SEGMENT REPORTING

6 Months Ended

Jun. 30, 2022

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 members of the executive management team are the chief operating decision-makers. This team measures the performance of the reportable segment based on net operating income (“NOI”), a non-GAAP 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 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 six months ended June 30, 2022 and 2021, 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 June 30, 2022	Multifamily		All Other		Total
Revenue	$	62,201	$	915	$	63,116
Property operating expenses, including real estate taxes	25,986		230		26,216
Net operating income	$	36,215	$	685	$	36,900
Property management					(2,721)
Casualty gain (loss)					(382)
Depreciation and amortization					(24,768)
General and administrative expenses					(5,221)
Gain (loss) on sale of real estate and other investments					27
Interest expense					(7,561)
Interest and other income					(17)
Net income (loss)					$	(3,743)

	(in thousands)
Three Months Ended June 30, 2021	Multifamily		All Other		Total
Revenue	$	44,957	$	1,699	$	46,656
Property operating expenses, including real estate taxes	17,967		793		18,760
Net operating income	$	26,990	$	906	$	27,896
Property management					(2,085)
Casualty gain (loss)					27
Depreciation and amortization					(19,308)
General and administrative expenses					(3,797)
Gain (loss) on sale of real estate and other investments					26,840
Interest expense					(7,089)
Interest and other income					619
Net income (loss)					$	23,103

	(in thousands)
Six Months Ended June 30, 2022	Multifamily		All Other		Total
Revenue	$	121,599	$	1,831	$	123,430
Property operating expenses, including real estate taxes	51,529		560		52,089
Net operating income	$	70,070	$	1,271	$	71,341
Property management expenses					(4,974)
Casualty gain (loss)					(980)
Depreciation and amortization					(55,769)
General and administrative expenses					(9,721)
Gain (loss) on sale of real estate and other investments					27
Interest expense					(15,276)
Interest and other income					1,046
Net income (loss)					$	(14,306)

	(in thousands)
Six Months Ended June 30, 2021	Multifamily		All Other		Total
Revenue	$	89,198	$	4,106	$	93,304
Property operating expenses, including real estate taxes	35,841		2,160		38,001
Net operating income	$	53,357	$	1,946	$	55,303
Property management expenses					(3,852)
Casualty gain (loss)					(74)
Depreciation and amortization					(39,300)
General and administrative expenses					(7,703)
Gain (loss) on sale of real estate and other investments					26,840
Interest expense					(14,320)
Interest and other income					1,050
Net income (loss)					$	17,944

Segment Assets and Accumulated Depreciation

Segment assets are summarized as follows as of June 30, 2022, and December 31, 2021, respectively, along with reconciliations to the Condensed Consolidated Financial Statements:

	(in thousands)
As of June 30, 2022	Multifamily		All Other		Total
Segment assets
Property owned	$	2,374,726	$	26,701	$	2,401,427
Less accumulated depreciation	(480,113)		(7,721)		(487,834)
Total property owned	$	1,894,613	$	18,980	$	1,913,593
Cash and cash equivalents					13,156
Restricted cash					1,914
Other assets					18,950
Total Assets					$	1,947,613

	(in thousands)
As of December 31, 2021	Multifamily		All Other		Total
Segment assets
Property owned	$	2,244,250	$	26,920	$	2,271,170
Less accumulated depreciation	(436,004)		(7,588)		(443,592)
Total property owned	$	1,808,246	$	19,332	$	1,827,578
Mortgage loans receivable					43,276
Cash and cash equivalents					31,267
Restricted cash					7,358
Other assets					30,582
Total Assets					$	1,940,061