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MEZZANINE EQUITY AND EQUITY | 12 Months Ended
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Dec. 31, 2024
Equity [Abstract] |
MEZZANINE EQUITY AND EQUITY | MEZZANINE EQUITY AND EQUITY Series D Preferred Units (Mezzanine Equity). Series D preferred units outstanding were 165,600 preferred units as of December 31, 2024 and 2023. The Series D preferred units have a par value of $100 per preferred unit. The Series D preferred unit holders receive a preferred distribution at the rate of 3.862% per year and have a put option which allows the holder to redeem any or all of the Series D preferred units for cash equal to the issue price. Each Series D preferred unit is convertible, at the holder’s option, into 1.37931 Units. The Series D preferred units have an aggregate liquidation value of $16.6 million. Changes in the redemption value are based on changes in the trading value of common shares and are charged to common shares on the Consolidated Balance Sheets each quarter. The holders of the Series D preferred units do not have voting rights. Distributions to Series D unitholders are presented in the Consolidated Statements of Equity within net income (loss) attributable to controlling interests and noncontrolling interests. Series C Preferred Shares. On August 30, 2024, we delivered notice to holders of our Series C preferred shares that we intended to redeem all 3.9 million Series C preferred shares at a redemption price equal to $25 per share plus any accrued but unpaid distributions per share up to and including the redemption date of September 30, 2024. On September 30, 2024, the Company completed the redemption of all the outstanding Series C preferred shares for an aggregate redemption price of $97.0 million, excluding distributions, which were $3.5 million in excess of the carrying value and are included in redemption of preferred shares on the Consolidated Statements of Operations. Such shares were no longer outstanding as of December 31, 2024. Series C preferred shares outstanding were 3.9 million at December 31, 2023. The Series C preferred shares were nonvoting and redeemable for cash at $25 per share at Centerspace’s option. Holders of these shares were entitled to cumulative distributions, payable quarterly (as and if declared by the Board of Trustees). Distributions accrued at an annual rate of $1.65625 per share, which is equal to 6.625% of the $25 per share liquidation preference. Operating Partnership Units. Outstanding Units in the Operating Partnership were 980,000 Units at December 31, 2024 and 861,000 Units at December 31, 2023. During the year ended December 31, 2024, Centerspace issued 190,000 Units as partial consideration for the acquisition of one apartment community located in Denver, Colorado. Exchange Rights. Centerspace redeemed Units in exchange for common shares in connection with Unitholders exercising their exchange rights during the years ended December 31, 2024 and 2023 as detailed in the table below.
|  | (in thousands)
|  | Number of | Total Book
|  | Units | Value
Year ended December 31, 2024 |  | 71 |  | $ | (2,663) |
Year ended December 31, 2023 |  | 109 |  | $ | (1,910) |
Pursuant to the exercise of exchange rights, the Company redeemed Units for cash during the years ended December 31, 2024 and 2023 as detailed in the table below.
|  | (in thousands, except per Unit data)
|  | Number of | Aggregate | Average Price
|  | Units Redeemed | Cost | Per Unit
Year ended December 31, 2024 |  | — |  | $ | — |  | $ | — |
Year ended December 31, 2023 |  | 2 |  | $ | 130 |  | $ | 54.05 |
Series E Preferred Units (Noncontrolling interest). Centerspace had 1.6 million and 1.7 million Series E preferred units outstanding as of December 31, 2024 and 2023, respectively. Each Series E preferred unit has a par value of $100. The Series E preferred unit holders receive a preferred distribution at the rate of 3.875% per year. Each Series E preferred unit is convertible, at the holder’s option, into 1.20482 Units. Centerspace has the option, at its sole election, to convert Series E preferred units into Units if its stock has traded at or above $83 per share for 15 of 30 consecutive trading days and it has made at least three consecutive quarters of distributions with a rate of at least $0.804 per Unit. The Series E preferred units have an aggregate liquidation preference of $158.2 million at December 31, 2024. The holders of the Series E preferred units do not have voting rights. The Company redeemed Series E preferred units in exchange for common shares in connection with Series E unitholders exercising their exchange rights during the years ended December 31, 2024 and 2023 as detailed below.
|  | (in thousands)
|  | Number of Series E | Number of | Total
|  | Preferred Units Redeemed | Common Shares Issued | Value
Year ended December 31, 2024 |  | 143 |  | 172 |  | $ | 8,938 |
Year ended December 31, 2023 |  | 26 |  | 31 |  | $ | 1,390 |
The Company redeemed Series E preferred units in exchange for cash in connection with Series E unitholders exercising their exchange rights during the years ended December 31, 2024 and 2023 as detailed below.
|  | (in thousands)
|  | Number of Series E | Aggregate | Average Price
|  | Preferred Units Redeemed | Cost | Per Series E Unit (1)
Year ended December 31, 2024 |  | — |  | $ | — |  | $ | — |
Year ended December 31, 2023 |  | 7 |  | $ | 447 |  | $ | 52.45 |
(1)Average price per Series E unit factoring in conversion rate of 1.20482 Units for each Series E preferred unit. Common Shares and Equity Awards. Common shares outstanding on December 31, 2024 and 2023 totaled 16.7 million and 15.0 million, respectively. During the years ended December 31, 2024 and 2023, Centerspace issued approximately 13,524 and 19,606 common shares, respectively, with a total grant-date value of $1.0 million and $1.8 million, respectively, under its 2015 Incentive Plan, as share-based compensation for employees and trustees. These shares vested based on performance and service criteria. Refer to Note 13 for additional details on share-based compensation. During the year ended December 31, 2024, approximately 200 common shares were forfeited under the 2015 Incentive Plan compared to 15,000 common shares forfeited during the year ended December 31, 2023. Equity Distribution Agreement. On September 9, 2024 Centerspace amended its equity distribution agreement in connection with the at-the-market offering (“ATM Program”) through which it may offer and sell common shares in amounts and at times determined by management. The amendment increased the maximum aggregate offering price of common shares available for offer and sale thereunder from $250.0 million to $500.0 million. Under the ATM Program, the Company may enter into separate forward sale agreements. The proceeds from the sale of common shares under the ATM Program may be used for general corporate purposes, including the funding of acquisitions, construction or mezzanine loans, community renovations, and the repayment of indebtedness. As of December 31, 2024, common shares having an aggregate offering price of up to $262.9 million remained available under the ATM Program. The table below provides details on the sale of common shares under the ATM Program during the years ended December 31, 2024 and 2023.
| (in thousands, except per share amounts)
| Number of Common Shares | Total Consideration(1) | Average Price Per Share(1)
Year ended December 31, 2024(2) | 1,587 |  | $ | 112,613 |  | $ | 71.66 |
Year ended December 31, 2023 | — |  | $ | — |  | $ | — |
(1)Total consideration is net of $1.1 million in commissions for the year ended December 31, 2024. (2)Includes 869,000 shares sold on a forward basis for $62.7 million which were physically settled during the year ended December 31, 2024. Share Repurchase Program. On March 10, 2022, the Board of Trustees approved a share repurchase program (the “ Share Repurchase Program”), providing for the repurchase of up to an aggregate of $50 million of the Company’s outstanding common shares. Under the Share Repurchase Program, the Company is authorized to repurchase common shares through open-market purchases, privately-negotiated transactions, block trades, or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The specific timing and amount of repurchases will vary based on available capital resources or other financial and operational performance, market conditions, securities law limitations, and other factors. The table below provides details on the shares repurchased during the years ended December 31, 2024 and 2023. As of December 31, 2024, the Company had $4.7 million remaining authorized for purchase under this program.
| (in thousands, except per share amounts)
| Number of Common Shares |  | Aggregate Cost(1) | Average Price Per Share(1)
Year ended December 31, 2024 | 88 |  |  | $ | 4,703 |  | $ | 53.62 |
Year ended December 31, 2023 | 216 |  |  | $ | 11,539 |  | $ | 53.44 |
(1)Amount includes commissions.

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