Equibles

8-K

CENTERSPACE (CSR)

8-K 2022-05-02 For: 2022-05-02
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Added on April 04, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 2, 2022

CENTERSPACE

(Exact name of Registrant as specified in its charter)

North Dakota 001-35624 45-0311232
(State or Other Jurisdiction<br>of Incorporation or Organization) (Commission File Number) (I.R.S. Employer Identification No.)

3100 10th Street SW, Post Office Box 1988, Minot, ND 58702-1988

(Address of principal executive offices) (Zip code)

(701) 837-4738

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Shares of Beneficial Interest, no par value CSR New York Stock Exchange
Series C Cumulative Redeemable Preferred Shares CSR -PRC New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

The Company issued an earnings release on May 2, 2022, announcing certain financial and operational results for the three months ended March 31, 2022. A copy of the press release is furnished as Exhibit 99.1 and incorporated herein by reference.

The information in this Item 2.02 and item 9.01, including the press release furnished as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01    Financial Statements and Exhibits

(d)Exhibits

Exhibit
Number Description
99.1 Earnings Release and Supplemental Operating and Financial Data, dated May 2, 2022.
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL Document.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Centerspace
By /s/ Mark O. Decker, Jr.
Mark O. Decker, Jr.
Date: May 2, 2022 President and Chief Executive Officer

Document

Exhibit 99.1

q1_2022a.jpg

Earnings Release

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Centerspace Reports First Quarter 2022 Financial Results and Affirms Core FFO Guidance

MINNEAPOLIS, MN, May 2, 2022 – Centerspace (NYSE: CSR) announced today its financial and operating results for the three months ended March 31, 2022. The tables below show Net Income, Funds from Operations (“FFO”)1, and Core FFO1, all on a per share basis, for the three months ended March 31, 2022; Same-Store Revenues, Expenses, and Net Operating Income (“NOI”)1 over comparable periods; and Same-Store Weighted-Average Occupancy for each of the three months ended March 31, 2022, December 31, 2021, and March 31, 2021.

Three Months Ended March 31,
Per Share 2022 2021
Net Income - diluted $ (0.68) $ (0.49)
FFO - diluted $ 1.01 $ 0.92
Core FFO - diluted $ 0.98 $ 0.95 Year-Over-Year<br>Comparison Sequential<br>Comparison
--- --- --- --- ---
Same-Store Results Q1 2022 vs. Q1 2021 Q1 2022 vs. Q4 2021
Revenues 8.6 % (0.2) %
Expenses 9.6 % 4.2 %
NOI 7.8 % (3.0) % Three months ended
--- --- --- --- --- --- ---
Same-Store Results March 31, 2022 December 31, 2021 March 31, 2021
Weighted Average Occupancy 93.9 % 93.4 % 94.7 %

(1)NOI, FFO, Core FFO, and same-store results are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to “Non-GAAP Financial Measures and Reconciliations” below.

Highlights

•Net Loss was $(0.68) per diluted share for the first quarter of 2022, compared to a Net Loss of $(0.49) per diluted share for the same period of 2021;

•Core FFO increased 3.2% to $0.98 per diluted share for the three months ended March 31, 2022, compared to $0.95 for the three months ended March 31, 2021;

•Same-store revenues increased by 8.6% for the first quarter of 2022 compared to the first quarter of 2021;

•Same-store new lease rates were 6.9% for the first quarter of 2022, compared to 0.7% in the same period the prior year. Same-store renewal lease over lease rates were 9.6% for the first quarter of 2022, compared to 4.0% in the same period the prior year. Same-store blended lease over lease rates were 7.9% for the first quarter of 2022, compared to 2.0% for the same period the prior year;

•Continued to grow the portfolio through the addition of 4 communities totaling 397 homes in the Minneapolis, Minnesota region; and

•Continued to strengthen the balance sheet by issuing 321,000 common shares under the ATM program for net proceeds of $31.7 million.

Acquisitions and Dispositions

During the quarter, Centerspace acquired a portfolio of three communities in the Minneapolis, Minnesota region totaling 267 apartment homes for an aggregate purchase price of $68.1 million. The company also acquired Noko Apartments in Minneapolis for an aggregate purchase price of $46.4 million. The company previously financed the construction and mezzanine loan.

Subsequent Events

Following the end of the quarter, Centerspace paid off $22.3 million in mortgages. The Company does not have significant debt maturities over the next three years with only 5% of total debt maturing through the first quarter of 2025.

Balance Sheet

At the end of the first quarter, Centerspace had $223.3 million of total liquidity on its balance sheet, consisting of $210.0 million available under the lines of credit and cash and cash equivalents of $13.3 million.

Revised 2022 Financial Outlook

Centerspace revised its 2022 financial outlook and affirms its Core FFO guidance. For additional information, see S-14 of the Supplemental Financial and Operating Data for the quarter ended March 31, 2022 included at the end of this release. These ranges should be considered in their entirety. The revised outlook is:

Previous Outlook for 2022 Updated Outlook for 2022
Low High Low High
Earnings per Share – diluted $ (0.41) $ (0.16) $ (0.37) $ (0.11)
Same-Store Revenue 6.0 % 8.0 % 7.0 % 9.0 %
Same-Store Expenses 3.5 % 5.0 % 5.5 % 7.5 %
Same-Store NOI 8.0 % 10.0 % 8.0 % 10.0 %
FFO per Share – diluted $ 4.25 $ 4.50 $ 4.26 $ 4.52
Core FFO per Share – diluted $ 4.33 $ 4.57 $ 4.33 $ 4.57

Upcoming Events

On May 17, 2022, at 9:00 a.m. CDT, Centerspace will be holding its 2022 Annual Meeting of Shareholders live via the Internet. Shareholders can participate in and/or vote at the Annual Meeting via live webcast over the internet at www.virtualshareholdermeeting.com/CSR2022. Shareholders must enter their 16-digit control number found in their proxy materials, either on the Notice of Internet Availability of Proxy Materials, the proxy card, or in the instructions that accompanied the proxy materials to enter the 2022 Annual Meeting. The company urges the shareholders to vote and submit proxies in advance of the Annual Meeting by one of the methods described in the proxy materials for the Annual Meeting. The Annual Meeting webcast will begin promptly at 9:00 a.m. CDT. On the day of the Annual Meeting, the company recommends that you log into its virtual meeting at least 15 minutes prior to the scheduled start time to ensure you can access the meeting.

Earnings Call

Live webcast and replay:  https://ir.centerspacehomes.com
Live Conference Call Conference Call Replay
Tuesday, May 3, 2022, at 10:00 AM ET Replay available until May 17, 2022
USA Toll Free Number 1-844-200-6205 USA Toll Free Number 1-866-813-9403
International Toll Free Number 1-929-526-1599 International Toll Free Number 44-204-525-0658
Canada Toll Free Number 1-833-950-0062 Canada Toll Free Number 1-226-828-7578
Conference Number 273559 Conference Number 099828

Supplemental Information

Supplemental Operating and Financial Data for the quarter ended March 31, 2022 included herein (“Supplemental Information”), is available in the Investors section on Centerspace’s website at www.centerspacehomes.com or by calling Investor Relations at 701-837-7104. Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined and reconciled in the Supplemental Financial and Operating Data, which accompanies this earnings release.

About Centerspace

Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of March 31, 2022, Centerspace owned 83 apartment communities consisting of 14,838 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for 2021 by the Minneapolis Star Tribune. For more information, please visit www.centerspacehomes.com.

Forward-Looking Statements

Certain statements in this press release and the accompanying Supplemental Operating and Financial Data are based on the company's current expectations and assumptions, and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial conditions, or plans expressed or implied by the forward-looking statements. Although the company believes the expectations reflected in its forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be achieved. Such risks, uncertainties, and other factors that might cause such differences include, but are not limited to those risks and uncertainties detailed from time to time in Centerspace's filings with the Securities and Exchange Commission, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” contained in its Annual Report on Form 10-K for the year ended December 31, 2021, in its subsequent quarterly reports on Form 10-Q, and in other public reports. The company assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.

Contact Information

Investor Relations

Emily Miller

Phone: 701-837-7104

IR@centerspacehomes.com

Marketing & Media

Kelly Weber

Phone: 701-837-7104

kweber@centerspacehomes.com

Supplemental Financial and Operating Data

Table of Contents

March 31, 2022

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 S-4
Same-Store Controllable Expenses S-5
Funds From Operations and Core Funds From Operations S-5
Adjusted EBITDA S-7
Debt and Capital Analysis
Debt Analysis S-8
Capital Analysis S-9
Portfolio Analysis
Same-Store Comparison S-10
Portfolio Summary S-12
Capital Expenditures S-13
2022Financial Outlook S-14

Common Share Data (NYSE: CSR)

1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
2022 2021 2021 2021 2021
High closing price $ 108.27 $ 111.26 $ 105.42 $ 79.71 $ 73.42
Low closing price $ 89.01 $ 96.58 $ 78.42 $ 67.28 $ 68.00
Average closing price $ 97.15 $ 103.29 $ 94.10 $ 71.99 $ 71.37
Closing price at end of quarter $ 98.12 $ 110.90 $ 94.50 $ 78.90 $ 68.00
Common share distributions – annualized $ 2.92 $ 2.88 $ 2.88 $ 2.80 $ 2.80
Closing dividend yield – annualized 3.0 % 2.6 % 3.1 % 3.6 % 4.1 %
Closing common shares outstanding (thousands) 15,365 15,016 14,281 14,045 13,220
Closing limited partnership units outstanding (thousands) 997 832 845 881 950
Closing Series E preferred units outstanding, as converted (thousands) 2,186 2,186 2,186 — —
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands) $ 1,819,930 $ 1,999,971 $ 1,635,984 $ 1,177,661 $ 963,560
S-1
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CENTERSPACE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands)

Three Months Ended
3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
REVENUE $ 60,314 $ 57,988 $ 50,413 $ 46,656 $ 46,648
EXPENSES
Property operating expenses, excluding real estate taxes 19,014 16,852 14,434 13,018 13,449
Real estate taxes 6,859 6,654 5,916 5,742 5,792
Property management expense 2,253 2,697 2,203 2,085 1,767
Casualty (gain) loss 598 280 (10) (27) 101
Depreciation/amortization 31,001 30,418 22,447 19,308 19,992
General and administrative expenses 4,500 4,231 4,279 3,797 3,906
TOTAL EXPENSES $ 64,225 $ 61,132 $ 49,269 $ 43,923 $ 45,007
Gain (loss) on sale of real estate and other investments — 678 — 26,840 —
Operating income (loss) (3,911) (2,466) 1,144 29,573 1,641
Interest expense (7,715) (7,456) (7,302) (7,089) (7,231)
Interest and other income (loss) 1,063 1,117 (5,082) 619 431
Net income (loss) $ (10,563) $ (8,805) $ (11,240) $ 23,103 $ (5,159)
Dividends to Series D preferred unitholders (160) (160) (160) (160) (160)
Net (income) loss attributable to noncontrolling interest – Operating Partnership and Series E preferred units 2,157 1,793 1,930 (1,386) 469
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities (23) (36) (22) (19) (17)
Net income (loss) attributable to controlling interests (8,589) (7,208) (9,492) 21,538 (4,867)
Dividends to preferred shareholders (1,607) (1,607) (1,607) (1,607) (1,607)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ (10,196) $ (8,815) $ (11,099) $ 19,931 $ (6,474)
Per Share Data - Basic
Net earnings (loss) per common share – basic $ (0.68) $ (0.61) $ (0.79) $ 1.49 $ (0.49)
Per Share Data - Diluted
Net earnings (loss) per common share – diluted $ (0.68) $ (0.61) $ (0.79) $ 1.48 $ (0.49) S-2
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CENTERSPACE

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
ASSETS
Real estate investments
Property owned $ 2,390,952 $ 2,271,170 $ 2,203,606 $ 1,838,837 $ 1,883,407
Less accumulated depreciation (465,752) (443,592) (426,926) (407,400) (408,014)
1,925,200 1,827,578 1,776,680 1,431,437 1,475,393
Mortgage loans receivable — 43,276 42,160 37,457 30,107
Total real estate investments 1,925,200 1,870,854 1,818,840 1,468,894 1,505,500
Cash and cash equivalents 13,313 31,267 20,816 5,194 10,816
Restricted cash 2,409 7,358 2,376 8,444 1,610
Other assets 24,651 30,582 34,919 17,218 18,427
TOTAL ASSETS $ 1,965,573 $ 1,940,061 $ 1,876,951 $ 1,499,750 $ 1,536,353
LIABILITIES, MEZZANINE EQUITY, AND EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 50,360 $ 62,403 $ 58,092 $ 52,413 $ 53,852
Revolving line of credit 46,000 76,000 57,000 87,000 181,544
Notes payable, net of loan costs 299,359 299,344 299,454 319,286 319,236
Mortgages payable, net of loan costs 521,536 480,703 489,140 287,143 293,709
TOTAL LIABILITIES $ 917,255 $ 918,450 $ 903,686 $ 745,842 $ 848,341
SERIES D PREFERRED UNITS $ 22,412 $ 25,331 $ 21,585 $ 18,022 $ 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 1,203,685 1,157,255 1,092,130 1,033,940 980,453
Accumulated distributions in excess of net income (495,732) (474,318) (454,691) (433,310) (443,409)
Accumulated other comprehensive income (loss) (2,550) (4,435) (5,784) (12,064) (12,798)
Total shareholders’ equity $ 798,933 $ 772,032 $ 725,185 $ 682,096 $ 617,776
Noncontrolling interests – Operating Partnership and Series E preferred units 226,302 223,600 225,850 53,133 53,007
Noncontrolling interests – consolidated real estate entities 671 648 645 657 669
Total equity $ 1,025,906 $ 996,280 $ 951,680 $ 735,886 $ 671,452
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY $ 1,965,573 $ 1,940,061 $ 1,876,951 $ 1,499,750 $ 1,536,353 S-3
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CENTERSPACE

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (unaudited)

This release contains certain non-GAAP financial measures. The non-GAAP financial measures should not be considered a substitute for operating results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The definitions and calculations of these non-GAAP financial measures, as calculated by us, may not be comparable to non-GAAP financial measures reported by other REITs that do not define each of the non-GAAP financial measures exactly as Centerspace does.

The company provides certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or in service for substantially all of the periods being compared, and, in the case of newly-constructed properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, Centerspace determines the composition of its same-store pool for that year as well as adjusts the previous year, which allows us to evaluate full period-over-period operating comparisons for existing apartment communities and their contribution to net income. The company believes that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of its communities are performing year-over-year. Centerspace uses this measure to assess whether or not the company has been successful in increasing NOI, renewing the leases on existing residents, controlling operating costs, and making prudent capital improvements.

Reconciliation of Operating Income (Loss) to Net Operating Income

Net operating income, or NOI, is a non-GAAP financial measure which the company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.

(in thousands, except percentages)
Three Months Ended Sequential Year-Over-Year
3/31/2022 12/31/2021 3/31/2021 Change % Change Change % Change
Operating income (loss) $ (3,911) $ (2,466) $ 1,641 58.6 % (338.3) %
Adjustments:
Property management expenses 2,253 2,697 1,767 (444) (16.5) % 486 27.5 %
Casualty (gain) loss 598 280 101 318 113.6 % 497 492.1 %
Depreciation and amortization 31,001 30,418 19,992 583 1.9 % 11,009 55.1 %
General and administrative expenses 4,500 4,231 3,906 269 6.4 % 594 15.2 %
(Gain) loss on sale of real estate and other investments — (678) — 678 (100.0) % —
Net operating income $ 34,441 $ 34,482 $ 27,407 (0.1) % 25.7 %
Revenue
Same-store $ 46,891 $ 46,980 $ 43,194 (0.2) % 8.6 %
Non-same-store 12,507 10,198 1,047 2,309 22.6 % 11,460 1,094.6 %
Other properties 916 810 668 106 13.1 % 248 37.1 %
Dispositions — — 1,739 — — (1,739) (100.0) %
Total 60,314 57,988 46,648 2,326 4.0 % 13,666 29.3 %
Property operating expenses, including real estate taxes
Same-store 19,215 18,436 17,529 779 4.2 % 1,686 9.6 %
Non-same-store 6,329 4,753 345 1,576 33.2 % 5,984 1,734.5 %
Other properties 329 312 264 17 5.4 % 65 24.6 %
Dispositions — 5 1,103 (5) (100.0) % (1,103) (100.0) %
Total 25,873 23,506 19,241 2,367 10.1 % 6,632 34.5 %
Net operating income
Same-store 27,676 28,544 25,665 (868) (3.0) % 2,011 7.8 %
Non-same-store 6,178 5,445 702 733 13.5 % 5,476 780.1 %
Other properties 587 498 404 89 17.9 % 183 45.3 %
Dispositions — (5) 636 5 (100.0) % (636) (100.0) %
Total $ 34,441 $ 34,482 $ 27,407 (0.1) % 25.7 %

All values are in US Dollars.

S-4

Reconciliation of Same-Store Controllable Expenses to Total Property Operating Expenses, Including Real Estate Taxes

Same-store controllable expenses exclude real estate taxes and insurance, in order to provide a measure of expenses that are within management's control, and is used for the purposes of budgeting, business planning, and performance evaluation. This is a non-GAAP financial measure and should not be considered an alternative to total expenses or total property operating expenses.

(in thousands, except percentages)
Three Months Ended March 31,
2022 2021 Change % Change
Controllable expenses
On-site compensation(1) $ 4,745 $ 4,522 4.9 %
Repairs and maintenance 2,572 2,196 376 17.1 %
Utilities 3,946 3,159 787 24.9 %
Administrative and marketing 1,046 933 113 12.1 %
Total $ 12,309 $ 10,810 13.9 %
Non-controllable expenses
Real estate taxes $ 5,242 $ 5,350 (2.0) %
Insurance 1,664 1,369 295 21.5 %
Total $ 6,906 $ 6,719 2.8 %
Property operating expenses, including real estate taxes - non-same-store $ 6,329 $ 345 1,734.5 %
Property operating expenses, including real estate taxes - other properties 329 264 65 24.6 %
Property operating expenses, including real estate taxes - dispositions — 1,103 (1,103) (100.0) %
Total property operating expenses, including real estate taxes $ 25,873 $ 19,241 34.5 %

All values are in US Dollars.

(1)On-site compensation for administration, leasing, and maintenance personnel.

Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations

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

Centerspace uses the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding:

•depreciation and amortization related to real estate;

•gains and losses from the sale of certain real estate assets; and

•impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.

The exclusion in Nareit’s definition of FFO of gains and losses from the sale of real estate assets and impairment write-downs helps to identify the operating results of the long-term assets that form the base of the company's investments, and assists management and investors in comparing those operating results between periods.

Due to the limitations of the Nareit FFO definition, Centerspace has made certain interpretations in applying this definition. The company believes that all such interpretations not specifically identified in the Nareit definition are consistent with this definition. Nareit’s FFO White Paper 2018 Restatement clarified that impairment write-downs of land related to a REIT’s main business are excluded from FFO and a REIT has the option to exclude impairment write-downs of assets that are incidental to its main business.

While FFO is widely used by Centerspace as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO in the same way. Accordingly, FFO presented here is not necessarily comparable to FFO

S-5

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.

(in thousands, except per share amounts)
Three Months Ended
3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Funds From Operations
Net income (loss) available to common shareholders $ (10,196) $ (8,815) $ (11,099) $ 19,931 $ (6,474)
Adjustments:
Noncontrolling interests – Operating Partnership (2,157) (1,793) (1,930) 1,386 (469)
Depreciation and amortization 31,001 30,418 22,447 19,308 19,992
Less depreciation – non real estate (101) (101) (80) (87) (98)
Less depreciation – partially owned entities (21) (21) (24) (24) (24)
(Gain) loss on sale of real estate — (678) — (26,840) —
FFO applicable to common shares and Units $ 18,526 $ 19,010 $ 9,314 $ 13,674 $ 12,927
Adjustments to Core FFO:
Non-cash casualty (gain) loss 25 — — — —
Loss on extinguishment of debt — 2 530 3 —
Technology implementation costs 103 535 625 447 413
Commercial lease termination proceeds — — (450) — —
Acquisition related costs — 90 140 — —
Interest rate swap termination, amortization, and mark-to-market (613) (411) 5,353 — —
Amortization of assumed debt (115) (26) (27) — —
Other miscellaneous items (4) (61) (3) — —
Core FFO applicable to common shares and Units $ 17,922 $ 19,139 $ 15,482 $ 14,124 $ 13,340
Funds from operations applicable to common shares and Units $ 18,526 $ 19,010 $ 9,314 $ 13,674 $ 12,927
Dividends to preferred unitholders 160 160 160 160 160
Funds from operations applicable to common shares and Units - diluted $ 18,686 $ 19,170 $ 9,474 $ 13,834 $ 13,087
Core funds from operations applicable to common shares and Units $ 17,922 $ 19,139 $ 15,482 $ 14,124 $ 13,340
Dividends to preferred unitholders 160 160 160 160 160
Core funds from operations applicable to common shares and Units - diluted $ 18,082 $ 19,299 $ 15,642 $ 14,284 $ 13,500
Per Share Data
Earnings (loss) per share and Unit - diluted $ (0.68) $ (0.61) $ (0.81) $ 1.48 $ (0.49)
FFO per share and Unit - diluted $ 1.01 $ 1.07 $ 0.60 $ 0.95 $ 0.92
Core FFO per share and Unit - diluted $ 0.98 $ 1.08 $ 0.98 $ 0.98 $ 0.95
Weighted average shares and Units - diluted 18,542 17,868 15,922 14,514 14,282 S-6
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Reconciliation of Net Income (Loss) Available to Common Shareholders to Adjusted EBITDA

Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain/loss on sale of real estate and other investments, impairment of real estate investments, gain/loss on extinguishment of debt, gain/loss from involuntary conversion; and other non-routine items or items not considered core to business operations. The company considers Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, the cost of debt, or non-operating gains and losses. Adjusted EBITDA is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP.

(in thousands)
Three Months Ended
3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Adjusted EBITDA
Net income (loss) available to common shareholders $ (8,589) $ (7,208) $ (9,492) $ 21,538 $ (4,867)
Adjustments:
Dividends to preferred unitholders 160 160 160 160 160
Noncontrolling interests – Operating Partnership (2,157) (1,793) (1,930) 1,386 (469)
Income (loss) before noncontrolling interests – Operating Partnership $ (10,586) $ (8,841) $ (11,262) $ 23,084 $ (5,176)
Adjustments:
Interest expense 7,700 7,440 7,287 7,075 7,216
Loss on extinguishment of debt — 2 530 3 —
Depreciation/amortization related to real estate investments 30,980 30,397 22,423 19,284 19,969
Non-cash casualty (gain) loss 25 — — — —
Interest income (464) (644) (769) (583) (407)
(Gain) loss on sale of real estate and other investments — (678) — (26,840) —
Technology implementation costs 103 534 625 447 413
Commercial lease termination proceeds — — (450) — —
Acquisition related costs — 90 140 — —
Interest rate swap termination and mark-to-market (582) (359) 5,361 — —
Other miscellaneous items (4) (61) (3) — —
Adjusted EBITDA $ 27,172 $ 27,880 $ 23,882 $ 22,470 $ 22,015
S-7
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CENTERSPACE

DEBT ANALYSIS

(in thousands)

Debt Maturity Schedule

Annual Expirations

Future Maturities of Debt
Secured Fixed<br>Debt Unsecured Fixed<br>Debt Unsecured Variable Debt Total<br>Debt % of<br>Total Debt Weighted<br><br>Average Interest Rate(1)
2022 (remainder) $ 22,254 $ — $ — $ 22,254 2.6 % 3.92 %
2023 42,305 — — 42,305 4.9 % 4.02 %
2024 — — — — — —
2025 31,907 — 46,000 77,907 8.9 % 3.03 %
2026 53,125 — — 53,125 6.1 % 3.74 %
Thereafter 375,372 300,000 — 675,372 77.5 % 3.21 %
Total debt $ 524,963 $ 300,000 $ 46,000 $ 870,963 100.0 % 3.29 %

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

3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Debt Balances Outstanding
Secured fixed rate - other mortgages $ 326,113 $ 284,934 $ 293,547 $ 288,363 $ 295,001
Secured fixed rate - Fannie Mae credit facility 198,850 198,850 198,850 — —
Unsecured fixed rate line of credit(1) — 75,000 57,000 50,000 50,000
Unsecured variable rate line of credit 46,000 1,000 — 37,000 131,544
Unsecured term loans — — — 145,000 145,000
Unsecured senior notes 300,000 300,000 300,000 175,000 175,000
Debt total $ 870,963 $ 859,784 $ 849,397 $ 695,363 $ 796,545
Other mortgages rate 3.85 % 3.81 % 3.83 % 3.90 % 3.92 %
Fannie Mae Credit Facility rate 2.78 % 2.78 % 2.78 % — —
Lines of credit rate (rate with swap) 2.56 % 4.22 % 2.79 % 2.24 % 2.18 %
Term loan rate (rate with swap) — — — 4.19 % 4.11 %
Senior notes rate 3.12 % 3.12 % 3.12 % 3.47 % 3.47 %
Total debt 3.29 % 3.26 % 3.23 % 3.70 % 3.37 %

(1)The current rate on our line of credit is LIBOR plus 150 basis points. The LIBOR exposure on the line of credit was hedged using an interest rate swap with a notional of $75.0 million and a fixed rate of 2.81%. The interest rate swap was terminated in February 2022.

S-8

CENTERSPACE

CAPITAL ANALYSIS

(in thousands, except per share and unit amounts)

Three Months Ended
3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Equity Capitalization
Common shares outstanding 15,365 15,016 14,281 14,045 13,220
Operating partnership units outstanding 997 832 845 881 950
Series E preferred units (as converted) 2,186 2,186 2,186 — —
Total common shares and units outstanding 18,548 18,034 17,312 14,926 14,170
Market price per common share (closing price at end of period) $ 98.12 $ 110.90 $ 94.50 $ 78.90 $ 68.00
Equity capitalization-common shares and units $ 1,819,930 $ 1,999,971 $ 1,635,984 $ 1,177,661 $ 963,560
Recorded book value of preferred shares $ 93,530 $ 93,530 $ 93,530 $ 93,530 $ 93,530
Total equity capitalization $ 1,913,460 $ 2,093,501 $ 1,729,514 $ 1,271,191 $ 1,057,090
Series D Preferred Units $ 22,412 $ 25,331 $ 21,585 $ 18,022 $ 16,560
Debt Capitalization
Total debt $ 870,963 $ 859,784 $ 849,397 $ 695,363 $ 796,545
Total capitalization $ 2,806,835 $ 2,978,616 $ 2,600,496 $ 1,984,576 $ 1,870,195
Total debt to total capitalization(1) 31.0 % 28.9 % 33.1 % 35.0 % 43.1 %

(1)Total debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet, market value of common shares and operating partnership units, and book value of Series C preferred shares and Series D preferred units outstanding at the end of the period.

Three Months Ended
3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Debt service coverage ratio(1) 2.93 x 3.17 x 2.75 x 2.62 x 2.53 x
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization 2.50 x 2.68 x 2.32 x 2.21 x 2.14 x
Net debt/Adjusted EBITDA(2) 7.89 x 7.43 x 8.67 x 7.68 x 8.92 x
Net debt and preferred equity/Adjusted EBITDA(2) 8.96 x 8.50 x 9.88 x 8.92 x 10.17 x
Distribution Data
Common shares and Units outstanding at record date 16,363 15,848 15,126 14,926 14,171
Total common distribution declared $ 11,944 $ 11,411 $ 10,890 $ 10,448 $ 9,919
Common distribution per share and Unit $ 0.73 $ 0.72 $ 0.72 $ 0.70 $ 0.70
Payout ratio (Core FFO per diluted share and unit basis)(3) 74.5 % 66.7 % 73.5 % 71.4 % 73.7 %

(1)Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization. This term is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.

(2)Net debt is the total debt balance less cash and cash equivalents and net tax deferred exchange proceeds (included within restricted cash). Adjusted EBITDA is annualized for periods less than one year. Net debt and adjusted EBITDA are non-GAAP financial measures and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.

(3)Payout ratio (Core FFO per diluted share and unit basis) is the ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual Core FFO per diluted share and unit. This term is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP.

S-9

CENTERSPACE

SAME-STORE FIRST QUARTER COMPARISONS

(in thousands, except property data amounts and percentages)

Apartment Homes Included Revenues Expenses NOI
Regions Q1 2022 Q1 2021 % Change Q1 2022 Q1 2021 % Change Q1 2022 Q1 2021 % Change
Denver, CO 1,457 $ 8,458 $ 7,665 10.3 % $ 2,468 $ 2,570 (4.0) % $ 5,990 $ 5,095 17.6 %
Minneapolis, MN 2,537 12,391 11,402 8.7 % 5,398 4,880 10.6 % 6,993 6,522 7.2 %
North Dakota 2,421 8,157 7,949 2.6 % 3,653 3,271 11.7 % 4,504 4,678 (3.7) %
Omaha, NE 1,370 4,363 4,026 8.4 % 1,898 1,762 7.7 % 2,465 2,264 8.9 %
Rochester, MN 1,121 5,003 4,643 7.8 % 2,096 1,986 5.5 % 2,907 2,657 9.4 %
St. Cloud, MN 1,192 4,165 3,656 13.9 % 2,084 1,635 27.5 % 2,081 2,021 3.0 %
Other Mountain West 1,221 4,354 3,853 13.0 % 1,618 1,425 13.5 % 2,736 2,428 12.7 %
Same-Store Total 11,319 $ 46,891 $ 43,194 8.6 % $ 19,215 $ 17,529 9.6 % $ 27,676 $ 25,665 7.8 %
% of NOI Contribution Weighted Average Occupancy (1) Average Monthly<br>Rental Rate (2) Average Monthly<br>Revenue per Occupied Home (3)
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Regions Q1 2022 Q1 2021 Growth Q1 2022 Q1 2021 % Change Q1 2022 Q1 2021 % Change
Denver, CO 21.6 % 94.3 % 93.7 % 0.6 % $ 1,819 $ 1,683 8.1 % $ 2,052 $ 1,872 9.6 %
Minneapolis, MN 25.3 % 93.3 % 93.0 % 0.3 % 1,583 1,503 5.3 % 1,744 1,611 8.3 %
North Dakota 16.3 % 94.8 % 96.2 % (1.4) % 1,103 1,061 4.0 % 1,185 1,138 4.1 %
Omaha, NE 8.9 % 94.9 % 95.1 % (0.2) % 1,000 912 9.6 % 1,118 1,030 8.5 %
Rochester, MN 10.5 % 92.9 % 95.5 % (2.6) % 1,518 1,376 10.3 % 1,601 1,446 10.7 %
St. Cloud, MN 7.5 % 93.0 % 94.6 % (1.6) % 1,120 970 15.5 % 1,252 1,081 15.8 %
Other Mountain West 9.9 % 94.0 % 97.7 % (3.7) % 1,155 987 17.0 % 1,264 1,077 17.4 %
Same-Store Total 100.0 % 93.9 % 94.7 % (0.8) % $ 1,339 $ 1,236 8.3 % $ 1,471 $ 1,343 9.5 %

(1)Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rent. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.

(2)Average monthly rental rate is scheduled rent divided by the total number of apartment homes.

(3)Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.

S-10

CENTERSPACE

SAME-STORE SEQUENTIAL QUARTER COMPARISONS

(in thousands, except property data amounts and percentages)

Apartment Homes Included Revenues Expenses NOI
Regions Q1 2022 Q4 2021 % Change Q1 2022 Q4 2021 % Change Q1 2022 Q4 2021 % Change
Denver, CO 1,457 $ 8,458 $ 8,163 3.6 % $ 2,468 $ 2,657 (7.1) % $ 5,990 $ 5,506 0.4 %
Minneapolis, MN 2,537 12,391 12,572 (1.4) % 5,398 5,145 4.9 % 6,993 7,427 (5.8) %
North Dakota 2,421 8,157 8,155 — 3,653 3,273 11.6 % 4,504 4,882 (7.7) %
Omaha, NE 1,370 4,363 4,222 3.3 % 1,898 1,888 0.5 % 2,465 2,334 5.6 %
Rochester, MN 1,121 5,003 4,996 0.1 % 2,096 2,174 (3.6) % 2,907 2,822 3.0 %
St. Cloud, MN 1,192 4,165 4,576 (9.0) % 2,084 1,820 14.5 % 2,081 2,756 (24.5) %
Other Mountain West 1,221 4,354 4,296 1.4 % 1,618 1,479 9.4 % 2,736 2,817 (2.9) %
Same-Store Total 11,319 $ 46,891 $ 46,980 (0.2) % $ 19,215 $ 18,436 4.2 % $ 27,676 $ 28,544 (3.0) %
% of NOI Contribution Weighted Average Occupancy Average Monthly<br>Rental Rate Average Monthly<br>Revenue per Occupied Home
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Regions Q1 2022 Q4 2021 Growth Q1 2022 Q4 2021 % Change Q1 2022 Q4 2021 % Change
Denver, CO 21.6 % 94.3 % 93.5 % 0.8 % $ 1,819 $ 1,797 1.2 % $ 2,052 $ 1,997 2.8 %
Minneapolis, MN 25.3 % 93.3 % 92.6 % 0.7 % 1,583 1,593 (0.6) % 1,744 1,807 (3.5) %
North Dakota 16.3 % 94.8 % 95.3 % (0.5) % 1,103 1,107 (0.4) % 1,185 1,178 0.6 %
Omaha, NE 8.9 % 94.9 % 93.9 % 1.0 % 1,000 996 0.4 % 1,118 1,094 2.2 %
Rochester, MN 10.5 % 92.9 % 91.7 % 1.2 % 1,518 1,515 0.2 % 1,601 1,620 (1.2) %
St. Cloud, MN 7.5 % 93.0 % 91.9 % 1.1 % 1,120 1,106 1.3 % 1,252 1,392 (10.1) %
Other Mountain West 9.9 % 94.0 % 94.5 % (0.5) % 1,155 1,133 1.9 % 1,264 1,241 1.9 %
Same-Store Total 100.0 % 93.9 % 93.4 % 0.5 % $ 1,339 $ 1,334 0.4 % $ 1,471 $ 1,487 (1.1) %
S-11
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CENTERSPACE

PORTFOLIO SUMMARY(1)

Three Months Ended
3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Number of Apartment Homes at Period End
Same-Store 11,319 10,672 10,676 10,676 11,265
Non-Same-Store 3,519 3,769 3,599 903 903
All Communities 14,838 14,441 14,275 11,579 12,168
Average Monthly Rental Rate(2)
Same-Store $ 1,339 $ 1,314 $ 1,279 $ 1,233 $ 1,200
Non-Same-Store 1,218 1,225 1,506 1,617 1,584
All Communities $ 1,292 $ 1,291 $ 1,293 $ 1,263 $ 1,229
Average Monthly Revenue per Occupied Apartment Home(3)
Same-Store $ 1,471 $ 1,463 $ 1,392 $ 1,333 $ 1,302
Non-Same-Store 1,271 1,306 1,606 1,739 1,705
All Communities $ 1,424 $ 1,423 $ 1,397 $ 1,365 $ 1,332
Weighted Average Occupancy(4)
Same-Store 93.9 % 93.4 % 94.3 % 94.9 % 94.9 %
Non-Same-Store 94.5 % 94.7 % 95.1 % 94.2 % 91.8 %
All Communities 94.0 % 93.7 % 94.4 % 94.8 % 94.6 %
Operating Expenses as a % of Scheduled Rent
Same-Store 41.0 % 39.5 % 41.8 % 41.9 % 42.9 %
Non-Same-Store 50.6 % 44.1 % 39.9 % 32.9 % 34.9 %
All Communities 43.0 % 40.6 % 41.6 % 41.0 % 42.1 %
Capital Expenditures
Total Capital Expenditures per Apartment Home – Same-Store $ 145 $ 369 $ 255 $ 159 $ 131

(1)Previously reported amounts are not revised for changes in the composition of the same-store properties pool.

(2)Average monthly rental rate is scheduled rent divided by the total number of apartment homes. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.

(3)Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.

(4)Weighted average occupancy is the percentage resulting from dividing actual rental revenue by scheduled rent. The company believes that weighted average occupancy is a meaningful measure of occupancy because it considers the value of each vacant unit at its estimated market rate. Weighted average occupancy may not completely reflect short-term trends in physical occupancy and the calculation of weighted average occupancy may not be comparable to that disclosed by other REITs.

S-12

CENTERSPACE

CAPITAL EXPENDITURES

($ in thousands, except per home amounts)

Three Months Ended
Same Store Capital Expenditures 3/31/2022 3/31/2021
Total Same-Store Apartment Homes 11,319 11,319
Building - Exterior $ 527 $ 484
Building - Interior — 92
Mechanical, Electrical, & Plumbing 270 147
Furniture & Equipment 80 65
Landscaping & Grounds 92 67
Turnover 667 535
Capital Expenditures - Same-Store $ 1,636 $ 1,390
Capital Expenditures per Apartment Home - Same-Store $ 145 $ 123
Value Add $ 5,570 $ 2,631
Total Capital Spend - Same-Store $ 7,206 $ 4,021
Total Capital Spend per Apartment Home - Same-Store $ 637 $ 355
Three Months Ended
Capital Expenditures - All Properties 3/31/2022 3/31/2021
All Properties - Weighted Average Apartment Homes 14,839 11,575
Capital Expenditures $ 1,841 $ 1,555
Capital Expenditures per Apartment Home $ 124 $ 134
Value Add 5,570 2,631
Acquisition Capital 1,589 558
Total Capital Spend 9,000 4,744
Total Capital Spend per Apartment Home $ 607 $ 410
Three Months Ended
Value Add Capital Expenditures 3/31/2022 3/31/2021
Interior - Units
Same-Store $ 2,637 $ 1,691
Non-Same-Store — —
Total Interior Units $ 2,637 $ 1,691
Common Areas and Exteriors
Same-Store $ 2,933 $ 940
Non-Same-Store — —
Total Common Areas and Exteriors $ 2,933 $ 940
Total Value-Add Capital Expenditures
Same-Store $ 5,570 $ 2,631
Non-Same-Store — —
Total Portfolio Value-Add $ 5,570 $ 2,631
S-13
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CENTERSPACE

2022 Financial Outlook

(in thousands, except per share and per home amounts)

Centerspace revised its outlook for 2022 in the table below.

Three Months Ended 2022 Previous Outlook Range 2022 Revised Outlook Range
March 31, 2022 Low High Low High
YTD Actual Amount Amount Amount Amount
Same-store growth
Revenue $ 46,891 6.0 % 8.0 % 7.0 % 9.0 %
Controllable expenses 12,309 3.8 % 5.3 % 7.0 % 9.0 %
Non-controllable expenses 6,906 3.0 % 4.5 % 3.0 % 4.5 %
Total Expenses $ 19,215 3.5 % 5.0 % 5.5 % 7.5 %
Same-store NOI $ 27,676 8.0 % 10.0 % 8.0 % 10.0 %
Components of NOI
Same-store NOI $ 27,676 $ 115,600 $ 118,100 $ 115,850 $ 118,150
Non-same-store NOI (1) 6,178 30,300 30,800 29,200 29,900
Other Commercial NOI 587 1,800 1,900 2,100 2,300
Total NOI $ 34,441 $ 147,700 $ 150,800 $ 147,150 $ 150,350
(1) Previous outlook range was adjusted to reclassify NOI from non-same-store to other commercial.
Interest expense $ (7,715) (32,200) (31,700) (32,200) (31,700)
Preferred dividends $ (1,607) (6,400) (6,400) (6,400) (6,400)
Recurring income and expenses
Interest and other income $ 1,040 $ 660 $ 700 $ 1,580 $ 1,750
General and administrative and property management (6,753) (27,800) (27,100) (27,625) (26,975)
Casualty losses (598) (2,000) (1,700) (1,900) (1,600)
Non-real estate depreciation and amortization (101) (430) (390) (375) (325)
Non-controlling interest (21) (70) (90) (110) (100)
Total recurring income and expenses $ (6,433) $ (29,640) $ (28,580) $ (28,430) $ (27,250)
FFO $ 18,686 $ 79,460 $ 84,120 $ 80,120 $ 85,000
Non-core income and expenses
Casualty loss $ 25 $ 600 $ 500 $ 500 $ 350
Technology implementation costs 103 990 890 950 850
Interest rate swap termination, amortization, and mark-to-market (613) — — 200 200
Other miscellaneous items (119) — — (300) (400)
Total non-core income and expenses $ (604) $ 1,590 $ 1,390 $ 1,350 $ 1,000
Core FFO $ 18,082 $ 81,050 $ 85,510 $ 81,470 $ 86,000
EPS - Diluted $ (0.68) $ (0.41) $ (0.16) $ (0.37) $ (0.11)
FFO per diluted share $ 1.01 $ 4.25 $ 4.50 $ 4.26 $ 4.52
Core FFO per diluted share $ 0.98 $ 4.33 $ 4.57 $ 4.33 $ 4.57
Weighted average shares outstanding - diluted 18,542 18,700 18,700 18,800 18,800
Additional Assumptions
Same-store capital expenditures (per home) $ 145 $ 925 $ 975 $ 925 975
Value-add expenditures $ 5,570 $ 21,000 $ 24,000 $ 21,000 $ 24,000
Investments $ 116,874 $ 116,874 $ 116,874 $ 116,874 $ 116,874
S-14
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Reconciliation of Net Income (Loss) Available to Common Shareholders to FFO and Core FFO

The following table presents reconciliations of Net income (loss) available to common shareholders to FFO and Core FFO, which are non-GAAP financial measures described in greater detail under “Non-GAAP Financial Measures and Reconciliations.” They should not be considered as alternatives to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO and Core FFO also do not represent cash generated from operating activities in accordance with GAAP, nor are they indicative of funds available to fund all cash needs, including the ability to service indebtedness or make distributions to shareholders. The outlook and projections provided below are based on current expectations and are forward-looking.

Previous Outlook Revised Outlook
Three Months Ended 12 Months Ended 12 Months Ended
March 31, 2022 December 31, 2022 December 31, 2022
Actual Low High Low High
Net income (loss) available to common shareholders $ (10,196) $ 282 $ 4,922 $ 927 $ 5,747
Noncontrolling interests - Operating Partnership and Series E preferred units (2,157) (7,885) (7,885) (7,885) (7,885)
Depreciation and amortization 31,001 86,923 86,923 86,923 86,923
Less depreciation - non real estate (101) (430) (390) (375) (325)
Less depreciation - partially owned entities (21) (70) (90) (110) (100)
Dividends to preferred unitholders 160 640 640 640 640
FFO applicable to common shares and Units $ 18,686 $ 79,460 $ 84,120 $ 80,120 $ 85,000
Adjustments to Core FFO:
Casualty loss write off 25 600 500 500 350
Technology implementation costs 103 990 890 950 850
Interest rate swap termination and amortization (613) — — 200 200
Other miscellaneous items (119) — — (300) (400)
Core FFO applicable to common shares and Units $ 18,082 $ 81,050 $ 85,510 $ 81,470 $ 86,000
Earnings per share - diluted $ (0.68) $ (0.41) $ (0.16) $ (0.37) $ (0.11)
FFO per share - diluted $ 1.01 $ 4.25 $ 4.50 $ 4.26 $ 4.52
Core FFO per share - diluted $ 0.98 $ 4.33 $ 4.57 $ 4.33 $ 4.57

Reconciliation of Operating Income to Net Operating Income

Net operating income, or NOI, is a non-GAAP financial measure which the company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.

Previous Outlook Revised Outlook
Three Months Ended 12 Months Ended 12 Months Ended
March 31, 2022 December 31, 2021 December 31, 2021
Actual Low High Low High
Operating income $ (3,911) $ 30,977 $ 35,077 $ 30,702 $ 34,852
Adjustments:
General and administrative and property management expenses 6,753 27,800 27,100 27,625 26,975
Casualty loss 598 2,000 1,700 1,900 1,600
Depreciation and amortization 31,001 86,923 86,923 86,923 86,923
Net operating income $ 34,441 $ 147,700 $ 150,800 $ 147,150 $ 150,350 S-15
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