EX-99.1 2 centerspace063023exhibit991.htm EX-99.1 Document

Exhibit 99.1
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Earnings Release
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Centerspace Reports Second Quarter 2023 Financial Results and Increases 2023 Core FFO Guidance
MINNEAPOLIS, MN, July 31, 2023 – Centerspace (NYSE: CSR) announced today its financial and operating results for the three and six months ended June 30, 2023. The tables below show Net Income (Loss), Funds from Operations (“FFO”)1, and Core FFO1, all on a per common share basis, for the three and six months ended June 30, 2023; Same-Store Revenues, Expenses, and Net Operating Income (Loss) (“NOI”)1 over comparable periods; and Same-Store1 Weighted-Average Occupancy for each of the three months ended June 30, 2023, March 31, 2023, and June 30, 2022.
 Three Months Ended June 30,Six Months Ended June 30,
Per Common Share2023202220232022
Net income (loss) - diluted
$(0.23)$(0.30)$2.55 $(0.97)
FFO - diluted(1)
$1.11 $1.02 $2.01 $2.03 
Core FFO - diluted(1)
$1.28 $1.12 $2.36 $2.10 
 Year-Over-Year
Comparison		Sequential
Comparison		YTD Comparison
Same-Store ResultsQ2 2023 vs. Q2 2022Q2 2023 vs. Q1 20232023 vs. 2022
Revenues8.5%2.1%9.5%
Expenses3.3%(4.9)%6.6%
NOI(1)
12.1%7.2%11.6%
Three months endedSix months ended
Same-Store ResultsJune 30, 2023March 31, 2023June 30, 2022June 30, 2023June 30, 2022
Weighted Average Occupancy95.2%94.8%95.0%95.0%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” in supplemental and financial operating data within.
Highlights
•Net loss increased 23.3% to $0.23 per diluted share for the second quarter of 2023, compared to Net loss of $0.30 per diluted share for the same period of 2022;
•Core FFO per diluted share increased 14.3% to $1.28 for the three months ended June 30, 2023, compared to $1.12 for the three months ended June 30, 2022;
•Same-store revenues increased by 8.5% for the second quarter of 2023 compared to the second quarter of 2022, driving a 12.1% increase in NOI compared to the same period of the prior year;
•Total expenses decreased by $3.4 million to $55.9 million for the three months ended June 30, 2023, compared to $59.3 million for the three months ended June 30, 2022; and
•Increased the 2023 financial outlook ranges for net income per diluted share, FFO per diluted share, and Core FFO per diluted share. Refer to page S-18 in the supplemental and financial operating date within for additional detail.
Balance Sheet
At the end of the second quarter, Centerspace had $246.7 million of total liquidity on its balance sheet, consisting of $237.0 million available under the lines of credit and cash and cash equivalents of $9.7 million.
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Revised 2023 Financial Outlook
Centerspace revised its 2023 financial outlook upward. For additional information, see S-18 of the Supplemental Financial and Operating Data for the quarter ended June 30, 2023 included at the end of this release. These ranges should be considered in their entirety. The table below reflects the revised outlook.
Previous Outlook for 2023Updated Outlook for 2023
LowHighLowHigh
Net income per Share – diluted$2.73 $3.62 $2.84 $3.64 
Same-Store Revenue6.00 %8.00 %6.50 %8.00 %
Same-Store Expenses4.75 %6.25 %4.00 %5.25 %
Same-Store NOI7.00 %9.00 %8.50 %10.00 %
FFO per Share – diluted$4.03 $4.33 $4.14 $4.35 
Core FFO per Share – diluted$4.27 $4.56 $4.55 $4.75 
Additional assumptions:
•Same-store capital expenditures of $1,100 per home to $1,150 per home
•Value-add expenditures of $31.5 million to $34.5 million
•Investments from potential acquisitions of $95.0 million to $100.0 million
•Proceeds from potential dispositions of $220.0 million to $225.0 million
Earnings Call
Live webcast and replay:  https://ir.centerspacehomes.com
  
Live Conference CallConference Call Replay
Tuesday, August 1, 2023, at 10:00 AM ETReplay available until August 15, 2023
USA Toll Free Number1-833-470-1428USA 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 Number474781 Conference Number413439
Supplemental Information
Supplemental Operating and Financial Data for the quarter ended June 30, 2023 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, 2023, Centerspace owned interests in 75 apartment communities consisting of 13,497 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for the fourth consecutive year in 2023 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. 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. 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. As a result, reliance should not be placed on these forward-looking
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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, 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, 2022, 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
Josh Klaetsch
Phone: 701-837-7104
Email: IR@centerspacehomes.com
Marketing & Media
Kelly Weber
Phone: 701-837-7104
Email: kweber@centerspacehomes.com
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Supplemental Financial and Operating Data
Table of Contents
June 30, 2023


Common Share Data (NYSE: CSR)
 2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
 20232023202220222022
High closing price$64.18 $71.07 $70.20 $89.71 $103.17 
Low closing price$53.98 $51.39 $58.50 $65.85 $76.65 
Average closing price$58.61 $61.68 $64.64 $79.40 $87.61 
Closing price at end of quarter$61.36 $54.63 $58.67 $67.32 $81.55 
Common share distributions – annualized$2.92 $2.92 $2.92 $2.92 $2.92 
Closing dividend yield – annualized4.8 %5.3 %5.0 %4.3 %3.6 %
Closing common shares outstanding (thousands)
14,949 15,032 15,020 15,376 15,373 
Closing limited partnership units outstanding (thousands)
961 967 971 980 995 
Closing Series E preferred units outstanding, as converted (thousands)
2,094 2,103 2,119 2,186 2,186 
Total closing common shares, limited partnership units, and Series E preferred units, as converted, outstanding (thousands)
18,004 18,102 18,110 18,542 18,554 
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units and Series E preferred units, as converted (thousands)
$1,104,725 $988,912 $1,062,514 $1,248,247 $1,513,079 

S-1


CENTERSPACE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands)
 Three Months EndedSix Months Ended
 6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
REVENUE$64,776 $67,897 $67,848 $65,438 $63,116 $132,673 $123,430 
EXPENSES
Property operating expenses, excluding real estate taxes17,872 21,342 21,755 20,290 19,011 39,214 38,025 
Real estate taxes7,174 7,581 7,464 7,039 7,205 14,755 14,064 
Property management expense2,247 2,568 2,358 2,563 2,721 4,815 4,974 
Casualty loss
53 252 335 276 382 305 980 
Depreciation and amortization24,371 25,993 25,768 23,720 24,768 50,364 55,769 
General and administrative expenses4,162 7,723 3,276 4,519 5,221 11,885 9,721 
TOTAL EXPENSES$55,879 $65,459 $60,956 $58,407 $59,308 $121,338 $123,533 
Gain (loss) on sale of real estate and other investments
(67)60,159 14 — 27 60,092 27 
Loss on litigation settlement(2,864)— — — — (2,864)— 
Operating income (loss)
5,966 62,597 6,906 7,031 3,835 68,563 (76)
Interest expense(8,641)(10,319)(9,603)(7,871)(7,561)(18,960)(15,276)
Interest and other income (loss)
295 49 132 70 (17)344 1,046 
Net income (loss)
$(2,380)$52,327 $(2,565)$(770)$(3,743)$49,947 $(14,306)
Dividends to Series D preferred unitholders(160)(160)(160)(160)(160)(320)(320)
Net (income) loss attributable to noncontrolling interest – Operating Partnership and Series E preferred units
712 (8,566)753 439 950 (7,854)3,107 
Net income attributable to noncontrolling interests – consolidated real estate entities
(35)(30)(34)(32)(38)(65)(61)
Net income (loss) attributable to controlling interests
(1,863)43,571 (2,006)(523)(2,991)41,708 (11,580)
Dividends to preferred shareholders(1,607)(1,607)(1,607)(1,607)(1,607)(3,214)(3,214)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$(3,470)$41,964 $(3,613)$(2,130)$(4,598)$38,494 $(14,794)
Per Share Data - Basic
Net income (loss) per common share – basic
$(0.23)$2.79 $(0.24)$(0.14)$(0.30)$2.57 $(0.97)
Per Share Data - Diluted
Net income (loss) per common share – diluted
$(0.23)$2.76 $(0.24)$(0.14)$(0.30)$2.55 $(0.97)
S-2

CENTERSPACE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)
6/30/20233/31/202312/31/20229/30/20226/30/2022
ASSETS
Real estate investments
Property owned$2,434,138 $2,420,911 $2,534,124 $2,513,470 $2,401,427 
Less accumulated depreciation(543,264)(519,167)(535,401)(511,000)(487,834)
Total real estate investments1,890,874 1,901,744 1,998,723 2,002,470 1,913,593 
Cash and cash equivalents9,745 8,939 10,458 14,957 13,156 
Restricted cash566 48,903 1,433 1,417 1,914 
Other assets18,992 19,298 22,687 19,742 18,950 
TOTAL ASSETS$1,920,177 $1,978,884 $2,033,301 $2,038,586 $1,947,613 
LIABILITIES, MEZZANINE EQUITY, AND EQUITY
LIABILITIES
Accounts payable and accrued expenses$56,713 $56,639 $58,812 $58,322 $48,077 
Revolving lines of credit18,989 143,469 113,500 171,500 73,000 
Notes payable, net of unamortized loan costs299,428 299,412 399,007 299,388 299,374 
Mortgages payable, net of unamortized loan costs563,079 474,999 495,126 496,530 497,917 
TOTAL LIABILITIES$938,209 $974,519 $1,066,445 $1,025,740 $918,368 
SERIES D PREFERRED UNITS$16,560 $16,560 $16,560 $16,560 $18,627 
EQUITY
Series C Preferred Shares of Beneficial Interest93,530 93,530 93,530 93,530 93,530 
Common Shares of Beneficial Interest1,169,501 1,176,059 1,177,484 1,209,732 1,207,849 
Accumulated distributions in excess of net income(522,796)(508,420)(539,422)(524,905)(511,552)
Accumulated other comprehensive loss(1,758)(1,917)(2,055)(2,158)(2,362)
Total shareholders’ equity$738,477 $759,252 $729,537 $776,199 $787,465 
Noncontrolling interests – Operating Partnership and Series E preferred units226,294 227,920 220,132 219,466 222,528 
Noncontrolling interests – consolidated real estate entities637 633 627 621 625 
TOTAL EQUITY$965,408 $987,805 $950,296 $996,286 $1,010,618 
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY$1,920,177 $1,978,884 $2,033,301 $2,038,586 $1,947,613 
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 the company, 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 the company to evaluate the performance of existing apartment communities and their contribution to net operating 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, raising average rental revenue, renewing leases on existing residents, controlling operating costs, and making prudent capital improvements.
For the comparison of the six months ended June 30, 2023 and 2022, five apartment communities were non-same-store. Sold communities are included in “Dispositions,” while “Other properties” includes non-multifamily properties and the non-multifamily components of mixed-use properties.
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 (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance.
S-4

 (in thousands, except percentages)
 Three Months EndedSequentialYear-Over-Year
 6/30/20233/31/20236/30/2022$ Change% Change$ Change% Change
Operating income$5,966 $62,597 $3,835 $(56,631)(90.5)%$2,131 55.6 %
Adjustments:
Property management expenses2,247 2,568 2,721 (321)(12.5)%(474)(17.4)%
Casualty loss
53 252 382 (199)(79.0)%(329)(86.1)%
Depreciation and amortization24,371 25,993 24,768 (1,622)(6.2)%(397)(1.6)%
General and administrative expenses4,162 7,723 5,221 (3,561)(46.1)%(1,059)(20.3)%
(Gain) loss on sale of real estate and other investments(1)
67 (60,159)(27)60,226 *94 (348.1)%
Loss on litigation settlement2,864 — — 2,864 N/A2,864 N/A
Net operating income$39,730 $38,974 $36,900 $756 1.9 %$2,830 7.7 %
Revenue
Same-store$60,104 $58,859 $55,386 $1,245 2.1 %$4,718 8.5 %
Non-same-store3,629 3,639 2,050 (10)(0.3)%1,579 77.0 %
Other properties983 1,002 915 (19)(1.9)%68 7.4 %
Dispositions60 4,397 4,765 (4,337)(98.6)%(4,705)(98.7)%
Total64,776 67,897 63,116 (3,121)(4.6)%1,660 2.6 %
Property operating expenses, including real estate taxes
Same-store23,382 24,593 22,629 (1,211)(4.9)%753 3.3 %
Non-same-store1,348 1,310 769 38 2.9 %579 75.3 %
Other properties254 151 230 103 68.2 %24 10.4 %
Dispositions62 2,869 2,588 (2,807)(97.8)%(2,526)(97.6)%
Total25,046 28,923 26,216 (3,877)(13.4)%(1,170)(4.5)%
Net operating income
Same-store36,722 34,266 32,757 2,456 7.2 %3,965 12.1 %
Non-same-store2,281 2,329 1,281 (48)(2.1)%1,000 78.1 %
Other properties729 851 685 (122)(14.3)%44 6.4 %
Dispositions(2)1,528 2,177 (1,530)(100.1)%(2,179)(100.1)%
Total$39,730 $38,974 $36,900 $756 1.9 %$2,830 7.7 %
(1)Current quarter activity relates to dispositions that occurred in a prior period.
* Not a meaningful percentage
S-5

Six Months Ended June 30,
20232022$ Change% Change
Operating income (loss)$68,563 $(76)$68,639 *
Adjustments:
Property management expenses4,815 4,974 (159)(3.2)%
Casualty loss
305 980 (675)(68.9)%
Depreciation and amortization50,364 55,769 (5,405)(9.7)%
General and administrative expenses11,885 9,721 2,164 22.3 %
Gain on sale of real estate and other investments(60,092)(27)(60,065)*
Loss on litigation settlement2,864 — 2,864 N/A
Net operating income$78,704 $71,341 $7,363 10.3 %
Revenue
Same-store$118,964 $108,635 $10,329 9.5 %
Non-same-store7,266 3,717 3,549 95.5 %
Other properties1,985 1,831 154 8.4 %
Dispositions4,458 9,247 (4,789)(51.8)%
Total132,673 123,430 9,243 7.5 %
Property operating expenses, including real estate taxes
Same-store47,976 44,998 2,978 6.6 %
Non-same-store2,657 1,480 1,177 79.5 %
Other properties404 560 (156)(27.9)%
Dispositions2,932 5,051 (2,119)(42.0)%
Total53,969 52,089 1,880 3.6 %
Net operating income
Same-store70,988 63,637 7,351 11.6 %
Non-same-store4,609 2,237 2,372 106.0 %
Other properties1,581 1,271 310 24.4 %
Dispositions1,526 4,196 (2,670)(63.6)%
Total$78,704 $71,341 $7,363 10.3 %
* Not a meaningful percentage
S-6

Reconciliation of Same-Store Controllable Expenses to Total Property Operating Expenses, Including Real Estate Taxes
Centerspace defines same-store controllable expenses as property operating expenses excluding real estate taxes and insurance. 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.
 (in thousands, except percentages)
 Three Months Ended June 30,Six Months Ended June 30,
 20232022$ Change% Change20232022$ Change% Change
Controllable expenses
On-site compensation(1)
$6,501 $5,922 $579 9.8 %$12,518 $11,471 $1,047 9.1 %
Repairs and maintenance3,281 3,533 (252)(7.1)%6,751 6,478 273 4.2 %
Utilities3,431 3,635 (204)(5.6)%8,409 8,419 (10)(0.1)%
Administrative and marketing1,330 1,257 73 5.8 %2,583 2,480 103 4.2 %
Total$14,543 $14,347 $196 1.4 %$30,261 $28,848 $1,413 4.9 %
Non-controllable expenses
Real estate taxes$6,591 $6,319 $272 4.3 %$13,356 $12,293 $1,063 8.6 %
Insurance2,248 1,963 285 14.5 %4,359 3,857 502 13.0 %
Total$8,839 $8,282 $557 6.7 %$17,715 $16,150 $1,565 9.7 %
Property operating expenses, including real estate taxes - non-same-store$1,348 $769 $579 75.3 %$2,657 $1,480 $1,177 79.5 %
Property operating expenses, including real estate taxes - other properties254 230 24 10.4 %404 560 (156)(27.9)%
Property operating expenses, including real estate taxes - dispositions62 2,588 (2,526)(97.6)%2,932 5,051 (2,119)(42.0)%
Total property operating expenses, including real estate taxes$25,046 $26,216 $(1,170)(4.5)%$53,969 $52,089 $1,880 3.6 %
(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 and amortization.
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;
•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; and
•similar adjustments for partially owned consolidated real estate entities.
The exclusion in Nareit’s definition of FFO of gains and losses from the sale of real estate assets and impairment write-downs 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.
S-7

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 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.
S-8

(in thousands, except per share amounts)
Three Months EndedSix Months Ended
6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
Funds From Operations     
Net income (loss) available to common shareholders
$(3,470)$41,964 $(3,613)$(2,130)$(4,598)$38,494 $(14,794)
Adjustments:
Noncontrolling interests – Operating Partnership and Series E preferred units(712)8,566 (753)(439)(950)7,854 (3,107)
Depreciation and amortization24,371 25,993 25,768 23,720 24,768 50,364 55,769 
Less depreciation – non real estate(89)(91)(91)(94)(101)(180)(202)
Less depreciation – partially owned entities(19)(19)(19)(18)(7)(38)(28)
(Gain) loss on sale of real estate and other assets
71 (60,159)(14)— (27)(60,088)(27)
FFO applicable to common shares and Units$20,152 $16,254 $21,278 $21,039 $19,085 $36,406 $37,611 
Adjustments to Core FFO:
Non-cash casualty (gain) loss(52)13 20 46 163 (39)188 
Loss on extinguishment of debt— — — — 5 — 5 
Technology implementation costs(1)
— — 89 234 447 — 550 
Interest rate swap termination, amortization, and mark-to-market159 138 104 204 205 297 (408)
Amortization of assumed debt(116)(116)(117)(116)(116)(232)(231)
Pursuit costs— 5 137 38 1,127 5 1,127 
Severance and transition related costs(19)3,199 — — — 3,180 — 
Loss on litigation settlement and one-time trial costs(2)
3,201 — — — — 3,201 — 
Other miscellaneous items(3)
(22)49 (28)17 100 27 96 
Core FFO applicable to common shares and Units$23,303 $19,542 $21,483 $21,462 $21,016 $42,845 $38,938 
FFO applicable to common shares and Units$20,152 $16,254 $21,278 $21,039 $19,085 $36,406 $37,611 
Dividends to preferred unitholders160 160 160 160 160 320 320 
FFO applicable to common shares and Units - diluted$20,312 $16,414 $21,438 $21,199 $19,245 $36,726 $37,931 
Core FFO applicable to common shares and Units$23,303 $19,542 $21,483 $21,462 $21,016 $42,845 $38,938 
Dividends to preferred unitholders160 160 160 160 160 320 320 
Core FFO applicable to common shares and Units - diluted$23,463 $19,702 $21,643 $21,622 $21,176 $43,165 $39,258 
Per Share Data
Net income (loss) per share and Unit - diluted$(0.23)$2.76 $(0.24)$(0.14)$(0.30)$2.55 $(0.97)
FFO per share and Unit - diluted$1.11 $0.89 $1.16 $1.13 $1.02 $2.01 $2.03 
Core FFO per share and Unit - diluted$1.28 $1.07 $1.17 $1.15 $1.12 $2.36 $2.10 
Weighted average shares - basic14,949 15,025 15,027 15,373 15,369 14,987 15,233 
Effect of redeemable operating partnership Units965 968 974 984 995 967 978 
Effect of Series D preferred units228 228 228 228 228 228 228 
Effect of Series E preferred units2,103 2,118 2,185 2,186 2,186 2,111 2,186 
Effect of dilutive restricted stock units and stock options24 20 9 30 48 20 57 
Weighted average shares and Units - diluted18,269 18,359 18,423 18,801 18,826 18,313 18,682 
(1)Costs are related to a two-year implementation.
(2)Consists of a $2.9 million loss on litigation settlement for a trial judgment entered against the Company and $340,000 in one-time trial costs related to the litigation matter.
(3)Consists of (gain) loss on investments.
S-9

Reconciliation of Net Income (Loss) Available to Controlling Interests 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, financing costs, 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
6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
Adjusted EBITDA
Net income (loss) available to controlling interests
$(1,863)$43,571 $(2,006)$(523)$(2,991)$41,708 $(11,580)
Adjustments: 
Dividends to Series D preferred unitholders160 160 160 160 160 320 320 
Noncontrolling interests – Operating Partnership and Series E preferred units(712)8,566 (753)(439)(950)7,854 (3,107)
Income (loss) before noncontrolling interests – Operating Partnership and Series E preferred units
$(2,415)$52,297 $(2,599)$(802)$(3,781)$49,882 $(14,367)
Adjustments:  
Interest expense8,626 10,305 9,589 7,856 7,547 18,931 15,247 
Loss on extinguishment of debt— — — — 5 — 5 
Depreciation and amortization related to real estate investments24,351 25,971 25,747 23,699 24,759 50,322 55,739 
Non-cash casualty (gain) loss (52)13 20 46 163 (39)188 
Interest income(248)(92)(92)(82)(74)(340)(538)
(Gain) loss on sale of real estate and other investments
71 (60,159)(14)— (27)(60,088)(27)
Technology implementation costs(1)
— — 89 234 447 — 550 
Interest rate swap termination and mark-to-market— — — — 18 — (564)
Pursuit costs— 5 137 38 1,127 5 1,127 
Severance and transition related costs(19)3,199 — — — 3,180 — 
Loss on litigation settlement and one-time trial costs(2)
3,201 — — — — 3,201 — 
Other miscellaneous items(3)
(22)49 (28)17 100 27 96 
Adjusted EBITDA$33,493 $31,588 $32,849 $31,006 $30,284 $65,081 $57,456 
(1)Costs are related to a two-year implementation.
(2)Consists of a $2.9 million loss on litigation settlement for a trial judgment entered against the Company and $340,000 in one-time trial costs related to the litigation matter.
(3)Consists of (gain) loss on investments.
S-10


CENTERSPACE
DEBT ANALYSIS
(in thousands)
Debt Maturity Schedule
Annual Expirations
Future Maturities of Debt
Secured Fixed
Debt		Unsecured Fixed
Debt		Unsecured Variable DebtTotal
Debt		% of
Total Debt
Weighted
Average Interest Rate(1)
2023 (remainder)$22,385 $— $— $22,385 2.5 %4.12 %
2024— — 989 989 0.1 %12.68 %
202530,851 — 18,000 48,851 5.5 %4.56 %
202651,270 — — 51,270 5.8 %3.73 %
202750,309 — — 50,309 5.7 %3.47 %
Thereafter411,714 300,000 — 711,714 80.4 %3.42 %
Total debt$566,529 $300,000 $18,989 $885,518 100.0 %3.54 %
(1)Weighted average interest rate of debt that matures during the year.

6/30/20233/31/202312/31/20229/30/20226/30/2022
Debt Balances Outstanding     
Secured fixed rate - mortgages payable - other$367,679 $279,340 $299,427 $300,956 $302,360 
Secured fixed rate - Fannie Mae credit facility198,850 198,850 198,850 198,850 198,850 
Unsecured variable rate lines of credit18,989 143,469 113,500 171,500 73,000 
Unsecured term loans— — 100,000 — — 
Unsecured senior notes300,000 300,000 300,000 300,000 300,000 
Debt total$885,518 $921,659 $1,011,777 $971,306 $874,210 
Mortgages payable - other rate4.14 %3.85 %3.85 %3.85 %3.85 %
Fannie Mae Credit Facility rate2.78 %2.78 %2.78 %2.78 %2.78 %
Lines of credit rate7.35 %6.39 %5.23 %4.13 %3.04 %
Unsecured term loan rate — — 5.57 %— — 
Unsecured senior notes rate3.12 %3.12 %3.12 %3.12 %3.12 %
Total debt3.54 %3.71 %3.62 %3.45 %3.27 %


S-11

CENTERSPACE 
CAPITAL ANALYSIS 
(in thousands, except per share and unit amounts)
Three Months Ended
6/30/20233/31/202312/31/20229/30/20226/30/2022
Equity Capitalization
Common shares outstanding14,949 15,032 15,020 15,376 15,373 
Operating partnership units outstanding961 967 971 980 995 
Series E preferred units (as converted)2,094 2,103 2,119 2,186 2,186 
Total common shares, Units, and Series E preferred units, as converted, outstanding18,004 18,102 18,110 18,542 18,554 
Market price per common share (closing price at end of period)$61.36 $54.63 $58.67 $67.32 $81.55 
Equity capitalization-common shares and units$1,104,725 $988,912 $1,062,514 $1,248,247 $1,513,079 
Recorded book value of preferred shares$93,530 $93,530 $93,530 $93,530 $93,530 
Total equity capitalization$1,198,255 $1,082,442 $1,156,044 $1,341,777 $1,606,609 
Series D Preferred Units$16,560 $16,560 $16,560 $16,560 $18,627 
Debt Capitalization
Total debt$885,518 $921,659 $1,011,777 $971,306 $874,210 
Total capitalization$2,100,333 $2,020,661 $2,184,381 $2,329,643 $2,499,446 
Total debt to total capitalization(1)
42.2 %45.6 %46.3 %41.7 %35.0 %
(1)Total debt to total market capitalization, a non-GAAP financial measure, is total debt not adjusted for unamortized deferred financing costs from the balance sheet divided by the sum of total debt from the balance sheet, market value of common shares, operating partnership units, and the as converted Series E preferred units, and book value of Series C preferred shares and Series D preferred units outstanding at the end of the period. This non-GAAP financial measure should not be considered a substitute for operating results determined in accordance with GAAP.

Three Months EndedSix Months Ended
6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
Debt service coverage ratio(1)
3.33  x2.70  x2.99  x3.35  x3.39  x2.99  x3.16  x
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization2.83  x2.35  x2.58  x2.81  x2.83  x2.57  x2.64  x
Net debt/Adjusted EBITDA(2)
6.54  x7.22  x7.62  x7.71  x7.11  x6.73  x7.49  x
Net debt and preferred equity/Adjusted EBITDA(2)
7.36  x8.09  x8.46  x8.60  x8.03  x7.57  x8.47  x
Distribution Data
Common shares and Units outstanding at record date15,910 15,999 15,991 16,356 16,368 15,910 16,368 
Total common distribution declared
$11,608 $11,668 $11,614 $11,939 $11,948 $23,276 $23,892 
Common distribution per share and Unit
$0.73 $0.73 $0.73 $0.73 $0.73 $1.46 $1.46 
Payout ratio (Core FFO per diluted share and unit basis)(3)
57.0 %68.2 %62.4 %63.5 %65.2 %61.9 %69.5 %
(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 outstanding debt balance less cash and cash equivalents. 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.
6/30/20233/31/202312/31/20229/30/20226/30/2022
Total debt$885,518 $921,659 $1,011,777 $971,306 $874,210 
Less: cash and cash equivalents9,745 8,939 10,458 14,957 13,156 
Net debt$875,773 $912,720 $1,001,319 $956,349 $861,054 
(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. Refer to the Core FFO definition included within the Non-GAAP Financial Measures and Reconciliations section.
S-12


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

 Apartment Homes IncludedRevenuesExpensesNOI
RegionsQ2 2023Q2 2022% ChangeQ2 2023Q2 2022% ChangeQ2 2023Q2 2022% Change
Denver, CO1,889 $11,968 $10,955 9.2 %$3,944 $3,568 10.5 %$8,024 $7,387 8.6 %
Minneapolis, MN4,519 21,069 19,685 7.0 %9,088 8,880 2.3 %11,981 10,805 10.9 %
North Dakota2,422 9,241 8,482 8.9 %3,630 3,523 3.0 %5,611 4,959 13.1 %
Omaha, NE872 3,443 3,134 9.9 %1,381 1,325 4.2 %2,062 1,809 14.0 %
Rochester, MN1,129 5,760 5,235 10.0 %2,137 2,138 — %3,623 3,097 17.0 %
St. Cloud, MN832 3,459 3,177 8.9 %1,405 1,375 2.2 %2,054 1,802 14.0 %
Other Mountain West(1)
1,222 5,164 4,718 9.5 %1,797 1,820 (1.3)%3,367 2,898 16.2 %
Same-Store Total12,885 $60,104 $55,386 8.5 %$23,382 $22,629 3.3 %$36,722 $32,757 12.1 %


 % of NOI Contribution
Weighted Average Occupancy (2)
Average Monthly
Rental Rate (3)
Average Monthly
Revenue per Occupied Home (4)
RegionsQ2 2023Q2 2022GrowthQ2 2023Q2 2022% ChangeQ2 2023Q2 2022% Change
Denver, CO21.8 %96.1 %94.2 %1.9 %$1,928 $1,820 5.9 %$2,198 $2,053 7.1 %
Minneapolis, MN32.6 %94.9 %95.0 %(0.1)%1,463 1,394 4.9 %1,637 1,528 7.1 %
North Dakota15.3 %96.1 %95.6 %0.5 %1,201 1,118 7.4 %1,323 1,221 8.4 %
Omaha, NE5.6 %94.7 %97.2 %(2.5)%1,262 1,126 12.1 %1,389 1,232 12.7 %
Rochester, MN9.9 %95.0 %95.2 %(0.2)%1,688 1,536 9.9 %1,790 1,624 10.2 %
St. Cloud, MN5.6 %91.7 %90.8 %0.9 %1,343 1,229 9.3 %1,512 1,401 7.9 %
Other Mountain West(1)
9.2 %95.3 %96.5 %(1.2)%1,327 1,207 9.9 %1,479 1,333 11.0 %
Same-Store Total100.0 %95.2 %95.0 %0.2 %$1,467 $1,371 7.0 %$1,634 $1,509 8.3 %
(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 rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rental 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. Centerspace 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.
(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
(in thousands, except property data amounts and percentages)

Apartment Homes IncludedRevenuesExpensesNOI
RegionsQ2 2023Q1 2023% ChangeQ2 2023Q1 2023% ChangeQ2 2023Q1 2023% Change
Denver, CO1,889 $11,968 $11,740 1.9 %$3,944 $4,035 (2.3)%$8,024 $7,705 4.1 %
Minneapolis, MN4,519 21,069 20,805 1.3 %9,088 9,588 (5.2)%11,981 11,217 6.8 %
North Dakota2,422 9,241 8,879 4.1 %3,630 3,814 (4.8)%5,611 5,065 10.8 %
Omaha, NE872 3,443 3,356 2.6 %1,381 1,433 (3.6)%2,062 1,923 7.2 %
Rochester, MN1,129 5,760 5,648 2.0 %2,137 2,228 (4.1)%3,623 3,420 5.9 %
St. Cloud, MN832 3,459 3,351 3.2 %1,405 1,691 (16.9)%2,054 1,660 23.7 %
Other Mountain West(1)
1,222 5,164 5,080 1.7 %1,797 1,804 (0.4)%3,367 3,276 2.8 %
Same-Store Total12,885 $60,104 $58,859 2.1 %$23,382 $24,593 (4.9)%$36,722 $34,266 7.2 %

% of NOI Contribution
Weighted Average Occupancy (2)
Average Monthly
Rental Rate (3)
Average Monthly
Revenue per Occupied Home (4)
RegionsQ2 2023Q1 2023GrowthQ2 2023Q1 2023% ChangeQ2 2023Q1 2023% Change
Denver, CO21.8 %96.1 %95.8 %0.3 %$1,928 $1,912 0.8 %$2,198 $2,162 1.7 %
Minneapolis, MN32.6 %94.9 %94.6 %0.3 %1,463 1,454 0.6 %1,637 1,622 0.9 %
North Dakota15.3 %96.1 %95.9 %0.2 %1,201 1,175 2.2 %1,323 1,274 3.8 %
Omaha, NE5.6 %94.7 %94.0 %0.7 %1,262 1,234 2.3 %1,389 1,364 1.8 %
Rochester, MN9.9 %95.0 %94.8 %0.2 %1,688 1,664 1.4 %1,790 1,759 1.8 %
St. Cloud, MN5.6 %91.7 %90.1 %1.6 %1,343 1,315 2.1 %1,512 1,490 1.5 %
Other Mountain West(1)
9.2 %95.3 %95.1 %0.2 %1,327 1,319 0.6 %1,479 1,457 1.5 %
Same-Store Total100.0 %95.2 %94.8 %0.4 %$1,467 $1,450 1.2 %$1,634 $1,606 1.7 %
(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 rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rental 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. Centerspace 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.
(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-14

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

Apartment Homes IncludedRevenuesExpensesNOI
Regions20232022% Change20232022% Change20232022% Change
Denver, CO1,889 $23,708 $21,580 9.9 %$7,979 $6,743 18.3 %$15,729 $14,837 6.0 %
Minneapolis, MN4,519 41,874 38,689 8.2 %18,677 17,880 4.5 %23,197 20,809 11.5 %
North Dakota2,422 18,119 16,638 8.9 %7,444 7,176 3.7 %10,675 9,462 12.8 %
Omaha, NE872 6,799 6,192 9.8 %2,815 2,652 6.1 %3,984 3,540 12.5 %
Rochester, MN1,129 11,409 10,238 11.4 %4,365 4,235 3.1 %7,044 6,003 17.3 %
St. Cloud, MN832 6,810 6,226 9.4 %3,095 2,874 7.7 %3,715 3,352 10.8 %
Other Mountain West(1)
1,222 10,245 9,072 12.9 %3,601 3,438 4.7 %6,644 5,634 17.9 %
Same-Store Total12,885 $118,964 $108,635 9.5 %$47,976 $44,998 6.6 %$70,988 $63,637 11.6 %

% of NOI Contribution
Weighted Average Occupancy (2)
Average Monthly
Rental Rate (3)
Average Monthly
Revenue per Occupied Home (4)
Regions20232022Growth20232022% Change20232022% Change
Denver, CO22.2 %95.9 %94.1 %1.8 %$1,920 $1,806 6.3 %$2,180 $2,023 7.8 %
Minneapolis, MN32.7 %94.8 %94.6 %0.2 %1,459 1,384 5.4 %1,630 1,509 8.0 %
North Dakota15.0 %96.0 %95.2 %0.8 %1,188 1,111 6.9 %1,298 1,203 7.9 %
Omaha, NE5.6 %94.4 %96.4 %(2.0)%1,248 1,111 12.3 %1,377 1,228 12.1 %
Rochester, MN9.9 %94.9 %94.1 %0.8 %1,676 1,522 10.1 %1,774 1,607 10.4 %
St. Cloud, MN5.2 %90.9 %91.6 %(0.7)%1,329 1,214 9.5 %1,501 1,362 10.2 %
Other Mountain West(1)
9.4 %95.2 %95.3 %(0.1)%1,323 1,180 12.1 %1,468 1,298 13.1 %
Same-Store Total100.0 %95.0 %94.5 %0.5 %$1,459 $1,358 7.4 %$1,620 $1,487 8.9 %
(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 rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rental 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. Centerspace 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.
(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-15

CENTERSPACE
PORTFOLIO SUMMARY(1)
Three Months Ended
6/30/20233/31/202312/31/20229/30/20226/30/2022
Number of Apartment Homes at Period End
Same-Store12,885 12,885 11,330 11,330 11,319 
Non-Same-Store612 612 3,735 3,734 3,519 
All Communities13,497 13,497 15,065 15,064 14,838 
Average Monthly Rental Rate(2)
Same-Store$1,467 $1,450 $1,438 $1,411 $1,366 
Non-Same-Store1,894 1,890 1,352 1,286 1,245 
All Communities$1,487 $1,470 $1,417 $1,381 $1,337 
Average Monthly Revenue per Occupied Apartment Home(3)
Same-Store$1,634 $1,606 $1,592 $1,565 $1,518 
Non-Same-Store2,072 2,066 1,471 1,417 1,329 
All Communities$1,654 $1,627 $1,562 $1,530 $1,473 
Weighted Average Occupancy(4)
Same-Store95.2 %94.8 %94.9 %94.5 %94.8 %
Non-Same-Store95.4 %95.9 %94.7 %94.6 %95.0 %
All Communities95.2 %94.9 %94.9 %94.5 %94.8 %
Operating Expenses as a % of Scheduled Rent
Same-Store41.2 %43.9 %43.1 %42.5 %40.3 %
Non-Same-Store38.8 %37.8 %51.7 %48.7 %47.1 %
All Communities41.1 %43.5 %45.1 %43.9 %41.8 %
Capital Expenditures
Total Capital Expenditures per Apartment Home – Same-Store
$258 $115 $364 $465 $196 
(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-16

CENTERSPACE
CAPITAL EXPENDITURES
($ in thousands, except per home amounts)
Three Months EndedSix Months Ended
Same Store Capital Expenditures6/30/20236/30/20226/30/20236/30/2022
Total Same-Store Apartment Homes12,885 12,885 12,885 12,885 
Building - Exterior$231 $62 $231 $595 
Building - Interior64 225 64 230 
Mechanical, Electrical, & Plumbing775 308 1,059 533 
Furniture & Equipment153 113 178 193 
Landscaping & Grounds3 138 3 221 
Turnover replacements730 1,346 1,509 2,080 
Work in progress1,370 305 1,767 (205)
Capital Expenditures - Same-Store$3,326 $2,497 $4,811 $3,647 
Capital Expenditures per Apartment Home - Same-Store$258 $194 $373 $283 
Value Add$5,952 $6,327 $8,489 $10,011 
Total Capital Spend - Same-Store$9,278 $8,824 $13,300 $13,658 
Total Capital Spend per Apartment Home - Same-Store$720 $685 $1,032 $1,060 
Three Months EndedSix Months Ended
Capital Expenditures - All Properties6/30/20236/30/20226/30/20236/30/2022
All Properties - Weighted Average Apartment Homes13,497 14,838 14,019 14,838 
Capital Expenditures$3,404 $2,892 $5,134 $4,217 
Capital Expenditures per Apartment Home$252 $195 $366 $284 
Value Add5,976 6,367 8,606 10,051 
Acquisition Capital5,290 1,364 9,962 2,564 
Total Capital Spend14,670 10,623 23,702 16,832 
Total Capital Spend per Apartment Home$1,087 $716 $1,691 $1,134 
Three Months EndedSix Months Ended
Value Add Capital Expenditures6/30/20236/30/20226/30/20236/30/2022
Interior - Units
Same-Store$4,499 $4,318 $5,718 $6,955 
Non-Same-Store— — — — 
Total Interior Units$4,499 $4,318 $5,718 $6,955 
Common Areas and Exteriors
Same-Store$1,330 $1,917 $2,555 $4,850 
Non-Same-Store24 53 117 53 
Total Common Areas and Exteriors$1,354 $1,970 $2,672 $4,903 
Work in Progress
Same-Store$123 $92 $216 $(1,794)
Non-Same-Store— (13)$— $(13)
Total Work in Progress$123 $79 $216 $(1,807)
Total Value-Add Capital Expenditures
Same-Store$5,952 $6,327 $8,489 $10,011 
Non-Same-Store24 40 117 40 
Total Portfolio Value-Add$5,976 $6,367 $8,606 $10,051 
S-17

CENTERSPACE
2023 Financial Outlook
(in thousands, except per share and per home amounts)
Centerspace revised its outlook for 2023 in the table below.
Six Months Ended2023 Previous Outlook Range2023 Revised Outlook Range
June 30, 2023LowHighLowHigh
YTD ActualAmountAmountAmountAmount
Same-store growth
Revenue$118,964 6.00 %8.00 %6.50 %8.00 %
Controllable expenses30,261 3.00 %4.50 %2.00 %3.50 %
Non-controllable expenses17,715 8.00 %9.50 %7.50 %9.00 %
Total Expenses$47,976 4.75 %6.25 %4.00 %5.25 %
Same-store NOI(1)
$70,988 7.00 %9.00 %8.50 %10.00 %
Components of NOI(1)
Same-store$70,988 $138,300 $141,300 $137,000 $139,000 
Non-same-store4,609 8,900 9,100 9,000 9,200 
Other properties1,581 2,000 2,400 1,700 1,800 
Dispositions1,526 $2,500 $2,800 $7,200 $7,400 
Total NOI(1)
$78,704 $151,700 $155,600 $154,900 $157,400 
Accretion (dilution) from investments and capital market activity, excluding impact from change in share count$— — — (400)(200)
Other operating income and expenses
General and administrative and property management(16,700)(32,300)(31,500)(31,100)(30,700)
Casualty loss(305)(1,500)(1,300)(1,300)(1,100)
Loss on litigation settlement(2,864)— — (3,200)(3,200)
Non-real estate depreciation and amortization(180)(375)(325)(375)(325)
Non-controlling interest(65)(110)(100)(110)(100)
Total other operating income and expenses$(20,114)$(34,285)$(33,225)$(36,085)$(35,425)
Interest expense$(18,960)(37,400)(36,900)(37,000)(36,600)
Interest and other income310 $160 $350 $600 $800 
Dividends to preferred shareholders(3,214)(6,400)(6,400)(6,400)(6,400)
FFO applicable to common shares and Units - diluted(1)
$36,726 $73,775 $79,425 $75,615 $79,575 
Non-core income and expenses
Non-cash casualty (gain) loss$(39)$500 $300 $400 $200 
Interest rate swap amortization297 900 1,000 900 1,000 
Amortization of assumed debt(232)— — — — 
Pursuit costs5 70 60 70 60 
Severance and transition related costs3,180 3,200 3,200 3,180 3,180 
Loss on litigation settlement and one-time trial costs3,201 — — 3,200 3,200 
Other miscellaneous items27 (310)(350)(310)(350)
Total non-core income and expenses$6,439 $4,360 $4,210 $7,440 $7,290 
Core FFO applicable to common shares and Units - diluted(1)
$43,165 $78,135 $83,635 $83,055 $86,865 
EPS - Diluted$2.55 $2.73 $3.62 $2.84 $3.64 
FFO per diluted share(1)
$2.01 $4.03 $4.33 $4.14 $4.35 
Core FFO per diluted share(1)
$2.36 $4.27 $4.56 $4.55 $4.75 
Weighted average shares outstanding - diluted18,313 18,300 18,325 18,250 18,275 
Additional Assumptions
Same-store capital expenditures (per home)$373 $1,100 1,150 $1,100 1,150 
Value-add expenditures$8,606 $24,500 $27,500 $31,500 $34,500 
Investments$— $— $— $95,000 $100,000 
Dispositions$144,255 $155,000 $165,000 $220,000 $225,000 
(1)NOI, 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, refer to "Non-GAAP Financial Measures and Reconciliations" in the Supplemental Financial and Operating Data" above.
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.
Previous OutlookRevised Outlook
Six Months Ended12 Months Ended12 Months Ended
June 30, 2023December 31, 2023December 31, 2023
ActualLowHighLowHigh
Net income available to common shareholders$38,494 $57,839 $74,307 $59,679 $74,457 
Noncontrolling interests - Operating Partnership and Series E preferred units7,854 (7,795)(7,885)(7,795)(7,885)
Depreciation and amortization50,364 92,556 91,768 92,556 91,768 
Less depreciation - non real estate(180)(375)(325)(375)(325)
Less depreciation - partially owned entities(38)(110)(100)(110)(100)
Gain on sale of real estate(60,088)(68,980)(78,980)(68,980)(78,980)
Dividends to preferred unitholders320 640 640 640 640 
FFO applicable to common shares and Units - diluted$36,726 $73,775 $79,425 $75,615 $79,575 
Adjustments to Core FFO:
Non-cash casualty (gain) loss(39)500 300 400 200 
Interest rate swap termination, amortization, and mark-to-market297 900 1,000 900 1,000 
Amortization of assumed debt(232)— — — — 
Pursuit costs5 70 60 70 60 
Severance and transition related costs3,180 3,200 3,200 3,180 3,180 
Loss on litigation settlement and one-time trial costs3,201 — — 3,200 3,200 
Other miscellaneous items27 (310)(350)(310)(350)
Core FFO applicable to common shares and Units - diluted$43,165 $78,135 $83,635 $83,055 $86,865 
Net income per share - diluted$2.55 $2.73 $3.62 $2.84 $3.64 
FFO per share - diluted$2.01 $4.03 $4.33 $4.14 $4.35 
Core FFO per share - diluted$2.36 $4.27 $4.56 $4.55 $4.75 
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 sales of real estate and other investments, depreciation, 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.
Previous OutlookRevised Outlook
Six Months Ended12 Months Ended12 Months Ended
June 30, 2023December 31, 2023December 31, 2023
ActualLowHighLowHigh
Operating income$68,563 $94,324 $110,012 $96,060 $109,948 
Adjustments:
General and administrative and property management expenses16,700 32,300 31,500 31,100 30,700 
Casualty loss305 1,500 1,300 1,300 1,100 
Depreciation and amortization50,364 92,556 91,768 92,556 91,768 
Gain on sale of real estate and other investments(60,092)(68,980)(78,980)(68,980)(78,980)
Loss on litigation settlement2,864 — — 2,864 2,864 
Net operating income$78,704 $151,700 $155,600 $154,900 $157,400 
S-19