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SEGMENTS | 6 Months Ended
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Jun. 30, 2023
Segment Reporting [Abstract] |
SEGMENTS | SEGMENTS Centerspace operates in a single reportable segment which includes the ownership, management, development, redevelopment, and acquisition of apartment communities. Each of the operating properties is considered a separate operating segment because each property earns revenues, incurs expenses, and has discrete financial information. The chief operating decision-makers evaluate each property’s operating results to make decisions about resources to be allocated and to assess performance and do not group the properties based on geography, size, or type for this purpose. The apartment communities have similar long-term economic characteristics and provide similar products and services to residents. No apartment community comprises more than 10% of consolidated revenues, profits, or assets. Accordingly, the apartment communities are aggregated into a single reportable segment. “All other” includes non-multifamily components of mixed-use properties and apartment communities the Company has disposed or designated as held for sale. During the six months ended June 30, 2023, nine sold apartment communities were reclassified from the multifamily segment to all other for all periods presented. The members of the executive management team are the chief operating decision-makers. This team measures the performance of the reportable segment based on net operating income (“NOI”), a non-GAAP measure, which the Company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expense. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance. The following tables present NOI for the three and six months ended June 30, 2023 and 2022, respectively, along with reconciliations to net income in the Condensed Consolidated Financial Statements. Segment assets are also reconciled to total assets as reported in the Condensed Consolidated Financial Statements.
| (in thousands)
Three Months Ended June 30, 2023 | Multifamily |  | All Other |  | Total
Revenue | $ | 63,733 |  |  | $ | 1,043 |  |  | $ | 64,776 |
Property operating expenses, including real estate taxes | 24,730 |  |  | 316 |  |  | 25,046 |
Net operating income | $ | 39,003 |  |  | $ | 727 |  |  | $ | 39,730 |
Property management |  |  |  |  | (2,247) |
Casualty loss |  |  |  |  | (53) |
Depreciation and amortization |  |  |  |  | (24,371) |
General and administrative expenses |  |  |  |  | (4,162) |
Loss on sale of real estate and other investments |  |  |  |  | (67) |
Loss on litigation settlement |  |  |  |  | (2,864) |
Interest expense |  |  |  |  | (8,641) |
Interest and other income |  |  |  |  | 295 |
Net loss |  |  |  |  | $ | (2,380) |
| (in thousands)
Three Months Ended June 30, 2022 | Multifamily |  | All Other |  | Total
Revenue | $ | 57,436 |  |  | $ | 5,680 |  |  | $ | 63,116 |
Property operating expenses, including real estate taxes | 23,398 |  |  | 2,818 |  |  | 26,216 |
Net operating income | $ | 34,038 |  |  | $ | 2,862 |  |  | $ | 36,900 |
Property management |  |  |  |  | (2,721) |
Casualty loss |  |  |  |  | (382) |
Depreciation and amortization |  |  |  |  | (24,768) |
General and administrative expenses |  |  |  |  | (5,221) |
Gain on sale of real estate and other investments |  |  |  |  | 27 |
Interest expense |  |  |  |  | (7,561) |
Interest and other loss |  |  |  |  | (17) |
Net loss |  |  |  |  | $ | (3,743) |
| (in thousands)
Six Months Ended June 30, 2023 | Multifamily |  | All Other |  | Total
Revenue | $ | 126,230 |  |  | $ | 6,443 |  |  | $ | 132,673 |
Property operating expenses, including real estate taxes | 50,633 |  |  | 3,336 |  |  | 53,969 |
Net operating income | $ | 75,597 |  |  | $ | 3,107 |  |  | $ | 78,704 |
Property management |  |  |  |  | (4,815) |
Casualty loss |  |  |  |  | (305) |
Depreciation and amortization |  |  |  |  | (50,364) |
General and administrative expenses |  |  |  |  | (11,885) |
Gain on sale of real estate and other investments |  |  |  |  | 60,092 |
Loss on litigation settlement |  |  |  |  | (2,864) |
Interest expense |  |  |  |  | (18,960) |
Interest and other income |  |  |  |  | 344 |
Net income |  |  |  |  | $ | 49,947 |
| (in thousands)
Six Months Ended June 30, 2022 | Multifamily |  | All Other |  | Total
Revenue | $ | 112,352 |  |  | $ | 11,078 |  |  | $ | 123,430 |
Property operating expenses, including real estate taxes | 46,478 |  |  | 5,611 |  |  | 52,089 |
Net operating income | $ | 65,874 |  |  | $ | 5,467 |  |  | $ | 71,341 |
Property management |  |  |  |  | (4,974) |
Casualty loss |  |  |  |  | (980) |
Depreciation and amortization |  |  |  |  | (55,769) |
General and administrative expenses |  |  |  |  | (9,721) |
Gain on sale of real estate and other investments |  |  |  |  | 27 |
Interest expense |  |  |  |  | (15,276) |
Interest and other income |  |  |  |  | 1,046 |
Net loss |  |  |  |  | $ | (14,306) |
Segment Assets and Accumulated Depreciation Segment assets are summarized as follows as of June 30, 2023, and December 31, 2022, respectively, along with reconciliations to the Condensed Consolidated Financial Statements:
| (in thousands)
As of June 30, 2023 | Multifamily |  | All Other |  | Total
Segment assets |  |  |  |  |
Property owned | $ | 2,407,300 |  |  | $ | 26,838 |  |  | $ | 2,434,138 |
Less accumulated depreciation | (534,566) |  |  | (8,698) |  |  | (543,264) |
Total property owned | $ | 1,872,734 |  |  | $ | 18,140 |  |  | $ | 1,890,874 |
Cash and cash equivalents |  |  |  |  | 9,745 |
Restricted cash |  |  |  |  | 566 |
Other assets |  |  |  |  | 18,992 |
Total Assets |  |  |  |  | $ | 1,920,177 |
| (in thousands)
As of December 31, 2022 | Multifamily |  | All Other |  | Total
Segment assets |  |  |  |  |
Property owned | $ | 2,385,351 |  |  | $ | 148,773 |  |  | $ | 2,534,124 |
Less accumulated depreciation | (487,129) |  |  | (48,272) |  |  | (535,401) |
Total property owned | $ | 1,898,222 |  |  | $ | 100,501 |  |  | $ | 1,998,723 |
Cash and cash equivalents |  |  |  |  | 10,458 |
Restricted cash |  |  |  |  | 1,433 |
Other assets |  |  |  |  | 22,687 |
Total Assets |  |  |  |  | $ | 2,033,301 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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