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What changed in CENTERSPACE's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CENTERSPACE's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+247 added−243 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-18)

Top changes in CENTERSPACE's 2025 10-K

247 paragraphs added · 243 removed · 198 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe also have a separate private note purchase agreement with PGIM and certain other lenders for the issuance of $125.0 million of senior unsecured promissory notes (“Unsecured Club Notes”, and, collectively with the Unsecured Shelf Notes, the “unsecured senior notes”), of which all $125.0 million was issued in September 2021.
Biggest changeWe issued $125.0 million of senior unsecured promissory notes (“Unsecured Club Notes”, and, collectively with the Unsecured Shelf Notes, the “unsecured senior notes”) under a separate private note purchase agreement with PGIM and certain other lenders. The following table shows the notes issued under both agreements as of December 31, 2025 and 2024.
FINANCING AND DISTRIBUTIONS To fund our investment and capital activities, we rely on a combination of issuance of common shares, preferred shares, Units in exchange for property, and borrowed funds. We regularly issue dividends to our shareholders and Unitholders. Each of these is described below.
FINANCING AND DISTRIBUTIONS To fund our investment and capital activities, we rely on a combination of issuance of common shares, preferred shares, Units in exchange for property, and borrowed funds. We regularly issue distributions to our shareholders and Unitholders. Each of these is described below.
As part of our ESG initiatives, we publish an annual ESG report detailing our efforts related to furthering our mission, including through providing corporate sponsorship in the communities which we serve, offering paid time off for team members to volunteer, training and compensation programs. During the year ended December 31, 2024, team members completed over 2,700 volunteer hours.
As part of our ESG initiatives, we publish an annual ESG report detailing our efforts related to furthering our mission, including through providing corporate sponsorship in the communities which we serve, offering paid time off for team members to volunteer, training and compensation programs. During the year ended December 31, 2025, team members completed over 2,700 volunteer hours.
On February 1, 1997, we were restructured as an Umbrella Partnership Real Estate Investment Trust (“UPREIT”), and we conduct our daily business operations primarily through our operating partnership, Centerspace, LP (the “Operating Partnership”). The sole general partner of Centerspace, LP 3 Table of Contents is Centerspace, Inc., a North Dakota corporation and our wholly owned subsidiary.
On February 1, 1997, we were restructured as an Umbrella Partnership Real Estate Investment Trust (“UPREIT”), and we conduct our daily business operations primarily through our operating partnership, Centerspace, LP (the “Operating Partnership”). The sole general partner of Centerspace, LP is Centerspace, Inc., a North Dakota corporation and our wholly owned subsidiary.
The FMCF is currently secured by mortgages on 11 apartment communities. The notes are interest-only, with varying maturity dates of 7, 10, and 12 years, at a blended weighted average, fixed interest rate of 2.78%. As of December 31, 2024 and 2023, the FMCF had a balance of $198.9 million.
The FMCF is currently secured by mortgages on 7 apartment communities. The notes are interest-only, with varying maturity dates of 7, 10, and 12 years, at a blended weighted average fixed interest rate of 2.78%. As of December 31, 2025 and 2024, the FMCF had a balance of $198.9 million.
Contributions of properties to the Company can be structured as tax-deferred transactions through the issuance of limited partnership units (“Units”), which is one of the reasons the Company is structured in this manner. As of December 31, 2024, Centerspace, Inc. owned an 85.3% interest in Centerspace, LP. The remaining interest in Centerspace, LP is held by individual limited partners.
Contributions of properties to the Company can be structured as tax-deferred transactions through the issuance of limited partnership units (“Units”), which is one of the reasons the Company is structured in this manner. As of December 31, 2025, Centerspace, Inc. owned an 85.6% interest in Centerspace, LP. The remaining interest in Centerspace, LP is held by individual limited partners.
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. The Series E preferred units have an aggregate liquidation preference of $158.2 million.
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. The Series E preferred units have an aggregate liquidation preference of $157.0 million.
As of December 31, 2024, we owned 15 apartment communities that served as collateral for mortgage loans, in addition to the apartment communities secured by the FMCF. All of these mortgage loans were non-recourse to us other than for standard carve-out obligations.
As of December 31, 2025, we owned 10 apartment communities that served as collateral for mortgage loans, in addition to the apartment communities secured by the FMCF. All of these mortgage loans were non-recourse to us other than for standard carve-out obligations.
During the year ended December 31, 2024, we issued 1.6 million common shares under the ATM Program at an average price of $71.66 per share, net of commissions. Total consideration, net of commissions and issuance costs, was approximately $112.0 million.
There were no sales of common shares under the ATM Program during the year ended December 31, 2025. During the year ended December 31, 2024, we issued 1.6 million common shares under the ATM Program at an average price of $71.66 per share, net of commissions. Total consideration, net of commissions and issuance costs, was approximately $112.0 million.
The results of these assessments are a component of the merit increase and pay for performance strategy. As of December 31, 2024, the average tenure of our team members was 4.27 years. Environmental, Social, and Governance.
The results of these assessments are a component of the merit increase and pay for performance strategy. As of December 31, 2025, the average tenure of our team members was 4.7 years. Environmental, Social, and Governance.
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 preference of $16.6 million. The holders of the Series D preferred units do not have voting rights. We had 1.6 million Series E preferred units outstanding as of December 31, 2024.
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 preference of $5.9 million. The holders of the Series D preferred units do not have voting rights. We had 1.6 million Series E preferred units outstanding as of December 31, 2025.
Distributions to our common shareholders and unitholders in the years ended December 31, 2024 and 2023 totaled approximately 67% and 68%, respectively, on a per share and Unit basis of our funds from operations.
Distributions to our common shareholders and unitholders in the years ended December 31, 2025 and 2024 totaled approximately 65% and 67%, respectively, on a per share and Unit basis of our funds from operations.
In September 2024, we entered into an operating line of credit agreement with US Bank, N.A. which has a borrowing capacity of up to $10.0 million and pricing based on SOFR. This operating line of credit terminates in September 2025 and is designed to enhance treasury management activities and more effectively manage cash balances.
We have an operating line of credit agreement with US Bank, N.A. which has a borrowing capacity of up to $10.0 million and pricing based on SOFR. This operating line of credit terminates in September 2026 and is designed to enhance treasury management activities and more effectively manage cash balances.
Our current emphasis is on making operational enhancements that will improve our residents’ experience, redeveloping some of our existing apartment communities to meet current market demands, and acquiring new apartment communities in large, attractive markets, including the Minneapolis/St. Paul and Denver metropolitan areas.
Our current emphasis is on making operational enhancements that will improve our residents’ experience, redeveloping some of our existing apartment communities to meet current market demands, and acquiring new apartment communities in large, attractive markets, including the Minneapolis/St. Paul, Denver, Boulder/Fort Collins, and Salt Lake City metropolitan areas.
As of December 31, 2024, we owned interests in 71 apartment communities, containing 13,012 homes and having a total real estate investment amount, net of accumulated depreciation, of $1.9 billion. Our corporate headquarters is located in Minot, North Dakota. We also have a corporate office in Minneapolis, Minnesota. Website and Available Information Our internet address is www.centerspacehomes.com.
As of December 31, 2025, we owned 61 apartment communities, containing 12,262 homes and having a total real estate investment amount, net of accumulated depreciation, of $1.9 billion. Our corporate headquarters is located in Minot, North Dakota. We also have a corporate office in Minneapolis, Minnesota. Website and Available Information Our internet address is www.centerspacehomes.com.
Our objective is to attract, develop, retain, and reward individuals with the talent and skills to help support our business objectives and make our communities home for our residents. As of December 31, 2024, we had 404 employees (374 full-time and 30 part-time) across multiple states. Compensation and benefits.
Our objective is to attract, develop, retain, and reward individuals with the talent and skills to help support our business objectives and make our communities home for our residents. As of December 31, 2025, we had 349 employees (334 full-time and 15 part-time) across multiple states. Compensation and benefits.
We partnered with Interplay Learning to bring a library of maintenance courses that provide immersive, hands-on learning using virtual reality to complete training 6 Table of Contents designed for continuing education and onboarding. During the year ended December 31, 2024, team members completed approximately 24,700 training courses and attended 3,965 live training events. Team member engagement.
We partnered with Interplay Learning to bring a library of maintenance courses that provide immersive, hands-on learning using virtual reality to complete training designed for continuing education and onboarding. During the year ended December 31, 2025, team members completed approximately 14,800 training courses and attended nearly 6,600 online training events. 6 Table of Contents Team member engagement.
STRUCTURE We were organized under the laws of North Dakota on July 31, 1970 and have operated as a REIT under Sections 856-858 of the Internal Revenue Code of 1986, as amended (the “Code”), since our formation.
Information on our website does not constitute part of this Report. 3 Table of Contents STRUCTURE We were organized under the laws of North Dakota on July 31, 1970 and have operated as a REIT under Sections 856-858 of the Internal Revenue Code of 1986, as amended (the “Code”), since our formation.
Copies of these documents are also available free of charge to shareholders upon request addressed to the Secretary at Centerspace, P.O. Box 1988, Minot, North Dakota 58702-1988. Information on our website does not constitute part of this Report.
Copies of these documents are also available free of charge to shareholders upon request addressed to the Secretary at Centerspace, P.O. Box 1988, Minot, North Dakota 58702-1988.
As of December 31, 2024, 74.5% of our team members self-identified as white, 7.7% as Hispanic and/or Latino, 5.7% as Black or African American, and 12.1% other ethnicities. As of December 31, 2024, 47.5% of our total team members, 66.6% of our senior management, and 50.0% of our Board of Trustees self-identified as female.
As of December 31, 2025, 79.7% of our team members self-identified as white, 7.7% as Hispanic and/or Latino, 2.9% as Black or African American, and 9.7% other ethnicities. As of December 31, 2025, 47.0% of our total team members, 57.0% of our senior management, and 57.1% of our Board of Trustees self-identified as female.
On October 28, 2024, the shelf agreement was amended to extend the period of time during which we may borrow money to October 2027 and to increase the borrowing capacity to $300.0 million.
(collectively, “PGIM”) under which we have issued $175.0 million in unsecured senior promissory notes (“Unsecured Shelf Notes”). On October 28, 2024, the shelf agreement was amended to extend the period of time during which we may borrow money to October 2027 and to increase the borrowing capacity to $300.0 million.
At-the-Market Offering Program We have an equity distribution agreement in connection with an at-the-market offering program (“ATM Program”). On September 9, 2024 we amended our equity distribution agreement to increase the maximum aggregate offering price of common shares available for offer and sale thereunder from $250.0 million to $500.0 million, in amounts and at times determined by management.
At-the-Market Offering Program We have entered into an equity distribution agreement in connection with an at-the-market offering program (“ATM Program”) through which we may offer and sell common shares in amounts and at times determined by management. The maximum aggregate offering price of common shares available for offer and sale under the ATM Program is $500.0 million.
Interest rates on mortgage loans range from 3.45% to 5.04%, and the mortgage loans have varying maturity dates from May 1, 2025, through February 1, 2037. 5 Table of Contents As of December 31, 2024, our ratio of total indebtedness to total gross real estate investments was 39.0%.
Interest rates on mortgage loans range from 2.78% to 5.04%, and the mortgage loans have varying maturity dates from June 1, 2026, through June 1, 2060. As of December 31, 2025, our ratio of total indebtedness to total gross real estate investments was 41.8%. Our borrowings are subject to customary covenants and limitations.
Our primary unsecured credit facility (the “Unsecured Credit Facility” or “Facility”) is a revolving, multi-bank line of credit, with Bank of Montreal serving as administrative agent. Our line of credit has total commitments and borrowing capacity of up to $250.0 million, based on the value of unencumbered properties.
Our primary unsecured credit facility (the “Unsecured Credit Facility” or “Facility”) is a revolving, multi-bank line of credit, with Bank of Montreal serving as administrative agent. In May 2025, we exercised the accordion feature of the Facility, expanding the borrowing capacity by $150.0 million to $400.0 million.
As of December 31, 2024, the additional borrowing availability was $206.0 million beyond the $44.0 million drawn, priced at an interest rate of 5.81%. On July 26, 2024, the Unsecured Credit Facility was amended to extend maturity and to modify the leverage-based margin ratios applicable to borrowings (as described below).
As of December 31, 2024, the Company had additional borrowing availability of $206.0 million beyond the $44.0 million drawn under the Facility, priced at an interest rate of 5.81%. This Facility matures in July 2028, with an option to extend maturity for up to two additional six-month periods.
As of December 31, 2024, we had common shares having an aggregate offering price of up to $262.9 million remaining available under the ATM Program.
As of December 31, 2025, we had common shares having an aggregate offering price of up to $262.9 million remaining available under the ATM Program. 4 Table of Contents Bank Financing and Other Debt As of December 31, 2025, we owned 44 apartment communities that were not encumbered by mortgages and which were available to provide credit support for our unsecured borrowings.
Generally, Units receive the same per unit cash distributions as the per share dividends paid on common shares. Our Declaration of Trust, as amended (our “Declaration of Trust”), does not contain any restrictions on our ability to offer limited partnership Units of Centerspace, LP in exchange for property.
Our Declaration of Trust, as amended (our “Declaration of Trust”), does not contain any restrictions on our ability to offer limited partnership Units of Centerspace, LP in exchange for property. As a result, any decision to do so is vested solely in our Board of Trustees. We had 59,400 Series D preferred units outstanding as of December 31, 2025.
Issuance of Securities in Exchange for Property Our organizational structure allows us to issue shares and Units of Centerspace, LP in exchange for real estate contributions. The Units generally are redeemable, at our option, for cash or common shares on a one-for-one basis.
We believe we were in compliance with all such covenants and limitations as of December 31, 2025. 5 Table of Contents Issuance of Securities in Exchange for Property Our organizational structure allows us to issue shares and Units of Centerspace, LP in exchange for real estate contributions.
Removed
Redemption of 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.
Added
Prior to the exercise of the accordion feature, the line of credit had total commitments and borrowing capacity of up to $250.0 million, based on the value of unencumbered properties. As of December 31, 2025, the additional borrowing availability was $246.0 million beyond the $154.0 million drawn, priced at an interest rate of 5.12%.
Removed
On September 30, 2024, we 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 4 Table of Contents of Operations.
Added
The Secured Overnight Financing Rate (“SOFR”) is the benchmark alternative reference rate under the Facility.
Removed
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 $25.00 at our option. Holders of these shares were entitled to cumulative distributions, payable quarterly (as and if declared by the Board of Trustees).
Added
As of December 31, 2025, there was $925,000 outstanding on this line of credit, priced at an interest rate of 5.91%, compared to $3.4 million outstanding as of December 31, 2024, priced at an interest rate of 6.56%. We have a private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc.
Removed
Distributions accrued at an annual rate of $1.65625, which is equal to 6.625% of the $25.00 per share liquidation preference. Bank Financing and Other Debt As of December 31, 2024, we owned 45 apartment communities that were not encumbered by mortgages and which were available to provide credit support for our unsecured borrowings.
Added
The Units generally are redeemable, at our option, for cash or common shares on a one-for-one basis. Generally, Units receive the same per unit cash distributions as the per share dividends paid on common shares.
Removed
As amended, this credit facility matures in July 2028, with an option to extend maturity for up to two additional six-month periods, and has an accordion option to increase borrowing capacity up to $400.0 million. The Secured Overnight Financing Rate (“SOFR”) is the benchmark alternative reference rate under the Facility.
Removed
The Unsecured Credit Facility and unsecured senior notes are subject to customary financial covenants and limitations. We believe we were in compliance with all such financial covenants and limitations as of December 31, 2024.
Removed
As of December 31, 2024, there was $3.4 million outstanding on this line of credit. We previously had a $6.0 million operating line of credit with Wells Fargo Bank, N.A. with pricing based on SOFR that matured on August 31, 2024. As of December 31, 2023, there was no outstanding balance on this line of credit.
Removed
We have a private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc. (collectively, “PGIM”) under which we have issued $175.0 million in unsecured senior promissory notes (“Unsecured Shelf Notes”).
Removed
The following table shows the notes issued under both agreements as of December 31, 2024.
Removed
As a result, any decision to do so is vested solely in our Board of Trustees. In October 2024, we issued 190,000 Units as partial consideration for the acquisition of an apartment community located in Denver, Colorado. We had 165,600 Series D preferred units outstanding as of December 31, 2024.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Tax Matters We may incur tax liabilities if we were to fail to qualify as a REIT, which could force us to borrow funds during unfavorable market conditions. We have elected to be taxed as a REIT under the Code.
Biggest changeThis ownership limit as well as other restrictions on ownership and transfer of our stock in our charter may discourage a tender offer, takeover, or other transaction in which holders of our common shares might receive a premium for their shares over the then prevailing market price or which holders might believe to be otherwise in their best interests. 18 Table of Contents Risks Related to Tax Matters We may incur tax liabilities if we were to fail to qualify as a REIT, which could force us to borrow funds during unfavorable market conditions.
Expenses associated with our investment in these multifamily properties, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances reduce rental income from the community. Furthermore, such regulations may impair our ability to attract higher-paying residents to such multifamily properties.
Expenses associated with our investment in these multifamily properties, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances reduce rental income from the community. Furthermore, such regulations may impair our ability to attract higher-paying residents to our properties.
Adverse changes in taxes and other laws may affect our liabilities relating to our properties and operations. Increases in real estate taxes, including recent property tax increases in several of the markets in which we operate, and service and transfer taxes may adversely affect our cash available for distributions and our ability to service our debt.
Adverse changes in tax laws and other laws may affect our liabilities relating to our properties and operations. Increases in real estate taxes, including recent property tax increases in several of the markets in which we operate, and service and transfer taxes may adversely affect our cash available for distributions and our ability to service our debt.
We have a shelf registration statement that enables us to sell an undetermined number of equity and other securities listed in the prospectus. Future sales of preferred shares or other securities may adversely affect the rights on common shareholders and have an adverse impact on the market price of our common shares.
We have a shelf registration statement that enables us to sell an undetermined number of equity and other securities listed in the prospectus. Future sales of preferred shares or other securities may adversely affect the rights of common shareholders and have an adverse impact on the market price of our common shares.
In connection with our current or former ownership (direct or indirect), operation, management, development, and control of real properties, we may be potentially liable for removal or remediation costs for hazardous or toxic substances at those properties, as well as certain other costs, including governmental fines and claims for injuries to persons and property.
In connection with our current or former ownership (direct or indirect), operation, management, development, and control of real properties, we may be liable for removal or remediation costs for hazardous or toxic substances at those properties, as well as certain other costs, including governmental fines and claims for injuries to persons and property.
Some of our apartment communities are located in areas that may experience catastrophic weather and other natural events from time to time, including snow or ice storms, flooding, tornadoes, or other severe or inclement weather. These natural events could cause damage or losses that may be greater than insured levels.
Some of our apartment communities are located in areas that may experience catastrophic weather and other natural events from time to time, including snow or ice storms, fires, flooding, tornadoes, or other severe or inclement weather. These natural events could cause damage or losses that may be greater than insured levels.
The new tariffs, along with any additional tariffs or trade restrictions that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries, could result in reduced economic activity, increased costs in operating our business, reduced spending on housing, limits on trade with the U.S. or other potentially adverse economic outcomes.
New or existing tariffs, along with any additional tariffs or trade restrictions that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries, could result in reduced economic activity, increased costs in operating our business, reduced spending on housing, limits on trade with the U.S. or other potentially adverse economic outcomes.
For taxable year beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6% on such income.
For taxable years beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6% on such income.
There has been a recent increase in municipalities and other local governments, including those in which we own properties, considering or being urged by advocacy groups to consider rent control or rent stabilization laws and regulations or take other actions which could limit our ability to raise rents based solely on market conditions.
There has been a recent increase in municipalities and other local governments, including those in locations where we own properties, considering or being urged by advocacy groups to consider rent control or rent stabilization laws and regulations or take other actions which could limit our ability to raise rents based solely on market conditions.
If we cannot satisfy all of the technical requirements of Section 1031, or if Section 1031 is repealed, selling a property with a tax protection agreement could trigger a material obligation to make the associated unitholders whole. Complying with REIT requirements may force us to forgo otherwise attractive opportunities or liquidate otherwise attractive investments.
If we cannot satisfy all of the technical requirements of Section 1031, or if Section 1031 is repealed, selling a property with a tax protection agreement could trigger a material obligation to make the associated Operating Partnership unitholders whole. Complying with REIT requirements may force us to forgo otherwise attractive opportunities or liquidate otherwise attractive investments.
If distributions to the holders of our securities had been 18 Table of Contents made in anticipation of qualifying as a REIT, we may need short-term debt or long-term debt or proceeds from asset sales or sales of common shares to fund required distributions as a result of differences in timing between the actual receipt of income and the recognition of income for federal income tax purposes, or the effect of non-deductible capital expenditures, the creation of reserves or required debt or amortization payments.
If distributions to the holders of our securities had been made in anticipation of qualifying as a REIT, we may need short-term debt or long-term debt or proceeds from asset sales or sales of common shares to fund required distributions as a result of differences in timing between the actual receipt of income and the recognition of income for federal income tax purposes, or the effect of non-deductible capital expenditures, the creation of reserves or required debt or amortization payments.
Multifamily residential properties may be subject to rent stabilization regulations and other restritctions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts.
Multifamily residential properties may be subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts.
A security breach or other significant disruption involving computer networks and related systems could cause substantial costs and other negative effects, including litigation, remediation costs, costs to deploy additional protection strategies, compromising of confidential information, and reputational damage adversely affecting investor confidence. 12 Table of Contents The costs of mitigating cybersecurity risks are significant and are likely to increase in the future.
A security breach or other significant disruption involving computer networks and related systems could cause substantial costs and other negative effects, including litigation, remediation costs, costs to deploy additional protection strategies, compromising of confidential information, and reputational damage adversely affecting investor confidence. The costs of mitigating cybersecurity risks are significant and are likely to increase in the future.
We have tax protection agreements in place on twenty-eight properties. If these properties are sold in a taxable transaction, we must make the unitholders associated with these particular properties whole through the payment of their related tax. We dispose of properties in transactions intended to qualify as “like-kind exchanges” under Section 1031 of the Code whenever possible.
We have tax protection agreements in place on 21 properties. If these properties are sold in a taxable transaction, we must make the unitholders associated with these particular properties whole through the payment of their related tax. We dispose of properties in transactions intended to qualify as “like-kind exchanges” under Section 1031 of the Code whenever possible.
Risks Related to Our Properties and Operations We depend on residents for rental payments, which accounts for most of our revenue, and low occupancy rates or lease terminations could reduce our revenues from rents.
Risks Related to Our Properties and Operations We depend on residents for rental payments, which account for most of our revenue, and low occupancy rates or lease terminations could reduce our revenues from rents.
Indoor air quality issues may also require special investigation and remediation. These air quality issues can result from inadequate ventilation, chemical contaminants from indoor or outdoor sources, or biological contaminants such as molds, pollen, viruses, and bacteria.
Indoor air quality issues may also require special investigation and remediation. These air quality issues can result from inadequate ventilation, chemical contaminants from indoor or outdoor sources, or natural or biological contaminants such as radon, molds, pollen, viruses, and bacteria.
If the IRS were to treat Centerspace, LP as an entity taxable as a corporation (such as a publicly traded partnership taxable as a corporation), we would no longer qualify as a REIT because the value of our ownership interest in Centerspace, LP would exceed 5% of our assets and because we would be considered to hold more than 10% of the voting securities and value of the outstanding securities of another corporation.
If the IRS were to treat the Operating Partnership as an entity taxable as a corporation (such as a publicly traded partnership taxable as a corporation), we would no longer qualify as a REIT because the value of our ownership interest in the Operating Partnership would exceed 5% of our assets and because we would be considered to hold more than 10% of the voting securities and value of the outstanding securities of another corporation.
If we cannot meet the technical requirements of a desired Section 1031 exchange, we may have to make a special dividend payment to our shareholders if we cannot mitigate the taxable gains realized. The failure to reinvest proceeds from sales of properties into tax-deferred exchanges could necessitate payments to unitholders with tax protection agreements.
If we cannot meet the technical requirements of a desired Section 1031 exchange, we may have to make a special dividend payment to our shareholders if we cannot mitigate the taxable gains realized. The failure to reinvest proceeds from sales of properties into tax-deferred exchanges could necessitate payments to certain Operating Partnership unitholders with tax protection agreements.
As a result, any senior officer may terminate his or her relationship with us at any time, without providing advance notice. If we fail to effectively manage a transition to new personnel, or if we fail to attract and retain qualified and experienced personnel on acceptable terms, it could adversely affect our business.
Any other senior officer may terminate his or her relationship with us at any time, without providing advance notice. If we fail to effectively manage a transition to new personnel, or if we fail to attract and retain qualified and experienced personnel on acceptable terms, it could adversely affect our business.
Sales of substantial amounts of our common or preferred shares in the public market, or the perception that such sales or issuances might occur, may dilute the interests of the current common shareholders and could adversely affect the market price of our common shares.
Sales of substantial amounts of our common or preferred shares, or the perception that such sales or issuances might occur, may dilute the interests of the current common shareholders and could adversely affect the market price of our common shares.
The federal income tax provisions applicable to REITs provide that any gain realized by a REIT on the sale of property held as 19 Table of Contents inventory or other property held primarily for sale to customers in the ordinary course of business is treated as income from a “prohibited transaction” that is subject to a 100% penalty tax.
The federal income tax provisions applicable to REITs provide that any gain realized by a REIT on the sale of property held as inventory or other property held primarily for sale to customers in the ordinary course of business is treated as income from a “prohibited transaction” that is subject to a 100% penalty tax.
A Phase I environmental study generally includes a visual inspection of the property and the surrounding areas, an examination of current 13 Table of Contents and historical uses of the property and the surrounding areas, and a review of relevant state and federal documents but does not involve invasive techniques such as soil and ground water sampling.
A Phase I environmental study generally includes a visual inspection of the property and the surrounding areas, an examination of current and historical uses of the property and the surrounding areas, and a review of relevant state and federal documents but does not involve invasive techniques such as soil and ground water sampling.
Some of our properties were acquired using limited partnership Units of 11 Table of Contents Centerspace, LP, our operating partnership, and are subject to certain tax-protection agreements that restrict our ability to sell these properties in transactions that would create current taxable income to the former owners.
Some of our properties were acquired using limited partnership Units of Centerspace, LP, our operating partnership, and are subject to certain tax-protection agreements that restrict our ability to sell these properties in transactions that would create current taxable income to the former owners.
Incurring mortgage and other secured debt obligations increases our risk of property losses because defaults on 15 Table of Contents indebtedness secured by property may prompt foreclosure actions initiated by lenders and ultimately our loss of the property securing any loans for which we are in default.
Incurring mortgage and other secured debt obligations increases our risk of property losses because defaults on indebtedness secured by property may prompt foreclosure actions initiated by lenders and ultimately our loss of the property securing any loans for which we are in default.
The Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) are major sources of financing for the multifamily housing sector, and both have historically experienced losses due to credit-related expenses, securities impairments, and fair value losses.
The Federal National Mortgage Association 16 Table of Contents (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) are major sources of financing for the multifamily housing sector, and both have historically experienced losses due to credit-related expenses, securities impairments, and fair value losses.
Any such access, disclosure, or other loss of information could lead to legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption to our operations and the services we provide to customers or damage our reputation.
Any such access, disclosure, or other loss of information could lead to legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption to our operations and the 13 Table of Contents services we provide to customers or damage our reputation.
We may face opposition from governmental authorities or third parties alleging that our activities are anti-competitive. The residential real estate industry has recently faced increased scrutiny from regulators claiming that certain market tools employed by property owners to evaluate market rents leads to anti-competitive behavior. In January 2025, the U.S.
We may face opposition from governmental authorities or third parties alleging that our activities are anti-competitive. The residential real estate industry has recently faced increased scrutiny from regulators claiming that certain market tools employed 11 Table of Contents by property owners to evaluate market rents leads to anti-competitive behavior. In January 2025, the U.S.
The short-term nature of these leases generally serves to reduce our risk to adverse effects of inflation, as our leases allow for adjustments in the rental rate at the time of renewal, which may enable us to seek increases.
The short-term nature of these leases generally serves to reduce our risk to adverse effects of inflation and increases in operating costs, as our leases allow for adjustments in the rental rate at the time of renewal, which may enable us to seek increases.
Our financial performance risks include, but are not limited to, the following: • downturns in national, regional, and local economic conditions (particularly increases in unemployment); • competition from other apartment communities; • local real estate market conditions, including an oversupply of apartments or other housing, or a reduction in demand for apartment communities; • the attractiveness of our apartment communities to residents as well as residents’ perceptions of the safety, convenience, and attractiveness of our apartment communities and the areas in which they are located; 8 Table of Contents • changes in interest rates and availability of attractive financing that might make other housing options, like home ownership, more attractive; • our ability to collect rents from our residents; • vacancies, changes in rental rates, and the periodic need to repair, renovate, and redevelop our apartment communities; • increases in operating costs, including real estate taxes, state and local taxes, insurance premiums and other expenses, utilities, and security costs, many of which remain constant when circumstances reduce revenues from a property; • increases in compensation costs due to the tight labor market in many markets in which we operate; • our ability to provide adequate maintenance for our apartment communities; • our ability to provide adequate insurance on our apartment communities; and • changes in tax laws and other government regulations that could affect the value of REITs generally or our business in particular.
These risks include, but are not limited to, the following: • downturns in national, regional, and local economic conditions (particularly increases in unemployment); • competition from other apartment communities and alternative housing; • local real estate market conditions, including an oversupply of apartments or other housing, or a reduction in demand for apartment communities; • the attractiveness of our apartment communities to residents as well as residents’ perceptions of the safety, convenience, and attractiveness of our apartment communities and the areas in which they are located; • changes in interest rates and availability of attractive financing that might make other housing options, like home ownership, more attractive; • our ability to collect rents from our residents; • vacancies, changes in rental rates, and the periodic need to repair, renovate, and redevelop our apartment communities; • increases in operating costs, including real estate taxes, state and local taxes, insurance premiums and other expenses, utilities, and security costs, many of which remain constant when circumstances reduce revenues from a property; • increases in compensation costs due to the tight labor market in many markets in which we operate; • technological changes, such as artificial intelligence; • our ability to provide adequate maintenance for our apartment communities; • our ability to provide adequate insurance on our apartment communities; and • changes in tax laws and other government regulations that could affect the value of REITs generally or our business in particular.
To minimize any counterparty credit risk, we enter into hedging arrangements only with investment grade financial institutions. These arrangements may lead to losses, which could hurt our financial condition. 16 Table of Contents Risks Related to Our Shares Corporate social responsibility, specifically related to ESG, may impose additional costs and expose us to new risks.
To minimize any counterparty credit risk, we enter into hedging arrangements only with investment grade financial institutions. These arrangements may lead to losses, which could hurt our financial condition. Risks Related to Our Shares Corporate social responsibility, specifically related to ESG, may impose additional costs and expose us to new risks.
Failure of our operating partnership to qualify as a partnership would lead to corporate taxation and significantly reduce the amount of cash available for distribution. We believe that Centerspace, LP, our operating partnership, qualifies as a partnership for federal income tax purposes.
Failure of the Operating Partnership to qualify as a partnership would lead to corporate taxation and significantly reduce the amount of cash available for distribution. We believe that the Operating Partnership, qualifies as a partnership for federal income tax purposes.
Under current law, unless a sale of real property qualifies for a safe harbor, whether the sale of a property constitutes the sale of property held primarily for sale to customers is generally a question of the facts and circumstances regarding a particular transaction.
Under current law, unless a sale of real property qualifies for a 20 Table of Contents safe harbor, whether the sale of a property constitutes the sale of property held primarily for sale to customers is generally a question of the facts and circumstances regarding a particular transaction.
The risk of a breach or security failure, particularly through cyber-attacks or cyber-intrusion, has generally increased because of the rise in new technologies and the increased sophistication and activities of the perpetrators of attempted attacks and intrusions.
The risk of a breach or security failure, particularly through cyber-attacks or cyber-intrusion, has generally increased because of the rise in new technologies, including artificial intelligence, and the increased sophistication and activities of the perpetrators of attempted attacks and intrusions.
We may be responsible for potential liabilities under environmental laws. Under various federal, state and local laws, ordinances, and regulations, we, as a current or previous owner or operator of real estate, may be liable for the costs of removal or remediation of hazardous or toxic substances in, on, around, or under that property.
Under various federal, state and local laws, ordinances, and regulations, we, as a current or previous owner or operator of real estate, may be liable for the costs of removal or remediation of hazardous or toxic substances in, on, around, or under that property.
See “Multifamily residential properties may be subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts. ” See “Adverse changes in taxes and other laws may affect our liabilities relating to our properties and operations.” Catastrophic weather, natural events, and climate change could adversely affect our business .
See “Multifamily residential properties may be 10 Table of Contents subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts. ” See “Adverse changes in tax laws and other laws may affect our liabilities relating to our properties and operations.” Catastrophic weather, natural events, and climate change could adversely affect our business .
Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt. As of December 31, 2024, 26 of our properties were encumbered by mortgages.
Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt. As of December 31, 2025, 17 of our properties were encumbered by mortgages.
We may have limited ability to change our portfolio of properties quickly in response to our strategic plan and changes in economic or other conditions, the prohibitions under the federal income tax laws on REITs holding property for sale, and related regulations may affect our ability to sell properties.
We may have limited ability to change our portfolio by selling properties quickly in response to our strategic plan and changes in economic or other conditions, the prohibitions under the federal income tax laws on REITs holding property for sale, and related regulations.
Our Board may reduce distributions for many reasons, including, but not limited to, the following: • operating and financial results that may not support the current distribution payment; • unanticipated costs, capital requirements, or cash requirements; • annual distribution requirements under the REIT provisions of the Code; • a conclusion that the payment of distributions would cause us to breach the terms of certain agreements or contracts, such as financial ratio covenants in our debt financing documents; or • other factors the Board of Trustees may consider relevant.
Our Board may reduce distributions for many reasons, including, but not limited to, the following: • operating and financial results that may not support the current distribution payment; 17 Table of Contents • unanticipated costs, capital requirements, or cash requirements; • a conclusion that the payment of distributions would cause us to breach the terms of certain agreements or contracts, such as financial ratio covenants in our debt financing documents; or • other factors the Board of Trustees may consider relevant.
Acquiring or developing new properties and expanding into new markets introduces several risks, including, but not limited to, the following: • we may be unable to identify suitable properties or other assets that meet our acquisition or development criteria or in consummating acquisitions or developments on satisfactory terms, or at all; • we may be unable to maintain consistent standards, controls, policies, and procedures, or realize the anticipated benefits of the acquisitions within our expected time frame, or at all; • acquisitions and divestitures could divert our attention from our existing properties and could cause us to lose key employees or be unable to attract highly qualified new employees; • unfamiliarity with the dynamics and prevailing market conditions or local government or permitting procedures of any new geographic markets could adversely affect our ability to successfully expand into or operate within those markets or cause us to become more dependent on third parties in new markets because of our inability to directly and efficiently manage and otherwise monitor new properties in new markets; • we may make assumptions about the expected future performance of acquired properties, including expected occupancy, rental rates, and cash flows, that prove to be inaccurate; and • we may improperly estimate the costs of repositioning or redeveloping an acquired property.
Acquiring or developing new properties and expanding into new markets introduces several risks, including, but not limited to, the following: 9 Table of Contents • we may be unable to identify suitable properties or other assets that meet our acquisition or development criteria or consummate acquisitions or developments on satisfactory terms, or at all; • we may be unable to maintain consistent standards, controls, policies, and procedures, or realize the anticipated benefits of the acquisitions within our expected time frame, or at all; • development and redevelopment activities associated with new properties are subject to a number of risks, including risks associated with construction work, cost overruns, project delays, or other factors that may increase the expected costs of a project; • acquisitions and divestitures could divert our attention from our existing properties and could cause us to lose key employees or be unable to attract highly qualified new employees; • unfamiliarity with the dynamics and prevailing market conditions or local government or permitting procedures of any new geographic markets could adversely affect our ability to successfully expand into or operate within those markets or cause us to become more dependent on third parties in new markets because of our inability to directly and efficiently manage and otherwise monitor new properties in new markets; • we may make assumptions about the expected future performance of acquired properties, including expected occupancy, rental rates, and cash flows, that prove to be inaccurate; and • we may improperly estimate the costs of repositioning or redeveloping an acquired property.
The COVID-19 pandemic affected our business in the past, and the potential future outbreak of other highly infectious or contagious diseases may materially and adversely impact and disrupt our business, income, cash flow, results of operations, financial condition, liquidity, prospects, and ability to service our debt obligations, and our ability to pay dividends and other distributions to our equityholders.
A potential future pandemic or other outbreak of a highly infectious or contagious diseases may materially and adversely impact and disrupt our business, income, cash flow, results of operations, financial condition, liquidity, prospects, and ability to service our debt obligations, and our ability to pay dividends and other distributions to our equityholders.
Qualification as a REIT involves the application of highly technical and complex Code provisions, including income, asset, and distribution tests, for which there are only limited judicial or administrative interpretations. Even a technical or inadvertent mistake could endanger our REIT status.
We have elected to be taxed as a REIT under the Code. Qualification as a REIT involves the application of highly technical and complex Code provisions, including income, asset, and distribution tests, for which there are only limited judicial or administrative interpretations. Even a technical or inadvertent mistake could endanger our REIT status.
Restrictive covenants in our debt agreements may limit our operating and financial flexibility, and our inability to comply with these covenants could have significant implications . Our indebtedness, which at December 31, 2024 totaled outstanding borrowings of approximately $966.6 million, contains significant restrictions and covenants.
Restrictive covenants in our debt agreements may limit our operating and financial flexibility, and our inability to comply with these covenants could have significant implications . Our indebtedness, which at December 31, 2025 totaled outstanding borrowings of approximately $1.1 billion, contains significant restrictions and covenants.
We are subject to the normal risks associated with debt financing, including the risks that: • our cash flow will be insufficient to meet required payments of principal and interest, particularly if net operating income is reduced significantly due to the effects of the uncertain global macroeconomic and political conditions including inflation, price volatility and the COVID-19 pandemic; • we will not be able to renew, refinance, or repay our indebtedness when due; and • the terms of any renewal or refinancing are at terms less favorable than the terms of our current indebtedness.
We are subject to the normal risks associated with debt financing, including the risks that: • our cash flow will be insufficient to meet required payments of principal and interest, particularly if net operating income is reduced significantly due to the effects of the uncertain global macroeconomic and political conditions including inflation, and price volatility; • we will not be able to renew, refinance, or repay our indebtedness when due; and • the terms of any renewal or refinancing are at terms less favorable than the terms of our current indebtedness. 15 Table of Contents These risks increase when credit markets are tight and interest rates are high.
Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition. Our results of operations are materially affected by economic and political conditions in the United States and internationally, including inflation, deflation, interest rates, recession, availability of capital, and the effects of governmental initiatives to manage economic conditions.
Our results of operations are materially affected by economic and political conditions in the United States and internationally, including inflation, deflation, interest rates, recession, availability of capital, and the effects of governmental initiatives to manage economic conditions.
We may face risks in connection with Section 1031 exchanges . From time to time, we dispose of properties in transactions intended to qualify as “like-kind exchanges” under Section 1031 of the Code.
From time to time, we dispose of properties in transactions intended to qualify as “like-kind exchanges” under Section 1031 of the Code.
The current conflicts in Ukraine and the Middle East, resulting sanctions and related countermeasures by the United States and other countries, could lead to market disruptions, including significant volatility in the credit and capital markets and the economy in general, which could weaken our operations and financial performance.
Actual or threatened wars or other international conflicts, such as those in Ukraine, the Middle East, and South America, resulting sanctions and related countermeasures by the United States and other countries, could lead to market disruptions, including significant volatility in the credit and capital markets and the economy in general, which could weaken our operations and financial performance.
Our overall operations are concentrated in the Midwest and Mountain West regions of the United States. Our performance could be adversely affected by economic conditions in, and other factors relating to, these geographic areas, including supply and demand for apartments in these areas, zoning and other regulatory conditions, and competition from other communities and alternative forms of housing.
Our performance could be adversely affected by economic conditions in, and other factors relating to, these geographic areas, including supply and demand for apartments in these areas, zoning and other regulatory conditions, and competition from other communities and alternative forms of housing.
The imposition of a corporate tax on Centerspace, LP would significantly reduce the amount of cash available for distribution. Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations, which could reduce the net cash received by our shareholders and may harm our ability to raise additional funds through any future sale of our stock.
Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations, which could reduce the net cash received by our shareholders and may harm our ability to raise additional funds through any future sale of our stock.
The costs of complying with these laws and regulations may be substantial, and limits or restrictions on construction, or the completion of required renovations, may limit the implementation of our investment strategy or reduce overall returns on our investments. Risks related to joint ventures may adversely affect our financial performance and results of operations.
The costs of complying with these laws and regulations may be substantial, and limits or restrictions on construction, or the completion of required renovations, may limit the implementation of our investment strategy or reduce overall returns on our investments.
Any development or escalation of these conflicts, or any new conflicts, including those resulting from the policies of the U.S. Presidential Administration, could significantly affect worldwide political stability and cause turmoil in the capital markets and generally in the global financial system. Additionally, geopolitical and macroeconomic consequences of these events cannot be predicted but could severely impact the world economy.
Any development or escalation of these conflicts, or any new conflicts, including those resulting from the policies of the U.S. Presidential Administration, could significantly affect worldwide political stability and cause turmoil in the capital markets and generally in the global financial system.
We may be unable to attract and retain qualified employees . Strong economic growth in recent years has created a tight labor market in many markets in which we operate, and we depend on employees at our apartment communities to provide attractive homes for our residents. Further, inflation may necessitate increasing employee wages and salaries to retain our employees.
We may be unable to attract and retain qualified employees . We face tight labor markets in many markets in which we operate, and we depend on employees at our apartment communities to provide attractive homes for our residents. Further, 12 Table of Contents inflation may necessitate increasing employee wages and salaries to retain our employees.
Any material increases in insurance rates or decrease in available coverage in the future could adversely affect our results of operations. Changes in federal or state laws and regulations relating to climate change could increase our costs, including capital expenditures to improve the energy efficiency of our existing communities or new development communities without a corresponding increase in revenue.
Changes in federal or state laws and regulations relating to climate change could increase our costs, including capital expenditures to improve the energy efficiency of our existing communities or new development communities without a corresponding increase in revenue.
Our senior officers have experience in the real estate industry, and the loss of them would likely have a significant adverse effect on our operations and could adversely impact our relationships with lenders and industry personnel. Except for our Chief Executive Officer and Chief Financial Officer, we do not have employment contracts with any of our senior officers.
We depend on our senior officers for essentially all aspects of our business operations. Our senior officers have experience in the real estate industry, and the loss of any one of them would likely have a significant adverse effect on our operations and could adversely impact our relationships with lenders and industry personnel.
However, because these leases generally allow residents to leave at the expiration of the lease term without penalty, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms. Furthermore, we may be unable to increase rents, whether due to market conditions or applicable law, at a rate consistent with inflation.
However, because these leases generally allow residents to leave at the expiration of the lease term without penalty, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms.
See “ Multifamily residential properties may be subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts. ” The Inflation Reduction Act of 2022 may also increase our tax burden.
See “ Multifamily residential properties may be subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts. ” We may be unable to retain or attract qualified management.
A downturn or slowdown in the demand for multifamily housing may have more pronounced effects on our business and results of operations or on the value of our assets than if we were more diversified in our investments into more than one asset class. 9 Table of Contents Our operations are concentrated in certain regions of the United States, and we are subject to general economic conditions in the regions in which we operate.
As a result, we are subject to risks inherent in investments in a single asset class. A downturn or slowdown in the demand for multifamily housing may have more pronounced effects on our business and results of operations or on the value of our assets than if our investments were diversified into more than one asset class.
At any time, the U.S. federal income tax laws governing REITs or the administrative and judicial interpretations of those laws may be amended.
Treasury Department, which may result in revisions to regulations and interpretations as well as statutory changes. At any time, the U.S. federal income tax laws governing REITs or the administrative and judicial interpretations of those laws may be amended.
Complying with zoning and permitting law may affect our acquisition, redevelopment, and development costs. We face risks associated with zoning and permitting of our communities, most of which are governed by municipal, county, and state regulations.
The resulting time required for development, redevelopment, and lease-up means that we may have to wait years for significant cash returns. Complying with zoning and permitting law may affect our acquisition, redevelopment, and development costs. We face risks associated with zoning and permitting of our communities, most of which are governed by municipal, county, and state regulations.
This limits our ability to retain cash or earnings to fund future growth and makes us more dependent on raising funds through other means, which may include raising additional equity capital.
This limits our ability to retain cash or earnings to fund future growth and makes us more dependent on raising funds through other means, which may include raising additional equity capital. Future sales of common shares, preferred shares, or other securities may dilute current shareholders and could have an adverse impact on the market price of our common shares.
In addition, a reduction of the number of insurance providers or the unwillingness of existing insurance providers to write insurance for multifamily properties may reduce the potential availability 10 Table of Contents and cost for obtaining insurance on our properties.
In addition, a reduction of the number of insurance providers or the unwillingness of existing insurance providers to write insurance for multifamily properties may reduce the potential availability and increase the cost for obtaining insurance on our properties. Any material increases in insurance rates or decrease in available coverage in the future could adversely affect our results of operations.
Risks related to properties under development, redevelopment, or newly developed properties may adversely affect our financial performance. We may be unable to obtain, or may suffer delays in obtaining, necessary zoning, land-use, building, occupancy, and other required governmental permits and authorizations, which could lead to increased costs or abandonment of projects.
We may be unable to obtain, or may suffer delays in obtaining, necessary zoning, land-use, building, occupancy, and other required governmental permits and authorizations, which could lead to increased costs or abandonment of projects. We may be unable to obtain financing on favorable terms, or at all, and we may be unable to complete lease-up of a property on schedule.
Similarly, disclosure of any non-public sensitive information relating to our business or our residents or prospective residents could damage our reputation, our business, or our results of operations. The continuing evolution of social media will present us with new and ongoing challenges and risks, the effects of which we cannot predict.
Similarly, disclosure of any non-public sensitive information relating to our business or our residents or prospective residents could damage our reputation, our business, or our results of operations.
Future sales of common shares, preferred shares, or other securities may dilute current shareholders and could have an adverse impact on the market price of our common shares. 17 Table of Contents We may issue additional classes or series of our shares of beneficial interest with rights and preferences that are superior to the rights and preferences of our common shares.
We may issue additional classes or series of our shares of beneficial interest with rights and preferences that are superior to the rights and preferences of our common shares. Our Declaration of Trust provides for an unlimited number of shares of beneficial interest.
There is also substantial uncertainty surrounding tariffs and international trade relations, and it is difficult for us to predict future trade measures and the impact they will have on our business and operations. In early 2025, the new Administration imposed and threatened additional tariffs on imports from various countries.
Additionally, geopolitical and macroeconomic consequences of these events cannot be predicted but could severely impact the world economy. 8 Table of Contents There is also substantial uncertainty surrounding tariffs and international trade relations, and it is difficult for us to predict future trade measures and the impact they will have on our business and operations.
In addition, we may be unable to sell a property with low occupancy without incurring a loss. These events and others could cause us to reduce the amount of distributions we make to shareholders and may also cause the value of our common shares to decline.
These events and others could cause us to reduce the amount of distributions we make to shareholders and may also cause the value of our common shares to decline. Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition.
The loss of key personnel at these apartment communities, or the inability or cost of replacing such personnel at such communities, could hurt our business and results of operations. We face risks associated with cyber-attacks, cyber intrusions, or otherwise, which could pose a risk to our systems, networks, and services .
The loss of key personnel at these apartment communities, or the inability or cost of replacing such personnel at such communities, could hurt our business and results of operations. The failure of third-party management companies to properly manage our properties could adversely affect our results of operations. We rely on property management companies to manage some of our properties.
The REIT rules are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S. Treasury Department, which may result in revisions to regulations and interpretations as well as statutory changes.
Federal, state and foreign income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions affecting REITs could have a negative effect on us. The REIT rules are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S.
Removed
In response, some of these countries imposed and threatened additional tariffs on imports from the U.S. How long current tariffs will remain in place, and whether the new Administration will enact the threatened tariffs or impose entirely new ones is uncertain.
Added
Risks Related to Our Strategic Alternatives Review Process Our Review of Strategic Alternatives May Not Result in an Executed or Consummated Transaction or Transactions, and the Process of Reviewing Strategic Alternatives or its Conclusion Could Adversely Affect our Business and Our Shareholders.
Removed
As a result, we are subject to risks inherent in investments in a single asset class.
Added
On November 11, 2025, we confirmed that our Board of Trustees had initiated a review of the Company’s strategic alternatives, and that the Board of Trustees is actively considering a wide range of options including, among other things, a sale, merger and other business combinations, as well as continuing to execute on our independent business strategy.
Removed
See “ Legislative or regulatory actions affecting REITs could have an adverse effect on us or our shareholders .” We may be unable to retain or attract qualified management. We depend on our senior officers for essentially all aspects of our business operations.
Added
We are actively working with our financial and legal advisors in connection with our strategic alternatives review process. We may not be able to identify or consummate a suitable transaction or transactions and do not currently have any commitments relating to any transactions.
Removed
We may be unable to obtain financing on favorable terms, or at all, and we may be unable to complete lease-up of a property on schedule. The resulting time required for development, redevelopment, and lease-up means that we may have to wait years for significant cash returns.
Added
We may not be able to successfully implement a strategic transaction we pursue, and even if we determine to pursue one or more strategic transactions, we may be unable to do so on acceptable financial terms and any such transaction or transactions may not improve the market price of our common stock.
Removed
We have entered into, and may continue to enter into, partnerships or joint ventures with other persons or entities. Joint venture investments involve risks that may not be present with other methods of ownership, based on the financial condition and business interests of our partners, which are beyond our control and which may conflict with our interests.
Added
Pursuing strategic alternatives is subject to risks, including those outlined herein, and if we are unsuccessful in consummating a strategic transaction or transactions, our business could be materially adversely affected. We have and will continue to incur substantial expenses associated with identifying, evaluating and negotiating potential strategic alternatives.
Removed
Sometimes, we and our partner have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner’s interest, at a time when we otherwise would not have initiated such a transaction.
Added
In addition, the process could negatively impact our ability to recruit and retain qualified personnel, business partners and other stakeholders important to our success.
Removed
Our ability to acquire our partner’s interest may be limited if we lack sufficient cash, available borrowing capacity, or other capital resources. In such event, we may have to sell our interest in the joint venture when we would otherwise prefer to retain it.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+1 added−0 removed12 unchanged
Biggest changeSenior management, including the SVP of IT, conducts regular meetings to discuss technology initiatives and cybersecurity risks and strategies. A comprehensive approach to assessing, identifying, and managing cybersecurity risks is part of the Company’s overall risk management strategy. A combination of internal and external monitoring services help identify, manage, and assess how management responds within our enterprise risk management processes.
Biggest changeSenior management, including the SVP of IT, conducts regular meetings to discuss technology initiatives and cybersecurity risks and strategies. A comprehensive approach to assessing, identifying, and managing cybersecurity risks is part of the Company’s overall risk management strategy.
Risk Factors – “We face risks associated with cyber-attacks, cyber intrusions, or otherwise, which could pose a risk to our systems, networks, and services” and “Security breaches could compromise our information and expose us to liability, which would cause our business and reputation to suffer.” and “Security breaches could compromise our information and expose us to liability, which would cause our business and reputation to suffer.”
Risk Factors – “We face risks associated with cyber-attacks, cyber intrusions, or otherwise, which could pose a risk to our systems, networks, and services” and “Security breaches could compromise our information and expose us to liability, which would cause our business and reputation to suffer.”
Senior leadership, including our Senior Vice President of Information Technology (the “SVP of IT”), meets with the Board of Trustees at least annually to present and discuss strategies 20 Table of Contents and cybersecurity initiatives. This meeting includes reporting of cybersecurity incidents at least annually or more often, if identified.
Senior leadership, including our Senior Vice President of Information Technology (the “SVP of IT”), meets with the Board of Trustees at least annually to present and discuss strategies and cybersecurity initiatives. This meeting includes reporting of cybersecurity incidents at least annually or more often, if identified.
Added
We believe our cybersecurity program is aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework 2.0, which serves as the foundational model guiding our controls, governance, and continuous risk‑management practices. A combination of internal and external monitoring services help identify, manage, and 21 Table of Contents assess how management responds within our enterprise risk management processes.

Item 2. Properties

Properties — owned and leased real estate

10 edited+1 added−4 removed6 unchanged
Biggest changeCloud, MN (1) 149 19,465 94.0 % Rimrock West Apartments - Billings, MT 78 5,741 94.9 % River Pointe - Fridley, MN (2) 300 42,301 96.7 % River Ridge Apartment Homes - Bismarck, ND 146 27,525 92.5 % Rocky Meadows Apartments - Billings, MT 98 8,054 94.9 % Rum River Apartments - Isanti, MN 72 6,214 91.7 % Silver Springs Apartment Homes - Rapid City, SD 52 4,315 90.4 % SouthFork Townhomes + Flats - Lakeville, MN (1) 272 55,570 96.0 % Southpoint Apartments - Grand Forks, ND 96 10,902 100.0 % Sunset Trail Apartment Homes - Rochester, MN 146 19,990 95.9 % The Bosk - Woodbury, MN (2) 288 64,369 91.7 % Union Pointe - Longmont, CO 256 77,034 93.4 % Venue on Knox - Minneapolis, MN (2) 97 24,743 92.8 % Westend - Denver, CO 390 131,069 96.9 % Whispering Ridge - Omaha, NE (1) 336 32,505 95.5 % Woodhaven - Minneapolis, MN (2) 176 26,355 97.7 % Woodridge on Second - Rochester, MN 110 12,738 93.6 % Zest - Minneapolis, MN (1) 45 11,687 97.8 % TOTAL SAME-STORE 12,580 $ 2,333,918 NON-SAME-STORE Lake Vista Apartment Homes - Loveland, CO (1) 303 89,285 96.7 % Lydian - Denver, CO (1) 129 39,558 89.9 % TOTAL NON-SAME-STORE 432 $ 128,843 TOTAL MULTIFAMILY 13,012 $ 2,462,761 23 Table of Contents (in thousands) Investment Physical Net Rentable (initial cost plus Occupancy Square improvements less as of Property Name and Location Footage impairment) December 31, 2024 OTHER - MIXED USE COMMERCIAL 71 France - Edina, MN (1) 20,922 $ 6,195 60.5 % Civic Lofts - Denver, CO 1,600 — 100.0 % Lugano at Cherry Creek - Denver, CO 11,998 2,463 100.0 % Lydian - Denver, CO (1) 22,676 672 100.0 % Noko Apartments - Minneapolis, MN 23,988 118 100.0 % Oxbo Urban Rentals- St Paul, MN (2) 11,477 3,526 100.0 % Red 20 Apartments - Minneapolis, MN (1) 10,508 2,959 100.0 % Zest - Minneapolis, MN (1) 3,200 53 100.0 % TOTAL OTHER - MIXED USE COMMERCIAL 106,369 $ 15,986 OTHER - COMMERCIAL 3100 10th St SW - Minot, ND (4) 9,603 $ 1,994 N/A TOTAL OTHER - COMMERCIAL 9,603 $ 1,994 TOTAL SQUARE FOOTAGE - OTHER 115,972 TOTAL GROSS REAL ESTATE INVESTMENTS $ 2,480,741 (1) Encumbered by mortgage debt.
Biggest change(in thousands) Investment Physical Number of (initial cost plus Occupancy Apartment improvements less as of Community Name and Location Homes impairment) December 31, 2025 SAME-STORE 71 France - Edina, MN (1) 241 $ 69,024 98.3 % Alps Park Apartments - Rapid City, SD 71 6,448 98.6 % Arcata Apartments - Golden Valley, MN (1) 165 35,562 96.4 % Ashland Apartment Homes - Grand Forks, ND 84 9,194 95.2 % Avalon Cove Townhomes - Rochester, MN 187 41,582 97.9 % Bayberry Place - Eagan, MN (2)(3) 120 17,323 84.2 % Burgundy & Hillsboro - New Hope, MN (2) 250 36,952 96.4 % Canyon Lake Apartments - Rapid City, SD 109 6,805 92.7 % Cardinal Point Apartments - Grand Forks, ND 251 37,626 95.6 % Cascade Shores Townhomes + Flats - Rochester, MN 366 85,501 94.8 % Castlerock Apartment Homes - Billings, MT 165 7,695 94.6 % Civic Lofts - Denver, CO 176 48,637 90.3 % Connelly on Eleven - Burnsville, MN 240 27,796 96.3 % Cottonwood Apartment Homes - Bismarck, ND 268 25,582 94.0 % Country Meadows Apartment Homes - Billings, MT 133 10,064 91.7 % Deer Ridge Apartment Homes - Jamestown, ND 163 25,709 93.9 % Donovan Apartment Homes - Lincoln, NE 232 28,729 94.8 % Dylan at RiNo - Denver, CO 274 91,487 94.5 % Evergreen Apartment Homes - Isanti, MN 72 7,438 95.8 % Gardens Apartments - Grand Forks, ND 74 9,630 98.7 % Greenfield - Omaha, NE 96 8,437 94.8 % Homestead Garden Apartments - Rapid City, SD 152 18,697 96.1 % Ironwood - New Hope, MN 182 40,578 96.2 % Lake Vista Apartment Homes - Loveland, CO (1) 303 90,549 97.7 % Lakeside Village Apartment Homes - Lincoln, NE 208 25,161 93.8 % Legacy Apartments - Grand Forks, ND 360 34,860 97.2 % Legacy Heights Apartment Homes - Bismarck, ND 119 15,615 98.3 % Lugano at Cherry Creek - Denver, CO 328 105,759 93.0 % Lyra Apartments - Centennial, CO (2) 215 93,923 95.8 % Martin Blu - Eden Prairie, MN (1) 191 50,780 95.3 % Meadows Apartments - Jamestown, ND 81 7,547 92.9 % Monticello Crossings - Monticello, MN 202 33,537 91.6 % Monticello Village - Monticello, MN 60 5,707 95.0 % Noko Apartments - Minneapolis, MN 130 45,313 95.4 % Northridge Apartments - Bismarck, ND 68 8,939 94.1 % Olympic Village Apartments - Billings, MT 274 15,940 96.7 % Oxbo Urban Rentals - St Paul, MN 191 58,589 92.7 % Palisades - Roseville, MN (1) 330 65,851 96.4 % Park Place Apartments - Plymouth, MN 500 115,081 97.4 % Parkhouse Apartment Homes - Thornton, CO (1) 465 149,968 91.6 % Plymouth Pointe - Plymouth, MN (2) 96 15,011 95.8 % Pointe West Apartments - Rapid City, SD 90 6,183 93.3 % 23 Table of Contents (in thousands) Investment Physical Number of (initial cost plus Occupancy Apartment improvements less as of Community Name and Location Homes impairment) December 31, 2025 Quarry Ridge Apartments - Rochester, MN 320 42,327 96.9 % Red 20 Apartments - Minneapolis, MN 130 27,032 96.2 % Rimrock West Apartments - Billings, MT 78 5,789 93.6 % River Pointe - Fridley, MN (2) 300 42,546 96.3 % River Ridge Apartment Homes - Bismarck, ND 146 27,685 98.0 % Rocky Meadows Apartments - Billings, MT 98 8,232 89.8 % Rum River Apartments - Isanti, MN 72 6,253 94.4 % Silver Springs Apartment Homes - Rapid City, SD 52 4,341 96.2 % SouthFork Townhomes + Flats - Lakeville, MN (1) 272 55,832 96.3 % Southpoint Apartments - Grand Forks, ND 96 11,230 95.8 % Sunset Trail Apartment Homes - Rochester, MN 146 20,093 96.6 % Union Pointe - Longmont, CO 256 77,121 93.4 % Westend - Denver, CO 390 133,966 94.6 % Whispering Ridge - Omaha, NE (1) 336 32,690 95.2 % Woodridge on Second - Rochester, MN 110 12,683 91.8 % TOTAL SAME-STORE 11,084 $ 2,148,629 NON-SAME-STORE Lydian - Denver, CO (1) 129 40,707 91.5 % Railway Flats - Loveland, CO (1) 420 105,027 92.1 % Sugarmont - Salt Lake City, UT (2) 341 145,932 94.4 % The Bosk - Woodbury, MN (2) 288 67,445 77.8 % TOTAL NON-SAME-STORE 1,178 $ 359,111 TOTAL MULTIFAMILY 12,262 $ 2,507,740 (in thousands) Investment Physical Net Rentable (initial cost plus Occupancy Square improvements less as of Property Name and Location Footage impairment) December 31, 2025 OTHER - MIXED USE COMMERCIAL 71 France - Edina, MN (1) 20,963 $ 6,410 100.0 % Civic Lofts - Denver, CO 1,600 — 100.0 % Lugano at Cherry Creek - Denver, CO 11,998 2,494 100.0 % Lydian - Denver, CO (1) 22,676 716 100.0 % Noko Apartments - Minneapolis, MN 23,988 118 100.0 % Oxbo Urban Rentals- St Paul, MN 11,477 3,526 100.0 % Red 20 Apartments - Minneapolis, MN 10,508 3,016 100.0 % TOTAL OTHER - MIXED USE COMMERCIAL 103,210 $ 16,280 TOTAL GROSS REAL ESTATE INVESTMENTS $ 2,524,020 (1) Encumbered by mortgage debt.
Generally, our third-party management contracts are for terms of one year or less and provide for compensation ranging from 2.5% to 5.0% of 21 Table of Contents gross rent collections and, typically, we may terminate these contracts upon 60 days or less notice for cause or upon the property manager’s failure to meet certain specified financial performance goals.
Generally, our third-party management contracts are for terms of one year or less and provide for compensation ranging from 2.5% to 5.0% of gross rent collections and, typically, we may terminate these contracts upon 60 days or less notice for cause or upon the property manager’s failure to meet certain specified financial performance goals.
We define re-positioned communities as having significant development and construction activity on existing buildings pursuant to an authorized plan, which has an impact on current operating results, occupancy and the ability to lease space with the intended result of improved community cash flow and competitive position through extensive unit and amenity upgrades.
We define re-positioned communities as having significant development and construction activity on existing buildings pursuant to an authorized plan, which has an impact on current operating results, occupancy and the ability to lease space with the intended result of improved community cash flow and competitive position through extensive unit and amenity 22 Table of Contents upgrades.
However, all decisions relating to purchase, sale, insurance coverage, major capital improvements, annual operating budgets, and major renovations are made exclusively by our employees and implemented by the third-party management companies.
In that case, however, all decisions relating to purchase, sale, insurance coverage, major capital improvements, annual operating budgets, and major renovations are made exclusively by our employees and implemented by the third-party management companies.
Summary of Communities Owned as of December 31, 2024 The following table presents information regarding our 71 apartment communities held for investment, as of December 31, 2024. We provide certain information on a same-store and non-same-store basis.
Summary of Communities Owned as of December 31, 2025 The following table presents information regarding our 61 apartment communities held for investment, as of December 31, 2025. We provide certain information on a same-store and non-same-store basis.
On the first day of each calendar year, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate the performance of existing apartment communities. “Other” includes non-multifamily properties and non-multifamily components of mixed use properties.
On the first day of each calendar year, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate the performance of existing apartment communities. “Other” includes non-multifamily properties and non-multifamily components of mixed use properties. We own the following real estate through our wholly-owned subsidiaries.
Not all communities undergoing value add are considered a re-positioned community.Non-same store communities are communities not owned or stabilized as of the beginning of the previous year, including re-positioned communities, and excluding communities held for sale and the non-multifamily components of mixed-use properties.
Non-same store communities are communities not owned or stabilized as of the beginning of the previous year, including re-positioned communities, and excluding communities held for sale and the non-multifamily components of mixed-use properties.
We categorize a re-positioned community as same-store when the development and construction activity has been completed, and operations have stabilized. This is typically reaching an overall occupancy of 90%.
We categorize a re-positioned community as same-store when the development and construction activity has been completed, and operations have stabilized. This is typically reaching an overall occupancy of 90%. Not all communities undergoing value add are considered a re-positioned community.
We own the following interests in real estate either through our wholly-owned subsidiaries or by ownership of a controlling interest in an entity owning the real estate. We account for these interests on a consolidated basis. Additional information is included in Schedule III to our financial statements included in this Report.
We account for these interests on a consolidated basis. Additional information is included in Schedule III to our financial statements included in this Report.
Properties by State The following table presents, as of December 31, 2024, the total property owned by state: (in thousands) State Total % of Total Minnesota $ 1,247,773 50.4 % Colorado 841,967 33.9 % North Dakota 210,375 8.5 % Nebraska 92,894 3.7 % Montana 47,042 1.9 % South Dakota 40,690 1.6 % Total $ 2,480,741 100.0 %
(3) Apartment community’s physical occupancy decreased due to casualty event. 24 Table of Contents Properties by State The following table presents, as of December 31, 2025, the total property owned by state: (in thousands) State Total % of Total Minnesota $ 1,038,906 41.0 % Colorado 940,354 37.3 % North Dakota 213,617 8.5 % Utah 145,932 5.8 % Nebraska 95,017 3.8 % Montana 47,720 1.9 % South Dakota 42,474 1.7 % Total $ 2,524,020 100.0 %
Removed
(in thousands) Investment Physical Number of (initial cost plus Occupancy Apartment improvements less as of Community Name and Location Homes impairment) December 31, 2024 SAME-STORE 71 France - Edina, MN (1) 241 $ 68,757 93.8 % Alps Park Apartments - Rapid City, SD 71 6,443 88.7 % Arcata Apartments - Golden Valley, MN 165 34,212 97.6 % Ashland Apartment Homes - Grand Forks, ND 84 8,683 98.8 % Avalon Cove Townhomes - Rochester, MN 187 41,302 92.5 % Bayberry Place - Eagan, MN (2) 120 17,601 91.7 % Burgundy & Hillsboro - New Hope, MN (2) 250 36,816 94.0 % Canyon Lake Apartments - Rapid City, SD 109 6,571 92.7 % Cardinal Point Apartments - Grand Forks, ND 251 35,619 98.0 % Cascade Shores Townhomes + Flats - Rochester, MN (1) 366 85,151 96.2 % Castlerock Apartment Homes - Billings, MT 165 7,599 92.7 % Civic Lofts - Denver, CO 176 62,543 92.6 % Connelly on Eleven - Burnsville, MN 240 29,488 95.4 % Cottonwood Apartment Homes - Bismarck, ND 268 25,480 94.4 % Country Meadows Apartment Homes - Billings, MT 133 9,827 95.5 % Cypress Court Apartments - St.
Added
(2) Encumbered by mortgage in our Fannie Mae Credit Facility.
Removed
Cloud, MN (1) (3) 196 21,626 94.9 % Deer Ridge Apartment Homes - Jamestown, ND 163 25,680 94.5 % Donovan Apartment Homes - Lincoln, NE 232 27,595 94.0 % Dylan at RiNo - Denver, CO 274 91,069 94.5 % Elements of Linden Hills - Minneapolis, MN (1) 31 9,069 96.8 % Evergreen Apartment Homes - Isanti, MN 72 7,414 88.9 % FreightYard Townhomes & Flats - Minneapolis, MN 96 27,021 96.9 % Gardens Apartments - Grand Forks, ND 74 9,399 96.0 % Grand Gateway Apartment Homes - St.
Removed
Cloud, MN 116 12,129 90.5 % Greenfield - Omaha, NE 96 8,305 95.8 % Grove Ridge - Cottage Grove, MN (2) 84 14,982 86.9 % Homestead Garden Apartments - Rapid City, SD 152 17,630 97.4 % Ironwood - New Hope, MN 182 40,317 96.2 % Lakeside Village Apartment Homes - Lincoln, NE 208 24,489 92.8 % 22 Table of Contents (in thousands) Investment Physical Number of (initial cost plus Occupancy Apartment improvements less as of Community Name and Location Homes impairment) December 31, 2024 Legacy Apartments - Grand Forks, ND 360 33,940 96.7 % Legacy Heights Apartment Homes - Bismarck, ND 119 15,280 96.6 % Lugano at Cherry Creek - Denver, CO 328 105,167 93.3 % Lyra Apartments - Centennial, CO (2) 215 93,788 93.0 % Martin Blu - Eden Prairie, MN (1) 191 50,177 95.8 % Meadows Apartments - Jamestown, ND 81 7,168 93.8 % Monticello Crossings - Monticello, MN 202 33,255 94.6 % Monticello Village - Monticello, MN 60 5,656 90.0 % New Hope Garden & Village - New Hope, MN (2) 150 15,812 99.3 % Noko Apartments - Minneapolis, MN 130 45,173 95.4 % Northridge Apartments - Bismarck, ND 68 8,705 95.6 % Olympic Village Apartments - Billings, MT 274 15,821 96.0 % Oxbo Urban Rentals - St Paul, MN (2) 191 58,366 94.8 % Palisades - Roseville, MN (1) 330 65,611 92.7 % Park Place Apartments - Plymouth, MN 500 112,782 95.0 % Parkhouse Apartment Homes - Thornton, CO (1) 465 149,319 94.6 % Plymouth Pointe - Plymouth, MN (2) 96 14,910 99.0 % Pointe West Apartments - Rapid City, SD 90 5,731 96.7 % Ponds at Heritage Place - Sartell, MN 58 5,578 98.3 % Prosper West - Waite Park, MN (1) 313 29,197 94.3 % Quarry Ridge Apartments - Rochester, MN 320 42,245 95.3 % Red 20 Apartments - Minneapolis, MN (1) 130 26,843 93.9 % Regency Park Estates - St.
Removed
(2) Encumbered by mortgage in our Fannie Mae Credit Facility. (3) Owned by a joint venture entity and consolidated in our financial statements. We have an approximately 86.1% ownership in Cypress Court. (4) This is our Minot corporate office building.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings In the ordinary course of our operations, we become involved in litigation. At this time, we know of no material pending or threatened legal proceedings to which we are a party or of which any of our properties are the subject. Item 4. Mine Safety Disclosures Not Applicable. 24 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings In the ordinary course of our operations, we become involved in litigation. At this time, we know of no material pending or threatened legal proceedings to which we are a party or of which any of our properties are the subject. Item 4. Mine Safety Disclosures Not Applicable. 25 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe comparison assumes the reinvestment of all distributions. 25 Table of Contents Period Ending Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Centerspace 100.00 101.75 165.11 90.87 94.84 112.94 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 FTSE Nareit Equity REITs 100.00 92.00 131.78 99.67 113.35 123.25 FTSE Nareit Equity Apartments Index 100.00 84.66 138.51 94.25 99.78 120.22 Source: S&P Global Market Intelligence Item 6.
Biggest changeThe comparison assumes the reinvestment of all distributions. 26 Table of Contents Period Ending Index 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Centerspace 100.00 162.26 89.31 93.21 110.99 117.59 S&P 500 Index 100.00 128.71 105.40 133.10 166.40 196.16 FTSE Nareit Equity REITs Index 100.00 143.24 108.34 123.21 133.97 137.83 FTSE Nareit Equity Apartments Index 100.00 163.61 111.34 117.87 142.02 129.86 Source: S&P Global Market Intelligence Item 6.
Unregistered Sales of Shares Under the terms of Centerspace, LP’s Agreement of Limited Partnership, limited partners have the right to require Centerspace, LP to redeem their limited partnership Units any time following the first anniversary of the date they acquired such Units (“Exchange Right”).
Unregistered Sales of Shares Under the terms of Centerspace, LP’s Agreement of Limited Partnership, limited partners have the right to require Centerspace, LP to redeem their common limited partnership Units any time following the first anniversary of the date they acquired such Units (“Exchange Right”).
Set forth below is a graph that compares, for the five years commencing December 31, 2019 and ending December 31, 2024, the cumulative total returns for our common shares with the comparable cumulative total return of three indices, the Standard & Poor’s 500 Index (“S&P 500”), the FTSE Nareit Equity REITs Index, and the FTSE Nareit Equity Apartments Index, the latter of which is an index prepared by the FTSE Group for the National Association of Real Estate Investment Trusts, which includes all tax-qualified equity REITs listed on the NYSE and the NASDAQ Market.
Set forth below is a graph that compares, for the five years commencing December 31, 2020 and ending December 31, 2025, the cumulative total returns for our common shares with the comparable cumulative total return of three indices, the Standard & Poor’s 500 Index (“S&P 500”), the FTSE Nareit Equity REITs Index, and the FTSE Nareit Equity Apartments Index, the latter of which is an index prepared by the FTSE Group for the National Association of Real Estate Investment Trusts, which includes all tax-qualified equity REITs listed on the NYSE and the NASDAQ Market.
The performance graph assumes that, at the close of trading on December 31, 2019, $100 was invested in our common shares and in each of the indices.
The performance graph assumes that, at the close of trading on December 31, 2020, $100 was invested in our common shares and in each of the indices.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our Common Shares of Beneficial Interest, no par value, are traded on the New York Stock Exchange under the symbol “CSR”. Shareholders As of February 11, 2025, there were approximately 2,246 common shareholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our Common Shares of Beneficial Interest, no par value, are traded on the New York Stock Exchange under the symbol “CSR”. Shareholders As of February 10, 2026, there were approximately 2,083 common shareholders of record.
Issuer Purchases of Equity Securities Maximum Dollar Total Number of Shares Amount of Shares That Total Number of Average Price Purchased as Part of May Yet Be Purchased Shares and Units Paid per Publicly Announced Under the Plans or Period Purchased (1) Share and Unit (2) Plans or Programs Programs (3) October 1 - 31, 2024 — $ — — $ 4,713,230 November 1 - 30, 2024 — — — 4,713,230 December 1 - 31, 2024 — — — 4,713,230 Total — $ — — (1) Includes Units redeemed for cash pursuant to the exercise of exchange rights.
Issuer Purchases of Equity Securities Maximum Dollar Total Number of Shares Amount of Shares That Total Number of Average Price Purchased as Part of May Yet Be Purchased Shares and Units Paid per Publicly Announced Under the Plans or Period Purchased (1) Share and Unit (2) Plans or Programs Programs (3) October 1 - 31, 2025 — $ — — $ 96,545,554 November 1 - 30, 2025 — — — 96,545,554 December 1 - 31, 2025 — — — 96,545,554 Total — $ — — (1) Includes Units and Series D preferred units redeemed for cash pursuant to the exercise of exchange rights.
On October 31, 2024 and December 31, 2024, we issued an aggregate of 8,648 and 120 unregistered common shares, respectively, to limited partners of Centerspace, LP upon exercise of their Exchange Rights for an equal number of Units. All such issuances of our common shares were exempt from registration as private placements under Section 4(a)(2) of the Securities Act.
On November 30, 2025, we issued an aggregate of 41,018 unregistered common shares to limited partners of Centerspace, LP upon exercise of their Exchange Rights for an equal number of Units. All such issuances of our common shares were exempt from registration as private placements under Section 4(a)(2) of the Securities Act.
(2) Amount includes commissions paid. (3) On March 10, 2022, the board authorized a $50.0 million share repurchase program.
(2) Amount is based on market prices and includes commissions paid. (3) Effective July 31, 2025, the board authorized a $100.0 million share repurchase program which expires on July 31, 2026.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

76 edited+14 added−15 removed59 unchanged
Biggest changeFFO applicable to common shares and Units for the year ended December 31, 2024, increased to $83.3 million compared to $77.3 million for the year ended December 31, 2023, a change of 7.8%, primarily due to $3.2 million in severance and transition expenses related to the departure of our former CEO in 2023 and a $3.9 million loss on litigation settlement in 2023, both of which did not occur in 2024, along with increased NOI from same-store and non-same-store communities in the in the year ended December 31, 2024, offset by the redemption of our Series C preferred shares during 2024 and increased casualty loss claim and decreased NOI from dispositions. 33 Table of Contents Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds from Operations and Core Funds From Operations (in thousands, except per share and unit amounts) Year Ended December 31, 2024 2023 Funds from Operations: Net income (loss) available to common shareholders $ (19,660) $ 34,897 Adjustments: Noncontrolling interests – Operating Partnership and Series E preferred units (3,635) 7,141 Depreciation and amortization 106,450 101,678 Less depreciation – non real estate (327) (322) Less depreciation – partially owned entities (98) (80) Impairment of real estate investments — 5,218 (Gain) loss on sale of real estate 577 (71,240) FFO applicable to common shares and Units $ 83,307 $ 77,292 Adjustments to Core FFO: Non-cash casualty loss $ 2,432 $ 1,350 Interest rate swap amortization 712 936 Amortization of assumed debt 1,206 (212) Severance and transition related costs — 3,170 Loss on litigation settlement and associated trial costs (1) 37 4,270 Redemption of preferred shares 3,511 — Other miscellaneous items (2) (526) (132) Core FFO applicable to common shares and Units $ 90,679 $ 86,674 FFO applicable to common shares and Units $ 83,307 $ 77,292 Dividends to Series D preferred unitholders 640 640 FFO applicable to common shares and Units - diluted $ 83,947 $ 77,932 Core FFO applicable to common shares and Units $ 90,679 $ 86,674 Dividends to Series D preferred unitholders 640 640 Core FFO applicable to common shares and Units - diluted $ 91,319 $ 87,314 Per Share Data Income (loss) per common share - diluted $ (1.27) $ 2.32 FFO per share and Unit - diluted $ 4.49 $ 4.27 Core FFO per share and Unit - diluted $ 4.88 $ 4.78 Weighted average shares - basic 15,504 14,994 Effect of redeemable operating partnership units 870 925 Effect of Series D preferred units 228 228 Effect of Series E preferred units 2,056 2,100 Effect of dilutive restricted stock units and stock options 36 24 Weighted average shares and Units - diluted 18,694 18,271 (1) Consists of $37,000 in associated trial costs related to the litigation matter for the year ended December 31, 2024.
Biggest changeFFO applicable to common shares and Units for the year ended December 31, 2025, increased to $93.4 million compared to $83.3 million for the year ended December 31, 2024, a change of 12.1%, primarily due to increased NOI from same-store and non-same-store communities along with distributions to preferred shareholders that occurred in the prior year that did not occur in the year ended December 31, 2025, offset by increased interest expense and general and administrative expense and decreased NOI from dispositions. 33 Table of Contents Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds from Operations and Core Funds from Operations (in thousands, except per share and unit amounts) Year Ended December 31, 2025 2024 Funds from Operations: Net income (loss) available to common shareholders $ 17,101 $ (19,660) Adjustments: Noncontrolling interests – Operating Partnership and Series E preferred units 2,969 (3,635) Depreciation and amortization 113,231 106,450 Less depreciation – non real estate (335) (327) Less depreciation – partially owned entities (43) (98) Impairment of real estate investments 37,719 — (Gain) loss on sale of real estate (79,470) 577 Less gain on sale of real estate - partially owned entities 2,252 — Add loss on sale of non real estate assets (50) — FFO applicable to common shares and Units $ 93,374 $ 83,307 Adjustments to Core FFO: Non-cash casualty loss $ 537 $ 2,432 Loss on extinguishment of debt 98 — Interest rate swap amortization 407 712 Amortization of assumed debt 1,958 1,206 Legal and other costs related to strategic review 1,336 — Redemption of Series C preferred shares — 3,511 Other miscellaneous items (1) (507) (489) Core FFO applicable to common shares and Units $ 97,203 $ 90,679 FFO applicable to common shares and Units $ 93,374 $ 83,307 Distributions to Series D preferred unitholders 486 640 FFO applicable to common shares and Units - diluted $ 93,860 $ 83,947 Core FFO applicable to common shares and Units $ 97,203 $ 90,679 Distributions to Series D preferred unitholders 486 640 Core FFO applicable to common shares and Units - diluted $ 97,689 $ 91,319 Per Share Data Net income (loss) per common share - diluted (2) $ 1.02 $ (1.27) FFO per share and Unit - diluted $ 4.74 $ 4.49 Core FFO per share and Unit - diluted $ 4.93 $ 4.88 Weighted average shares - basic for net income (loss) 16,728 15,504 Effect of operating partnership Units for FFO and Core FFO 966 870 Effect of Series D preferred units, as converted, for FFO and Core FFO 173 228 Effect of Series E preferred units, as converted, for FFO and Core FFO 1,901 2,056 Effect of dilutive restricted stock units and stock options for FFO and Core FFO 47 36 Weighted average shares and Units for FFO and Core FFO - diluted 19,815 18,694 (1) Consists of (gain) loss on investments.
On the first day of each calendar year, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate the performance of existing apartment communities and their contribution to net income.
On the first day of each calendar year, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate the performance of existing apartment communities and their contribution to net income (loss).
Core FFO should not be considered as an alternative to net income or as any other GAAP measurement of performance, but rather should be considered an additional supplemental measure.
Core FFO should not be considered as an alternative to net income (loss) or as any other GAAP measurement of performance, but rather should be considered an additional supplemental measure.
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 should not be considered as an alternative to net income (loss) or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure.
However, the cost to operate and maintain communities could increase at a rate greater than our ability to increase rents, which could adversely affect our results of operations. High inflation could have a negative impact on our residents and their ability to absorb rent increases. We also continue to monitor pressures surrounding supply chain challenges.
However, the cost to operate and maintain communities could increase at a rate greater than our ability to increase rents, which could adversely affect our results of operations. High inflation could have a negative impact on our residents and their ability to absorb rent increases. We also continue to monitor pressures surrounding supply chain challenges, including the impact of tariffs.
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.
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, 2025 and 2024.
(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.
(in thousands, except per share amounts) Number of Common Shares Total Consideration (1) Average Price Per Share (1) Year ended December 31, 2025 — $ — $ — Year ended December 31, 2024 (2) 1,587 $ 112,613 $ 71.66 (1) Total consideration is net of $1.1 million in commissions for the year ended December 31, 2024.
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 needs, including the ability to service indebtedness or make distributions to shareholders. 32 Table of Contents Core funds from operations (“Core FFO”), a non-GAAP measure, is FFO adjusted for non-routine items or items not considered core to business operations.
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 needs, including the ability to service indebtedness or make distributions to shareholders. Core funds from operations (“Core FFO”), a non-GAAP measure, is FFO adjusted for non-routine items or items not considered core to business operations.
As described further below, the process of allocating property costs to its components requires a considerable amount of subjective judgments to be made by management. If we do not allocate these costs appropriately or incorrectly estimate the useful lives of our real estate, depreciation expense may be misstated.
As described further below, the process of allocating property costs to its 38 Table of Contents components requires a considerable amount of subjective judgments to be made by management. If we do not allocate these costs appropriately or incorrectly estimate the useful lives of our real estate, depreciation expense may be misstated.
The FMCF is currently secured by mortgages on 11 apartment communities. The notes are interest-only, with varying maturity dates of 7, 10, and 12 years, and a blended weighted average fixed interest rate of 2.78%. As of December 31, 2024 and 2023, the FMCF had a balance of $198.9 million.
The FMCF is currently secured by mortgages on 7 apartment communities. The notes are interest-only, with varying maturity dates of 7, 10, and 12 years, and a blended weighted average fixed interest rate of 2.78%. As of December 31, 2025 and 2024, the FMCF had a balance of $198.9 million.
Changes in Cash, Cash Equivalents, and Restricted Cash As of December 31, 2024, we had cash and cash equivalents of $12.0 million and restricted cash consisting of $1.1 million of escrows held by lenders for real estate taxes, insurance, and capital additions.
As of December 31, 2024, we had cash and cash equivalents of $12.0 million and restricted cash consisting of $1.1 million of escrows held by lenders for real estate taxes, insurance, and capital additions.
Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. We use a 10-37 year estimated 38 Table of Contents life for buildings and improvements and a 5-10 year estimated life for furniture, fixtures, and equipment. Maintenance and repairs are charged to operations as incurred.
Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. We use a 10-37 year estimated life for buildings and improvements and a 5-10 year estimated life for furniture, fixtures, and equipment. Maintenance and repairs are charged to operations as incurred.
As amended, the interest rates on the line of credit are based on the consolidated leverage ratio, at our option, on either the lender’s base rate plus a margin, ranging from 20-80 basis points, or the daily or term Secured Overnight Financing Rate (“SOFR”), plus a margin that ranges from 120-180 basis points, with the consolidated leverage ratio described under the Third Amended and Restated Credit Agreement, as amended.
As amended, the interest rates on the line of credit are based on the consolidated leverage ratio, at our option, on either the lender’s base rate plus a margin, ranging from 20-80 basis points, or daily or term SOFR, plus a margin that ranges from 120-180 basis points with the consolidated leverage ratio described under the Third Amended and Restated Credit Agreement, as amended.
We seek to manage a strong balance sheet that should provide us with flexibility to pursue both internal and external growth. 27 Table of Contents RESULTS OF OPERATIONS We are presenting our results of operations for the years ended December 31, 2024 and 2023.
We seek to manage a strong balance sheet that should provide us with flexibility to pursue both internal and external growth. 28 Table of Contents RESULTS OF OPERATIONS We are presenting our results of operations for the years ended December 31, 2025 and 2024.
For additional comparison of results of operations for the years ended December 31, 2023 and December 31, 2022, please refer to our Annual Report on Form 10-K filed with the SEC on February 20, 2024. Non-GAAP Financial Measures Net operating income.
For additional comparison of results of operations for the years ended December 31, 2024 and December 31, 2023, please refer to our Annual Report on Form 10-K filed with the SEC on February 18, 2025. Non-GAAP Financial Measures Net operating income.
Contractual Obligations and Other Commitments Our primary contractual obligations relate to borrowings under our lines of credit, unsecured senior notes, and mortgages payable. Our primary line of credit had a $44.0 million balance outstanding at December 31, 2024 and matures in July 2028.
Contractual Obligations and Other Commitments Our primary contractual obligations relate to borrowings under our lines of credit, unsecured senior notes, and mortgages payable. Our primary line of credit had a $154.0 million balance outstanding at December 31, 2025 and matures in July 2028.
Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Executive Summary We are a real estate investment trust, or REIT that owns, manages, acquires, redevelops, and develops apartment communities.
Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. See “Special Note Regarding Forward-Looking Statements.” Executive Summary We are a real estate investment trust, or REIT that owns, manages, acquires, redevelops, and develops apartment communities.
As of December 31, 2024, the weighted average rate of interest on our mortgage debt was 4.02%, compared to 4.05% on December 31, 2023. Refer to Note 6 of our Consolidated Financial Statements contained in this Report for the principal payments due on our mortgage indebtedness and other tabular information.
As of December 31, 2025, the weighted average rate of interest on our mortgage debt was 3.88%, compared to 4.02% on December 31, 2024. Refer to Note 6 of our Consolidated Financial Statements contained in this Report for the principal payments due on our mortgage indebtedness and other tabular information.
The following table shows the notes issued under both agreements as of December 31, 2024 and 2023.
The following table shows the notes issued under both agreements as of December 31, 2025 and 2024.
Refer to Real Estate Investments in Note 2 of the Notes to the Consolidated Financial Statements in the report for more details. General and administrative expenses.
Refer to Real Estate Investments in Notes 2 and 9 of the Notes to the Consolidated Financial Statements in this Report for more details. General and administrative expenses.
In September 2024, we entered into an operating line of credit agreement with US Bank, N.A. which has a borrowing capacity of up to $10.0 million and pricing based on SOFR. This operating line of credit terminates in September 2025 and is designed to enhance treasury management activities and more effectively manage cash balances.
We have an operating line of credit agreement with US Bank, N.A. which has a borrowing capacity of up to $10.0 million and pricing based on SOFR. This operating line of credit terminates in September 2026 and is designed to enhance treasury management activities and more effectively manage cash balances.
(in thousands) Amount Maturity Date Fixed Interest Rate Series A $ 75,000 September 13, 2029 3.84 % Series B $ 50,000 September 30, 2028 3.69 % Series C $ 50,000 June 6, 2030 2.70 % Series 2021-A $ 35,000 September 17, 2030 2.50 % Series 2021-B $ 50,000 September 17, 2031 2.62 % Series 2021-C $ 25,000 September 17, 2032 2.68 % Series 2021-D $ 15,000 September 17, 2034 2.78 % We have a $198.9 million Fannie Mae Credit Facility Agreement (“FMCF”).
(in thousands) Amount Maturity Date Fixed Interest Rate Series A $ 75,000 September 13, 2029 3.84 % Series B $ 50,000 September 30, 2028 3.69 % Series C $ 50,000 June 6, 2030 2.70 % Series 2021-A $ 35,000 September 17, 2030 2.50 % Series 2021-B $ 50,000 September 17, 2031 2.62 % Series 2021-C $ 25,000 September 17, 2032 2.68 % Series 2021-D $ 15,000 September 17, 2034 2.78 % We have a $198.9 million FMCF.
For the year ended December 31, 2024, our highlights included the following: • Net Loss was $1.27 per diluted share for the year ended December 31, 2024, compared to Net Income of $2.32 per diluted share for the year ended December 31, 2023; • Core funds from operations (“CFFO”) per diluted share, a non-GAAP measure, increased 2.1% (refer to reconciliations of Funds from Operations and Core Funds from Operations beginning on page 32 for additional detail) to $4.88 from $4.78; • Operating income decreased to $20.5 million for the year ended December 31, 2024 compared to $84.5 million for the prior year; and • Same-store year-over-year net operating income growth of 3.7% driven by same-store revenue growth of 3.3% (refer to Reconciliation of Operating Income (Loss) to Net Operating Income beginning on page 29 for additional detail).
For the year ended December 31, 2025, our highlights included the following: • Net Income was $1.02 per diluted share for the year ended December 31, 2025, compared to Net Loss of $1.27 per diluted share for the year ended December 31, 2024; • Core funds from operations (“CFFO”) per diluted share, a non-GAAP measure, increased 1.0% to $4.93 from $4.88 (refer to reconciliations of Funds from Operations and Core Funds from Operations beginning on page 32 for additional detail); • Operating income increased to $64.5 million for the year ended December 31, 2025 compared to $20.5 million for the prior year; and • Same-store year-over-year net operating income growth of 3.5% driven by same-store revenue growth of 2.4% (refer to Reconciliation of Operating Income (Loss) to Net Operating Income beginning on page 29 for additional detail).
Approximately 2.9% of the increase was due to higher average monthly revenue per occupied home and 0.3% from an increase in occupancy as weighted average occupancy increased from 94.9% to 95.2% for the years ended December 31, 2023 and 2024, respectively.
Approximately 2.0% of the increase was due to higher average monthly revenue per occupied home and 0.3% from an increase in occupancy as weighted average occupancy increased from 95.4% to 95.7% for the years ended December 31, 2024 and 2025, respectively.
Our operating line of credit had a $3.4 million balance outstanding at December 31, 2024 and matures in September 2025. Our unsecured senior notes had an aggregate balance of $300.0 million at December 31, 2024 with varying maturities from September 2028 through September 2034.
Our operating line of credit had a $925,000 balance outstanding at December 31, 2025 and matures in September 2026. Our unsecured senior notes had an aggregate balance of $300.0 million at December 31, 2025 with varying maturities from September 2028 through September 2034.
As of December 31, 2024, we had total liquidity of approximately $224.6 million, which included $212.6 million available on our lines of credit based on the value of unencumbered properties and $12.0 million of cash and cash equivalents.
As of December 31, 2024, we had total liquidity of approximately $224.6 million, which included $212.6 million available on our lines of credit based on the value of unencumbered properties and $12.0 million of cash and cash equivalents. Debt As of December 31, 2025, we had access to the Unsecured Credit Facility.
Sold communities are included in “Dispositions,” for all periods presented, while “Other properties” includes non-multifamily properties and the non-multifamily components of mixed-use properties. During the years ended December 31, 2024 and 2023, we disposed of two and thirteen apartment communities, respectively, consisting of 205 and 2,279 apartment homes, respectively.
Sold communities are included in “Dispositions,” for all periods presented, while “Other properties” includes non-multifamily properties and the non-multifamily components of mixed-use properties. During the years ended December 31, 2025 and 2024, we disposed of twelve and two apartment communities, respectively, consisting of 1,511 and 205 apartment homes, respectively.
(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. We have a share repurchase program (the “Share Repurchase Program”), providing for the repurchase of up to an aggregate of $50.0 million of our outstanding common shares.
(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. We had a share repurchase program, providing for the repurchase of up to an aggregate of $50.0 million of our outstanding common shares. This program expired on March 10, 2025.
For the comparison of the years ended December 31, 2024 and 2023, 69 apartment communities were classified as same-store and two apartment communities were non-same-store. See Item 2 - Properties for the list of communities classified as same-store and non-same-store.
For the comparison of the years ended December 31, 2025 and 2024, 57 apartment communities were classified as same-store and four apartment communities and two apartment communities, respectively, were non-same-store. See Item 2 - Properties for the list of communities classified as same-store and non-same-store.
In the years ended December 31, 2024 and 2023, we recorded a loss on the sale of real estate and other investments of $577,000 and a gain on the sale of real estate and other investments of $71.2 million, respectively.
In the years ended December 31, 2025 and 2024, we recorded a gain on the sale of real estate and other investments of $79.5 million and a loss on the sale of real estate and other investments of $577,000, respectively.
The FMCF is included within mortgages payable on the Consolidated Balance Sheets. Mortgage loan indebtedness, excluding net debt premiums and discounts and the FMCF, was $420.4 million and $392.3 million on December 31, 2024, and 2023, respectively on 15 and 14 apartment communities, respectively.
The FMCF is included within mortgages payable on the Consolidated Balance Sheets. Mortgage loan indebtedness, excluding net debt premiums and discounts and the FMCF, was $400.1 million and $420.4 million on December 31, 2025, and 2024, respectively on 10 and 15 apartment communities, respectively.
We fund capital expenditures, primarily to maintain or renovate our apartment communities. The amounts of these expenditures can vary from year to year depending on the age of the apartment community, timing of planned improvements, and lease turnover. As of December 31, 2024, we had no significant off-balance-sheet arrangements.
We fund capital expenditures, primarily to maintain or renovate our apartment communities. The amounts of these expenditures can vary from year to year depending on the age of the apartment community, timing of planned improvements, and lease turnover. As of December 31, 2025, we had no significant off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
Property management expense, consisting of property management overhead and property management fees paid to third parties decreased by 2.4% to $9.1 million in the year ended December 31, 2024, compared to $9.4 million in the year ended December 31, 2023.
Property management expense. Property management expense, consisting of property management overhead and property management fees paid to third parties increased by 5.6% to $9.6 million in the year ended December 31, 2025, compared to $9.1 million in the year ended December 31, 2024.
As of December 31, 2024, we 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.
As of December 31, 2025, we had $96.5 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, 2025 63 $ 3,454 $ 54.86 Year ended December 31, 2024 88 $ 4,703 $ 53.62 (1) Amount includes commissions.
The increase was primarily due to increased insurance claims activity throughout 2024 compared to the prior year period. Refer to Involuntary Conversion of Assets in Note 2 of the Notes to the Consolidated Financial Statements in the report for more details. Depreciation and amortization.
The decrease was primarily due to decreases in insurance claims activity and increases in insurance recoveries throughout 2025 compared to the prior year period. Refer to Involuntary Conversion of Assets in Note 2 of the Notes to the Consolidated Financial Statements in this Report for more details. 31 Table of Contents Depreciation and amortization.
Property operating expenses at same-store communities increased by 2.7% or $2.6 million in the year ended December 31, 2024, compared to the same period in the prior year.
Property operating expenses at same-store communities increased by 0.6% or $541,000 in the year ended December 31, 2025, compared to the same period in the prior year.
For the year ended December 31, 2024, we declared cash distributions of $49.9 million to common shareholders and unitholders of Centerspace, LP, as compared to net cash provided by operating activities of $98.2 million and FFO of $83.3 million.
For the year ended December 31, 2025, we declared cash distributions of $54.5 million to common shareholders and unitholders of Centerspace, LP, as compared to net cash provided by operating activities of $98.5 million and FFO of $93.4 million.
We had 1.6 million and 1.7 million Series E preferred units outstanding on 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.
We had 1.6 million Series E preferred units (noncontrolling interests) outstanding on December 31, 2025 and 2024. 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 common Units.
Net loss available to common shareholders for the year ended December 31, 2024 decreased to $19.7 million compared to a net income of $34.9 million for the year ended December 31, 2023.
Net income available to common shareholders for the year ended December 31, 2025 increased to $17.1 million compared to a net loss of $19.7 million for the year ended December 31, 2024.
Weighted average occupancy may not 30 Table of Contents completely reflect short-term trends in physical occupancy, and our calculation of weighted average occupancy may not be comparable to that disclosed by other REITs and other real estate companies. December 31, Number of Homes 2024 2023 Same-store 12,580 12,580 Non-same-store 432 303 Dispositions — 205 Total 13,012 13,088 Same-store analysis.
Weighted average occupancy may not completely reflect short-term trends in physical occupancy, and our calculation of weighted average occupancy may not be comparable to that disclosed by other REITs and other real estate companies. December 31, Number of Homes 2025 2024 Same-store 11,084 11,084 Non-same-store 1,178 417 Dispositions — 1,511 Total 12,262 13,012 Same-store analysis.
At same-store communities, controllable expenses (which exclude insurance and real estate taxes), increased by $2.1 million, primarily due to increased repairs and maintenance, technology costs related to smart home technology, and compensation costs, offset by decreased utilities and turnover costs.
At same-store communities, controllable expenses (which exclude insurance and real estate taxes), increased by $417,000, primarily due to increased utilities, turnover expense, and compensation costs, offset by decreased repairs and maintenance and marketing expense.
As of December 31, 2023, we had total liquidity of approximately $234.6 million, which included $226.0 million available on our lines of credit based on the value of unencumbered properties and $8.6 million of cash and cash equivalents.
As of December 31, 2025, we had total liquidity of approximately $267.9 million, which included $255.1 million available on our lines of credit based on the value of unencumbered properties and $12.8 million of cash and cash equivalents.
Revenue from same-store communities increased by 3.3%, or $7.9 million, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
Revenue from same-store communities increased by 2.4%, or $5.4 million, in the year ended December 31, 2025, compared to the year ended December 31, 2024.
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.
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; • gains and losses from change in control; • 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. 32 Table of Contents The exclusion in Nareit’s definition of FFO of impairment write-downs and gains and losses from the sale of real estate assets helps to identify the operating results of the long-term assets that form the base of our investments, and assists management and investors in comparing those operating results between periods.
As of December 31, 2023, we had cash and cash equivalents of $8.6 million and restricted cash consisting of $639,000 of escrows held by lenders for real estate taxes, insurance, and capital additions.
Changes in Cash, Cash Equivalents, and Restricted Cash As of December 31, 2025, we had cash and cash equivalents of $12.8 million and restricted cash consisting of $2.8 million of escrows held by lenders and security deposits. The escrows held by lenders are for real estate taxes, insurance, and capital additions.
Operating income decreased by 75.8% to $20.5 million in the year ended December 31, 2024, compared to $84.5 million in the year ended December 31, 2023. Interest expense.
Operating income increased to $64.5 million in the year ended December 31, 2025, compared to $20.5 million in the year ended December 31, 2024. Interest expense.
(2) Consists of (gain) loss on investments and one-time professional fees. 34 Table of Contents Liquidity and Capital Resources Overview We strive to maintain a strong balance sheet and preserve financial flexibility, which we believe should enhance our ability to capitalize on appropriate investment opportunities as they may arise.
(2) Refer to Note 3 of the Notes to the Consolidated Financial Statements for additional details on net income (loss) per share. 34 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Overview We strive to maintain a strong balance sheet and preserve financial flexibility, which we believe should enhance our ability to capitalize on appropriate investment opportunities as they may arise.
On October 28, 2024, the shelf agreement was amended to extend the period of time during which we may borrow money to October 2027 and to increase the borrowing capacity to $300.0 million.
On October 28, 2024, the shelf agreement was amended to extend the period of time during which we may borrow money to October 2027 and to increase the borrowing capacity to $300.0 million. We issued $125.0 million of Unsecured Club Notes under a separate private note purchase agreement with PGIM and certain other lenders.
We amended our equity distribution agreement in connection with the at-the-market offering (“ATM Program”) through which we 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 36 Table of Contents million.
Equity We have entered into an equity distribution agreement in connection with the ATM Program through which we may offer and sell common shares in amounts and at times determined by management. The maximum aggregate offering price of common shares available for offer and sale thereunder is $500.0 million.
Interest and other income increased to $2.6 million in the year ended December 31, 2024, compared to $1.2 million in the same period of the prior year, primarily due to interest income on two real estate related notes receivable, offset by a decrease from interest received on escrow funds in 2023 that did not occur in 2024.
Interest and other income increased to $3.4 million in the year ended December 31, 2025, compared to $2.6 million in the same period of the prior year, primarily due to interest income on two real estate related notes receivable and interest from funds held in escrow. Net income (loss) available to common shareholders.
Depreciation and amortization increased by 4.7% to $106.5 million in the year ended December 31, 2024, compared to $101.7 million in the year ended December 31, 2023, attributable to an increase of $5.6 million from same-store communities and $3.8 million from non-same-store communities driven by the addition of an apartment community in the fourth quarter of both 2024 and 2023 along with value add and acquisition capital projects, offset by a decrease of $5.1 million from dispositions.
Depreciation and amortization increased by 6.4% to $113.2 million in the year ended December 31, 2025, compared to $106.5 million in the year ended December 31, 2024, attributable to an increase of $14.0 million from non-same-store communities driven by the addition of three apartment communities, one in the fourth quarter of 2024 and two in 2025, offset by a decrease of $5.9 million from dispositions of 12 apartment communities during the year and $695,000 from same store communities.
As of December 31, 2024, common shares having an aggregate offering price of up to $262.9 million remained available under the ATM program. Further information can be found in Note 4 of our Consolidated Financial Statements contained in this Report.
As of December 31, 2025, common shares having an aggregate offering price of up to $262.9 million remained available under the ATM program.
As of December 31, 2024, we owned interests in 71 apartment communities consisting of 13,012 homes as detailed in Item 2 - Properties. Property owned, as presented in the Consolidated Balance Sheets, was $2.5 billion at December 31, 2024, compared to $2.4 billion at December 31, 2023.
As of December 31, 2025, we owned 61 apartment communities consisting of 12,262 homes as detailed in Item 2 - Properties. Property owned, as presented in the Consolidated Balance Sheets, was $2.5 billion at December 31, 2025 and 2024. Renting apartment homes is our primary source of revenue, and our business objective is to provide great homes.
Non-same-store analysis. Revenue from non-same-store apartment communities increased by $6.5 million in the year ended December 31, 2024, compared to the same period in the prior year. Property operating expenses from non-same-store apartment communities increased by $2.1 million. Net operating income from non-same-store communities increased by $4.3 million.
Same-store NOI increased by $4.8 million to $143.7 million for the year ended December 31, 2025 compared to $138.9 million in the same period in the prior year. Non-same-store analysis. Revenue from non-same-store apartment communities increased by $11.4 million in the year ended December 31, 2025, compared to the same period in the prior year.
The decrease was due to the sale of two apartment communities for a loss in 2024 compared to the sale of 13 apartment communities for a gain and associated commercial space during 2023. Refer to Note 9 in the Notes to the Consolidated Financial Statements. Loss on Litigation Settlement.
The increase was due to the sale of 12 apartment communities for a net gain in 2025 compared to the sale of two apartment communities for a loss in the prior year. Refer to Note 9 in the Notes to the Consolidated Financial Statements. Operating income.
General and administrative expenses decreased by 11.3% to $17.8 million in the year ended December 31, 2024, compared to $20.1 million in the year ended December 31, 2023, primarily attributable to $3.2 million in executive severance and transition costs related to the CEO departure in 2023 and lower legal fees due to a litigation settlement from 2023 both of which did not occur in 2024, offset by $1.2 million in increased incentive related compensation. 31 Table of Contents Gain (loss) on sale of real estate and other investments.
General and administrative expenses increased by 17.5% to $20.9 million in the year ended December 31, 2025, compared to $17.8 million in the year ended December 31, 2024, primarily attributable to $1.3 million in one-time professional fees associated with a shareholder relations matter and $1.2 million in incentive compensation. Gain (loss) on sale of real estate and other investments.
The table below provides details on the sale of common shares under the ATM Program during the years ended December 31, 2024 and 2023.
Further information can be found in Note 4 of our Consolidated Financial Statements contained in this Report. 36 Table of Contents The table below provides details on the sale of common shares under the ATM Program during the years ended December 31, 2025 and 2024.
Reconciliation of Operating Income to Net Operating Income (non-GAAP) The following table provides a reconciliation of operating income to NOI (non-GAAP), which is defined above. 28 Table of Contents (in thousands, except percentages) Year Ended December 31, 2024 2023 $ Change % Change Operating income $ 20,475 $ 84,453 $ (63,978) (75.8) % Adjustments: Property management expenses 9,128 9,353 (225) (2.4) % Casualty loss 3,307 2,095 1,212 57.9 % Depreciation and amortization 106,450 101,678 4,772 4.7 % Impairment of real estate investments — 5,218 (5,218) (100.0) % General and administrative expenses 17,802 20,080 (2,278) (11.3) % (Gain) loss on sale of real estate and other investments 577 (71,244) 71,821 * Loss on litigation settlement — 3,864 (3,864) (100.0) % Net operating income $ 157,739 $ 155,497 $ 2,242 1.4 % * Not a meaningful percentage . 29 Table of Contents GAAP and Non-GAAP Financial Measures The following table metrics, including GAAP and non-GAAP measures, cover the years ended December 31, 2024 and 2023.
(in thousands, except percentages) Year Ended December 31, 2025 2024 $ Change % Change Operating income $ 64,537 $ 20,475 $ 44,062 215.2 % Adjustments: Property management expenses 9,638 9,128 510 5.6 % Casualty loss 816 3,307 (2,491) (75.3) % Depreciation and amortization 113,231 106,450 6,781 6.4 % Impairment of real estate investments 37,719 — 37,719 N/A General and administrative expenses 20,918 17,802 3,116 17.5 % (Gain) loss on sale of real estate and other investments (79,470) 577 (80,047) * Net operating income $ 167,389 $ 157,739 $ 9,650 6.1 % * Not a meaningful percentage . 29 Table of Contents GAAP and Non-GAAP Financial Measures The following table metrics, including GAAP and non-GAAP measures, cover the years ended December 31, 2025 and 2024.
During the year ended December 31, 2024, we used capital for various activities, including: • Redeeming all of our Series C preferred shares for $97.0 million; • Funding $13.6 million on a mezzanine loan for the development of an apartment community; 37 Table of Contents • Repaying approximately $10.9 million of mortgage principal; • Repurchasing of 87,722 common shares for $4.7 million, net of fees and expenses; • Paying distributions on common shares, Series E preferred units, Units, and Series C preferred shares of $59.7 million; and • Funding capital improvements for apartment communities of approximately $56.7 million.
During the year ended December 31, 2025, we used capital for various activities, including: • Funding acquisitions of real estate assets of $206.3 million; 37 Table of Contents • Repaying approximately $96.8 million of mortgage principal; • Redeeming 106,200 Series D preferred units for $10.6 million; • Repurchasing 62,973 common shares for $3.5 million, net of fees and expenses; • Paying distributions to noncontrolling interests in consolidated real estate entities of $4.5 million; • Paying distributions on common shares, Units, and Series E preferred units of $60.2 million; and • Funding capital improvements for apartment communities of approximately $34.2 million.
Refer to Item 7A in this Report for additional information on our market and interest rate risk.
Refer to Item 7A in this Report for additional information on our market and interest rate risk. Our borrowings are subject to customary covenants and limitations. We believe we were in compliance with all such covenants and limitations as of December 31, 2025.
Renting apartment homes is our primary source of revenue, and our business objective is to provide great homes. We strive to maximize resident satisfaction and retention by investing in high-quality assets in desirable locations and developing and training team members to create vibrant apartment communities through resident-centered operations.
We strive to maximize resident satisfaction and retention by investing in high-quality assets in desirable locations and developing and training team members to create vibrant apartment communities through resident-centered operations. We believe that delivering superior resident experiences will drive consistent profitability for our business and shareholders. We have paid quarterly distributions every quarter since our first distribution in 1971.
Non-controllable expenses at same-store communities increased by $438,000 primarily due to insurance premiums and deductibles on claims offset by a decrease in real estate taxes resulting from successful real estate tax appeals. Same-store NOI increased by $5.3 million to $150.5 million for the year ended December 31, 2024 compared to $145.2 million in the same period in the prior year.
Non-controllable expenses at same-store communities increased by $124,000 primarily due to an increase in real estate taxes primarily due to fewer tax appeal refunds in 2025 compared to the prior year, offset by a decrease in insurance premiums.
Refer to the Reconciliation of Operating Income to Net Operating Income above. Non-GAAP financial measures 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. * Not a meaningful percentage .
Non-GAAP financial measures 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. * Not a meaningful percentage . 30 Table of Contents Year Ended December 31, Weighted Average Occupancy (1) 2025 2024 Same-store 95.7 % 95.4 % Non-same-store 88.2 % 92.4 % Total 95.2 % 95.3 % (1) Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rental revenue.
The decrease was primarily due to decreased headcount with fewer properties due to dispositions and a decrease in third party management fees. Casualty loss. Casualty loss increased to $3.3 million in the year ended December 31, 2024, compared to $2.1 million in the year ended December 31, 2023.
The increase was primarily due to increased compensation costs compared to the prior year and third party management fees for management of an apartment community we acquired in the second quarter of the current year. Casualty loss. Casualty loss decreased to $816,000 in the year ended December 31, 2025, compared to $3.3 million in the year ended December 31, 2024.
The increase in revenue, property operating expenses, and NOI from non-same-store communities is primarily due to the addition of apartment communities during the fourth quarter of 2023 and 2024. Other and dispositions analysis. Revenue from other, which encompasses our commercial and mixed use activity, decreased by 0.4% or $11,000 while revenue from dispositions decreased by $14.7 million.
Other properties and dispositions analysis. Revenue from other properties, which encompasses our commercial and mixed use activity, increased by 40.8% or $1.0 million while revenue from dispositions decreased by $5.1 million. Property operating expenses from other properties increased by 17.5% or $164,000 while property operating expenses from dispositions decreased by $2.4 million due to sold properties.
As amended, this credit facility 35 Table of Contents matures in July 2028, with an option to extend maturity for up to two additional six-month periods and has an accordion option to increase borrowing capacity up to $400.0 million.
The line of credit is utilized to refinance existing indebtedness, to finance property acquisitions, to finance capital expenditures, and for 35 Table of Contents general corporate purposes. This Facility matures in July 2028, with an option to extend maturity for up to two additional six-month periods. SOFR is the benchmark alternative reference rate under the Facility.
In addition to cash flows from operations, during the year ended December 31, 2024, we generated capital from various activities, including: • Receiving $18.3 million in net proceeds from the sale of two apartment communities; • Receiving $17.4 million on our line of credit, net of repayments; • Issuing approximately 1.6 million common shares for consideration of $112.1 million, net of commissions and issuance costs; and • Receiving $1.9 million in insurance proceeds, primarily due to one large casualty event that was settled.
In addition to cash flows from operations, during the year ended December 31, 2025, we generated capital from various activities, including: • Receiving $212.2 million in net proceeds from the sale of twelve apartment communities and corporate office space; and • Receiving $107.6 million in net draws on our lines of credit.
(in thousands) Year Ended December 31, 2024 2023 $ Change % Change Revenue Same-store (1) $ 249,872 $ 241,989 $ 7,883 3.3 % Non-same-store (1) 7,993 1,526 6,467 * Other properties (1) 2,589 2,600 (11) (0.4) % Dispositions (1) 529 15,194 (14,665) * Total 260,983 261,309 (326) (0.1) % Property operating expenses, including real estate taxes Same-store (1) 99,365 96,785 2,580 2.7 % Non-same-store (1) 2,584 448 2,136 * Other properties (1) 968 797 171 21.5 % Dispositions (1) 327 7,782 (7,455) * Total 103,244 105,812 (2,568) (2.4) % Net operating income Same-store (1) 150,507 145,204 5,303 3.7 % Non-same-store (1) 5,409 1,078 4,331 * Other properties (1) 1,621 1,803 (182) (10.1) % Dispositions (1) 202 7,412 (7,210) * Total $ 157,739 $ 155,497 $ 2,242 1.4 % Property management expense (9,128) (9,353) (225) (2.4) % Casualty loss (3,307) (2,095) 1,212 57.9 % Depreciation and amortization (106,450) (101,678) 4,772 4.7 % Impairment of real estate investments — (5,218) (5,218) (100.0) % General and administrative expenses (17,802) (20,080) (2,278) (11.3) % Gain (loss) on sale of real estate and other investments (577) 71,244 (71,821) 100.8 % Loss on litigation settlement — (3,864) (3,864) (100.0) % Interest expense (37,280) (36,429) 851 2.3 % Interest and other income 2,613 1,207 1,406 116.5 % NET INCOME (LOSS) $ (14,192) $ 49,231 $ (63,423) 128.8 % Dividends to Series D preferred unitholders (640) (640) — — Net (income) loss attributable to noncontrolling interests – Operating Partnership and Series E preferred units 3,635 (7,141) 10,776 (150.9) % Net income attributable to noncontrolling interests – consolidated real estate entities (131) (125) (6) (4.8) % Net income (loss) attributable to controlling interests (11,328) 41,325 (52,653) 127.4 % Dividends to preferred shareholders (4,821) (6,428) 1,607 (25.0) % Redemption of preferred shares (3,511) — (3,511) N/A NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ (19,660) $ 34,897 $ (54,557) 156.3 % (1) This is a non-GAAP financial measure which is a component of NOI (non-GAAP), as defined above.
(in thousands) Year Ended December 31, 2025 2024 $ Change % Change Revenue Same-store (1) $ 231,136 $ 225,762 $ 5,374 2.4 % Non-same-store (1) 17,041 5,597 11,444 * Other properties (1) 3,470 2,464 1,006 40.8 % Dispositions (1) 22,015 27,160 (5,145) * Total 273,662 260,983 12,679 4.9 % Property operating expenses, including real estate taxes Same-store (1) 87,439 86,898 541 0.6 % Non-same-store (1) 7,289 2,575 4,714 * Other properties (1) 1,101 937 164 17.5 % Dispositions (1) 10,444 12,834 (2,390) * Total 106,273 103,244 3,029 2.9 % Net operating income Same-store (1) 143,697 138,864 4,833 3.5 % Non-same-store (1) 9,752 3,022 6,730 * Other properties (1) 2,369 1,527 842 55.1 % Dispositions (1) 11,571 14,326 (2,755) * Total $ 167,389 $ 157,739 $ 9,650 6.1 % Property management expense (9,638) (9,128) 510 5.6 % Casualty loss (816) (3,307) (2,491) (75.3) % Depreciation and amortization (113,231) (106,450) 6,781 6.4 % Impairment of real estate investments (37,719) — 37,719 N/A General and administrative expenses (20,918) (17,802) 3,116 17.5 % Gain (loss) on sale of real estate and other investments 79,470 (577) 80,047 * Interest expense (44,884) (37,280) 7,604 20.4 % Loss on extinguishment of debt (98) — 98 N/A Interest and other income 3,409 2,613 796 30.5 % NET INCOME (LOSS) $ 22,964 $ (14,192) $ 37,156 261.8 % Distributions to Series D preferred unitholders (486) (640) 154 (24.1) Net (income) loss attributable to noncontrolling interests – Operating Partnership and Series E preferred units (2,969) 3,635 (6,604) (181.7) % Net income attributable to noncontrolling interests – consolidated real estate entities (2,408) (131) (2,277) * Net income (loss) attributable to controlling interests 17,101 (11,328) 28,429 251.0 % Distributions to Series C preferred shareholders — (4,821) 4,821 (100.0) % Redemption of Series C preferred shares — (3,511) 3,511 (100.0) % NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ 17,101 $ (19,660) $ 36,761 187.0 % (1) This is a non-GAAP financial measure which is a component of NOI (non-GAAP), as defined above.
Acquisitions and Dispositions . During the year ended December 31, 2024, we completed the following transactions in furtherance of our strategic plan: • Disposed of two non-core apartment communities for an aggregate sales price of $19.0 million; and • Acquired The Lydian, a 129 home apartment community in Denver, Colorado for an aggregate purchase price of $54 million.
During the year ended December 31, 2025, we completed the following transactions in furtherance of our strategic plan: • Disposed of twelve non-core apartment communities throughout Minnesota and one corporate office building for an aggregate sales price of $215.5 million; • Acquired Railway Flats in Loveland, Colorado, an apartment community consisting of 420 homes for an aggregate purchase price of $132.2 million, which included the assumption of $76.5 million in mortgage debt; and • Acquired Sugarmont, our first apartment community in Salt Lake City, Utah, consisting of 341 homes for an aggregate purchase price of $149.0 million.
Interest expense increased 2.3% to $37.3 million in the year ended December 31, 2024, compared to $36.4 million in the year ended December 31, 2023, primarily due to the assumption of mortgages upon acquisition of The Lydian in the fourth quarter of 2024 and Lake Vista in the fourth quarter of 2023, offset by lower interest on lines of credit in 2024 and a higher rate term loan that was paid off early in 2023.
Interest expense increased 20.4% to $44.9 million in the year ended December 31, 2025, compared to $37.3 million in the year ended December 31, 2024, primarily due to an increase in the average daily balance on our lines of credit in order to fund acquisitions of apartment communities, the assumption of mortgages upon acquisition of The Lydian in the fourth quarter of 2024 and Railway Flats in the third quarter of 2025, and amortization of debt discounts for assumed mortgages.
Impairment of real estate investments. There was no impairment of real estate investments in the year ended December 31, 2024, compared to $5.2 million in 2023. These impairments were the result of two apartment communities that were written down to estimated fair value based on the receipt and acceptance of market offers to purchase the apartment communities.
Impairment of real estate investments. There was $37.7 million of impairment on real estate investments in the year ended December 31, 2025, compared to no such impairment in 2024.
Each Series E preferred unit is convertible, at the holder’s option, into 1.20482 Units. The Series E preferred units have an aggregate liquidation preference of $158.2 million. The holders of the Series E preferred units do not have voting rights.
The Series E preferred units had an aggregate liquidation preference of $157.0 million and $158.2 million as of December 31, 2025 and 2024, respectively The holders of the Series E preferred units do not have voting rights. We had 59,400 and 165,600 Series D preferred units outstanding as of December 31, 2025 and 2024, respectively.
One of the notes receivable originated in December 2023 and the other was acquired during the fourth quarter of 2024 in connection with the acquisition of The Lydian. Net income (loss) available to common shareholders. Net income (loss) available to common shareholders decreased to a net loss of $19.7 million compared to a net income of $34.9 million in 2023.
Net income (loss) available to common shareholders increased to a net income of $17.1 million compared to a net loss of $19.7 million in 2024.
During the year ended December 31, 2024, we completed the following financing transactions: • Issued approximately 1.6 million common shares for net consideration of $112.6 million and an average price of $71.66 per share under our ATM Program, compared to 87,722 shares repurchased at an average price of $53.62 per share, excluding commissions.
Financing Transactions. During the year ended December 31, 2025, we completed the following financing transactions: • Repurchased 62,973 shares at an average price of $54.86 per share, including commissions. Outlook We intend to continue our focus on maximizing the financial performance of the communities in our existing portfolio.
Debt As of December 31, 2024, we had a multibank, revolving line of credit with total commitments and borrowing capacity of $250.0 million, based on the value of unencumbered properties, (the “Unsecured Credit Facility”). As of December 31, 2024, the additional borrowing availability was $206.0 million beyond the $44.0 million drawn.
In May 2025, we exercised the accordion feature of the Facility, expanding the borrowing capacity by $150.0 million to $400.0 million. Prior to the exercise of the accordion feature, the line of credit had total commitments and borrowing capacity of up to $250.0 million, based on the value of unencumbered properties.
(in thousands) Less than More than Total 1 Year 1-3 Years 3-5 Years 5 Years Lines of credit (principal and interest) (1) $ 56,650 $ 6,081 $ 5,113 45,456 — Notes payable (principal and interest) $ 351,043 $ 9,347 $ 18,694 $ 140,668 $ 182,334 Mortgages payable (principal and interest) $ 750,561 $ 58,313 $ 186,030 $ 123,884 $ 382,334 Total $ 1,158,254 $ 73,741 $ 209,837 $ 310,008 $ 564,668 (1) The future interest payments on the lines of credit were estimated using the outstanding principal balance and interest rate in effect as of December 31, 2024.
(in thousands) Less than More than Total 1 Year 1-3 Years 3-5 Years 5 Years Lines of credit (principal and interest) (1) $ 175,228 $ 8,850 $ 166,378 $ — $ — Notes payable (principal and interest) 341,696 9,347 68,233 85,398 178,718 Mortgages payable (principal and interest) 752,620 76,661 148,469 55,914 471,576 Total $ 1,269,544 $ 94,858 $ 383,080 $ 141,312 $ 650,294 (1) The future interest payments on the lines of credit were estimated using the outstanding principal balance and interest rate in effect as of December 31, 2025.
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We believe that delivering superior resident experiences will drive consistent profitability for our business and shareholders. We have paid quarterly distributions every quarter since our first distribution in 1971. Significant Transactions and Events for the Year Ended December 31, 2024 Highlights .
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Significant Transactions and Events for the Year Ended December 31, 2025 Highlights .
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The acquisition was financed through the assumption of mortgage debt, issuance of common operating partnership units, and cash. Financing Transactions.
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Reconciliation of Operating Income to Net Operating Income (non-GAAP) The following table provides a reconciliation of operating income to NOI (non-GAAP), which is defined above.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeMortgage loan indebtedness, excluding net debt premiums and discounts and the FMCF, increased by $28.1 million as of December 31, 2024, compared to December 31, 2023, primarily due to the assumption of a mortgage loan in connection with a 2024 acquisition, offset by principal payments on mortgages.
Biggest changeWe estimate that a decrease in 30-day SOFR of 100 basis points would increase our net income (loss) by a similar amount. 39 Table of Contents Mortgage loan indebtedness, excluding net debt premiums and discounts and the FMCF, decreased by $20.3 million as of December 31, 2025, compared to December 31, 2024, primarily due to mortgage payoffs and principal payments, offset by the assumption of mortgage loans in connection with a 2025 acquisition.
Our exposure to market risk is primarily related to fluctuations in the general level of interest rates on our current and future fixed and variable rate debt obligations. Our operating results are, therefore, affected by changes in interest rates, including SOFR. As of December 31, 2024, we had $47.4 million of variable-rate borrowings under our lines of credit.
Our exposure to market risk is primarily related to fluctuations in the general level of interest rates on our current and future fixed and variable rate debt obligations. Our operating results are, therefore, affected by changes in interest rates, including SOFR. As of December 31, 2025, we had $154.9 million of variable-rate borrowings under our lines of credit.
We estimate that an increase in 30-day SOFR of 100 basis points with constant risk spreads would result in a $474,000 reduction to our net income (loss) on an annual basis. We estimate that a decrease in 30-day SOFR of 100 basis points would increase our net income (loss) by a similar amount.
We estimate that an increase in 30-day SOFR of 100 basis points with constant risk spreads would result in a $1.5 million reduction to our net income (loss) on an annual basis.
As of December 31, 2024 and 2023, all of our mortgage debt, $420.4 million and $392.3 million, respectively, was at fixed rates of interest with staggered maturities. As of December 31, 39 Table of Contents 2024, the weighted average rate of interest on our mortgage debt was 4.02%, compared to 4.05% on December 31, 2023.
As of December 31, 2025 and 2024, all of our mortgage debt, $400.1 million and $420.4 million, respectively, was at fixed rates of interest with staggered maturities. As of December 31, 2025, the weighted average rate of interest on our mortgage debt was 3.88%, compared to 4.02% on December 31, 2024.
Future Principal Payments (in thousands, except percentages) Fair Debt 2025 2026 2027 2028 2029 Thereafter Total Value Fixed Rate $ 36,290 $ 102,809 $ 48,666 $ 118,321 $ 102,477 $ 510,701 $ 919,264 $ 803,700 Average Interest Rate (1) 3.62 % 3.60 % 3.58 % 3.59 % 3.56 % 3.68 % 3.60 % Variable Rate 3,359 — — $ 44,000 — — $ 47,359 $ 47,359 Average Interest Rate (1)(2) 6.56 % — — 5.81 % — — 5.86 % (1) Interest rate is annualized.
Future Principal Payments (in thousands, except percentages) Fair Debt 2026 2027 2028 2029 2030 Thereafter Total Value Fixed Rate $ 56,507 $ 49,679 $ 114,224 $ 97,237 $ 4,159 $ 577,178 $ 898,984 $ 802,043 Average Interest Rate (1) 2.97 % 3.44 % 3.44 % 3.42 % 3.33 % 3.11 % 3.43 % Variable Rate $ 925 — $ 154,000 $ — — — $ 154,925 $ 154,925 Average Interest Rate (1)(2) 5.91 % — 5.12 % — — — 5.12 % (1) Interest rate is annualized.

Other CSR 10-K year-over-year comparisons