0000798359 2020 FY false P5Y P3Y P15Y 1 P10D P4Y 33.33 33.33 33.33 0000798359 2020-01-01 2020-12-31 0000798359 us-gaap:CommonStockMember 2020-01-01 2020-12-31 0000798359 us-gaap:SeriesCPreferredStockMember 2020-01-01 2020-12-31 iso4217:USD 0000798359 2020-06-30 xbrli:shares 0000798359 2021-02-15 0000798359 2020-12-31 0000798359 2019-12-31 0000798359 us-gaap:MediumTermNotesMember 2020-12-31 0000798359 us-gaap:MediumTermNotesMember 2019-12-31 0000798359 us-gaap:MortgagesMember 2020-12-31 0000798359 us-gaap:MortgagesMember 2019-12-31 iso4217:USD xbrli:shares 0000798359 iret:SeriesDPreferredUnitsMember 2019-12-31 0000798359 iret:SeriesDPreferredUnitsMember 2020-12-31 0000798359 iret:SeriesCPreferredSharesOfBeneficialInterestMember 2020-12-31 0000798359 iret:SeriesCPreferredSharesOfBeneficialInterestMember 2019-12-31 0000798359 2019-01-01 2019-12-31 0000798359 2018-05-01 2018-12-31 0000798359 2017-05-01 2018-04-30 0000798359 us-gaap:PreferredStockMember 2017-04-30 0000798359 us-gaap:CommonStockMember 2017-04-30 0000798359 us-gaap:RetainedEarningsMember 2017-04-30 0000798359 us-gaap:ComprehensiveIncomeMember 2017-04-30 0000798359 us-gaap:NoncontrollingInterestMember 2017-04-30 0000798359 2017-04-30 0000798359 us-gaap:RetainedEarningsMember 2017-05-01 2018-04-30 0000798359 us-gaap:NoncontrollingInterestMember 2017-05-01 2018-04-30 0000798359 us-gaap:ComprehensiveIncomeMember 2017-05-01 2018-04-30 0000798359 us-gaap:SeriesBPreferredStockMember 2017-05-01 2018-04-30 0000798359 us-gaap:SeriesBPreferredStockMember us-gaap:RetainedEarningsMember 2017-05-01 2018-04-30 0000798359 us-gaap:SeriesCPreferredStockMember 2017-05-01 2018-04-30 0000798359 us-gaap:RetainedEarningsMember us-gaap:SeriesCPreferredStockMember 2017-05-01 2018-04-30 0000798359 us-gaap:CommonStockMember 2017-05-01 2018-04-30 0000798359 us-gaap:PreferredStockMember 2017-05-01 2018-04-30 0000798359 us-gaap:PreferredStockMember 2018-04-30 0000798359 us-gaap:CommonStockMember 2018-04-30 0000798359 us-gaap:RetainedEarningsMember 2018-04-30 0000798359 us-gaap:ComprehensiveIncomeMember 2018-04-30 0000798359 us-gaap:NoncontrollingInterestMember 2018-04-30 0000798359 2018-04-30 0000798359 us-gaap:RetainedEarningsMember srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2018-04-30 0000798359 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2018-04-30 0000798359 us-gaap:PreferredStockMember srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2018-04-30 0000798359 us-gaap:CommonStockMember srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2018-04-30 0000798359 us-gaap:RetainedEarningsMember srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2018-04-30 0000798359 us-gaap:ComprehensiveIncomeMember srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2018-04-30 0000798359 us-gaap:NoncontrollingInterestMember srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2018-04-30 0000798359 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2018-04-30 0000798359 us-gaap:RetainedEarningsMember 2018-05-01 2018-12-31 0000798359 us-gaap:NoncontrollingInterestMember 2018-05-01 2018-12-31 0000798359 us-gaap:ComprehensiveIncomeMember 2018-05-01 2018-12-31 0000798359 us-gaap:SeriesCPreferredStockMember 2018-05-01 2018-12-31 0000798359 us-gaap:RetainedEarningsMember us-gaap:SeriesCPreferredStockMember 2018-05-01 2018-12-31 0000798359 us-gaap:CommonStockMember 2018-05-01 2018-12-31 0000798359 us-gaap:PreferredStockMember 2018-12-31 0000798359 us-gaap:CommonStockMember 2018-12-31 0000798359 us-gaap:RetainedEarningsMember 2018-12-31 0000798359 us-gaap:ComprehensiveIncomeMember 2018-12-31 0000798359 us-gaap:NoncontrollingInterestMember 2018-12-31 0000798359 2018-12-31 0000798359 us-gaap:RetainedEarningsMember 2019-01-01 2019-12-31 0000798359 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-12-31 0000798359 us-gaap:ComprehensiveIncomeMember 2019-01-01 2019-12-31 0000798359 us-gaap:RetainedEarningsMember us-gaap:SeriesCPreferredStockMember 2019-01-01 2019-12-31 0000798359 us-gaap:SeriesCPreferredStockMember 2019-01-01 2019-12-31 0000798359 us-gaap:CommonStockMember 2019-01-01 2019-12-31 0000798359 us-gaap:PreferredStockMember 2019-01-01 2019-12-31 0000798359 us-gaap:PreferredStockMember 2019-12-31 0000798359 us-gaap:CommonStockMember 2019-12-31 0000798359 us-gaap:RetainedEarningsMember 2019-12-31 0000798359 us-gaap:ComprehensiveIncomeMember 2019-12-31 0000798359 us-gaap:NoncontrollingInterestMember 2019-12-31 0000798359 us-gaap:RetainedEarningsMember 2020-01-01 2020-12-31 0000798359 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-12-31 0000798359 us-gaap:ComprehensiveIncomeMember 2020-01-01 2020-12-31 0000798359 us-gaap:RetainedEarningsMember us-gaap:SeriesCPreferredStockMember 2020-01-01 2020-12-31 0000798359 us-gaap:CommonStockMember 2020-01-01 2020-12-31 0000798359 us-gaap:PreferredStockMember 2020-01-01 2020-12-31 0000798359 us-gaap:PreferredStockMember 2020-12-31 0000798359 us-gaap:CommonStockMember 2020-12-31 0000798359 us-gaap:RetainedEarningsMember 2020-12-31 0000798359 us-gaap:ComprehensiveIncomeMember 2020-12-31 0000798359 us-gaap:NoncontrollingInterestMember 2020-12-31 0000798359 2017-05-01 0000798359 us-gaap:CommonStockMember 2020-12-31 0000798359 us-gaap:CommonStockMember 2019-12-31 0000798359 us-gaap:CommonStockMember 2018-12-31 0000798359 us-gaap:CommonStockMember 2018-04-30 0000798359 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0000798359 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:CashMember 2019-12-31 iret:apartment_community iret:numberOfApartmentHomes 0000798359 us-gaap:ResidentialRealEstateMember 2020-12-31 xbrli:pure 0000798359 srt:MinimumMember us-gaap:BuildingAndBuildingImprovementsMember 2020-01-01 2020-12-31 0000798359 srt:MaximumMember us-gaap:BuildingAndBuildingImprovementsMember 2020-01-01 2020-12-31 0000798359 srt:MinimumMember us-gaap:FurnitureAndFixturesMember 2020-01-01 2020-12-31 0000798359 srt:MaximumMember us-gaap:FurnitureAndFixturesMember 2020-01-01 2020-12-31 0000798359 srt:MinimumMember iret:RenovationsAndImprovementsMember 2020-01-01 2020-12-31 0000798359 srt:MaximumMember iret:RenovationsAndImprovementsMember 2020-01-01 2020-12-31 0000798359 2018-01-01 2018-12-31 iret:property 0000798359 us-gaap:ResidentialRealEstateMember 2017-05-01 2018-04-30 0000798359 us-gaap:CommercialRealEstateMember 2017-05-01 2018-04-30 0000798359 us-gaap:LandMember 2017-05-01 2018-04-30 0000798359 us-gaap:ResidentialRealEstateMember iret:GrandForksNorthDakotaMember 2017-05-01 2018-04-30 0000798359 iret:BloomingtonMinnesotaMember iret:CommercialIndustrialMember 2017-05-01 2018-04-30 0000798359 iret:CommercialIndustrialMember iret:WoodburyMinnesotaMember 2017-05-01 2018-04-30 0000798359 iret:ImpairedPropertyMinotNDMember srt:RetailSiteMember 2017-05-01 2018-04-30 0000798359 us-gaap:LandMember iret:ImpairedPropertyWillistonNdMember 2017-05-01 2018-04-30 0000798359 us-gaap:LandMember iret:GrandForksNorthDakotaMember 2017-05-01 2018-04-30 0000798359 iret:BismarkNorthDakotaFirstPropertyMember us-gaap:LandMember 2017-05-01 2018-04-30 0000798359 us-gaap:LandMember iret:BismarkNorthDakotaSecondPropertyMember 2017-05-01 2018-04-30 0000798359 iret:BismarkNorthDakotaMember us-gaap:LandMember 2017-05-01 2018-04-30 0000798359 srt:MinimumMember us-gaap:ServiceLifeMember 2017-04-30 2017-04-30 0000798359 srt:MaximumMember us-gaap:ServiceLifeMember 2017-04-30 2017-04-30 0000798359 srt:MinimumMember us-gaap:ServiceLifeMember 2018-05-01 2018-12-31 0000798359 srt:MaximumMember us-gaap:ServiceLifeMember 2018-05-01 2018-12-31 0000798359 iret:PropertyWithPreviousNineYearLifeMember us-gaap:ServiceLifeMember 2017-04-30 2017-04-30 0000798359 srt:MinimumMember iret:PropertyWithPreviousNineYearLifeMember us-gaap:ServiceLifeMember 2018-05-01 2018-12-31 0000798359 srt:MaximumMember iret:PropertyWithPreviousNineYearLifeMember us-gaap:ServiceLifeMember 2018-05-01 2018-12-31 0000798359 us-gaap:ServiceLifeMember 2017-05-01 2018-04-30 0000798359 us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:RealEstateDepositsForPropertyAcquisitionMember 2020-12-31 0000798359 iret:EscrowDepositsMember 2020-12-31 0000798359 us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember iret:RentalIncomeMember 2020-01-01 2020-12-31 0000798359 iret:FeeIncomeMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2020-01-01 2020-12-31 0000798359 srt:MinimumMember 2020-12-31 0000798359 srt:MaximumMember 2020-12-31 0000798359 us-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member us-gaap:AccountingStandardsUpdate201409Member 2018-05-01 0000798359 iret:OtherPropertyRevenueMember 2020-01-01 2020-12-31 0000798359 iret:OtherPropertyRevenueMember 2019-01-01 2019-12-31 0000798359 iret:OtherPropertyRevenueMember 2018-01-01 2018-12-31 0000798359 iret:MultiFamilySameStoreMember iret:TaxIncrementFinancingMember iret:IronwoodMember 2020-03-31 0000798359 iret:MultiFamilySameStoreMember iret:TaxIncrementFinancingMember iret:IronwoodMember 2020-03-01 2020-03-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:ConstructionLoansMember iret:MinneapolisMinnesotaMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MinneapolisMinnesotaMember iret:MezzanineLoanMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:ConstructionLoansMember iret:MinneapolisMinnesotaMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MinneapolisMinnesotaMember iret:MezzanineLoanMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MinneapolisMinnesotaMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MinneapolisMinnesotaMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2017-08-01 2017-08-31 0000798359 us-gaap:MortgageReceivablesMember iret:MultiFamilySameStoreMember 2017-08-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2019-05-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2017-05-01 2018-04-30 0000798359 iret:MultiFamilySameStoreMember 2017-07-31 0000798359 iret:MultiFamilySameStoreMember iret:IronwoodMember 2017-07-31 0000798359 iret:MultiFamilySameStoreMember 2017-05-01 2017-07-31 0000798359 iret:PerformanceSharesAndRestrictedStockUnitsMember 2020-01-01 2020-12-31 0000798359 iret:PerformanceSharesAndRestrictedStockUnitsMember 2019-01-01 2019-12-31 0000798359 iret:PerformanceSharesAndRestrictedStockUnitsMember 2018-05-01 2018-12-31 0000798359 iret:PreferredUnitsMember 2020-01-01 2020-12-31 0000798359 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-12-31 0000798359 iret:WeightedAverageStockOptionsMember 2020-01-01 2020-12-31 0000798359 iret:ExerciseofExchangeRightsMember 2020-01-01 2020-12-31 0000798359 iret:ExerciseofExchangeRightsMember 2019-01-01 2019-12-31 0000798359 us-gaap:PerformanceSharesMember iret:IncentivePlan2015Member 2020-01-01 2020-12-31 0000798359 us-gaap:PerformanceSharesMember iret:IncentivePlan2015Member 2019-01-01 2019-12-31 0000798359 iret:IncentivePlan2015Member 2020-01-01 2020-12-31 0000798359 iret:IncentivePlan2015Member 2019-01-01 2019-12-31 0000798359 iret:AtTheMarketOfferingMember 2019-11-30 0000798359 iret:AtTheMarketOfferingMember 2020-12-31 0000798359 iret:AtTheMarketOfferingMember 2020-01-01 2020-12-31 0000798359 iret:AtTheMarketOfferingMember 2019-01-01 2019-12-31 0000798359 iret:ShareRepurchaseProgramMember 2016-12-07 0000798359 2016-12-07 2016-12-07 0000798359 iret:ShareRepurchaseProgramMember 2017-12-05 2017-12-05 0000798359 iret:ShareRepurchaseProgramMember 2019-12-05 0000798359 iret:ShareRepurchaseProgramMember 2020-01-01 2020-12-31 0000798359 iret:ShareRepurchaseProgramMember 2019-01-01 2019-12-31 0000798359 iret:SeriesCPreferredSharesOfBeneficialInterestMember 2018-04-30 0000798359 us-gaap:SeriesCPreferredStockMember 2018-04-30 0000798359 us-gaap:SeriesCPreferredStockMember 2020-12-31 0000798359 us-gaap:SeriesCPreferredStockMember 2019-12-31 0000798359 iret:SeriesDPreferredUnitsMember 2019-02-26 2019-02-26 0000798359 2019-02-26 2019-02-26 0000798359 iret:CommonsAtSouthgateMinotNDMember 2019-12-31 0000798359 iret:SouthgateMinotNdMember 2018-12-31 0000798359 iret:SouthgateMinotNdMember 2019-01-01 2019-12-31 0000798359 iret:SouthgateMinotNdMember 2020-01-01 2020-12-31 0000798359 iret:SouthgateMinotNdMember 2019-12-31 0000798359 iret:IRET71FranceLLCMember 2020-12-31 0000798359 iret:IRET71FranceLLCMember 2020-01-01 2020-12-31 0000798359 iret:IRET71FranceLLCMember 2019-12-31 0000798359 iret:IretCypressCourtApartmentsLlcMember 2020-12-31 0000798359 iret:IretCypressCourtApartmentsLlcMember 2019-12-31 0000798359 iret:BMOLineOfCreditMember us-gaap:LineOfCreditMember 2020-12-31 0000798359 us-gaap:DomesticLineOfCreditMember iret:BMOLineOfCreditMember 2020-12-31 0000798359 us-gaap:DomesticLineOfCreditMember iret:BMOLineOfCreditMember 2020-01-01 2020-12-31 iret:extension 0000798359 iret:BMOLineOfCreditMember us-gaap:LineOfCreditMember 2020-01-01 2020-12-31 0000798359 iret:BMOLineOfCreditMember us-gaap:LineOfCreditMember 2019-12-31 0000798359 iret:TermLoanMaturing2024Member us-gaap:UnsecuredDebtMember 2020-12-31 0000798359 iret:TermLoanMaturing2025Member us-gaap:UnsecuredDebtMember 2020-12-31 0000798359 us-gaap:DomesticLineOfCreditMember srt:MinimumMember us-gaap:BaseRateMember 2020-01-01 2020-12-31 0000798359 us-gaap:DomesticLineOfCreditMember srt:MaximumMember us-gaap:BaseRateMember 2020-01-01 2020-12-31 0000798359 us-gaap:DomesticLineOfCreditMember srt:MinimumMember us-gaap:LondonInterbankOfferedRateLIBORMember 2020-01-01 2020-12-31 0000798359 us-gaap:DomesticLineOfCreditMember srt:MaximumMember us-gaap:LondonInterbankOfferedRateLIBORMember 2020-01-01 2020-12-31 0000798359 us-gaap:UnsecuredDebtMember 2020-12-31 0000798359 iret:NoteMaturing2029Member us-gaap:UnsecuredDebtMember 2020-12-31 0000798359 iret:NoteMaturing2028Member us-gaap:UnsecuredDebtMember 2020-12-31 0000798359 srt:MinimumMember us-gaap:MortgagesMember 2020-12-31 0000798359 us-gaap:MortgagesMember srt:MaximumMember 2020-12-31 iret:loan 0000798359 us-gaap:MortgagesMember 2020-01-01 2020-12-31 0000798359 us-gaap:UnsecuredDebtMember us-gaap:LineOfCreditMember 2020-12-31 0000798359 us-gaap:UnsecuredDebtMember us-gaap:LineOfCreditMember 2019-12-31 0000798359 us-gaap:UnsecuredDebtMember us-gaap:LineOfCreditMember 2020-01-01 2020-12-31 0000798359 us-gaap:UnsecuredDebtMember us-gaap:MediumTermNotesMember 2020-12-31 0000798359 us-gaap:UnsecuredDebtMember us-gaap:MediumTermNotesMember 2019-12-31 0000798359 us-gaap:UnsecuredDebtMember us-gaap:MediumTermNotesMember 2020-01-01 2020-12-31 0000798359 us-gaap:UnsecuredDebtMember us-gaap:SeniorNotesMember 2020-12-31 0000798359 us-gaap:UnsecuredDebtMember us-gaap:SeniorNotesMember 2019-12-31 0000798359 us-gaap:UnsecuredDebtMember us-gaap:SeniorNotesMember 2020-01-01 2020-12-31 0000798359 us-gaap:UnsecuredDebtMember 2020-12-31 0000798359 us-gaap:UnsecuredDebtMember 2019-12-31 0000798359 us-gaap:UnsecuredDebtMember 2020-01-01 2020-12-31 0000798359 iret:FixedRateMortgagesPayableMember 2020-12-31 0000798359 iret:FixedRateMortgagesPayableMember 2019-12-31 0000798359 iret:FixedRateMortgagesPayableMember 2020-01-01 2020-12-31 0000798359 iret:MortgagesAndTermLoansMember 2020-12-31 iret:derivative_instrument 0000798359 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:InterestRateSwapMember 2020-12-31 0000798359 us-gaap:DesignatedAsHedgingInstrumentMember srt:ScenarioForecastMember us-gaap:InterestRateSwapMember 2023-01-31 0000798359 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccountsPayableAndAccruedLiabilitiesMember us-gaap:InterestRateSwapMember 2020-12-31 0000798359 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccountsPayableAndAccruedLiabilitiesMember us-gaap:InterestRateSwapMember 2019-12-31 0000798359 us-gaap:InterestRateSwapMember 2020-01-01 2020-12-31 0000798359 us-gaap:InterestRateSwapMember 2019-01-01 2019-12-31 0000798359 us-gaap:InterestRateSwapMember 2018-05-01 2018-12-31 0000798359 us-gaap:InterestRateSwapMember 2017-05-01 2018-04-30 0000798359 us-gaap:InterestExpenseMember us-gaap:InterestRateSwapMember 2020-01-01 2020-12-31 0000798359 us-gaap:InterestExpenseMember us-gaap:InterestRateSwapMember 2019-01-01 2019-12-31 0000798359 us-gaap:InterestExpenseMember us-gaap:InterestRateSwapMember 2018-05-01 2018-12-31 0000798359 us-gaap:InterestExpenseMember us-gaap:InterestRateSwapMember 2017-05-01 2018-04-30 0000798359 us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2020-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:InterestRateSwapMember 2020-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0000798359 us-gaap:RiskLevelLowMember 2020-01-01 2020-12-31 0000798359 us-gaap:RiskLevelHighMember 2020-01-01 2020-12-31 0000798359 srt:MinimumMember 2020-01-01 2020-12-31 0000798359 srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:OtherGainsLossesMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-01 2020-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestIncomeMember 2020-01-01 2020-12-31 0000798359 us-gaap:FairValueMeasurementsRecurringMember 2020-01-01 2020-12-31 0000798359 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-12-31 0000798359 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-12-31 0000798359 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0000798359 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:CashMember 2020-12-31 0000798359 us-gaap:CashMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-12-31 0000798359 us-gaap:CashMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0000798359 iret:AcquisitionsMember 2020-01-01 2020-12-31 0000798359 iret:AcquisitionsMember 2019-01-01 2019-12-31 iret:unit 0000798359 iret:IronwoodApartmentsNewHopeMNMember iret:MultiFamilySameStoreMember iret:AcquisitionsMember 2020-12-31 0000798359 iret:IronwoodApartmentsNewHopeMNMember iret:AcquisitionsMember 2020-01-01 2020-12-31 0000798359 iret:IronwoodApartmentsNewHopeMNMember iret:AcquisitionsMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ParkhouseApartmentsNewHopeMNMember iret:AcquisitionsMember 2020-12-31 0000798359 iret:ParkhouseApartmentsNewHopeMNMember iret:AcquisitionsMember 2020-01-01 2020-12-31 0000798359 iret:ParkhouseApartmentsNewHopeMNMember iret:AcquisitionsMember 2020-12-31 0000798359 iret:AcquisitionsMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:AcquisitionsMember iret:SouthForkLakevilleMNMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:AcquisitionsMember iret:SouthForkLakevilleMNMember 2019-01-01 2019-12-31 0000798359 iret:FreightYardMinneapolisMinnesotaMember iret:MultiFamilySameStoreMember iret:AcquisitionsMember 2019-12-31 0000798359 iret:FreightYardMinneapolisMinnesotaMember iret:MultiFamilySameStoreMember iret:AcquisitionsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:AcquisitionsMember iret:LuganoDenverColoradoMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:AcquisitionsMember iret:LuganoDenverColoradoMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:AcquisitionsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:AcquisitionsMember 2019-12-31 0000798359 iret:AcquisitionsMember iret:MinotNorthDakotaMember srt:OtherPropertyMember 2019-01-01 2019-12-31 0000798359 iret:AcquisitionsMember iret:MinotNorthDakotaMember srt:OtherPropertyMember 2019-12-31 0000798359 iret:AcquisitionsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 srt:RetailSiteMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 iret:UnimprovedLandMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ForestParkGrandForksNDMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ForestParkGrandForksNDMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:LandmarkGrandForksNDMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:LandmarkGrandForksNDMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 iret:SouthwindGrandForksNDMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-12-31 0000798359 iret:SouthwindGrandForksNDMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ValleyParkGrandForksNDMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ValleyParkGrandForksNDMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-12-31 0000798359 iret:DakotaWestMember srt:OtherPropertyMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-12-31 0000798359 iret:DakotaWestMember srt:OtherPropertyMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 iret:UnimprovedLandMember iret:RapidCitySouthDakotaMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-12-31 0000798359 iret:UnimprovedLandMember iret:RapidCitySouthDakotaMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PinehurstBillingsMontanaMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PinehurstBillingsMontanaMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:BrookfieldVillageTopekaKansasMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:BrookfieldVillageTopekaKansasMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:CrownColonyTopekaKansasMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:CrownColonyTopekaKansasMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MariposaTopekaKansasMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MariposaTopekaKansasMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:SherwoodTopekaKansasMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:SherwoodTopekaKansasMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:VillaWestTopekaKansasMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:VillaWestTopekaKansasMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CrestviewBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CrestviewBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:NorthPointeBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:NorthPointeBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:KirkwoodManorBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:KirkwoodManorBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:WestwoodParkBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:WestwoodParkBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PebbleSpringsBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PebbleSpringsBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:ArborsSSiouxCityNeMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:ArborsSSiouxCityNeMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:IndianHillsSiouxCityIaMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:IndianHillsSiouxCityIaMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:RidgeOaksSiouxCityIaMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:RidgeOaksSiouxCityIaMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CottageWestTwinHomesSiouxFallsSdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CottageWestTwinHomesSiouxFallsSdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:GablesTownhomesSiouxFallsSdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:GablesTownhomesSiouxFallsSdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:OakmontEstatesSiouxFallsSdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:OakmontEstatesSiouxFallsSdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:OakwoodEstatesSiouxFallsSdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:OakwoodEstatesSiouxFallsSdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:OxbowParkSiouxFallsSdMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:OxbowParkSiouxFallsSdMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PrairieWindsSiouxFallsSdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PrairieWindsSiouxFallsSdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:SierraVistaSiouxFallsSdMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:SierraVistaSiouxFallsSdMember iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:MinotNorthDakotaMember srt:OtherPropertyMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:MinotNorthDakotaMember srt:OtherPropertyMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:Woodbury1865WoodlaneWoodburyMnMember srt:OtherPropertyMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-12-31 0000798359 iret:Woodbury1865WoodlaneWoodburyMnMember srt:OtherPropertyMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:Woodbury1865WoodlaneWoodburyMnMember srt:OtherPropertyMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 srt:OtherPropertyMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2020-12-31 0000798359 srt:OtherPropertyMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 srt:OtherPropertyMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:UnimprovedLandMember iret:CreeksideCrossingBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:UnimprovedLandMember iret:CreeksideCrossingBismarckNdMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:UnimprovedLandMember iret:MinotNorthDakota2Member us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:UnimprovedLandMember iret:MinotNorthDakota2Member us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:UnimprovedLandMember iret:WestonWestonWisconsinMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:UnimprovedLandMember iret:WestonWestonWisconsinMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 iret:UnimprovedLandMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 iret:UnimprovedLandMember us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0000798359 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 us-gaap:SegmentDiscontinuedOperationsMember 2017-05-01 2018-04-30 0000798359 us-gaap:SegmentDiscontinuedOperationsMember 2020-01-01 2020-12-31 0000798359 us-gaap:SegmentDiscontinuedOperationsMember 2019-01-01 2019-12-31 0000798359 us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2018-05-01 2018-12-31 0000798359 us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2017-05-01 2018-04-30 0000798359 iret:TenantReimbursementMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2018-05-01 2018-12-31 0000798359 iret:TenantReimbursementMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2017-05-01 2018-04-30 0000798359 us-gaap:RealEstateMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2018-05-01 2018-12-31 0000798359 us-gaap:RealEstateMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2017-05-01 2018-04-30 0000798359 us-gaap:ManagementServiceMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2018-05-01 2018-12-31 0000798359 us-gaap:ManagementServiceMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2017-05-01 2018-04-30 0000798359 us-gaap:AllOtherSegmentsMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2018-05-01 2018-12-31 0000798359 us-gaap:AllOtherSegmentsMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2017-05-01 2018-04-30 0000798359 us-gaap:SegmentDiscontinuedOperationsMember 2018-05-01 2018-12-31 0000798359 us-gaap:DiscontinuedOperationsHeldforsaleMember 2020-01-01 2020-12-31 0000798359 us-gaap:DiscontinuedOperationsHeldforsaleMember 2019-01-01 2019-12-31 iret:segment 0000798359 2018-01-01 2018-09-30 0000798359 iret:MultiFamilySameStoreMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-12-31 0000798359 us-gaap:AllOtherSegmentsMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-12-31 0000798359 us-gaap:RealEstateMember iret:MultiFamilySameStoreMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-12-31 0000798359 us-gaap:RealEstateMember us-gaap:AllOtherSegmentsMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-12-31 0000798359 us-gaap:RealEstateMember 2020-01-01 2020-12-31 0000798359 us-gaap:ManagementServiceMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:OperatingSegmentsMember 2019-01-01 2019-12-31 0000798359 us-gaap:AllOtherSegmentsMember us-gaap:OperatingSegmentsMember 2019-01-01 2019-12-31 0000798359 us-gaap:RealEstateMember iret:MultiFamilySameStoreMember us-gaap:OperatingSegmentsMember 2019-01-01 2019-12-31 0000798359 us-gaap:RealEstateMember us-gaap:AllOtherSegmentsMember us-gaap:OperatingSegmentsMember 2019-01-01 2019-12-31 0000798359 us-gaap:RealEstateMember 2019-01-01 2019-12-31 0000798359 us-gaap:ManagementServiceMember 2019-01-01 2019-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:OperatingSegmentsMember 2018-05-01 2018-12-31 0000798359 us-gaap:AllOtherSegmentsMember us-gaap:OperatingSegmentsMember 2018-05-01 2018-12-31 0000798359 us-gaap:RealEstateMember iret:MultiFamilySameStoreMember us-gaap:OperatingSegmentsMember 2018-05-01 2018-12-31 0000798359 us-gaap:RealEstateMember us-gaap:AllOtherSegmentsMember us-gaap:OperatingSegmentsMember 2018-05-01 2018-12-31 0000798359 us-gaap:RealEstateMember 2018-05-01 2018-12-31 0000798359 us-gaap:ManagementServiceMember 2018-05-01 2018-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:OperatingSegmentsMember 2017-05-01 2018-04-30 0000798359 us-gaap:AllOtherSegmentsMember us-gaap:OperatingSegmentsMember 2017-05-01 2018-04-30 0000798359 us-gaap:RealEstateMember iret:MultiFamilySameStoreMember us-gaap:OperatingSegmentsMember 2017-05-01 2018-04-30 0000798359 us-gaap:RealEstateMember us-gaap:AllOtherSegmentsMember us-gaap:OperatingSegmentsMember 2017-05-01 2018-04-30 0000798359 us-gaap:RealEstateMember 2017-05-01 2018-04-30 0000798359 us-gaap:ManagementServiceMember 2017-05-01 2018-04-30 0000798359 iret:MultiFamilySameStoreMember us-gaap:OperatingSegmentsMember 2020-12-31 0000798359 us-gaap:AllOtherSegmentsMember us-gaap:OperatingSegmentsMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember us-gaap:OperatingSegmentsMember 2019-12-31 0000798359 us-gaap:AllOtherSegmentsMember us-gaap:OperatingSegmentsMember 2019-12-31 0000798359 iret:BMOCapitalMarketsMember 2017-05-01 2018-04-30 0000798359 iret:SubjectToRestrictionsOnTaxableDispositionsMember 2020-12-31 0000798359 2020-01-01 2020-03-31 0000798359 2020-04-01 2020-06-30 0000798359 2020-07-01 2020-09-30 0000798359 2020-10-01 2020-12-31 0000798359 2019-01-01 2019-03-31 0000798359 2019-04-01 2019-06-30 0000798359 2019-07-01 2019-09-30 0000798359 2019-10-01 2019-12-31 0000798359 iret:IncentivePlan2015Member 2015-09-15 0000798359 iret:IncentivePlan2015Member 2015-09-15 2015-09-15 0000798359 us-gaap:RestrictedStockMember iret:AwardOn19May2020Member iret:IncentivePlan2015Member iret:TrusteeMember 2020-05-19 2020-05-19 0000798359 iret:TrusteeAwardsMember us-gaap:StockCompensationPlanMember 2020-01-01 2020-12-31 0000798359 iret:TrusteeAwardsMember us-gaap:StockCompensationPlanMember 2019-01-01 2019-12-31 0000798359 iret:TrusteeAwardsMember us-gaap:StockCompensationPlanMember 2018-05-01 2018-12-31 0000798359 iret:TrusteeAwardsMember us-gaap:StockCompensationPlanMember 2017-05-01 2018-04-30 0000798359 iret:AwardOn13March2020Member us-gaap:RestrictedStockMember srt:ManagementMember iret:IncentivePlan2015Member 2020-03-13 2020-03-13 0000798359 us-gaap:RestrictedStockMember iret:AwardOn12August2020Member iret:EmployeesMember iret:IncentivePlan2015Member 2020-08-12 2020-08-12 0000798359 us-gaap:RestrictedStockMember iret:EmployeesMember iret:IncentivePlan2015Member iret:AwardOn19November2019Member 2020-11-19 2020-11-19 0000798359 iret:AwardOn30November2019Member us-gaap:RestrictedStockMember iret:EmployeesMember iret:IncentivePlan2015Member 2020-11-30 2020-11-30 0000798359 iret:AwardOn21May2020Member us-gaap:EmployeeStockOptionMember srt:ManagementMember iret:IncentivePlan2015Member 2020-05-21 2020-05-21 0000798359 iret:AwardOn21May2020Member us-gaap:EmployeeStockOptionMember srt:ManagementMember iret:IncentivePlan2015Member 2020-01-01 2020-12-31 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember 2020-01-01 2020-12-31 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember 2019-01-01 2019-12-31 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember 2018-05-01 2018-12-31 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember 2017-05-01 2018-04-30 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember 2017-04-30 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember 2018-04-30 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember 2018-12-31 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember 2019-12-31 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember 2020-12-31 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember iret:AwardIn2018Member 2020-01-01 2020-12-31 0000798359 us-gaap:RestrictedStockMember iret:AwardOn19May2020Member iret:IncentivePlan2015Member iret:TrusteeMember 2020-01-01 2020-12-31 0000798359 us-gaap:RestrictedStockMember iret:RestrictedShareAwardsMember iret:AwardIn2018Member 2020-12-31 0000798359 iret:AwardIn2018Member iret:LongTermIncentivePlan2012Member 2020-12-31 0000798359 iret:AwardIn2018Member iret:LongTermIncentivePlan2012Member 2019-12-31 0000798359 iret:AwardIn2018Member iret:LongTermIncentivePlan2012Member 2018-12-31 0000798359 iret:AwardIn2018Member iret:LongTermIncentivePlan2012Member 2018-04-30 0000798359 iret:RestrictedStockUnitsWithServiceConditionsMember us-gaap:RestrictedStockUnitsRSUMember 2017-04-30 0000798359 us-gaap:RestrictedStockUnitsRSUMember iret:RestrictedStockWithMarketConditionsMember 2017-04-30 0000798359 iret:RestrictedStockUnitsWithServiceConditionsMember us-gaap:RestrictedStockUnitsRSUMember 2017-05-01 2018-04-30 0000798359 us-gaap:RestrictedStockUnitsRSUMember iret:RestrictedStockWithMarketConditionsMember 2017-05-01 2018-04-30 0000798359 iret:RestrictedStockUnitsWithServiceConditionsMember us-gaap:RestrictedStockUnitsRSUMember 2018-04-30 0000798359 us-gaap:RestrictedStockUnitsRSUMember iret:RestrictedStockWithMarketConditionsMember 2018-04-30 0000798359 iret:RestrictedStockUnitsWithServiceConditionsMember us-gaap:RestrictedStockUnitsRSUMember 2018-05-01 2018-12-31 0000798359 us-gaap:RestrictedStockUnitsRSUMember iret:RestrictedStockWithMarketConditionsMember 2018-05-01 2018-12-31 0000798359 iret:RestrictedStockUnitsWithServiceConditionsMember us-gaap:RestrictedStockUnitsRSUMember 2018-12-31 0000798359 us-gaap:RestrictedStockUnitsRSUMember iret:RestrictedStockWithMarketConditionsMember 2018-12-31 0000798359 iret:RestrictedStockUnitsWithServiceConditionsMember us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-12-31 0000798359 us-gaap:RestrictedStockUnitsRSUMember iret:RestrictedStockWithMarketConditionsMember 2018-01-01 2018-12-31 0000798359 iret:RestrictedStockUnitsWithServiceConditionsMember us-gaap:RestrictedStockUnitsRSUMember 2019-12-31 0000798359 us-gaap:RestrictedStockUnitsRSUMember iret:RestrictedStockWithMarketConditionsMember 2019-12-31 0000798359 iret:RestrictedStockUnitsWithServiceConditionsMember us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-12-31 0000798359 us-gaap:RestrictedStockUnitsRSUMember iret:RestrictedStockWithMarketConditionsMember 2019-01-01 2019-12-31 0000798359 iret:RestrictedStockUnitsWithServiceConditionsMember us-gaap:RestrictedStockUnitsRSUMember 2020-12-31 0000798359 us-gaap:RestrictedStockUnitsRSUMember iret:RestrictedStockWithMarketConditionsMember 2020-12-31 0000798359 us-gaap:ShareBasedCompensationAwardTrancheOneMember us-gaap:RestrictedStockMember iret:IncentivePlan2015Member iret:AwardIn2018Member 2020-03-13 2020-03-13 0000798359 us-gaap:RestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember iret:IncentivePlan2015Member iret:AwardIn2018Member 2020-03-13 2020-03-13 0000798359 us-gaap:RestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember iret:IncentivePlan2015Member iret:AwardIn2018Member 2020-03-13 2020-03-13 0000798359 us-gaap:SubsequentEventMember iret:UnionPointeApartmentHomesMember 2021-01-06 0000798359 us-gaap:SubsequentEventMember iret:UnionPointeApartmentHomesMember 2021-01-06 2021-01-06 0000798359 us-gaap:SubsequentEventMember iret:UnsecuredSeriesCNotesMember us-gaap:UnsecuredDebtMember 2021-01-06 0000798359 us-gaap:SubsequentEventMember iret:UnsecuredSeriesCNotesMember us-gaap:UnsecuredDebtMember 2021-01-05 0000798359 iret:MultiFamilySameStoreMember iret:Seven1FranceEdinaMNMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:Seven1FranceEdinaMNMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:Seven1FranceEdinaMNMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:AlpsParkRapidCitySdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:AlpsParkRapidCitySdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:AlpsParkRapidCitySdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ArcataGoldenValleyMnMember 2020-12-31 0000798359 iret:AshlandGrandForksNdMember srt:MinimumMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:AshlandGrandForksNdMember iret:MultiFamilySameStoreMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:AshlandGrandForksNdMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:AvalonCoveRochesterMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:AvalonCoveRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:AvalonCoveRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:BoulderCourtEaganMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:BoulderCourtEaganMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:BoulderCourtEaganMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CanyonLakeRapidCitySdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:CanyonLakeRapidCitySdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CanyonLakeRapidCitySdMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CardinalPointGrandForksNdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:CardinalPointGrandForksNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:CardinalPointGrandForksNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CascadeShoresRochesterMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:CascadeShoresRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CascadeShoresRochesterMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CastlerockBillingsMtMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:CastlerockBillingsMtMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CastlerockBillingsMtMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ChateauMinotNdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:ChateauMinotNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ChateauMinotNdMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:CimarronHillsOmahaNeMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:CimarronHillsOmahaNeMember srt:MinimumMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:CimarronHillsOmahaNeMember iret:MultiFamilySameStoreMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ColonialVillaBurnsvilleMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:ColonialVillaBurnsvilleMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:ColonialVillaBurnsvilleMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ColonyLincolnNeMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:ColonyLincolnNeMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:ColonyLincolnNeMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CommonsAtSouthgateMinotNDMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:CommonsAtSouthgateMinotNDMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:CommonsAtSouthgateMinotNDMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CottonwoodBismarckNdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:CottonwoodBismarckNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CottonwoodBismarckNdMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CountryMeadowsBillingsMtMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:CountryMeadowsBillingsMtMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:CountryMeadowsBillingsMtMember 2020-01-01 2020-12-31 0000798359 iret:CrystalBayRochesterMnMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:CrystalBayRochesterMnMember srt:MinimumMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:CrystalBayRochesterMnMember iret:MultiFamilySameStoreMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CypressCourtStCloudMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:CypressCourtStCloudMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:CypressCourtStCloudMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:DeerRidgeJamestownNdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:DeerRidgeJamestownNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:DeerRidgeJamestownNdMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:DylanDenverCoMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:DylanDenverCoMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:EvergreenIsantiMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:EvergreenIsantiMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:EvergreenIsantiMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:FrenchCreekRochesterMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:FrenchCreekRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:FrenchCreekRochesterMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:GardensGrandForksNDMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:GardensGrandForksNDMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:GardensGrandForksNDMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:GrandGatewayStCloudMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:GrandGatewayStCloudMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:GrandGatewayStCloudMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:GrandevilleAtCascadeLakeRochesterMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:GrandevilleAtCascadeLakeRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:GrandevilleAtCascadeLakeRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:GreenfieldOmahaNeMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:GreenfieldOmahaNeMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:GreenfieldOmahaNeMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:HeritageManorRochesterMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:HeritageManorRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:HeritageManorRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:HomesteadGardenRapidCitySdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:HomesteadGardenRapidCitySdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:HomesteadGardenRapidCitySdMember 2020-01-01 2020-12-31 0000798359 iret:LakesideVillageLincolnNeMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:LakesideVillageLincolnNeMember srt:MinimumMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:LakesideVillageLincolnNeMember iret:MultiFamilySameStoreMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:LegacyGrandForksNdMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:LegacyGrandForksNdMember srt:MinimumMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:LegacyGrandForksNdMember iret:MultiFamilySameStoreMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:LegacyHeightsBismarckNDMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:LegacyHeightsBismarckNDMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:LegacyHeightsBismarckNDMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MeadowsJamestownNdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:MeadowsJamestownNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MeadowsJamestownNdMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MonticelloCrossingsMonticelloMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:MonticelloCrossingsMonticelloMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MonticelloCrossingsMonticelloMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MonticelloVillageMonticelloMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:MonticelloVillageMonticelloMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:MonticelloVillageMonticelloMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:NorthridgeBismarckNDMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:NorthridgeBismarckNDMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:NorthridgeBismarckNDMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:OlympicVillageBillingsMtMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:OlympicVillageBillingsMtMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:OlympicVillageBillingsMtMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:OlympikVillageRochesterMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:OlympikVillageRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:OlympikVillageRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:OxboStPaulMNMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:OxboStPaulMNMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ParkMeadowsWaiteParkMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:ParkMeadowsWaiteParkMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:ParkMeadowsWaiteParkMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ParkPlacePlymouthMNMember 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ParkPlacePlymouthMNMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PlazaMinotNdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:PlazaMinotNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:PlazaMinotNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PointeWestRapidCitySdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:PointeWestRapidCitySdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PointeWestRapidCitySdMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PondsAtHeritagePlaceSartellMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:PondsAtHeritagePlaceSartellMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:PondsAtHeritagePlaceSartellMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:QuarryRidgeRochesterMnMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:QuarryRidgeRochesterMnMember srt:MinimumMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:QuarryRidgeRochesterMnMember iret:MultiFamilySameStoreMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:Red20MinneapolisMnMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:Red20MinneapolisMnMember srt:MinimumMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:Red20MinneapolisMnMember iret:MultiFamilySameStoreMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:RegencyParkEstatesStCloudMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:RegencyParkEstatesStCloudMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:RegencyParkEstatesStCloudMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:RimrockWestBillingsMtMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:RimrockWestBillingsMtMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:RimrockWestBillingsMtMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:RiverRidgeBismarckNdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:RiverRidgeBismarckNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:RiverRidgeBismarckNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:RockyMeadowsBillingsMtMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:RockyMeadowsBillingsMtMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:RockyMeadowsBillingsMtMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:RumRiverIsantiMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:RumRiverIsantiMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:RumRiverIsantiMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:SilverSpringsRapidCitySdMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:SilverSpringsRapidCitySdMember srt:MinimumMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:SilverSpringsRapidCitySdMember iret:MultiFamilySameStoreMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:SouthPointeMinotNdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:SouthPointeMinotNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:SouthPointeMinotNdMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:SouthpointGrandForksNdMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:SouthpointGrandForksNdMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:SouthpointGrandForksNdMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:SunsetTrailRochesterMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:SunsetTrailRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:SunsetTrailRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ThomasbrookLincolnNeMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:ThomasbrookLincolnNeMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:ThomasbrookLincolnNeMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:VillageGreenRochesterMnMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:VillageGreenRochesterMnMember srt:MinimumMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:VillageGreenRochesterMnMember iret:MultiFamilySameStoreMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:WestStonehillWaiteParkMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:WestStonehillWaiteParkMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:WestStonehillWaiteParkMnMember 2020-01-01 2020-12-31 0000798359 iret:WestendDenverCOMember iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:WestendDenverCOMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:WhisperingRidgeOmahaNeMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:WhisperingRidgeOmahaNeMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember srt:MaximumMember iret:WhisperingRidgeOmahaNeMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:WinchesterRochesterMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:WinchesterRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:WinchesterRochesterMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:WoodridgeRochesterMnMember 2020-12-31 0000798359 srt:MinimumMember iret:MultiFamilySameStoreMember iret:WoodridgeRochesterMnMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember iret:WoodridgeRochesterMnMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilySameStoreMember 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember iret:FreightYardTownhomesFlatsMinneapolisMNMember 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember iret:FreightYardTownhomesFlatsMinneapolisMNMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember iret:IronwoodMinneapolisMNMember 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember iret:IronwoodMinneapolisMNMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember iret:LuganoAtCherryCreekDenverCOMember 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember iret:LuganoAtCherryCreekDenverCOMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember iret:ParkhouseThorntonCOMember 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember iret:ParkhouseThorntonCOMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember iret:SouthForkTownhomesMember 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember iret:SouthForkTownhomesMember 2020-01-01 2020-12-31 0000798359 iret:MultiFamilyNonSameStoreMember 2020-12-31 0000798359 srt:MultifamilyMember 2020-12-31 0000798359 iret:Seven1FranceEdinaMNMember iret:OtherMixedUseMember 2020-12-31 0000798359 srt:MinimumMember iret:Seven1FranceEdinaMNMember iret:OtherMixedUseMember 2020-01-01 2020-12-31 0000798359 iret:Seven1FranceEdinaMNMember srt:MaximumMember iret:OtherMixedUseMember 2020-01-01 2020-12-31 0000798359 iret:LuganoAtCherryCreekDenverCOMember iret:OtherMixedUseMember 2020-12-31 0000798359 iret:LuganoAtCherryCreekDenverCOMember iret:OtherMixedUseMember 2020-01-01 2020-12-31 0000798359 iret:OtherMixedUseMember iret:OxboStPaulMNMember 2020-12-31 0000798359 iret:OtherMixedUseMember iret:OxboStPaulMNMember 2020-01-01 2020-12-31 0000798359 iret:PlazaMinotNdMember iret:OtherMixedUseMember 2020-12-31 0000798359 srt:MinimumMember iret:PlazaMinotNdMember iret:OtherMixedUseMember 2020-01-01 2020-12-31 0000798359 srt:MaximumMember iret:PlazaMinotNdMember iret:OtherMixedUseMember 2020-01-01 2020-12-31 0000798359 iret:Red20MinneapolisMnMember iret:OtherMixedUseMember 2020-12-31 0000798359 iret:Red20MinneapolisMnMember srt:MinimumMember iret:OtherMixedUseMember 2020-01-01 2020-12-31 0000798359 iret:Red20MinneapolisMnMember srt:MaximumMember iret:OtherMixedUseMember 2020-01-01 2020-12-31 0000798359 iret:OtherMixedUseMember 2020-12-31 0000798359 iret:OtherCommercialMember iret:A310010thStSWMinotNDMember 2020-12-31 0000798359 iret:OtherCommercialMember iret:A310010thStSWMinotNDMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:OtherCommercialMember iret:MinotIpsMinotNdMember 2020-12-31 0000798359 iret:OtherCommercialMember iret:MinotIpsMinotNdMember srt:MinimumMember 2020-01-01 2020-12-31 0000798359 iret:OtherCommercialMember iret:MinotIpsMinotNdMember srt:MaximumMember 2020-01-01 2020-12-31 0000798359 iret:OtherCommercialMember 2020-12-31 0000798359 iret:SubtotalOfMultiFamilyAndCommercialMember 2020-12-31 0000798359 us-gaap:WhollyOwnedPropertiesMember 2019-12-31 0000798359 us-gaap:WhollyOwnedPropertiesMember 2018-12-31 0000798359 us-gaap:WhollyOwnedPropertiesMember iret:MultiFamilySameStoreMember 2020-01-01 2020-12-31 0000798359 us-gaap:WhollyOwnedPropertiesMember iret:MultiFamilySameStoreMember 2019-01-01 2019-12-31 0000798359 us-gaap:WhollyOwnedPropertiesMember 2020-01-01 2020-12-31 0000798359 us-gaap:WhollyOwnedPropertiesMember 2019-01-01 2019-12-31 0000798359 us-gaap:WhollyOwnedPropertiesMember 2020-12-31 0000798359 iret:UnimprovedLandMember 2019-12-31 0000798359 iret:UnimprovedLandMember 2018-12-31 0000798359 iret:UnimprovedLandMember 2020-01-01 2020-12-31 0000798359 iret:UnimprovedLandMember 2019-01-01 2019-12-31 0000798359 iret:UnimprovedLandMember 2020-12-31
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 2020
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 001-35624
INVESTORS REAL ESTATE TRUST
(Exact name of Registrant as specified in its charter)

North Dakota |  | 45-0311232
(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)
3100 10th Street SW | Post Office Box 1988 |
Minot | ND | 58702-1988
(Address of principal executive offices) | (Zip code)

701-837-4738
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common Shares of Beneficial Interest, no par value | CSR | New York Stock Exchange
Series C Cumulative Redeemable Preferred Shares | CSR-PRC | New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☑ Yes ☐ No
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. ☐ Yes ☑ No
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No
Indicate by checkmark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). ☑ Yes ☐ No
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☑ | Accelerated filer | ☐ | Emerging growth company | ☐
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |  |

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No
The aggregate market value of the Registrant’s outstanding common shares of beneficial interest held by non-affiliates of the Registrant as of June 30, 2020 was 895,669,484 based on the last reported sale price on the New York Stock Exchange on June 30, 2020. For purposes of this calculation, the Registrant has assumed that its trustees and executive officers are affiliates.
The number of common shares of beneficial interest outstanding as of February 15, 2021, was 13,053,065.
References in this Report to the “Company,” “Centerspace,” “we,” “us,” or “our” include consolidated subsidiaries, unless the context indicates otherwise.
Documents Incorporated by Reference: Portions of Centerspace's definitive Proxy Statement for its 2021 Annual Meeting of Shareholders will be incorporated by reference into Part III (Items 10, 11, 12, 13 and 14) hereof.

Table of Contents
CENTERSPACE
INDEX

|  | PAGE
PART I |  |
Item 1. | Business | 3
Item 1A. | Risk Factors | 8
Item 1B. | Unresolved Staff Comments | 19
Item 2. | Properties | 19
Item 3. | Legal Proceedings | 22
Item 4. | Mine Safety Disclosures | 22
PART II |  |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 23
Item 6. | Selected Financial Data | 25
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | 38
Item 8. | Financial Statements and Supplementary Data | 39
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 39
Item 9A. | Controls and Procedures | 39
Item 9B. | Other Information | 40
PART III |  |
Item 10. | Trustees, Executive Officers and Corporate Governance | 40
Item 11. | Executive Compensation | 40
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 40
Item 13. | Certain Relationships and Related Transactions, and Trustee Independence | 40
Item 14. | Principal Accountant Fees and Services | 40
PART IV |  |
Item 15. | Exhibits, Financial Statement Schedules | 40
Exhibit Index | 42
Signatures | 44
Reports of Independent Registered Public Accounting Firm and Financial Statements | F-2

1

Table of Contents
Special Note Regarding Forward-Looking Statements
Certain statements included in this Report and the documents incorporated into this document by reference are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements include statements about our plans and objectives, including our future financial condition, anticipated capital expenditures, anticipated distributions, and our belief that we have the liquidity and capital resources necessary to meet our known obligations and to make additional real estate acquisitions and capital improvements when appropriate to enhance long-term growth. 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 those words and similar expressions. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, including risks associated with the ongoing COVID-19 pandemic, 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 we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance that our 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 our control and could differ materially from our actual results and performance.
The following factors, among others, could cause our future results to differ materially from those expressed in the forward-looking statements:
•the COVID-19 pandemic and its ongoing effects on our employees, residents, and commercial tenants, third party vendors and suppliers, and apartment communities, as well as our cash flow, business, financial condition, and results of operations;
•deteriorating economic conditions and rising unemployment rates in the markets where we own apartment communities or in which we may invest in the future;
•rental conditions in our markets, including occupancy levels and rental rates, our potential inability to renew residents or obtain new residents upon expiration of existing leases, changes in tax and housing laws, or other factors, including the impact of the COVID-19-related governmental rules and regulations relating to rental rates, evictions, and other rental conditions;
•changes in operating costs, including real estate taxes, utilities, insurance costs, and expenses related to complying with COVID-19 restrictions or otherwise responding to the COVID-19 pandemic;
•timely access to materials required to renovate apartment communities;
•adverse changes in our markets, including future demand for apartment homes in our markets, barriers of entry into new markets, limitations on our ability to increase rental rates, our ability to identify and consummate attractive acquisitions and dispositions on favorable terms, our ability to reinvest sales proceeds successfully, and our inability to accommodate any significant decline in market value of real estate serving as collateral for our mortgage obligations;
•reliance on a single asset class (multifamily) and certain geographic areas (Midwest and Mountain West regions) of the U.S.;
•inability to expand our operations into new or existing markets successfully;
•failure of new acquisitions to achieve anticipated results or be efficiently integrated;
•inability to complete lease-up of our projects on schedule and on budget;
•inability to sell our non-core properties on terms that are acceptable;
•failure to reinvest proceeds from sales of properties into tax-deferred exchanges, which could necessitate special dividend and tax protection payments;
•inability to fund capital expenditures out of cash flow;
•inability to pay, or need to reduce, dividends on our common shares;
•inability to raise additional equity capital;
•financing risks, including our potential inability to meet existing covenants in our existing credit facilities or to obtain new debt or equity financing on favorable terms, or at all;
•level and volatility of interest or capitalization rates or capital market conditions;
•loss contingencies and the availability and cost of casualty insurance for losses;
2

Table of Contents
•inability to continue to satisfy complex tax rules in order to maintain our status as a REIT for federal income tax purposes, inability of the Operating Partnership to satisfy the rules to maintain its status as a partnership for tax purposes, and the risk of changes in laws affecting REITs;
•inability to attract and retain qualified personnel;
•cyber liability or potential liability for breaches of our privacy or information security systems;
•inability to address catastrophic weather, natural events, and climate change;
•inability to comply with laws and regulations applicable to our business and any related investigations or litigation; and
•other risks identified in this Report, in our other SEC reports, or in other documents that we publicly disseminate.
Readers should carefully review our financial statements and the notes thereto, as well as the section entitled “Risk Factors” in Item 1A of this Report and the other documents we file from time to time with the Securities and Exchange Commission (“SEC”).
In light of these uncertainties, the events anticipated by our forward-looking statements might not occur. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause our actual results to differ materially from those contemplated in any forward-looking statements included in this Report should not be construed as exhaustive.
PART I
Item 1. Business
OVERVIEW
Investors Real Estate Trust doing business as Centerspace (“we,” “us,” “our,” “Centerspace,” or the “Company”) is a real estate investment trust (“REIT”) organized under the laws of North Dakota, that is focused on the ownership, management, acquisition, development, and redevelopment of apartment communities. Over the past several years, we have extensively repositioned our portfolio from a diversified, multi-segment collection of properties into a single segment concentrated on apartment communities. Our current emphasis is on making operational enhancements that will improve our residents’ experience, redeveloping some of our existing apartment communities to meet current market demands, and acquiring new apartment communities in the Minneapolis/St. Paul and Denver metropolitan areas. On December 9, 2020, we announced a new name, Centerspace, and brand platform that reflects both transformation of the Company and our vision for the future.
We focus on investing in markets characterized by stable and growing economic conditions, strong employment, and an attractive quality of life that we believe, in combination, lead to higher demand for our apartment homes and retention of our residents. As of December 31, 2020, we owned interests in 67 apartment communities, containing 11,910 homes and having a total real estate investment amount, net of accumulated depreciation, of $1.4 billion. Our corporate headquarters is located in Minot, North Dakota. We also have a corporate office in Minneapolis, Minnesota.
Effective January 1, 2019, we changed our fiscal year end from April 30 to December 31. As a result of this change, we filed a transition report on Form 10-KT for the eight-month transition period ended December 31, 2018, in accordance with SEC rules and regulations. The references in this Report to the terms listed below reflect the respective period noted (all other reporting periods defined separately):

Term |  | Financial Reporting Period
Year ended December 31, 2020 |  | January 1, 2020 through December 31, 2020
Year ended December 31, 2019 |  | January 1, 2019 through December 31, 2019
Year ended December 31, 2018 |  | January 1, 2018 through December 31, 2018
Transition period ended December 31, 2018 |  | May 1, 2018 through December 31, 2018
Fiscal year ended April 30, 2018 |  | May 1, 2017 through April 30, 2018

Website and Available Information
Our internet address is www.centerspacehomes.com. We make available, free of charge, through the “SEC filings” tab under the Investors section of our website, our Transition Report on Form 10-KT, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports, and proxy statements for our Annual Meetings of Shareholders, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after
3

Table of Contents
such reports are filed with or furnished to the SEC. These reports are also available at www.sec.gov. We also make press releases, investor presentations, and certain supplemental information available on our website. Current copies of our Code of Conduct; Code of Ethics for Senior Financial Officers; and Charters for the Audit, Compensation, and Nominating and Governance Committees of our Board of Trustees are also available on our website under the “Corporate Governance” tab under the Investors section of our website. Copies of these documents are also available free of charge to shareholders upon request addressed to the Secretary at Centerspace, P.O. Box 1988, Minot, North Dakota 58702-1988. Information on our website does not constitute part of this Report.
STRUCTURE
We were organized under the laws of North Dakota on July 31, 1970, and have operated as a REIT under Sections 856-858 of the Internal Revenue Code since our formation. On February 1, 1997, we were restructured as an Umbrella Partnership Real Estate Investment Trust (“UPREIT”), and we conduct our daily business operations primarily through our operating partnership, Centerspace, LP (the “Operating Partnership”). The sole general partner of Centerspace, LP is Centerspace, Inc., a North Dakota corporation and our wholly owned subsidiary. All of our assets and liabilities have been contributed to Centerspace, LP, through Centerspace, Inc., in exchange for the sole general partnership interest in Centerspace, LP. Centerspace, LP holds substantially all of the assets of the Company. Centerspace, LP conducts the operations of the business and is structured as a partnership with no publicly traded equity. Contributions of properties to the Company can be structured as tax-deferred transactions through the issuance of OP Units, which is one of the reasons the Company is structured in this manner. As of December 31, 2020, Centerspace, Inc. owned a 93.0% interest in Centerspace, LP. The remaining interest in Centerspace, LP is held by individual limited partners.
BUSINESS STRATEGIES
Our business is focused on our mission - to provide a great home - for our residents, our employees and our investors. We fulfill this mission by providing renters well-located options that range from workforce to lifestyle housing. While fulfilling our mission, we are seeking consistent earnings growth through exceptional operations, disciplined capital allocation, and market knowledge and efficiencies. Our operations and investment strategies are the foundation for fulfilling our mission.
Operations Strategy
We manage our apartment communities with a focus on providing an exceptional resident experience and maximizing our property financial results. Our initiatives to optimize our operations include:
•Providing excellent customer service to enhance resident satisfaction and retention;
•Employing new technologies that make our communities more efficient and more accessible to residents;
•Optimizing revenues;
•Controlling operating costs; and
•Unlocking value within the portfolio through redevelopment and enhancement of existing assets.
Investment Strategy
Our business objective under our current strategic plan is to employ an investment strategy that includes the following elements:
•Investing in income-producing apartment communities that grow distributable cash flow and are located in key geographic markets with populations ranking in the top 50 U.S. metropolitan statistical areas, including expansion in the Minneapolis and Denver markets and our planned entrance into the Nashville market;
•Selecting markets with favorable market characteristics, including strong growth prospects and employment forecasts, high occupancy rates, strong rent growth potential, and institutional liquidity;
•Leveraging our portfolio to take advantage of our heightened market knowledge and regional experience;
•Building a strong market presence in new markets; and
•Reducing our exposure to tertiary markets.
4

Table of Contents
FINANCING AND DISTRIBUTIONS
To fund our investment and capital activities, we rely on a combination of issuance of common shares, preferred shares, OP Units in exchange for property, and borrowed funds. We regularly issue dividends to our shareholders. Each of these is described below.
At-the-Market Offering
In November 2019, we entered into an equity distribution agreement in connection with an at-the-market offering (“2019 ATM Program”) through which we may offer and sell common shares having an aggregate gross sales price of up to $150.0 million, in amounts and at times that we determine. The proceeds from the sale of common shares under the 2019 ATM Program are intended to be used for general corporate purposes, which may include the funding of future acquisitions and the repayment of indebtedness. During the year ended December 31, 2020, we issued 829,078 common shares under the 2019 ATM Program at an average price of $71.39 per share, net of commissions. Total consideration, net of commissions and issuance costs, was approximately $59.2 million. As of December 31, 2020, we had common shares having an aggregate offering price of up to $68.5 million remaining available under the 2019 ATM Program.
Issuance of Senior Securities
On October 2, 2017, we issued 4,118,460 shares of 6.625% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest (the “Series C preferred shares”). As of December 31, 2020, 3,881,453 shares remained outstanding. Depending on future interest rates and market conditions, we may issue additional preferred shares or other senior securities which would have dividend and liquidation preference over our common shares.
Bank Financing and Other Debt
As of December 31, 2020, we owned 47 apartment communities that were not encumbered by mortgages, with 34 of these properties providing credit support for our unsecured borrowings. Our primary unsecured credit facility (“unsecured credit facility”) is a revolving, multi-bank line of credit, with the Bank of Montreal serving as administrative agent. Our line of credit has total commitments and borrowing capacity of $250.0 million, based on the value of properties contained in the unencumbered asset pool (“UAP”). As of December 31, 2020, the additional borrowing availability was $97.1 million beyond the $152.9 million drawn, including the balance on our operating line of credit (discussed below), priced at an interest rate of 2.85%, including the impact of our interest rate swap. This credit facility matures on August 31, 2022, with one 12-month option to extend the maturity date at our election.
Under our primary unsecured credit facility, we also have a $70.0 million unsecured term loan, which matures on January 15, 2024, and a $75.0 million unsecured term loan, which matures on August 31, 2025.
We have a private shelf agreement for the issuance of up to $150.0 million of unsecured senior promissory notes (“unsecured senior notes”). Under this agreement, we issued $75.0 million of Series A notes due September 13, 2029 bearing interest at a rate of 3.84% annually, and $50.0 million of Series B notes due September 30, 2028 bearing interest at a rate of 3.69% annually. As of December 31, 2020, we had $25.0 million remaining available under the private shelf agreement.
As of December 31, 2020, we owned 20 apartment communities that served as collateral for mortgage loans. All of these mortgages payable were non-recourse to us other than for standard carve-out obligations.
We also have a $6.0 million operating line of credit, which is designed to enhance treasury management activities and more effectively manage cash balances. As of December 31, 2020, our ratio of total indebtedness to total gross real estate investments was 39.3%.
Issuance of Securities in Exchange for Property
Our organizational structure allows us to issue shares and limited partnership units (or “OP Units”) of Centerspace, LP in exchange for real estate. The OP Units generally are redeemable, at our option for cash or common shares on a one-for-one basis. Generally, OP Units receive the same per unit cash distributions as the per share dividends paid on common shares.
Our Declaration of Trust, as amended (our “Declaration of Trust”), does not contain any restrictions on our ability to offer limited partnership units of Centerspace, LP in exchange for property. As a result, any decision to do so is vested solely in our Board of Trustees. On February 26, 2019, we issued 165,600 newly created Series D preferred units as partial consideration for the acquisition of SouthFork Townhomes. The Series D preferred unit holders receive a preferred distribution at the rate of 3.862% per year. The Series D preferred units have a put option which allows the holder to redeem any or all of the Series D
5

Table of Contents
preferred units for cash equal to the issue price. Each Series D preferred unit is convertible, at the holder’s option, into 1.37931 Units, representing a conversion exchange rate of $72.50 per unit. The holders of the Series D preferred units do not have any voting rights. For the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018 and the fiscal year ended April 30, 2018, we did not issue any regular OP Units of Centerspace, LP in exchange for properties.
Distributions to Shareholders
The Internal Revenue Code requires a REIT to distribute 90% of its net taxable income, excluding net capital gains, to its shareholders, and a separate requirement to distribute 100% net capital gains or pay a corporate level tax in lieu thereof. We have distributed, and intend to continue to distribute, enough of our taxable income to satisfy these requirements. Our general practice has been to target cash distributions to our common shareholders and the holders of limited partnership units of approximately 65% to 90% of our funds from operations and to use the remaining funds for capital improvements or the reduction of debt. Distributions to our common shareholders and unitholders in the years ended December 31, 2020 and 2019 totaled approximately 81% and 69%, respectively, on a per share and unit basis of our funds from operations.
For additional information on our sources of liquidity and funds from operations, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and Capital Resources.”
HUMAN CAPITAL
We strive to be a great place to work and offer competitive benefits and training programs to our team members. Our objective is to attract and reward individuals with the talent and skills to help support our business objectives and make our communities home for our residents. Our total rewards program includes competitive compensation, paid leave, paid holidays, volunteer time, health and dental benefits, discounted rental rates on our apartments, employee assistance program, life insurance, 401(k) plan, and more.
As of December 31, 2020, we had 365 employees (340 full-time and 25 part-time) across six states. Training is important, and we facilitate that through a learning management system which allows us to provide custom training as well as utilize a library of multifamily focused courses specializing in customer service, sales, leadership, diversity, and fair housing.
We take great pride in our pay for performance strategy where team members are aligned with overall company performance as well as specific performance metrics based on roles. Our annual performance management process invites team members to complete a self-review along with their manager's assessment. The results of these assessments are a component of the merit increase and pay for performance strategy.
As part of our Environmental, Social, and Governance (ESG) initiatives, we publish an annual ESG report detailing our efforts related to furthering our mission - through providing corporate sponsorship in the communities which we serve, offering paid time off for team members to volunteer, training and compensation programs, and our commitment to diversity, equity, and inclusion. As of December 31, 2020:
•The average tenure of our team members is 3.6 years;
•53% of our total team members, 46% of our senior management, and 37% of our Board of Trustees are female;
•We have over 200 custom courses on our learning management system;
•Over 10,000 training courses were completed by team members;
•Our online reputation management scores increased from 504 to 605;
•76.5% of our team members participated in our engagement management survey; and
•648 volunteer hours were completed by team members.
INSURANCE
We purchase general liability and property insurance coverage for each of our properties. We also purchase limited terrorism, environmental, and flood insurance as well as other types of insurance coverage related to a variety of risks and exposures. There are certain types of losses that may not be covered or could exceed coverage limits. Due to changing market conditions, our insurance policies are also subject to increasing deductibles and coverage limits. Based on market conditions, we may change or potentially eliminate insurance coverages or face higher deductibles or other costs. Although we believe that we have adequate insurance coverage on our properties, we may incur losses, which could be material, due to uninsured risks, deductibles and/or losses in excess of coverage limits, any of which could have a material adverse effect on our business.
6

Table of Contents
COMPETITION
There are numerous housing alternatives that compete with our apartment communities in attracting residents. Our apartment communities compete directly with other apartment communities, condominiums, and single-family homes in the areas in which our properties are located. If the demand for our apartment communities is reduced or competitors develop or acquire competing housing, rental and occupancy rates may decrease, which could have a material adverse effect on our business. Additionally, we compete with other real estate investors, including REITs, to acquire properties. This competition affects our ability to acquire properties we want to add to our portfolio and the cost of those acquisitions.
GOVERNMENT REGULATION
See the discussion under the caption “Risks Related to Our Properties and Operations -- We may be responsible for potential liabilities under environmental laws” in Item 1A, Risk Factors, for information concerning the potential effects of environmental matters on our business, “Complying with laws benefiting disabled persons or other safety regulations and requirements may affect our costs and investment strategies” in Item 1A, Risk Factors, for information concerning the potential effects of compliance with disabled persons and other safety regulations on our business, “Changes in federal or state laws and regulations relating to climate change could result in increased costs to our business, including capital expenditures to improve the energy efficiency of our existing communities or new development communities without a corresponding increase in revenue” in Item 1A, Risk Factors, for information concerning the potential effects of climate change regulation on our business, “Complying with zoning and permitting law may affect our acquisition, redevelopment, and development costs” in Item 1A. Risk Factors, for information concerning the potential costs associated with zoning and permitting regulations, and “The current pandemic of COVID-19 and the potential future outbreak of other highly infectious or contagious diseases may materially and adversely impact and disrupt our business, income, cash flow, results of operations, financial condition, liquidity, prospects and ability to service our debt obligations, and our ability to pay dividends and other distributions to our equityholders” in Item 1A Risk Factors, for information concerning the potential effects of regulations related to the COVID-19 pandemic, which discussions thereunder are incorporated by reference into this Item 1.
7

Table of Contents
Item 1A. Risk Factors
We face certain risks related to our ownership of apartment communities and operation of our business. Set forth below are the risks that we believe are material to our shareholders and unitholders. You should carefully consider the following risks in evaluating our properties, business, and operations. Our business, financial condition, cash flows, results of operations, value of our real estate assets and/or the value of an investment in our stock or units are subject to various risks and uncertainties, including those set forth below, any of which could cause our actual operating results to vary materially from our recent results or from our anticipated future results.
Risks Related to Our Properties and Operations
The current pandemic of COVID-19 and the potential future outbreak of other highly infectious or contagious diseases may materially and adversely impact and disrupt our business, income, cash flow, results of operations, financial condition, liquidity, prospects and ability to service our debt obligations, and our ability to pay dividends and other distributions to our equityholders. One of the most significant risk factors is the continuing adverse effects of the COVID-19 pandemic and its associated potential economic impact on our financial condition, results of operations, and cash flows as well as the adverse effects on our residents and commercial tenants, the real estate market, and the global economy and financial markets generally. The extent to which COVID-19 continues to impact us and our residents and commercial tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity, and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. Moreover, you should interpret many of the other risks identified in this Report, as well as the risks set forth below, as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19.
Moreover, the ongoing COVID-19 pandemic and continuing restrictions intended to prevent and mitigate its spread could have
additional adverse effects on our business, including with regards to:
•the COVID-19 pandemic and its ongoing effects on our employees, residents, and commercial tenants, third party vendors and suppliers, and apartment communities, as well as our cash flow, business, financial condition, and results of operations;
•deteriorating economic conditions and rising unemployment rates in the markets where we own apartment communities or in which we may invest in the future;
•government actions or regulations arising out of the COVID-19 pandemic that limit economic and consumer activity or affect the operation of our properties;
•rental conditions in our markets, including occupancy levels and rental rates, our potential inability to renew residents or obtain new residents upon expiration of existing leases, changes in tax and housing laws, or other factors, including the impact of the COVID-19-related governmental rules and regulations relating to rental rates, evictions, and other rental conditions; and
•changes in operating costs, including real estate taxes, utilities, insurance costs, healthcare costs, and expenses related to complying with COVID-19 restrictions or otherwise responding to the COVID-19 pandemic.
Our financial performance is subject to risks associated with the real estate industry and ownership of apartment communities. Our financial performance risks include, but are not limited to, the following:
•downturns in national, regional, and local economic conditions (particularly increases in unemployment);
•competition from other apartment communities;
•local real estate market conditions, including an oversupply of apartments or other housing, or a reduction in demand for apartment communities;
•the attractiveness of our apartment communities to residents as well as residents’ perceptions of the safety, convenience, and attractiveness of our apartment communities and the areas in which they are located;
•changes in interest rates and availability of attractive financing that might make other housing options, like home ownership, more attractive;
•our ability to collect rents from our residents;
•vacancies, changes in rental rates, and the periodic need to repair, renovate, and redevelop our apartment communities;
8

Table of Contents
•increases in operating costs, including real estate taxes, state and local taxes, insurance expenses, utilities, and security costs, many of which are not reduced significantly when circumstances cause a reduction in revenues from a property;
•increases in compensation costs due to the tight labor market in many of the markets in which we operate;
•our ability to provide adequate maintenance for our apartment communities;
•our ability to provide adequate insurance on our apartment communities; and
•changes in tax laws and other government regulations that could affect the value of REITs generally or our business in particular.
Our property acquisition activities may not produce the cash flows expected and could subject us to various risks that could adversely affect our operating results. We have acquired and intend to continue to pursue the acquisition of apartment communities, but the success of our acquisition activities is subject to numerous risks, including the following:
•acquisition agreements are subject to customary closing conditions, including completion of due diligence investigations, and we may be unable to complete an acquisition after making a non-refundable deposit and incurring other acquisition-related costs;
•expected occupancy, rental rates, and operating expenses of acquired apartment communities may differ from the actual results, or from those of our existing apartment communities;
•we may be unable to obtain financing for acquisitions on favorable terms, or at all;
•competition for these properties could cause us to pay higher prices or prevent us from purchasing a desired property at all;
•we may be subject to unknown liabilities from acquired properties, with either no recourse or limited recourse against prior owners or other third parties with respect to these unknown liabilities; and
•we may be unable to quickly and efficiently integrate new acquisitions into our existing operations.
We may be unable to acquire or develop properties and expand our operations into new or existing markets successfully. We intend to explore acquisitions or developments of properties in new and existing geographic markets. Acquiring or developing new properties and expanding into new markets introduces several risks, including but not limited to the following:
•we may not be successful in identifying suitable properties or other assets that meet our acquisition or development criteria or in consummating acquisitions or developments on satisfactory terms, or at all;
•we may be unable to maintain consistent standards, controls, policies, and procedures, or realize the anticipated benefits of the acquisitions within the anticipated time frame, or at all;
•acquisitions and divestitures could divert our attention from our existing properties and could cause us to lose key employees or be unable to attract highly qualified new employees;
•unfamiliarity with the dynamics and prevailing market conditions or local government or permitting procedures of any new geographic markets could adversely affect our ability to successfully expand into or operate within those markets or cause us to become more dependent on third parties in new markets due to our inability to directly and efficiently manage and otherwise monitor new properties in new markets;
•we may make assumptions regarding the expected future performance of acquired properties, including expected occupancy, rental rates, and cash flows, that prove to be inaccurate; and
•we may improperly estimate the costs of repositioning or redeveloping an acquired property.
We also may abandon opportunities to enter new markets that we have begun to explore for any reason and may, as a result, fail to recover expenses already incurred.
Our current or future insurance may not protect us against possible losses. We carry comprehensive liability, fire, extended coverage, and other insurance with respect to our properties at levels that we believe to be adequate and comparable to coverage customarily obtained by owners of similar properties. However, the coverage limits of our current or future policies may be insufficient to cover the full cost of repair or replacement of all potential losses, or our level of coverage may not continue to be available in the future or, if available, may be available only at unacceptable cost or with unacceptable terms. We also do not maintain coverage for certain catastrophic events like hurricanes and earthquakes because the cost of such insurance is deemed by management to be higher than the risk of loss due to the location of our properties. In most cases, we have to renew our insurance policies on an annual basis and negotiate acceptable terms for coverage, exposing us to the volatility of the insurance
9

Table of Contents
markets, including the possibility of rate increases. In addition, a reduction of the number of insurance providers or the unwillingness of existing insurance providers to write insurance for multifamily properties may reduce the potential availability and/or cost for obtaining insurance on our properties. Any material increases in insurance rates or decrease in available coverage in the future could adversely affect our results of operations.
Catastrophic weather, natural events, and climate change could adversely affect our business. Some of our apartment communities are located in areas that may experience catastrophic weather and other natural events from time to time, including snow or ice storms, flooding, tornadoes, or other severe or inclement weather. During the year ended December 31, 2020, many of our markets were impacted by a series of adverse weather-related events. These events included extreme cold, record-setting snowfall, extensive hail storms in certain markets, and tornadoes, which caused excess ice and snow accumulation, water and hail damage, and other weather-related damage to some of our apartment communities. Although most of these losses were covered by insurance, these or other adverse and natural events could cause damage or losses that may be greater than insured levels. In the event of a loss in excess of insured limits, we could lose all or a portion of our investment in an affected property as well as additional revenue from that apartment community. We may continue to be obligated to repay mortgage indebtedness or other obligations related to an affected apartment community.
To the extent that we experience any significant changes in the climate in areas where our apartment communities are located, we may experience extreme weather conditions and prolonged changes in precipitation and temperature, all of which could result in physical damage to, and/or a decrease in demand for, our apartment communities located in these areas. If the impact of any such climate change were to be material, or occur for a lengthy period of time, our business may be adversely affected.
Changes in federal or state laws and regulations relating to climate change could result in increased costs to our business, including capital expenditures to improve the energy efficiency of our existing communities or new development communities without a corresponding increase in revenue. Among other things, “green” building codes may seek to reduce emissions through the imposition of standards for design, construction materials, water and energy usage and efficiency and waste management. The imposition of such requirements in the future, including the imposition of new energy efficiency standards or requirements relating to resistance to inclement weather, could increase the costs of maintaining or improving our properties without a corresponding increase in revenue, thereby having an adverse effect on our financial condition or results of operation. The impact of climate change also may increase the cost of, or make unavailable, property insurance or other hazard insurance on terms we find acceptable or necessary to adequately protect our properties.
We are dependent on a concentration of our investments in a single asset class, making our results of operations more vulnerable to a downturn or slowdown in the sector or other economic factors. Since April 30, 2018, substantially all of our investments have been concentrated in the multifamily sector. As a result, we will be subject to risks inherent in investments in a single type of property. A downturn or slowdown in the demand for multifamily housing may have more pronounced effects on our business and results of operations or on the value of our assets than if we had continued to be more diversified in our investments into more than one asset class.
Our operations are concentrated in certain regions of the United States, and we are subject to general economic conditions in the regions in which we operate. Our overall operations are concentrated in the Midwest region and portions of the West region of the United States. Our performance could be adversely affected by economic conditions in, and other factors relating to, these geographic areas, including supply and demand for apartments in these areas, zoning and other regulatory conditions, and competition from other communities and alternative forms of housing. In particular, our performance is influenced by job growth and unemployment rates in the areas in which we operate. To the extent the economic conditions, job growth and unemployment in any of these markets deteriorate or any of these areas experience natural disasters or more pronounced effects of climate change, the value of our portfolio, our results of operations, and our ability to make payments on our debt and to make distributions could be adversely affected.
Our business depends on our ability to continue to provide high quality housing and consistent operation of our apartment communities, the failure of which could adversely affect our business and results of operations. Our business depends on providing our residents with quality housing and reliable services (including utilities), along with the consistent operation of our communities and their associated amenities, including covered parking, swimming pools, clubhouses with fitness facilities, playground areas, and other similar features. We may be required to undertake significant capital expenditures to renovate or reconfigure our communities in order to attract new residents and retain existing residents. The delayed delivery, material reduction, or prolonged interruption in any of these services may cause our residents to terminate their leases, may result in the reduction of rents and/or may result in an increase in our costs. In addition, we may fail to provide quality housing and continuous access to amenities as a result of other factors, including mechanical failure, power failure, inclement weather, physical or electronic security breaches, vandalism or acts of terrorism, or other similar events. Any of these issues could cause our residents to terminate or fail to renew their leases, could expose us to additional costs or liability claims, and could damage
10

Table of Contents
our reputation, any of which could impact our ability to provide quality housing and consistent operation of our apartment communities, which in turn could materially affect our business and results of operations.
Competition may negatively impact our earnings. We compete with many kinds of institutions, including other REITs, private partnerships, individuals, pension funds, and banks in attracting residents and finding investment opportunities. Many of these institutions are active in the markets in which we invest and have greater financial and other resources than we do, including access to capital on more favorable terms. Our apartment communities compete directly with other multifamily apartment communities, single-family homes, condominiums, and other short-term rentals.
Short-term leases could expose us to the effects of declining market rents. Our apartment leases are generally for a term of 12 months or less. Because these leases generally allow residents to leave at the expiration of the lease term without penalty, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms.
Because real estate investments are relatively illiquid and various other factors limit our ability to dispose of assets, we may not be able to sell properties when appropriate. We may have limited ability to change our portfolio of properties quickly in response to our strategic plan and changes in economic or other conditions, and the prohibitions under the federal income tax laws on REITs holding property for sale and related regulations may affect our ability to sell properties. Under certain circumstances, the Internal Revenue Code (the “Code”) imposes penalties on a REIT that sells property held for less than two years and limits the number of properties it can sell in a given year. Our ability to dispose of assets also may be limited by constraints on our ability to use disposition proceeds to make acquisitions on financially attractive terms. Some of our properties were acquired using limited partnership units of Centerspace, LP, our operating partnership, and are subject to certain tax-protection agreements that restrict our ability to sell these properties in transactions that would create current taxable income to the former owners. As a result, we are motivated to structure the sale of these assets as tax-free exchanges, the requirements of which are technical and may be difficult to achieve.
Inability to manage growth effectively may adversely affect our operating results. We have experienced significant growth at various times in the past and may do so in the future, principally through the acquisition of additional real estate properties. Effective management of rapid growth presents challenges, including:
•the need to expand our management team and staff;
•the need to enhance internal operating systems and controls; and
•the ability to consistently achieve targeted returns on individual properties.
We may not be able to maintain similar rates of growth in the future or manage our growth effectively.
Adverse changes in taxes and other laws may affect our liabilities relating to our properties and operations. Increases in real estate taxes, including recent property tax increases in several of the markets in which we operate, and service and transfer taxes may adversely affect our cash available for distributions and our ability to pay amounts due on our debt. Similarly, changes in laws that increase the potential liability for environmental conditions or that affect development, construction, and safety requirements may result in significant unanticipated costs. Future enactment of rent control or rent stabilization laws or other laws regulating apartment communities may reduce rental revenues or increase operating costs.
We may be unable to retain or attract qualified management. We are dependent upon our senior officers for essentially all aspects of our business operations. Our senior officers have experience in the real estate industry, and the loss of them would likely have a material adverse effect on our operations and could adversely impact our relationships with lenders and industry personnel. We do not have employment contracts with any of our senior officers. As a result, any senior officer may terminate his or her relationship with us at any time, without providing advance notice. If we fail to effectively manage a transition to new personnel, or if we fail to attract and retain qualified and experienced personnel on acceptable terms, it could adversely affect our business.
We may not be able to attract and retain qualified employees. Strong economic growth in recent years has created a tight labor market in many of the markets in which we operate, and we are dependent on employees at our apartment communities to provide attractive homes for our residents. The loss of key personnel at these apartment communities, or the inability or cost of replacing such personnel at such communities, could have an adverse impact on our business and results of operations.
We face risks associated with security breaches through cyber-attacks, cyber intrusions, or otherwise, which could pose a risk to our systems, networks, and services. We face risks associated with security breaches or disruptions, whether through cyber-attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to emails, or persons inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by
11

Table of Contents
computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity, and sophistication of attempted attacks and intrusions around the world have increased. In the normal course of business, we and our service providers (including service providers engaged in providing web hosting, property management, leasing, accounting and/or payroll software/services) collect and retain certain personal information provided by our residents, employees, and vendors. We also rely extensively on computer systems to process transactions and manage our business. While we and our service providers employ a variety of data security measures to protect confidential information on our systems and periodically review and improve our data security measures, we cannot provide assurance that we or our service providers will be able to prevent unauthorized access to this personal information, that our efforts to maintain the security and integrity of the information that we and our service providers collect will be effective, or that attempted security breaches or disruptions would not be successful or damaging. Even the most well-protected information, networks, systems, and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target. In some cases, these breaches are designed not to be detected and, in fact, may not be detected. Accordingly, we and our service providers may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, thereby making it impossible to entirely mitigate this risk. The risk of a breach or security failure, particularly through cyber-attacks or cyber-intrusion, has generally increased due to the rise in new technologies and the increased sophistication and activities of the perpetrators of attempted attacks and intrusions. A security breach or other significant disruption involving computer networks and related systems could cause substantial costs and other negative effects, including litigation, remediation costs, costs to deploy additional protection strategies, compromising of confidential information, and reputational damage adversely affecting investor confidence.
We may be responsible for potential liabilities under environmental laws. Under various federal, state, and local laws, ordinances and regulations, we, as a current or previous owner or operator of real estate, may be liable for the costs of removal or remediation of hazardous or toxic substances in, on, around, or under that property. These laws may impose liability without regard to whether we knew of, or were responsible for, the presence of the hazardous or toxic substances. The presence of these substances, or the failure to properly remediate any property containing these substances, may adversely affect our ability to sell or rent the affected property or to borrow funds using the property as collateral. In arranging for the disposal or treatment of hazardous or toxic substances, we also may be liable for the costs of removal of, or remediation of, these substances at that disposal or treatment facility, whether or not we own or operate the facility. In connection with our current or former ownership (direct or indirect), operation, management, development, and/or control of real properties, we may be potentially liable for removal or remediation costs with respect to hazardous or toxic substances at those properties, as well as certain other costs, including governmental fines and claims for injuries to persons and property. Although we are not aware of any such claims associated with our existing properties that would have a material adverse effect on our business, potential future costs and damage claims may be substantial and could exceed any insurance coverage we may have for such events or such coverage may not exist. The presence of such substances, or the failure to properly remediate any such impacts, may adversely affect our ability to borrow against, develop, sell, or rent the affected property. Some environmental laws create or allow a government agency to impose a lien on the impacted property in favor of the government for damages and costs it incurs as a result of responding to hazardous or toxic substances.
Environmental laws also govern the presence, maintenance, and removal of asbestos, and require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos; notify and train those who may come into contact with asbestos; and undertake special precautions if asbestos would be disturbed during renovation or demolition of a building. Indoor air quality issues may also necessitate special investigation and remediation. These air quality issues can result from inadequate ventilation, chemical contaminants from indoor or outdoor sources, or biological contaminants such as molds, pollen, viruses and bacteria. Asbestos or air quality remediation programs could be costly, necessitate the temporary relocation of some or all of the property’s residents, or require rehabilitation of an affected property.
It is generally our policy to obtain a Phase I environmental study on each property that we seek to acquire. A Phase I environmental study generally includes a visual inspection of the property and the surrounding areas, an examination of current and historical uses of the property and the surrounding areas, and a review of relevant state and federal documents but does not involve invasive techniques such as soil and ground water sampling. If the Phase I indicates any possible environmental problems, our policy is to order a Phase II study, which involves testing the soil and ground water for actual hazardous substances. However, Phase I and Phase II environmental studies, or any other environmental studies undertaken with respect to any of our current or future properties, may not reveal the full extent of potential environmental liabilities. We currently do not carry insurance for environmental liabilities.
Expanding social media usage could present new risks. The use of social media could cause us to suffer broad reputational damage. Negative posts or comments about us through social media, whether by residents or prospective residents, could damage our reputation or that of our apartment communities, whether or not such claims or posts are valid, which in turn could adversely affect our business and results of operations. Similarly, disclosure of any non-public sensitive information relating to
12

Table of Contents
our business or our residents or prospective residents could damage our reputation, our business, or our results of operations. The continuing evolution of social media will present us with new and ongoing challenges and risks.
Litigation risks could affect our business. As a publicly traded owner, manager, and developer of apartment communities, we may incur liability based on various conditions at our properties and the buildings thereon. In the past, we have been, and in the future may become, involved in legal proceedings, including consumer, employment, tort, or commercial litigation, any of which if decided adversely to us or settled by us and not adequately covered by insurance, could result in liability that could be material to our results of operations.
Risks related to properties under development, redevelopment, or newly developed properties may adversely affect our financial performance. We may be unable to obtain, or may suffer delays in obtaining, necessary zoning, land-use, building, occupancy, and other required governmental permits and authorizations, which could lead to increased costs or abandonment of projects. We may not be able to obtain financing on favorable terms, or at all, and we may not be able to complete lease-up of a property on schedule. The resulting time required for development, redevelopment, and lease-up means that we may have to wait years for significant cash returns.
Complying with zoning and permitting law may affect our acquisition, redevelopment, and development costs. We face risks associated with zoning and permitting of our communities, the majority of which are governed by municipal, county, and state regulations. We may be liable for costs associated with bringing communities into compliance and additionally may face costs or delays when seeking approvals for redevelopment or development projects within our portfolio.Some regulations related to zoning or permitting allow governmental entities to discontinue operations if violations are left uncured, which would significantly impact our business. We are not aware of any non-compliance at our communities that would have a material adverse effect on our business.
Future cash flows may not be sufficient to ensure recoverability of the carrying value of our real estate assets. We periodically evaluate the recoverability of the carrying value of our real estate assets under United States generally accepted accounting principles (“GAAP”). Factors considered in evaluating impairment of our real estate assets held for investment include recurring net operating losses and other significant adverse changes in general market conditions that are considered permanent in nature. Generally, a real estate asset held for investment is not considered impaired if the estimated undiscounted future cash flows of the asset over its estimated holding period are in excess of the asset’s net book value at the balance sheet date. Assumptions used to estimate annual and residual cash flow and the estimated holding period of these assets require the judgment of management.
Complying with laws benefiting disabled persons or other safety regulations and requirements may affect our costs and investment strategies. Federal, state, and local laws and regulations designed to improve disabled persons’ access to and use of buildings, including the Americans with Disabilities Act of 1990, may require modifications to, or restrict renovations of, existing buildings that may require unexpected expenditures. These laws and regulations may require that structural features be added to buildings under construction. Legislation or regulations that may be adopted in the future may impose further burdens or restrictions on us with respect to improved access to, and use of these buildings by, disabled persons. Noncompliance could result in the imposition of fines by government authorities or the award of damages to private litigants. The costs of complying with these laws and regulations may be substantial, and limits or restrictions on construction, or the completion of required renovations, may limit the implementation of our investment strategy or reduce overall returns on our investments.
Risks related to joint ventures may adversely affect our financial performance and results of operations. We have entered into, and may continue in the future to enter into, partnerships or joint ventures with other persons or entities. Joint venture investments involve risks that may not be present with other methods of ownership, based on the financial condition and business interests of our partners, which are beyond our control and which may conflict with our interests.
In some instances, we and/or our partner may have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner’s interest, at a time when we otherwise would not have initiated such a transaction. Our ability to acquire our partner’s interest may be limited if we do not have sufficient cash, available borrowing capacity, or other capital resources. In such event, we may be forced to sell our interest in the joint venture when we would otherwise prefer to retain it. Joint ventures may require us to share decision-making authority with our partners, which could limit our ability to control the properties in the joint ventures. Even when we have a controlling interest, certain major decisions may require partner approval, such as the sale, acquisition, or financing of a property.
A terrorism attack, other geopolitical crisis, or widespread outbreak of an illness or other health issue, such as the COVID-19 pandemic, could negatively affect various aspects of our business, including our workforce and supply chains, and could make it more difficult and expensive to meet our obligations to our residents. Our operations are susceptible to
13

Table of Contents
national or international events, including acts or threats of war or terrorism, political instability, natural disasters, and health epidemics or pandemics. These risks include a widespread outbreak of an illness or other health issue, such as the COVID-19 pandemic, resulting in a worldwide pandemic that has affected hundreds of countries around the world, including the U.S. The COVID-19 pandemic has resulted in travel bans, quarantines, and work restrictions that prohibit many employees from going to work. As a result of pandemics, including COVID-19, businesses can be shut down, supply chains can be interrupted, slowed, or rendered inoperable, and individuals can become ill, quarantined, or otherwise unable to work and/or travel due to health reasons or governmental restrictions. Governmental mandates may require dramatic changes at our apartment communities or could impact the availability of goods or services from many of our suppliers for extended or indefinite periods of time.
Potential changes to the financial condition of Fannie Mae and Freddie Mac and in government support for apartment communities may adversely affect our business. Historically, we have depended on the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) to provide financing for certain apartment communities. Although Fannie Mae and Freddie Mac have a mandate to support multifamily housing through their financing activities, government proposals relating to the future of agency mortgage finance in the U.S. could involve the phase-out of Fannie Mae and Freddie Mac. Although we believe that Fannie Mae and Freddie Mac will continue to provide liquidity to the multifamily sector, any phase-out of Fannie Mae and Freddie Mac, change in their mandate, or reduction in government support for apartment communities generally could result in adverse changes to interest rates, capital availability, development of additional apartment communities, and the value of these communities.
Employee theft or fraud could result in loss. Certain employees have access to, or signature authority with respect to, our bank accounts or assets, which exposes us to the risk of fraud or theft. Certain employees also have access to key information technology (“IT”) infrastructure and to resident and other information that may be commercially valuable. If any employee were to compromise our IT systems, or misappropriate resident or other information, we could incur losses, including potentially significant financial or reputational harm. We may not have insurance that covers any losses in full or covers losses from particular criminal acts.
Risks Related to Our Indebtedness and Financings
Our inability to renew, repay, or refinance our debt may result in losses. We incur a significant amount of debt in the ordinary course of our business and in connection with acquisitions of real properties. Because we have a limited ability to retain earnings as a result of the REIT distribution requirements, we will generally be required to refinance debt that matures with additional debt or equity. We are subject to the normal risks associated with debt financing, including the risks that:
•our cash flow will be insufficient to meet required payments of principal and interest, particularly if net operating income is reduced significantly due to the effects of the COVID-19 pandemic;
•we will not be able to renew, refinance, or repay our indebtedness when due; and
•the terms of any renewal or refinancing are at terms less favorable than the terms of our current indebtedness.
These risks increase when credit markets are tight, as they may be during the COVID-19 pandemic. In general, when the credit markets are tight, we may encounter resistance from lenders when we seek financing or refinancing for properties or proposed acquisitions, and the terms of such financing or refinancing are likely to be less favorable to us than the terms of our current indebtedness.
We anticipate that we will need to refinance a significant portion of our outstanding debt as it matures. We cannot guarantee that any refinancing of debt with other debt will be possible on terms that are favorable or acceptable to us. If we cannot refinance, extend, or pay principal payments due at maturity with the proceeds of other capital transactions, our cash flows may not be sufficient in all years to repay debt as it matures. If we are unable to refinance our indebtedness on acceptable terms, or at all, we may be forced to dispose of one or more properties on disadvantageous terms, which may result in losses. These losses could have a material adverse effect on our business, our ability to make distributions to our shareholders, and our ability to pay amounts due on our debt. If a property is mortgaged to secure payment of indebtedness and we are unable to meet mortgage payments or refinance the debt at maturity, the mortgagor could foreclose upon the property, appoint a receiver, and receive an assignment of rents and leases or pursue other remedies, including taking ownership of the property, all with a consequent loss of revenues and asset value. Foreclosures also could affect our ability to obtain new debt and could create taxable income without accompanying cash proceeds, thereby hindering our ability to meet the REIT distribution requirements of the Code and impeding our ability to obtain financing for our other properties.
Restrictive covenants in our debt agreements may limit our operating and financial flexibility, and our inability to comply with these covenants could have significant implications. Our indebtedness, which at December 31, 2020 totaled outstanding borrowings of approximately $721.3 million, contains a number of significant restrictions and covenants. These restrictions and covenants include financial covenants relating to fixed charge coverage ratios, maximum secured debt, maintenance of
14

Table of Contents
unencumbered asset value, and total debt to total asset value, among others and certain non-financial covenants. These may limit our ability to make future investments and dispositions, add incremental secured and recourse debt, and add overall leverage. Our ability to comply with these covenants will depend on our future performance, which may be affected by events beyond our control. Our failure to comply with these covenants would be an event of default. An event of default under the terms of our indebtedness would permit the lenders to accelerate indebtedness under effected agreements, which would include agreements that contain cross-acceleration provisions with respect to other indebtedness.
Rising interest rates may affect our cost of capital and financing activities. The potential for rising interest rates could limit our ability to refinance portions of our fixed-rate indebtedness when it matures and would increase our interest costs. We also have an unsecured credit facility that bears interest at variable rates based on amounts drawn. As a result, any increase in interest rates could increase our interest expense on our variable rate debt, increase our interest rates when refinancing fixed-rate debt, increase the cost of issuing new debt, and reduce the cash available for distribution to shareholders.
Interest rate hedging arrangements may result in losses. From time to time, we use interest rate swaps and other hedging instruments to manage our interest rate risks. Although these arrangements may partially protect us against rising interest rates, they also may reduce the benefits to us if interest rates decline. If a hedging arrangement is not indexed to the same rate as the indebtedness that is hedged, we may be exposed to losses to the extent that the rate governing the indebtedness and the rate governing the hedging arrangement change independently of each other, and nonperformance by the other party to the hedging arrangement also may subject us to increased credit risks. In order to minimize any counterparty credit risk, we enter into hedging arrangements only with investment grade financial institutions.
Potential changes to LIBOR could affect our financing covenants. LIBOR has been used as a primary benchmark for short-term interest rates, including under our credit facility. The U.K. Financial Conduct Authority (FCA), which regulates LIBOR, has announced it has commitments from panel banks to continue to contribute to LIBOR through the end of 2021, but it will not use its powers to compel contributions beyond such date. The ICE Benchmark Administration, in its capacity as administrator of USD LIBOR, has announced it plans to extend publication of USD LIBOR (excluding one-week and two-month tenor) by 18 months to June 2023. However, a joint statement by key regulatory authorities calls on banks to cease entering into new contracts that use USD LIBOR as a reference rate by no later than December 31, 2021. The Alternative References Rates Committee, a steering committee comprised of large U.S. financial institutions, has proposed replacing USD LIBOR with a new index calculated by short-term repurchase agreements - Secured Overnight Financing Rate (SOFR). At this time, no consensus exists as to what rate or rates may become accepted alternatives to LIBOR, and it is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR, whether LIBOR rates will cease to be published or supported before or after 2021 or whether any additional reforms to LIBOR may be enacted in the United Kingdom or elsewhere. Although the full impact of such reforms and actions, together with any transition away from LIBOR, including the potential or actual discontinuance of LIBOR publication, remains unclear, these changes may have a material adverse impact on the availability of financing. In addition, as it relates to future and derivatives contracts, ISDA master agreements between counterparties may need to be amended or replaced, including derivative contracts in which we are invested. There can be no assurance that a new global standard will be agreed upon or that any new rate will be reflective of the original interest rate and credit risk included within LIBOR, any of which could have a material adverse effect on our financing costs as well as our business and results of operations.
Risks Related to Our Shares
Our stock price may fluctuate significantly. The market price and trading volume of our common shares are subject to fluctuation due to general market conditions, the risks discussed in this report, and several other factors, including the following:
•regional, national, and global economic and business conditions;
•actual or anticipated changes in our quarterly operating results or dividends;
•changes in our estimates of funds from operations or earnings;
•investor interest in our property portfolio;
•the market perception and performance of REITs in general and apartment REITs in particular;
•the market perception or trading volume of REITs relative to other investment opportunities;
•the market perception of our financial condition, performance, distributions, and growth potential;
•general stock and bond market conditions, including potential increases in interest rates that could lead investors to seek higher annual yields from dividends;
15

Table of Contents
•shifts in our investor base to a higher concentration of passive investors, including exchange-traded funds and index funds, that could have an adverse effect on our ability to communicate with our shareholders;
•our ability to access capital markets, which could impact our cost of capital;
•a change in our credit rating or analyst ratings;
•changes in minimum dividend requirements;
•terrorism or other factors that adversely impact the markets in which our stock trades; and
•changes in tax laws or government regulations that could affect the attractiveness of our stock.
Rising interest rates could have an adverse effect on our share price. If interest rates increase, this could cause holders of our common shares and other investors to seek higher dividends on our shares or higher yields through other investments, which could adversely affect the market price of our shares.
Low trading volume on the NYSE may prevent the timely sale or resale of our shares. Although our common shares are listed on the NYSE, the daily trading volume of our shares may be lower than the trading volume for other companies. As a result of lower trading volume, an owner of our common shares may encounter difficulty in selling our shares in a timely manner and may incur a substantial loss.
Failure to generate sufficient revenue or other liquidity needs could limit cash flow available for distributions to our shareholders. A decrease in rental revenue, an increase in funding to support our acquisition and development needs, or other unmet liquidity needs could have an adverse effect on our ability to pay distributions to our shareholders or the Operating Partnership’s unitholders.
Payment of distributions on our common shares is not guaranteed. Our Board of Trustees must approve any stock distributions and may elect at any time, or from time to time, and for an indefinite duration, to reduce or not pay the distributions payable on our common shares. Our Board may reduce distributions for a variety of reasons, including but not limited to the following:
•operating and financial results cannot support the current distribution payment;
•unanticipated costs, capital requirements, or cash requirements;
•annual distribution requirements under the REIT provisions of the Code;
•a conclusion that the payment of distributions would cause us to breach the terms of certain agreements or contracts, such as financial ratio covenants in our debt financing documents; or
•other factors the Board of Trustees may consider relevant.
Our future growth depends, in part, on our ability to raise additional equity capital, which will have the effect of diluting the interests of our common shareholders. Our future growth depends upon, among other things, our ability to raise equity capital and issue limited partnership units of Centerspace, LP. Sales of substantial amounts of our common or preferred shares in the public market, or the perception that such sales or issuances might occur, may dilute the interests of the current common shareholders and could adversely affect the market price of our common shares. In addition, as a REIT, we are required to make distributions to holders of our equity securities of at least 90% of our REIT taxable income, determined before a deduction for dividends paid and excluding any net capital gain. This limits our ability to retain cash or earnings to fund future growth and makes us more dependent on raising funds through other means, which may include raising additional equity capital.
We may issue additional classes or series of our shares of beneficial interest with rights and preferences that are superior to the rights and preferences of our common shares. Our Declaration of Trust provides for an unlimited number of shares of beneficial interest. Without the approval of our common shareholders, our Board of Trustees may establish additional classes or series of our shares of beneficial interest, and such classes or series may have dividend rights, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences, or other rights and preferences that are superior to the rights of the holders of our common shares. In that regard, in September 2017, we filed a shelf registration statement with the SEC that enables us to sell an undetermined number of equity and debt securities as defined in the prospectus, including under the 2019 ATM Program. Future sales of common shares, preferred shares, or convertible debt securities may dilute current shareholders and could have an adverse impact on the market price of our common shares.
Any material weaknesses identified in our internal control over financial reporting could adversely affect our stock price. Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal control over financial reporting. If we were to identify one or more material weaknesses in our internal control over financial reporting, we could lose
16

Table of Contents
investor confidence in our financial reporting and results of operations, which in turn could have an adverse effect on our stock price.
Certain provisions of our Declaration of Trust may limit a change in control and deter a takeover. In order to maintain our qualification as a REIT, among other things, our Declaration of Trust provides that any transaction that would result in our disqualification as a REIT under Section 856 of the Code will be void, including any transaction that would result in the following:
•less than 100 Persons owning our shares;
•our being “closely held” within the meaning of Section 856(h) of the Code; or
•50% or more of the fair market value of our shares being held by Persons other than “United States persons,” for federal income tax purposes.
If the transaction is not void, then the shares in violation of the foregoing conditions will automatically be exchanged for an equal number of excess shares, and these excess shares will be transferred to an excess share trustee for the exclusive benefit of the charitable beneficiaries named by our Board of Trustees. The Trust’s Declaration of Trust also provides a limit on a Person owning in excess of the ownership limit of 9.8%, in number or value, of the Trust’s outstanding shares, although the Board of Trustees retains the ability to make exceptions to this ownership threshold. These limitations may have the effect of preventing a change in control or takeover of us by a third party, even if the change in control or takeover would be in the best interests of our shareholders.
Risks Related to Tax Matters
We may incur tax liabilities as a consequence of failing to qualify as a REIT, which could force us to borrow funds during unfavorable market conditions. We have elected to be taxed as a REIT under the Code. Qualification as a REIT involves the application of highly technical and complex Code provisions, including income, asset, and distribution tests, for which there are only limited judicial or administrative interpretations. Even a technical or inadvertent mistake could endanger our REIT status. The determination that we qualify as a REIT requires an ongoing analysis of various factual matters and circumstances, some of which may not be within our control. For example, in order to qualify as a REIT, at least 95% of our gross income in any year must come from certain passive sources that are itemized in the REIT tax laws, and we are prohibited from owning specified amounts of debt or equity securities of some issuers. Thus, to the extent revenues from non-qualifying sources, such as income from third-party management services, represent more than 5% of our gross income in any taxable year, we will not satisfy the 95% income test and may fail to qualify as a REIT, unless certain relief provisions contained in the Code apply. Even if relief provisions apply, however, a tax would be imposed with respect to excess net income. We are also required to make distributions to the holders of our securities of at least 90% of our REIT taxable income, determined before a deduction for dividends paid and excluding any net capital gain. To the extent that we satisfy the 90% test but distribute less than 100% of our REIT taxable income, we will be subject to corporate income tax on such undistributed income and could be subject to an additional 4% excise tax. Because we need to meet these tests to maintain our qualification as a REIT, it could cause us to have to forgo certain business opportunities and potentially require us to liquidate otherwise attractive investments. The fact that we hold substantially all of our assets (except for qualified REIT subsidiaries) through Centerspace, LP, our operating partnership, and its subsidiaries, and our ongoing reliance on factual determinations, such as determinations related to the valuation of our assets, further complicates the application of the REIT requirements for us. If Centerspace, LP or one or more of our subsidiaries is determined to be taxable as a corporation, we may fail to qualify as a REIT. Either our failure to qualify as a REIT, for any reason, or the imposition of taxes on excess net income from non-qualifying sources, could adversely affect our business and our ability to make distributions to our shareholders and pay amounts due on our debt. New legislation, regulations, administrative interpretations or court decisions could change the tax laws with respect to our qualification as a REIT or the federal income tax consequences of our qualification.
If we were to fail to qualify as a REIT, we would be subject to federal income tax on our taxable income at regular corporate rates, could be subject to increased state and local taxes and, unless entitled to relief under applicable statutory provisions, would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost our qualification, which would likely have a material adverse effect on us, our ability to make distributions to our shareholders, and our ability to pay amounts due on our debt. This treatment would reduce funds available for investment or distributions to the holders of our securities due to the additional tax liability to us for the year or years involved, and we would no longer be able to deduct, and would not be required to make, distributions to our shareholders. To the extent that distributions to the holders of our securities had been made in anticipation of qualifying as a REIT, we may need short-term debt or long-term debt or proceeds from asset sales or sales of common shares to fund required distributions as a result of differences in timing between the actual receipt of income and the recognition of income for federal income tax purposes, or the effect of non-deductible
17

Table of Contents
capital expenditures, the creation of reserves or required debt or amortization payments. The inability of our cash flows to cover our distribution requirements could have an adverse impact on our ability to raise short and long-term debt or sell equity securities in order to fund distributions required to maintain our REIT status.
Failure of our operating partnership to qualify as a partnership would result in corporate taxation and significantly reduce the amount of cash available for distribution. We believe that Centerspace, LP, our operating partnership, qualifies as a partnership for federal income tax purposes. However, we can provide no assurance that the IRS will not challenge its status as a partnership for federal income tax purposes or that a court would not sustain such a challenge. If the IRS were to be successful in treating Centerspace, LP as an entity taxable as a corporation (such as a publicly traded partnership taxable as a corporation), we would cease to qualify as a REIT because the value of our ownership interest in Centerspace, LP would exceed 5% of our assets and because we would be considered to hold more than 10% of the voting securities and value of the outstanding securities of another corporation. The imposition of a corporate tax on Centerspace, LP would significantly reduce the amount of cash available for distribution.
Legislative or regulatory actions affecting REITs could have an adverse effect on us or our shareholders. Changes to tax laws or regulations may adversely impact our shareholders and our business and financial results. The REIT rules are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S. Treasury Department, which may result in revisions to regulations and interpretations as well as statutory changes.
We cannot predict whether, when, or to what extent the Tax Cuts and Jobs Act of 2017 and any new U.S. federal tax laws, regulations, interpretations, or rulings will impact the real estate investment industry or REITs. Prospective investors are urged to consult their tax advisers regarding the effect of the Tax Cuts and Jobs Act of 2017 and potential future changes to the federal tax laws of an investment in our shares or Units.
Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations, which could reduce the net cash received by our shareholders and may be detrimental to our ability to raise additional funds through any future sale of our stock. Dividends paid by REITs to U.S. shareholders that are individuals, trusts, or estates are generally not eligible for the reduced tax rate applicable to qualified dividends received from non-REIT corporations but, under the 2017 Tax Cuts and Jobs Act, U.S. shareholders that are individuals, trusts, and estates generally may deduct 20% of ordinary dividends from a REIT (for taxable years beginning after December 31, 2017 and before January 1, 2026). Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate is still higher than the tax rate applicable to regular corporate qualified dividends. This may cause investors to view REIT investments as less attractive than investments in non-REIT corporations, which in turn may adversely affect the value of stock in REITs, including our stock. Investors should consult with their tax advisers regarding the U.S. tax consequences of an investment in our stock or Units.
We may face risks in connection with Section 1031 exchanges. From time to time, we dispose of properties in transactions intended to qualify as “like-kind exchanges” under Section 1031 of the Code. If a transaction intended to qualify as a Section 1031 exchange is later determined to be taxable, we may face adverse consequences, and if the laws applicable to such transactions are amended or repealed, we may not be able to dispose of properties on a tax-deferred basis. If we are unable to meet the technical requirements of a desired Section 1031 exchange, we may be required to make a special dividend payment to our shareholders if we are unable to mitigate the taxable gains realized. The failure to reinvest proceeds from sales of properties into tax-deferred exchanges could necessitate payments to unitholders with tax protection agreements.
We have tax protection agreements in place on twenty properties. If these properties are sold in a taxable transaction, we must make the unitholders associated with these particular properties whole through the payment of their related tax. We dispose of properties in transactions intended to qualify as “like-kind exchanges” under Section 1031 of the Code whenever possible. If we are not able to satisfy all of the technical requirements of Section 1031, or if Section 1031 is repealed, selling a property with a tax protection agreement could trigger a material obligation to make the associated unitholders whole.
Complying with REIT requirements may force us to forgo otherwise attractive opportunities or liquidate otherwise attractive investments. To qualify and maintain our status as a REIT, we must satisfy certain requirements with respect to the character of our assets. If we fail to comply with these requirements at the end of any quarter, we must correct such failure within 30 days after the end of the quarter (by, possibly, selling assets notwithstanding their prospects as an investment) to avoid losing our REIT status. This could include potentially selling otherwise attractive assets or liquidating or foregoing otherwise attractive investments. These actions could reduce our income and amounts available for distribution to our shareholders.
Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flows. Even if we qualify as a REIT under the U.S. tax code, we may be subject to certain federal, state, and local taxes on our income and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a foreclosure, and state or local income,
18

Table of Contents
property, and transfer taxes, such as mortgage recording taxes. Any of these taxes would decrease cash available for distribution to our shareholders.
The tax imposed on REITs engaging in prohibited transactions and our agreements entered into with certain contributors of our properties may limit our ability to engage in transactions that would be treated as sales for federal income tax purposes. The federal income tax provisions applicable to REITs provide that any gain realized by a REIT on the sale of property held as inventory or other property held primarily for sale to customers in the ordinary course of business is treated as income from a “prohibited transaction” that is subject to a 100% penalty tax. Under current law, unless a sale of real property qualifies for a safe harbor, the question of whether the sale of a property constitutes the sale of property held primarily for sale to customers is generally a question of the facts and circumstances regarding a particular transaction. We may make sales that do not satisfy the requirements of the safe harbors, or the IRS may successfully assert that one or more of our sales are prohibited transactions and, as a result, we may be required to pay a penalty tax. To avert this penalty tax, we may hold some of our assets through a taxable REIT subsidiary (“TRS”). While the TRS structure would allow the economic benefits of ownership to flow to us, a TRS is subject to tax on its income at the federal and state level. We have entered into agreements with certain contributors of our properties that contain limitations on our ability to dispose of certain properties in taxable transactions. The restrictions on taxable dispositions are effective for varying periods. Such agreements may require that we make a payment to the contributor in the event that we dispose of a covered property in a taxable sale during the restriction period.
Our ownership of TRSs is limited, and our transactions with TRSs will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms. A REIT may own up to 100% of the stock of one or more TRSs. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT. Our TRS is subject to applicable federal, state, and local income tax on any taxable income. TRS rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. We scrutinize transactions with our TRS to ensure that they are entered into on arm's-length terms to avoid incurring the 100% excise tax described above.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Communities
We are organized as a REIT under Sections 856-858 of the Code and are structured as an UPREIT, which allows us to accept the contribution of real estate to our Operating Partnership in exchange for OP Units. Our business is focused on the ownership, management, acquisition, redevelopment, and development of apartment communities, which we own and operate through our Operating Partnership. We are a fully integrated owner-operator of apartment communities.
Certain Lending Requirements
In certain instances, in connection with the financing of investment properties, the lender may require, as a condition of the loan, that the properties be owned by a “single asset entity.” Accordingly, we have organized a number of wholly owned subsidiary entities for the purpose of holding title in an entity that complies with such lending conditions. All financial statements of these subsidiaries are consolidated into our financial statements.
Management and Leasing of Our Real Estate Assets
We conduct our corporate operations from offices in Minot, North Dakota and Minneapolis, Minnesota. The day-to-day management of our properties is generally carried out by our own employees. When properties acquired have effective pre-existing property management in place or when particular properties are, in our judgment, not attractive candidates for self-management, we may utilize third-party professional management companies for day-to-day management. However, all decisions relating to purchase, sale, insurance coverage, major capital improvements, annual operating budgets, and major renovations are made exclusively by our employees and implemented by the third-party management companies. Generally, our third-party management contracts are for terms of one year or less and provide for compensation ranging from 2.5% to 5.0% of gross rent collections and, typically, we may terminate these contracts upon 60 days or less notice for cause or upon the property manager’s failure to meet certain specified financial performance goals.
19

Table of Contents
Summary of Communities Owned as of December 31, 2020
The following table presents information regarding our 67 apartment communities and two other properties held for investment, as of December 31, 2020. We provide certain information on a same-store and non-same-store basis. Same-store 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, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate the performance of existing apartment communities. “Other” includes non-multifamily properties and non-multifamily components of mixed use properties. We own the following interests in real estate either through our wholly-owned subsidiaries or by ownership of a controlling interest in an entity owning the real estate. We account for these interests on a consolidated basis. Additional information is included in Schedule III to our financial statements included in this Report.

|  |  | (in thousands) |
|  |  | Investment | Physical
|  | Number of | (initial cost plus | Occupancy
|  | Apartment | improvements less | as of
Community Name and Location |  | Homes | impairment) | December 31, 2020
SAME-STORE |  |  |  |
71 France - Edina, MN (1) |  | 241 |  | $ | 66,929 |  | 93.8 | %
Alps Park - Rapid City, SD |  | 71 |  | 6,263 |  | 100.0 | %
Arcata - Golden Valley, MN (2) |  | 165 |  | 33,480 |  | 95.2 | %
Ashland - Grand Forks, ND (1) |  | 84 |  | 8,656 |  | 92.9 | %
Avalon Cove - Rochester, MN |  | 187 |  | 36,336 |  | 95.7 | %
Boulder Court - Eagan, MN (2) |  | 115 |  | 9,870 |  | 96.5 | %
Canyon Lake - Rapid City, SD (1) |  | 109 |  | 6,529 |  | 99.1 | %
Cardinal Point - Grand Forks, ND (2) |  | 251 |  | 35,288 |  | 96.0 | %
Cascade Shores - Rochester, MN (1) |  | 90 |  | 18,444 |  | 100.0 | %
Castlerock - Billings, MT (2) |  | 166 |  | 8,138 |  | 100.0 | %
Chateau - Minot, ND (2) |  | 104 |  | 21,453 |  | 95.2 | %
Cimarron Hills - Omaha, NE (1) |  | 234 |  | 15,508 |  | 95.7 | %
Colonial Villa - Burnsville, MN (2) |  | 239 |  | 29,511 |  | 93.3 | %
Colony - Lincoln, NE (1) |  | 232 |  | 20,376 |  | 97.8 | %
Commons and Landing at Southgate - Minot, ND (2) |  | 341 |  | 55,516 |  | 93.0 | %
Cottonwood - Bismarck, ND (2) |  | 268 |  | 24,481 |  | 95.5 | %
Country Meadows - Billings, MT (2) |  | 133 |  | 10,145 |  | 94.7 | %
Crystal Bay - Rochester, MN |  | 76 |  | 12,218 |  | 97.4 | %
Cypress Court - St. Cloud, MN (1) (3) |  | 196 |  | 20,936 |  | 95.9 | %
Deer Ridge - Jamestown, ND (2) |  | 163 |  | 25,162 |  | 95.7 | %
Dylan - Denver, CO (2) (4) (5) |  | 274 |  | 90,400 |  | 96.4 | %
Evergreen - Isanti, MN (2) |  | 72 |  | 7,222 |  | 98.6 | %
French Creek - Rochester, MN |  | 40 |  | 5,192 |  | 100.0 | %
Gardens - Grand Forks, ND (2) |  | 74 |  | 9,352 |  | 94.6 | %
Grand Gateway - St. Cloud, MN (2) |  | 116 |  | 9,964 |  | 95.7 | %
GrandeVille at Cascade Lake - Rochester, MN (1) |  | 276 |  | 57,455 |  | 96.0 | %
Greenfield - Omaha, NE (2) |  | 96 |  | 7,352 |  | 86.5 | %
Heritage Manor - Rochester, MN |  | 182 |  | 11,112 |  | 95.1 | %
Homestead Garden - Rapid City, SD |  | 152 |  | 15,334 |  | 98.0 | %
Lakeside Village - Lincoln, NE (1) |  | 208 |  | 18,902 |  | 96.6 | %
Legacy - Grand Forks, ND (1) |  | 360 |  | 34,133 |  | 96.9 | %
Legacy Heights - Bismarck, ND (2) |  | 119 |  | 15,206 |  | 96.6 | %
Meadows - Jamestown, ND (2) |  | 81 |  | 7,196 |  | 98.8 | %
Monticello Crossings - Monticello, MN (2) |  | 202 |  | 32,246 |  | 96.0 | %
Monticello Village - Monticello, MN (2) |  | 60 |  | 5,480 |  | 95.0 | %
Northridge - Bismarck, ND (2) |  | 68 |  | 8,677 |  | 97.1 | %
Olympic Village - Billings, MT (2) |  | 274 |  | 15,780 |  | 97.8 | %
Olympik Village - Rochester, MN |  | 140 |  | 10,602 |  | 85.7 | %
Oxbo - St Paul, MN (2) (4) (5) |  | 191 |  | 57,609 |  | 97.4 | %
Park Meadows - Waite Park, MN |  | 360 |  | 20,519 |  | 92.8 | %
Park Place - Plymouth, MN (2) (5) |  | 500 |  | 101,823 |  | 92.2 | %
Plaza - Minot, ND (2) |  | 71 |  | 16,779 |  | 91.5 | %

20

Table of Contents

|  |  | (in thousands) |
|  |  | Investment | Physical
|  | Number of | (initial cost plus | Occupancy
|  | Apartment | improvements less | as of
Community Name and Location |  | Homes | impairment) | December 31, 2020
Pointe West - Rapid City, SD (2) |  | 90 |  | 5,963 |  | 98.9 | %
Ponds at Heritage Place - Sartell, MN (2) |  | 58 |  | 5,469 |  | 93.1 | %
Quarry Ridge - Rochester, MN (1) |  | 313 |  | 34,634 |  | 94.9 | %
Red 20 - Minneapolis, MN (1) |  | 130 |  | 26,413 |  | 96.9 | %
Regency Park Estates - St. Cloud, MN (1) |  | 147 |  | 14,237 |  | 94.6 | %
Rimrock West - Billings, MT (2) |  | 78 |  | 5,976 |  | 96.2 | %
River Ridge - Bismarck, ND (2) |  | 146 |  | 26,338 |  | 95.2 | %
Rocky Meadows - Billings, MT (2) |  | 98 |  | 8,127 |  | 99.0 | %
Rum River - Isanti, MN (1) |  | 72 |  | 6,210 |  | 97.2 | %
Silver Springs - Rapid City, SD (1) |  | 52 |  | 4,112 |  | 100.0 | %
South Pointe - Minot, ND (2) |  | 196 |  | 16,088 |  | 93.9 | %
Southpoint - Grand Forks, ND (2) |  | 96 |  | 10,705 |  | 96.9 | %
Sunset Trail - Rochester, MN |  | 146 |  | 16,710 |  | 95.2 | %
Thomasbrook - Lincoln, NE (1) |  | 264 |  | 16,592 |  | 96.2 | %
Village Green - Rochester, MN |  | 36 |  | 3,613 |  | 100.0 | %
West Stonehill - Waite Park, MN (1) |  | 313 |  | 19,277 |  | 96.8 | %
Westend - Denver, CO (2) (4) (5) |  | 390 |  | 128,310 |  | 95.9 | %
Whispering Ridge - Omaha, NE (1) |  | 336 |  | 30,555 |  | 93.2 | %
Winchester - Rochester, MN |  | 115 |  | 9,410 |  | 93.0 | %
Woodridge - Rochester, MN (1) |  | 110 |  | 11,896 |  | 94.5 | %
TOTAL SAME-STORE |  | 10,567 |  | $ | 1,424,209 |  | 95.0 | %
NON-SAME-STORE |  |  |  |
FreightYard Townhomes & Flats - Minneapolis, MN (4) |  | 96 |  | $ | 26,382 |  | 86.5 | %
Ironwood - Minneapolis, MN |  | 182 |  | 39,123 |  | 97.3 | %
Lugano at Cherry Creek - Denver, CO (4) |  | 328 |  | 96,080 |  | 95.7 | %
Parkhouse - Thornton, CO (2) |  | 465 |  | 142,807 |  | 93.5 | %
SouthFork Townhomes - Lakeville, MN (1) (4) |  | 272 |  | 50,777 |  | 91.5 | %
TOTAL NON-SAME-STORE |  | 1,343 |  | $ | 355,169 |  | 92.3 | %
TOTAL MULTIFAMILY |  | 11,910 |  | $ | 1,779,378 |  |

21

Table of Contents

|  |  | (in thousands) |
|  |  | Investment | Physical
|  | Net Rentable | (initial cost plus | Occupancy
|  | Square | improvements less | as of
Property Name and Location |  | Footage | impairment) | December 31, 2020
OTHER - MIXED USE COMMERCIAL |  |  |  |
71 France - Edina, MN (1) |  | 20,955 |  | $ | 6,746 |  | 88.1 | %
Lugano at Cherry Creek - Denver, CO |  | 13,295 |  | 1,806 |  | 47.8 | %
Oxbo - St Paul, MN (2) |  | 11,477 |  | 3,526 |  | 100.0 | %
Plaza - Minot, ND (2) |  | 50,610 |  | 9,678 |  | 100.0 | %
Red 20 - Minneapolis, MN (1) |  | 10,508 |  | 2,944 |  | 89.6 | %
TOTAL OTHER - MIXED USE COMMERCIAL |  | 106,845 |  | $ | 24,700 |  |
OTHER - COMMERCIAL |  |  |  |
3100 10th St SW - Minot, ND(6) |  | 9,690 |  | $ | 2,111 |  | — |
Minot IPS - Minot, ND |  | 27,698 |  | 6,368 |  | — |
TOTAL OTHER - COMMERCIAL |  | 37,388 |  | $ | 8,479 |  |
TOTAL SQUARE FOOTAGE - OTHER |  | 144,233 |  |  |
TOTAL GROSS REAL ESTATE INVESTMENTS, EXCLUDING MORTGAGE NOTES RECEIVABLE |  |  | $ | 1,812,557 |  |

(1)Encumbered by mortgage debt.
(2)Pledged as credit support on unencumbered asset pool for our line of credit.
(3)Owned by a joint venture entity and consolidated in our financial statements. We have an approximately 86.1% ownership in Cypress Court.
(4)Non-same-store for the comparison of the year ended December 31, 2019 to the year ended December 31, 2018.
(5)Non-same-store for the comparison of the eight months ended December 31, 2018 to the eight months ended December 31, 2017.
(6)This is our Minot corporate office building.
Properties by State
The following table presents, as of December 31, 2020, the total amount of property owned, net of accumulated depreciation, by state:

|  | (in thousands) |
State |  | Multifamily | Other | Total | % of Total
Minnesota |  | $ | 623,324 |  | $ | 10,946 |  | $ | 634,270 |  | 44.9 | %
Colorado |  | 433,389 |  | 1,733 |  | 435,122 |  | 30.8 | %
North Dakota |  | 216,040 |  | 9,240 |  | 225,280 |  | 15.9 | %
Nebraska |  | 71,946 |  | — |  | 71,946 |  | 5.1 | %
South Dakota |  | 25,155 |  | — |  | 25,155 |  | 1.8 | %
Montana |  | 21,535 |  | — |  | 21,535 |  | 1.5 | %
Total |  | $ | 1,391,389 |  | $ | 21,919 |  | $ | 1,413,308 |  | 100.0 | %

Item 3. Legal Proceedings
In the ordinary course of our operations, we become involved in litigation. At this time, we know of no material pending or threatened legal proceedings, or other proceedings contemplated by governmental authorities, that would have a material impact upon us.
Item 4. Mine Safety Disclosures
Not Applicable.
22

Table of Contents
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
Market Information
Our Common Shares of Beneficial Interest, no par value, are traded on the New York Stock Exchange under the symbol “CSR”.
Shareholders
As of February 15, 2021, there were approximately 2,573 common shareholders of record.
Unregistered Sales of Shares
Under the terms of Centerspace, LP’s Agreement of Limited Partnership, limited partners have the right to require Centerspace, LP to redeem their limited partnership units any time following the first anniversary of the date they acquired such Units (“Exchange Right”). When a limited partner exercises the Exchange Right, we have the right, in our sole discretion, to redeem such Units by either making a cash payment or exchanging the Units for our common shares, on a one-for-one basis. The Exchange Right is subject to certain conditions and limitations, including that the limited partner may not exercise the Exchange Right more than two times during a calendar year and the limited partner may not exercise for less than 100 Units, or, if such limited partner holds less than 100 Units, for less than all of the Units held by such limited partner. Centerspace, LP and some limited partners have contractually agreed to a holding period of greater than one year, a greater number of redemptions during a calendar year, or other modifications to their Exchange Right.
During three months ended December 31, 2020, we issued an aggregate of 24,698 unregistered common shares to limited partners of Centerspace, LP upon exercise of their Exchange Rights for an equal number of Units. All such issuances of our common shares were exempt from registration as private placements under Section 4(a)(2) of the Securities Act, including Regulation D promulgated thereunder. We have registered the resale of such common shares under the Securities Act.
Issuer Purchases of Equity Securities

|  |  |  |  | Maximum Dollar
|  |  |  | Total Number of Shares | Amount of Shares That
|  | Total Number of | Average Price | Purchased as Part of | May Yet Be Purchased
|  | Shares and Units | Paid per | Publicly Announced | Under the Plans or
Period |  | Purchased(1) | Share and Unit(2) | Plans or Programs | Programs(3)
October 1 - 31, 2020 |  | 30 |  | $ | 70.01 |  | — |  | $ | 44,371,557 |
November 1 - 30, 2020 |  | — |  | — |  | — |  | 44,371,557 |
December 1 - 31, 2020 |  | — |  | — |  | — |  | — |
Total |  | 30 |  | $ | 70.01 |  | — |  |

(1)Includes a total of 30 Units redeemed for cash pursuant to the exercise of exchange rights.
(2)Amount includes commissions paid.
(3)On December 5, 2019, the board authorized a new $50,000,000 repurchase program which expired on December 5, 2020.
Comparative Stock Performance
The information contained in this Comparative Stock Performance section shall not be deemed to be “soliciting material” or “filed” or “incorporated by reference” into our future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act.
Set forth below is a graph that compares, for the five years commencing December 31, 2015 and ending December 31, 2020, the cumulative total returns for our common shares with the comparable cumulative total return of three indices, the Standard & Poor’s 500 Index (“S&P 500”), the FTSE Nareit Equity REITs Index, and the SNL U.S. REIT Multifamily Index, the latter of which is an index prepared by the FTSE Group for the National Association of Real Estate Investment Trusts, which includes all tax-qualified equity REITs listed on the NYSE and the NASDAQ Market. The performance graph assumes that, at the close
23

Table of Contents
of trading on December 31, 2015, $100 was invested in our common shares and in each of the indices. The comparison assumes the reinvestment of all distributions.

| Period Ending
Index | 12/31/2015 | 12/31/2016 | 12/31/2017 | 12/31/2018 | 12/31/2019 | 12/31/2020
Centerspace | 100.00 |  | 101.67 |  | 84.91 |  | 77.36 |  | 119.31 |  | 121.46 |
S&P 500 Index | 100.00 |  | 113.51 |  | 138.29 |  | 132.23 |  | 173.86 |  | 205.85 |
FTSE Nareit Equity REITs | 100.00 |  | 110.83 |  | 115.15 |  | 110.70 |  | 137.65 |  | 124.44 |
SNL U.S. REIT Multifamily | 100.00 |  | 120.45 |  | 127.12 |  | 130.70 |  | 165.73 |  | 138.54 |

Source: S&P Global Market Intelligence
24

Table of Contents
Item 6. Selected Financial Data
Set forth below is selected financial data on a historical basis for the years ended December 31, 2020 and 2019, the eight months ended December 31, 2018, and the three most recent fiscal years ended April 30, 2018. This information should be read in conjunction with the consolidated financial statements and notes appearing elsewhere in this Report.

|  | (in thousands, except per share and apartment community data)
|  | Year Ended December 31, | Eight Months Ended | Fiscal Year Ended April 30,
|  | 2020 | 2019 | December 31, 2018 | 2018 | 2017 | 2016
Consolidated Statement of Operations Data |  |  |  |  |  |  |
Revenue |  | $ | 177,994 |  | $ | 185,755 |  | $ | 121,871 |  | $ | 169,745 |  | $ | 160,104 |  | $ | 145,500 |
Impairment of real estate investments in continuing and discontinued operations |  | — |  | — |  | 1,221 |  | 18,065 |  | 57,028 |  | 5,983 |
Gain (loss) on sale of discontinued operations and real estate and other investments |  | 25,503 |  | 97,624 |  | 10,277 |  | 183,687 |  | 74,847 |  | 33,422 |
Income (loss) from continuing operations |  | 4,743 |  | 84,822 |  | (5,890) |  | (37,194) |  | (46,228) |  | 9,182 |
Income (loss) from discontinued operations |  | — |  | — |  | 570 |  | 164,823 |  | 76,753 |  | 67,420 |
Net income (loss) |  | 4,743 |  | 84,822 |  | (5,320) |  | 127,629 |  | 30,525 |  | 76,602 |
Net income (loss) attributable to controlling interests |  | 4,441 |  | 78,669 |  | (4,398) |  | 116,788 |  | 43,347 |  | 72,006 |
Net income (loss) available to common shareholders |  | (1,790) |  | 71,848 |  | (8,945) |  | 104,562 |  | 31,366 |  | 60,492 |
Consolidated Balance Sheet Data |  |  |  |  |  |  |
Total real estate investments |  | 1,437,969 |  | 1,311,472 |  | 1,289,476 |  | 1,380,245 |  | 1,121,385 |  | 1,204,654 |
Total assets |  | 1,464,183 |  | 1,392,418 |  | 1,335,997 |  | 1,426,658 |  | 1,474,514 |  | 1,755,022 |
Revolving lines of credit |  | 152,871 |  | 50,079 |  | 57,500 |  | 124,000 |  | 57,050 |  | 17,500 |
Notes payable |  | 269,246 |  | 269,058 |  | 143,991 |  | 69,514 |  | — | —
Mortgages payable |  | 297,074 |  | 329,664 |  | 444,197 |  | 509,919 |  | 565,978 |  | 648,173 |
Total shareholders’ equity |  | 618,207 |  | 619,053 |  | 568,786 |  | 605,663 |  | 553,721 |  | 618,758 |
Consolidated Per Common Share Data (basic and diluted) |  |  |  |  |  |  |
Earnings (loss) from continuing operations – basic |  | $ | (0.15) |  | $ | 6.06 |  | $ | (0.79) |  | $ | (3.54) |  | $ | (3.01) |  | — |
Earnings (loss) from discontinued operations – basic |  | — |  | — |  | $ | 0.04 |  | $ | 12.25 |  | $ | 5.59 |  | $ | 4.91 |
Net income (loss) per common share - basic |  | $ | (0.15) |  | $ | 6.06 |  | $ | (0.75) |  | $ | 8.71 |  | $ | 2.58 |  | $ | 4.91 |
Earnings (loss) from continuing operations – diluted |  | $ | (0.15) |  | $ | 6.00 |  | $ | (0.79) |  | $ | (3.54) |  | $ | (3.01) |  | — |
Earnings (loss) from discontinued operations – diluted |  | — |  | — |  | $ | 0.04 |  | $ | 12.25 |  | $ | 5.59 |  | $ | 4.91 |
Net income (loss) per common share - diluted |  | $ | (0.15) |  | $ | 6.00 |  | $ | (0.75) |  | $ | 8.71 |  | $ | 2.58 |  | $ | 4.91 |
Distributions |  | $ | 2.80 |  | $ | 2.80 |  | $ | 2.10 |  | $ | 2.80 |  | $ | 4.60 |  | $ | 5.20 |
Other Data |  |  |  |  |  |  |
Total apartment communities |  | 67 |  | 69 |  | 87 |  | 90 |  | 87 |  | 99 |
Total homes |  | 11,910 |  | 11,953 |  | 13,702 |  | 14,176 |  | 13,212 |  | 12,974 |
Funds from operations applicable to common shares and units |  | $ | 47,356 |  | $ | 52,866 |  | $ | 30,559 |  | $ | 38,941 |  | $ | 55,207 |  | $ | 103,874 |

CALENDAR YEAR |  | 2020 | 2019 | 2018 | 2017 | 2016 | 2015
Tax status of distributions |  |  |  |  |  |  |
Capital gain |  | 13.62 | % | 38.53 | % | 100.00 | % | 48.87 | % | 87.57 | % | 11.99 | %
Ordinary income |  | 7.91 | % | 23.43 | % | — |  | 14.59 | % | 12.43 | % | 36.28 | %
Return of capital |  | 78.47 | % | 38.04 | % | — |  | 36.54 | % | — |  | 51.73 | %

25

Table of Contents
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes appearing elsewhere in this report. Historical results and trends which might appear in the consolidated financial statements should not be interpreted as being indicative of future operations.
We are presenting our result of operations for the years ended December 31, 2020 and 2019. For additional comparison of results of operations for the years ended December 31, 2019 and December 31, 2018, please refer to our Annual Report on Form 10-K filed with the SEC on February 19, 2020. For additional comparison of results of operations for the eight months ended December 31, 2018 and 2017, and the fiscal years ended April 30, 2018 and 2017, please refer to our Transition Report on from 10-KT filed with the SEC on February 27, 2019.
This and other sections of this Report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future.
Executive Summary
We own, manage, acquire, redevelop, and develop apartment communities. We primarily focus on investing in markets characterized by stable and growing economic conditions, strong employment, and an attractive quality of life that we believe, in combination, lead to higher demand for our apartment homes and retention of our residents. As of December 31, 2020, we owned interests in 67 apartment communities consisting of 11,910 homes as detailed in Item 2 - Properties. Property owned, as presented in the consolidated balance sheet, was $1.8 billion at December 31, 2020, compared to $1.6 billion at December 31, 2019.
Renting apartment homes is our primary source of revenue, and our business objective is to provide great homes. We strive to maximize resident satisfaction and retention by investing in high-quality assets in desirable locations and developing and training team members to create vibrant apartment communities through resident-centered operations. We believe that delivering superior resident experiences will drive consistent profitability for our shareholders. We have paid quarterly distributions every quarter since our first distribution in 1971.
COVID-19 Developments
The COVID-19 pandemic has had an impact on our business since March 2020, when it spread to many of the markets in which we own properties. Our first priority continues to be the health and well-being of our residents, team members, and the communities we serve. We enhanced cleaning protocols at our communities and offices, implemented physical distancing in community common spaces, and instituted remote work guidelines for our team members, all in accordance with state and local guidelines. We are utilizing technology to allow our property teams to interact remotely with prospective residents through virtual leasing. We have provided rent deferrals to residents and rent abatement to commercial tenants who were financially impacted by the COVID-19 pandemic. To support our team members working on-site, we have provided additional COVID-19 paid time off and enhanced flextime arrangements.
Certain states and cities, including some of those in which our apartment communities are located, have reacted to the COVID-19 pandemic by instituting quarantines, restrictions on travel, shelter-in-place or stay-at-home directives, restrictions on types of businesses that may continue to operate, and restrictions on the types of construction projects that may continue. We cannot predict when restrictions currently in place will expire or whether additional restrictions will be imposed in the future. We implemented a plan to safely re-open common spaces in several of our communities while adhering to state and local guidelines, but we recognize that an increase in COVID-19 cases in these markets could cause us to close common spaces or take other preventive measures.
Financial Impact of the COVID-19 Pandemic
Many companies, especially in urban areas, have extended directives for employees to work from home during the COVID-19 pandemic. These extended directives have resulted in decreased traffic to businesses and, in some cases, closures of businesses in urban areas, which has resulted in lower demand and lower rent increases for our five urban based apartment communities. The COVID-19 pandemic and these directives have affected our operations and the conduct of business at our apartment communities and offices, but did not have a material impact on our financial condition, operating results, or cash flows for the twelve months ended December 31, 2020.
26

Table of Contents
Absent the ability to contain or treat the COVID-19 virus, with a corresponding re-opening of the economy, the ongoing COVID-19 pandemic may have adverse financial and economic impacts that include, but are not limited to, the following:
•cause our residents or commercial tenants to defer or stop rental payments, and abandon or fail to renew leases, which would reduce our primary source of net operating income and cash flows;
•cause the capital markets generally to become restricted or unavailable, thereby limiting our access to any needed debt or equity capital financing;
•impact the business of, or cause the loss of, certain critical third-party suppliers or other service providers;
•restrict our ability to continue to pay dividends on a quarterly basis at the current rate;
•impair the value of our tangible or intangible assets;
•require us to record loss contingencies and incur additional expenses related to our COVID-19 response; or
•cause the U.S. economy to suffer an extended economic slowdown, which could lead to a prolonged recession or even economic depression, which in turn would affect the demand for our apartment communities and could have an adverse impact on our business and operating results.
We have taken the following actions in order to protect our residents and employees, manage expenses and preserve cash flow during the COVID-19 pandemic:
•we eliminated the majority of travel for our team members during 2020 and reduced planned travel through 2021;
•left vacant positions unfilled;
•used onsite team members to perform work normally contracted to third parties; and
•we have moved the meetings of our Board of Trustees to virtual meetings, thereby limiting the expense associated with in-person meetings.
Despite our efforts to manage our response to the effects of the COVID-19 pandemic, the ultimate impact of the COVID-19 pandemic on our rental revenue in future years cannot be determined at present. The situation surrounding the COVID-19 pandemic remains fluid, and we are actively managing our response in collaboration with residents, commercial tenants, government officials, and business partners and assessing potential impacts to our financial position and operating results, as well as potential adverse impacts on our business. Our management remains committed to ensuring the safety of our team members, residents, and communities, and to maintaining the financial stability of our business enterprise for the duration of the COVID-19 pandemic.
Significant Transactions and Events for the Year Ended December 31, 2020
Highlights. For the year ended December 31, 2020, our highlights included the following:
•Net Loss was $0.15 per diluted share for the year ended December 31, 2020, compared to Net Income of $6.00 per diluted share for the year ended December 31, 2019;
•Same-store year-over-year revenue growth of 2.1%, driven by 1.7% growth in rental revenue and 0.4% growth in occupancy;
•Same-store net operating income growth of 1.8%;
•Funded $18.5 million of multifamily construction loans;
•Announced Nashville as one of our target markets; and
•Rebranded the Company as Centerspace to reflect both the transformation of the company and its vision for the future.
Acquisitions and Dispositions. During the year ended December 31, 2020, we completed the following transactions in furtherance of our strategic plan:
•Continued our focus on key growth markets, expanding in Minneapolis, Minnesota and Denver, Colorado, acquiring a total of two apartment communities in these markets, consisting of 647 homes, for an aggregate purchase price of $191.0 million;
•Acquired the remaining noncontrolling interest in 71 France for $12.2 million;
27

Table of Contents
•Disposed of four apartment communities in Grand Forks, North Dakota, a commercial property, and a parcel of unimproved land for an aggregate sale price of $44.3 million.
Financing Transactions. During the year ended December 31, 2020, we completed the following financing transactions:
•We issued 829,078 common shares under the 2019 ATM Program for total consideration, net of commissions and issuance costs, of approximately $59.2 million.
Outlook
We intend to continue our focus on maximizing the financial performance of the communities in our existing portfolio. To accomplish this, we have introduced initiatives to expand our operating margin by enhancing the resident experience, making value-add investments, and implementing technology solutions and expense controls. We will actively manage our existing portfolio and strategically pursue acquisitions of multifamily communities in our target markets of Minneapolis, Minnesota and Denver, Colorado as opportunities arise and market conditions allow. We will explore potential new markets and acquisition opportunities, including in Nashville, Tennessee, as market conditions allow. Our continued management of a strong balance sheet should provide us with flexibility to pursue both internal and external growth.
28

Table of Contents
RESULTS OF OPERATIONS
Reconciliation of Operating Income (Loss) to Net Operating Income
The following table provides a reconciliation of operating income to net operating income (“NOI”), which is defined below.

|  | (in thousands, except percentages)
|  | Year Ended December 31,
|  | 2020 | 2019 | $ Change | % Change
Operating income (loss) |  | $ | 8,340 |  | $ | 11,417 |  | $ | (3,077) |  | (27.0) | %
Adjustments: |  |  |  |  |
Property management expenses |  | 5,801 |  | 6,186 |  | (385) |  | (6.2) | %
Casualty loss |  | 1,662 |  | 1,116 |  | 546 |  | 48.9 | %
Depreciation and amortization |  | 75,593 |  | 74,271 |  | 1,322 |  | 1.8 | %
General and administrative expenses |  | 13,440 |  | 14,450 |  | (1,010) |  | (7.0) | %
Net operating income |  | $ | 104,836 |  | $ | 107,440 |  | $ | (2,604) |  | (2.4) | %

Consolidated Results of Operations
The following consolidated results of operations cover the years ended December 31, 2020 and 2019.

|  | (in thousands)
|  | Year Ended December 31,
|  | 2020 | 2019 | $ Change | % Change
Revenue |  |  |  |  |
Same-store |  | $ | 152,790 |  | $ | 149,615 |  | $ | 3,175 |  | 2.1 | %
Non-same-store |  | 18,441 |  | 6,020 |  | 12,421 |  | 206.3 | %
Other properties and dispositions |  | 6,763 |  | 30,120 |  | (23,357) |  | (77.5) | %
Total |  | 177,994 |  | 185,755 |  | (7,761) |  | (4.2) | %
Property operating expenses, including real estate taxes |  |  |  |  |
Same-store |  | 63,227 |  | 61,622 |  | 1,605 |  | 2.6 | %
Non-same-store |  | 6,817 |  | 2,287 |  | 4,530 |  | 198.1 | %
Other properties and dispositions |  | 3,114 |  | 14,406 |  | (11,292) |  | (78.4) | %
Total |  | 73,158 |  | 78,315 |  | (5,157) |  | (6.6) | %
Net operating income |  |  |  |  |
Same-store |  | 89,563 |  | 87,993 |  | 1,570 |  | 1.8 | %
Non-same-store |  | 11,624 |  | 3,733 |  | 7,891 |  | 211.4 | %
Other properties and dispositions |  | 3,649 |  | 15,714 |  | (12,065) |  | (76.8) | %
Total |  | $ | 104,836 |  | $ | 107,440 |  | $ | (2,604) |  | (2.4) | %
Property management expense |  | (5,801) |  | (6,186) |  | (385) |  | (6.2) | %
Casualty loss |  | (1,662) |  | (1,116) |  | 546 |  | 48.9 | %
Depreciation and amortization |  | (75,593) |  | (74,271) |  | 1,322 |  | 1.8 | %
General and administrative expenses |  | (13,440) |  | (14,450) |  | (1,010) |  | (7.0) | %
Interest expense |  | (27,525) |  | (30,537) |  | (3,012) |  | (9.9) | %
Loss on extinguishment of debt |  | (23) |  | (2,360) |  | (2,337) |  | (99.0) | %
Interest and other income (loss) |  | (1,552) |  | 2,092 |  | (3,644) |  | (174.2) | %
Income (loss) before gain (loss) on sale of real estate and other investments, and gain (loss) on litigation settlement |  | (20,760) |  | (19,388) |  | (1,372) |  | (7.1) | %
Gain (loss) on sale of real estate and other investments |  | 25,503 |  | 97,624 |  | (72,121) |  | (73.9) | %
Gain (loss) on litigation settlement |  | — |  | 6,586 |  | (6,586) |  | (100.0) | %
NET INCOME (LOSS) |  | $ | 4,743 |  | $ | 84,822 |  | $ | (80,079) |  | (94.4) | %
Dividends to preferred unitholders |  | (640) |  | (537) |  | (103) |  | 19.2 | %
Net (income) loss attributable to noncontrolling interests – Operating Partnership |  | 212 |  | (6,752) |  | 6,964 |  | (103.1) | %
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities |  | 126 |  | 1,136 |  | (1,010) |  | (88.9) | %
Net income (loss) attributable to controlling interests |  | 4,441 |  | 78,669 |  | (74,228) |  | (94.4) | %
Dividends to preferred shareholders |  | (6,528) |  | (6,821) |  | 293 |  | (4.3) | %
Redemption of preferred shares |  | 297 |  | — |  | 297 |  | 100.0 | %
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |  | $ | (1,790) |  | $ | 71,848 |  | $ | (73,638) |  | (102.5) | %

29

Table of Contents

|  | Year Ended December 31,
Weighted Average Occupancy (1) |  | 2020 | 2019
Same-store |  | 94.8 | % | 94.4 | %
Non-same-store |  | 93.2 | % | 94.8 | %
Total |  | 94.7 | % | 94.4 | %

(1)Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rental revenue. Scheduled rental revenue represents the value of all homes, with occupied homes valued at contractual rental rates pursuant to leases and vacant homes valued at estimated market rents. When calculating actual rents for occupied homes and market rents for vacant homes, delinquencies and concessions are not taken into account. The currently offered effective rates on new leases at the community are used as the starting point in determination of the market rates of vacant homes. We believe that weighted average occupancy is a meaningful measure of occupancy because it considers the value of each vacant unit at is estimated market rate. Weighted average occupancy may not completely reflect short-term trends in physical occupancy, and our calculation of weighted average occupancy may not be comparable to that disclosed by other real estate companies.

|  | December 31,
Number of Homes |  | 2020 | 2019
Same-store |  | 10,567 |  | 10,567 |
Non-same-store |  | 1,343 |  | 696 |
Total |  | 11,910 |  | 11,263 |

Net operating income. NOI is a non-GAAP financial measure which we define as total real estate revenues less property operating expenses, including real estate taxes, which is reconciled to operating income (loss) in the table above. We believe 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.
Throughout this Report, we have provided 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, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate the performance of existing apartment communities and their contribution to net income. Management believes that measuring performance on a same-store basis is useful to investors because it enables evaluation of how our communities are performing year-over-year. Management uses this measure to assess whether or not it has been successful in increasing NOI, renewing the leases of existing residents, controlling operating costs, and making prudent capital improvements. The discussion below focuses on the main factors affecting real estate revenue and real estate expenses from same-store apartment communities because changes from one year to another in real estate revenue and expenses from non-same-store communities are due to the addition of those properties to our real estate portfolio, and accordingly provide less useful information for evaluating the ongoing operational performance of our real estate portfolio.
For the comparison of the twelve months ended December 31, 2020 and 2019, 62 apartment communities were classified as same-store and five apartment communities were non-same-store. See Item 2 - Properties for the list of communities classified as same-store and non-same-store. Sold communities are included in “Other” for the periods prior to the sale, which also includes non-multifamily properties and the non-multifamily components of mixed-use properties.
Revenue. Total revenue decreased by 4.2% to $178.0 million for the year ended December 31, 2020 compared to $185.8 million in the year ended December 31, 2019. A decrease of $23.4 million from dispositions and other properties was offset by an increase of $12.4 million from five non-same-store apartment communities. Revenue from same-store communities increased by 2.1% or $3.2 million in the year ended December 31, 2020, compared to the same period in the prior year. Approximately 1.7% of the increase was attributable to growth in average rental revenue, which was impacted by $450,000 of additional ratio utility billings ("RUBs") revenue as a result of the acceleration of our billing cycle after transitioning to a new RUBs service provider during the fourth quarter. Approximately 0.4% of the increase was due to higher occupancy as weighted average occupancy increased from 94.4% to 94.8% for the years ended December 31, 2019 and 2020, respectively.
Property operating expenses, including real estate taxes. Total property operating expenses, including real estate taxes, decreased by 6.6% to $73.2 million in the year ended December 31, 2020 compare d to $78.3 million in the year ended December 31, 2019. A total of $11.3 million of the decrease was attributable to other properties, primarily due to dispositions, but was partially offset by an increase of $4.5 million from non-same-store apartment communities. Property operating expenses at same-store communities increased by 2.6% or $1.6 million in the year ended December 31, 2020, compared to the
30

Table of Contents
same period in the prior year. Insurance and real estate taxes comprised $1.2 million and $1.6 million of the increase, respectively. The increase in real estate taxes was primarily due to increases in Rochester, Minneapolis, and Denver. The increase in non-controllable expenses was offset by a $1.2 million decrease in controllable operating expenses, primarily due to decreased snow removal costs, utilities, and cost containment efforts related to the COVID-19 pandemic.
Net operating income. NOI decreased by 2.4% to $104.8 million in the year ended December 31, 2020 compared to $107.4 million in the year ended December 31, 2019.
Property management expense. Property management expense, consisting of property management overhead and property management fees paid to third parties, was $5.8 million in the year ended December 31, 2020 and $6.2 million in the year ended December 31, 2019. The decrease was primarily driven by compensation costs, reduced travel, and advertising.
Casualty gain (loss). Casualty loss increased by 48.9% to $1.7 million in the year ended December 31, 2020, compared to $1.1 million in the year ended December 31, 2019. The increase was primarily due to hail losses that were historically insured at lower deductibles, but beginning in 2020 our carriers limited coverage and increased deductibles for hail and wind-related losses. We also incurred losses at one property due to plumbing failures. Related to the 2020 hail losses, in the fourth quarter of 2020 we also incurred $754,000 in capitalized asset replacement costs, with an additional $1.3 million expected to be incurred in 2021.
Depreciation and amortization. Depreciation and amortization increased by 1.8% to $75.6 million in the year ended December 31, 2020, compared to $74.3 million in the year ended December 31, 2019. This increase was primarily due to non-same-store properties and offset by decreases from sold properties.
General and administrative expenses. General and administrative expenses decreased by 7.0% to $13.4 million in the year ended December 31, 2020, compared to $14.5 million in the year ended December 31, 2019, primarily attributable to decreases of $680,000 in compensation costs, $178,000 in severance-related costs, $381,000 in consulting costs, $277,000 in legal costs related to our pursuit of a construction defect claim which was resolved in the prior year, and $238,000 in decreased travel due to the COVID-19 pandemic. These decreases were partially offset by an increase of $402,000 in rebranding costs and $137,000 due to incentive compensation related to higher share award valuations compared to previous awards in the long-term incentive plan.
Operating income. Operating income decreased by 27.0% to $8.3 million in the year ended December 31, 2020, compared to a gain of $11.4 million in the year ended December 31, 2019.
Interest expense. Interest expense decreased 9.9% to $27.5 million in the year ended December 31, 2020, compared to $30.5 million in the year ended December 31, 2019, primarily due to the replacement of maturing debt with lower interest rate debt and lower interest rates on our line of credit.
Loss on extinguishment of debt. We recorded loss on extinguishment of debt in the years ended December 31, 2020 and 2019 of $23,000 and $2.4 million, respectively, primarily due to prepayment penalties associated with the disposal of assets and the write-off of unamortized loan costs.
Interest and other income (loss). We recorded a loss of $1.6 million in interest and other income (loss) in the year ended December 31, 2020, compared to income of $2.1 million in the prior year. The decrease was primarily due to a $3.4 million loss from certain marketable securities.
Gain (loss) on sale of real estate and other investments. In the years ended December 31, 2020 and 2019, we recorded gains on sale of real estate and other investments in continuing operations of $25.5 million and $97.6 million, respectively, primarily related to increased dispositions in 2019.
Gain (loss) on litigation settlement. In the year ended December 31, 2019, we recorded a gain on litigation settlement of $6.6 million from the settlement of a construction defect claim.
31

Table of Contents
Funds from Operations
We believe that Funds from Operations (“FFO”), which is a standard supplemental measure for equity real estate investment trusts, is helpful to investors in understanding our operating performance, primarily because its calculation does not assume the value of real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation.
We use 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 our investments, and assists management and investors in comparing those operating results between periods.
Due to limitations of the Nareit FFO definition, we have made certain interpretations in applying the definition. We believe 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.
While FFO is widely used by us as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO 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.
Net loss available to common shareholders for the year ended December 31, 2020 decreased to $1.8 million compared to net income of $71.8 million for the year ended December 31, 2019. FFO applicable to common shares and Units for the year ended December 31, 2020, decreased to $47.4 million compared to $52.9 million for the year ended December 31, 2019, a change of 10.4%, primarily due to a $6.6 million gain on litigation settlement in the prior year which did not recur in the current year, as well as decreased NOI from sold properties and increased loss on marketable securities in the current year. The decrease in FFO was partially offset by increases in NOI from same-store and non-same-store communities and reductions in interest expense and prepayment penalties. For a comparison of FFO applicable to common shares and Units for the years ended December 31, 2019 and 2018, refer to our Annual Report on Form 10-K filed with the SEC on February 19, 2020. For a comparison of FFO applicable to common shares and Units for the eight months ended December 31, 2018 and 2017 and the fiscal years ended April 30, 2018 and 2017, please refer to our Transition Report on from 10-KT filed with the SEC on February 27, 2019.
32

Table of Contents
Reconciliation of Net Income Available to Common Shareholders to Funds from Operations

| (in thousands, except per share and unit amounts)
| Year Ended December 31,
| 2020 | 2019
Net income (loss) available to common shareholders | $ | (1,790) |  |  | $ | 71,848 |
Adjustments: |  |  |
Noncontrolling interests – Operating Partnership | (212) |  |  | 6,752 |
Depreciation and amortization | 75,593 |  |  | 74,271 |
Less depreciation – non real estate | (353) |  |  | (322) |
Less depreciation – partially owned entities | (379) |  |  | (2,059) |
(Gain) loss on sale of real estate | (25,503) |  |  | (97,624) |
Funds from operations applicable to common shares and Units | $ | 47,356 |  |  | $ | 52,866 |
Funds from operations applicable to common shares and Units | $ | 47,356 |  |  | $ | 52,866 |
Dividends to preferred unitholders | 640 |  |  | 537 |
Funds from operations applicable to common shares and Units - diluted | $ | 47,996 |  |  | $ | 53,403 |
Per Share Data |  |  |
Earnings (loss) per common share - diluted | $ | (0.15) |  |  | $ | 6.00 |
FFO per share and Unit - diluted | $ | 3.47 |  |  | $ | 4.05 |
Weighted average shares and Units - diluted | 13,835 |  |  | 13,182 |

Liquidity and Capital Resources
Overview
Our primary sources of liquidity are cash and cash equivalents on hand and cash flows generated from operations. Other sources include availability under our unsecured lines of credit, proceeds from property dispositions, including restricted cash related to net tax deferred proceeds, offerings of preferred and common shares under our shelf registration statement, including offerings of common shares under our 2019 ATM Program, and long-term unsecured debt and secured mortgages.
Our primary liquidity demands are normally-recurring operating and overhead expenses, debt service and repayments, capital improvements to our communities, distributions to the holders of our preferred shares, common shares, Series D preferred units, and Units, value-add redevelopment, common and preferred share buybacks and Unit redemptions, and acquisition of additional communities.
We intend to maintain a strong balance sheet and preserve our financial flexibility, which we believe should enhance our ability to capitalize on appropriate investment opportunities as they may arise. We intend to maintain our capital structure by taking certain actions, including:
•extending and sequencing our debt maturity dates;
•managing interest rate exposure through the appropriate use of a mix of fixed and floating debt and utilizing our lines of credit and senior notes as appropriate;
•maintaining adequate coverage ratios on our debt obligations; and
•where appropriate, accessing the equity markets through our 2019 ATM Program and other offerings under our shelf registration statement.
We have historically met our short-term liquidity requirements through net cash flows provided by our operating activities and, from time to time, through draws on our lines of credit. We believe our ability to generate cash from property operating activities and draws on our lines of credit to be adequate to meet all expected operating requirements and to make distributions to our shareholders in accordance with the REIT provisions of the Internal Revenue Code. Budgeted expenditures for ongoing maintenance and capital improvements and renovations to our real estate portfolio are also generally expected to be funded from existing cash on hand, cash flow generated from property operations, draws on our lines of credit and/or new borrowings, and we believe we will have sufficient liquidity to meet our commitments over the next twelve months.
33

Table of Contents
To maintain our qualification as a REIT, we must pay dividends to our shareholders aggregating annually at least 90% of our REIT taxable income, excluding net capital gains. Under a separate requirement, we must distribute 100% of net capital gains or pay a corporate level tax in lieu thereof. While we have historically satisfied this distribution requirement by making cash distributions to our shareholders, we may choose to satisfy this requirement by making distributions of other property, including, in limited circumstances, our own common shares. As a result of this distribution requirement, our Operating Partnership cannot rely on retained earnings to fund ongoing operations. We pay dividends from cash available for distribution. Until it is distributed, cash available for distribution is typically invested in investment grade securities or is used to reduce balances outstanding under our line of credit. In the event of deterioration in property operating results, we may need to consider additional cash preservation alternatives, including reducing development activities, capital improvements, and renovations. For the year ended December 31, 2020, we declared cash distributions of $38.5 million to common shareholders and unitholders of Centerspace, LP, as compared to net cash provided by operating activities of $61.2 million and FFO of $47.4 million.
Factors that could increase or decrease our future liquidity include, but are not limited to, changes in interest rates or sources of financing, general volatility in capital and credit markets, changes in minimum REIT dividend requirements, and our ability to access the capital markets on favorable terms, or at all. As a result of the foregoing conditions or general economic conditions in our markets that affect our ability to attract and retain residents, we may not generate sufficient cash flow from operations. If we are unable to obtain capital from other sources, we may not be able to pay the distribution required to maintain our status as a REIT, make required principal and interest payments, make strategic acquisitions or make necessary routine capital improvements or undertake value add renovation opportunities with respect to our existing portfolio of operating assets.
As of December 31, 2020, we had total liquidity of approximately $97.5 million, which included $97.1 million available on our line of credit based on the value of properties contained in our unencumbered asset pool (“UAP”) and $392,000 of cash and cash equivalents. As of December 31, 2019, we had total liquidity of approximately $226.5 million, which included $199.9 million available on our line of credit based on the UAP and $26.6 million of cash and cash equivalents.
COVID-19-Related Impacts on Liquidity
We anticipate that our primary sources of liquidity will continue to be cash and cash equivalents on hand, cash flows generated from operations and availability under our unsecured lines of credit. Although cash flows may be reduced as a result of lower monthly collections of rent as well as the potential for lower occupancy or reduced rental rates during and after the COVID-19 pandemic, we have other available sources of liquidity such as proceeds from property dispositions, including offerings of preferred and common shares under our shelf registration statement, offerings of common shares under our 2019 ATM Program; and long term unsecured term loans and secured mortgages. We have the following contractual obligations over the next twelve months:
•$26.1 million of debt maturities in 2021; and
•$20.6 million remaining to fund, under construction and mezzanine loans we originated for the development of a multifamily community in Minneapolis, Minnesota.
Potential Impact of COVID-19-Related Effects on Continuing Debt Availability
Although we are in compliance with our covenants under all of our debt facilities and currently expect to continue to remain in compliance with these covenants, there can be no assurance that we will remain in compliance with those covenants or be able to access these funds depending on the length of the COVID-19 pandemic and the breadth of its impact on the U.S. economy generally and the credit markets in particular. Under the terms of our credit facility, we may be unable to obtain advances under our credit facility if:
•we are unable to make certain representations and warranties, including a certification that, since April 30, 2018, there has been no adverse change in our business, financial condition, operations, performance or properties, taken as a whole, which would reasonably be expected to have a material adverse effect;
•changes in our consolidated property NOI or capitalization rates applicable to the properties in our borrowing base reduce or eliminate availability under our credit facility; or
•changes in the nature and composition (including occupancy rate) of the properties in our borrowing base cause these properties to become ineligible to be part of our borrowing base, and if we are not able to replace such properties with other qualifying properties, such ineligibility could reduce or eliminate the availability under our credit facility.
34

Table of Contents
Even if we remain in compliance with the foregoing representations, warranties, and covenants, we may be unable to access the full amount available under our credit facilities if our lenders fail to fund their commitments, which could occur if:
•credit market deterioration or overall economic conditions affect the ability of one or more of our lenders to meet their funding commitments under our revolving credit facility. If a lender fails to fund its commitment under the revolving credit facility, that portion of the credit facility will be unavailable if the lender’s commitment is not replaced by a new commitment from an alternate lender;
•distressed market conditions cause our lenders to transfer their commitments to other institutions, which could result in committed funds not being available, particularly if consolidation of the commitments under our credit facility or among its lenders were to occur; or
•we are unable to obtain additional letters of credit due to a default by any lender in meeting its funding obligations.
As of the date of this filing, we have not experienced any restrictions or limitations on the availability of credit in our markets or with our lenders, although there can be no assurance that we will continue to be able to access the credit markets generally or our credit facility in the future.
Debt
We have an unsecured credit facility for $395.0 million, with the commitment allocated to a revolving line of credit for $250.0 million and the remaining $145.0 million allocated between two term loans: a $70.0 million unsecured term loan that matures on January 15, 2024 and a $75.0 million term loan that matures on August 31, 2025.
As of December 31, 2020, our line of credit had total commitments and borrowing capacity of $250.0 million, based on the value of properties contained in the UAP. As December 31, 2020, the additional borrowing availability was $97.1 million beyond the $152.9 million drawn, including the balance on our operating line of credit (discussed below). At December 31, 2019, the line of credit borrowing capacity was $250.0 million based on the UAP, of which $50.1 million was drawn on the line. The multi-bank line of credit bears interest either at the lender’s base rate plus a margin ranging from 35 to 85 basis points, or LIBOR, plus a margin ranging from 135 to 190 basis points based on our consolidated leverage. The line of credit is utilized to refinance existing indebtedness, to finance property acquisitions, to finance capital expenditures, and for general corporate purposes.This credit facility matures on August 31, 2022, with one twelve-month option to extend the maturity date at our election.
We have a private shelf agreement for the issuance of up to $150.0 million of unsecured senior promissory notes. Under this agreement, we issued $75.0 million of Series A notes due September 13, 2029, bearing interest at a rate of 3.84% annually, and $50.0 million of Series B notes due September 30, 2028, bearing interest at a rate of 3.69% annually, under this facility. An additional $25.0 million remains available under this agreement. Subsequent to December 31, 2020, we issued $50.0 million of 2.7% unsecured Series C notes, due June 6, 2030. In concert with this issuance, we amended and expanded our Note Purchase Private Shelf Agreement (the "Agreement") with Prudential to increase the aggregate amount available under the Agreement from $150.0 million to $225.0 million. After the issuance of Series C notes, we have $50.0 million remaining under the Agreement.
We also have a $6.0 million operating line of credit. This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances. This operating line matures on August 1, 2021, with pricing based on a market spread plus the one-month LIBOR index rate.
Mortgage loan indebtedness was $298.4 million on December 31, 2020 and $331.4 million on December 31, 2019. As of December 31, 2020, the weighted average rate of interest on our mortgage debt was 3.93%, compared to 4.02% on December 31, 2019. Refer to Note 6 of our consolidated financial statements contained in this Report for the principal payments due on our mortgage indebtedness and other tabular information.
All of our term debt is at fixed rates of interest, with staggered maturities. This reduces the exposure to changes in interest rates, which minimizes the effect of interest rate fluctuations on our results of operations and cash flows.
Equity
In November 2019, we entered into an equity distribution agreement in connection with the 2019 ATM Program through which we may offer and sell common shares having an aggregate gross sales price of up to $150.0 million, in amounts and at times that we determine. The proceeds from the sale of common shares under the 2019 ATM Program are intended to be used for general corporate purposes, which may include the funding of future acquisitions and the repayment of indebtedness. During
35

Table of Contents
the year ended December 31, 2020, we issued 829,078 common shares under the 2019 ATM Program at an average price of $71.39 per share, net of commissions. Total consideration, net of commissions and issuance costs, was approximately $59.2 million. As of December 31, 2020, common shares having an aggregate offering price of up to $68.5 million remained available under the 2019 ATM Program.
On December 5, 2019, our Board of Trustees authorized a new share purchase program to repurchase up to $50 million of our common shares or preferred shares over a one-year period. Under this repurchase program, we could repurchase common shares or preferred shares in open-market purchases, including pursuant to Rule 10b5-1 and Rule 10b-18 plans, as determined by management and in accordance with the requirements of the SEC. This program expired on December 5, 2020. During the year ended December 31, 2020, we repurchased and retired approximately 237,000 Series C preferred shares for an aggregate cost of $5.6 million, including commissions, at an average price per share of $23.75. During the year ended December 31, 2019, we repurchased and retired approximately 329,000 common shares for an aggregate cost of $18.0 million, including commissions, at an average price per share of $54.69.
As of December 31, 2020 and 2019, we had 3.9 million and 4.1 million Series C preferred shares outstanding, respectively.
Changes in Cash, Cash Equivalents, and Restricted Cash
As of December 31, 2020, we had restricted cash consisting of $1.9 million of escrows held by lenders for real estate taxes, insurance, and capital additions and $5.0 million in deposits for real estate acquisitions. As of December 31, 2019, we had restricted cash consisting of $2.3 million of escrows held by lenders for real estate taxes, insurance, and capital additions and $17.2 million in net tax-deferred exchange proceeds remaining from a portion of our dispositions.
The following discussion relates to changes in consolidated cash, cash equivalents, and restricted cash which are presented in our consolidated statements of cash flows in Item 15 of this report.
In addition to cash flows from operations, during the year ended December 31, 2020, we generated capital from various activities, including:
•Receipt of $59.2 million from the issuance of 829,078 common shares under our 2019 ATM Program;
•Disposition of four apartment communities in Grand Forks, North Dakota, one commercial property, and one parcel of unimproved land for an aggregate sale price of $44.3 million;
•Receipt of $10.0 million from repayment of a mortgage receivable;
•Draws of $102.8 million on our line of credit; and
•Sale of $3.9 million of marketable securities.
During the year ended December 31, 2020, we used capital for various activities, including:
•Acquisition of Ironwood Apartments, a 182-home apartment community located in New Hope, Minnesota, an inner-ring suburb of Minneapolis, for an aggregate purchase price of $46.3 million, of which $28.6 million was paid in cash and $17.7 million from payoff of a note receivable and accrued interest;
•Acquisition of Parkhouse Apartment Homes, a 465-home apartment community located in Thornton, Colorado, a suburb of Denver, for an aggregate purchase price of $144.8 million;
•Acquisition of the remaining noncontrolling interest in 71 France for $12.2 million;
•Funding $18.5 million of mezzanine/construction loans;
•Repaying approximately $32.9 million of mortgage principal;
•Repurchasing 237,000 Series C preferred shares for an aggregate cost of approximately $5.6 million;
•Paying distributions on common shares and Units of $35.0 million; and
•Funding capital improvements for apartment communities of approximately $30.3 million.
36

Table of Contents
Contractual Obligations and Other Commitments
Our primary contractual obligations relate to borrowings under our lines of credit, term loans, unsecured senior notes, and mortgages payable. The primary line of credit had a $153.0 million balance outstanding at December 31, 2020 and matures in August 2022, with a 12-month option to extend the maturity date, subject to customary conditions. We also had two term loans with an aggregate balance of $145.0 million at December 31, 2020: a $70.0 million term loan that matures in January 2024 and a $75.0 million term loan that matures in August 2025.
In addition, we had unsecured senior notes with an aggregate balance of $125.0 million at December 31, 2020. The $75.0 million of Series A senior notes mature on September 13, 2029 and the $50.0 million of Series B senior notes mature on September 30, 2028.

|  | (in thousands)
|  |  |  | Less than |  |  |  |  |  | More than
|  | Total |  | 1 Year |  | 1-3 Years |  | 3-5 Years |  | 5 Years
Mortgages payable (principal and interest) |  | $ | 356,659 |  |  | $ | 37,042 |  |  | $ | 100,155 |  |  | $ | 49,756 |  |  | $ | 169,706 |
Lines of credit (principal and interest)(1) |  | $ | 160,440 |  |  | $ | 10,263 |  |  | $ | 150,177 |  |  | — |  |  | — |
Notes payable (principal and interest) |  | $ | 198,574 |  |  | $ | 10,902 |  |  | $ | 21,804 |  |  | $ | 161,077 |  |  | $ | 4,791 |
Total |  | $ | 715,673 |  |  | $ | 58,207 |  |  | $ | 272,136 |  |  | $ | 210,833 |  |  | $ | 174,497 |

(1)The future interest payments on the lines of credit were estimated using the outstanding principal balance and interest rate in effect as of December 31, 2020.
Inflation
Our apartment leases generally have terms of one year or less, which means that, in an inflationary environment, we would have the ability to increase rents upon the commencement of new leases or renewal of existing leases, thereby minimizing the risk of inflation. However, the cost to operate and maintain communities could increase at a rate greater than our ability to increase rents, which could adversely affect our results of operations.
Off-Balance-Sheet Arrangements
As of December 31, 2020, we had no significant off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
Critical Accounting Policies
Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements included in this Report.
Real Estate. Real estate is carried at cost, net of accumulated depreciation, less an adjustment for impairment, if any. Depreciation requires an estimate by management of the useful life of each asset as well as an allocation of the costs associated with a property to its various components. As described further below, the process of allocating property costs to its components involves a considerable amount of subjective judgments to be made by management. If we do not allocate these costs appropriately or incorrectly estimate the useful lives of our real estate, depreciation expense may be misstated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. We use a 10-37 year estimated life for buildings and improvements and a 5-10 year estimated life for furniture, fixtures, and equipment. Maintenance and repairs are charged to operations as incurred. Renovations and improvements that improve and/or extend the useful life of the asset are capitalized over their estimated useful life, generally five to twenty years.
Property sales or dispositions are recorded when control of the assets are transferred to the buyer and we have no significant continuing involvement with the property sold. The gain or loss on disposal is recognized net of certain closing and other costs associated with the disposition.
Acquisition of Investments in Real Estate. Upon acquisitions of real estate, we assess the fair value of acquired tangible assets (including land, buildings and personal property), which is determined by valuing the property as if it were vacant, and consider whether there were significant intangible assets acquired (for example, above-and below-market leases, the value of acquired in-place leases and resident relationships) and assumed liabilities, and allocate the purchase price based on these assessments. The as-if-vacant value is allocated to land, buildings, and personal property based on our determination of the relative fair value
37

Table of Contents
of these assets. Techniques used to estimate fair value include discounted cash flow analysis and reference to recent sales of comparable properties. Estimates of future cash flows are based on a number of factors, including the historical operating results, known trends, and market/economic conditions that may affect the property. Land value is assigned based on the purchase price if land is acquired separately or based on a relative fair value allocation if acquired in a portfolio acquisition.
Other intangible assets acquired include amounts for in-place lease values that are based upon our evaluation of the specific characteristics of the leases. Factors considered in the fair value analysis include an estimate of carrying costs and foregone rental income during hypothetical expected lease-up periods, consideration of current market conditions, and costs to execute similar leases. We also consider information about each property obtained during our pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible and intangible assets acquired.
Capitalization of Costs. We follow the real estate project costs guidance in ASC 970, Real Estate – General, in accounting for the costs of re-development projects. As real estate is undergoing re-development, all project costs directly associated with and attributable to the construction of a project are capitalized to the cost of the real property. The capitalization period begins when re-development activities and expenditures begin and ends upon completion, which is when the asset is ready for its intended use. Generally, rental property is considered substantially complete upon issuance of a certificate of occupancy.
Impairment. We periodically evaluate our long-lived assets, including our investments in real estate, for impairment indicators. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, expected holding period of each property, and legal and environmental concerns. If indicators exist, we compare the expected future undiscounted cash flows for the property against the carrying amount of that property. If the sum of the estimated undiscounted cash flows is less than the carrying amount, an impairment loss is recorded for the difference between the estimated fair value and the carrying amount. If our anticipated holding period for properties, the estimated fair value of properties, or other factors change based on market conditions or otherwise, our evaluation of impairment charges may be different and such differences could be material to our consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.
Recent Accounting Pronouncements
For disclosure regarding recent accounting pronouncements and the anticipated impact they will have on our operations, please refer to Note 2 to our consolidated financial statements appearing elsewhere in this Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Our exposure to market risk is primarily related to fluctuations in the general level of interest rates on our current and future fixed and variable rate debt obligations. We currently use interest rate swaps to offset the impact of interest rate fluctuations on our $70.0 million and $75.0 million variable-rate term loans and a portion of our line of credit. The swap on our $70.0 million term loan has a notional amount of $70.0 million and an average pay rate of 2.16%. The swap on our $75.0 million term loan has a notional amount of $75.0 million and an average pay rate of 2.81%. The swap on our line of credit has a notional amount of $50.0 million and an average pay rate of 2.02%. The aggregate fair value of our interest rate swaps is a liability of $15.9 million, as of December 31, 2020. We do not enter into derivative instruments for trading or speculative purposes. The interest rate swaps expose us to credit risk in the event of non-performance by the counterparty under the terms of the agreement.
We have a private shelf agreement for the issuance of up to $150.0 million of unsecured senior promissory notes (“unsecured senior notes”). Under this agreement, we issued $75.0 million of Series A notes due September 13, 2029, bearing interest at a rate of 3.84% annually, and $50.0 million of Series B notes due September 30, 2028, bearing interest at a rate of 3.69% annually.
As of December 31, 2020, we had no variable-rate mortgage debt outstanding and $297.9 million of variable-rate borrowings under our line of credit and term loans, of which $195.0 million is fixed through interest rate swaps. We estimate that an increase in 30-day LIBOR of 100 basis points with constant risk spreads would result in our net income being reduced by approximately $1.0 million on an annual basis. We estimate that a decrease in 30-day LIBOR of 100 basis points would increase the amount of net income by a similar amount.
Mortgage loan indebtedness decreased by $32.9 million as of December 31, 2020, compared to December 31, 2019, primarily due to loan maturities and prepayments. As of December 31, 2020 and 2019, 100.0% of our $298.4 million of mortgage debt was at fixed rates of interest, with staggered maturities. As of December 31, 2020, the weighted average rate of interest on our
38

Table of Contents
mortgage debt was 3.93%, compared to 4.02% on December 31, 2019. Even though our goal is to maintain a fairly low exposure to interest rate risk, we may become vulnerable to significant fluctuations in interest rates on any future repricing or refinancing of our fixed or variable rate debt or future debt.
The following table provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. Average variable rates are based on rates in effect at the reporting date.

|  | Future Principal Payments (in thousands, except percentages)
|  |  |  |  |  |  |  |  | Fair
Debt |  | 2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | Total | Value
Fixed Rate |  | $ | 25,665 |  | $ | 37,219 |  | $ | 45,068 |  | $ | 3,777 |  | $ | 32,505 |  | $ | 279,211 |  | $ | 423,445 |  | $ | 439,851 |
Average Interest Rate(1) |  | 4.23 | % | 3.99 | % | 3.79 | % | 3.75 | % | 3.75 | % | 3.74 | % | 3.89 | % |
Variable Rate(2) |  | $ | 5,871 |  | $ | 147,000 |  | — |  | $ | 70,000 |  | $ | 75,000 |  | — |  | $ | 297,871 |  | $ | 297,871 |
Average Interest Rate(1) |  | 3.64 | % | 2.85 | % | — |  | 3.65 | % | 4.63 | % | — |  | 3.23 | % |

(1)Interest rate is annualized and includes the effect of our interest rate swaps.
(2)Includes $152.9 million under our line of credit and $145.0 million on our term loans, of which $195.0 million is synthetically fixed with interest rate swaps.
Item 8. Financial Statements and Supplementary Data
Our consolidated financial statements and related notes, together with the Report of the Independent Registered Public Accounting Firm, are set forth beginning on page F-1 of this Report and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures: As of December 31, 2020, the end of the period covered by this Report, our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting: There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fourth quarter of the year to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2020. Our internal control over financial reporting is a process designed under the supervision of our principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP.
As of December 31, 2020, management conducted an assessment of the effectiveness of our internal control over financial reporting, based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management has determined that our internal control over financial reporting as of December 31, 2020, was effective.
Our internal control over financial reporting includes policies and procedures that:
•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions, acquisitions and dispositions of assets;
39

Table of Contents
•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and the trustees; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions or deterioration in the degree of compliance with the policies or procedures.
Our internal control over financial reporting as of December 31, 2020 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report on page F-4 of our consolidated financial statements contained in our Annual Report on Form 10-K, which expresses an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2020.
Item 9B. Other Information
None.
PART III
Item 10. Trustees, Executive Officers and Corporate Governance
The information required by this Item regarding Trustees is incorporated by reference to the information under “Election of Trustees,” “Information About Our Executive Officers,” “Code of Conduct and Code of Ethics for Senior Financial Officers,” and “Board Committees” in our definitive proxy statement for our 2021 Annual Meeting of Shareholders to be filed with the SEC no later than 120 days after the end of the year covered by this Report.
Item 11. Executive Compensation
The information required by this Item is incorporated by reference to the information under “Trustee Compensation,” “Compensation Discussion and Analysis” and “Executive Officer Compensation Tables” in our definitive proxy statement for our 2021 Annual Meeting of Shareholders to be filed with the SEC no later than 120 days after the end of the year covered by this Report.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
The information required by this Item is incorporated by reference to the information under “Securities Authorized for Issuance Under Equity Compensation Plans” and “Security Ownership of Certain Beneficial Owners and Management” in our definitive proxy statement for our 2021 Annual Meeting of Shareholders to be filed with the SEC no later than 120 days after the end of the year covered by this Report.
Item 13. Certain Relationships and Related Transactions, and Trustee Independence
The information required by this Item is incorporated by reference to the information under “Relationships and Related Party Transactions” and “Corporate Governance and Board Matters” in our definitive proxy statement for our 2021 Annual Meeting of Shareholders to be filed with the SEC no later than 120 days after the end of the year covered by this Report.
Item 14. Principal Accounting Fees and Services
The information required by this Item is incorporated by reference to the information under “Accounting and Audit Committee Matters” in our definitive proxy statement for our 2021 Annual Meeting of Shareholders to be filed with the SEC no later than 120 days after the end of the year covered by this Report.
PART IV
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as part of this report:
40

Table of Contents
1. Financial Statements
See the “Table of Contents” to our consolidated financial statements on page F-1 of this Report.
2. Financial Statement Schedules
See the “Table of Contents” to our consolidated financial statements on page F-1 of this Report.
The following financial statement schedules should be read in conjunction with the financial statements referenced in Part II, Item 8 of this Report: Schedule III Real Estate and Accumulated Depreciation
3. Exhibits
See the Exhibit Index set forth in part (b) below.
The Exhibit Index below lists the exhibits to this Report. We will furnish a printed copy of any exhibit listed below to any security holder who requests it upon payment of a fee of 15 cents per page. All Exhibits are either contained in this Report or are incorporated by reference as indicated below.
Item 16. 10-K Summary
None.
41

Table of Contents
EXHIBIT INDEX

EXHIBIT NO. |  | DESCRIPTION
1.1 |  | Equity Distribution Agreement dated November 7, 2019 between the Company and BMO Capital Markets Corp., BTIG, LLC, Jefferies LLC, Raymond James & Associates, Inc. and Robert W. Baird & Co. Incorporated (incorporated herein by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 7, 2019).
3.1. |  | Articles of Amendment and Third Restated Declaration of Trust of Investors Real Estate Trust adopted on September 23, 2003, as amended on September 18, 2007 (incorporated herein by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed with the Commission on June 30, 2014).
3.2 |  | Seventh Restated Trustee’s Regulations (Bylaws) of Investors Real Estate Trust, adopted on April 27, 2020 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 1, 2020).
3.3 |  | Articles Supplementary to the Company’s Articles of Amendment and Third Restated Declaration of Trust designating the Company’s 6.625% Series C Cumulative Redeemable Preferred Shares, no par value per share (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form 8-A filed with the SEC on September 28, 2017).
4.1 |  | Note Purchase and Private Shelf Agreement, dated as of September 13, 2019, by and among IRET Properties, a North Dakota Limited Partnership, as the Issuer, Investors Real Estate Trust, as the Parent, IRET, Inc., as the General Partner, certain subsidiaries of the Parent, PGIM, Inc., an affiliate of Prudential Financial, Inc., certain affiliates of PGIM, Inc., and the Purchasers of the Series A Notes (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 17, 2019).
4.2 |  | Form of Series A Senior Note under the Note Agreement (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 17, 2019).
4.3 |  | Form of Series B Notes under the Note Agreement (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K dated October 1, 2019).
4.4 |  | Form of Guaranty Agreement under the Note Agreement (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 17, 2019).
4.5 |  | Description of Securities (incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 10-K filed wi th the Commission on February 19, 2020).
4.6 |  | Amendment to Note Purchase and Private Shelf Agreement, dated as of September 13, 2019, by and among Centerspace, LP, a North Dakota Limited Partnership, as the Issuer, Investors Real Estate, as the Parent, Centerspace, Inc., as the General Partner, certain subsidiaries of the Parent, PGIM Inc., an affiliate of Prudential Financial, Inc., certain affiliates of PGIM, Inc., and the Purchasers of the Series A Notes (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Commission on January 7, 2021).
4.7 |  | Form of Series C Notes under Note Agreement (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the Commission on January 7, 2021).
10.1** |  | 2015 Incentive Plan dated June 23, 2015 (incorporated herein by reference to Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the Commission on August 3, 2015).
10.2** |  | Amendment to 2015 Incentive Plan dated April 19, 2016 (incorporated herein by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K filed with the Commission on June 29, 2016).
10.3** |  | Amendment to 2015 Incentive Plan dated March 13, 2020 (incorporated herein by reference to Appendix B to the Company's Proxy Statement on Schedule 14A filed with the Commission on April 6, 2020).
10.4** |  | Form of Trustee Stock Award Agreement under the 2015 Incentive Plan dated June 22, 2016 (incorporated herein by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K filed with the Commission on June 29, 2016).
10.5** |  | Form of Performance Stock Award Agreement under the 2015 Incentive Plan dated June 22, 2016 (incorporated herein by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed with the Commission on June 29, 2016).
10.6** |  | Form of Stock Award Agreement under the 2015 Incentive Plan dated June 22, 2016 (incorporated herein by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K filed with the Commission on June 29, 2016).
10.7** |  | Form of Stock Award Agreement (one-year measurement period) under the 2015 Incentive Plan dated September 16, 2015 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015).

42

Table of Contents

EXHIBIT NO. |  | DESCRIPTION
10.8** |  | Form of Stock Award Agreement (two-year measurement period) under the 2015 Incentive Plan dated September 16, 2015 (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015).
10.9** |  | Form of Stock Award Agreement (three-year measurement period) under the 2015 Incentive Plan dated September 16, 2015 (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015).
10.10** |  | Form of Change in Control Severance Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 7, 2015).
10.11** |  | Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 21, 2015).
10.12 |  | Second Amended and Restated Credit Agreement and related Annex I attached thereto, dated as of August 31, 2018, by and among IRET Properties, a North Dakota Limited Partnership, as the Borrower, the Guarantors party thereto, the several financial institutions party thereto, as Lenders, and the Bank of Montreal, as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on September 6, 2018).
10.13 |  | First Amendment to Second Amended and Restated Credit Agreement and related Annex I attached thereto, by and among IRET Properties, a North Dakota Limited Partnership, as the Borrower, the Guarantors party thereto, the several financial institutions party thereto, as Lenders, and the Bank of Montreal, as Administrative Agent (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on From 10-K filed with the Commission on February 19, 2020).
10.14 |  | Second Amendment to Second Amended and Restated Credit Agreement and related Annex I attached thereto, by and among IRET Properties, a North Dakota Limited Partnership, as the Borrower, the Guarantors party thereto, the several financial institutions party thereto, as Lenders, and the Bank of Montreal, as Administrative Agent (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on September 17, 2019).
10.15 |  | Amended and Restated Agreement of Limited Partnership of IRET Properties, A North Dakota Limited Partnership (as amended and restated through February 27, 2019) (incorporated by reference to Exhibit 10.30 to the Company's Transition Report on Form 10-K filed with the Commission on February 27, 2019).
10.16 |  | Third Amendment to the Amended and Restated Agreement of Limited Partnership of IRET Properties, A North Dakota Limited Partnership (incorporated herein by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed on October 2, 2017).
10.17 |  | Fourth Amendment to the Amended and Restated Agreement of Limited Partnership of IRET Properties, A North Dakota Limited Partnership, dated as of February 26, 2019 (incorporated by reference to Exhibit 10.32 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on February 27, 2019).
21.1† |  | Subsidiaries of Centerspace
23.1† |  | Consent of Independent Registered Public Accounting Firm
24.1† |  | Power of Attorney (included on the signature page to this Annual Report on Form 10-K and incorporated by reference herein).
31.1† |  | Section 302 Certification of President and Chief Executive Officer
31.2† |  | Section 302 Certification of Chief Financial Officer
32.1† |  | Section 906 Certification of the President and Chief Executive Officer
32.2† |  | Section 906 Certification of the Chief Financial Officer
101† |  | The following materials from our Annual Report on Form 10-K for the twelve-months ended December 31, 2020 formatted in Inline eXtensible Business Reporting Language ("iXBRL"): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Statements of Cash Flows, (v) notes to these consolidated financial statements, and (vi) the Cover Page to our Annual Report on From 10-K.
104 |  | Cover Page Interactive Data File (formatted as Inline iXBRL and contained in Exhibit 101)

† Filed herewith
** Indicates management compensatory plan, contract or arrangement.
43

Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 22, 2021 | Investors Real Estate Trust dba Centerspace
| By: | /s/ Mark O. Decker, Jr.
|  | Mark O. Decker, Jr.
|  | President & Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature |  | Title |  | Date
/s/ Jeffrey P. Caira |  |  |  |
Jeffrey P. Caira |  | Trustee & Chairman |  | February 22, 2021
/s/ Mark O. Decker, Jr. |  |  |  |
Mark O. Decker, Jr. |  | President & Chief Executive Officer (Principal Executive Officer); Trustee |  | February 22, 2021
/s/ John A. Kirchmann |  |  |  |
John A. Kirchmann |  | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |  | February 22, 2021
/s/ Michael T. Dance |  |  |  |
Michael T. Dance |  | Trustee |  | February 22, 2021
/s/ Emily Nagle Green |  |  |  |
Emily Nagle Green |  | Trustee |  | February 22, 2021
/s/ Linda J. Hall |  |  |  |
Linda J. Hall |  | Trustee |  | February 22, 2021
/s/ Terrance P. Maxwell |  |  |  |
Terrance P. Maxwell |  | Trustee |  | February 22, 2021
/s/ John A. Schissel |  |  |  |
John A. Schissel |  | Trustee |  | February 22, 2021
/s/ Mary J. Twinem |  |  |  |
Mary J. Twinem |  | Trustee |  | February 22, 2021

44

Table of Contents
CENTERSPACE AND SUBSIDIARIES
TABLE OF CONTENTS

|  | PAGE
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | F-2
CONSOLIDATED FINANCIAL STATEMENTS |
| Consolidated Balance Sheets | F-4
| Consolidated Statements of Operations | F-5
| Consolidated Statements of Comprehensive Income | F-6
| Consolidated Statements of Equity | F-7
| Consolidated Statements of Cash Flows | F-9
| Notes to Consolidated Financial Statements | F-11
ADDITIONAL INFORMATION |
| Schedule III - Real Estate and Accumulated Depreciation | F-35

Schedules other than those listed above are omitted since they are not required or are not applicable, or the required information is shown in the consolidated financial statements or notes thereon.
F-1

Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Trustees and Shareholders
Investors Real Estate Trust
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Investors Real Estate Trust (a North Dakota real estate investment trust) and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for the years ended December 31, 2020 and 2019, eight month period ended December 31, 2018, and the year ended April 30, 2018, and the related notes and financial statement schedule included under Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years ended December 31, 2020 and 2019, eight month period ended December 31, 2018, and the year ended April 30, 2018, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 22, 2021 expressed an unqualified opinion
Basis for opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ GRANT THORNTON LLP
We have served as the Company’s auditor since 2013.
Minneapolis, Minnesota
February 22, 2021
F-2

Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Trustees and Shareholders
Investors Real Estate Trust
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Investors Real Estate Trust (a North Dakota real estate investment trust) and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2020, and our report dated February 22, 2021 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON LLP
Minneapolis, Minnesota
February 22, 2021
F-3

Table of Contents
CENTERSPACE AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|  | (in thousands)
|  | December 31, 2020 | December 31, 2019 |
ASSETS |  |  |  |
Real estate investments |  |  |  |
Property owned |  | $ | 1,812,557 |  | $ | 1,643,078 |  |
Less accumulated depreciation |  | (399,249) |  | (349,122) |  |
|  | 1,413,308 |  | 1,293,956 |  |
Unimproved land |  | — |  | 1,376 |  |
Mortgage loans receivable |  | 24,661 |  | 16,140 |  |
Total real estate investments |  | 1,437,969 |  | 1,311,472 |  |
Cash and cash equivalents |  | 392 |  | 26,579 |  |
Restricted cash |  | 6,918 |  | 19,538 |  |
Other assets |  | 18,904 |  | 34,829 |  |
TOTAL ASSETS |  | $ | 1,464,183 |  | $ | 1,392,418 |  |
LIABILITIES, MEZZANINE EQUITY, AND EQUITY |  |  |  |
LIABILITIES |  |  |  |
Accounts payable and accrued expenses |  | $ | 55,609 |  | $ | 47,155 |  |
Revolving lines of credit |  | 152,871 |  | 50,079 |  |
Notes payable, net of unamortized loan costs of $754 and $942, respectively |  | 269,246 |  | 269,058 |  |
Mortgages payable, net of unamortized loan costs of $1,371 and $1,712, respectively |  | 297,074 |  | 329,664 |  |
TOTAL LIABILITIES |  | $ | 774,800 |  | $ | 695,956 |  |
COMMITMENTS AND CONTINGENCIES (NOTE 14) |  |  |  |
SERIES D PREFERRED UNITS (Cumulative convertible preferred units, $100 par value, 165,600 units issued and outstanding at December 31, 2020 and December 31, 2019, aggregate liquidation preference of $16,560,000) |  | $ | 16,560 |  | $ | 16,560 |  |
EQUITY |  |  |  |
Series C Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 3,881,453 shares issued and outstanding at December 31, 2020, aggregate liquidation preference of $97,036,325 and 4,118,460 shares issued and outstanding at December 31, 2019, aggregate liquidation preference of $102,971,475) |  | 93,530 |  | 99,456 |  |
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 13,027,172 shares issued and outstanding at December 31, 2020 and 12,098,379 shares issued and outstanding at December 31, 2019) |  | 968,263 |  | 917,400 |  |
Accumulated distributions in excess of net income |  | (427,681) |  | (390,196) |  |
Accumulated other comprehensive income (loss) |  | (15,905) |  | (7,607) |  |
Total shareholders’ equity |  | $ | 618,207 |  | $ | 619,053 |  |
Noncontrolling interests – Operating Partnership (976,516 units at December 31, 2020 and 1,058,142 units at December 31, 2019) |  | 53,930 |  | 55,284 |  |
Noncontrolling interests – consolidated real estate entities |  | 686 |  | 5,565 |  |
TOTAL EQUITY |  | $ | 672,823 |  | $ | 679,902 |  |
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY |  | $ | 1,464,183 |  | $ | 1,392,418 |  |

See Notes to Consolidated Financial Statements.
F-4

Table of Contents
CENTERSPACE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

|  | (in thousands, except per share data)
|  | Year Ended December 31, |  | Eight Months Ended December 31, |  | Fiscal Year Ended April 30,
|  | 2020 | 2019 |  | 2018 |  | 2018
REVENUE |  | $ | 177,994 |  | $ | 185,755 |  |  | $ | 121,871 |  |  | $ | 169,745 |
EXPENSES |  |  |  |  |  |  |
Property operating expenses, excluding real estate taxes |  | 51,625 | 57,249 |  | 37,198 |  |  | 54,292 |
Real estate taxes |  | 21,533 | 21,066 |  | 13,521 |  |  | 18,742 |
Property management expense |  | 5,801 | 6,186 |  | 3,663 |  |  | 5,526 |
Casualty loss |  | 1,662 | 1,116 |  | 915 |  |  | 500 |
Depreciation and amortization |  | 75,593 | 74,271 |  | 50,456 |  |  | 82,070 |
Impairment of real estate investments |  | — | — |  | 1,221 |  |  | 18,065 |
General and administrative expenses |  | 13,440 | 14,450 |  | 9,812 |  |  | 14,254 |
TOTAL EXPENSES |  | 169,654 |  | 174,338 |  |  | 116,786 |  |  | 193,449 |
Operating income (loss) |  | 8,340 |  | 11,417 |  |  | 5,085 |  |  | (23,704) |
Interest expense |  | (27,525) |  | (30,537) |  |  | (21,359) |  |  | (34,178) |
Loss on extinguishment of debt |  | (23) |  | (2,360) |  |  | (556) |  |  | (940) |
Interest and other income (loss) |  | (1,552) |  | 2,092 |  |  | 1,233 |  |  | 1,508 |
Income (loss) before gain (loss) on sale of real estate and other investments, gain (loss) on litigation settlement, and income (loss) from discontinued operations |  | (20,760) |  | (19,388) |  |  | (15,597) |  |  | (57,314) |
Gain (loss) on sale of real estate and other investments |  | 25,503 |  | 97,624 |  |  | 9,707 |  |  | 20,120 |
Gain (loss) on litigation settlement |  | — |  | 6,586 |  |  | — |  |  | — |
Income (loss) from continuing operations |  | 4,743 |  | 84,822 |  |  | (5,890) |  |  | (37,194) |
Income (loss) from discontinued operations |  | — |  | — |  |  | 570 |  |  | 164,823 |
NET INCOME (LOSS) |  | 4,743 |  | 84,822 |  |  | (5,320) |  |  | 127,629 |
Dividends to preferred unitholders |  | (640) |  | (537) |  |  | — |  |  | — |
Net (income) loss attributable to noncontrolling interests – Operating Partnership |  | 212 |  | (6,752) |  |  | 1,032 |  |  | (12,702) |
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities |  | 126 |  | 1,136 |  |  | (110) |  |  | 1,861 |
Net income (loss) attributable to controlling interests |  | 4,441 |  | 78,669 |  |  | (4,398) |  |  | 116,788 |
Dividends to preferred shareholders |  | (6,528) |  | (6,821) |  |  | (4,547) |  |  | (8,569) |
Redemption of preferred shares |  | 297 |  | — |  |  | — |  |  | (3,657) |
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |  | $ | (1,790) |  | $ | 71,848 |  |  | $ | (8,945) |  |  | $ | 104,562 |
BASIC |  |  |  |  |  |  |
Earnings (loss) per common share from continuing operations – basic |  | $ | (0.15) |  | $ | 6.06 |  |  | $ | (0.79) |  |  | $ | (3.54) |
Earnings (loss) per common share from discontinued operations – basic |  | — |  | — |  |  | $ | 0.04 |  |  | $ | 12.25 |
NET EARNINGS (LOSS) PER COMMON SHARE – BASIC |  | $ | (0.15) |  | $ | 6.06 |  |  | $ | (0.75) |  |  | $ | 8.71 |
DILUTED |  |  |  |  |  |  |
Earnings (loss) per common share from continuing operations – diluted |  | $ | (0.15) |  | $ | 6.00 |  |  | $ | (0.79) |  |  | $ | (3.54) |
Earnings (loss) per common share from discontinued operations – diluted |  | — |  | — |  |  | $ | 0.04 |  |  | $ | 12.25 |
NET EARNINGS (LOSS) PER COMMON SHARE – DILUTED |  | $ | (0.15) |  | $ | 6.00 |  |  | $ | (0.75) |  |  | $ | 8.71 |

See Notes to Consolidated Financial Statements.
F-5

Table of Contents
CENTERSPACE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

|  | (in thousands)
|  | Year Ended December 31, |  | Eight Months Ended December 31, |  | Fiscal Year Ended April 30,
|  | 2020 |  | 2019 |  | 2018 |  | 2018
NET INCOME (LOSS) |  | $ | 4,743 |  |  | $ | 84,822 |  |  | $ | (5,320) |  |  | $ | 127,629 |
Other comprehensive income: |  |  |  |  |  |  |  |
Unrealized gain (loss) from derivative instrument |  | (11,068) |  |  | (7,040) |  |  | (2,794) |  |  | 1,627 |
(Gain) loss on derivative instrument reclassified into earnings |  | 2,770 |  |  | 289 |  |  | 159 |  |  | 152 |
Total comprehensive income (loss) |  | $ | (3,555) |  |  | $ | 78,071 |  |  | $ | (7,955) |  |  | $ | 129,408 |
Net comprehensive (income) loss attributable to noncontrolling interests – Operating Partnership |  | 882 |  |  | (6,058) |  |  | 1,032 |  |  | (12,888) |
Net comprehensive (income) loss attributable to noncontrolling interests – consolidated real estate entities |  | 126 |  |  | 1,136 |  |  | (110) |  |  | 1,861 |
Comprehensive income (loss) attributable to controlling interests |  | $ | (2,547) |  |  | $ | 73,149 |  |  | $ | (7,033) |  |  | $ | 118,381 |

See Notes to Consolidated Financial Statements.
F-6

Table of Contents
CENTERSPACE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY

|  | (in thousands, except per share amounts)
|  |  | NUMBER |  | ACCUMULATED | ACCUMULATED |  |
|  |  | OF |  | DISTRIBUTIONS | OTHER | NONREDEEMABLE |
|  | PREFERRED | COMMON | COMMON | IN EXCESS OF | COMPREHENSIVE | NONCONTROLLING | TOTAL
|  | SHARES | SHARES | SHARES | NET INCOME | INCOME | INTERESTS | EQUITY
Balance at April 30, 2017 |  | $ | 111,357 |  | 12,120 |  | $ | 908,905 |  | $ | (466,541) |  | — |  | $ | 82,437 |  | $ | 636,158 |
Net income (loss) attributable to controlling interest and noncontrolling interests |  |  |  |  | 116,788 |  |  | 11,582 |  | 128,370 |
Change in fair value of derivatives |  |  |  |  |  | 1,779 |  |  | 1,779 |
Distributions – common shares and Units ($2.80 per share and Unit) |  |  |  |  | (33,689) |  |  | (4,096) |  | (37,785) |
Distributions – Series B preferred shares ($0.9938 per Series B share) |  |  |  |  | (4,571) |  |  |  | (4,571) |
Distributions – Series C preferred shares ($1.65625 per Series C share) |  |  |  |  | (3,999) |  |  |  | (3,999) |
Share-based compensation, net of forfeitures |  |  | 10 |  | 1,663 |  |  |  |  | 1,663 |
Issuance of Series C preferred shares |  | 99,456 |  |  |  |  |  |  | 99,456 |
Redemption of Units for common shares |  |  | 3 |  | 34 |  |  |  | (34) |  | — |
Redemption of Units for cash |  |  |  |  |  |  | (8,775) |  | (8,775) |
Shares repurchased |  | (111,357) |  | (178) |  | (9,935) |  | (3,657) |  |  |  | (124,949) |
Contributions from nonredeemable noncontrolling interests – consolidated real estate entities |  |  |  |  |  |  | 619 |  | 619 |
Other |  |  | (2) |  | (570) |  |  |  | 167 |  | (403) |
Balance at April 30, 2018 |  | $ | 99,456 |  | 11,953 |  | $ | 900,097 |  | $ | (395,669) |  | $ | 1,779 |  | $ | 81,900 |  | $ | 687,563 |
Cumulative adjustment upon adoption of ASC 606 and ASC 610-20 |  |  |  |  | 627 |  |  |  | 627 |
Balance on May 1, 2018 |  | 99,456 |  | 11,953 |  | 900,097 |  | (395,042) |  | 1,779 |  | 81,900 |  | 688,190 |
Net income (loss) attributable to controlling interests and noncontrolling interests |  |  |  |  | (4,398) |  |  | (480) |  | (4,878) |
Change in fair value of derivatives |  |  |  |  |  | (2,635) |  |  | (2,635) |
Distributions – common shares and Units ($2.10 per share and Unit) |  |  |  |  | (25,060) |  |  | (2,917) |  | (27,977) |
Distributions – Series C preferred shares ($1.2422 per Series C share) |  |  |  |  | (4,548) |  |  |  | (4,548) |
Share-based compensation, net of forfeitures |  |  | 3 |  | 1,042 |  |  |  |  | 1,042 |
Redemption of Units for common shares |  |  | 33 |  | 649 |  |  |  | (649) |  | — |
Redemption of Units for cash |  |  |  |  |  |  | (498) |  | (498) |
Shares repurchased |  |  | (42) |  | (2,172) |  |  |  |  | (2,172) |
Distributions to nonredeemable noncontrolling interests - consolidated real estate entities |  |  |  |  |  |  | (2,432) |  | (2,432) |
Conversion to equity of notes receivable from nonredeemable noncontrolling interests – consolidated real estate entities |  |  |  |  |  |  | (392) |  | (392) |
Acquisition of nonredeemable noncontrolling interests – consolidated real estate entities |  |  |  | (175) |  |  |  | 131 |  | (44) |
Other |  |  | (5) |  | (207) |  |  |  |  | (207) |
Balance at December 31, 2018 |  | $ | 99,456 |  | 11,942 |  | $ | 899,234 |  | $ | (429,048) |  | (856) |  | $ | 74,663 |  | $ | 643,449 |

See Notes to Consolidated Financial Statements.
F-7

Table of Contents
CENTERSPACE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY (continued)

|  | (in thousands, except per share amounts)
|  |  | NUMBER |  | ACCUMULATED | ACCUMULATED |  |
|  |  | OF |  | DISTRIBUTIONS | OTHER | NONREDEEMABLE |
|  | PREFERRED | COMMON | COMMON | IN EXCESS OF | COMPREHENSIVE | NONCONTROLLING | TOTAL
|  | SHARES | SHARES | SHARES | NET INCOME | INCOME | INTERESTS | EQUITY
Balance at December 31, 2018 |  | $ | 99,456 |  | 11,942 |  | $ | 899,234 |  | $ | (429,048) |  | $ | (856) |  | $ | 74,663 |  | $ | 643,449 |
Net income (loss) attributable to controlling interests and noncontrolling interests |  |  |  |  | 78,669 |  |  | 5,790 |  | 84,459 |
Change in fair value of derivatives |  |  |  |  |  | (6,751) |  |  | (6,751) |
Distributions – common shares and Units ($2.10 per share and Unit) |  |  |  |  | (32,996) |  |  | (3,414) |  | (36,410) |
Distributions – Series C preferred shares ($1.2422 per Series C share) |  |  |  |  | (6,821) |  |  |  | (6,821) |
Share-based compensation, net of forfeitures |  |  | 11 |  | 1,905 |  |  |  |  | 1,905 |
Sale of common shares, net |  |  | 308 |  | 22,019 |  |  |  |  | 22,019 |
Redemption of Units for common shares |  |  | 173 |  | 7,823 |  |  |  | (7,823) |  | — |
Redemption of Units for cash |  |  |  |  |  |  | (8,147) |  | (8,147) |
Shares repurchased |  |  | (329) |  | (18,023) |  |  |  |  | (18,023) |
Acquisition of redeemable noncontrolling interests |  |  |  | 4,529 |  |  |  |  | 4,529 |
Distributions to nonredeemable noncontrolling interests - consolidated real estate entities |  |  |  |  |  |  | (220) |  | (220) |
Other |  |  | (7) |  | (87) |  |  |  |  | (87) |
Balance at December 31, 2019 |  | $ | 99,456 |  | 12,098 |  | $ | 917,400 |  | $ | (390,196) |  | $ | (7,607) |  | $ | 60,849 |  | $ | 679,902 |
Net income (loss) attributable to controlling interests and noncontrolling interests |  |  |  |  | 4,441 |  |  | (338) |  | 4,103 |
Change in fair value of derivatives |  |  |  |  |  | (8,298) |  |  | (8,298) |
Distributions – common shares and Units ($2.80 per common share and Unit) |  |  |  |  | (35,695) |  |  | (2,842) |  | (38,537) |
Distributions – Series C preferred shares ($1.65625 per Series C share) |  |  |  |  | (6,528) |  |  |  | (6,528) |
Share-based compensation, net of forfeitures |  |  | 20 |  | 2,106 |  |  |  |  | 2,106 |
Sale of common shares, net |  |  | 829 |  | 58,852 |  |  |  |  | 58,852 |
Redemption of Units for common shares |  |  | 81 |  | (1,750) |  |  |  | 1,750 |  | — |
Redemption of Units for cash |  |  |  |  |  |  | (50) |  | (50) |
Shares repurchased |  | (5,926) |  | — |  | — |  | 297 |  |  |  | (5,629) |
Acquisition of noncontrolling interests - consolidated real estate entities |  |  |  | (7,584) |  |  |  | (4,637) |  | (12,221) |
Other |  |  | (1) |  | (761) |  |  |  | (116) |  | (877) |
Balance at December 31, 2020 |  | $ | 93,530 |  | 13,027 |  | $ | 968,263 |  | $ | (427,681) |  | $ | (15,905) |  | $ | 54,616 |  | $ | 672,823 |

See Notes to Consolidated Financial Statements.
F-8

Table of Contents
CENTERSPACE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

|  | (in thousands)
|  | Year Ended December 31, |  | Eight Months Ended December 31, |  | Fiscal Year Ended April 30,
|  | 2020 | 2019 |  | 2018 |  | 2018
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |  |  |
Net income (loss) |  | $ | 4,743 |  | $ | 84,822 |  |  | $ | (5,320) |  |  | $ | 127,629 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |  |  |  |  |
Depreciation and amortization |  | 76,596 |  | 75,408 |  |  | 51,394 |  |  | 83,276 |
Depreciation and amortization from discontinued operations |  | — |  | — |  |  | — |  |  | 8,526 |
(Gain) loss on sale of real estate, land, other investments and discontinued operations |  | (25,503) |  | (97,624) |  |  | (10,277) |  |  | (183,687) |
Realized (gain) loss on marketable securities |  | 3,378 |  | — |  |  | — |  |  | — |
(Gain) loss on extinguishment of debt and discontinued operations |  | 23 |  | 2,360 |  |  | 482 |  |  | 6,839 |
(Gain) loss on litigation settlement |  | — |  | (1,349) |  |  | — |  |  | — |
Share-based compensation expense |  | 2,106 |  | 1,905 |  |  | 845 |  |  | 1,587 |
Impairment of real estate investments |  | — |  | — |  |  | 1,221 |  |  | 18,065 |
Bad debt expense |  | 2,332 |  | 1,050 |  |  | 592 |  |  | 1,423 |
Other, net |  | 1,310 |  | 46 |  |  | 37 |  |  | 34 |
Changes in other assets and liabilities: |  |  |  |  |  |  |
Other assets |  | (4,818) |  | 1,076 |  |  | (1,145) |  |  | (646) |
Accounts payable and accrued expenses |  | 1,061 |  | 1,930 |  |  | 2,205 |  |  | (7,851) |
Net cash provided (used) by operating activities |  | $ | 61,228 |  | $ | 69,624 |  |  | $ | 40,034 |  |  | $ | 55,195 |
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |  |  |
Proceeds from repayment of mortgage loans receivable |  | 10,020 |  | — |  |  | — |  |  | — |
Proceeds from sale of marketable securities |  | 3,856 |  | — |  |  | — |  |  | — |
Increase in mortgages and notes receivable |  | (24,862) |  | (6,279) |  |  | (918) |  |  | (15,480) |
Purchase of marketable securities |  | (179) |  | (6,942) |  |  | — |  |  | — |
Proceeds from sale of discontinued operations |  | — |  | — |  |  | — |  |  | 426,131 |
Proceeds from sale of real estate and other investments |  | 43,686 |  | 199,282 |  |  | 62,695 |  |  | 64,639 |
Payments for acquisitions of real estate assets |  | (168,696) |  | (158,466) |  |  | (977) |  |  | (374,081) |
Payments for improvements of real estate assets |  | (30,315) |  | (20,954) |  |  | (11,518) |  |  | (17,980) |
Other investing activities |  | 1,525 |  | 366 |  |  | 1,889 |  |  | (3,117) |
Net cash provided (used) by investing activities |  | $ | (164,965) |  | $ | 7,007 |  |  | $ | 51,171 |  |  | $ | 80,112 |
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |  |  |
Proceeds from mortgages payable |  | — |  | 59,900 |  |  | — |  |  | — |
Principal payments on mortgages payable |  | (33,422) |  | (177,743) |  |  | (67,016) |  |  | (205,159) |
Proceeds from revolving lines of credit |  | 155,028 |  | 245,397 |  |  | 53,017 |  |  | 370,350 |
Principal payments on revolving lines of credit |  | (52,235) |  | (252,818) |  |  | (119,517) |  |  | (303,400) |
Proceeds from notes payable and other debt |  | — |  | 124,878 |  |  | 74,352 |  |  | 72,714 |
Principal payments on notes payable and other debt |  | — |  | — |  |  | — |  |  | (21,689) |
Payoff of financing liability |  | — |  | — |  |  | — |  |  | (7,900) |
Proceeds from sale of common shares, net of issuance costs |  | 58,852 |  | 22,019 |  |  | — |  |  | — |
Payments for acquisition of noncontrolling interests – consolidated real estate entities |  | (12,221) |  | (1,260) |  |  | — |  |  | — |
Proceeds from sale of preferred shares |  | — |  | — |  |  | — |  |  | 99,467 |
Repurchase of common shares |  | — |  | (18,023) |  |  | (2,172) |  |  | (9,935) |
Repurchase of preferred shares |  | (5,629) |  | — |  |  | — |  |  | (115,017) |
Repurchase of partnership units |  | (50) |  | (8,147) |  |  | (498) |  |  | (8,775) |
Distributions paid to common shareholders |  | (35,045) |  | (32,891) |  |  | (16,724) |  |  | (33,689) |
Distributions paid to preferred shareholders |  | (6,528) |  | (6,821) |  |  | (5,116) |  |  | (8,763) |
Distributions paid to noncontrolling interests – Unitholders of the Operating Partnership |  | (2,900) |  | (3,630) |  |  | (1,959) |  |  | (4,096) |
Distributions paid to noncontrolling interests – consolidated real estate entities |  | (116) |  | (220) |  |  | (2,432) |  |  | (99) |
Distributions paid to preferred unitholders |  | (640) |  | (377) |  |  | — |  |  | — |
Other financing activities |  | (164) |  | (34) |  |  | — |  |  | — |
Net cash provided (used) by financing activities |  | $ | 64,930 |  | $ | (49,770) |  |  | $ | (88,065) |  |  | $ | (175,991) |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |  | (38,807) |  | 26,861 |  |  | 3,140 |  |  | (40,684) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF YEAR |  | 46,117 |  | 19,256 |  |  | 16,116 |  |  | 56,800 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF YEAR |  | $ | 7,310 |  | $ | 46,117 |  |  | $ | 19,256 |  |  | $ | 16,116 |

F-9

Table of Contents
CENTERSPACE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

|  | Year Ended December 31, |  | Eight Months Ended December 31, |  | Fiscal Year Ended April 30,
|  | 2020 | 2019 |  | 2018 |  | 2018
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |  |  |  |  |  |  |
Accrued capital expenditures |  | $ | (1,420) |  | $ | 1,273 |  |  | $ | (329) |  |  | $ | (3,415) |
Distributions declared but not paid |  | 9,802 |  | 9,210 |  |  | — |  |  | — |
Property acquired through issuance of Series D preferred units |  | — |  | 16,560 |  |  | — |  |  | — |
Real estate assets acquired through exchange of note receivable |  | 17,663 |  | — |  |  | — |  |  | — |
Note receivable exchanged through real estate acquisition |  | (17,663) |  | — |  |  | — |  |  | — |
Conversion to equity of notes receivable from noncontrolling interests - consolidated real estate entities |  | — |  | — |  |  | 670 |  |  | — |
Construction debt reclassified to mortgages payable |  | — |  | — |  |  | — |  |  | 23,300 |
Increase in mortgage notes receivable due to sale of real estate |  | — |  | — |  |  | — |  |  | 10,329 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |  |  |  |  |  |  |
Cash paid for interest, net of amounts capitalized of $0, $0, $0 and $431, respectively |  | 26,051 |  | 28,679 |  |  | 24,135 |  |  | 35,758 |

| (in thousands)
Balance sheet description | December 31, 2020 |  | December 31, 2019 |  | December 31, 2018 |  | April 30, 2018
Cash and cash equivalents | $ | 392 |  |  | $ | 26,579 |  |  | $ | 13,792 |  |  | $ | 11,891 |
Restricted cash | 6,918 |  |  | 19,538 |  |  | 5,464 |  |  | 4,225 |
Total cash, cash equivalents and restricted cash | $ | 7,310 |  |  | $ | 46,117 |  |  | $ | 19,256 |  |  | $ | 16,116 |

See Notes to Consolidated Financial Statements.
F-10

Table of Contents
CENTERSPACE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020, 2019, 2018, and April 30, 2018
NOTE 1 • ORGANIZATION
Investors Real Estate Trust doing business as Centerspace (“Centerspace,” “we,” “our,” or “us”) is a real estate investment trust (“REIT”) focused on the ownership, management, acquisition, redevelopment and development of apartment communities. As of December 31, 2020, we held for investment 67 apartment communities with 11,910 homes. We conduct a majority of our business activities through our consolidated operating partnership, Centerspace, LP, (the “Operating Partnership”), as well as through a number of other subsidiary entities.
All references to Centerspace, we, or us refer to Centerspace and its consolidated subsidiaries.
NOTE 2 • BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying consolidated financial statements include our accounts and the accounts of all our subsidiaries in which we maintain a controlling interest, including the Operating Partnership. All intercompany balances and transactions are eliminated in consolidation.
On September 20, 2018, our Board of Trustees approved a change in our fiscal year-end from April 30 to December 31, effective as of January 1, 2019. As a result of this change, we filed a transition report on Form 10-KT for the eight-month transition period ended December 31, 2018, in accordance with SEC rules and regulations. The references in these notes to the consolidated financial statements to the terms listed below reflect the respective periods presented in the consolidated financial statements:

Term |  | Financial Reporting Period
Year ended December 31, 2020 |  | January 1, 2020 through December 31, 2020
Year ended December 31, 2019 |  | January 1, 2019 through December 31, 2019
Transition period ended December 31, 2018 |  | May 1, 2018 through December 31, 2018
Fiscal year ended April 30, 2018 |  | May 1, 2017 through April 30, 2018

Our interest in the Operating Partnership as of December 31, 2020 and 2019 was 93.0% and 92.0%, respectively, of the limited partnership units of the Operating Partnership (“Units”), which includes 100% of the general partnership interest.
The consolidated financial statements also reflect the ownership by the Operating Partnership of certain joint venture entities in which the Operating Partnership has a general partner’s or controlling interest. These entities are consolidated into our other operations with noncontrolling interests reflecting the noncontrolling partners’ share of ownership, income, and expenses.
SIGNIFICANT RISKS AND UNCERTAINTIES
The COVID-19 pandemic is a source of significant risk and uncertainty that could have an adverse impact on our business. the COVID-19 pandemic has adversely impacted the global economy and financial markets, and multifamily residents and commercial tenants have experienced financial hardship or closure.
The extent to which the COVID-19 pandemic could have an adverse effect on our financial condition, results of operations, and cash flows is uncertain and will depend on future developments. The COVID-19 pandemic has not had a material adverse impact on our financial condition, results of operations, and cash flows for the year ended December 31, 2020; however, we continue to monitor the impact on all aspects of our business and cannot predict the impact it may have on our financial condition, results of operations, and cash flows in the future.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
F-11

Table of Contents
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
RECENT ACCOUNTING PRONOUNCEMENTS
The following table provides a brief description of recent GAAP accounting standards updates (“ASUs”).

Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments; ASU 2018-19, Codification Improvements to Topic 326; ASU 2019-05, Financial Instruments - Credit Losses - Targeted Transition Relief; ASU 2019-11, Codification improvements to Topic 326, Financial Instruments - Credit Losses | These ASUs require entities to estimate a lifetime expected credit loss for most financial assets, such as loans and other financial instruments, and to present the net amount expected to be collected. In 2018, another ASU was issued to amend ASU 2016-13 which clarifies that it does not apply to operating lease receivables. In 2019, an additional ASU was issued to provide transition relief in which an entity is allowed to elect the fair value option on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. | These ASUs are effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. | We elected the fair value option for all of our mortgages and notes receivable at January 1, 2020, as allowed by ASU 2019-05. As a result, we do not have any receivables or other financial instruments to which we are applying this standard.
ASU 2018-13, Fair Value Measurements (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirement for Fair Value Measurements | This ASU eliminates certain disclosure requirements affecting all levels of measurement, and modifies and adds new disclosure requirements for Level 3 measurements. | This ASU is effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. | The new standard did not have a material impact on our consolidated financial statements.
ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting | This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. | This ASU is optional and may be elected over time. | We are currently evaluating the practical expedients and the impact they may have on our consolidated financial statements.
ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entitiy's Own Equity | This ASU simplifies accounting for convertible instruments and removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. This ASU also simplifies the diluted earnings per share calculation in certain areas and provide updated disclosure requirements. | This ASU is effective for annual reporting periods beginning after December 31, 2021. Early adoption is permitted. | We are currently evaluating the ASU and the impact it may have on our consolidated financial statements.

RECLASSIFICATIONS
Certain previously reported amounts have been reclassified to conform to the current financial statement presentation. These reclassifications had no impact on net income as reported in the consolidated statement of operations, total assets, liabilities or equity as reported in the consolidated balance sheets and total shareholder’s equity. We report in discontinued operations the results of operations and the related gains or losses of properties that have either been disposed or classified as held for sale and for which the disposition represents a strategic shift that has or will have a major effect on our operations and financial results.
REAL ESTATE INVESTMENTS
Real estate investments are recorded at cost less accumulated depreciation and an adjustment for impairment, if any. Property, consisting primarily of real estate investments, totaled $1.4 billion and $1.3 billion as of December 31, 2020 and 2019, respectively. Upon acquisitions of real estate, we assess the fair value of acquired tangible assets (including land, buildings and personal property), which is determined by valuing the property as if it were vacant, and consider whether there were significant intangible assets acquired (for example, above- and below-market leases, the value of acquired in-place leases and resident relationships) and assumed liabilities, and allocate the purchase price based on these assessments. The as-if-vacant value is allocated to land, buildings, and personal property based on our determination of the relative fair values of these assets. The estimated fair value of the property is the amount that would be recoverable upon the disposition of the property. Techniques used to estimate fair value include discounted cash flow analysis and reference to recent sales of comparable
F-12

Table of Contents
properties. Estimates of future cash flows are based on a number of factors, including the historical operating results, known trends, and market/economic conditions that may affect the property. Land value is assigned based on the purchase price if land is acquired separately or based on a relative fair value allocation if acquired in a portfolio acquisition.
Other intangible assets acquired include amounts for in-place lease values that are based upon our evaluation of the specific characteristics of the leases. Factors considered in the fair value analysis include an estimate of carrying costs and foregone rental income during hypothetical expected lease-up periods, considering current market conditions, and costs to execute similar leases. We also consider information about each property obtained during pre-acquisition due diligence, marketing, and leasing activities in estimating the relative fair value of the tangible and intangible assets acquired.
Acquired above- and below-market lease values are recorded as the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market value lease rates for the corresponding in-place leases. The capitalized above- and below-market lease values are amortized as adjustments to rental revenue over the remaining terms of the respective leases.
Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. We use a 10-37 year estimated life for buildings and improvements and a 5-10 year estimated life for furniture, fixtures, and equipment.
We follow the real estate project costs guidance in ASC 970, Real Estate – General, in accounting for the costs of development and redevelopment projects. As real estate is undergoing development or redevelopment, all project costs directly associated with and attributable to the development and construction of a project, including interest expense and real estate tax expense, are capitalized to the cost of the real property. The capitalization period begins when development activities and expenditures begin and are identifiable to a specific property and ends upon completion, which is when the asset is ready for its intended use. Generally, rental property is considered substantially complete upon issuance of a certificate of occupancy. General and administrative costs are expensed as incurred. Interest of approximately $4,000 was capitalized in continuing and discontinued operations for the fiscal year ended April 30, 2018. We did not capitalize interest during the years ended December 31, 2020 and 2019, or the transition period ended December 31, 2018.
Expenditures for ordinary maintenance and repairs are expensed to operations as incurred. Renovations and improvements that improve and/or extend the useful life of the asset are capitalized and depreciated over their estimated useful life, generally five to twenty years. Property sales or dispositions are recorded when control of the assets transfers to the buyer and we have no significant continuing involvement with the property sold.
We periodically evaluate our long-lived assets, including real estate investments, for impairment indicators. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, expected holding period of each property, and legal and environmental concerns. If indicators exist, we compare the expected future undiscounted cash flows for the property against the carrying amount of that property. If the sum of the estimated undiscounted cash flows is less than the carrying amount, an impairment loss is recorded for the difference between the estimated fair value and the carrying amount. If our anticipated holding period for properties, the estimated fair value of properties or other factors change based on market conditions or otherwise, our evaluation of impairment charges may be different and such differences could be material to our consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future physical occupancy, rental rates, and capital requirements that could differ materially from actual results. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.
During the years ended December 31, 2020 and 2019, we did not incur a loss for impairment on real estate.
During the transition period ended December 31, 2018, we incurred a loss of $1.2 million due to impairment of a parcel of land in Bismarck, North Dakota. The parcel was written-down to estimated fair value based on receipt of a market offer to purchase and our intent to dispose of the property.
During the fiscal year ended April 30, 2018, we incurred a loss of $18.1 million due to impairment of one apartment community, three other commercial properties, and four parcels of land. We recognized impairments of $12.2 million on one apartment community in Grand Forks, North Dakota; $1.4 million on an industrial property in Bloomington, Minnesota; $922,000 on an industrial property in Woodbury, Minnesota; and $630,000 on a retail property in Minot, North Dakota. These properties were written-down to estimated fair value based on independent appraisals and market data or, in the case of the retail property, receipt of a market offer to purchase and our intent to dispose of the property. We recognized impairments of $428,000 on a parcel of land in Williston, North Dakota; $1.5 million on a parcel of land in Grand Forks, North Dakota; and
F-13

Table of Contents
$256,000 and $709,000 on two parcels of land in Bismarck, North Dakota. These parcels were written down to estimated fair value based on independent appraisals and market data.
CHANGE IN DEPRECIABLE LIVES OF REAL ESTATE ASSETS
Effective May 1, 2017, we changed the estimated useful lives of our real estate assets to better reflect the estimated periods during which they would be of economic benefit. Generally, the estimated lives of buildings and improvements that previously were 20-40 years were decreased to 10-37 years, while those that were previously nine years were changed to 5-10 years. The effect of this change in estimate for the fiscal year ended April 30, 2018, was to increase depreciation expense by approximately $29.3 million, decrease net income by $29.3 million, and decrease earnings per share by $0.22.
REAL ESTATE HELD FOR SALE
Real estate held for sale is stated at the lower of its carrying amount or estimated fair value less disposal costs. Our determination of fair value is based on inputs management believes are consistent with those that market participants would use. Estimates are significantly impacted by estimates of sales price, selling velocity, and other factors. Due to uncertainties in the estimation process, actual results could differ from such estimates. Depreciation is not recorded on assets classified as held for sale.
We classify properties as held for sale when they meet the GAAP criteria, which include: (a) management commits to and initiates a plan to sell the asset; (b) the sale is probable and expected to be completed within one year under terms that are usual and customary for sales of such assets; and (c) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. We generally consider these criteria met when the transaction has been approved by our Board of Trustees, there are no known significant contingencies related to the sale, and management believes it is probable that the sale will be completed within one year. We had no properties classified as held for sale at December 31, 2020 and 2019.
We report in discontinued operations the results of operations and the related gains or losses on the sales of properties that have either been disposed of or classified as held for sale and meet the classification of a discontinued operation as described in ASC 205 - Presentation of Financial Statements and ASC 360 - Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under these standards, a disposal (or classification as held for sale) of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
Cash and cash equivalents include all cash and highly liquid investments purchased with maturities of three months or less. Cash and cash equivalents consist of our bank deposits, short-term investment certificates acquired subject to repurchase agreements, and our deposits in a money market mutual fund. We are potentially exposed to credit risk for cash deposited with FDIC-insured financial institutions in accounts which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts.
As of December 31, 2020 restricted cash consisted of $5.0 million of real estate deposits for property acquisitions and $1.9 million in escrows held by lenders. As of December 31, 2019, restricted cash consisted primarily of net tax-deferred exchange proceeds remaining from a portion of our dispositions and escrows held by lenders. Escrows include funds deposited with a lender for payment of real estate taxes and insurance, and reserves to be used for replacement of structural elements and mechanical equipment at certain communities. The funds are under the control of the lender. Disbursements are made after supplying written documentation to the lender.
LEASES
Effective January 1, 2019, we adopted ASUs 2016-02, 2018-10, 2018-11, 2018-20, and 2019-01 related to leases using the modified retrospective approach. We elected to adopt the package of practical expedients permitted under the transition guidance, which permits us to not reassess prior conclusions about lease identification, classification, and initial direct costs under the new standard, and the practical expedient related to land easements, which allows us to not evaluate existing or expired land easements that were not previously accounted for under ASC 840. We made an accounting policy election to exclude leases in which we are a lessee with a term of 12 months or less from the balance sheet.
F-14

Table of Contents
As a lessor, we primarily lease multifamily apartment homes which qualify as operating leases with terms that are generally one year or less. Rental revenues are recognized in accordance with ASC 842, Leases, using a method that represents a straight-line basis over the term of the lease. Rental income represents approximately 98.4% of our total revenues and includes gross market rent less adjustments for concessions, vacancy loss, and bad debt. Other property revenues represent the remaining 1.6% of our total revenues and are primarily driven by other fee income, which is typically recognized when earned, at a point in time.
Some of our apartment communities have commercial spaces available for lease. Lease terms for these spaces typically range from three to fifteen years. The leases for commercial spaces generally include options to extend the lease for additional terms.
Beginning in April 2020, we offered multifamily residents suffering from financial hardship related to the COVID-19 pandemic the option to apply for a rent deferral. We elected to account for these accommodations as though enforceable rights and obligations for the accommodations existed without evaluating if such a right or obligation existed under the lease agreement, as allowed by the FASB Q&A released on April 10, 2020 related to lease modification guidance under ASC 842. The accommodations were recognized as variable lease payments. As of December 31, 2020, approximately $99,600 remained outstanding under the rent deferral agreements offered to multifamily residents.
We also abated rent, common area maintenance, and real estate taxes for commercial tenants that experienced government-mandated interruptions or closures of their businesses. The accommodations were recognized as variable lease payments, as allowed by the FASB Q&A released on April 10, 2020. During the year ended December 31, 2020, we recognized a reduction in revenue of $656,000 due to the abatement of amounts due from our commercial tenants.
Many of our leases contain non-lease components for utility reimbursement from our residents. We have elected the practical expedient to combine lease and non-lease components for all asset classes. The combined components are included in lease income and are accounted for under ASC 842.
The aggregate amount of future scheduled lease income on our operating leases for commercial spaces, excluding any variable lease income and non-lease components, as of December 31, 2020, was as follows:

|  | (in thousands)
2021 |  | $ | 2,216 |
2022 |  | 2,214 |
2023 |  | 2,208 |
2024 |  | 2,194 |
2025 |  | 2,166 |
Thereafter |  | 2,373 |
Total scheduled lease income - operating leases |  | $ | 13,371 |

REVENUE
We adopted ASU 2014-09, Revenue from Contracts with Customers, as of May 1, 2018, using the modified retrospective approach. We elected to apply the new standard to contracts that were not complete as of May 1, 2018. Under the new standard, revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration the company expects to be entitled for those goods and services.
Revenue streams that are included in ASU 2014-09 include:
•Other property revenues: We recognize revenue for rental related income not included as a component of a lease, such as other application fees, as earned, and have concluded that this is appropriate under the new standard.
•Gains or losses on sales of real estate: Subsequent to the adoption of the new standard, a gain or loss is recognized when the criteria for derecognition of an asset are met, including when (1) a contract exists and (2) the buyer obtained control of the nonfinancial asset that was sold. As a result, we may recognize a gain on real estate disposition transactions that previously did not qualify as a sale or for full profit recognition under the previous accounting standard. Any gain or loss on real estate dispositions is net of certain closing and other costs associated with the disposition.
We concluded that the adoption of the new standard required a cumulative adjustment of $627,000 to the opening balance of retained earnings as of May 1, 2018, due to the sale of a group of properties in the prior fiscal year. The sale of properties was previously accounted for using the installment method. Under the installment method, we recorded a mortgage receivable net of the deferred gain on sale, which was to be recognized as payments were received. The gain on sale under the new revenue standard is recognized when control of the assets is transferred to the buyer. As a result of our adoption of the new standard, we
F-15

Table of Contents
recorded a cumulative adjustment to retained earnings and increased the mortgage receivable by $627,000 to recognize the previously deferred gain on sale.
The following table presents the disaggregation of revenue streams of our rental income for the years ended December 31, 2020 and 2019, and the transition period ended December 31, 2018:

|  |  | (in thousands)
|  |  | Year ended December 31, |  | Transition period ended
Revenue Stream | Applicable Standard |  | 2020 | 2019 |  | December 31, 2018
Fixed lease income - operating leases | Leases |  | $ | 168,119 |  | $ | 176,706 |  |  | $ | 114,047 |
Variable lease income - operating leases | Leases |  | 7,068 |  | 5,586 |  |  | 3,528 |
Other property revenue | Revenue from contracts with customers |  | 2,807 |  | 3,463 |  |  | 4,296 |
Total revenue |  |  | $ | 177,994 |  | $ | 185,755 |  |  | $ | 121,871 |

INCOME TAXES
We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended. Under those sections, a REIT which distributes at least 90% of its REIT taxable income, excluding capital gains, as a dividend to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to shareholders. For the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018 and the fiscal year ended April 30, 2018, we distributed in excess of 90% of our taxable income and realized capital gains from property dispositions within the prescribed time limits. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even as a REIT, we may be subject to certain state and local income and property taxes, and to federal income and excise taxes on undistributed taxable income. In general, however, if we qualify as a REIT, no provisions for federal income taxes are necessary except for taxes on undistributed REIT taxable income and taxes on the income generated by a taxable REIT subsidiary (TRS).
We have one TRS, which is subject to corporate federal and state income taxes on its taxable income at regular statutory rates. There were no income tax provisions or material deferred income tax items for our TRS for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018.
We conduct our business activity as an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) through our Operating Partnership. UPREIT status allows us to accept the contribution of real estate in exchange for Units. Generally, such a contribution to a limited partnership allows for the deferral of gain by an owner of appreciated real estate.
The following table indicates how distributions were characterized for federal income tax purposes for the years ended December 31, 2020, December 31, 2019, and December 31, 2018:

CALENDAR YEAR |  | 2020 | 2019 | 2018
Tax status of distributions |  |  |  |
Capital gain |  | 13.62 | % | 38.53 | % | 100.00 | %
Ordinary income |  | 7.91 | % | 23.43 | % | — |
Return of capital |  | 78.47 | % | 38.04 | % | — |

VARIABLE INTEREST ENTITY
We have determined that our Operating Partnership and each of our less-than-wholly owned real estate partnerships is a variable interest entity (“VIE”), as the limited partners or the functional equivalent of limited partners lack substantive kick-out rights and substantive participating rights. We are the primary beneficiary of the VIEs, and the VIEs are required to be consolidated on our balance sheet because we have a controlling financial interest in the VIEs and have both the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs as well as the obligation to absorb losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. Because our Operating Partnership is a VIE, all of our assets and liabilities are held through a VIE.
F-16

Table of Contents
OTHER ASSETS
As of December 31, 2020 and 2019, other assets consisted of the following amounts:

| in thousands
| December 31, 2020 | December 31, 2019 |
Receivable arising from straight line rents | $ | 336 |  | $ | 785 |  |
Accounts receivable, net of allowance | 523 |  | 154 |  |
Real estate related loans receivable | 6,332 |  | 16,557 |  |
Marketable securities | — |  | 7,055 |  |
Prepaid and other assets | 5,702 |  | 4,866 |  |
Intangible assets, net of accumulated amortization | 1,150 |  | 1,212 |  |
Property and equipment, net of accumulated depreciation | 2,674 |  | 1,277 |  |
Goodwill | 986 |  | 1,086 |  |
Deferred charges and leasing costs | 1,201 |  | 1,837 |  |
Total Other Assets | $ | 18,904 |  | $ | 34,829 |  |

PROPERTY AND EQUIPMENT
Property and equipment consists primarily of office equipment located at our corporate offices in Minot, North Dakota and in Minneapolis, Minnesota. The consolidated balance sheets reflects these assets at cost, net of accumulated depreciation, and are included within Other Assets. As of December 31, 2020 and 2019, property and equipment cost was $4.7 million and $2.9 million, respectively. Accumulated depreciation was $2.0 million and $1.7 million as of December 31, 2020 and 2019, respectively, and are included within other assets in the consolidated balance sheets.
MORTGAGE LOANS RECEIVABLE AND NOTES RECEIVABLE
I n March 2020, in connection with our acquisition of Ironwood, an apartment community in New Hope, Minnesota, we acquired a tax increment financing note receivable (“TIF”) with a principal balance of $6.6 million, which appears within Other Assets in our consolidated balance sheets. The note bears an interest rate of 4.5% with payments due in February and August of each year.
I n December 2019, we originated a $29.9 million construction loan and a $15.3 million mezzanine loan for the development of a multifamily development located in Minneapolis, Minnesota. The construction and mezzanine loans bear interest at 4.5% and 11.5%, respectively. As of December 31, 2020 and 2019, we had funded $24.7 million and $6.2 million, respectively, of the construction loan, which appears within mortgages receivable in our consolidated balance sheets. The loans are secured by mortgages and mature on December 31, 2023, and the agreement provides us with an option to purchase the development. The loans represent an investment in an unconsolidated variable interest entity. We are not the primary beneficiary of the VIE as we do not have the power to direct the activities which most significantly impact the entity’s economic performance nor do we have significant influence over the entity.
In August 2017, we sold 13 apartment communities in exchange for cash and an $11.0 million note secured by a mortgage on the assets. As of December 31, 2020, the note was paid in full. As of December 31, 2019 the remaining balance on the mortgage was $10.0 million. The note had an interest rate of 5.5%. Monthly payments were interest-only, with the principal balance payable at maturity. We received and recognized approximately $279,000, $570,000, $448,000, and $372,000 of interest income during the years ended December 31, 2020 and 2019, the transition period ended December 31, 2019, and the fiscal year ended April 30, 2018, respectively.
In July 2017, we originated a $16.2 million loan in a multifamily development located in New Hope, Minnesota, a Minneapolis suburb. We funded an additional $341,000 upon satisfaction of certain conditions set forth in the loan agreement. The note had an interest rate of 6%. During the year ended December 31, 2020, we executed the purchase option for the apartment community (refer to Note 9 for details on acquisition). The note was paid in full as part of our acquisition of this apartment community.
MARKETABLE SECURITIES
Marketable securities consisted of equity securities. We report equity securities at fair value based on quoted market prices (Level 1 inputs). Any unrealized gains or losses are included in interest and other income (loss) on the consolidated statements
F-17

Table of Contents
of operations. As of December 31, 2020, we had no marketable securities. As of December 31, 2019, the cost basis of marketable securities was $6.9 million, the gross unrealized gain was $113,000, and the carrying value was $7.1 million. During the year ended December 31, 2020, we had a realized loss of $3.4 million arising from the disposal of such securities.
GAIN ON LITIGATION SETTLEMENT
During the year ended December 31, 2019, we recorded a gain on litigation settlement of $6.6 million from the settlement on a construction defect claim. The gain consisted of $5.2 million of cash received and $1.4 million of liabilities waived under the terms of the settlement.
NOTE 3 • EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. We have issued restricted stock units (“RSUs”) and incentive stock options (“ISOs”) under our 2015 Incentive Plan and Series D Convertible Preferred Units (“Series D preferred units”), which could have a dilutive effect on our earnings per share upon exercise of the RSUs, ISOs, or upon conversion of the Series D preferred units (refer to Note 4 for further discussion of the preferred units). Other than the issuance of RSUs, ISOs, and Series D preferred units, we have no outstanding options, warrants, convertible stock, or other contractual obligations requiring issuance of additional common shares that would result in a dilution of earnings. Under the terms of the Operating Partnership’s Agreement of Limited Partnership, limited partners have the right to require the Operating Partnership to redeem their limited partnership units (“Units”) any time following the first anniversary of the date they acquired such Units (“Exchange Right”). Upon the exercise of Exchange Rights, and in our sole discretion, we may issue common shares in exchange for Units on a one-for-one-basis.
For the years ended December 31, 2020 and 2019, and the transition period ended December 31, 2018, performance-based restricted stock awards of 26,994, 37,822, and 25,300 were excluded from the calculation of diluted earnings per share because the assumed proceeds per share plus the average unearned compensation were greater than the average market price of the common shares for the periods presented and, therefore, were anti-dilutive. Refer to Note 16 - Share-Based Compensation for discussion of the terms for these awards.
For the year ended December 31, 2020, Series D preferred units of 228,000 and time-based RSUs of 13,000 were excluded from the calculation of diluted earnings per shares because they were anti-dilutive because including these items would have improved earnings per share.
For the year ended December 31, 2020, weighted average stock options of 86,000 were excluded from the calculation of diluted earnings per share because the assumed proceeds per share plus the average unearned compensation were greater than the average market price of common shares for the period and were, therefore, anti-dilutive.
The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted earnings per share reported in the consolidated financial statements for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018:
F-18

Table of Contents

|  | (in thousands, except per share data)
|  | Year Ended December 31, |  | Period Ended |  | Fiscal Year Ended
|  | 2020 | 2019 |  | December 31, 2018 |  | April 30, 2018
NUMERATOR |  |  |  |  |  |  |
Income (loss) from continuing operations – controlling interests |  | $ | 4,441 |  | $ | 78,669 |  |  | $ | (4,908) |  |  | $ | (30,266) |
Income (loss) from discontinued operations – controlling interests |  | — |  | — |  |  | 510 |  |  | 147,054 |
Net income (loss) attributable to controlling interests |  | 4,441 |  | 78,669 |  |  | (4,398) |  |  | 116,788 |
Dividends to preferred shareholders |  | (6,528) |  | (6,821) |  |  | (4,547) |  |  | (8,569) |
Redemption of preferred shares |  | 297 |  | — |  |  | — |  |  | (3,657) |
Numerator for basic earnings per share – net income (loss) available to common shareholders |  | (1,790) |  | 71,848 |  |  | (8,945) |  |  | 104,562 |
Noncontrolling interests – Operating Partnership |  | (212) |  | 6,752 |  |  | (1,032) |  |  | 12,702 |
Dividends to preferred unitholders |  | 640 |  | 537 |  |  | — |  |  | — |
Numerator for diluted earnings (loss) per share |  | $ | (1,362) |  | $ | 79,137 |  |  | $ | (9,977) |  |  | $ | 117,264 |
DENOMINATOR |  |  |  |  |  |  |
Denominator for basic earnings per share weighted average shares |  | 12,564 |  | 11,744 |  |  | 11,937 |  |  | 11,998 |
Effect of redeemable operating partnership units |  | 1,030 |  | 1,237 |  |  | 1,387 |  |  | 1,462 |
Effect of Series D preferred units |  | — |  | 193 |  |  | — |  |  | — |
Effect of diluted restricted stock awards and restricted stock units |  | — |  | 8 |  |  | — |  |  | — |
Denominator for diluted earnings per share |  | 13,594 |  | 13,182 |  |  | 13,324 |  |  | 13,460 |
Earnings (loss) per common share from continuing operations – basic |  | $ | (0.15) |  | $ | 6.06 |  |  | $ | (0.79) |  |  | $ | (3.54) |
Earnings (loss) per common share from discontinued operations – basic |  | — |  | — |  |  | 0.04 |  |  | 12.25 |
NET EARNINGS (LOSS) PER COMMON SHARE – BASIC |  | $ | (0.15) |  | $ | 6.06 |  |  | $ | (0.75) |  |  | $ | 8.71 |
Earnings (loss) per common share from continuing operations – diluted |  | $ | (0.15) |  | $ | 6.00 |  |  | $ | (0.79) |  |  | $ | (3.54) |
Earnings (loss) per common share from discontinued operations – diluted |  | — |  | — |  |  | 0.04 |  |  | 12.25 |
NET EARNINGS (LOSS) PER COMMON SHARE – DILUTED |  | $ | (0.15) |  | $ | 6.00 |  |  | $ | (0.75) |  |  | $ | 8.71 |

NOTE 4 • EQUITY AND MEZZANINE EQUITY
Operating Partnership Units. Outstanding Units in the Operating Partnership were 1.0 million Units at December 31, 2020 and 1.1 million Units at December 31, 2019.
Exchange Rights. Pursuant to the exercise of Exchange Rights, we redeemed Units for cash during the years ended December 31, 2020 and 2019 as detailed in the table below.

|  | (in thousands, except per Unit amounts)
|  | Number of | Aggregate | Average Price
|  | Units | Cost | Per Unit
Year Ended December 31, 2020 |  | 1 |  | $ | 50 |  | $ | 70.10 |
Year Ended December 31, 2019 |  | 136 |  | $ | 8,142 |  | $ | 60.02 |

F-19

Table of Contents
We also redeemed Units in exchange for common shares during the years ended December 31, 2020 and 2019 as detailed in the table below.

|  | (in thousands)
|  | Number of | Total Book
|  | Units | Value
Year Ended December 31, 2020 |  | 81 |  | $ | (1,750) |
Year Ended December 31, 2019 |  | 174 |  | $ | 7,823 |

Common Shares and Equity Awards. Common shares outstanding on December 31, 2020 and 2019, totaled 13.0 million and 12.1 million, respectively. During the years ended December 31, 2020 and 2019, we issued approximately 21,000 and 18,000 common shares, respectively, with a total grant-date value of $1.0 million and $1.1 million, respectively, under our 2015 Incentive Plan, as share-based compensation for employees and trustees. During the years ended December 31, 2020 and 2019, approximately 2,400 and 3,300 common shares were forfeited under the 2015 Incentive Plan, respectively.
Equity Distribution Agreement. In November 2019, we entered into an equity distribution agreement in connection with an at-the-market offering ("2019 ATM Program") through which we may offer and sell common shares having an aggregate sales price of up to $150.0 million, in amounts and at times as we determine. The proceeds from the sale of common shares under the 2019 ATM Program are intended to be used for general corporate purposes, which may include the funding of future acquisitions, community renovations, and the repayment of indebtedness. As of December 31, 2020, we had common shares having an aggregate offering price of up to $68.5 million remaining available under the 2019 ATM Program.
The table below provides details on the sale of common shares during the years ended December 31, 2020 and 2019.

| (in thousands, except per share amounts)
| Number of Common Shares | Total Consideration(1) | Average Price Per Share(1)
Year ended December 31, 2020 | 829 |  | $ | 59,187 |  | $ | 71.39 |
Year ended December 31, 2019 | 308 |  | $ | 22,019 |  | $ | 72.29 |

(1)Total consideration is net of $901,000 and $310,000 in commissions for the years ended December 31, 2020 and 2019, respectively.
Share Repurchase Program. On December 7, 2016, our Board of Trustees authorized a share repurchase program to repurchase up to $50 million of our common shares over a one year period. This program was reauthorized for two additional one year periods. On December 5, 2019, our Board of Trustees terminated this share repurchase program and authorized a new share purchase program to repurchase up to $50 million of our common or preferred shares over a one-year period. Under this new repurchase program, we could repurchase common or preferred shares in open-market purchases, including pursuant to Rule 10b5-1 and Rule 10b-18 plans, as determined by management and in accordance with the requirements of the SEC. This program expired on December 5, 2020. Shares repurchased during the years ended December 31, 2020 and 2019 are detailed in the table below.

| (in thousands, except per share amounts)
| Number of Common Shares | Number of Preferred Shares | Aggregate Cost(1) | Average Price Per Share(1)
Year ended December 31, 2020 | — |  | 237 |  | $ | 5,629 |  | $ | 23.75 |
Year ended December 31, 2019(2) | 329 |  | — |  | $ | 18,023 |  | $ | 54.69 |

(1)Amount includes commissions.
(2)Repurchases during the year were under the prior repurchase program.
Issuance of Series C Preferred Shares. In the fiscal year ended April 30, 2018, we issued 4.1 million shares of our 6.625% Series C Cumulative Redeemable Preferred Shares ("Series C preferred shares"). As of December 31, 2020 and 2019, we had 3.9 million and 4.1 million Series C preferred shares outstanding, respectively. The Series C preferred shares are nonvoting and redeemable for cash at $25.00 per share at our option on or after October 2, 2022. Holders of these shares are entitled to cumulative distributions, payable quarterly (as and if declared by the Board of Trustees). Distributions accrue at an annual rate of $1.65625 per share, which is equal to 6.625% of the $25.00 per share liquidation preference ($97.0 million and $103.0 million liquidation preference in the aggregate, as of December 31, 2020 and 2019, respectively).
Series D Preferred Units (Mezzanine Equity). On February 26, 2019, we issued 165,600 newly created Series D preferred units at an issuance price of $100 per preferred unit as partial consideration for the acquisition of SouthFork Townhomes. The Series D preferred unit holders receive a preferred distribution at the rate of 3.862% per year. The Series D preferred units have a put
F-20

Table of Contents
option which allows the holder to redeem any or all of the Series D preferred units for cash equal to the issue price. Each Series D preferred unit is convertible, at the holder's option, into 1.37931 Units, representing a conversion exchange rate of $72.50 per unit. Changes in the redemption value are charged to common shares on our consolidated balance sheets from period to period. The holders of the Series D preferred units do not have any voting rights. Distributions to Series D unitholders are presented in the consolidated statements of equity within net income (loss) attributable to controlling interests and noncontrolling interests.
Redeemable Noncontrolling Interests (Mezzanine Equity). Redeemable noncontrolling interests on our consolidated balance sheets represent the noncontrolling interest in a joint venture in which our unaffiliated partner, at its election, could require us to buy its interest at a purchase price to be determined by an appraisal conducted in accordance with the terms of the agreement, or at a negotiated price. Redeemable noncontrolling interests are presented at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to common shares on our consolidated balance sheets. During the year ended December 31, 2019, we acquired the remaining 34.5% noncontrolling interests in the real estate partnership that owns Commons and Landing at Southgate for $1.3 million. Activity of the redeemable noncontrolling interests is detailed in the table below.

|  | (in thousands)
|  | Year ended December 31, |  |  |  |
|  | 2019 |  |  |  |
Balance at beginning of fiscal year |  | $ | 5,968 |  |  |  |  |
Contributions |  | — |  |  |  |  |
Net (loss) income |  | (174) |  |  |  |  |
Acquisition of redeemable noncontrolling interests |  | (5,794) |  |  |  |  |
Balance at close of fiscal year |  | $ | — |  |  |  |  |

NOTE 5 • NONCONTROLLING INTERESTS
Interests in the Operating Partnership held by limited partners are represented by Units. The Operating Partnership’s income is allocated to holders of Units based upon the ratio of their holdings to the total Units outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to noncontrolling interests in accordance with the terms of the Operating Partnership’s Agreement of Limited Partnership.
We reflect noncontrolling interests in consolidated real estate entities on the Balance Sheet for the portion of properties consolidated by us that are not wholly owned by us. The earnings or losses from these properties attributable to the noncontrolling interests are reflected as net income attributable to noncontrolling interests – consolidated real estate entities in the consolidated statements of operations.
During the year ended December 31, 2020, we acquired the 47.4% noncontrolling interests in the real estate partnership that owns 71 France for $12.2 million.
Our noncontrolling interests – consolidated real estate entities at December 31, 2020 and 2019 were as follows:

|  | (in thousands)
|  | December 31, 2020 | December 31, 2019 |
IRET - 71 France, LLC |  | $ | — |  | $ | 4,817 |  |
IRET - Cypress Court Apartments, LLC |  | 686 |  | 748 |  |
Noncontrolling interests – consolidated real estate entities |  | $ | 686 |  | $ | 5,565 |  |

F-21

Table of Contents
NOTE 6 • DEBT
As of December 31, 2020, 47 of our apartment communities were not encumbered by mortgages, with 34 of those apartment communities providing credit support for our unsecured borrowings. Our primary unsecured credit facility (“unsecured credit facility”) is a revolving, multi-bank line of credit, with the Bank of Montreal serving as administrative agent. Our line of credit has total commitments and borrowing capacity of $250.0 million, based on the value of properties contained in the unencumbered asset pool (“UAP”). As of December 31, 2020, we had additional borrowing availability of $97.1 million beyond the $152.9 million drawn, including the balance on our operating line of credit (discussed below), priced at an interest rate of 2.85%, including the impact of our interest rate swap. This credit facility matures on August 31, 2022, with one 12-month option to extend the maturity date at our election. At December 31, 2019, the line of credit borrowing capacity was $250.0 million based on the UAP, of which $50.1 million was drawn on the line.
Under our unsecured credit facility, we also have unsecured term loans of $70.0 million and $75.0 million, included within notes payable on the consolidated balance sheets, which mature on January 15, 2024 and August 31, 2025, respectively.
The interest rates on the line of credit and term loans are based, at our option, on the lender's base rate plus a margin, ranging from 35-85 basis points, or the London Interbank Offered Rate (“LIBOR”), plus a margin that ranges from 135-190 basis points based on our consolidated leverage. Our unsecured credit facility and unsecured senior notes are subject to customary financial covenants and limitations. We believe that we are in compliance with all such financial covenants and limitations as of December 31, 2020.
We have a private shelf agreement for the issuance of up to $150.0 million of unsecured senior promissory notes (“unsecured senior notes”). Under this agreement, we issued $75.0 million of Series A notes due September 13, 2029, bearing interest at a rate of 3.84% annually, and $50.0 million of Series B notes due September 30, 2028, bearing interest at a rate of 3.69% annually. We have $25.0 million remaining available under the private shelf agreement.
As of December 31, 2020, we owned 20 apartment communities that served as collateral for mortgage loans. All of these mortgage loans were non-recourse to us other than for standard carve-out obligations. Interest rates on mortgage loans range from 3.47% to 5.73%, and the mortgage loans have varying maturity dates from June 1, 2021, through September 1, 2031. As of December 31, 2020, we believe there are no material defaults or instances of material noncompliance in regards to any of these mortgage loans.
We also have a $6.0 million operating line of credit. This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances. This operating line has a one-year term, with pricing based on a market spread plus the one-month LIBOR index rate.
The following table summarizes our indebtedness:

|  | (in thousands) |
|  | December 31, 2020 | December 31, 2019 |  | Weighted Average Maturity in Years
Lines of credit |  | $ | 152,871 |  | $ | 50,079 |  |  | 1.62
Term loans(1) |  | 145,000 |  | 145,000 |  |  | 3.88
Unsecured senior notes(1) |  | 125,000 |  | 125,000 |  |  | 8.33
Unsecured debt |  | 422,871 |  | 320,079 |  |  | 4.38
Mortgages payable - fixed |  | 298,445 |  | 331,376 |  |  | 5.23
Total debt |  | $ | 721,316 |  | $ | 651,455 |  |  | 4.73
Annual Weighted Average Interest Rates |  |  |  |  |
Lines of credit (rate with swap) |  | 2.85 | % | 3.81 | % |  |
Term loans (rate with swaps) |  | 4.15 | % | 4.11 | % |  |
Unsecured senior notes |  | 3.78 | % | 3.78 | % |  |
Mortgages payable |  | 3.93 | % | 4.02 | % |  |
Total debt |  | 3.62 | % | 3.97 | % |  |

(1)Included within notes payable on our consolidated balance sheets.
F-22

Table of Contents
The aggregate amount of required future principal payments on mortgages payable and notes payable as of December 31, 2020 is as follows:

|  | (in thousands)
2021 |  | $ | 25,665 |
2022 |  | 37,219 |
2023 |  | 45,068 |
2024 |  | 3,777 |
2025 |  | 102,505 |
Thereafter |  | 354,211 |
Total payments |  | $ | 568,445 |

NOTE 7 • DERIVATIVE INSTRUMENTS
Our objective in using interest rate derivatives is to add stability to interest expense and to manage our exposure to interest rate fluctuations. To accomplish this objective, we primarily use interest rate swap contracts to fix the variable rate interest on our term loans and a portion of our primary line of credit. The interest rate swap contracts qualify as cash flow hedges.
The ineffective portion of a hedging instrument is not recognized currently in earnings or disclosed. Changes in the fair value of cash flow hedges are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income for our interest rate swap will be reclassified to interest expense as interest payments are made on our term loan and line of credit. During the next 12 months, we estimate an additional $4.4 million will be reclassified as an increase to interest expense.
At December 31, 2020, we had three interest rate swap contracts in effect with a notional amount of $195.0 million and one additional interest rate swap that becomes effective on January 31, 2023 with a notional amount of $70.0 million.
The fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets as of December 31, 2020 and 2019 is detailed below.

|  |  |  |  |  |  | (in thousands)
|  |  |  |  |  |  |  |  |  |  | December 31, 2020 |  | December 31, 2019 |  |
|  |  |  |  |  |  |  |  | Balance Sheet Location |  | Fair Value |  | Fair Value |  |
Total derivative instruments designated at hedging instruments - interest rate swaps |  |  |  |  |  |  |  |  | Accounts Payable and Accrued Expenses |  | $ | 15,905 |  |  | $ | 7,607 |  |  |

The effect of the Company's derivative financial instruments on the consolidated statements of operations as of December 31, 2020, December 31, 2019, December 31, 2018, and April 30, 2018 is detailed below.

| (in thousands)
| Gain (Loss) Recognized in OCI |  | Location of Gain (Loss) Reclassified from Accumulated OCI into Income |  | Gain (Loss) Reclassified from Accumulated OCI into Income
| Year Ended December 31, |  | Transition Period Ended December 31, |  | Fiscal Year Ended April 30, |  |  |  | Year Ended December 31, |  | Transition Period Ended December 31, |  | Fiscal Year Ended April 30,
| 2020 | 2019 |  | 2018 |  | 2018 |  |  |  | 2020 | 2019 |  | 2018 |  | 2018
Total derivatives in cash flow hedging relationships - interest rate swaps | $ | (11,068) |  | $ | (7,040) |  |  | $ | (2,794) |  |  | $ | 1,627 |  |  | Interest expense |  | $ | (2,770) |  | $ | (289) |  |  | $ | (159) |  |  | $ | (152) |

NOTE 8 • FAIR VALUE MEASUREMENTS
Cash and cash equivalents, restricted cash, accounts payable, accrued expenses, and other liabilities are carried at amounts that reasonably approximate their fair value due to their short-term nature. For variable rate line of credit debt that re-prices frequently, fair values are based on carrying values.
F-23

Table of Contents
In determining the fair value of other financial instruments, we apply Financial Accounting Standard Board ASC 820, Fair Value Measurement and Disclosures. Fair value hierarchy under ASC 820 distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (Levels 1 and 2) and the reporting entity’s own assumptions about market participant assumptions (Level 3). Fair value estimates may differ from the amounts that may ultimately be realized upon sale or disposition of the assets and liabilities.
Fair Value Measurements on a Recurring Basis

|  | (in thousands)
|  | Total | Level 1 | Level 2 | Level 3
December 31, 2020 |  |  |  |  |
Assets |  |  |  |  |
Mortgages and notes receivable |  | $ | 30,994 |  | $ | — |  | $ | — |  | $ | 30,994 |
Liabilities |  |  |  |  |
Derivative instruments - interest rate swaps |  | $ | 15,905 |  | $ | — |  | $ | — |  | $ | 15,905 |
December 31, 2019 |  |  |  |  |
Liabilities |  |  |  |  |
Derivative instruments - interest rate swaps |  | $ | 7,607 |  | $ | — |  | $ | — |  | $ | 7,607 |

The fair value of our interest rate swaps is determined using the market standard methodology of netting discounted expected variable cash payments and receipts. The variable cash payments and receipts are based on an expectation of future interest rates (a forward curve) derived from observable market interest rate curves. We consider both our own nonperformance risk and the counterparty’s nonperformance risk in the fair value measurement.
Effective January 1, 2020, we elected the fair value option for our mortgage loans receivable and notes receivable, as allowed under ASU 2019-05 which provided transition relief upon adoption of ASU 2016-13, "Financial Instruments - Credit Losses." We utilize an income approach with level 3 inputs based on expected future cash flows to value these instruments. The inputs include market transactions for similar instruments, management estimates of comparable interest rates (range of 3.75% to 5.00%), and instrument specific credit risk (range of 0.5% to 1.0%). Changes in fair value of these receivables from period to period are reported in interest and other income on our consolidated statements of operations.

|  | (in thousands)
|  | Fair Value Measurement | Other Gains (Losses) | Interest Income | Total Changes in Fair Value Included in Current Period Earnings
Year ended December 31, 2020 |  | $ | 30,994 |  | $ | 12 |  | $ | 1,442 |  | $ | 1,454 |

Fair Value Measurements on a Nonrecurring Basis
There were no non-financial assets measured at fair value on a nonrecurring basis at December 31, 2020 and 2019.
Financial Assets and Liabilities Not Measured at Fair Value
The fair value of mortgages payable and unsecured senior notes is estimated based on the discounted cash flows of the loans using market research and management estimates of comparable interest rates (Level 3).
F-24

Table of Contents
The estimated fair values of our financial instruments as of December 31, 2020 and 2019 are as follows:

|  | (in thousands)
|  | December 31, 2020 | December 31, 2019 |
|  | Amount | Fair Value | Amount | Fair Value |  |
FINANCIAL ASSETS |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 392 |  | $ | 392 |  | $ | 26,579 |  | $ | 26,579 |  |  |
Restricted cash |  | 6,918 |  | 6,918 |  | 19,538 |  | 19,538 |  |  |
Mortgage and note receivables(1) |  | — |  | — |  | 32,810 |  | 32,810 |  |  |
FINANCIAL LIABILITIES |  |  |  |  |  |  |
Revolving lines of credit(2) |  | 152,871 |  | 152,871 |  | 50,079 |  | 50,079 |  |  |
Term loans(2) |  | 145,000 |  | 145,000 |  | 145,000 |  | 145,000 |  |  |
Unsecured senior notes |  | 125,000 |  | 133,181 |  | 125,000 |  | 126,816 |  |  |
Mortgages payable |  | 298,445 |  | 308,855 |  | 331,376 |  | 332,471 |  |  |

(1)As of January 1, 2020, we elected the fair value option, as allowed under ASU 2019-05. Fair value for these instruments is discussed within the Fair Value Measurements on a Recurring Basis section above.
(2)Excluding the effect of the interest rate swap agreement.
NOTE 9 • ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS
We acquired $191.0 million and $171.4 million of new real estate during the years ended December 31, 2020 and 2019, respectively. Our acquisitions during the years ended December 31, 2020 and 2019 are detailed below.
Year Ended December 31, 2020

|  |  | (in thousands)
|  |  | Total | Form of Consideration | Investment Allocation
|  | Date | Acquisition |  |  |  |  | Intangible |
Acquisitions |  | Acquired | Cost | Cash | Other(1) | Land | Building | Assets | Other(2)
182 homes - Ironwood Apartments - New Hope, MN |  | March 5, 2020 | $ | 46,263 |  | $ | 28,600 |  | $ | 17,663 |  | $ | 2,165 |  | $ | 36,869 |  | $ | 824 |  | $ | 6,405 |
465 homes - Parkhouse Apartments - Thornton, CO |  | September 22, 2020 | 144,750 |  | 144,750 |  | — |  | 10,474 |  | 132,105 |  | 2,171 |  | — |
Total Acquisitions |  |  | $ | 191,013 |  | $ | 173,350 |  | $ | 17,663 |  | $ | 12,639 |  | $ | 168,974 |  | $ | 2,995 |  | $ | 6,405 |

(1)Payoff of note receivable and accrued interest by seller at closing.
(2)Consists of TIF note acquired. Refer to Note 2 for further discussion.
F-25

Table of Contents
Year Ended December 31, 2019

|  |  | (in thousands)
|  |  | Total | Form of Consideration | Investment Allocation
|  | Date | Acquisition |  |  |  |  | Intangible
Acquisitions |  | Acquired | Cost | Cash | Units(1) | Land | Building | Assets
Multifamily |  |  |  |  |  |  |  |
272 homes - SouthFork Townhomes - Lakeville, MN |  | February 26, 2019 | $ | 44,000 |  | $ | 27,440 |  | $ | 16,560 |  | $ | 3,502 |  | $ | 39,950 |  | $ | 548 |
96 homes - FreightYard Townhomes and Flats - Minneapolis, MN |  | September 6, 2019 | 26,000 |  | 26,000 |  | — |  | 1,889 |  | 23,615 |  | 496 |
328 homes - Lugano at Cherry Creek - Denver, CO(3) |  | September 26, 2019 | 99,250 |  | 99,250 |  | — |  | 7,679 |  | 89,365 |  | 1,781 |
|  |  | $ | 169,250 |  | $ | 152,690 |  | $ | 16,560 |  | $ | 13,070 |  | $ | 152,930 |  | $ | 2,825 |
Other |  |  |  |  |  |  |  |
Minot 3100 10th St SW - Minot, ND(2) |  | May 23, 2019 | $ | 2,112 |  | $ | 2,112 |  | — |  | $ | 246 |  | $ | 1,866 |  | — |
Total Acquisitions |  |  | $ | 171.362 |  | $ | 154,802 |  | $ | 16,560 |  | $ | 13,316 |  | $ | 154,796 |  | $ | 2,825 |

(1)Value of Series D preferred units at the acquisition date.
(2)Acquired for use as our Minot corporate office building after renovations have been completed.
(3)Investment allocation excludes a $425 acquisition credit related to retail space lease-up.
DISPOSITIONS
During the year ended December 31, 2020, we continued our portfolio transformation by disposing of four apartment communities, one commercial property and one parcel of unimproved land for a total sales price of $44.3 million. The dispositions for the years ended December 31, 2020 and 2019 are detailed below.
Year Ended December 31, 2020

|  |  | (in thousands)
|  | Date |  | Book Value |
Dispositions |  | Disposed | Sales Price | and Sale Cost | Gain/(Loss)
Multifamily |  |  |  |  |
268 homes - Forest Park - Grand Forks, ND |  | August 18, 2020 | $ | 19,625 |  | $ | 6,884 |  | $ | 12,741 |
90 homes - Landmark - Grand Forks, ND |  | August 18, 2020 | 3,725 |  | 1,348 |  | 2,377 |
164 homes - Southwind - Grand Forks, ND |  | August 18, 2020 | 10,850 |  | 4,573 |  | 6,277 |
168 homes - Valley Park - Grand Forks, ND |  | August 18, 2020 | 8,300 |  | 4,059 |  | 4,241 |
|  |  | $ | 42,500 |  | $ | 16,864 |  | $ | 25,636 |
Other |  |  |  |  |
Dakota West |  | August 7, 2020 | $ | 500 |  | $ | 474 |  | $ | 26 |
Unimproved Land |  |  |  |  |
Rapid City Land - Rapid City, SD |  | June 29, 2020 | $ | 1,300 |  | $ | 1,490 |  | $ | (190) |
Total Dispositions |  |  | $ | 44,300 |  | $ | 18,828 |  | $ | 25,472 |

F-26

Table of Contents
Year Ended December 31, 2019

|  |  | (in thousands)
|  | Date |  | Book Value |
Dispositions |  | Disposed | Sales Price | and Sale Cost | Gain/(Loss)
Multifamily |  |  |  |  |
21 homes - Pinehurst - Billings, MT |  | July 26, 2019 | $ | 1,675 |  | $ | 961 |  | $ | 714 |
160 homes - Brookfield Village - Topeka, KS |  | September 24, 2019 | 10,350 |  | 5,853 |  | 4,497 |
220 homes - Crown Colony - Topeka, KS |  | September 24, 2019 | 17,200 |  | 7,876 |  | 9,324 |
54 homes - Mariposa - Topeka, KS |  | September 24, 2019 | 6,100 |  | 4,290 |  | 1,810 |
300 homes - Sherwood - Topeka, KS |  | September 24, 2019 | 26,150 |  | 11,536 |  | 14,614 |
308 homes - Villa West - Topeka, KS |  | September 24, 2019 | 22,950 |  | 15,165 |  | 7,785 |
152 homes - Crestview - Bismarck, ND |  | October 29, 2019 | 8,250 |  | 2,681 |  | 5,569 |
73 homes - North Pointe - Bismarck, ND |  | October 29, 2019 | 5,225 |  | 3,179 |  | 2,046 |
108 homes - Kirkwood - Bismarck, ND |  | October 29, 2019 | 5,400 |  | 2,518 |  | 2,882 |
65 homes - Westwood Park - Bismarck, ND |  | October 29, 2019 | 4,250 |  | 1,931 |  | 2,319 |
16 homes - Pebble Springs - Bismarck, ND |  | October 29, 2019 | 875 |  | 573 |  | 302 |
192 homes - Arbors - Sioux City, IA |  | December 11, 2019 | 16,200 |  | 6,110 |  | 10,090 |
120 homes - Indian Hills - Sioux City, IA |  | December 11, 2019 | 8,100 |  | 5,302 |  | 2,798 |
132 homes - Ridge Oaks - Sioux City, IA |  | December 11, 2019 | 7,700 |  | 4,006 |  | 3,694 |
50 homes - Cottage West - Sioux Falls, SD |  | December 12, 2019 | 6,991 |  | 4,391 |  | 2,600 |
24 homes - Gables - Sioux Falls, SD |  | December 12, 2019 | 2,515 |  | 2,052 |  | 463 |
79 homes - Oakmont - Sioux Falls, SD |  | December 12, 2019 | 7,010 |  | 3,917 |  | 3,093 |
160 homes - Oakwood - Sioux Falls, SD |  | December 12, 2019 | 12,090 |  | 3,056 |  | 9,034 |
120 homes - Oxbow Park - Sioux Falls, SD |  | December 12, 2019 | 10,452 |  | 2,713 |  | 7,739 |
48 homes - Prairie Winds - Sioux Falls, SD |  | December 12, 2019 | 3,763 |  | 1,112 |  | 2,651 |
44 homes - Sierra Vista - Sioux Falls, SD |  | December 12, 2019 | 3,178 |  | 2,292 |  | 886 |
|  |  | $ | 186,424 |  | $ | 91,514 |  | $ | 94,910 |
Other |  |  |  |  |
Minot 1400 31st Ave SW - Minot, ND |  | May 23, 2019 | $ | 6,530 |  | $ | 6,048 |  | $ | 482 |
Woodbury 1865 Woodland - Woodbury, MN |  | November 1, 2019 | 5,765 |  | 4,079 |  | 1,686 |
|  |  | $ | 12,295 |  | $ | 10,127 |  | $ | 2,168 |
Unimproved Land |  |  |  |  |
Creekside Crossing - Bismarck, ND |  | March 1, 2019 | $ | 3,049 |  | $ | 3,205 |  | $ | (156) |
Minot 1525 24th Ave SW - Minot, ND |  | April 3, 2019 | 725 |  | 593 |  | 132 |
Weston - Weston, WI |  | July 31, 2019 | 600 |  | 427 |  | 173 |
|  |  | $ | 4,374 |  | $ | 4,225 |  | $ | 149 |
Total Dispositions |  |  | $ | 203,093 |  | $ | 105,866 |  | $ | 97,227 |

NOTE 10 • DISCONTINUED OPERATIONS
We report in discontinued operations the results of operations and the related gains or losses on the sales of properties that have either been disposed of or classified as held for sale and meet the classification of a discontinued operation as described in ASC 205 - Presentation of Financial Statements and ASC 360 - Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under this standard, a disposal (or classification as held for sale) of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.
We determined that our strategic decision to exit our healthcare segment met the criteria for discontinued operations, and we consequently classified 27 property dispositions as discontinued operations during the fiscal year ended April 30, 2018. We classified no dispositions as discontinued operations during the years ended December 31, 2020 and 2019, and the transition period ended December 31, 2018. We had no gains or losses from the sale of properties classified as discontinued operations for the years ended December 31, 2020 and 2019. The following information shows the effect on net income and the gains or losses from the sale of properties classified as discontinued operations for the transition period ended December 31, 2018 and the fiscal year ended April 30, 2018.
F-27

Table of Contents

|  |  |  | (in thousands)
|  |  | Transition Period Ended | Fiscal Year Ended
|  |  |  | December 31, 2018 | April 30, 2018
REVENUE |  |  |  |  |
Real estate rentals |  |  |  | $ | — |  | $ | 19,744 |
Tenant reimbursement |  |  |  | — |  | 11,650 |
TOTAL REVENUE |  |  |  | — |  | 31,394 |
EXPENSES |  |  |  |  |
Property operating expenses, excluding real estate taxes |  |  |  | — |  | 6,350 |
Real estate taxes |  |  |  | — |  | 5,191 |
Property management expense |  |  |  | — |  | 206 |
Depreciation and amortization |  |  |  | — |  | 8,445 |
TOTAL EXPENSES |  |  |  | — |  | 20,192 |
Operating income (loss) |  |  |  | — |  | 11,202 |
Interest expense(1) |  |  |  | — |  | (4,172) |
Gain (loss) on extinguishment of debt(1) |  |  |  | — |  | (6,508) |
Interest income |  |  |  | — |  | 661 |
Other income |  |  |  | — |  | 73 |
Income (loss) from discontinued operations before gain on sale |  |  |  | — |  | 1,256 |
Gain (loss) on sale of discontinued operations |  |  |  | 570 |  | 163,567 |
INCOME (LOSS) FROM DISCONTINUED OPERATIONS |  |  |  | $ | 570 |  | $ | 164,823 |
Segment Data |  |  |  |  |
All other |  |  |  | $ | 570 |  | $ | 164,823 |
Total |  |  |  | $ | 570 |  | $ | 164,823 |

|  |  |  | (in thousands)
|  |  | Transition Period Ended | Fiscal Year Ended
|  |  |  | December 31, 2018 | April 30, 2018
Property Sale Data |  |  |  |  |
Sales price |  |  |  | $ | — |  | $ | 437,652 |
Net book value and sales costs |  |  |  | — |  | (274,085) |
Gain on sale of discontinued operations |  |  |  | $ | — |  | $ | 163,567 |

As of December 31, 2020 and 2019, we had no assets or liabilities classified as held for sale.
NOTE 11 • SEGMENTS
We operate in a single reportable segment which includes the ownership, management, development, redevelopment, and acquisition of apartment communities. Each of our operating properties is considered a separate operating segment because each property earns revenues, incurs expenses, and has discrete financial information. Our chief operating decision-makers evaluate each property’s operating results to make decisions about resources to be allocated and to assess performance. We do not group our operations based on geography, size, or type. Our apartment communities have similar long-term economic characteristics and provide similar products and services to our residents. No apartment community comprises more than 10% of consolidated revenues, profits, or assets. Accordingly, our apartment communities are aggregated into a single reportable segment. “All other” is composed of non-multifamily properties, non-multifamily components of mixed use properties, and properties disposed or designated as held for sale.
Prior to the third quarter of fiscal year 2018, we reported our results in two reportable segments: multifamily and healthcare. We sold substantially all of our healthcare portfolio during the third quarter of fiscal year 2018 and classified it as discontinued operations, at which point healthcare no longer met the quantitative thresholds for reporting as a separate reportable segment.
Our executive management team comprises our chief operating decision-makers. This team measures the performance of our reportable segment based on net operating income (“NOI”), which we define as total real estate revenues less property operating expenses, including real estate taxes. We believe 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, 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.
F-28

Table of Contents
The following tables present NOI for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018 from our reportable segment and reconcile net operating income to net income as reported in the consolidated financial statements. Segment assets are also reconciled to total assets as reported in the consolidated financial statements.

|  | (in thousands)
Year ended December 31, 2020 |  | Multifamily | All Other | Total
Revenue |  | $ | 171,231 |  | $ | 6,763 |  | $ | 177,994 |
Property operating expenses, including real estate taxes |  | 70,044 |  | 3,114 |  | 73,158 |
Net operating income |  | $ | 101,187 |  | $ | 3,649 |  | $ | 104,836 |
Property management expenses |  |  |  | (5,801) |
Casualty loss |  |  |  | (1,662) |
Depreciation and amortization |  |  |  | (75,593) |
General and administrative expenses |  |  |  | (13,440) |
Interest expense |  |  |  | (27,525) |
Loss on debt extinguishment |  |  |  | (23) |
Interest and other income (loss) |  |  |  | (1,552) |
Income (loss) before gain (loss) on sale of real estate and other investments |  |  |  | (20,760) |
Gain (loss) on sale of real estate and other investments |  |  |  | 25,503 |
Net income (loss) |  |  |  | $ | 4,743 |

|  | (in thousands)
Year ended December 31, 2019 |  | Multifamily | All Other | Total
Revenue |  | $ | 155,635 |  | $ | 30,120 |  | $ | 185,755 |
Property operating expenses, including real estate taxes |  | 63,909 |  | 14,406 |  | 78,315 |
Net operating income |  | $ | 91,726 |  | $ | 15,714 |  | $ | 107,440 |
Property management expenses |  |  |  | (6,186) |
Casualty loss |  |  |  | (1,116) |
Depreciation and amortization |  |  |  | (74,271) |
General and administrative expenses |  |  |  | (14,450) |
Interest expense |  |  |  | (30,537) |
Loss on debt extinguishment |  |  |  | (2,360) |
Interest and other income |  |  |  | 2,092 |
Income (loss) before gain on sale of real estate and other investments and gain (loss) on litigation settlement |  |  |  | (19,388) |
Gain (loss) on sale of real estate and other investments |  |  |  | 97,624 |
Gain (loss) on litigation settlement |  |  |  | 6,586 |
Net income (loss) |  |  |  | $ | 84,822 |

|  | (in thousands)
Transition period ended December 31, 2018 |  | Multifamily | All Other | Total
Revenue |  | $ | 96,234 |  | $ | 25,637 |  | $ | 121,871 |
Property operating expenses, including real estate taxes |  | 39,360 |  | 11,359 |  | 50,719 |
Net operating income |  | $ | 56,874 |  | $ | 14,278 |  | $ | 71,152 |
Property management expenses |  |  |  | (3,663) |
Casualty loss |  |  |  | (915) |
Depreciation and amortization |  |  |  | (50,456) |
Impairment of real estate investments |  |  |  | (1,221) |
General and administrative expenses |  |  |  | (9,812) |
Interest expense |  |  |  | (21,359) |
Loss on debt extinguishment |  |  |  | (556) |
Interest and other income |  |  |  | 1,233 |
Income (loss) before gain on sale of real estate and other investments |  |  |  | (15,597) |
Gain (loss) on sale of real estate and other investments |  |  |  | 9,707 |
Income (loss) from continuing operations |  |  |  | (5,890) |
Income (loss) from discontinued operations |  |  |  | 570 |
Net income (loss) |  |  |  | $ | (5,320) |

F-29

Table of Contents

|  | (in thousands)
Fiscal Year ended April 30, 2018 |  | Multifamily (1) | All Other (1) | Total
Revenue |  | $ | 159,983 |  | $ | 9,762 |  | $ | 169,745 |
Property operating expenses, including real estate taxes |  | 70,460 |  | 2,574 |  | 73,034 |
Net operating income |  | $ | 89,523 |  | $ | 7,188 |  | $ | 96,711 |
Property management expenses |  |  |  | (5,526) |
Casualty loss |  |  |  | (500) |
Depreciation and amortization |  |  |  | (82,070) |
Impairment of real estate investments |  |  |  | (18,065) |
General and administrative expenses |  |  |  | (14,203) |
Acquisition and investment related costs |  |  |  | (51) |
Interest expense |  |  |  | (34,178) |
Loss on debt extinguishment |  |  |  | (940) |
Interest and other income |  |  |  | 1,508 |
Income (loss) before loss on sale of real estate and other investments and income (loss) from discontinued operations |  |  |  | (57,314) |
Gain (loss) on sale of real estate and other investments |  |  |  | 20,120 |
Income (loss) from continuing operations |  |  |  | (37,194) |
Income (loss) from discontinued operations |  |  |  | 164,823 |
Net income (loss) |  |  |  | $ | 127,629 |

(1)Revenue, property operating expenses, including real estate taxes, and net operating income for the year ended April 30, 2018 have not been updated for properties sold during the years ended December 31, 2020 and 2019.
Segment Assets and Accumulated Depreciation

|  | (in thousands)
As of December 31, 2020 |  | Multifamily | All Other | Total
Segment assets |  |  |  |
Property owned |  | $ | 1,779,378 |  | $ | 33,179 |  | $ | 1,812,557 |
Less accumulated depreciation |  | (387,989) |  | (11,260) |  | (399,249) |
Total property owned |  | $ | 1,391,389 |  | $ | 21,919 |  | $ | 1,413,308 |
Cash and cash equivalents |  |  |  | 392 |
Restricted cash |  |  |  | 6,918 |
Other assets |  |  |  | 18,904 |
Mortgage loans receivable |  |  |  | 24,661 |
Total Assets |  |  |  | $ | 1,464,183 |

|  | (in thousands)
As of December 31, 2019 |  | Multifamily | All Other | Total
Segment assets |  |  |  |
Property owned |  | $ | 1,572,529 |  | $ | 70,549 |  | $ | 1,643,078 |
Less accumulated depreciation |  | (319,318) |  | (29,804) |  | (349,122) |
Total property owned |  | $ | 1,253,211 |  | $ | 40,745 |  | $ | 1,293,956 |
Cash and cash equivalents |  |  |  | 26,579 |
Restricted cash |  |  |  | 19,538 |
Other assets |  |  |  | 34,829 |
Unimproved land |  |  |  | 1,376 |
Mortgage loans receivable |  |  |  | 16,140 |
Total Assets |  |  |  | $ | 1,392,418 |

NOTE 12 • RETIREMENT PLANS
We sponsor a defined contribution 401(k) plan to provide retirement benefits for employees that meet minimum employment criteria. We currently match, dollar for dollar, employee contributions to the 401(k) plan in an amount equal to up to 5.0% of the eligible wages of each participating employee. 401(k) matching contributions are fully vested when made. We recognized expense of approximately $875,000, $738,000, $476,000, and $838,000 in the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018, respectively.
F-30

Table of Contents
NOTE 13 • TRANSACTIONS WITH RELATED PARTIES
Transactions with BMO Capital Markets
We have an historical and ongoing relationship with BMO Capital Markets (“BMO”). On July 17, 2017, we engaged BMO to provide financial advisory services in connection with the proposed disposition of our healthcare property portfolio. A family member of Mark O. Decker, Jr., our President and Chief Executive Officer, is an employee of BMO and could have an indirect material interest in any such engagement and related transaction(s). The Board pre-approved the engagement of BMO. During the fiscal year ended April 30, 2018, we completed the disposition of 27 of our 28 healthcare properties and paid BMO a transaction fee of $1.8 million in connection with this engagement.
NOTE 14 • COMMITMENTS AND CONTINGENCIES
Legal Proceedings. We are involved in various lawsuits arising in the normal course of business. We believe that such matters will not have a material adverse effect on our consolidated financial statements.
Environmental Matters. It is generally our policy to obtain a Phase I environmental assessment of each property that we seek to acquire. Such assessments have not revealed, nor are we aware of, any environmental liabilities that we believe would have a material adverse effect on our financial position or results of operations. We own properties that contain or potentially contain (based on the age of the property) asbestos or lead. For certain of these properties, we estimated the fair value of the conditional asset retirement obligation and chose not to book a liability because the amounts involved were immaterial. With respect to certain other properties, we have not recorded any related asset retirement obligation as the fair value of the liability cannot be reasonably estimated due to insufficient information. We believe we do not have sufficient information to estimate the fair value of the asset retirement obligations for these properties because a settlement date or range of potential settlement dates has not been specified by others and, additionally, there are currently no plans or expectation of plans to demolish these properties or to undertake major renovations that would require removal of the asbestos, lead and/or underground storage tanks. These properties are expected to be maintained by repairs and maintenance activities that would not involve the removal of the asbestos, lead and/or underground storage tanks. Also, a need for renovations caused by resident changes, technology changes or other factors has not been identified.
Insurance. We carry insurance coverage on our properties in amounts and types that we believe are customarily obtained by owners of similar properties and are sufficient to achieve our risk management objectives.
Restrictions on Taxable Dispositions. Twenty of our apartment communities, consisting of approximately 4,032 homes, are subject to restrictions on taxable dispositions under agreements entered into with some of the sellers or contributors of the properties and are effective for varying periods. We do not believe that the agreements materially affect the conduct of our business or our decisions whether to dispose of restricted properties during the restriction period because we generally hold these and our other properties for investment purposes rather than for sale. Where we deem it to be in our shareholders’ best interests to dispose of such properties, we generally seek to structure sales of such properties as tax deferred transactions under Section 1031 of the Internal Revenue Code. Otherwise, we may be required to provide tax indemnification payments to the parties to these agreements.
Redemption Value of Units. Pursuant to a Unitholder’s exercise of its Exchange Rights, we have the right, in our sole discretion, to acquire such Units by either making a cash payment or acquiring the Units for our common shares, on a one-for-one basis. All Units receive the same per Unit cash distributions as the per share dividends paid on common shares. Units are redeemable for an amount of cash per Unit equal to the average of the daily market price of our common shares for the ten consecutive trading days immediately preceding the date of valuation of the Unit. As of December 31, 2020 and 2019, the aggregate redemption value of the then-outstanding Units owned by limited partners, as determined by the ten-day average market price for our common shares, was approximately $69.0 million and $76.6 million, respectively.
F-31

Table of Contents
NOTE 15 • QUARTERLY RESULTS OF CONSOLIDATED OPERATIONS (unaudited)

|  | (in thousands, except per share data)
QUARTER ENDED |  | March 31, 2020 | June 30, 2020 | September 30, 2020 | December 31, 2020
Revenues |  | $ | 44,406 |  | $ | 43,910 |  | $ | 44,138 |  | $ | 45,540 |
Net income (loss) attributable to controlling interests |  | $ | (7,007) |  | $ | (3,803) |  | $ | 19,629 |  | $ | (4,378) |
Net income (loss) available to common shareholders |  | $ | (8,439) |  | $ | (5,387) |  | $ | 18,021 |  | $ | (5,985) |
Net income (loss) per common share - basic |  | $ | (0.69) |  | $ | (0.44) |  | $ | 1.40 |  | $ | (0.46) |
Net income (loss) per common share - diluted |  | $ | (0.67) |  | $ | (0.44) |  | $ | 1.38 |  | $ | (0.46) |

|  | (in thousands, except per share data)
QUARTER ENDED |  | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019
Revenues |  | $ | 45,608 |  | $ | 46,934 |  | $ | 47,436 |  | $ | 45,777 |
Net income (loss) attributable to controlling interests |  | $ | (4,698) |  | $ | 3,113 |  | $ | 31,596 |  | $ | 48,658 |
Net income (loss) available to common shareholders |  | $ | (6,403) |  | $ | 1,407 |  | $ | 29,891 |  | $ | 46,953 |
Net income (loss) per common share - basic |  | $ | (0.54) |  | $ | 0.11 |  | $ | 2.57 |  | $ | 3.95 |
Net income (loss) per common share - diluted |  | $ | (0.54) |  | $ | 0.11 |  | $ | 2.54 |  | $ | 3.89 |

The above financial information is unaudited. In the opinion of management, all adjustments (which are of a normal recurring nature) have been included for a fair presentation.
NOTE 16 • SHARE BASED COMPENSATION
Share-based awards are provided to officers, non-officer employees, and trustees under our 2015 Incentive Plan approved by shareholders on September 15, 2015, as amended and restated on May 19, 2020 which allows for awards in the form of cash, unrestricted, and restricted common shares, stock options, stock appreciation rights, and restricted stock units ("RSUs") up to an aggregate of 425,000 shares over the ten-year period in which the plan will be in effect. Under our 2015 Incentive Plan, officers and non-officer employees may earn share awards under a long-term incentive plan, which is a forward-looking program that measures long-term performance over the stated performance period. These awards are payable to the extent deemed earned in shares. The terms of the long-term incentive awards granted under the program may vary from year to year. Through December 31, 2020, awards under the 2015 Incentive Plan consisted of restricted and unrestricted common shares, RSUs, and stock options. We account for forfeitures of restricted and unrestricted common shares and RSUs when they occur instead of estimating the forfeitures.
Year Ended December 31, 2020 LTIP Awards
Awards granted to trustees on May 19, 2020 consisted of 8,272 RSUs, which vest on May 19, 2021. All of these awards are classified as equity awards. We recognize compensation expense associated with the time-based awards ratably over the requisite service period. The fair value of share awards at grant date for non-employee trustees was approximately $533,000, $505,000, $348,000, and $389,000 for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018, respectively.
Awards granted to employees on March 13, 2020, consist of an aggregate of 8,806 time-based RSU awards. The time-based RSUs vest as to one-third of the shares on each of March 13, 2021, March 13, 2022, and March 13, 2023. Awards granted to employees on August 12, 2020 consist of 480 time-based RSUs, which vest on August 12, 2021. Awards granted to employees on November 19, 2020 and November 30, 2020 consist of 281 and 142 time-based RSUs, respectively. These awards vest as to 50% on each the first and second anniversary of the grant date. These awards are classified as equity awards.
Awards granted to employees on May 21, 2020, consist of 141,000 stock options which vest as to 25% on each of May 21, 2021, January 1, 2022, January 1, 2023 and January 1, 2024 and expire 10 years after grant date. The fair value of stock options was $7.255 per share and was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

Exercise price | $ | 66.36 |
Risk-free rate | 0.978 | %
Expected term | 6.25 years
Expected volatility | 21.08 | %
Dividend Yield | 3.974 | %

F-32

Table of Contents
Share-Based Compensation Expense
Total share-based compensation expense recognized in the consolidated financial statements for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018, for all share-based awards was as follows:

|  | (in thousands)
|  | Year Ended December 31, |  | Transition Period Ended |  | Fiscal Year Ended April 30,
|  | 2020 | 2019 |  | December 31, 2018 |  | 2018
Share based compensation expense |  | $ | 2,106 |  | $ | 1,905 |  |  | $ | 845 |  |  | $ | 1,587 |

Restricted Share Awards
The total fair value of time-based share grants vested during the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018 was $136,000, $310,000, $147,000, and $1.1 million, respectively.
The activity for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018, related to our restricted share awards was as follows:

|  | Awards with Service Conditions
|  |  | Wtd Avg Grant-
|  | Shares | Date Fair Value
Unvested at April 30, 2017 |  | 19,511 |  |
Granted |  | 9,136 |  | $ | 57.55 |
Vested |  | (18,545) |  | $ | 59.89 |
Forfeited |  | (202) |  | $ | 62.40 |
Unvested at April 30, 2018 |  | 9,900 |  |
Granted |  | — |  |
Vested |  | (2,709) |  | $ | 63.21 |
Forfeited |  | — |  |
Unvested at December 31, 2018 |  | 7,191 |  |
Granted |  | — |  |
Vested |  | (4,999) |  | $ | 61.06 |
Forfeited |  | — |  |
Unvested at December 31, 2019 |  | 2,192 |  | 59.20 |
Granted |  | — |  |
Vested |  | (2,192) |  | $ | 59.20 |
Forfeited |  | — |  |
Unvested at December 31, 2020 |  | — |  |

Restricted Stock Units
During the year ended December 31, 2020, we issued 9,709 time-based RSUs to employees and 8,272 to trustees. The RSUs to employees generally vest over a three-year period and the RSUs to trustees generally vest over a one-year period. The fair value of the time-based RSUs granted during the year ended December 31, 2020 was $1,227,000. The total compensation cost related to non-vested time-based RSUs not yet recognized is $644,000, which we expect to recognize over a weighted average period of 1.4 years.
The unamortized value of awards and RSUs with market conditions as of December 31, 2020, December 31, 2019, December 31, 2018, and April 30 2018, was approximately $487,000, $1.3 million, $1.1 million, and $448,000 respectively.
The activity for the years ended December 31, 2020 and 2019, the transition period ended December 31, 2018, and the fiscal year ended April 30, 2018, related to our RSUs was as follows:
F-33

Table of Contents

|  | RSUs with Service Conditions |  | RSUs with Market Conditions
|  |  | Wtd Avg Grant- |  |  | Wtd Avg Grant-
|  | Shares | Date Fair Value |  | Shares | Date Fair Value
Unvested at April 30, 2017 |  | — |  | — |  |  | — |  | — |
Granted |  | 6,994 |  | $ | 60.54 |  |  | 11,538 |  | $ | 70.90 |
Vested |  | (207) |  | $ | 50.30 |  |  | — |  | — |
Forfeited |  | — |  | — |  |  | — |  | — |
Unvested at April 30, 2018 |  | 6,787 |  | $ | 60.85 |  |  | 11,538 |  | $ | 70.90 |
Granted |  | 14,878 |  | $ | 53.60 |  |  | 15,461 |  | $ | 57.70 |
Vested |  | (2,943) |  | $ | 60.83 |  |  | — |  | — |
Forfeited |  | (462) |  | $ | 53.60 |  |  | (1,680) |  | $ | 70.90 |
Unvested at December 31, 2018 |  | 18,260 |  | $ | 55.13 |  |  | 25,319 |  | $ | 62.84 |
Granted |  | 16,084 |  | $ | 59.76 |  |  | 12,978 |  | $ | 79.49 |
Vested |  | (11,633) |  | $ | 55.35 |  |  | — |  | — |
Forfeited |  | (365) |  | $ | 51.73 |  |  | (475) |  | $ | 57.70 |
Unvested at December 31, 2019 |  | 22,346 |  | $ | 58.41 |  |  | 37,822 |  | $ | 68.62 |
Granted |  | 17,981 |  | $ | 68.25 |  |  | — |  | $ | — |
Vested |  | (14,991) |  | $ | 59.10 |  |  | (13,357) |  | $ | 74.68 |
Change in awards(1) |  | — |  | — |  |  | 4,436 |  | — |
Forfeited |  | (508) |  | $ | 62.99 |  |  | (1,907) |  | $ | 63.92 |
Unvested at December 31, 2020 |  | 24,828 |  | $ | 65.03 |  |  | 26,994 |  | $ | 67.87 |

(1)Represents the change in the number of restricted stock units earned at the end of the measurement period.
Stock Options
During the year ended December 31, 2020, we issued 141,000 stock options to employees. The stock options vest over a four-year period. The fair value of the stock options granted during the year ended December 31, 2020 was $7.255 per share. The total compensation costs related to non-vested stock options not yet recognized is $629,000, which we expect to recognize over a weighted average period of 3.0 years.
The stock option activity for the year ended December 31, 2020 was as follows:

|  | Number of Shares | Weighted Average Exercise Price
Outstanding at beginning of year |  | — |  | — |
Granted |  | 141,000 |  | $ | 66.36 |
Exercised |  | — |  | — |
Forfeited |  | (1,952) |  | $ | 66.36 |
Outstanding at end of year |  | 139,048 |  | $ | 66.36 |
Exercisable at end of year |  | — |  | — |

The intrinsic value of a stock option represents the amount by which the current price of the underlying stock exceeds the exercise price of the option. As of December 31, 2020, stock options outstanding had an aggregate intrinsic value of $595,000 with a weighted average remaining contractual term of 9.39 years.
NOTE 17 • SUBSEQUENT EVENTS
On January 6, 2021, we acquired Union Pointe Apartment Homes, a 256 home apartment community located in Longmont, Colorado, for an aggregate purchase price of $76.9 million.
On January 6, 2021, we also issued $50.0 million of 2.7% unsecured Series C notes due on June 6, 2030. In concert with the issuance, we amended and expanded our Note Purchase Private Shelf Agreement (the “Agreement”) with Prudential to increase the aggregate amount available under the agreement from $150.0 million to $225.0 million. After the close of the Series C Notes, we have $175.0 million outstanding with an additional $50.0 million of capacity remaining under the Agreement.
F-34

Table of Contents
CENTERSPACE AND SUBSIDIARIES
December 31, 2020
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  |  |  |  | Gross amount at which carried at |  |  | Life on which
|  | Initial Cost to Company |  | close of period |  |  | depreciation in
|  |  |  | Costs capitalized |  |  |  |  | Date of | latest income
|  |  | Buildings & | subsequent to |  | Buildings & |  | Accumulated | Construction | statement is
Description | Encumbrances(1) | Land | Improvements | acquisition | Land | Improvements | Total | Depreciation | or Acquisition | computed
Same-Store |  |  |  |  |  |  |  |  |  |  |
71 France - Edina, MN | $ | 53,324 |  | $ | 4,721 |  | $ | 61,762 |  | $ | 446 |  | $ | 4,801 |  | $ | 62,128 |  | $ | 66,929 |  | $ | (14,312) |  | 2016 | 30-37 | years
Alps Park - Rapid City, SD | — |  | 287 |  | 5,551 |  | 425 |  | 336 |  | 5,927 |  | 6,263 |  | (1,589) |  | 2013 | 30-37 | years
Arcata - Golden Valley, MN | — |  | 2,088 |  | 31,036 |  | 356 |  | 2,128 |  | 31,352 |  | 33,480 |  | (8,600) |  | 2015 | 30-37 | years
Ashland - Grand Forks, ND | 4,866 |  | 741 |  | 7,569 |  | 346 |  | 823 |  | 7,833 |  | 8,656 |  | (2,323) |  | 2012 | 30-37 | years
Avalon Cove - Rochester, MN | — |  | 1,616 |  | 34,074 |  | 646 |  | 1,808 |  | 34,528 |  | 36,336 |  | (5,927) |  | 2016 | 30-37 | years
Boulder Court - Eagan, MN | — |  | 1,067 |  | 5,498 |  | 3,305 |  | 1,576 |  | 8,294 |  | 9,870 |  | (4,429) |  | 2003 | 30-37 | years
Canyon Lake - Rapid City, SD | 2,508 |  | 305 |  | 3,958 |  | 2,266 |  | 420 |  | 6,109 |  | 6,529 |  | (3,208) |  | 2001 | 30-37 | years
Cardinal Point - Grand Forks, ND | — |  | 1,600 |  | 33,400 |  | 288 |  | 1,727 |  | 33,561 |  | 35,288 |  | (2,971) |  | 2013 | 30-37 | years
Cascade Shores - Rochester, MN | 11,400 |  | 1,585 |  | 16,710 |  | 149 |  | 1,587 |  | 16,857 |  | 18,444 |  | (2,967) |  | 2016 | 30-37 | years
Castlerock - Billings, MT | — |  | 736 |  | 4,864 |  | 2,538 |  | 1,045 |  | 7,093 |  | 8,138 |  | (4,549) |  | 1998 | 30-37 | years
Chateau - Minot, ND | — |  | 301 |  | 20,058 |  | 1,094 |  | 326 |  | 21,127 |  | 21,453 |  | (6,119) |  | 2013 | 30-37 | years
Cimarron Hills - Omaha, NE | 8,700 |  | 706 |  | 9,588 |  | 5,214 |  | 1,639 |  | 13,869 |  | 15,508 |  | (7,858) |  | 2001 | 30-37 | years
Colonial Villa - Burnsville, MN | — |  | 2,401 |  | 11,515 |  | 15,595 |  | 3,206 |  | 26,305 |  | 29,511 |  | (12,940) |  | 2003 | 30-37 | years
Colony - Lincoln, NE | 11,610 |  | 1,515 |  | 15,730 |  | 3,131 |  | 1,817 |  | 18,559 |  | 20,376 |  | (5,412) |  | 2012 | 30-37 | years
Commons and Landing at Southgate - Minot, ND | — |  | 5,945 |  | 47,512 |  | 2,059 |  | 6,424 |  | 49,092 |  | 55,516 |  | (14,012) |  | 2015 | 30-37 | years
Cottonwood - Bismarck, ND | — |  | 1,056 |  | 17,372 |  | 6,053 |  | 1,962 |  | 22,519 |  | 24,481 |  | (12,455) |  | 1997 | 30-37 | years
Country Meadows - Billings, MT | — |  | 491 |  | 7,809 |  | 1,845 |  | 599 |  | 9,546 |  | 10,145 |  | (5,858) |  | 1995 | 30-37 | years
Crystal Bay - Rochester, MN | — |  | 433 |  | 11,425 |  | 360 |  | 479 |  | 11,739 |  | 12,218 |  | (1,984) |  | 2016 | 30-37 | years
Cypress Court - St. Cloud, MN | 11,641 |  | 1,583 |  | 18,879 |  | 474 |  | 1,625 |  | 19,311 |  | 20,936 |  | (5,409) |  | 2012 | 30-37 | years
Deer Ridge - Jamestown, ND | — |  | 711 |  | 24,129 |  | 322 |  | 785 |  | 24,377 |  | 25,162 |  | (6,224) |  | 2013 | 30-37 | years
Dylan - Denver, CO | — |  | 12,155 |  | 77,215 |  | 1,030 |  | 12,241 |  | 78,159 |  | 90,400 |  | (8,205) |  | 2018 | 30 | years
Evergreen - Isanti, MN | — |  | 1,129 |  | 5,524 |  | 569 |  | 1,159 |  | 6,063 |  | 7,222 |  | (2,041) |  | 2008 | 30-37 | years
French Creek - Rochester, MN | — |  | 201 |  | 4,735 |  | 256 |  | 212 |  | 4,980 |  | 5,192 |  | (809) |  | 2016 | 30-37 | years
Gardens - Grand Forks, ND | — |  | 518 |  | 8,702 |  | 132 |  | 535 |  | 8,817 |  | 9,352 |  | (1,759) |  | 2015 | 30-37 | years
Grand Gateway - St. Cloud, MN | — |  | 814 |  | 7,086 |  | 2,064 |  | 970 |  | 8,994 |  | 9,964 |  | (3,480) |  | 2012 | 30-37 | years
GrandeVille at Cascade Lake - Rochester, MN | 36,000 |  | 5,003 |  | 50,363 |  | 2,089 |  | 5,188 |  | 52,267 |  | 57,455 |  | (10,304) |  | 2015 | 30-37 | years
Greenfield - Omaha, NE | — |  | 578 |  | 4,122 |  | 2,652 |  | 876 |  | 6,476 |  | 7,352 |  | (2,425) |  | 2007 | 30-37 | years
Heritage Manor - Rochester, MN | — |  | 403 |  | 6,968 |  | 3,741 |  | 790 |  | 10,322 |  | 11,112 |  | (6,243) |  | 1998 | 30-37 | years
Homestead Garden - Rapid City, SD | — |  | 655 |  | 14,139 |  | 540 |  | 792 |  | 14,542 |  | 15,334 |  | (3,427) |  | 2015 | 30-37 | years
Lakeside Village - Lincoln, NE | 11,489 |  | 1,215 |  | 15,837 |  | 1,850 |  | 1,476 |  | 17,426 |  | 18,902 |  | (5,230) |  | 2012 | 30-37 | years
Legacy - Grand Forks, ND | 13,072 |  | 1,362 |  | 21,727 |  | 11,044 |  | 2,474 |  | 31,659 |  | 34,133 |  | (18,730) |  | 1995-2005 | 30-37 | years
Legacy Heights - Bismarck, ND | — |  | 1,207 |  | 13,742 |  | 257 |  | 1,142 |  | 14,064 |  | 15,206 |  | (2,604) |  | 2015 | 30-37 | years
Meadows - Jamestown, ND | — |  | 590 |  | 4,519 |  | 2,087 |  | 730 |  | 6,466 |  | 7,196 |  | (3,788) |  | 1998 | 30-37 | years
Monticello Crossings - Monticello, MN | — |  | 1,734 |  | 30,136 |  | 376 |  | 1,951 |  | 30,295 |  | 32,246 |  | (5,407) |  | 2017 | 30-37 | years
Monticello Village - Monticello, MN | — |  | 490 |  | 3,756 |  | 1,234 |  | 655 |  | 4,825 |  | 5,480 |  | (2,434) |  | 2004 | 30-37 | years

F-35

Table of Contents
CENTERSPACE AND SUBSIDIARIES
December 31, 2020
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  |  |  |  | Gross amount at which carried at |  |  | Life on which
|  | Initial Cost to Company |  | close of period |  |  | depreciation in
|  |  |  | Costs capitalized |  |  |  |  | Date of | latest income
|  |  | Buildings & | subsequent to |  | Buildings & |  | Accumulated | Construction | statement is
Description | Encumbrances(1) | Land | Improvements | acquisition | Land | Improvements | Total | Depreciation | or Acquisition | computed
Northridge - Bismarck, ND | $ | — |  | $ | 884 |  | $ | 7,515 |  | $ | 278 |  | $ | 1,048 |  | $ | 7,629 |  | $ | 8,677 |  | $ | (1,641) |  | 2015 | 30-37 | years
Olympic Village - Billings, MT | — |  | 1,164 |  | 10,441 |  | 4,175 |  | 1,885 |  | 13,895 |  | 15,780 |  | (8,287) |  | 2000 | 30-37 | years
Olympik Village - Rochester, MN | — |  | 1,034 |  | 6,109 |  | 3,459 |  | 1,450 |  | 9,152 |  | 10,602 |  | (4,136) |  | 2005 | 30-37 | years
Oxbo - St Paul, MN | — |  | 5,809 |  | 51,586 |  | 214 |  | 5,822 |  | 51,787 |  | 57,609 |  | (7,107) |  | 2018 | 30 | years
Park Meadows - Waite Park, MN | — |  | 1,143 |  | 9,099 |  | 10,277 |  | 2,140 |  | 18,379 |  | 20,519 |  | (12,605) |  | 1997 | 30-37 | years
Park Place - Plymouth, MN | — |  | 10,609 |  | 80,781 |  | 10,433 |  | 10,819 |  | 91,004 |  | 101,823 |  | (11,303) |  | 2018 | 30 | years
Plaza - Minot, ND | — |  | 867 |  | 12,784 |  | 3,128 |  | 1,011 |  | 15,768 |  | 16,779 |  | (5,734) |  | 2009 | 30-37 | years
Pointe West - Rapid City, SD | — |  | 240 |  | 3,538 |  | 2,185 |  | 463 |  | 5,500 |  | 5,963 |  | (3,865) |  | 1994 | 30-37 | years
Ponds at Heritage Place - Sartell, MN | — |  | 395 |  | 4,564 |  | 510 |  | 419 |  | 5,050 |  | 5,469 |  | (1,539) |  | 2012 | 30-37 | years
Quarry Ridge - Rochester, MN | 24,057 |  | 2,254 |  | 30,024 |  | 2,356 |  | 2,412 |  | 32,222 |  | 34,634 |  | (10,969) |  | 2006 | 30-37 | years
Red 20 - Minneapolis, MN | 21,274 |  | 1,900 |  | 24,116 |  | 397 |  | 1,908 |  | 24,505 |  | 26,413 |  | (6,829) |  | 2015 | 30-37 | years
Regency Park Estates - St. Cloud, MN | 7,400 |  | 702 |  | 10,198 |  | 3,337 |  | 1,179 |  | 13,058 |  | 14,237 |  | (4,394) |  | 2011 | 30-37 | years
Rimrock West - Billings, MT | — |  | 330 |  | 3,489 |  | 2,157 |  | 568 |  | 5,408 |  | 5,976 |  | (3,250) |  | 1999 | 30-37 | years
River Ridge - Bismarck, ND | — |  | 576 |  | 24,670 |  | 1,092 |  | 922 |  | 25,416 |  | 26,338 |  | (8,025) |  | 2008 | 30-37 | years
Rocky Meadows - Billings, MT | — |  | 656 |  | 5,726 |  | 1,745 |  | 840 |  | 7,287 |  | 8,127 |  | (4,687) |  | 1995 | 30-37 | years
Rum River - Isanti, MN | 3,041 |  | 843 |  | 4,823 |  | 544 |  | 870 |  | 5,340 |  | 6,210 |  | (2,162) |  | 2007 | 30-37 | years
Silver Springs - Rapid City, SD | 1,997 |  | 215 |  | 3,007 |  | 890 |  | 273 |  | 3,839 |  | 4,112 |  | (958) |  | 2015 | 30-37 | years
South Pointe - Minot, ND | — |  | 550 |  | 9,548 |  | 5,990 |  | 1,489 |  | 14,599 |  | 16,088 |  | (10,311) |  | 1995 | 30-37 | years
Southpoint - Grand Forks, ND | — |  | 576 |  | 9,893 |  | 236 |  | 663 |  | 10,042 |  | 10,705 |  | (2,293) |  | 2013 | 30-37 | years
Sunset Trail - Rochester, MN | — |  | 336 |  | 12,814 |  | 3,560 |  | 826 |  | 15,884 |  | 16,710 |  | (9,024) |  | 1999 | 30-37 | years
Thomasbrook - Lincoln, NE | 13,100 |  | 600 |  | 10,306 |  | 5,686 |  | 1,710 |  | 14,882 |  | 16,592 |  | (8,563) |  | 1999 | 30-37 | years
Village Green - Rochester, MN | — |  | 234 |  | 2,296 |  | 1,083 |  | 361 |  | 3,252 |  | 3,613 |  | (1,682) |  | 2003 | 30-37 | years
West Stonehill - Waite Park, MN | 16,425 |  | 939 |  | 10,167 |  | 8,171 |  | 1,912 |  | 17,365 |  | 19,277 |  | (12,060) |  | 1995 | 30-37 | years
Westend - Denver, CO | — |  | 25,525 |  | 102,180 |  | 605 |  | 25,532 |  | 102,778 |  | 128,310 |  | (9,952) |  | 2018 | 30 | years
Whispering Ridge - Omaha, NE | 19,664 |  | 2,139 |  | 25,424 |  | 2,992 |  | 2,551 |  | 28,004 |  | 30,555 |  | (7,850) |  | 2012 | 30-37 | years
Winchester - Rochester, MN | — |  | 748 |  | 5,622 |  | 3,040 |  | 1,112 |  | 8,298 |  | 9,410 |  | (4,418) |  | 2003 | 30-37 | years
Woodridge - Rochester, MN | 5,202 |  | 370 |  | 6,028 |  | 5,498 |  | 761 |  | 11,135 |  | 11,896 |  | (6,266) |  | 1997 | 30-37 | years
Total Same-Store | $ | 276,770 |  | $ | 119,580 |  | $ | 1,143,758 |  | $ | 160,871 |  | $ | 137,250 |  | $ | 1,286,959 |  | $ | 1,424,209 |  | $ | (375,942) |  |  |  |
Non-Same-Store |  |  |  |  |  |  |  |  |  |  |
FreightYard Townhomes & Flats - Minneapolis, MN | — |  | 1,889 |  | 23,616 |  | 877 |  | 1,895 |  | 24,487 |  | 26,382 |  | (1,171) |  | 2019 | 30 | years
Ironwood - Minneapolis, MN | — |  | 2,165 |  | 36,874 |  | 84 |  | 2,167 |  | 36,956 |  | 39,123 |  | (1,187) |  | 2020 | 30 | years
Lugano at Cherry Creek - Denver, CO | — |  | 7,679 |  | 87,766 |  | 635 |  | 7,679 |  | 88,401 |  | 96,080 |  | (4,330) |  | 2019 | 30 | years
Parkhouse - Thornton, CO | — |  | 10,474 |  | 132,105 |  | 228 |  | 10,484 |  | 132,323 |  | 142,807 |  | (1,722) |  | 2020 | 30 | years
SouthFork Townhomes - Lakeville, MN | 21,675 |  | 3,502 |  | 40,153 |  | 7,122 |  | 3,583 |  | 47,194 |  | 50,777 |  | (3,638) |  | 2019 | 30 | years
Total Non-Same-Store | $ | 21,675 |  | $ | 25,709 |  | $ | 320,514 |  | $ | 8,946 |  | $ | 25,808 |  | $ | 329,361 |  | $ | 355,169 |  | $ | (12,048) |  |  |  |
Total Multifamily | $ | 298,445 |  | $ | 145,289 |  | $ | 1,464,272 |  | $ | 169,817 |  | $ | 163,058 |  | $ | 1,616,320 |  | $ | 1,779,378 |  | $ | (387,990) |  |  |  |

F-36

Table of Contents
CENTERSPACE AND SUBSIDIARIES
December 31, 2020
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  |  |  |  |  | Gross amount at which carried at |  |  | Life on which
|  |  | Initial Cost to Company |  | close of period |  |  | depreciation in
|  |  |  |  | Costs capitalized |  |  |  |  | Date of | latest income
|  |  |  | Buildings & | subsequent to |  | Buildings & |  | Accumulated | Construction | statement is
Description |  | Encumbrances(1) | Land | Improvements | acquisition | Land | Improvements | Total | Depreciation | or Acquisition | computed
Other - Mixed Use |  |  |  |  |  |  |  |  |  |  |  |
71 France - Edina, MN |  | — |  | $ | — |  | $ | 5,879 |  | $ | 867 |  | $ | — |  | $ | 6,746 |  | $ | 6,746 |  | $ | (1,151) |  | 2016 | 30-37 | years
Lugano at Cherry Creek - Denver, CO |  | — |  | — |  | 1,600 |  | 206 |  | — |  | 1,806 |  | 1,806 |  | (72) |  | 2019 | 30 | years
Oxbo - St Paul, MN |  | — |  | — |  | 3,472 |  | 54 |  | — |  | 3,526 |  | 3,526 |  | (436) |  | 2015 | 30 | years
Plaza - Minot, ND |  | — |  | 389 |  | 5,444 |  | 3,845 |  | 607 |  | 9,071 |  | 9,678 |  | (4,305) |  | 2009 | 30-37 | years
Red 20 - Minneapolis, MN |  | — |  | — |  | 2,525 |  | 419 |  | — |  | 2,944 |  | 2,944 |  | (683) |  | 2015 | 30-37 | years
Total Other - Mixed Use |  | — |  | $ | 389 |  | $ | 18,920 |  | $ | 5,391 |  | $ | 607 |  | $ | 24,093 |  | $ | 24,700 |  | $ | (6,647) |  |  |  |
Other - Commercial |  |  |  |  |  |  |  |  |  |  |  |
3100 10th St SW - Minot, ND |  | — |  | $ | 246 |  | $ | 1,866 |  | $ | (1) |  | $ | 246 |  | $ | 1,865 |  | $ | 2,111 |  | $ | (103) |  | 2019 | 30 | years
Minot IPS - Minot, ND |  | — |  | 416 |  | 5,952 |  | — |  | 416 |  | 5,952 |  | 6,368 |  | (4,509) |  | 2012 | 30-37 | years
Total Other - Commercial |  | — |  | $ | 662 |  | $ | 7,818 |  | $ | (1) |  | $ | 662 |  | $ | 7,817 |  | $ | 8,479 |  | $ | (4,612) |  |  |  |
Total |  | $ | 298,445 |  | $ | 146,340 |  | $ | 1,491,010 |  | $ | 175,207 |  | $ | 164,327 |  | $ | 1,648,230 |  | $ | 1,812,557 |  | $ | (399,249) |  |  |  |

(1)Amounts in this column are the mortgages payable balance as of December 31, 2020. These amounts do not include amounts owing under the Company's multi-bank line of credit, term loans, or unsecured senior notes.
F-37

Table of Contents
CENTERSPACE AND SUBSIDIARIES
December 31, 2020 and 2019
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)
Reconciliations of the carrying value of total property owned for the years ended December 31, 2020 and 2019 are as follows:

|  | (in thousands)
|  | Year Ended December 31, |  |
|  | 2020 | 2019 |  |
Balance at beginning of year |  | $ | 1,643,078 |  | $ | 1,627,636 |  |  |
Additions during year |  |  |  |  |
Multifamily and Other |  | 181,771 |  | 168,504 |  |  |
Improvements and Other |  | 27,460 |  | 21,868 |  |  |
|  | 1,852,309 |  | 1,818,008 |  |  |
Deductions during year |  |  |  |  |
Cost of real estate sold |  | (38,111) |  | (171,112) |  |  |
Other (1) |  | (1,641) |  | (3,818) |  |  |
Balance at close of year |  | $ | 1,812,557 |  | $ | 1,643,078 |  |  |

Reconciliations of accumulated depreciation/amortization for the years ended December 31, 2020 and 2019 are as follows:

|  | (in thousands)
|  | Year Ended December 31, |  |
|  | 2020 | 2019 |  |
Balance at beginning of year |  | $ | 349,122 |  | $ | 353,871 |  |  |
Additions during year |  |  |  |  |
Provisions for depreciation |  | 72,051 |  | 71,787 |  |  |
Deductions during year |  |  |  |  |
Accumulated depreciation on real estate sold or classified as held for sale |  | (21,440) |  | (72,758) |  |  |
Write down of asset and accumulated depreciation on impaired assets |  | — |  | — |  |  |
Other (1) |  | (484) |  | (3,778) |  |  |
Balance at close of year |  | $ | 399,249 |  | $ | 349,122 |  |  |

F-38

Table of Contents
CENTERSPACE AND SUBSIDIARIES
December 31, 2020 and 2019
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)
Reconciliations of unimproved land for the years ended December 31, 2020 and 2019 are as follows:

|  | (in thousands)
|  | Year Ended December 31, |  |
|  | 2020 | 2019 |  |
Balance at beginning of year |  | $ | 1,376 |  | $ | 5,301 |  |  |
Deductions during year |  |  |  |  |
Cost of real estate sold |  | (1,376) |  | (3,925) |  |  |
Balance at close of year |  | — |  | 1,376 |  |  |
Total real estate investments, excluding mortgage notes receivable (2) |  | $ | 1,413,308 |  | $ | 1,295,332 |  |  |

(1)Consists of miscellaneous disposed assets.
(2)The net basis, including held for sale properties, for Federal Income Tax purposes was $1.4 billion and $1.3 billion at December 31, 2020 and December 31, 2019, respectively.
F-39