,165 86,923 86,923 
Less depreciation - non real estate(366)(430)(390)
Less depreciation - partially owned entities(93)(70)(90)
(Gain) loss on sale of real estate(27,518)— — 
Dividends to preferred unitholders$640 $640 $640 
FFO applicable to common shares and Units$55,565 $79,460 $84,120 
Adjustments to Core FFO:
Casualty loss write off— 600 500 
Loss on extinguishment of debt535 — — 
Technology implementation costs2,020 990 890 
Commercial lease termination proceeds(450)— — 
Acquisition related costs230 — — 
Interest rate swap termination, amortization, and mark-to-market4,942 — — 
Other miscellaneous items(117)— — 
Core FFO applicable to common shares and Units$62,725 $81,050 $85,510 
Earnings per share - diluted$(0.47)$(0.41)$(0.16)
FFO per share - diluted$3.54 $4.25 $4.50 
Core FFO per share - diluted$3.99 $4.33 $4.57 
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.
Outlook
12 Months Ended12 Months Ended
December 31, 2021December 31, 2022
ActualLowHigh
Operating income$29,892 $30,977 $35,077 
Adjustments:
General and administrative and property management expenses24,965 27,800 27,100 
Casualty loss344 2,000 1,700 
Depreciation and amortization92,165 86,923 86,923 
(Gain) loss on sale of real estate and other assets(27,518)— — 
Net operating income$119,848 $147,700 $150,800 

S-19