CSR 8-K
Centerspace (CSR)
8-K
2026-08-14
For: 2026-08-11
View Original
Added on
August 15, 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): August 11, 2026
(Exact name of Registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(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:
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 | ||||||
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 2.01. Completion of Acquisition or Disposition of Assets
As previously disclosed, in connection with its strategic review, its Board of Trustees (the “Board”) of Centerspace (the “Company”) approved a portfolio optimization and deleveraging plan that included targeted asset sales. In connection with such plan, the Company entered into purchase and sale agreements for the sale of 14 multifamily apartment communities under four separate purchase and sale agreements with three unaffiliated third-party purchasers, including (i) one community in Denver, Colorado (the “Denver Transaction”), (ii) two communities with an associated note receivable in Minnesota (the “Minnesota Transaction”), (iii) five communities in Rapid City, South Dakota (the “Rapid City Transaction”), and six communities in Bismarck, North Dakota (the “Bismarck Transaction” and with the Denver Transaction, the Minnesota Transaction, and the Rapid City Transaction, the “Transactions”).
The Company completed the Denver Transaction, the Minnesota Transaction, and the Rapid City Transaction in staggered closings in June and July 2026. On August 11, 2026, the Company completed the Bismarck Transaction.
The Company evaluated the Transactions as a series of related transactions for purposes of Form 8-K and Regulation S-X significance testing. Based on that evaluation, the Company determined that, upon completion of the Bismarck Transaction, the Transactions, in the aggregate, constituted a significant disposition of assets.
The Transactions represent the Company’s disposition of 14 multifamily apartment communities and a note receivable for aggregate gross proceeds of approximately $318.8 million. The Company expects to use the net proceeds from the Transactions to reduce outstanding indebtedness, including repayment of borrowings under its line of credit, to issue a potential special distribution of between approximately $50.0 million and $60.0 million, and for other general corporate purposes. The actual use of proceeds from the Transactions may differ from the intended uses described herein, and the results and effectiveness of the use of proceeds are uncertain.
The information required by Item 9.01(b) of Form 8-K with respect to the dispositions is filed as Exhibit 99.1 to this Current Report on Form 8-K.
Forward-Looking Statements
Certain statements in this Current Report on Form 8-K, including Exhibit 99.1, 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 Securities and Exchange Commission (“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 for the year ended December 31, 2025, in its subsequent quarterly reports on Form 10-Q, and in other reports the Company files with the SEC from time to time. In addition, such risks, uncertainties, and other factors include, but are not limited to, risks that the Transactions dispositions disrupt current plans and operations; the impacts of the announcement or consummation of the Transactions on business relationships; the anticipated costs related to the Transactions; and the ability of the Company to realize the anticipated benefits of the Transactions. The Company assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information
The following unaudited pro forma financial information of Centerspace, after giving effect to the Transactions, is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference:
•Unaudited pro forma condensed consolidated balance sheet as of June 30, 2026;
•Unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2026 and the statement of operations and comprehensive income for the fiscal year ended December 31, 2025;
•Notes to the unaudited pro forma condensed consolidated financial statements.
(d) Exhibits
| Exhibit | |||||
| Number | Description | ||||
| 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/ Anne Olson | |||||||
| Anne Olson | ||||||||
| Date: August 14, 2026 | President and Chief Executive Officer | |||||||
Exhibit 99.1
CENTERSPACE AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following pro forma condensed consolidated financial statements of Centerspace, collectively with its subsidiaries (the “Company") are based on the unaudited historical condensed consolidated financial statements as of and for the six months ended June 30, 2026 and the historical audited consolidated financial statements of the Company for the year ended December 31, 2025, adjusted to reflect the following transactions, in accordance with Article 11 of Regulation S-X:
a.In connection with a portfolio optimization and deleveraging plan approved by the Board of Trustees (the “Board”). The plan included a full exit from the Bismarck and Rapid City markets, one community in Denver, and two communities in Minneapolis, including a note receivable (collectively, “2026 Dispositions”) for an aggregate sale price of $318.8 million. The sales closed between June 29, 2026 and August 11, 2026. The sale of the community in Denver closed on June 29, 2026 and such disposition is reflected in the condensed consolidated balance sheet as of June 30, 2026.
b.A portion of the sale proceeds were utilized to repay the outstanding balance on the primary unsecured credit facility and the related interest expense.
The Company is evaluating a potential special distribution to common shareholders and operating partnership unitholders of approximately $50.0 million and $60.0 million, which, if declared, would be funded from the proceeds from the 2026 Dispositions. The accompanying unaudited pro forma condensed consolidated financial statements of the Company are not adjusted to reflect any potential special distribution payment.
The following unaudited pro forma condensed consolidated financial statements and notes thereto have been prepared by the Company’s management based upon the Company’s historical financial statements. The unaudited pro forma financial information reflected on the condensed consolidated balance sheet as of June 30, 2026 is intended to reflect the 2026 Dispositions and related adjustments as if they occurred on such date. The unaudited pro forma financial information reflected on the condensed consolidated statements of operations for the six months ended June 30, 2026, and for the year ended December 31, 2025 is intended to reflect the 2026 Dispositions and related adjustments as if they occurred on January 1 of the presented period.
The unaudited pro forma condensed consolidated financial information presented below is not fact and there can be no assurance that the Company’s results would not have differed significantly from those set forth below if the dispositions had actually occurred on January 1 of the periods presented. Accordingly, the unaudited pro forma condensed consolidated financial information is presented for informational purposes only and is not necessarily indicative of the Company’s financial position or results of operations that would have occurred had the events been consummated as of the dates indicated. In addition, the unaudited pro forma condensed consolidated financial information is not necessarily indicative of the Company’s future financial condition or operating results. The unaudited pro forma adjustments represent certain estimates and assumptions that management believes are reasonable and appropriate and are based on information available as of the date of the unaudited pro forma condensed consolidated financial information and are subject to change as additional analyses are performed. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma condensed consolidated financial information. In the Company’s opinion, all material adjustments necessary to reflect the effect of the 2026 Dispositions and related paydown of the line of credit have been made. The unaudited pro forma consolidated financial information does not give effect to the potential impact of current financial conditions, or any anticipated cost savings or operating synergies that may result from the 2026 Dispositions.
The unaudited pro forma condensed consolidated financial information was based on and should be read in conjunction with the Company’s historical financial statements referenced below:
a.The Company’s unaudited condensed consolidated financial statements as of June 30, 2026 and for the six months ended June 30, 2026, included in the Company’s Form 10-Q, filed with the SEC on August 3, 2026; and
b.The Company’s consolidated financial statements for the year ended December 31, 2025 included in the Company’s Form 10-K filed with the SEC on February 17, 2026;
The Company prepares its financial information in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) with all amounts stated in U.S. dollars (“USD”).
CENTERSPACE AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2026 (unaudited)
(In thousands, except per unit data)
| Transaction Accounting Adjustments | |||||||||||||||||||||||
| Centerspace Historical, as Reported | Dispositions | Other | Pro Forma | ||||||||||||||||||||
| (a) | (b) | (c) | |||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||
| Real estate investments | |||||||||||||||||||||||
| Property owned | $ | 2,261,220 | $ | — | $ | — | $ | 2,261,220 | |||||||||||||||
| Less accumulated depreciation | (605,402) | — | — | (605,402) | |||||||||||||||||||
| Total real estate investments | 1,655,818 | — | — | 1,655,818 | |||||||||||||||||||
| Cash and cash equivalents | 8,560 | 281,846 | (b1) | (177,498) | 112,908 | ||||||||||||||||||
| Restricted cash | 1,883 | — | — | 1,883 | |||||||||||||||||||
| Other assets | 38,993 | (702) | (b2) | — | 38,291 | ||||||||||||||||||
| Assets held for sale, net | 135,111 | (135,111) | (b2) | — | — | ||||||||||||||||||
| TOTAL ASSETS | $ | 1,840,365 | $ | 146,033 | $ | (177,498) | $ | 1,808,900 | |||||||||||||||
| LIABILITIES, MEZZANINE EQUITY, AND EQUITY | |||||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 51,370 | $ | (1,663) | (b2) | (1,498) | 48,209 | ||||||||||||||||
| Revolving lines of credit | 176,000 | — | (176,000) | — | |||||||||||||||||||
| Notes payable, net | 299,608 | — | — | 299,608 | |||||||||||||||||||
| Mortgages payable, net | 513,975 | — | — | 513,975 | |||||||||||||||||||
| Liabilities held for sale, net | 1,460 | (1,460) | (b2) | — | — | ||||||||||||||||||
| TOTAL LIABILITIES | $ | 1,042,413 | $ | (3,123) | (177,498) | 861,792 | |||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||||||||||||||||
SERIES D PREFERRED UNITS (Cumulative convertible preferred units, $100 par value, 59 units issued and outstanding at June 30, 2026, aggregate liquidation preference of $5,940 at June 30, 2026) | $ | 5,940 | $ | — | — | 5,940 | |||||||||||||||||
| EQUITY | |||||||||||||||||||||||
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 16,792 shares issued and outstanding at June 30, 2026) | 1,369,753 | — | — | 1,369,753 | |||||||||||||||||||
| Accumulated distributions in excess of net income | (689,530) | 128,103 | — | (561,427) | |||||||||||||||||||
| Total shareholders’ equity | $ | 680,223 | $ | 128,103 | $ | — | $ | 808,326 | |||||||||||||||
| Noncontrolling interests – Operating Partnership and Series E preferred units | 111,789 | 21,053 | (b4) | — | 132,842 | ||||||||||||||||||
| Total equity | $ | 792,012 | $ | 149,156 | (b3) | $ | — | 941,168 | |||||||||||||||
| TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY | $ | 1,840,365 | $ | 146,033 | $ | (177,498) | $ | 1,808,900 | |||||||||||||||
See accompanying Notes to the pro forma condensed consolidated financial statements.
CENTERSPACE AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 (unaudited)
(In thousands, except per unit data)
| Transaction Accounting Adjustments | ||||||||||||||||||||||||||
| Six Months Ended June 30, 2026, As Reported | 2026 Dispositions | Other | Six Months Ended June 30, 2026 Pro Forma | |||||||||||||||||||||||
| (d) | (e) | (f) | ||||||||||||||||||||||||
| REVENUE | $ | 130,851 | $ | (17,763) | $ | — | $ | 113,088 | ||||||||||||||||||
| EXPENSES | ||||||||||||||||||||||||||
| Property operating expenses, excluding real estate taxes | 35,867 | (5,024) | — | 30,843 | ||||||||||||||||||||||
| Real estate taxes | 14,354 | (1,706) | — | 12,648 | ||||||||||||||||||||||
| Property management expense | 4,473 | (5) | — | 4,468 | ||||||||||||||||||||||
| Casualty loss, net of recoveries | (227) | 289 | — | 62 | ||||||||||||||||||||||
| Depreciation and amortization | 51,573 | (4,351) | — | 47,222 | ||||||||||||||||||||||
| Impairment of real estate investments | 9,700 | (9,700) | — | — | ||||||||||||||||||||||
| General and administrative | 11,991 | — | — | 11,991 | ||||||||||||||||||||||
| TOTAL EXPENSES | $ | 127,731 | $ | (20,497) | $ | — | $ | 107,234 | ||||||||||||||||||
| Gain on sale of real estate and other investments | 271 | (271) | — | — | ||||||||||||||||||||||
| Operating income | 3,391 | 2,463 | — | 5,854 | ||||||||||||||||||||||
| Interest Expense | (21,093) | 23 | 4,718 | (16,352) | ||||||||||||||||||||||
| Interest and other income | 1,599 | (118) | — | 1,481 | ||||||||||||||||||||||
| NET LOSS | $ | (16,103) | $ | 2,368 | $ | 4,718 | $ | (9,017) | ||||||||||||||||||
| Distributions to Series D preferred unitholders | (115) | — | — | (115) | ||||||||||||||||||||||
| Net loss attributable to noncontrolling interests – Operating Partnership and Series E Preferred Units | 2,309 | (337) | (e1) | (671) | (f1) | 1,301 | ||||||||||||||||||||
| NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | $ | (13,909) | $ | 2,031 | $ | 4,047 | $ | (7,831) | ||||||||||||||||||
| NET LOSS PER COMMON SHARE – BASIC AND DILUTED | $ | (0.83) | $ | (0.47) | ||||||||||||||||||||||
| Weighted average shares - basic and diluted | 16,792 | 16,792 | ||||||||||||||||||||||||
See accompanying Notes to the pro forma condensed consolidated financial statements.
CENTERSPACE AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2025 (unaudited)
(In thousands, except per unit data)
| Transaction Accounting Adjustments | ||||||||||||||||||||||||||
| Year Ended December 31, 2025 as Reported | 2026 Dispositions | Other | Year Ended December 31, 2025 Pro Forma | |||||||||||||||||||||||
| (d) | (e) | (f) | ||||||||||||||||||||||||
| REVENUE | $ | 273,662 | $ | (35,655) | $ | — | $ | 238,007 | ||||||||||||||||||
| EXPENSES | ||||||||||||||||||||||||||
| Property operating expenses, excluding real estate taxes | 77,627 | (10,211) | — | 67,416 | ||||||||||||||||||||||
| Real estate taxes | 28,646 | (3,835) | — | 24,811 | ||||||||||||||||||||||
| Property management expense | 9,638 | (10) | — | 9,628 | ||||||||||||||||||||||
| Casualty loss, net of recoveries | 816 | (49) | — | 767 | ||||||||||||||||||||||
| Depreciation and amortization | 113,231 | (10,269) | — | 102,962 | ||||||||||||||||||||||
| Impairment of real estate investments | 37,719 | (14,500) | — | 23,219 | ||||||||||||||||||||||
| General and administrative expenses | 20,918 | — | — | 20,918 | ||||||||||||||||||||||
| TOTAL EXPENSES | 288,595 | (38,874) | — | 249,721 | ||||||||||||||||||||||
| Gain on sale of real estate and other investments | 79,470 | — | — | 79,470 | ||||||||||||||||||||||
| Operating income | 64,537 | 3,219 | — | 67,756 | ||||||||||||||||||||||
| Interest Expense | (44,884) | 544 | 9,594 | (34,746) | ||||||||||||||||||||||
| Loss on extinguishment of debt | (98) | — | — | (98) | ||||||||||||||||||||||
| Interest and other income | 3,409 | (245) | — | 3,164 | ||||||||||||||||||||||
| NET INCOME | $ | 22,964 | $ | 3,518 | $ | 9,594 | $ | 36,076 | ||||||||||||||||||
| Distributions to Series D preferred unitholders | (486) | — | — | (486) | ||||||||||||||||||||||
| Net income attributable to noncontrolling interests – Operating Partnership and Series E Preferred Units | (2,969) | (481) | (e1) | (1,400) | (f1) | (4,850) | ||||||||||||||||||||
| Net income attributable to noncontrolling interests – consolidated real estate entities | (2,408) | — | — | (2,408) | ||||||||||||||||||||||
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | 17,101 | $ | 3,037 | $ | 8,194 | $ | 28,332 | ||||||||||||||||||
| NET INCOME | $ | 22,964 | $ | 3,518 | $ | 9,594 | $ | 36,076 | ||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||||
| Loss on derivative instrument reclassified into earnings | 407 | — | — | 407 | ||||||||||||||||||||||
| TOTAL COMPREHENSIVE INCOME | $ | 23,371 | $ | 3,518 | $ | 9,594 | $ | 36,483 | ||||||||||||||||||
| Net comprehensive income attributable to noncontrolling interests – Operating Partnership and Series E preferred units | (2,910) | (1,092) | (e1) | (1,400) | (f1) | (5,402) | ||||||||||||||||||||
| Net comprehensive income attributable to noncontrolling interests – consolidated real estate entities | (2,408) | — | — | (2,408) | ||||||||||||||||||||||
| COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTERESTS | $ | 18,053 | $ | 2,426 | $ | 8,194 | $ | 28,673 | ||||||||||||||||||
| NET EARNINGS (LOSS) PER COMMON SHARE – BASIC | $ | 1.02 | $ | 1.69 | ||||||||||||||||||||||
| NET EARNINGS (LOSS) PER COMMON SHARE – DILUTED | $ | 1.02 | $ | 1.69 | ||||||||||||||||||||||
| Weighted average shares - basic | 16,728 | 16,728 | ||||||||||||||||||||||||
| Weighted average shares - diluted | 16,775 | 16,775 | ||||||||||||||||||||||||
See accompanying Notes to the pro forma condensed consolidated financial statements.
CENTERSPACE AND SUBSIDIARIES
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(a)Reflects the Company’s historical unaudited consolidated balance sheet as of June 30, 2026. Refer to the Company’s historical condensed consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 3, 2026.
(b)Reflects the historical financial position of the apartment communities and related assets included in the 2026 Dispositions as of June 30, 2026, in addition to certain pro forma adjustments described below that are a direct result of the transactions. The sale of the community in Denver closed on June 29, 2026 and such disposition is reflected in the condensed consolidated balance sheet as of June 30, 2026. As such, the Denver Transaction is excluded from the pro forma transaction adjustments.
(b1)The following table summarizes the estimated net cash proceeds upon closing of the 2026 Dispositions:
| (in thousands) | |||||
Sale price | $ | 288,800 | |||
Less: Estimated transaction costs and other adjustments | $ | (6,954) | |||
Estimated net cash proceeds | $ | 281,846 | |||
(b2)Reflects the assets and liabilities transferred or settled upon closing of the 2026 Dispositions.
(b3)Reflects the estimated gain (loss) on sale we would have recognized upon completion of the 2026 Dispositions as if the sales occurred as of June 30, 2026.
| (in thousands) | |||||
Sale price | $ | 288,800 | |||
Less: Estimated transaction costs and other adjustments | $ | (6,954) | |||
| Less: Net book value | $ | (132,690) | |||
| Estimated impact to total equity | $ | 149,156 | |||
(b4)Reflects the adjustment to pro forma equity attributable to the noncontrolling interest of the Operating Partnership Units and Series E Preferred Units based on the relative ownership interest percentage.
(c)Reflects the Company’s expected use of net proceeds to repay the remaining principal balance and accrued interest on the Company’s unsecured credit facility, which was secured in part by the properties included in the 2026 Dispositions. Upon closing the sale of the Denver Transaction, the Company paid $25 million on the unsecured credit facility, which is reflected in the revolving lines of credit balance on the historical condensed consolidated balance sheet as of June 30, 2026. The Company’s borrowings are subject to customary covenants and limitations, and upon closing of the 2026 Dispositions, the Company expects to remain in compliance with all such covenants and limitations.
(d)Reflects the Company’s historical condensed consolidated results of operations for the six months ended June 30, 2026 and the year ended December 31, 2025. Refer to the Company’s historical condensed consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 3, 2026 and the Company’s Annual Report on Form 10-K filed with the SEC on February 17, 2026.
(e)Reflects historical revenues and expenses of the apartment communities and related assets included in the 2026 Dispositions for the six months ended June 30, 2026 and the year ended December 31, 2025.
(e1)Reflects the adjustment to record pro forma net (income) loss attributable to the noncontrolling interest of the Operating Partnership Units and Series E Preferred Units based on the relative ownership interest percentage.
(f)Reflects the elimination of historical interest expense incurred on the Company’s primary unsecured credit facility, assuming the credit facility balance or other outstanding debt decreased by $201.0 million at an average interest rate of 4.67% for the six months ended June 30, 2026 and an average interest rate of 4.87% for the year ended December 31, 2025. This does not reflect any interest income that may be earned on cash remaining after use of proceeds to pay down the unsecured credit facility.
(f1)Reflects the adjustment to record pro forma net (income) loss attributable to the noncontrolling interest of the Operating Partnership Units and Series E Preferred Units based on the relative ownership interest percentage.