EX-99.1 2 centerspace093022exhibit991.htm EX-99.1 Document

Exhibit 99.1
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Earnings Release
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Centerspace Reports Third Quarter 2022 Financial Results and Updates Financial Outlook
MINNEAPOLIS, MN, October 31, 2022 – Centerspace (NYSE: CSR) announced today its financial and operating results for the three and nine months ended September 30, 2022. The tables below show Net Income (Loss), Funds from Operations (“FFO”)1, and Core FFO1, all on a per common share basis, for the three and nine months ended September 30, 2022; Same-Store Revenues, Expenses, and Net Operating Income (“NOI”)1 over comparable periods; and Same-Store Weighted-Average Occupancy for each of the three months ended September 30, 2022, June 30, 2022, and September 30, 2021.
 Three Months Ended September 30,Nine Months Ended September 30,
Per Common Share2022202120222021
Net income (loss) - diluted$(0.14)$(0.79)$(1.11)$0.12 
FFO - diluted$1.13 $0.60 $3.16 $2.44 
Core FFO - diluted$1.15 $0.98 $3.25 $2.91 
 Year-Over-Year
Comparison		Sequential
Comparison		YTD Comparison
Same-Store ResultsQ3 2022 vs. Q3 2021Q3 2022 vs. Q2 20222022 vs. 2021
Revenues11.1%2.8%10.4%
Expenses10.6%3.5%10.7%
NOI11.4%2.4%10.3%
Three months ended
Same-Store ResultsSeptember 30, 2022June 30, 2022September 30, 2021
Weighted Average Occupancy94.5%94.8%94.3%
(1)NOI, FFO, Core FFO, and same-store results are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to “Non-GAAP Financial Measures and Reconciliations” below.
Highlights
•Net Loss was $0.14 per diluted share for the third quarter of 2022, compared to Net loss of $0.79 per diluted share for the same period of 2021;
•Core FFO per diluted share increased 17.3% to $1.15 for the three months ended September 30, 2022, compared to $0.98 for the three months ended September 30, 2021;
•Same-store revenues increased by 11.1% for the third quarter of 2022 compared to the third quarter of 2021, driving an 11.4% increase in NOI compared to the same period of the prior year; and
•Revised 2022 financial outlook, our guidance range for net loss per share is $0.50 to $0.41 per diluted share. Our same-store NOI guidance for 2022 is 9.75% to 10.75%. Although we increased the mid-point of our revenue guidance for the same-store portfolio, persistent cost pressures were higher than we previously anticipated. We also experienced a higher than usual volume of noncontrollable unreimbursable losses across the portfolio, prompting us to increase our expense growth projections for both the same-store and non-same-store properties, thereby lowering our total NOI projections. As a result, our Core FFO guidance range is now $4.42 to $4.50 per diluted share. In addition to the impact of NOI, the acquisition of Lyra Apartments at the end of the third quarter of 2022 is expected to result in a reduction of $0.02 per share in the fourth quarter of 2022 relative to prior projections. Despite the near term dilution, we believe the acquisition of Lyra Apartments improves our overall portfolio and earnings quality, as well as continues our growth in Denver. For additional information, see S-17 of the Supplemental Financial and Operating Data for the quarter ended September 30, 2022 included at the end of this release.
Acquisitions
On September 30, 2022, we acquired Lyra Apartments, a 215 home apartment community located in Centennial, Colorado for $95.0 million.
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Subsequent Events
Through October 31, 2022, Centerspace repurchased 426,773 common shares for total consideration of $28.7 million and an average of $67.25 per share.
Balance Sheet
At the end of the third quarter, Centerspace had $99.5 million of total liquidity on its balance sheet, consisting of $84.5 million available under the lines of credit and cash and cash equivalents of $15.0 million.
Revised 2022 Financial Outlook
Centerspace revised its 2022 financial outlook. For additional information, see S-17 of the Supplemental Financial and Operating Data for the quarter ended September 30, 2022 included at the end of this release. These ranges should be considered in their entirety. The table below reflects the revised outlook.
Previous Outlook for 2022Updated Outlook for 2022
LowHighLowHigh
Net income (loss) per Share – diluted$(0.31)$(0.14)$(0.50)$(0.41)
Same-Store Revenue9.00 %10.50 %9.75 %10.25 %
Same-Store Expenses7.50 %8.50 %9.50 %10.00 %
Same-Store NOI10.00 %12.00 %9.75 %10.75 %
FFO per Share – diluted$4.32 $4.49 $4.30 $4.39 
Core FFO per Share – diluted$4.45 $4.61 $4.42 $4.50 
Upcoming Events
Centerspace is scheduled to participate in the upcoming National Association of Real Estate Investment Trusts (“Nareit”) REITWorld 2022 Annual Conference which will be held in San Francisco, California November 15-16.
Centerspace is scheduled to participate in Jefferies 2022 Real Estate Conference which will be held in Miami, Florida December 14-15.
Earnings Call
Live webcast and replay:  https://ir.centerspacehomes.com
  
Live Conference CallConference Call Replay
Tuesday, November 1, 2022, at 10:00 AM ETReplay available until November 15, 2022
USA Toll Free Number1-844-200-6205USA Toll Free Number1-866-813-9403
International Toll Free Number1-929-526-1599International Toll Free Number44-204-525-0658
Canada Toll Free Number1-833-950-0062Canada Toll Free Number1-226-828-7578
Conference Number305489Conference Number825680
Supplemental Information
Supplemental Operating and Financial Data for the quarter ended September 30, 2022 included herein (“Supplemental Information”), is available in the Investors section on Centerspace’s website at www.centerspacehomes.com or by calling Investor Relations at 701-837-7104. Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined and reconciled in the Supplemental Financial and Operating Data, which accompanies this earnings release.  
About Centerspace
Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of September 30, 2022, Centerspace owned interests in 84 apartment communities consisting of 15,064 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for 2021 by the Minneapolis Star Tribune. For more information, please visit www.centerspacehomes.com.
Forward-Looking Statements
Certain statements in this press release and the accompanying Supplemental Operating and Financial Data are based on the company's current expectations and assumptions, and are “forward-looking statements” within the meaning of Section 27A of
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the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial conditions, or plans expressed or implied by the forward-looking statements. Although the company believes the expectations reflected in its forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be achieved. Such risks, uncertainties, and other factors that might cause such differences include, but are not limited to those risks and uncertainties detailed from time to time in Centerspace's filings with the Securities and Exchange Commission, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” contained in its Annual Report on Form 10-K for the year ended December 31, 2021, in its subsequent quarterly reports on Form 10-Q, and in other public reports. The company assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.
Contact Information
Investor Relations
Joe McComish
Phone: 701-837-7104
IR@centerspacehomes.com
Marketing & Media
Kelly Weber
Phone: 701-837-7104
kweber@centerspacehomes.com
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Supplemental Financial and Operating Data
Table of Contents
September 30, 2022


Common Share Data (NYSE: CSR)
 3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
 20222022202220212021
High closing price$89.71 $103.17 $108.27 $111.26 $105.42 
Low closing price$65.85 $76.65 $89.01 $96.58 $78.42 
Average closing price$79.40 $87.61 $97.15 $103.29 $94.10 
Closing price at end of quarter$67.32 $81.55 $98.12 $110.90 $94.50 
Common share distributions – annualized$2.92 $2.92 $2.92 $2.88 $2.88 
Closing dividend yield – annualized4.3 %3.6 %3.0 %2.6 %3.1 %
Closing common shares outstanding (thousands)
15,376 15,373 15,365 15,016 14,281 
Closing limited partnership units outstanding (thousands)
980 995 997 832 845 
Closing Series E preferred units outstanding, as converted (thousands)
2,186 2,186 2,186 2,186 2,186 
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)
$1,248,247 $1,513,079 $1,819,930 $1,999,971 $1,635,984 

S-1


CENTERSPACE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands)
 Three Months EndedNine Months Ended
 9/30/20226/30/20223/31/202212/31/20219/30/20219/30/20229/30/2021
REVENUE$65,438 $63,116 $60,314 $57,988 $50,413 $188,868 $143,717 
EXPENSES
Property operating expenses, excluding real estate taxes20,290 19,011 19,014 16,852 14,434 58,315 40,901 
Real estate taxes7,039 7,205 6,859 6,654 5,916 21,103 17,450 
Property management expense2,563 2,721 2,253 2,697 2,203 7,537 6,055 
Casualty (gain) loss276 382 598 280 (10)1,256 64 
Depreciation and amortization23,720 24,768 31,001 30,418 22,447 79,489 61,747 
General and administrative expenses4,519 5,221 4,500 4,231 4,279 14,240 11,982 
TOTAL EXPENSES$58,407 $59,308 $64,225 $61,132 $49,269 $181,940 $138,199 
Gain (loss) on sale of real estate and other investments— 27 — 678 — 27 26,840 
Operating income (loss)7,031 3,835 (3,911)(2,466)1,144 6,955 32,358 
Interest expense(7,871)(7,561)(7,715)(7,456)(7,302)(23,147)(21,622)
Interest and other income (loss)70 (17)1,063 1,117 (5,082)1,116 (4,032)
Net income (loss)$(770)$(3,743)$(10,563)$(8,805)$(11,240)$(15,076)$6,704 
Dividends to Series D preferred unitholders(160)(160)(160)(160)(160)(480)(480)
Net (income) loss attributable to noncontrolling interest – Operating Partnership and Series E preferred units439 950 2,157 1,793 1,930 3,546 1,013 
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities(32)(38)(23)(36)(22)(93)(58)
Net income (loss) attributable to controlling interests(523)(2,991)(8,589)(7,208)(9,492)(12,103)7,179 
Dividends to preferred shareholders(1,607)(1,607)(1,607)(1,607)(1,607)(4,821)(4,821)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS$(2,130)$(4,598)$(10,196)$(8,815)$(11,099)$(16,924)$2,358 
Per Share Data - Basic
Net income (loss) per common share – basic$(0.14)$(0.30)$(0.68)$(0.61)$(0.79)$(1.11)$0.17 
Per Share Data - Diluted
Net income (loss) per common share – diluted$(0.14)$(0.30)$(0.68)$(0.61)$(0.79)$(1.11)$0.12 
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CENTERSPACE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)
9/30/20226/30/20223/31/202212/31/20219/30/2021
ASSETS
Real estate investments
Property owned$2,513,470 $2,401,427 $2,390,952 $2,271,170 $2,203,606 
Less accumulated depreciation(511,000)(487,834)(465,752)(443,592)(426,926)
2,002,470 1,913,593 1,925,200 1,827,578 1,776,680 
Mortgage loans receivable— — — 43,276 42,160 
Total real estate investments2,002,470 1,913,593 1,925,200 1,870,854 1,818,840 
Cash and cash equivalents14,957 13,156 13,313 31,267 20,816 
Restricted cash1,417 1,914 2,409 7,358 2,376 
Other assets19,742 18,950 24,651 30,582 34,919 
TOTAL ASSETS$2,038,586 $1,947,613 $1,965,573 $1,940,061 $1,876,951 
LIABILITIES, MEZZANINE EQUITY, AND EQUITY
LIABILITIES
Accounts payable and accrued expenses$58,322 $48,077 $50,360 $62,403 $58,092 
Revolving lines of credit171,500 73,000 46,000 76,000 57,000 
Notes payable, net of loan costs299,388 299,374 299,359 299,344 299,454 
Mortgages payable, net of loan costs496,530 497,917 521,536 480,703 489,140 
TOTAL LIABILITIES$1,025,740 $918,368 $917,255 $918,450 $903,686 
SERIES D PREFERRED UNITS$16,560 $18,627 $22,412 $25,331 $21,585 
EQUITY
Series C Preferred Shares of Beneficial Interest93,530 93,530 93,530 93,530 93,530 
Common Shares of Beneficial Interest1,209,732 1,207,849 1,203,685 1,157,255 1,092,130 
Accumulated distributions in excess of net income(524,905)(511,552)(495,732)(474,318)(454,691)
Accumulated other comprehensive income (loss)(2,158)(2,362)(2,550)(4,435)(5,784)
Total shareholders’ equity$776,199 $787,465 $798,933 $772,032 $725,185 
Noncontrolling interests – Operating Partnership and Series E preferred units219,466 222,528 226,302 223,600 225,850 
Noncontrolling interests – consolidated real estate entities621 625 671 648 645 
TOTAL EQUITY$996,286 $1,010,618 $1,025,906 $996,280 $951,680 
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY$2,038,586 $1,947,613 $1,965,573 $1,940,061 $1,876,951 
S-3

CENTERSPACE
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (unaudited)
This release contains certain non-GAAP financial measures. The non-GAAP financial measures should not be considered a substitute for operating results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The definitions and calculations of these non-GAAP financial measures, as calculated by us, may not be comparable to non-GAAP financial measures reported by other REITs that do not define each of the non-GAAP financial measures exactly as Centerspace does.
The company provides certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or in service for substantially all of the periods being compared, and, in the case of newly-constructed properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, Centerspace determines the composition of its same-store pool for that year as well as adjusts the previous year, which allows us to evaluate full period-over-period operating comparisons for existing apartment communities and their contribution to net income. The company believes that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of its communities are performing year-over-year. Centerspace uses this measure to assess whether or not the company has been successful in increasing NOI, renewing the leases on existing residents, controlling operating costs, and making prudent capital improvements.
Reconciliation of Operating Income (Loss) to Net Operating Income
Net operating income, or NOI, is a non-GAAP financial measure which the company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance.
 (in thousands, except percentages)
 Three Months EndedSequentialYear-Over-Year
 9/30/20226/30/20229/30/2021$ Change% Change$ Change% Change
Operating income (loss)$7,031 $3,835 $1,144 $3,196 83.3 %$5,887 514.6 %
Adjustments:
Property management expenses2,563 2,721 2,203 (158)(5.8)%360 16.3 %
Casualty (gain) loss276 382 (10)(106)(27.7)%286 *
Depreciation and amortization23,720 24,768 22,447 (1,048)(4.2)%1,273 5.7 %
General and administrative expenses4,519 5,221 4,279 (702)(13.4)%240 5.6 %
(Gain) loss on sale of real estate and other investments— (27)— 27 (100.0)%— — 
Net operating income$38,109 $36,900 $30,063 $1,209 3.3 %$8,046 26.8 %
Revenue
Same-store$50,253 $48,867 $45,252 $1,386 2.8 %$5,001 11.1 %
Non-same-store14,151 13,334 3,836 817 6.1 %10,315 268.9 %
Other properties1,034 915 848 119 13.0 %186 21.9 %
Dispositions— — 477 — — (477)(100.0)%
Total65,438 63,116 50,413 2,322 3.7 %15,025 29.8 %
Property operating expenses, including real estate taxes
Same-store20,389 19,700 18,434 689 3.5 %1,955 10.6 %
Non-same-store6,620 6,286 1,632 334 5.3 %4,988 305.6 %
Other properties317 230 287 87 37.8 %30 10.5 %
Dispositions3 — (3)3 N/A6 *
Total27,329 26,216 20,350 1,113 4.2 %6,979 34.3 %
Net operating income
Same-store29,864 29,167 26,818 697 2.4 %3,046 11.4 %
Non-same-store7,531 7,048 2,204 483 6.9 %5,327 241.7 %
Other properties717 685 561 32 4.7 %156 27.8 %
Dispositions(3)— 480 (3)— (483)(100.6)%
Total$38,109 $36,900 $30,063 $1,209 3.3 %$8,046 26.8 %
* Not a meaningful percentage
S-4

(in thousands, except percentages)
Nine Months Ended September 30,
20222021$ Change% Change
Operating income (loss)$6,955 $32,358 $(25,403)(78.5)%
Adjustments:
Property management expenses7,537 6,055 1,482 24.5 %
Casualty (gain) loss1,256 64 1,192 *
Depreciation and amortization79,489 61,747 17,742 28.7 %
General and administrative expenses14,240 11,982 2,258 18.8 %
(Gain) loss on sale of real estate and other investments(27)(26,840)26,813 (99.9)%
Net operating income$109,450 $85,366 $24,084 28.2 %
Revenue
Same-store$146,010 $132,208 $13,802 10.4 %
Non-same-store39,992 6,079 33,913 557.9 %
Other properties2,866 2,180 686 31.5 %
Dispositions— 3,250 (3,250)(100.0)%
Total188,868 143,717 45,151 31.4 %
Property operating expenses, including real estate taxes
Same-store59,305 53,574 5,731 10.7 %
Non-same-store19,234 2,333 16,901 724.4 %
Other properties876 808 68 8.4 %
Dispositions3 1,636 (1,633)(99.8)%
Total79,418 58,351 21,067 36.1 %
Net operating income
Same-store86,705 78,634 8,071 10.3 %
Non-same-store20,758 3,746 17,012 454.1 %
Other properties1,990 1,372 618 45.0 %
Dispositions(3)1,614 (1,617)(100.2)%
Total$109,450 $85,366 $24,084 28.2 %
* Not a meaningful percentage

S-5

Reconciliation of Same-Store Controllable Expenses to Total Property Operating Expenses, Including Real Estate Taxes
Same-store controllable expenses exclude real estate taxes and insurance, in order to provide a measure of expenses that are within management's control, and is used for the purposes of budgeting, business planning, and performance evaluation. This is a non-GAAP financial measure and should not be considered an alternative to total expenses or total property operating expenses.
 (in thousands, except percentages)
 Three Months Ended September 30,Nine Months Ended September 30,
 20222021$ Change% Change20222021$ Change% Change
Controllable expenses
On-site compensation(1)
$4,985 $4,820 $165 3.4 %$14,963 $14,021 $942 6.7 %
Repairs and maintenance3,887 2,692 1,195 44.4 %9,514 7,421 2,093 28.2 %
Utilities3,408 3,135 273 8.7 %10,443 8,813 1,630 18.5 %
Administrative and marketing1,174 1,052 122 11.6 %3,280 2,908 372 12.8 %
Total$13,454 $11,699 $1,755 15.0 %$38,200 $33,163 $5,037 15.2 %
Non-controllable expenses
Real estate taxes$5,310 $5,301 $9 0.2 %$16,073 $16,042 $31 0.2 %
Insurance1,625 1,434 191 13.3 %5,032 4,369 663 15.2 %
Total$6,935 $6,735 $200 3.0 %$21,105 $20,411 $694 3.4 %
Property operating expenses, including real estate taxes - non-same-store$6,620 $1,632 $4,988 305.6 %$19,234 $2,333 $16,901 724.4 %
Property operating expenses, including real estate taxes - other properties317 287 30 10.5 %876 808 68 8.4 %
Property operating expenses, including real estate taxes - dispositions3 (3)6 (200.0)%3 1,636 (1,633)(99.8)%
Total property operating expenses, including real estate taxes$27,329 $20,350 $6,979 34.3 %$79,418 $58,351 $21,067 36.1 %
(1)On-site compensation for administration, leasing, and maintenance personnel.
Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations
Centerspace believes that FFO, which is a non-GAAP financial measure used as a standard supplemental measure for equity real estate investment trusts, is helpful to investors in understanding its operating performance, primarily because its calculation does not assume that the value of real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation.
Centerspace uses the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding:
•depreciation and amortization related to real estate;
•gains and losses from the sale of certain real estate assets; and
•impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.
The exclusion in Nareit’s definition of FFO of gains and losses from the sale of real estate assets and impairment write-downs helps to identify the operating results of the long-term assets that form the base of the company's investments, and assists management and investors in comparing those operating results between periods.
Due to the limitations of the Nareit FFO definition, Centerspace has made certain interpretations in applying this definition. The company believes that all such interpretations not specifically identified in the Nareit definition are consistent with this definition. Nareit’s FFO White Paper 2018 Restatement clarified that impairment write-downs of land related to a REIT’s main business are excluded from FFO and a REIT has the option to exclude impairment write-downs of assets that are incidental to its main business.
While FFO is widely used by Centerspace as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO in the same way. Accordingly, FFO presented here is not necessarily comparable to FFO
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presented by other real estate companies. FFO should not be considered as an alternative to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash flow needs, including the ability to service indebtedness or make distributions to shareholders.
Core Funds from Operations (“Core FFO”) is FFO as adjusted for non-routine items or items not considered core to business operations. By further adjusting for items that are not considered part of core business operations, the company believes that Core FFO provides investors with additional information to compare core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income, or any other GAAP measurement of performance, but rather should be considered an additional supplemental measure. Core FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund the company's cash needs, including its ability to service indebtedness or make distributions to shareholders. Core FFO is a non-GAAP and non-standardized financial measure that may be calculated differently by other REITs and should not be considered a substitute for operating results determined in accordance with GAAP.
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(in thousands, except per share amounts)
Three Months EndedNine Months Ended
9/30/20226/30/20223/31/202212/31/20219/30/20219/30/20229/30/2021
Funds From Operations     
Net income (loss) available to common shareholders$(2,130)$(4,598)$(10,196)$(8,815)$(11,099)$(16,924)$2,358 
Adjustments:
Noncontrolling interests – Operating Partnership and Series E preferred units(439)(950)(2,157)(1,793)(1,930)(3,546)(1,013)
Depreciation and amortization23,720 24,768 31,001 30,418 22,447 79,489 61,747 
Less depreciation – non real estate(94)(101)(101)(101)(80)(296)(265)
Less depreciation – partially owned entities(18)(7)(21)(21)(24)(46)(72)
(Gain) loss on sale of real estate and other investments— (27)— (678)— (27)(26,840)
FFO applicable to common shares and Units$21,039 $19,085 $18,526 $19,010 $9,314 $58,650 $35,915 
Adjustments to Core FFO:
Non-cash casualty (gain) loss46 163 25 — — 234 — 
Loss on extinguishment of debt— 5 — 2 530 5 533 
Technology implementation costs(1)
234 447 103 535 625 784 1,485 
Commercial lease termination proceeds— — — — (450)— (450)
Acquisition related costs— — — 90 140 — 140 
Interest rate swap termination, amortization, and mark-to-market204 205 (613)(411)5,353 (204)5,353 
Amortization of assumed debt(116)(116)(115)(26)(27)(347)(27)
Pursuit costs38 1,127 — — — 1,165 — 
Other miscellaneous items17 100 (4)(61)(3)113 (3)
Core FFO applicable to common shares and Units$21,462 $21,016 $17,922 $19,139 $15,482 $60,400 $42,946 
Funds from operations applicable to common shares and Units$21,039 $19,085 $18,526 $19,010 $9,314 $58,650 $35,915 
Dividends to preferred unitholders160 160 160 160 160 480 480 
Funds from operations applicable to common shares and Units - diluted$21,199 $19,245 $18,686 $19,170 $9,474 $59,130 $36,395 
Core funds from operations applicable to common shares and Units$21,462 $21,016 $17,922 $19,139 $15,482 $60,400 $42,946 
Dividends to preferred unitholders160 160 160 160 160 480 480 
Core funds from operations applicable to common shares and Units - diluted$21,622 $21,176 $18,082 $19,299 $15,642 $60,880 $43,426 
Per Share Data
Net income (loss) per share and Unit - diluted$(0.14)$(0.30)$(0.68)$(0.61)$(0.81)$(1.11)$0.12 
FFO per share and Unit - diluted$1.13 $1.02 $1.01 $1.07 $0.60 $3.16 $2.44 
Core FFO per share and Unit - diluted$1.15 $1.12 $0.98 $1.08 $0.98 $3.25 $2.91 
Weighted average shares - basic15,373 15,369 15,097 14,541 14,065 15,280 13,501 
Effect of redeemable operating partnership units984 995 965 838 865 980 917 
Effect of Series D preferred units228 228 228 228 228 228 228 
Effect of Series E preferred units2,186 2,186 2,186 2,186 705 2,186 239 
Effect of dilutive restricted stock units and stock options30 48 66 75 59 48 32 
Weighted average shares and Units - diluted18,801 18,826 18,542 17,868 15,922 18,722 14,917 
(1)Costs are related to a two-year implementation.
S-8

Reconciliation of Net Income (Loss) Available to Controlling Interests to Adjusted EBITDA
Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain/loss on sale of real estate and other investments, impairment of real estate investments, gain/loss on extinguishment of debt, gain/loss from involuntary conversion; and other non-routine items or items not considered core to business operations. The company considers Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, the cost of debt, or non-operating gains and losses. Adjusted EBITDA is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP.
(in thousands)
Three Months EndedNine Months Ended
9/30/20226/30/20223/31/202212/31/20219/30/20219/30/20229/30/2021
Adjusted EBITDA
Net income (loss) available to controlling interests$(523)$(2,991)$(8,589)$(7,208)$(9,492)$(12,103)$7,179 
Adjustments: 
Dividends to Series D preferred unitholders160 160 160 160 160 480 480 
Noncontrolling interests – Operating Partnership and Series E preferred units(439)(950)(2,157)(1,793)(1,930)(3,546)(1,013)
Income (loss) before noncontrolling interests – Operating Partnership and Series E preferred units$(802)$(3,781)$(10,586)$(8,841)$(11,262)$(15,169)$6,646 
Adjustments:  
Interest expense7,856 7,547 7,700 7,440 7,287 23,103 21,578 
Loss on extinguishment of debt— 5 — 2 530 5 533 
Depreciation and amortization related to real estate investments23,699 24,759 30,980 30,397 22,423 79,438 61,676 
Non-cash casualty (gain) loss 46 163 25 — — 234 — 
Interest income(82)(74)(464)(644)(769)(620)(1,759)
(Gain) loss on sale of real estate and other investments— (27)— (678)— (27)(26,840)
Technology implementation costs234 447 103 534 625 784 1,486 
Commercial lease termination proceeds— — — — (450)— (450)
Acquisition related costs— — — 90 140 — 140 
Interest rate swap termination and mark-to-market— 18 (582)(359)5,361 (564)5,361 
Pursuit costs38 1,127 — — — 1,165 — 
Other miscellaneous items17 100 (4)(61)(3)113 (3)
Adjusted EBITDA$31,006 $30,284 $27,172 $27,880 $23,882 $88,462 $68,368 

S-9


CENTERSPACE
DEBT ANALYSIS
(in thousands)
Debt Maturity Schedule
Annual Expirations
Future Maturities of Debt
Secured Fixed
Debt		Unsecured Fixed
Debt		Unsecured Variable DebtTotal
Debt		% of
Total Debt
Weighted
Average Interest Rate(1)
2022 (remainder)$— $— $— $— — — 
202341,722 — — 41,722 4.3 %4.02 %
2024— — — — — — 
202531,490 — 171,500 202,990 20.9 %4.06 %
202652,395 — — 52,395 5.4 %3.73 %
Thereafter374,199 300,000 — 674,199 69.4 %3.21 %
Total debt$499,806 $300,000 $171,500 $971,306 100.0 %3.45 %
(1)Weighted average interest rate of debt that matures during the year.

9/30/20226/30/20223/31/202212/31/20219/30/2021
Debt Balances Outstanding     
Secured fixed rate - other mortgages$300,956 $302,360 $326,113 $284,934 $293,547 
Secured fixed rate - Fannie Mae credit facility198,850 198,850 198,850 198,850 198,850 
Unsecured fixed rate line of credit(1)
— — — 75,000 57,000 
Unsecured variable rate line of credit171,500 73,000 46,000 1,000 — 
Unsecured senior notes300,000 300,000 300,000 300,000 300,000 
Debt total$971,306 $874,210 $870,963 $859,784 $849,397 
Other mortgages rate3.85 %3.85 %3.85 %3.81 %3.83 %
Fannie Mae Credit Facility rate2.78 %2.78 %2.78 %2.78 %2.78 %
Lines of credit rate (rate with swap)(1)
4.13 %3.04 %2.56 %4.22 %2.79 %
Senior notes rate3.12 %3.12 %3.12 %3.12 %3.12 %
Total debt3.45 %3.27 %3.29 %3.26 %3.23 %
(1)The current rate on our line of credit is LIBOR plus 150 basis points. The LIBOR exposure on the line of credit was hedged using an interest rate swap with a notional of $75.0 million and a fixed rate of 2.81% which was terminated in February 2022.

S-10

CENTERSPACE 
CAPITAL ANALYSIS 
(in thousands, except per share and unit amounts)
Three Months Ended
9/30/20226/30/20223/31/202212/31/20219/30/2021
Equity Capitalization
Common shares outstanding15,376 15,373 15,365 15,016 14,281 
Operating partnership units outstanding980 995 997 832 845 
Series E preferred units (as converted)2,186 2,186 2,186 2,186 2,186 
Total common shares and units outstanding18,542 18,554 18,548 18,034 17,312 
Market price per common share (closing price at end of period)$67.32 $81.55 $98.12 $110.90 $94.50 
Equity capitalization-common shares and units$1,248,247 $1,513,079 $1,819,930 $1,999,971 $1,635,984 
Recorded book value of preferred shares$93,530 $93,530 $93,530 $93,530 $93,530 
Total equity capitalization$1,341,777 $1,606,609 $1,913,460 $2,093,501 $1,729,514 
Series D Preferred Units$16,560 $18,627 $22,412 $25,331 $21,585 
Debt Capitalization
Total debt$971,306 $874,210 $870,963 $859,784 $849,397 
Total capitalization$2,329,643 $2,499,446 $2,806,835 $2,978,616 $2,600,496 
Total debt to total capitalization(1)
41.7 %35.0 %31.0 %28.9 %32.7 %
(1)Total debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet, market value of common shares, operating partnership units, and the as converted Series E preferred units, and book value of Series C preferred shares and Series D preferred units outstanding at the end of the period.

Three Months EndedNine Months Ended
9/30/20226/30/20223/31/202212/31/20219/30/20219/30/20229/30/2021
Debt service coverage ratio(1)
3.35  x3.39  x2.93  x3.17  x2.75  x3.22  x2.63  x
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization2.81  x2.83  x2.50  x2.68  x2.32  x2.70  x2.22  x
Net debt/Adjusted EBITDA(2)
7.71  x7.11  x7.89  x7.43  x8.67  x8.11  x9.09  x
Net debt and preferred equity/Adjusted EBITDA(2)
8.60  x8.03  x8.96  x8.50  x9.88  x9.04  x10.35  x
Distribution Data
Common shares and Units outstanding at record date16,354 16,367 16,363 15,848 15,126 16,354 15,126 
Total common distribution declared
$11,939 $11,948 $11,944 $11,411 $10,890 $35,831 $31,257 
Common distribution per share and Unit
$0.73 $0.73 $0.73 $0.72 $0.72 $2.19 $2.12 
Payout ratio (Core FFO per diluted share and unit basis)(3)
63.5 %65.2 %74.5 %66.7 %73.5 %67.4 %72.9 %
(1)Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization. This term is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.
(2)Net debt is the total outstanding debt balance less cash and cash equivalents and net tax deferred exchange proceeds (included within restricted cash). Adjusted EBITDA is annualized for periods less than one year. Net debt and adjusted EBITDA are non-GAAP financial measures and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.
(3)Payout ratio (Core FFO per diluted share and unit basis) is the ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual Core FFO per diluted share and unit. This term is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Core FFO definition included within the Non-GAAP Financial Measures and Reconciliations section.
S-11



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

 Apartment Homes IncludedRevenuesExpensesNOI
RegionsQ3 2022Q3 2021% ChangeQ3 2022Q3 2021% ChangeQ3 2022Q3 2021% Change
Denver, CO1,457 $8,922 $8,012 11.4 %$3,121 $2,764 12.9 %$5,801 $5,248 10.5 %
Minneapolis, MN2,538 13,057 12,132 7.6 %5,768 4,991 15.6 %7,289 7,141 2.1 %
North Dakota2,422 8,784 8,183 7.3 %3,457 3,378 2.3 %5,327 4,805 10.9 %
Omaha, NE1,370 4,703 4,166 12.9 %2,084 1,933 7.8 %2,619 2,233 17.3 %
Rochester, MN1,129 5,451 4,874 11.8 %2,039 1,924 6.0 %3,412 2,950 15.7 %
St. Cloud, MN1,192 4,370 3,683 18.7 %2,154 1,750 23.1 %2,216 1,933 14.6 %
Other Mountain West1,222 4,966 4,202 18.2 %1,766 1,694 4.3 %3,200 2,508 27.6 %
Same-Store Total11,330 $50,253 $45,252 11.1 %$20,389 $18,434 10.6 %$29,864 $26,818 11.4 %


 % of NOI Contribution
Weighted Average Occupancy (1)
Average Monthly
Rental Rate (2)
Average Monthly
Revenue per Occupied Home (3)
RegionsQ3 2022Q3 2021GrowthQ3 2022Q3 2021% ChangeQ3 2022Q3 2021% Change
Denver, CO19.5 %96.4 %94.6 %1.8 %$1,902 $1,746 8.9 %$2,118 $1,937 9.3 %
Minneapolis, MN24.4 %94.2 %94.6 %(0.4)%1,623 1,564 3.8 %1,821 1,684 8.1 %
North Dakota17.8 %96.2 %94.2 %2.0 %1,148 1,107 3.7 %1,257 1,195 5.2 %
Omaha, NE8.8 %94.7 %94.6 %0.1 %1,083 962 12.6 %1,208 1,072 12.7 %
Rochester, MN11.4 %93.5 %93.2 %0.3 %1,619 1,453 11.4 %1,721 1,545 11.4 %
St. Cloud, MN7.4 %88.1 %91.5 %(3.4)%1,206 1,063 13.5 %1,387 1,125 23.3 %
Other Mountain West10.7 %95.7 %96.6 %(0.9)%1,279 1,081 18.3 %1,415 1,186 19.3 %
Same-Store Total100.0 %94.5 %94.3 %0.2 %$1,411 $1,301 8.5 %$1,565 $1,412 10.8 %
(1)Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rent. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.
(2)Average monthly rental rate is scheduled rent divided by the total number of apartment homes.
(3)Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.
S-12


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

Apartment Homes IncludedRevenuesExpensesNOI
RegionsQ3 2022Q2 2022% ChangeQ3 2022Q2 2022% ChangeQ3 2022Q2 2022% Change
Denver, CO1,457 $8,922 $8,667 2.9 %$3,121 $2,816 10.8 %$5,801 $5,851 (0.9)%
Minneapolis, MN2,538 13,057 12,911 1.1 %5,768 5,480 5.3 %7,289 7,431 (1.9)%
North Dakota2,422 8,784 8,482 3.6 %3,457 3,523 (1.9)%5,327 4,959 7.4 %
Omaha, NE1,370 4,703 4,501 4.5 %2,084 1,931 7.9 %2,619 2,570 1.9 %
Rochester, MN1,129 5,451 5,235 4.1 %2,039 2,138 (4.6)%3,412 3,097 10.2 %
St. Cloud, MN1,192 4,370 4,353 0.4 %2,154 1,992 8.1 %2,216 2,361 (6.1)%
Other Mountain West1,222 4,966 4,718 5.3 %1,766 1,820 (3.0)%3,200 2,898 10.4 %
Same-Store Total11,330 $50,253 $48,867 2.8 %$20,389 $19,700 3.5 %$29,864 $29,167 2.4 %

% of NOI ContributionWeighted Average OccupancyAverage Monthly
Rental Rate		Average Monthly
Revenue per Occupied Home
RegionsQ3 2022Q2 2022GrowthQ3 2022Q2 2022% ChangeQ3 2022Q2 2022% Change
Denver, CO19.5 %96.4 %94.0 %2.4 %$1,902 $1,856 2.5 %$2,118 $2,109 0.4 %
Minneapolis, MN24.4 %94.2 %94.2 %— 1,623 1,600 1.4 %1,821 1,799 1.2 %
North Dakota17.8 %96.2 %95.6 %0.6 %1,148 1,118 2.7 %1,257 1,221 2.9 %
Omaha, NE8.8 %94.7 %97.1 %(2.4)%1,083 1,028 5.4 %1,208 1,128 7.1 %
Rochester, MN11.4 %93.5 %95.2 %(1.7)%1,619 1,536 5.4 %1,721 1,624 6.0 %
St. Cloud, MN7.4 %88.1 %91.5 %(3.4)%1,206 1,150 4.9 %1,387 1,330 4.3 %
Other Mountain West10.7 %95.7 %96.5 %(0.8)%1,279 1,207 6.0 %1,415 1,333 6.2 %
Same-Store Total100.0 %94.5 %94.8 %(0.3)%$1,411 $1,365 3.4 %$1,565 $1,517 3.2 %


S-13

CENTERSPACE
SAME-STORE YEAR-TO-DATE COMPARISONS
For the Nine Months Ended
(in thousands, except property data amounts and percentages)

Apartment Homes IncludedRevenuesExpensesNOI
Regions20222021% Change20222021% Change20222021% Change
Denver, CO1,457 $26,047 $23,549 10.6 %$8,404 $7,838 7.2 %$17,643 $15,711 12.3 %
Minneapolis, MN2,538 38,359 34,928 9.8 %16,647 14,935 11.5 %21,712 19,993 8.6 %
North Dakota2,422 25,423 24,209 5.0 %10,633 9,848 8.0 %14,790 14,361 3.0 %
Omaha, NE1,370 13,567 12,229 10.9 %5,913 5,580 6.0 %7,654 6,649 15.1 %
Rochester, MN1,129 15,689 14,227 10.3 %6,274 5,847 7.3 %9,415 8,380 12.4 %
St. Cloud, MN1,192 12,888 10,972 17.5 %6,230 4,967 25.4 %6,658 6,005 10.9 %
Other Mountain West1,222 14,037 12,094 16.1 %5,204 4,559 14.1 %8,833 7,535 17.2 %
Same-Store Total11,330 $146,010 $132,208 10.4 %$59,305 $53,574 10.7 %$86,705 $78,634 10.3 %

% of NOI ContributionWeighted Average Occupancy Average Monthly
Rental Rate		Average Monthly
Revenue per Occupied Home
Regions20222021Growth20222021% Change20222021% Change
Denver, CO20.3 %94.9 %94.2 %0.7 %$1,859 $1,707 8.9 %$2,092 $1,906 9.8 %
Minneapolis, MN25.0 %93.9 %93.9 %— 1,602 1,528 4.8 %1,788 1,628 9.8 %
North Dakota17.1 %95.5 %95.4 %0.1 %1,123 1,082 3.8 %1,221 1,164 4.9 %
Omaha, NE8.8 %95.6 %95.0 %0.6 %1,037 934 11.0 %1,151 1,044 10.2 %
Rochester, MN10.9 %93.9 %94.4 %(0.5)%1,554 1,404 10.7 %1,645 1,484 10.8 %
St. Cloud, MN7.7 %90.8 %92.9 %(2.1)%1,159 1,013 14.4 %1,323 1,101 20.2 %
Other Mountain West10.2 %95.4 %97.5 %(2.1)%1,213 1,027 18.1 %1,337 1,128 18.5 %
Same-Store Total100.0 %94.4 %94.6 %(0.2)%$1,371 $1,263 8.6 %$1,517 $1,370 10.7 %
S-14

CENTERSPACE
PORTFOLIO SUMMARY(1)
Three Months Ended
9/30/20226/30/20223/31/202212/31/20219/30/2021
Number of Apartment Homes at Period End
Same-Store11,330 11,319 11,319 10,672 10,676 
Non-Same-Store3,734 3,519 3,519 3,769 3,599 
All Communities15,064 14,838 14,838 14,441 14,275 
Average Monthly Rental Rate(2)
Same-Store$1,411 $1,366 $1,339 $1,314 $1,279 
Non-Same-Store1,286 1,245 1,218 1,225 1,506 
All Communities$1,381 $1,337 $1,292 $1,291 $1,293 
Average Monthly Revenue per Occupied Apartment Home(3)
Same-Store$1,565 $1,518 $1,471 $1,463 $1,392 
Non-Same-Store1,417 1,329 1,271 1,306 1,606 
All Communities$1,530 $1,473 $1,424 $1,423 $1,397 
Weighted Average Occupancy(4)
Same-Store94.5 %94.8 %93.9 %93.4 %94.3 %
Non-Same-Store94.6 %95.0 %94.5 %94.7 %95.1 %
All Communities94.5 %94.8 %94.0 %93.7 %94.4 %
Operating Expenses as a % of Scheduled Rent
Same-Store42.5 %40.3 %41.0 %39.5 %41.8 %
Non-Same-Store48.7 %47.1 %50.6 %44.1 %39.9 %
All Communities43.9 %41.8 %43.0 %40.6 %41.6 %
Capital Expenditures
Total Capital Expenditures per Apartment Home – Same-Store
$465 $196 $145 $369 $255 
(1)Previously reported amounts are not revised for changes in the composition of the same-store properties pool.
(2)Average monthly rental rate is scheduled rent divided by the total number of apartment homes. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.
(3)Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.
(4)Weighted average occupancy is the percentage resulting from dividing actual rental revenue by scheduled rent. The company believes that weighted average occupancy is a meaningful measure of occupancy because it considers the value of each vacant unit at its estimated market rate. Weighted average occupancy may not completely reflect short-term trends in physical occupancy and the calculation of weighted average occupancy may not be comparable to that disclosed by other REITs.
S-15

CENTERSPACE
CAPITAL EXPENDITURES
($ in thousands, except per home amounts)
Three Months EndedNine Months Ended
Same Store Capital Expenditures9/30/20229/30/20219/30/20229/30/2021
Total Same-Store Apartment Homes11,330 11,330 11,330 11,330 
Building - Exterior$1,443 $1,251 $2,042 $2,151 
Building - Interior214 205 250 348 
Mechanical, Electrical, & Plumbing1,178 155 2,038 572 
Furniture & Equipment120 (4)312 103 
Landscaping & Grounds765 211 989 365 
Turnover1,544 991 3,490 2,377 
Capital Expenditures - Same-Store$5,264 $2,809 $9,121 $5,916 
Capital Expenditures per Apartment Home - Same-Store$465 $248 $805 $522 
Value Add$10,536 $6,837 $22,336 $14,017 
Total Capital Spend - Same-Store$15,800 $9,646 $31,457 $19,933 
Total Capital Spend per Apartment Home - Same-Store$1,395 $851 $2,776 $1,759 
Three Months EndedNine Months Ended
Capital Expenditures - All Properties9/30/20229/30/20219/30/20229/30/2021
All Properties - Weighted Average Apartment Homes14,981 12,472 14,882 11,874 
Capital Expenditures$6,835 $2,826 $11,175 $6,174 
Capital Expenditures per Apartment Home$456 $227 $751 $520 
Value Add10,752 6,837 22,610 14,024 
Acquisition Capital2,740 265 5,727 1,225 
Total Capital Spend20,327 9,928 39,512 21,423 
Total Capital Spend per Apartment Home$1,357 $796 $2,655 $1,804 
Three Months EndedNine Months Ended
Value Add Capital Expenditures9/30/20229/30/20219/30/20229/30/2021
Interior - Units
Same-Store$7,564 $4,574 $14,520 $9,380 
Non-Same-Store80 — 79 1 
Total Interior Units$7,644 $4,574 $14,599 $9,381 
Common Areas and Exteriors
Same-Store$2,972 $2,263 $7,816 $4,637 
Non-Same-Store136 — 195 6 
Total Common Areas and Exteriors$3,108 $2,263 $8,011 $4,643 
Total Value-Add Capital Expenditures
Same-Store$10,536 $6,837 $22,336 $14,017 
Non-Same-Store216 — 274 7 
Total Portfolio Value-Add$10,752 $6,837 $22,610 $14,024 

S-16

CENTERSPACE
2022 Financial Outlook
(in thousands, except per share and per home amounts)
Centerspace revised its outlook for 2022 in the table below.
Nine Months Ended2022 Previous Outlook Range2022 Revised Outlook Range
September 30, 2022LowHighLowHigh
YTD ActualAmountAmountAmountAmount
Same-store growth
Revenue$146,010 9.00 %10.50 %9.75 %10.25 %
Controllable expenses38,200 10.00 %11.50 %13.50 %14.50 %
Non-controllable expenses21,105 3.00 %3.50 %3.00 %3.50 %
Total Expenses$59,305 7.50 %8.50 %9.50 %10.00 %
Same-store NOI$86,705 10.00 %12.00 %9.75 %10.75 %
Components of NOI
Same-store NOI$86,705 $118,200 $119,800 $117,900 $118,800 
Non-same-store NOI (1)
20,758 29,200 29,700 27,800 27,900 
Other Commercial NOI1,990 2,200 2,300 2,300 2,400 
Other Sold NOI$(3)$— $— $— $— 
Total NOI$109,450 $149,600 $151,800 $148,000 $149,100 
Accretion (dilution) from investments and capital market activity, excluding impact from change in share count$— — — (350)(300)
Interest expense$(23,147)(32,200)(31,800)(31,700)(31,600)
Dividends to preferred shareholders$(4,821)(6,400)(6,400)(6,400)(6,400)
Gain (loss) on sale of real estate and other investments$27 — — — — 
Recurring income and expenses
Interest and other income$996 $1,380 $1,550 $1,180 $1,300 
General and administrative and property management(21,777)(28,900)(28,600)(28,150)(27,950)
Casualty losses(1,256)(1,800)(1,700)(1,700)(1,600)
Non-real estate depreciation and amortization(296)(375)(325)(375)(325)
Non-controlling interest(46)(110)(100)(110)(100)
Total recurring income and expenses$(22,379)$(29,805)$(29,175)$(29,155)$(28,675)
FFO$59,130 $81,195 $84,425 $80,395 $82,125 
Non-core income and expenses
Non-cash casualty (gain) loss$234 $500 $400 $400 $300 
Technology implementation costs784 1,000 900 1,100 1,000 
Interest rate swap termination, amortization, and mark-to-market(204)(100)(100)(100)(100)
Amortization of assumed debt(347)— — — — 
Pursuit costs1,165 1,100 1,100 1,100 1,200 
Other miscellaneous items118 (100)— (300)(350)
Total non-core income and expenses$1,750 $2,400 $2,300 $2,200 $2,050 
Core FFO$60,880 $83,595 $86,725 $82,595 $84,175 
EPS - Diluted$(1.11)$(0.31)$(0.14)$(0.50)$(0.41)
FFO per diluted share$3.16 $4.32 $4.49 $4.30 $4.39 
Core FFO per diluted share$3.25 $4.45 $4.61 $4.42 $4.50 
Weighted average shares outstanding - diluted18,722 18,800 18,800 18,700 18,700 
Additional Assumptions
Same-store capital expenditures (per home)$805 $950 1,000 $950 1,000 
Value-add expenditures$22,610 $26,000 $29,000 $26,000 $29,000 
S-17

Reconciliation of Net Income (Loss) Available to Common Shareholders to FFO and Core FFO
The following table presents reconciliations of Net income (loss) available to common shareholders to FFO and Core FFO, which are non-GAAP financial measures described in greater detail under “Non-GAAP Financial Measures and Reconciliations.” They should not be considered as alternatives to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO and Core FFO also do not represent cash generated from operating activities in accordance with GAAP, nor are they indicative of funds available to fund all cash needs, including the ability to service indebtedness or make distributions to shareholders. The outlook and projections provided below are based on current expectations and are forward-looking.
Previous OutlookRevised Outlook
Nine Months Ended12 Months Ended12 Months Ended
September 30, 2022December 31, 2022December 31, 2022
ActualLowHighLowHigh
Net income (loss) available to common shareholders$(16,924)$2,002 $5,172 $(1,506)$164 
Noncontrolling interests - Operating Partnership and Series E preferred units(3,546)(7,885)(7,885)(7,885)(7,885)
Depreciation and amortization79,489 86,923 86,923 89,631 89,631 
Less depreciation - non real estate(296)(375)(325)(375)(325)
Less depreciation - partially owned entities(46)(110)(100)(110)(100)
(Gain) loss on sale of real estate(27)— — — — 
Dividends to preferred unitholders480 640 640 640 640 
FFO applicable to common shares and Units$59,130 $81,195 $84,425 $80,395 $82,125 
Adjustments to Core FFO:
Non-cash casualty (gain) loss234 500 400 400 300 
Technology implementation costs784 1,000 900 1,100 1,000 
Interest rate swap termination, amortization, and mark-to-market(204)(100)(100)(100)(100)
Amortization of assumed debt(347)— — — — 
Pursuit costs1,165 1,100 1,100 1,100 1,200 
Other miscellaneous items118 (100)— (300)(350)
Core FFO applicable to common shares and Units$60,880 $83,595 $86,725 $82,595 $84,175 
Net income per share - diluted$(1.11)$(0.31)$(0.14)$(0.50)$(0.41)
FFO per share - diluted$3.16 $4.32 $4.49 $4.30 $4.39 
Core FFO per share - diluted$3.25 $4.45 $4.61 $4.42 $4.50 
Reconciliation of Operating Income to Net Operating Income
Net operating income, or NOI, is a non-GAAP financial measure which the company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.
Previous OutlookRevised Outlook
Nine Months Ended12 Months Ended12 Months Ended
September 30, 2022December 31, 2022December 31, 2022
ActualLowHighLowHigh
Operating income (loss)$6,955 $31,977 $34,577 $28,519 $29,919 
Adjustments:
General and administrative and property management expenses21,777 28,900 28,600 28,150 27,950 
Casualty loss1,256 1,800 1,700 1,700 1,600 
Depreciation and amortization79,489 86,923 86,923 89,631 89,631 
(Gain) loss on sale of real estate and other investments(27)— — — — 
Net operating income$109,450 $149,600 $151,800 $148,000 $149,100 
S-18