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SEGMENTS | 9 Months Ended
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Sep. 30, 2024
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. For the nine months ended September 30, 2024, two sold apartment communities were reclassified from the multifamily segment to “all other” for all periods presented. For the nine months ended September 30, 2023, thirteen 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 excludes gain (loss) on the sale of real estate and other assets, impairment, depreciation, amortization, financing costs, property management overhead, casualty gains (losses), loss on litigation settlement, 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 nine months ended September 30, 2024 and 2023, respectively, along with reconciliations to net income (loss) 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 September 30, 2024 | Multifamily |  | All Other |  | Total
Revenue | $ | 64,457 |  |  | $ | 568 |  |  | $ | 65,025 |
Property operating expenses, including real estate taxes | 26,430 |  |  | 229 |  |  | 26,659 |
Net operating income | $ | 38,027 |  |  | $ | 339 |  |  | $ | 38,366 |
Property management expense |  |  |  |  | (2,242) |
Casualty gain |  |  |  |  | 412 |
Depreciation and amortization |  |  |  |  | (26,084) |
General and administrative expenses |  |  |  |  | (4,102) |
Interest expense |  |  |  |  | (8,946) |
Interest and other income |  |  |  |  | 645 |
Net loss |  |  |  |  | $ | (1,951) |
| (in thousands)
Three Months Ended September 30, 2023 | Multifamily |  | All Other |  | Total
Revenue | $ | 60,789 |  |  | $ | 3,779 |  |  | $ | 64,568 |
Property operating expenses, including real estate taxes | 25,018 |  |  | 1,727 |  |  | 26,745 |
Net operating income | $ | 35,771 |  |  | $ | 2,052 |  |  | $ | 37,823 |
Property management expense |  |  |  |  | (2,197) |
Casualty loss |  |  |  |  | (937) |
Depreciation and amortization |  |  |  |  | (24,697) |
General and administrative expenses |  |  |  |  | (3,832) |
Gain on sale of real estate and other investments |  |  |  |  | 11,235 |
Interest expense |  |  |  |  | (8,556) |
Interest and other income |  |  |  |  | 330 |
Net income |  |  |  |  | $ | 9,169 |
| (in thousands)
Nine Months Ended September 30, 2024 | Multifamily |  | All Other |  | Total
Revenue | $ | 192,262 |  |  | $ | 2,312 |  |  | $ | 194,574 |
Property operating expenses, including real estate taxes | 75,943 |  |  | 974 |  |  | 76,917 |
Net operating income | $ | 116,319 |  |  | $ | 1,338 |  |  | $ | 117,657 |
Property management expense |  |  |  |  | (6,794) |
Casualty loss |  |  |  |  | (918) |
Depreciation and amortization |  |  |  |  | (78,810) |
General and administrative expenses |  |  |  |  | (12,941) |
Loss on sale of real estate and other investments |  |  |  |  | (577) |
Interest expense |  |  |  |  | (27,485) |
Interest and other income |  |  |  |  | 1,462 |
Net loss |  |  |  |  | $ | (8,406) |
| (in thousands)
Nine Months Ended September 30, 2023 | Multifamily |  | All Other |  | Total
Revenue | $ | 180,759 |  |  | $ | 16,482 |  |  | $ | 197,241 |
Property operating expenses, including real estate taxes | 72,771 |  |  | 7,943 |  |  | 80,714 |
Net operating income | $ | 107,988 |  |  | $ | 8,539 |  |  | $ | 116,527 |
Property management expense |  |  |  |  | (7,012) |
Casualty loss |  |  |  |  | (1,242) |
Depreciation and amortization |  |  |  |  | (75,061) |
General and administrative expenses |  |  |  |  | (15,717) |
Gain on sale of real estate and other investments |  |  |  |  | 71,327 |
Loss on litigation settlement |  |  |  |  | (2,864) |
Interest expense |  |  |  |  | (27,516) |
Interest and other income |  |  |  |  | 674 |
Net income |  |  |  |  | $ | 59,116 |
Segment Assets and Accumulated Depreciation Segment assets are summarized as follows as of September 30, 2024, and December 31, 2023, respectively, along with reconciliations to the Condensed Consolidated Financial Statements:
| (in thousands)
As of September 30, 2024 | Multifamily |  | All Other |  | Total
Segment assets |  |  |  |  |
Property owned | $ | 2,420,947 |  |  | $ | 17,308 |  |  | $ | 2,438,255 |
Less accumulated depreciation | (599,814) |  |  | (4,361) |  |  | (604,175) |
Total real estate investments | $ | 1,821,133 |  |  | $ | 12,947 |  |  | $ | 1,834,080 |
Cash and cash equivalents |  |  |  |  | 14,453 |
Restricted cash |  |  |  |  | 2,794 |
Other assets |  |  |  |  | 36,078 |
Total Assets |  |  |  |  | $ | 1,887,405 |
| (in thousands)
As of December 31, 2023 | Multifamily |  | All Other |  | Total
Segment assets |  |  |  |  |
Property owned | $ | 2,381,461 |  |  | $ | 38,685 |  |  | $ | 2,420,146 |
Less accumulated depreciation | (524,364) |  |  | (6,339) |  |  | (530,703) |
Total real estate investments | $ | 1,857,097 |  |  | $ | 32,346 |  |  | $ | 1,889,443 |
Cash and cash equivalents |  |  |  |  | 8,630 |
Restricted cash |  |  |  |  | 639 |
Other assets |  |  |  |  | 27,649 |
Total Assets |  |  |  |  | $ | 1,926,361 |

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- Definition The entire disclosure for reporting segments including data and tables. 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