EX-99.1 3 centerspace12312023ex991.htm EX-99.1
Exhibit 99.1

Earnings Release
Centerspace Announces Financial and Operating Results for the Year Ended
December 31, 2023, Provides 2024 Financial Outlook and Dividend Increase
MINNEAPOLIS, MN, February 20, 2024 – Centerspace (NYSE: CSR) announced today its financial and operating results for the year ended December 31, 2023. The tables below show Net Income (Loss), Funds from Operations (“FFO”)1, and Core FFO 1, all on a per diluted share basis, for the year ended December 31, 2023; Same-Store Revenues, Expenses, and Net Operating Income (“NOI”)1 over comparable periods; and Same-Store Weighted Average Occupancy for the three months ended December 31, 2023, September 30, 2023, and December 31, 2022 and the twelve months ended December 31, 2023 and 2022.

|  | Three Months Ended December 31, |  | Twelve Months Ended December 31,
Per Share |  | 2023 |  | 2022 |  | 2023 |  | 2022
Net income (loss) per share - diluted |  | $ | (0.65) |  |  | $ | (0.24) |  |  | $ | 2.32 |  |  | $ | (1.35) |
FFO - diluted(1) |  | 1.11 |  |  | 1.16 |  |  | 4.27 |  |  | 4.32 |
Core FFO - diluted(1) |  | 1.22 |  |  | 1.17 |  |  | 4.78 |  |  | 4.43 |

|  | Year-Over-Year Comparison |  | Sequential Comparison |  | YTD Comparison
Same-Store Results |  | 4Q23 vs 4Q22 |  | 4Q23 vs. 3Q23 |  | CY23 vs. CY22
Revenues |  | 3.9 | % |  | 0.5 | % |  | 7.2 | %
Expenses |  | (1.2) | % |  | (3.6) | % |  | 4.6 | %
Net Operating Income (“NOI”)(1) |  | 7.6 | % |  | 3.4 | % |  | 9.0 | %

|  | Three months ended |  | Twelve months ended
Same-Store Results |  | December 31, 2023 |  | September 30, 2023 |  | December 31, 2022 |  | December 31, 2023 |  | December 31, 2022
Weighted Average Occupancy |  | 94.8 | % |  | 94.7 | % |  | 94.8 | % |  | 94.9 | % |  | 94.6 | %

(1)NOI, Funds from Operations, and Core FFO are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to “Non-GAAP Financial Measures and Reconciliations” and “Non-GAAP Financial Measures and Other Terms” in the Supplemental Financial and Operating Data below.
Highlights for the Year Ended December 31, 2023
•Net Income was $2.32 per diluted share for the year ended December 31, 2023, compared to Net Loss of $1.35 per diluted share for the year ended December 31, 2022;
•Core FFO(1) increased to $4.78 or 7.9% per diluted share for the year ended December 31, 2023, compared to $4.43 for the year ended December 31, 2022;
•Operating income increased to $84.5 million for the year ended December 31, 2023 compared to $13.9 million for the prior year;
•Same-store year-over-year NOI(1) grew to 9.0% driven by same-store revenue growth of 7.2%;
•Continued to grow Colorado portfolio through acquisition of an apartment community in Loveland, Colorado consisting of 303 homes for an aggregate purchase price of $94.5 million;
•Thirteen communities in Minnesota, Nebraska, and North Dakota were sold for an aggregate sales price of $226.8 million. The sale included four communities in the St. Cloud market comprising 692 homes, two communities in the Omaha-Lincoln market comprising 498 homes, three communities in the Minneapolis-St. Paul market comprising 377

| 1 |

homes, and four communities in the Minot market comprising 712 homes and related commercial space.
•216,000 common shares repurchased for total consideration of $11.5 million and an average of $53.44 per share.
Balance Sheet
At December 31, 2023, Centerspace had $234.6 million of total liquidity on its balance sheet, including $226.0 million available on its lines of credit.
Subsequent Events
Subsequent to December 31, 2023, Centerspace entered into definitive purchase and sale agreements for two communities with expected gross proceeds of $18.9 million. The Company believes the sales will close in the first quarter. The closing of pending transactions is subject to certain conditions and restrictions; therefore, there can be no assurance that the transactions will be consummated or that the final terms will not differ in material respects.
Subsequent to December 31, 2023, Centerspace repurchased 87,722 common shares for total consideration of $4.7 million and an average price of $53.62 per share.
Dividend Distributions
Centerspace's Board of Trustees announced a quarterly distribution of $0.75 per share/unit, payable on April 8, 2024, to common shareholders and unitholders of record at the close of business on March 28, 2024. The announced distribution represents a $0.02 increase over the prior distribution.
The Board of Trustees also declared a distribution of $0.4140625 per share on the 6.625% Series C Cumulative Redeemable Preferred Shares (NYSE: CSR PRC), payable on March 28, 2024, to holders of record at the close of business on March 15, 2024. Series C preferred share distributions are cumulative and payable quarterly in arrears at an annual rate of $1.65625 per share.
2024 Financial Outlook
Centerspace is providing the following guidance for its 2024 performance.

2024 Financial Outlook
|  |  | Range for 2024
| 2023 Actual |  | Low |  | High
Net income (loss) per Share - diluted | $ | 2.32 |  |  | $ | (1.31) |  |  | $ | (0.99) |
FFO per Share - diluted | $ | 4.27 |  |  | $ | 4.54 |  |  | $ | 4.80 |
Core FFO per Share - diluted | $ | 4.78 |  |  | $ | 4.68 |  |  | $ | 4.92 |

Additional assumptions:
•Same-store capital expenditures of $1,075 per home to $1,150 per home
•Value-add expenditures of $25.0 million to $27.0 million
•Proceeds from potential dispositions of $18.8 million to $19.0 million
FFO and Core FFO are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, please refer to "2024 Financial Outlook" in the Supplemental Financial and Operating Data below.

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Earnings Call

Live webcast and replay: https://www.ir.centerspacehomes.com
Live Conference Call |  | Conference Call Replay
Wednesday, February 21, 2024 at 10:00 AM ET |  | Replay available until March 6, 2024
USA Toll Free Number | 1-833-470-1428 |  | USA Toll Free Number | 1-866-813-9403
International Toll Free Number | 1-929-526-1599 |  | International Toll Free Number | 1-929-458-6194
Canada Toll Free Number | 1-833-950-0062 |  | Canada Toll Free Number | 1-226-828-7578
Conference Number | 373306 |  | Conference Number | 297696

Supplemental Information
Supplemental Operating and Financial Data for the year ended December 31, 2023, is available in the Investors section on Centerspace’s website at https://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 December 31, 2023, Centerspace owned 72 apartment communities consisting of 13,088 homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. In 2022, Centerspace was named the National Apartment Association’s Leading Organization in Diversity, Equity, and Inclusion.. For more information, please visit www.centerspacehomes.com.
Forward-Looking Statements
Certain statements in this press release are based on the Company's current expectations and assumptions, and are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Forward-looking statements are typically identified by the use of terms such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “assumes,” “may,” “projects,” “outlook,” “future,” and variations of such words and similar expressions. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial conditions, or plans expressed or implied by the forward-looking statements. Although the Company believes the expectations reflected in its forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be achieved. 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 the Company's control and could differ materially from actual results and performance. Such risks and uncertainties are detailed from time to time in filings with the SEC, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” contained in the Company's Annual Report on Form 10-K, in quarterly reports on Form 10-Q, and in other reports the Company files with the SEC from time to time. The Company assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.
Contact Information
Investor Relations
Josh Klaetsch
Phone: 701-837-7104
E-mail: IR@centerspacehomes.com
Marketing & Media
Kelly Weber
Phone: 701-837-7104
E-mail: kweber@centerspacehomes.com

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Supplemental Financial and Operating Data
Table of Contents
December 31, 2023

| Page
Common Share Data | S-1
Key Financial Data |
Condensed Consolidated Statements of Operations | S-2
Condensed Consolidated Balance Sheets | S-3
Non-GAAP Financial Measures and Reconciliations |
Net Operating Income Detail | S-4
Same-Store Controllable Expenses | S-6
Funds From Operations and Core Funds From Operations | S-7
Adjusted EBITDA | S-8
Debt and Capital Analysis |
Debt Analysis | S-9
Capital Analysis | S-10
Portfolio Analysis |
Same-Store Comparison | S-11
Portfolio Summary | S-14
Capital Expenditures | S-15
202 4 Financial Outlook | S-16
N on-GAAP Financial Measures and Other Terms | S-18

Common Share Data (NYSE: CSR)

|  | Three Months Ended
|  | December 31, 2023 |  | September 30, 2023 |  | June 30, 2023 |  | March 31, 2023 |  | December 31, 2022
High closing price |  | $ | 59.33 |  |  | $ | 66.57 |  |  | $ | 64.18 |  |  | $ | 71.07 |  |  | $ | 70.20 |
Low closing price |  | $ | 47.82 |  |  | $ | 59.39 |  |  | $ | 53.98 |  |  | $ | 51.39 |  |  | $ | 58.50 |
Average closing price |  | $ | 54.61 |  |  | $ | 62.52 |  |  | $ | 58.61 |  |  | $ | 61.68 |  |  | $ | 64.64 |
Closing price at end of quarter |  | $ | 58.20 |  |  | $ | 60.26 |  |  | $ | 61.36 |  |  | $ | 54.63 |  |  | $ | 58.67 |
Common share distributions—annualized |  | $ | 2.92 |  |  | $ | 2.92 |  |  | $ | 2.92 |  |  | $ | 2.92 |  |  | $ | 2.92 |
Closing price dividend yield - annualized |  | 5.0 | % |  | 4.8 | % |  | 4.8 | % |  | 5.3 | % |  | 5.0 | %
Closing common shares outstanding (thousands) |  | 14,963 |  |  | 15,052 |  |  | 14,949 |  |  | 15,032 |  |  | 15,020 |
Closing limited partnership units outstanding (thousands) |  | 861 |  |  | 864 |  |  | 961 |  |  | 967 |  |  | 971 |
Closing Series E preferred units, as converted (thousands) |  | 2,078 |  |  | 2,087 |  |  | 2,094 |  |  | 2,103 |  |  | 2,119 |
Total closing common shares, limited partnership units, and Series E preferred units, as converted, outstanding (thousands) |  | 17,902 |  |  | 18,003 |  |  | 18,004 |  |  | 18,102 |  |  | 18,110 |
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands) |  | $ | 1,041,896 |  |  | $ | 1,084,861 |  |  | $ | 1,104,725 |  |  | $ | 988,912 |  |  | $ | 1,062,514 |

| S-1 |

CENTERSPACE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share amounts)

|  | Three Months Ended |  |  | Twelve months ended
|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022 |  |  | 12/31/2023 |  | 12/31/2022
REVENUE |  | $ | 64,068 |  |  | $ | 64,568 |  |  | $ | 64,776 |  |  | $ | 67,897 |  |  | $ | 67,848 |  |  |  | $ | 261,309 |  |  | $ | 256,716 |
EXPENSES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property operating expenses, excluding real estate taxes |  | 18,237 |  |  | 19,602 |  |  | 17,872 |  |  | 21,342 |  |  | 21,755 |  |  |  | 77,053 |  |  | 80,070 |
Real estate taxes |  | 6,861 |  |  | 7,143 |  |  | 7,174 |  |  | 7,581 |  |  | 7,464 |  |  |  | 28,759 |  |  | 28,567 |
Property management expenses |  | 2,341 |  |  | 2,197 |  |  | 2,247 |  |  | 2,568 |  |  | 2,358 |  |  |  | 9,353 |  |  | 9,895 |
Casualty loss |  | 853 |  |  | 937 |  |  | 53 |  |  | 252 |  |  | 335 |  |  |  | 2,095 |  |  | 1,591 |
Depreciation and amortization |  | 26,617 |  |  | 24,697 |  |  | 24,371 |  |  | 25,993 |  |  | 25,768 |  |  |  | 101,678 |  |  | 105,257 |
Impairment of real estate investments |  | 5,218 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 5,218 |  |  | — |
General and administrative expenses |  | 4,363 |  |  | 3,832 |  |  | 4,162 |  |  | 7,723 |  |  | 3,276 |  |  |  | 20,080 |  |  | 17,516 |
TOTAL EXPENSES |  | $ | 64,490 |  |  | $ | 58,408 |  |  | $ | 55,879 |  |  | $ | 65,459 |  |  | $ | 60,956 |  |  |  | $ | 244,236 |  |  | $ | 242,896 |
Gain (loss) on sale of real estate and other investments |  | (83) |  |  | 11,235 |  |  | (67) |  |  | 60,159 |  |  | 14 |  |  |  | 71,244 |  |  | 41 |
Loss on litigation settlement |  | (1,000) |  |  | — |  |  | (2,864) |  |  | — |  |  | — |  |  |  | (3,864) |  |  | — |
Operating income (loss) |  | (1,505) |  |  | 17,395 |  |  | 5,966 |  |  | 62,597 |  |  | 6,906 |  |  |  | 84,453 |  |  | 13,861 |
Interest expense |  | (8,913) |  |  | (8,556) |  |  | (8,641) |  |  | (10,319) |  |  | (9,603) |  |  |  | (36,429) |  |  | (32,750) |
Interest and other income |  | 533 |  |  | 330 |  |  | 295 |  |  | 49 |  |  | 132 |  |  |  | 1,207 |  |  | 1,248 |
Net income (loss) |  | $ | (9,885) |  |  | $ | 9,169 |  |  | $ | (2,380) |  |  | $ | 52,327 |  |  | $ | (2,565) |  |  |  | $ | 49,231 |  |  | $ | (17,641) |
Dividends to Series D preferred unitholders |  | (160) |  |  | (160) |  |  | (160) |  |  | (160) |  |  | (160) |  |  |  | (640) |  |  | (640) |
Net (income) loss attributable to noncontrolling interest – Operating Partnership and Series E preferred units |  | 1,917 |  |  | (1,204) |  |  | 712 |  |  | (8,566) |  |  | 753 |  |  |  | (7,141) |  |  | 4,299 |
Net income attributable to noncontrolling interests – consolidated real estate entities |  | (29) |  |  | (31) |  |  | (35) |  |  | (30) |  |  | (34) |  |  |  | (125) |  |  | (127) |
Net income (loss) attributable to controlling interests |  | (8,157) |  |  | 7,774 |  |  | (1,863) |  |  | 43,571 |  |  | (2,006) |  |  |  | 41,325 |  |  | (14,109) |
Dividends to preferred shareholders |  | (1,607) |  |  | (1,607) |  |  | (1,607) |  |  | (1,607) |  |  | (1,607) |  |  |  | (6,428) |  |  | (6,428) |
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |  | $ | (9,764) |  |  | $ | 6,167 |  |  | $ | (3,470) |  |  | $ | 41,964 |  |  | $ | (3,613) |  |  |  | $ | 34,897 |  |  | $ | (20,537) |
Net income (loss) per common share – basic |  | $ | (0.65) |  |  | $ | 0.41 |  |  | $ | (0.23) |  |  | $ | 2.79 |  |  | $ | (0.24) |  |  |  | $ | 2.33 |  |  | $ | (1.35) |
Net income (loss) per common share – diluted |  | $ | (0.65) |  |  | $ | 0.41 |  |  | $ | (0.23) |  |  | $ | 2.76 |  |  | $ | (0.24) |  |  |  | $ | 2.32 |  |  | $ | (1.35) |

| S-2 |

CENTERSPACE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)

|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022
ASSETS |  |  |  |  |  |  |  |  |  |
Real estate investments |  |  |  |  |  |  |  |  |  |
Property owned |  | $ | 2,420,146 |  |  | $ | 2,326,408 |  |  | $ | 2,434,138 |  |  | $ | 2,420,911 |  |  | $ | 2,534,124 |
Less accumulated depreciation |  | (530,703) |  |  | (516,673) |  |  | (543,264) |  |  | (519,167) |  |  | (535,401) |
Total real estate investments |  | 1,889,443 |  |  | 1,809,735 |  |  | 1,890,874 |  |  | 1,901,744 |  |  | 1,998,723 |
Cash and cash equivalents |  | 8,630 |  |  | 29,701 |  |  | 9,745 |  |  | 8,939 |  |  | 10,458 |
Restricted cash |  | 639 |  |  | 22,496 |  |  | 566 |  |  | 48,903 |  |  | 1,433 |
Other assets |  | 27,649 |  |  | 16,349 |  |  | 18,992 |  |  | 19,298 |  |  | 22,687 |
TOTAL ASSETS |  | $ | 1,926,361 |  |  | $ | 1,878,281 |  |  | $ | 1,920,177 |  |  | $ | 1,978,884 |  |  | $ | 2,033,301 |
LIABILITIES, MEZZANINE EQUITY, AND EQUITY |  |  |  |  |  |  |  |  |  |
LIABILITIES |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 62,754 |  |  | $ | 62,674 |  |  | $ | 56,713 |  |  | $ | 56,639 |  |  | $ | 58,812 |
Revolving line of credit |  | 30,000 |  |  | — |  |  | 18,989 |  |  | 143,469 |  |  | 113,500 |
Notes payable, net of unamortized loan costs |  | 299,459 |  |  | 299,443 |  |  | 299,428 |  |  | 299,412 |  |  | 399,007 |
Mortgages payable, net of unamortized loan costs |  | 586,563 |  |  | 539,245 |  |  | 563,079 |  |  | 474,999 |  |  | 495,126 |
TOTAL LIABILITIES |  | $ | 978,776 |  |  | $ | 901,362 |  |  | $ | 938,209 |  |  | $ | 974,519 |  |  | $ | 1,066,445 |
SERIES D PREFERRED UNITS |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |
EQUITY |  |  |  |  |  |  |  |  |  |
Series C Preferred Shares of Beneficial Interest |  | 93,530 |  |  | 93,530 |  |  | 93,530 |  |  | 93,530 |  |  | 93,530 |
Common Shares of Beneficial Interest |  | 1,165,694 |  |  | 1,169,025 |  |  | 1,169,501 |  |  | 1,176,059 |  |  | 1,177,484 |
Accumulated distributions in excess of net income |  | (548,273) |  |  | (527,586) |  |  | (522,796) |  |  | (508,420) |  |  | (539,422) |
Accumulated other comprehensive loss |  | (1,119) |  |  | (1,434) |  |  | (1,758) |  |  | (1,917) |  |  | (2,055) |
Total shareholders’ equity |  | $ | 709,832 |  |  | $ | 733,535 |  |  | $ | 738,477 |  |  | $ | 759,252 |  |  | $ | 729,537 |
Noncontrolling interests – Operating Partnership and Series E preferred units |  | 220,544 |  |  | 226,205 |  |  | 226,294 |  |  | 227,920 |  |  | 220,132 |
Noncontrolling interests – consolidated real estate entities |  | 649 |  |  | 619 |  |  | 637 |  |  | 633 |  |  | 627 |
TOTAL EQUITY |  | $ | 931,025 |  |  | $ | 960,359 |  |  | $ | 965,408 |  |  | $ | 987,805 |  |  | $ | 950,296 |
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY |  | $ | 1,926,361 |  |  | $ | 1,878,281 |  |  | $ | 1,920,177 |  |  | $ | 1,978,884 |  |  | $ | 2,033,301 |

| S-3 |

CENTERSPACE
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (unaudited)
This release contains certain non-GAAP financial measures. The non-GAAP financial measures should not be considered a substitute for operating results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The definitions and calculations of these non-GAAP financial measures, as calculated by the Company may not be comparable to non-GAAP measures reported by other REITs that do not define each of the non-GAAP financial measures exactly as Centerspace does. The non-GAAP financial measures are defined and further explained on pages S-18 through S-20, “Non-GAAP Financial Measures and Other Terms.”
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 development properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, Centerspace determines the composition of the same-store pool for that year and adjusts the previous year, to evaluate full period-over-period operating comparisons for existing apartment communities and their contribution to Net Operating Income. Measuring performance on a same-store basis allows investors to evaluate how a fixed pool of communities are performing year-over-year. Centerspace uses this measure to assess success in increasing NOI (defined and reconciled below), raising average rental revenue, renewing leases on existing residents, controlling operating costs, and making prudent capital improvements.
CENTERSPACE
RECONCILIATIONS OF OPERATING INCOME TO NET OPERATING INCOME (1)

| (dollars in thousands)
| Three Months Ended |  |  | Sequential |  | Year-Over-Year
| 12/31/2023 |  | 9/30/2023 |  | 12/31/2022 |  |  | $ Change |  | % Change |  | $ Change |  | % Change
Operating income (loss) | $ | (1,505) |  |  | $ | 17,395 |  |  | $ | 6,906 |  |  |  | $ | (18,900) |  |  | (108.7) | % |  | $ | (8,411) |  |  | (121.8) | %
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property management expenses | 2,341 |  |  | 2,197 |  |  | 2,358 |  |  |  | 144 |  |  | 6.6 | % |  | (17) |  |  | (0.7) | %
Casualty loss | 853 |  |  | 937 |  |  | 335 |  |  |  | (84) |  |  | (9.0) | % |  | 518 |  |  | 154.6 | %
Depreciation and amortization | 26,617 |  |  | 24,697 |  |  | 25,768 |  |  |  | 1,920 |  |  | 7.8 | % |  | 849 |  |  | 3.3 | %
Impairment | 5,218 |  |  | — |  |  | — |  |  |  | 5,218 |  |  | N/A |  | 5,218 |  |  | N/A
General and administrative expenses | 4,363 |  |  | 3,832 |  |  | 3,276 |  |  |  | 531 |  |  | 13.9 | % |  | 1,087 |  |  | 33.2 | %
(Gain) loss on sale of real estate and other investments | 83 |  |  | (11,235) |  |  | (14) |  |  |  | 11,318 |  |  | 100.7 | % |  | 97 |  |  | *
Loss on litigation settlement | 1,000 |  |  | — |  |  | — |  |  |  | 1,000 |  |  | N/A |  | 1,000 |  |  | N/A
Net Operating Income(1) | $ | 38,970 |  |  | $ | 37,823 |  |  | $ | 38,629 |  |  |  | $ | 1,147 |  |  | 3.0 | % |  | $ | 341 |  |  | 0.9 | %
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same-store | $ | 58,262 |  |  | $ | 57,949 |  |  | $ | 56,055 |  |  |  | $ | 313 |  |  | 0.5 | % |  | $ | 2,207 |  |  | 3.9 | %
Non-same-store | 5,209 |  |  | 3,556 |  |  | 3,497 |  |  |  | 1,653 |  |  | 46.5 | % |  | 1,712 |  |  | 49.0 | %
Other | 587 |  |  | 676 |  |  | 581 |  |  |  | (89) |  |  | (13.2) | % |  | 6 |  |  | 1.0 | %
Dispositions | 10 |  |  | 2,387 |  |  | 7,715 |  |  |  | (2,377) |  |  | (99.6) | % |  | (7,705) |  |  | (99.9) | %
Total | 64,068 |  |  | 64,568 |  |  | 67,848 |  |  |  | (500) |  |  | (0.8) | % |  | (3,780) |  |  | (5.6) | %
Property operating expenses, including real estate taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same-store | 23,055 |  |  | 23,906 |  |  | 23,324 |  |  |  | (851) |  |  | (3.6) | % |  | (269) |  |  | (1.2) | %
Non-same-store | 1,790 |  |  | 1,469 |  |  | 1,266 |  |  |  | 321 |  |  | 21.9 | % |  | 524 |  |  | 41.4 | %
Other | 251 |  |  | 270 |  |  | 249 |  |  |  | (19) |  |  | (7.0) | % |  | 2 |  |  | 0.8 | %
Dispositions | 2 |  |  | 1,100 |  |  | 4,380 |  |  |  | (1,098) |  |  | (99.8) | % |  | (4,378) |  |  | (100.0) | %
Total | 25,098 |  |  | 26,745 |  |  | 29,219 |  |  |  | (1,647) |  |  | (6.2) | % |  | (4,121) |  |  | (14.1) | %
Net Operating Income(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same-store | 35,207 |  |  | 34,043 |  |  | 32,731 |  |  |  | 1,164 |  |  | 3.4 | % |  | 2,476 |  |  | 7.6 | %
Non-same-store | 3,419 |  |  | 2,087 |  |  | 2,231 |  |  |  | 1,332 |  |  | 63.8 | % |  | 1,188 |  |  | 53.2 | %
Other | 336 |  |  | 406 |  |  | 332 |  |  |  | (70) |  |  | (17.2) | % |  | 4 |  |  | 1.2 | %
Dispositions | 8 |  |  | 1,287 |  |  | 3,335 |  |  |  | (1,279) |  |  | (99.4) | % |  | (3,327) |  |  | (99.8) | %
Total | $ | 38,970 |  |  | $ | 37,823 |  |  | $ | 38,629 |  |  |  | $ | 1,147 |  |  | 3.0 | % |  | $ | 341 |  |  | 0.9 | %

*Not a meaningful percentage
(1)Net Operating Income is a non-GAAP measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.

| S-4 |

CENTERSPACE
RECONCILIATIONS OF OPERATING INCOME TO NET OPERATING INCOME (1)

| (dollars in thousands)
| Twelve Months Ended December 31,
| 2023 |  | 2022 |  | $ Change |  | % Change
Operating income | $ | 84,453 |  |  | $ | 13,861 |  |  | $ | 70,592 |  |  | 509.3 | %
Adjustments: |  |  |  |  |  |  |
Property management expenses | 9,353 |  |  | 9,895 |  |  | (542) |  |  | (5.5) | %
Casualty loss | 2,095 |  |  | 1,591 |  |  | 504 |  |  | 31.7 | %
Depreciation and amortization | 101,678 |  |  | 105,257 |  |  | (3,579) |  |  | (3.4) | %
Impairment | 5,218 |  |  | — |  |  | 5,218 |  |  | N/A
General and administrative expenses | 20,080 |  |  | 17,516 |  |  | 2,564 |  |  | 14.6 | %
Gain on sale of real estate and other investments | (71,244) |  |  | (41) |  |  | (71,203) |  |  | *
Loss on litigation settlement | 3,864 |  |  | — |  |  | 3,864 |  |  | N/A
Net Operating Income(1) | $ | 155,497 |  |  | $ | 148,079 |  |  | $ | 7,418 |  |  | 5.0 | %
Revenue |  |  |  |  |  |  |
Same-store | $ | 230,333 |  |  | $ | 214,941 |  |  | $ | 15,392 |  |  | 7.2 | %
Non-same-store | 16,031 |  |  | 9,434 |  |  | 6,597 |  |  | 69.9 | %
Other | 2,601 |  |  | 2,466 |  |  | 135 |  |  | 5.5 | %
Dispositions | 12,344 |  |  | 29,875 |  |  | (17,531) |  |  | (58.7) | %
Total | 261,309 |  |  | 256,716 |  |  | 4,593 |  |  | 1.8 | %
Property operating expenses, including real estate taxes |  |  |  |  |  |  |
Same-store | 92,847 |  |  | 88,785 |  |  | 4,062 |  |  | 4.6 | %
Non-same-store | 5,915 |  |  | 3,542 |  |  | 2,373 |  |  | 67.0 | %
Other | 797 |  |  | 940 |  |  | (143) |  |  | (15.2) | %
Dispositions | 6,253 |  |  | 15,370 |  |  | (9,117) |  |  | (59.3) | %
Total | 105,812 |  |  | 108,637 |  |  | (2,825) |  |  | (2.6) | %
Net Operating Income(1) |  |  |  |  |  |  |
Same-store | 137,486 |  |  | 126,156 |  |  | 11,330 |  |  | 9.0 | %
Non-same-store | 10,116 |  |  | 5,892 |  |  | 4,224 |  |  | 71.7 | %
Other | 1,804 |  |  | 1,526 |  |  | 278 |  |  | 18.2 | %
Dispositions | 6,091 |  |  | 14,505 |  |  | (8,414) |  |  | (58.0) | %
Total | $ | 155,497 |  |  | $ | 148,079 |  |  | $ | 7,418 |  |  | 5.0 | %

*Not a meaningful percentage
(1)Net Operating Income is a non-GAAP measure. Refer to pages S-18 through S-20 “Reconciliations of non-GAAP Financial Measures and Other Terms” for additional information.

| S-5 |

CENTERSPACE
RECONCILIATIONS OF SAME-STORE CONTROLLABLE EXPENSES TO TOTAL PROPERTY OPERATING EXPENSES, INCLUDING REAL ESTATE TAXES (1)

| (dollars in thousands)
| Three Months Ended December 31, |  |  | Twelve Months Ended December 31,
| 2023 |  | 2022 |  | $ Change |  | % Change |  |  | 2023 |  | 2022 |  | $ Change |  | % Change
Controllable expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
On-site compensation (2) | $ | 6,221 |  |  | $ | 5,931 |  |  | $ | 290 |  |  | 4.9 | % |  |  | $ | 24,594 |  |  | $ | 22,448 |  |  | $ | 2,146 |  |  | 9.6 | %
Repairs and maintenance | 3,184 |  |  | 3,726 |  |  | (542) |  |  | (14.5) | % |  |  | 13,498 |  |  | 14,084 |  |  | (586) |  |  | (4.2) | %
Utilities | 3,438 |  |  | 3,955 |  |  | (517) |  |  | (13.1) | % |  |  | 14,992 |  |  | 15,663 |  |  | (671) |  |  | (4.3) | %
Administrative and marketing | 1,541 |  |  | 1,202 |  |  | 339 |  |  | 28.2 | % |  |  | 5,464 |  |  | 4,875 |  |  | 589 |  |  | 12.1 | %
Total | $ | 14,384 |  |  | $ | 14,814 |  |  | $ | (430) |  |  | (2.9) | % |  |  | $ | 58,548 |  |  | $ | 57,070 |  |  | $ | 1,478 |  |  | 2.6 | %
Non-controllable expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate taxes | $ | 6,132 |  |  | $ | 6,118 |  |  | $ | 14 |  |  | 0.2 | % |  |  | $ | 25,231 |  |  | $ | 23,781 |  |  | $ | 1,450 |  |  | 6.1 | %
Insurance | 2,539 |  |  | 2,392 |  |  | 147 |  |  | 6.1 | % |  |  | 9,068 |  |  | 7,934 |  |  | 1,134 |  |  | 14.3 | %
Total | $ | 8,671 |  |  | $ | 8,510 |  |  | $ | 161 |  |  | 1.9 | % |  |  | $ | 34,299 |  |  | $ | 31,715 |  |  | $ | 2,584 |  |  | 8.1 | %
Property operating expenses, including real estate taxes - non-same-store | $ | 1,790 |  |  | $ | 1,266 |  |  | $ | 524 |  |  | 41.4 | % |  |  | $ | 5,915 |  |  | $ | 3,542 |  |  | $ | 2,373 |  |  | 67.0 | %
Property operating expenses, including real estate taxes - other | 251 |  |  | 249 |  |  | 2 |  |  | 0.8 | % |  |  | 797 |  |  | 940 |  |  | (143) |  |  | (15.2) | %
Property operating expenses, including real estate taxes - dispositions | 2 |  |  | 4,380 |  |  | (4,378) |  |  | (100.0) | % |  |  | 6,253 |  |  | 15,370 |  |  | (9,117) |  |  | (59.3) | %
Total property operating expenses, including real estate taxes | $ | 25,098 |  |  | $ | 29,219 |  |  | $ | (4,121) |  |  | (14.1) | % |  |  | $ | 105,812 |  |  | $ | 108,637 |  |  | $ | (2,825) |  |  | (2.6) | %

(1)Same-store controllable expenses is a non-GAAP measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.
(2)On-site compensation for administration, leasing, and maintenance personnel.

| S-6 |

CENTERSPACE
RECONCILIATIONS OF NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS TO FUNDS FROM OPERATIONS AND CORE FUNDS FROM OPERATIONS (1)

|  | (in thousands, except per share amounts)
|  | Three Months Ended |  |  | Twelve Months Ended
|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022 |  |  | 12/31/2023 |  | 12/31/2022
Funds from Operations:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net (loss) income available to common shareholders |  | $ | (9,764) |  |  | $ | 6,167 |  |  | $ | (3,470) |  |  | $ | 41,964 |  |  | $ | (3,613) |  |  |  | $ | 34,897 |  |  | $ | (20,537) |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncontrolling interests - Operating Partnership and Series E preferred units |  | (1,917) |  |  | 1,204 |  |  | (712) |  |  | 8,566 |  |  | (753) |  |  |  | 7,141 |  |  | (4,299) |
Depreciation and amortization |  | 26,617 |  |  | 24,697 |  |  | 24,371 |  |  | 25,993 |  |  | 25,768 |  |  |  | 101,678 |  |  | 105,257 |
Less depreciation - non real estate |  | (85) |  |  | (56) |  |  | (89) |  |  | (91) |  |  | (91) |  |  |  | (322) |  |  | (387) |
Less depreciation - partially owned entities |  | (22) |  |  | (20) |  |  | (19) |  |  | (19) |  |  | (19) |  |  |  | (80) |  |  | (65) |
Impairment of real estate |  | 5,218 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 5,218 |  |  | — |
(Gain) loss on sale of real estate |  | 82 |  |  | (11,235) |  |  | 71 |  |  | (60,159) |  |  | (14) |  |  |  | (71,240) |  |  | (41) |
FFO applicable to common shares and Units |  | $ | 20,129 |  |  | $ | 20,757 |  |  | $ | 20,152 |  |  | $ | 16,254 |  |  | $ | 21,278 |  |  |  | $ | 77,292 |  |  | $ | 79,928 |
Adjustments to Core FFO: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-cash casualty loss (recovery) |  | 535 |  |  | 854 |  |  | (52) |  |  | 13 |  |  | 20 |  |  |  | 1,350 |  |  | 254 |
Loss on extinguishment of debt |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | 5 |
Technology implementation costs(2) |  | — |  |  | — |  |  | — |  |  | — |  |  | 89 |  |  |  | — |  |  | 873 |
Interest rate swap amortization and mark-to-market |  | 315 |  |  | 324 |  |  | 159 |  |  | 138 |  |  | 104 |  |  |  | 936 |  |  | (100) |
Amortization of assumed debt |  | 136 |  |  | (116) |  |  | (116) |  |  | (116) |  |  | (117) |  |  |  | (212) |  |  | (464) |
Pursuit costs |  | — |  |  | — |  |  | — |  |  | 5 |  |  | 137 |  |  |  | 5 |  |  | 1,302 |
Severance and transition related costs |  | (10) |  |  | — |  |  | (19) |  |  | 3,199 |  |  | — |  |  |  | 3,170 |  |  | — |
Loss on litigation settlement and associated trial costs(3) |  | 1,035 |  |  | 34 |  |  | 3,201 |  |  | — |  |  | — |  |  |  | 4,270 |  |  | — |
Other miscellaneous items(4) |  | (35) |  |  | (129) |  |  | (22) |  |  | 49 |  |  | (28) |  |  |  | (137) |  |  | 85 |
Core FFO applicable to common shares and Units |  | $ | 22,105 |  |  | $ | 21,724 |  |  | $ | 23,303 |  |  | $ | 19,542 |  |  | $ | 21,483 |  |  |  | $ | 86,674 |  |  | $ | 81,883 |
FFO applicable to common shares and Units |  | $ | 20,129 |  |  | $ | 20,757 |  |  | $ | 20,152 |  |  | $ | 16,254 |  |  | $ | 21,278 |  |  |  | $ | 77,292 |  |  | $ | 79,928 |
Dividends to Series D preferred unitholders |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  |  | 640 |  |  | 640 |
FFO applicable to common shares and Units - diluted |  | $ | 20,289 |  |  | $ | 20,917 |  |  | $ | 20,312 |  |  | $ | 16,414 |  |  | $ | 21,438 |  |  |  | $ | 77,932 |  |  | $ | 80,568 |
Core FFO applicable to common shares and Units |  | $ | 22,105 |  |  | $ | 21,724 |  |  | $ | 23,303 |  |  | $ | 19,542 |  |  | $ | 21,483 |  |  |  | $ | 86,674 |  |  | $ | 81,883 |
Dividends to Series D preferred unitholders |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  |  | 640 |  |  | 640 |
Core FFO applicable to common shares and Units - diluted |  | $ | 22,265 |  |  | $ | 21,884 |  |  | $ | 23,463 |  |  | $ | 19,702 |  |  | $ | 21,643 |  |  |  | $ | 87,314 |  |  | $ | 82,523 |
Per Share Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) per share and unit - diluted |  | $ | (0.65) |  |  | $ | 0.41 |  |  | $ | (0.23) |  |  | $ | 2.76 |  |  | $ | (0.24) |  |  |  | $ | 2.32 |  |  | $ | (1.35) |
FFO per share and unit - diluted |  | $ | 1.11 |  |  | $ | 1.15 |  |  | $ | 1.11 |  |  | $ | 0.89 |  |  | $ | 1.16 |  |  |  | $ | 4.27 |  |  | $ | 4.32 |
Core FFO per share and unit - diluted |  | $ | 1.22 |  |  | $ | 1.20 |  |  | $ | 1.28 |  |  | $ | 1.07 |  |  | $ | 1.17 |  |  |  | $ | 4.78 |  |  | $ | 4.43 |
Weighted average shares - basic |  | 15,013 |  | 14,989 |  | 14,949 |  | 15,025 |  | 15,027 |  |  | 14,994 |  | 15,216
Effect of redeemable operating partnership units |  | 862 |  | 908 |  | 965 |  | 968 |  | 974 |  |  | 925 |  | 978
Effect of Series D preferred units |  | 228 |  | 228 |  | 228 |  | 228 |  | 228 |  |  | 228 |  | 228
Effect of Series E preferred units |  | 2,087 |  | 2,093 |  | 2,103 |  | 2,118 |  | 2,185 |  |  | 2,100 |  | 2,185
Effect of dilutive restricted stock units and stock options |  | 31 |  | 28 |  | 24 |  | 20 |  | 9 |  |  | 24 |  | 38
Weighted average shares and units - diluted |  | 18,221 |  | 18,246 |  | 18,269 |  | 18,359 |  | 18,423 |  |  | 18,271 |  | 18,645

(1)Funds from operations and Core funds from operations are non-GAAP measures. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.
(2)Costs are related to a two-year implementation.
(3)Consists of $3.9 million loss on litigation settlement for a trial judgment entered against the Company and $406,000 in associated trial costs related to the litigation matter during the year ended December 31, 2023
(4)Consists of (gain) loss on investments

| S-7 |

CENTERSPACE
RECONCILIATIONS OF NET INCOME (LOSS) AVAILABLE TO CONTROLLING INTERESTS
TO ADJUSTED EBITDA(1)

|  | (in thousands)
|  | Three Months Ended |  |  | Twelve Months Ended
|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022 |  |  | 12/31/2023 |  | 12/31/2022
Net income (loss) attributable to controlling interests |  | $ | (8,156) |  |  | $ | 7,774 |  |  | $ | (1,863) |  |  | $ | 43,571 |  |  | $ | (2,006) |  |  |  | $ | 41,326 |  |  | $ | (14,109) |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends to Series D preferred unitholders |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  |  | 640 |  |  | 640 |
Noncontrolling interests – Operating Partnership and Series E preferred units |  | (1,918) |  |  | 1,204 |  |  | (712) |  |  | 8,566 |  |  | (753) |  |  |  | 7,140 |  |  | (4,299) |
Income (loss) before noncontrolling interests – Operating Partnership |  | (9,914) |  |  | 9,138 |  |  | (2,415) |  |  | 52,297 |  |  | (2,599) |  |  |  | 49,106 |  |  | (17,768) |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  | 8,900 |  |  | 8,542 |  |  | 8,626 |  |  | 10,305 |  |  | 9,589 |  |  |  | 36,373 |  |  | 32,692 |
Loss on extinguishment of debt |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | 5 |
Depreciation and amortization related to real estate investments |  | 26,595 |  |  | 24,675 |  |  | 24,351 |  |  | 25,971 |  |  | 25,747 |  |  |  | 101,592 |  |  | 105,185 |
Impairment of real estate investments |  | 5,218 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 5,218 |  |  | — |
Non-cash casualty loss (recovery) |  | 535 |  |  | 854 |  |  | (52) |  |  | 13 |  |  | 20 |  |  |  | 1,350 |  |  | 254 |
Interest income |  | (316) |  |  | (187) |  |  | (248) |  |  | (92) |  |  | (92) |  |  |  | (843) |  |  | (712) |
(Gain) loss on sale of real estate and other investments |  | 83 |  |  | (11,235) |  |  | 71 |  |  | (60,159) |  |  | (14) |  |  |  | (71,240) |  |  | (41) |
Technology implementation costs(2) |  | — |  |  | — |  |  | — |  |  | — |  |  | 89 |  |  |  | — |  |  | 873 |
Interest rate swap termination and mark-to-market |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | (564) |
Pursuit costs |  | — |  |  | — |  |  | — |  |  | 5 |  |  | 137 |  |  |  | 5 |  |  | 1,302 |
Severance and transition related costs |  | (10) |  |  | — |  |  | (19) |  |  | 3,199 |  |  | — |  |  |  | 3,170 |  |  | — |
Loss on litigation settlement and associated trial costs(3) |  | 1,035 |  |  | 34 |  |  | 3,201 |  |  | — |  |  | — |  |  |  | 4,270 |  |  | — |
Other miscellaneous items(4) |  | (35) |  |  | (129) |  |  | (22) |  |  | 49 |  |  | (28) |  |  |  | (137) |  |  | 85 |
Adjusted EBITDA |  | $ | 32,091 |  |  | $ | 31,692 |  |  | $ | 33,493 |  |  | $ | 31,588 |  |  | $ | 32,849 |  |  |  | $ | 128,864 |  |  | $ | 121,311 |

(1)Adjusted EBITDA is a non-GAAP measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.
(2)Costs are related to a two-year implementation.
(3)Consists of a $2.9 million loss on litigation settlement for a trial judgment entered against the Company and $406,000 in associated trial costs related to the litigation matter.
(4)Consists of (gain) loss on investments

| S-8 |

CENTERSPACE
DEBT ANALYSIS
(in thousands)
Debt Maturity Schedule
Annual Expirations

|  | Future Maturities of Debt
|  | Secured Fixed Debt |  | Unsecured Fixed Debt |  | Unsecured Variable Debt |  | Total Debt |  | % of Total Debt |  | Weighted Average Interest Rate(1)
2024 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | — | % |  | — | %
2025 |  | 30,414 |  |  | — |  |  | 30,000 |  |  | 60,414 |  |  | 6.6 | % |  | 4.92 | %
2026 |  | 99,537 |  |  | — |  |  | — |  |  | 99,537 |  |  | 10.8 | % |  | 3.59 | %
2027 |  | 49,675 |  |  | — |  |  | — |  |  | 49,675 |  |  | 5.4 | % |  | 3.47 | %
2028 |  | 65,842 |  |  | 50,000 |  |  | — |  |  | 115,842 |  |  | 12.6 | % |  | 3.14 | %
Thereafter |  | 344,522 |  |  | 250,000 |  |  | — |  |  | 594,522 |  |  | 64.6 | % |  | 3.48 | %
Total debt |  | $ | 589,990 |  |  | $ | 300,000 |  |  | $ | 30,000 |  |  | $ | 919,990 |  |  | 100.0 | % |  | 3.54 | %

(1)Weighted average interest rate of debt that matures during the year.

|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022
Debt Balances Outstanding(1) |  |  |  |  |  |  |  |  |  |
Secured fixed rate - mortgages payable - other |  | $ | 391,140 |  |  | $ | 343,709 |  | $ | 367,679 |  | $ | 279,340 |  | $ | 299,427
Secured fixed rate - mortgages payable - Fannie Mae credit facility |  | 198,850 |  |  | 198,850 |  | 198,850 |  | 198,850 |  | 198,850
Unsecured variable rate line of credit |  | 30,000 |  |  | — |  | 18,989 |  | 143,469 |  | 113,500
Unsecured term loans |  | — |  |  | — |  | — |  | — |  | 100,000
Unsecured senior notes |  | 300,000 |  |  | 300,000 |  | 300,000 |  | 300,000 |  | 300,000
Debt total |  | $ | 919,990 |  |  | $ | 842,559 |  | $ | 885,518 |  | $ | 921,659 |  | $ | 1,011,777
Quarterly Interest Rates |  |  |  |  |  |  |  |  |  |
Mortgages payable - other rate |  | 4.05 | % |  | 4.14 | % |  | 4.14 | % |  | 3.85 | % |  | 3.85 | %
Mortgages payable - Fannie Mae Credit Facility rate |  | 2.78 | % |  | 2.78 | % |  | 2.78 | % |  | 2.78 | % |  | 2.78 | %
Lines of credit rate(2) |  | 6.74 | % |  | — |  |  | 6.56 | % |  | 6.19 | % |  | 5.61 | %
Unsecured term loan rate |  | — |  |  | — |  |  | — |  |  | — |  |  | 5.57 | %
Unsecured senior notes rate |  | 3.12 | % |  | 3.12 | % |  | 3.12 | % |  | 3.12 | % |  | 3.12 | %
Total debt |  | 3.54 | % |  | 3.46 | % |  | 3.54 | % |  | 3.71 | % |  | 3.62 | %

(1) Excludes deferred financing costs and premiums or discounts.
(2) Interest rate excludes any unused facility fees and amounts reclassified from accumulated other comprehensive income into interest expense from terminated interest rate swaps, as shown in the table below.

|  | Three Months Ended
|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022
Reclassified from Accumulated OCI into interest expense |  | $ | 315 |  |  | $ | 324 |  |  | $ | 159 |  |  | $ | 138 |  |  | $ | 103 |

| S-9 |

CENTERSPACE
CAPITAL ANALYSIS
(in thousands, except per share and unit amounts)

|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022
Equity Capitalization |  |  |  |  |  |  |  |  |  |
Common shares outstanding |  | 14,963 |  |  | 15,052 |  |  | 14,949 |  |  | 15,032 |  |  | 15,020 |
Operating partnership units outstanding |  | 861 |  |  | 864 |  |  | 961 |  |  | 967 |  |  | 971 |
Series E preferred units (as converted) |  | 2,078 |  |  | 2,087 |  |  | 2,094 |  |  | 2,103 |  |  | 2,119 |
Total common shares and units outstanding |  | 17,902 |  |  | 18,003 |  |  | 18,004 |  |  | 18,102 |  |  | 18,110 |
Market price per common share (closing price at end of period) |  | $ | 58.20 |  |  | $ | 60.26 |  |  | $ | 61.36 |  |  | $ | 54.63 |  |  | $ | 58.67 |
Equity capitalization-common shares and units |  | $ | 1,041,896 |  |  | $ | 1,084,861 |  |  | $ | 1,104,725 |  |  | $ | 988,912 |  |  | $ | 1,062,514 |
Recorded book value of preferred shares |  | $ | 93,530 |  |  | $ | 93,530 |  |  | $ | 93,530 |  |  | $ | 93,530 |  |  | $ | 93,530 |
Total equity capitalization |  | $ | 1,135,426 |  |  | $ | 1,178,391 |  |  | $ | 1,198,255 |  |  | $ | 1,082,442 |  |  | $ | 1,156,044 |
Series D preferred units |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |  |  | 16,560 |
Debt capitalization |  |  |  |  |  |  |  |  |  |
Total debt |  | 919,990 |  |  | 842,559 |  |  | 885,518 |  |  | 921,659 |  |  | 1,011,777 |
Total capitalization |  | $ | 2,071,976 |  |  | $ | 2,037,510 |  |  | $ | 2,100,333 |  |  | $ | 2,020,661 |  |  | $ | 2,184,381 |
Total debt to total capitalization(1) |  | 44.4 | % |  | 41.4 | % |  | 42.2 | % |  | 45.6 | % |  | 46.3 | %

(1)Total debt to total market capitalization is a non-GAAP financial measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.

|  | Three Months Ended |  |  | Twelve Months Ended
|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022 |  |  | 12/31/2023 |  | 12/31/2022
Debt service coverage ratio(1) |  | 3.09 | x |  | 3.11 | x |  | 3.33 | x |  | 2.70 | x |  | 2.99 | x |  |  | 3.04 | x |  | 3.16 | x
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization |  | 2.64 | x |  | 2.65 | x |  | 2.83 | x |  | 2.35 | x |  | 2.58 | x |  |  | 2.61 | x |  | 2.67 | x
Net debt/Adjusted EBITDA(2) |  | 7.10 | x |  | 6.41 | x |  | 6.54 | x |  | 7.22 | x |  | 7.62 | x |  |  | 7.07 | x |  | 8.25 | x
Net debt and preferred equity/Adjusted EBITDA(2) |  | 7.96 | x |  | 7.28 | x |  | 7.36 | x |  | 8.09 | x |  | 8.46 | x |  |  | 7.93 | x |  | 9.16 | x
Distribution Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common shares and units outstanding at record date |  | 15,824 |  |  | 15,916 |  |  | 15,910 |  |  | 15,999 |  |  | 15,991 |  |  |  | 15,824 |  |  | 15,991 |
Total common distribution declared |  | $ | 11,551 |  |  | $ | 11,615 |  |  | $ | 11,608 |  |  | $ | 11,668 |  |  | $ | 11,614 |  |  |  | $ | 46,442 |  |  | $ | 47,445 |
Common distribution per share and unit |  | $ | 0.73 |  |  | $ | 0.73 |  |  | $ | 0.73 |  |  | $ | 0.73 |  |  | $ | 0.73 |  |  |  | $ | 2.92 |  |  | $ | 2.92 |
Payout ratio (Core FFO per diluted share and unit basis)(3) |  | 59.8 | % |  | 60.8 | % |  | 57.0 | % |  | 68.2 | % |  | 62.4 | % |  |  | 61.1 | % |  | 65.9 | %

(1)Debt service coverage ratio is a non-GAAP financial measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.
(2)Net debt divided by adjusted EBITDA is a non-GAAP financial measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.
(3)Payout ratio (Core FFO per diluted share and unit basis) is a non-GAAP financial measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.

| S-10 |

CENTERSPACE
SAME-STORE FOURTH QUARTER COMPARISONS
(dollars in thousands)

|  | Homes Included |  | Revenues |  | Expenses |  | NOI
Regions |  |  | Q4 2023 |  | Q4 2022 |  | % Change |  | Q4 2023 |  | Q4 2022 |  | % Change |  | Q4 2023 |  | Q4 2022 |  | % Change
Denver, CO |  | 1,889 |  |  | $ | 11,885 |  |  | $ | 11,557 |  |  | 2.8 | % |  | $ | 4,129 |  |  | $ | 3,693 |  |  | 11.8 | % |  | $ | 7,756 |  |  | $ | 7,864 |  |  | (1.4) | %
Minneapolis, MN |  | 4,519 |  |  | 21,452 |  |  | 20,689 |  |  | 3.7 | % |  | 9,586 |  |  | 9,891 |  |  | (3.1) | % |  | 11,866 |  |  | 10,798 |  |  | 9.9 | %
North Dakota |  | 1,710 |  |  | 6,966 |  |  | 6,509 |  |  | 7.0 | % |  | 2,653 |  |  | 2,527 |  |  | 5.0 | % |  | 4,313 |  |  | 3,982 |  |  | 8.3 | %
Omaha, NE |  | 872 |  |  | 3,597 |  |  | 3,279 |  |  | 9.7 | % |  | 1,230 |  |  | 1,597 |  |  | (23.0) | % |  | 2,367 |  |  | 1,682 |  |  | 40.7 | %
Rochester, MN |  | 1,129 |  |  | 5,744 |  |  | 5,593 |  |  | 2.7 | % |  | 2,134 |  |  | 2,365 |  |  | (9.8) | % |  | 3,610 |  |  | 3,228 |  |  | 11.8 | %
St. Cloud, MN |  | 832 |  |  | 3,461 |  |  | 3,309 |  |  | 4.6 | % |  | 1,555 |  |  | 1,481 |  |  | 5.0 | % |  | 1,906 |  |  | 1,828 |  |  | 4.3 | %
Other Mountain West(1) |  | 1,222 |  |  | 5,157 |  |  | 5,119 |  |  | 0.7 | % |  | 1,768 |  |  | 1,770 |  |  | (0.1) | % |  | 3,389 |  |  | 3,349 |  |  | 1.2 | %
Same-Store Total |  | 12,173 |  |  | $ | 58,262 |  |  | $ | 56,055 |  |  | 3.9 | % |  | $ | 23,055 |  |  | $ | 23,324 |  |  | (1.2) | % |  | $ | 35,207 |  |  | $ | 32,731 |  |  | 7.6 | %

|  | % of NOI |  | Weighted Average Occupancy (2) |  | Average Monthly Rental Rate (3) |  | Average Monthly Revenue per Occupied Home (4)
Regions |  |  | Q4 2023 |  | Q4 2022 |  | Growth |  | Q4 2023 |  | Q4 2022 |  | % Change |  | Q4 2023 |  | Q4 2022 |  | % Change
Denver, CO |  | 22.0 | % |  | 95.5 | % |  | 96.2 | % |  | (0.7) | % |  | $ | 1,967 |  |  | $ | 1,902 |  |  | 3.4 | % |  | $ | 2,196 |  |  | $ | 2,120 |  |  | 3.6 | %
Minneapolis, MN |  | 33.7 | % |  | 95.1 | % |  | 94.7 | % |  | 0.4 | % |  | 1,488 |  |  | 1,450 |  |  | 2.6 | % |  | 1,664 |  |  | 1,611 |  |  | 3.3 | %
North Dakota |  | 12.3 | % |  | 95.5 | % |  | 96.5 | % |  | (1.0) | % |  | 1,295 |  |  | 1,206 |  |  | 7.4 | % |  | 1,422 |  |  | 1,314 |  |  | 8.2 | %
Omaha, NE |  | 6.7 | % |  | 94.4 | % |  | 93.0 | % |  | 1.4 | % |  | 1,324 |  |  | 1,223 |  |  | 8.3 | % |  | 1,456 |  |  | 1,348 |  |  | 8.0 | %
Rochester, MN |  | 10.3 | % |  | 93.6 | % |  | 93.8 | % |  | (0.2) | % |  | 1,734 |  |  | 1,663 |  |  | 4.3 | % |  | 1,812 |  |  | 1,760 |  |  | 3.0 | %
St. Cloud, MN |  | 5.4 | % |  | 92.2 | % |  | 90.1 | % |  | 2.1 | % |  | 1,353 |  |  | 1,313 |  |  | 3.0 | % |  | 1,504 |  |  | 1,471 |  |  | 2.2 | %
Other Mountain West(1) |  | 9.6 | % |  | 94.2 | % |  | 95.8 | % |  | (1.6) | % |  | 1,342 |  |  | 1,314 |  |  | 2.1 | % |  | 1,493 |  |  | 1,458 |  |  | 2.4 | %
Same-Store Total |  | 100.0 | % |  | 94.8 | % |  | 94.8 | % |  | — | % |  | $ | 1,522 |  |  | $ | 1,467 |  |  | 3.7 | % |  | $ | 1,683 |  |  | $ | 1,618 |  |  | 4.0 | %

(1)Includes apartment communities in Billings, Montana and Rapid City, South Dakota.
(2)Weighted average occupancy is a non-GAAP financial measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.
(3)Average monthly rental rate is a non-GAAP financial measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.
(4)Average monthly revenue per occupied home is a non-GAAP financial measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.

| S-11 |

CENTERSPACE
SAME-STORE SEQUENTIAL QUARTER COMPARISONS
(dollars in thousands)

|  | Homes Included |  | Revenues |  | Expenses |  | NOI
Regions |  |  | Q4 2023 |  | Q3 2023 |  | % Change |  | Q4 2023 |  | Q3 2023 |  | % Change |  | Q4 2023 |  | Q3 2023 |  | % Change
Denver, CO |  | 1,889 |  |  | $ | 11,885 |  |  | $ | 11,805 |  |  | 0.7 | % |  | $ | 4,129 |  |  | $ | 4,172 |  |  | (1.0) | % |  | $ | 7,756 |  |  | $ | 7,633 |  |  | 1.6 | %
Minneapolis, MN |  | 4,519 |  |  | 21,452 |  |  | 21,167 |  |  | 1.3 | % |  | 9,586 |  |  | 9,722 |  |  | (1.4) | % |  | 11,866 |  |  | 11,445 |  |  | 3.7 | %
North Dakota |  | 1,710 |  |  | 6,966 |  |  | 6,912 |  |  | 0.8 | % |  | 2,653 |  |  | 2,718 |  |  | (2.4) | % |  | 4,313 |  |  | 4,194 |  |  | 2.8 | %
Omaha, NE |  | 872 |  |  | 3,597 |  |  | 3,580 |  |  | 0.5 | % |  | 1,230 |  |  | 1,545 |  |  | (20.4) | % |  | 2,367 |  |  | 2,035 |  |  | 16.3 | %
Rochester, MN |  | 1,129 |  |  | 5,744 |  |  | 5,779 |  |  | (0.6) | % |  | 2,134 |  |  | 2,245 |  |  | (4.9) | % |  | 3,610 |  |  | 3,534 |  |  | 2.2 | %
St. Cloud, MN |  | 832 |  |  | 3,461 |  |  | 3,528 |  |  | (1.9) | % |  | 1,555 |  |  | 1,522 |  |  | 2.2 | % |  | 1,906 |  |  | 2,006 |  |  | (5.0) | %
Other Mountain West(1) |  | 1,222 |  |  | 5,157 |  |  | 5,178 |  |  | (0.4) | % |  | 1,768 |  |  | 1,982 |  |  | (10.8) | % |  | 3,389 |  |  | 3,196 |  |  | 6.0 | %
Same-Store Total |  | 12,173 |  |  | $ | 58,262 |  |  | $ | 57,949 |  |  | 0.5 | % |  | $ | 23,055 |  |  | $ | 23,906 |  |  | (3.6) | % |  | $ | 35,207 |  |  | $ | 34,043 |  |  | 3.4 | %

|  | % of NOI |  | Weighted Average Occupancy(2) |  | Average Monthly Rental Rate(3) |  | Average Monthly Revenue per Occupied Home(4)
Regions |  |  | Q4 2023 |  | Q3 2023 |  | Growth |  | Q4 2023 |  | Q3 2023 |  | % Change |  | Q4 2023 |  | Q3 2023 |  | % Change
Denver, CO |  | 22.0 | % |  | 95.5 | % |  | 95.4 | % |  | 0.1 | % |  | $ | 1,967 |  |  | $ | 1,957 |  |  | 0.5 | % |  | $ | 2,196 |  |  | $ | 2,185 |  |  | 0.5 | %
Minneapolis, MN |  | 33.7 | % |  | 95.1 | % |  | 94.2 | % |  | 1.0 | % |  | 1,488 |  |  | 1,480 |  |  | 0.5 | % |  | 1,664 |  |  | 1,657 |  |  | 0.4 | %
North Dakota |  | 12.3 | % |  | 95.5 | % |  | 95.8 | % |  | (0.3) | % |  | 1,295 |  |  | 1,276 |  |  | 1.5 | % |  | 1,422 |  |  | 1,406 |  |  | 1.1 | %
Omaha, NE |  | 6.7 | % |  | 94.4 | % |  | 95.1 | % |  | (0.7) | % |  | 1,324 |  |  | 1,299 |  |  | 1.9 | % |  | 1,456 |  |  | 1,439 |  |  | 1.2 | %
Rochester, MN |  | 10.3 | % |  | 93.6 | % |  | 94.4 | % |  | (0.8) | % |  | 1,734 |  |  | 1,711 |  |  | 1.3 | % |  | 1,812 |  |  | 1,808 |  |  | 0.2 | %
St. Cloud, MN |  | 5.4 | % |  | 92.2 | % |  | 92.2 | % |  | — | % |  | 1,353 |  |  | 1,349 |  |  | 0.3 | % |  | 1,504 |  |  | 1,532 |  |  | (1.8) | %
Other Mountain West(1) |  | 9.6 | % |  | 94.2 | % |  | 95.0 | % |  | (0.8) | % |  | 1,342 |  |  | 1,338 |  |  | 0.3 | % |  | 1,493 |  |  | 1,487 |  |  | 0.4 | %
Same-Store Total |  | 100.0 | % |  | 94.8 | % |  | 94.7 | % |  | 0.1 | % |  | $ | 1,522 |  |  | $ | 1,511 |  |  | 0.7 | % |  | $ | 1,683 |  |  | $ | 1,676 |  |  | 0.4 | %

(1)Includes apartment communities in Billings, Montana and Rapid City, South Dakota.
(2)Weighted average occupancy is a non-GAAP financial measure. Refer to pages S-18 through S-20 “Non-GAAP Financial Measures and Other Terms” for additional information.
(3)Average monthly rental rate is a non-GAAP financial measure. Refer to pages S-18 through S-20 “Non-GAAP Financial Measures and Other Terms” for additional information.
(4)Average monthly revenue per occupied home is a non-GAAP financial measure. Refer to pages S-18 through S-20 “Non-GAAP Financial Measures and Other Terms” for additional information.

| S-12 |

CENTERSPACE
SAME-STORE YEAR-TO-DATE COMPARISONS
(dollars in thousands)

|  | Homes Included |  | Revenues |  | Expenses |  | NOI
Regions |  |  | 2023 |  | 2022 |  | % Change |  | 2023 |  | 2022 |  | % Change |  | 2023 |  | 2022 |  | % Change
Denver, CO |  | 1,889 |  |  | $ | 47,399 |  |  | $ | 44,397 |  |  | 6.8 | % |  | $ | 16,280 |  |  | $ | 14,260 |  |  | 14.2 | % |  | $ | 31,119 |  |  | $ | 30,137 |  |  | 3.3 | %
Minneapolis, MN |  | 4,519 |  |  | 84,492 |  |  | 79,707 |  |  | 6.0 | % |  | 37,987 |  |  | 37,302 |  |  | 1.8 | % |  | 46,505 |  |  | 42,405 |  |  | 9.7 | %
North Dakota |  | 1,710 |  |  | 27,155 |  |  | 24,965 |  |  | 8.8 | % |  | 10,724 |  |  | 10,028 |  |  | 6.9 | % |  | 16,431 |  |  | 14,937 |  |  | 10.0 | %
Omaha, NE |  | 872 |  |  | 13,976 |  |  | 12,733 |  |  | 9.8 | % |  | 5,589 |  |  | 5,648 |  |  | (1.0) | % |  | 8,387 |  |  | 7,085 |  |  | 18.4 | %
Rochester, MN |  | 1,129 |  |  | 22,932 |  |  | 21,281 |  |  | 7.8 | % |  | 8,744 |  |  | 8,639 |  |  | 1.2 | % |  | 14,188 |  |  | 12,642 |  |  | 12.2 | %
St. Cloud, MN |  | 832 |  |  | 13,799 |  |  | 12,701 |  |  | 8.6 | % |  | 6,172 |  |  | 5,934 |  |  | 4.0 | % |  | 7,627 |  |  | 6,767 |  |  | 12.7 | %
Other Mountain West(1) |  | 1,222 |  |  | 20,580 |  |  | 19,157 |  |  | 7.4 | % |  | 7,351 |  |  | 6,974 |  |  | 5.4 | % |  | 13,229 |  |  | 12,183 |  |  | 8.6 | %
Same-Store Total |  | 12,173 |  |  | $ | 230,333 |  |  | $ | 214,941 |  |  | 7.2 | % |  | $ | 92,847 |  |  | $ | 88,785 |  |  | 4.6 | % |  | $ | 137,486 |  |  | $ | 126,156 |  |  | 9.0 | %

|  | % of NOI |  | Weighted Average Occupancy(2) |  | Average Monthly Rental Rate(3) |  | Average Monthly Revenue per Occupied Home(4)
Regions |  |  | 2023 |  | 2022 |  | Growth |  | 2023 |  | 2022 |  | % Change |  | 2023 |  | 2022 |  | % Change
Denver, CO |  | 22.7 | % |  | 95.7 | % |  | 95.2 | % |  | 0.5 | % |  | $ | 1,941 |  |  | $ | 1,845 |  |  | 5.2 | % |  | $ | 2,185 |  |  | $ | 2,058 |  |  | 6.2 | %
Minneapolis, MN |  | 33.8 | % |  | 94.7 | % |  | 94.5 | % |  | 0.2 | % |  | 1,471 |  |  | 1,411 |  |  | 4.3 | % |  | 1,645 |  |  | 1,555 |  |  | 5.8 | %
North Dakota |  | 12.0 | % |  | 96.1 | % |  | 96.1 | % |  | — | % |  | 1,257 |  |  | 1,164 |  |  | 8.0 | % |  | 1,378 |  |  | 1,266 |  |  | 8.8 | %
Omaha, NE |  | 6.1 | % |  | 94.6 | % |  | 95.1 | % |  | (0.5) | % |  | 1,280 |  |  | 1,159 |  |  | 10.4 | % |  | 1,412 |  |  | 1,280 |  |  | 10.3 | %
Rochester, MN |  | 10.3 | % |  | 94.4 | % |  | 93.9 | % |  | 0.5 | % |  | 1,699 |  |  | 1,581 |  |  | 7.5 | % |  | 1,792 |  |  | 1,674 |  |  | 7.0 | %
St. Cloud, MN |  | 5.5 | % |  | 91.6 | % |  | 89.7 | % |  | 2.1 | % |  | 1,340 |  |  | 1,259 |  |  | 6.4 | % |  | 1,509 |  |  | 1,418 |  |  | 6.4 | %
Other Mountain West(1) |  | 9.6 | % |  | 94.9 | % |  | 95.5 | % |  | (0.6) | % |  | 1,331 |  |  | 1,238 |  |  | 7.5 | % |  | 1,479 |  |  | 1,367 |  |  | 8.2 | %
Same-Store Total |  | 100.0 | % |  | 94.9 | % |  | 94.6 | % |  | 0.3 | % |  | $ | 1,498 |  |  | $ | 1,414 |  |  | 5.9 | % |  | $ | 1,662 |  |  | $ | 1,555 |  |  | 6.9 | %

(1)Includes apartment communities in Billings, Montana and Rapid City, South Dakota.
(2)Weighted average occupancy is a non-GAAP financial measure. Refer to pages S-18 through S-20 “Non-GAAP Financial Measures and Other Terms” for additional information.
(3)Average monthly rental rate is a non-GAAP financial measure. Refer to pages S-18 through S-20 “Non-GAAP Financial Measures and Other Terms” for additional information.
(4)Average monthly revenue per occupied home is a non-GAAP financial measure. Refer to pages S-18 through S-20 “Non-GAAP Financial Measures and Other Terms” for additional information.

| S-13 |

CENTERSPACE
PORTFOLIO SUMMARY (1)

|  | Three Months Ended
|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022
Number of Apartment Homes at Period End |  |  |  |  |  |  |  |  |  |
Same-Store |  | 12,173 |  |  | 12,173 |  |  | 12,885 |  |  | 12,885 |  |  | 11,330 |
Non-Same-Store |  | 915 |  |  | 612 |  |  | 612 |  |  | 612 |  |  | 3,735 |
All Communities |  | 13,088 |  |  | 12,785 |  |  | 13,497 |  |  | 13,497 |  |  | 15,065 |
Average Monthly Rental Rate(2) |  |  |  |  |  |  |  |  |  |
Same-Store |  | $ | 1,522 |  |  | $ | 1,511 |  |  | $ | 1,467 |  |  | $ | 1,450 |  |  | $ | 1,438 |
Non-Same-Store |  | 1,893 |  |  | 1,907 |  |  | 1,894 |  |  | 1,890 |  |  | 1,352 |
All Communities |  | $ | 1,547 |  |  | $ | 1,530 |  |  | $ | 1,487 |  |  | $ | 1,470 |  |  | $ | 1,417 |
Average Monthly Revenue per Occupied Apartment Home(3) |  |  |  |  |  |  |  |  |  |
Same-Store |  | $ | 1,683 |  |  | $ | 1,676 |  |  | $ | 1,634 |  |  | $ | 1,606 |  |  | $ | 1,592 |
Non-Same-Store |  | 2,055 |  |  | 2,072 |  |  | 2,072 |  |  | 2,066 |  |  | 1,471 |
All Communities |  | $ | 1,708 |  |  | $ | 1,695 |  |  | $ | 1,654 |  |  | $ | 1,627 |  |  | $ | 1,562 |
Weighted Average Occupancy(4) |  |  |  |  |  |  |  |  |  |
Same-Store |  | 94.8 | % |  | 94.7 | % |  | 95.2 | % |  | 94.8 | % |  | 94.9 | %
Non-Same-Store |  | 95.8 | % |  | 93.5 | % |  | 95.4 | % |  | 95.9 | % |  | 94.7 | %
All Communities |  | 94.9 | % |  | 94.6 | % |  | 95.2 | % |  | 94.9 | % |  | 94.9 | %
Operating Expenses as a % of Scheduled Rent |  |  |  |  |  |  |  |  |  |
Same-Store |  | 41.5 | % |  | 43.3 | % |  | 41.2 | % |  | 43.9 | % |  | 43.1 | %
Non-Same-Store |  | 35.7 | % |  | 41.9 | % |  | 38.8 | % |  | 37.8 | % |  | 51.7 | %
All Communities |  | 41.0 | % |  | 43.3 | % |  | 41.1 | % |  | 43.5 | % |  | 45.1 | %
Recurring Capital Expenditures |  |  |  |  |  |  |  |  |  |
Total Recurring Capital Expenditures per Apartment Home – Same-Store |  | $ | 491 |  |  | $ | 389 |  |  | $ | 258 |  |  | $ | 115 |  |  | $ | 364 |

(1)Previously reported amounts are not revised for changes in the composition of the same-store properties pool.
(2)Average monthly rental rate is a non-GAAP financial measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.
(3)Average monthly revenue per occupied apartment home is a non-GAAP financial measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information. .
(4)Weighted average occupancy is a non-GAAP financial measure. Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information.

| S-14 |

CENTERSPACE
CAPITAL EXPENDITURES
(dollars in thousands, except per home amounts)

|  | Three Months Ended |  |  | Twelve Months Ended
|  | 12/31/2023 |  | 12/31/2022 |  |  | 12/31/2023 |  | 12/31/2022
Total Same-Store Apartment Homes |  | 12,173 |  |  | 12,173 |  |  |  | 12,173 |  |  | 12,173 |
All Properties - Weighted Average Apartment Homes |  | 13,088 |  |  | 15,065 |  |  |  | 13,088 |  |  | 14,914 |
Same-Store |  |  |  |  |  |  |  |  |
Building - Exterior |  | $ | 426 |  |  | $ | 250 |  |  |  | $ | 1,283 |  |  | $ | 2,142 |
Building - Interior |  | 122 |  |  | 303 |  |  |  | 104 |  |  | 510 |
Mechanical, Electrical, & Plumbing |  | 1,588 |  |  | 485 |  |  |  | 4,203 |  |  | 2,312 |
Furniture & Equipment |  | 63 |  |  | 136 |  |  |  | 308 |  |  | 427 |
Landscaping & Grounds |  | 944 |  |  | 343 |  |  |  | 970 |  |  | 1,243 |
Turnover Replacements |  | 1,322 |  |  | 1,100 |  |  |  | 4,023 |  |  | 5,227 |
Work in progress |  | 1,518 |  |  | 244 |  |  |  | 3,808 |  |  | (463) |
Recurring Capital Expenditures - Same-Store(1)(2) |  | $ | 5,983 |  |  | $ | 2,861 |  |  |  | $ | 14,699 |  |  | $ | 11,398 |
Recurring Capital Expenditures per Apartment Home - Same-Store(1) |  | $ | 491 |  |  | $ | 235 |  |  |  | $ | 1,208 |  |  | $ | 936 |
Recurring Capital Expenditures - All Properties(1)(2) |  | $ | 6,689 |  |  | $ | 4,105 |  |  |  | $ | 16,056 |  |  | $ | 14,508 |
Recurring Capital Expenditures per Apartment Home - All Properties(1) |  | $ | 511 |  |  | $ | 272 |  |  |  | $ | 1,227 |  |  | $ | 973 |
Value Add(1) |  |  |  |  |  |  |  |  |
Same-Store |  |  |  |  |  |  |  |  |
Interior - Units |  | $ | 3,481 |  |  | $ | 3,860 |  |  |  | $ | 13,712 |  |  | $ | 18,418 |
Common Areas and Exteriors |  | 5,580 |  |  | 6,141 |  |  |  | 9,868 |  |  | 13,962 |
Work in Progress |  | 4,603 |  |  | 270 |  |  |  | 5,515 |  |  | (1,677) |
Total Value Add - Same-Store |  | $ | 13,664 |  |  | $ | 10,271 |  |  |  | $ | 29,095 |  |  | $ | 30,703 |
All Properties |  |  |  |  |  |  |  |  |
Interior - Units |  | $ | 3,481 |  |  | $ | 3,922 |  |  |  | $ | 13,712 |  |  | $ | 18,517 |
Common Areas and Exteriors |  | 5,803 |  |  | 6,506 |  |  |  | 10,213 |  |  | 14,523 |
Work in Progress |  | 4,603 |  |  | 270 |  |  |  | 5,515 |  |  | (1,679) |
Total Value Add - All Properties |  | $ | 13,887 |  |  | $ | 10,698 |  |  |  | $ | 29,440 |  |  | $ | 31,361 |
Acquisition and Other Capital Expenditures(1) |  |  |  |  |  |  |  |  |
All Properties |  | $ | 3,183 |  |  | $ | 5,950 |  |  |  | $ | 17,068 |  |  | $ | 11,298 |
Total Capital Spend |  |  |  |  |  |  |  |  |
Total Capital Spend - Same-Store(3) |  | $ | 19,647 |  |  | $ | 13,132 |  |  |  | $ | 43,794 |  |  | $ | 42,101 |
Total Capital Spend per Apartment Home - Same Store(3) |  | $ | 1,614 |  |  | $ | 1,079 |  |  |  | $ | 3,598 |  |  | $ | 3,459 |
Total Capital Spend - All Properties |  | $ | 23,759 |  |  | $ | 20,753 |  |  |  | $ | 62,564 |  |  | $ | 57,167 |
Total Capital Spend per Apartment Home - All Properties |  | $ | 1,815 |  |  | $ | 1,378 |  |  |  | $ | 4,780 |  |  | $ | 3,833 |

(1)Refer to pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for definitions.
(2)Non-routine capital expenditures were reclassified for inclusion in the Acquisition and Other Capital Expenditures category. For the twelve months ended December 31, 2022, $217,000 was reclassified to Acquisition and Other Capital Expenditures.
(3)Excludes acquisition and other capital expenditures on same-store communities.

| S-15 |

CENTERSPACE
2024 Financial Outlook
(in thousands, except per share amounts)
Centerspace is providing guidance for 2024.

| Twelve Months Ended |  | 2024 Full-Year Guidance Range
| December 31, 2023 |  | Low |  | High
| Actual |  | Amount |  | Amount
Same-store growth (1) |  |  |  |  |
Revenue | $ | 244,839 |  |  | 3.00 | % |  | 5.00 | %
Controllable expenses | 61,873 |  |  | 6.00 | % |  | 7.50 | %
Non-controllable expenses | 36,442 |  |  | 4.75 | % |  | 6.50 | %
Total Expenses | $ | 98,315 |  |  | 5.50 | % |  | 7.00 | %
Same-store NOI (1)(2) | $ | 146,524 |  |  | 1.50 | % |  | 3.50 | %
Components of NOI(2) |  |  |  |  |
Same-store(1) | $ | 146,524 |  |  | $ | 148,700 |  |  | $ | 151,700 |
Non-same-store(1) | 1,078 |  |  | $ | 4,900 |  |  | $ | 5,100 |
Other(1) | 1,804 |  |  | $ | 1,750 |  |  | $ | 1,950 |
Dispositions(1) | 6,091 |  |  | — |  |  | — |
Total NOI(2) | $ | 155,497 |  |  | $ | 155,350 |  |  | $ | 158,750 |
Net impact of potential dispositions | $ | — |  |  | (200) |  |  | (100) |
Other operating income and expenses |  |  |  |  |
General and administrative and property management | (29,433) |  |  | (27,300) |  |  | (26,700) |
Casualty losses | (2,095) |  |  | (1,350) |  |  | (1,250) |
Loss on litigation settlement | (3,864) |  |  | — |  |  | — |
Non-real estate depreciation and amortization | (317) |  |  | (600) |  |  | (550) |
Non-controlling interest | (125) |  |  | (120) |  |  | (130) |
Total other operating income and expenses | $ | (35,834) |  |  | $ | (29,370) |  |  | $ | (28,630) |
Interest expense | $ | (36,429) |  |  | (38,800) |  |  | (38,400) |
Interest and other income | $ | 1,126 |  |  | 2,000 |  |  | 2,200 |
Dividends to preferred shareholders | $ | (6,428) |  |  | (6,428) |  |  | (6,428) |
FFO(2) | $ | 77,932 |  |  | $ | 82,552 |  |  | $ | 87,392 |
Non-core income and expenses |  |  |  |  |
Non-cash casualty (gain) loss | $ | 1,350 |  |  | $ | 450 |  |  | $ | 400 |
Interest rate swap amortization | 936 |  |  | 750 |  |  | 725 |
Severance and transition related costs | 3,170 |  |  | — |  |  | — |
Loss on litigation settlement and associated trial costs | 4,270 |  |  | 50 |  |  | 25 |
Amortization of assumed debt | (212) |  |  | 1,075 |  |  | 1,025 |
Other miscellaneous items | (132) |  |  | 100 |  |  | 50 |
Total non-core income and expenses | $ | 9,382 |  |  | $ | 2,425 |  |  | $ | 2,225 |
Core FFO(2) | $ | 87,314 |  |  | $ | 84,977 |  |  | $ | 89,617 |
Net income (loss) per share - diluted | $ | 2.32 |  |  | $ | (1.31) |  |  | $ | (0.99) |
FFO per diluted share(2) | $ | 4.27 |  |  | $ | 4.54 |  |  | $ | 4.80 |
Core FFO per diluted share(2) | $ | 4.78 |  |  | $ | 4.68 |  |  | $ | 4.92 |
Weighted average shares outstanding - diluted | 18,271 |  |  | 18,175 |  |  | 18,200 |
Additional Assumptions |  |  |  |  |
Same-store recurring capital expenditures (per home)(1) | $ | 900 |  |  | $ | 1,075 |  |  | $ | 1,150 |
Value-add expenditures | $ | 29,440 |  |  | 25,000 |  |  | 27,000 |
Proceeds from potential dispositions | $ | 226,755 |  |  | 18,800 |  |  | 19,000 |

(1)Amounts for the year ended December 31, 2023 reflect the 2024 same-store pool.
(2)NOI, FFO, and Core FFO are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to "Non-GAAP Financial Measures and Reconciliations" in the Supplemental Financial and Operating Data" above and pages S-18 through S-21 “Non-GAAP Financial Measures and Other Terms” for additional information. .

| S-16 |

Reconciliations 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 Other Terms." 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.

|  |  | Outlook
| Twelve Months Ended |  | Twelve Months Ended
| December 31, 2023 |  | December 31, 2024
| Amount |  |  | Low |  | High
Net income (loss) available to common shareholders | $ | 34,897 |  |  |  | $ | (16,071) |  |  | $ | (10,181) |
Noncontrolling interests - Operating Partnership and Series E preferred units | 7,141 |  |  |  | (7,795) |  |  | (7,885) |
Depreciation and amortization | 101,678 |  |  |  | 106,098 |  |  | 105,298 |
Less depreciation - non real estate | (322) |  |  |  | (600) |  |  | (550) |
Less depreciation - partially owned entities | (80) |  |  |  | (120) |  |  | (130) |
Impairment of real estate | 5,218 |  |  |  | — |  |  | — |
(Gain) loss on sale of real estate | (71,240) |  |  |  | 400 |  |  | 200 |
Dividends to preferred unitholders | 640 |  |  |  | 640 |  |  | 640 |
FFO applicable to common shares and Units | $ | 77,932 |  |  |  | $ | 82,552 |  |  | $ | 87,392 |
Adjustments to Core FFO: |  |  |  |  |  |
Non-cash casualty (gain) loss | 1,350 |  |  |  | 450 |  |  | 400 |
Interest rate swap amortization | 936 |  |  |  | 750 |  |  | 725 |
Amortization of assumed debt | (212) |  |  |  | 1,075 |  |  | 1,025 |
Severance and transition related costs | 3,170 |  |  |  | — |  |  | — |
Loss on litigation settlement and associated trial costs | 4,270 |  |  |  | 50 |  |  | 25 |
Other miscellaneous items | (132) |  |  |  | 100 |  |  | 50 |
Core FFO applicable to common shares and Units | $ | 87,314 |  |  |  | $ | 84,977 |  |  | $ | 89,617 |
Net income (loss) per share - diluted | $ | 2.32 |  |  |  | $ | (1.31) |  |  | $ | (0.99) |
FFO per share - diluted | $ | 4.27 |  |  |  | $ | 4.54 |  |  | $ | 4.80 |
Core FFO per share - diluted | $ | 4.78 |  |  |  | $ | 4.68 |  |  | $ | 4.92 |

Reconciliations 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.

|  |  | Outlook
| 12 Months Ended | 12 Months Ended
| December 31, 2023 | December 31, 2024
| Actual |  | Low |  | High
Operating income | $ | 84,453 |  |  | $ | 20,152 |  |  | $ | 25,277 |
Adjustments: |  |  |  |  |
General and administrative and property management expenses | 29,433 |  |  | 27,300 |  |  | 26,700 |
Casualty loss | 2,095 |  |  | 1,350 |  |  | 1,250 |
Depreciation and amortization | 101,678 |  |  | 106,098 |  |  | 105,298 |
Impairment of real estate | 5,218 |  |  | — |  |  | — |
(Gain) loss on sale of real estate and other assets | (71,244) |  |  | 400 |  |  | 200 |
Loss on litigation settlement | 3,864 |  |  | 50 |  |  | 25 |
Net Operating Income | $ | 155,497 |  |  | $ | 155,350 |  |  | $ | 158,750 |

| S-17 |

CENTERSPACE
NON-GAAP FINANCIAL MEASURES AND OTHER TERMS
Acquisition and Other Non-Routine Capital Expenditures
Represents capital additions contemplated in the underwriting at recently acquired communities. These amounts are considered when determining expected returns. Other includes casualty and other non-routine capital items including, but not limited to, tenant improvements, real estate special assessments, and capital expenditures incurred to dispose of properties. Casualty represents capitalized costs incurred in connection with the restoration of an apartment community after a casualty event.
Adjusted EBITDA
Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain/loss on sale of real estate and other investments, impairment of real estate investments, gain/loss on extinguishment of debt, gain/loss from involuntary conversion; and other non-routine items or items not considered core to business operations. The Company considers Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, financing costs, or non-operating gains and losses. Adjusted EBITDA is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP.
Average Monthly Rental Rate
Average monthly rental rate is scheduled rent divided by the total number of apartment homes.
Average Monthly Revenue per Occupied Home
Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.
Debt Service Coverage Ratio
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 this Non-GAAP Financial Measures and Other Terms section.

|  | Three Months Ended |  |  | Twelve Months Ended
|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022 |  |  | 12/31/2023 |  | 12/31/2022
Adjusted EBITDA |  | $ | 32,091 |  |  | $ | 31,692 |  |  | $ | 33,493 |  |  | $ | 31,588 |  |  | $ | 32,849 |  |  |  | $ | 128,864 |  |  | $ | 121,311 |
Interest Expense |  | 8,913 |  |  | 8,556 |  |  | 8,641 |  |  | 10,319 |  |  | 9,603 |  |  |  | 36,429 |  |  | 32,750 |
Principal Amortization |  | 1,487 |  |  | 1,646 |  |  | 1,416 |  |  | 1,383 |  |  | 1,375 |  |  |  | 5,932 |  |  | 5,692 |
Total Interest Expense and Principal Amortization |  | 10,400 |  | 10,202 |  | 10,057 |  | 11,702 |  | 10,978 |  |  | 42,361 |  | 38,442
Distributions paid to Series C preferred shareholders and Series D preferred unitholders |  | 1,767 |  | 1,767 |  | 1,767 |  | 1,767 |  | 1,767 |  |  | 7,068 |  | 7,068
Total Interest Expense, Principal Amortization, and preferred distributions |  | 12,167 |  | 11,969 |  | 11,824 |  | 13,469 |  | 12,745 |  |  | 49,429 |  | 45,510
Debt Service Coverage Ratio |  | 3.09 |  | 3.11 |  | 3.33 |  | 2.70 |  | 2.99 |  |  | 3.04 |  | 3.16
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization |  | 2.64 |  | 2.65 |  | 2.83 |  | 2.35 |  | 2.58 |  |  | 2.61 |  | 2.67

Funds From Operations and Core Funds From Operations
The Company believes that FFO, which is a non-GAAP financial measure used as a standard supplemental measure for equity real estate investment trusts, is helpful to investors in understanding its operating performance, primarily because its calculation does not assume that the value of real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation and amortization.

| S-18 |

The Company uses the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding:
•depreciation and amortization related to real estate;
•gains and losses from the sale of certain real estate assets;
•impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity; and
•similar adjustments for partially owned consolidated real estate entities.
The exclusion in Nareit’s definition of FFO of gains and losses from the sale of real estate assets and impairment write-downs helps to identify the operating results of the long-term assets that form the base of the Company's investments, and assists management and investors in comparing those operating results between periods.
Due to the limitations of the Nareit FFO definition, Centerspace has made certain interpretations in applying this definition. The Company believes that all such interpretations not specifically identified in the Nareit definition are consistent with this definition. Nareit’s FFO White Paper 2018 Restatement clarified that impairment write-downs of land related to a REIT’s main business are excluded from FFO and a REIT has the option to exclude impairment write-downs of assets that are incidental to its main business.
While FFO is widely used by Centerspace as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO in the same way. Accordingly, FFO presented here is not necessarily comparable to FFO presented by other real estate companies. FFO should not be considered as an alternative to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash flow needs, including the ability to service indebtedness or make distributions to shareholders.
Core Funds from Operations (“Core FFO”) is FFO as adjusted for non-routine items or items not considered core to business operations. By further adjusting for items that are not considered part of core business operations, the Company believes that Core FFO provides investors with additional information to compare core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income, or any other GAAP measurement of performance, but rather should be considered an additional supplemental measure. Core FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund the Company's cash needs, including its ability to service indebtedness or make distributions to shareholders. Core FFO is a non-GAAP and non-standardized financial measure that may be calculated differently by other REITs and should not be considered a substitute for operating results determined in accordance with GAAP.
Net Debt Divided by Adjusted EBITDA
Net debt is the total outstanding debt balance less cash and cash equivalents. Preferred equity is the sum of the book value of Series C preferred shares and Series D preferred units outstanding. 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 this Non-GAAP Financial Measures and Other Terms section.

|  | Three Months Ended |  |  | Twelve Months Ended
|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022 |  |  | 12/31/2023 |  | 12/31/2022
Total debt |  | $ | 919,990 |  |  | $ | 842,559 |  |  | $ | 885,518 |  |  | $ | 921,659 |  |  | $ | 1,011,777 |  |  |  | $ | 919,990 |  |  | $ | 1,011,777 |
Less: cash and cash equivalents |  | 8,630 |  |  | 29,701 |  |  | 9,745 |  |  | 8,939 |  |  | 10,458 |  |  |  | 8,630 |  |  | 10,458 |
Net debt |  | $ | 911,360 |  |  | $ | 812,858 |  |  | $ | 875,773 |  |  | $ | 912,720 |  |  | $ | 1,001,319 |  |  |  | $ | 911,360 |  |  | $ | 1,001,319 |
Adjusted EBITDA(1) |  | $ | 128,364 |  |  | $ | 126,768 |  |  | $ | 133,972 |  |  | $ | 126,352 |  |  | $ | 131,396 |  |  |  | $ | 128,864 |  |  | $ | 121,311 |
Net debt/Adjusted EBITDA |  | 7.10 |  | 6.41 |  | 6.54 |  | 7.22 |  | 7.62 |  |  | 7.07 |  | 8.25
Preferred Equity |  | $ | 110,090 |  |  | $ | 110,090 |  |  | $ | 110,090 |  |  | $ | 110,090 |  |  | $ | 110,090 |  |  |  | $ | 110,090 |  |  | $ | 110,090 |
Net debt and preferred equity |  | $ | 1,021,450 |  |  | $ | 922,948 |  |  | $ | 985,863 |  |  | $ | 1,022,810 |  |  | $ | 1,111,409 |  |  |  | $ | 1,021,450 |  |  | $ | 1,111,409 |
Adjusted EBITDA(1) |  | $ | 128,364 |  |  | $ | 126,768 |  |  | $ | 133,972 |  |  | $ | 126,352 |  |  | $ | 131,396 |  |  |  | $ | 128,864 |  |  | $ | 121,311 |
Net debt and preferred equity/Adjusted EBITDA |  | 7.96 |  | 7.28 |  | 7.36 |  | 8.09 |  | 8.46 |  |  | 7.93 |  | 9.16

(1)Annualized for periods less than one year.

| S-19 |

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. The Company 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 investments, depreciation and amortization, financing costs, property management expenses, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance.
Payout Ratio (Core FFO per Diluted Share and Unit Basis)
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 this Non-GAAP Financial Measures and Other Terms section.

|  | Three Months Ended |  |  | Twelve Months Ended
|  | 12/31/2023 |  | 9/30/2023 |  | 6/30/2023 |  | 3/31/2023 |  | 12/31/2022 |  |  | 12/31/2023 |  | 12/31/2022
Common distribution per share and unit |  | $ | 0.73 |  |  | $ | 0.73 |  |  | $ | 0.73 |  |  | $ | 0.73 |  |  | $ | 0.73 |  |  |  | $ | 2.92 |  |  | $ | 2.92 |
Core FFO per common share and unit diluted |  | 1.22 |  |  | 1.20 |  |  | 1.28 |  |  | 1.07 |  |  | 1.17 |  |  |  | 4.78 |  |  | 4.43 |
Payout ratio |  | 59.8 | % |  | 60.8 | % |  | 57.0 | % |  | 68.2 | % |  | 62.4 | % |  |  | 61.1 | % |  | 65.9 | %

Recurring Capital Expenditures
Represents expenditures necessary to help preserve the value of and maintain the functionality at communities. Property recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing items used to operate the communities such as appliances, mechanical equipment, flooring to roof replacement, paving, siding, and major landscaping.
Same-Store Controllable Expenses
The Company defines same-store controllable expenses as property operating expenses excluding real estate taxes and insurance. Same-store controllable expenses exclude real estate taxes and insurance, in order to provide a measure of expenses that are within management's control, and is used for the purposes of budgeting, business planning, and performance evaluation. This is a non-GAAP financial measure and should not be considered an alternative to total expenses or total property operating expenses and real estate taxes.
Scheduled Rental Revenue
Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rental rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.
Total Debt to Total Market Capitalization
Total debt to total market capitalization, a non-GAAP financial measure, is total debt not adjusted for unamortized deferred financing costs or unamortized debt premiums and discounts from the balance sheet divided by the sum of total debt from the balance sheet, market value of common shares, operating partnership units, and the as converted Series E preferred units, and book value of Series C preferred shares and Series D preferred units outstanding at the end of the period. This non-GAAP financial measure should not be considered a substitute for operating results determined in accordance with GAAP.
Value Add
Represents expenditures that result in increased income generation or decreased expense growth over time to improve a community’s cash flow and competitive position. This includes elective capital expenditures such as full-scale renovations including new amenities, interior unit turn renovations, enhanced clubhouses and common area hallways and certain resource management initiatives including smart home automation as well as environmental and sustainability initiatives for higher rental levels or expense savings in their respective markets.

| S-20 |

Weighted Average Occupancy
Weighted average occupancy is defined as 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-21 |