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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the quarterly period ended September 30, 2024
or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number 001-35624
CENTERSPACE
(Exact name of registrant as specified in its charter)
North Dakota45-0311232
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
3100 10th Street SWPost Office Box 1988MinotND58702-1988
(Address of principal executive offices)(Zip code)
(701) 837-4738
(Registrant’s telephone number, including area code)
    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days.
YesNo
    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YesNo
    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large Accelerated FilerAccelerated filer Non-accelerated filer
Smaller Reporting CompanyEmerging growth company
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YesNo
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares of Beneficial Interest, no par valueCSRNew York Stock Exchange
    The number of common shares of beneficial interest outstanding as of October 21, 2024, was 16,571,975.


TABLE OF CONTENTS
 Page
 
  
 
2

PART I
Item 1. Financial Statements.

CENTERSPACE AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except per share data)
 September 30, 2024December 31, 2023
ASSETS(Unaudited)
Real estate investments  
Property owned$2,438,255 $2,420,146 
Less accumulated depreciation(604,175)(530,703)
Total real estate investments1,834,080 1,889,443 
Cash and cash equivalents14,453 8,630 
Restricted cash2,794 639 
Other assets36,078 27,649 
TOTAL ASSETS$1,887,405 $1,926,361 
LIABILITIES, MEZZANINE EQUITY, AND EQUITY  
LIABILITIES  
Accounts payable and accrued expenses$61,000 $62,754 
Revolving lines of credit39,000 30,000 
Notes payable, net
299,506 299,459 
Mortgages payable, net
582,760 586,563 
TOTAL LIABILITIES$982,266 $978,776 
COMMITMENTS AND CONTINGENCIES (NOTE 10)
SERIES D PREFERRED UNITS (Cumulative convertible preferred units, $100 par value, 166 units issued and outstanding at September 30, 2024 and December 31, 2023, aggregate liquidation preference of $16,560)
$16,560 $16,560 
EQUITY  
Series C Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, $25 per share liquidation preference, no shares issued and outstanding at September 30, 2024 and 3,881 shares issued and outstanding December 31, 2023
 93,530 
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 16,568 shares issued and outstanding at September 30, 2024 and 14,963 shares issued and outstanding at December 31, 2023)
1,270,752 1,165,694 
Accumulated distributions in excess of net income(597,720)(548,273)
Accumulated other comprehensive loss(578)(1,119)
Total shareholders’ equity$672,454 $709,832 
Noncontrolling interests – Operating Partnership and Series E preferred units215,444 220,544 
Noncontrolling interests – consolidated real estate entities681 649 
TOTAL EQUITY$888,579 $931,025 
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY$1,887,405 $1,926,361 
See accompanying Notes to Condensed Consolidated Financial Statements.
3

CENTERSPACE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 (in thousands, except per share data)
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
REVENUE$65,025 $64,568 $194,574 $197,241 
EXPENSES    
Property operating expenses, excluding real estate taxes19,628 19,602 56,500 58,816 
Real estate taxes7,031 7,143 20,417 21,898 
Property management expense2,242 2,197 6,794 7,012 
Casualty (gain) loss
(412)937 918 1,242 
Depreciation and amortization26,084 24,697 78,810 75,061 
General and administrative expenses4,102 3,832 12,941 15,717 
TOTAL EXPENSES$58,675 $58,408 $176,380 $179,746 
Gain (loss) on sale of real estate and other investments
 11,235 (577)71,327 
Loss on litigation settlement   (2,864)
Operating income
6,350 17,395 17,617 85,958 
Interest expense(8,946)(8,556)(27,485)(27,516)
Interest and other income
645 330 1,462 674 
NET INCOME (LOSS)
$(1,951)$9,169 $(8,406)$59,116 
Dividends to Series D preferred unitholders(160)(160)(480)(480)
Net (income) loss attributable to noncontrolling interests – Operating Partnership and Series E preferred units
1,095 (1,204)2,735 (9,058)
Net income attributable to noncontrolling interests – consolidated real estate entities
(32)(31)(98)(96)
Net income (loss) attributable to controlling interests
(1,048)7,774 (6,249)49,482 
Dividends to preferred shareholders(1,607)(1,607)(4,821)(4,821)
Redemption of preferred shares(3,511) (3,511) 
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$(6,166)$6,167 $(14,581)$44,661 
NET INCOME (LOSS) PER COMMON SHARE – BASIC
$(0.40)$0.41 $(0.96)$2.98 
NET INCOME (LOSS) PER COMMON SHARE – DILUTED
$(0.40)$0.41 $(0.96)$2.96 
Weighted average shares - basic15,528 14,989 15,143 14,988 
Weighted average shares - diluted15,528 18,018 15,143 17,344 
See accompanying Notes to Condensed Consolidated Financial Statements.
4

CENTERSPACE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)


(in thousands)
Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Net income (loss)
$(1,951)$9,169 $(8,406)$59,116 
Other comprehensive loss:
Loss on derivative instrument reclassified into earnings
171 324 541 621 
Total comprehensive income (loss)
$(1,780)$9,493 $(7,865)$59,737 
Net comprehensive (income) loss attributable to noncontrolling interests – Operating Partnership and Series E preferred units
1,121 (1,151)2,821 (8,954)
Net income attributable to noncontrolling interests – consolidated real estate entities
(32)(31)(98)(96)
Comprehensive income (loss) attributable to controlling interests
$(691)$8,311 $(5,142)$50,687 
See accompanying Notes to Condensed Consolidated Financial Statements.

5

CENTERSPACE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited)
 (in thousands, except per share data)
Nine Months Ended September 30, 2023PREFERRED
SHARES
NUMBER
OF
COMMON
SHARES
COMMON
SHARES
ACCUMULATED
DISTRIBUTIONS
IN EXCESS OF
NET INCOME (LOSS)
ACCUMULATED OTHER COMPREHENSIVE LOSS
NONCONTROLLING
INTERESTS
TOTAL
EQUITY
Balance at December 31, 2022$93,530 15,020 $1,177,484 $(539,422)$(2,055)$220,759 $950,296 
Net income attributable to controlling interests and noncontrolling interests
   49,482 9,154 58,636 
Amortization of swap settlements621 621 
Distributions - common shares and Units ($2.19 per share and Unit)
   (32,825)(2,066)(34,891)
Distributions - Series C preferred shares ($1.2421875 per Series C share)
(4,821)(4,821)
Distributions - Series E preferred units ($2.90625 per unit)
(5,076)(5,076)
Share-based compensation, net of forfeitures 19 2,712   2,712 
Redemption of Units for common shares107 (1,919)1,919  
Redemption of Series E preferred units for common shares31 (2,296)2,296  
Shares repurchased(124)(6,718)(6,718)
Shares withheld for taxes(182)(182)
Other (1)(56) (162)(218)
Balance at September 30, 2023$93,530 15,052 $1,169,025 $(527,586)$(1,434)$226,824 $960,359 
Nine Months Ended September 30, 2024
Balance at December 31, 2023$93,530 14,963 $1,165,694 $(548,273)$(1,119)$221,193 $931,025 
Net loss attributable to controlling interests and noncontrolling interests
   (6,249)(2,637)(8,886)
Amortization of swap settlements541 541 
Distributions - common shares and Units ($2.25 per share and unit)
   (34,866)(1,868)(36,734)
Distributions - Series C preferred shares ($1.2421875 per Series C share)
   (4,821) (4,821)
Distributions - Series E preferred units ($2.90625 per unit)
(4,980)(4,980)
Share-based compensation, net of forfeitures 14 2,245   2,245 
Sale of common shares, net1,587 112,151 112,151 
Redemption of Units for common shares52 (2,212)2,212  
Redemption of Series E preferred units for common shares40 (2,271)2,271  
Shares repurchased(93,530)(88)(4,703)(3,511) (101,744)
Shares withheld for taxes(122)(122)
Other (30) (66)(96)
Balance at September 30, 2024$ 16,568 $1,270,752 $(597,720)$(578)$216,125 $888,579 
See accompanying Notes to Condensed Consolidated Financial Statements.

6

CENTERSPACE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited)
 (in thousands, except per share data)
Three Months Ended September 30, 2023PREFERRED
SHARES
NUMBER
OF
COMMON
SHARES
COMMON
SHARES
ACCUMULATED
DISTRIBUTIONS
IN EXCESS OF
NET INCOME (LOSS)
ACCUMULATED OTHER COMPREHENSIVE LOSS
NONCONTROLLING
INTERESTS
TOTAL
EQUITY
Balance at June 30, 2023$93,530 14,949 $1,169,501 $(522,796)$(1,758)$226,931 $965,408 
Net income attributable to controlling interests and noncontrolling interests
   7,774 1,235 9,009 
Amortization of swap settlements324 324 
Distributions - common shares and Units ($0.73 per share and unit)
   (10,957)(658)(11,615)
Distributions - Series C preferred shares ($0.4140625 per Series C share)
  (1,607) (1,607)
Distributions - Series E preferred units ($0.96875 per unit)
(1,682)(1,682)
Share-based compensation, net of forfeitures — 602   602 
Redemption of Units for common shares97 (898)898  
Redemption of Series E preferred units from common shares6 (176)176  
Other (4) (76)(80)
Balance at September 30, 2023$93,530 15,052 $1,169,025 $(527,586)$(1,434)$226,824 $960,359 
Three Months Ended September 30, 2024
Balance at June 30, 2024$93,530 15,057 $1,167,055 $(579,139)$(749)$217,600 $898,297 
Net loss attributable to controlling interests and noncontrolling interests
   (1,048)(1,063)(2,111)
Amortization of swap settlements171 171 
Distributions - common shares and Units ($0.75 per share and unit)
   (12,415)(607)(13,022)
Distributions - Series C preferred shares ($0.4140625 per Series C share)
   (1,607) (1,607)
Distributions - Series E preferred units ($0.96875 per unit)
(1,651)(1,651)
Share-based compensation, net of forfeitures 1 764   764 
Sale of common shares, net1,477 104,831 104,831 
Redemption of Units for common shares19 (845)845  
Redemption of Series E preferred units for common shares15 (1,051)1,051  
Shares repurchased(93,530)— — (3,511) (97,041)
Other (1)(2) (50)(52)
Balance at September 30, 2024$ 16,568 $1,270,752 $(597,720)$(578)$216,125 $888,579 
See accompanying Notes to Condensed Consolidated Financial Statements.
7

CENTERSPACE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
 (in thousands)
 Nine Months Ended September 30,
 20242023
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income (loss)
$(8,406)$59,116 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
  
Depreciation and amortization, including amortization of capitalized loan costs79,694 76,265 
(Gain) loss on sale of real estate and other investments
577 (71,323)
Loss on litigation settlement 2,864 
Share-based compensation expense2,245 2,712 
Loss on interest rate swap settlement amortization
541 621 
Casualty loss write off2,034 752 
Other, net1,411 50 
Changes in other assets and liabilities:  
Other assets(227)3,834 
Accounts payable and accrued expenses1,714 2,529 
Net cash provided by operating activities
$79,583 $77,420 
CASH FLOWS FROM INVESTING ACTIVITIES  
Proceeds from repayment of mortgage loans and notes receivable450 430 
Increase in mortgages and real estate related notes receivable(13,557) 
Net proceeds from sale of real estate and other investments
18,251 223,259 
Proceeds from insurance1,949 1,286 
Payments for improvements of real estate investments(47,436)(39,404)
Other investing activities(117)(200)
Net cash provided by (used by) investing activities
$(40,460)$185,371 
CASH FLOWS FROM FINANCING ACTIVITIES  
Proceeds from mortgages payable 90,000 
Principal payments on mortgages payable(4,980)(46,770)
Proceeds from revolving lines of credit108,771 75,907 
Principal payments on revolving lines of credit(99,771)(189,407)
Principal payments on notes payable (100,000)
Net proceeds from issuance of common shares112,218  
Repurchase of common shares(4,703)(6,718)
Redemption of Series C preferred shares(97,041) 
Distributions paid to common shareholders(33,374)(32,785)
Distributions paid to preferred shareholders(4,821)(4,821)
Distributions paid to Series D preferred unitholders(480)(480)
Distributions paid to noncontrolling interests – Operating Partnership and Series E preferred units(6,869)(7,194)
Other financing activities(95)(217)
Net cash used by financing activities
$(31,145)$(222,485)
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
7,978 40,306 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD9,269 11,891 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD$17,247 $52,197 
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES  
Accrued capital expenditures$4,916 $4,369 
Operating partnership units converted to common shares(2,212)(1,919)
Distributions declared but not paid to common shareholders13,022 11,615 
Series E preferred units converted to common shares(2,271)(2,296)
Retirement of shares withheld for taxes122 182 
Loss on litigation settlement 2,864 
Involuntary conversion of assets(2,785)(1,986)
Non-cash interest income718  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION  
Cash paid for interest$24,794 $26,190 
See accompanying Notes to Condensed Consolidated Financial Statements.
8

CENTERSPACE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands)
Balance sheet descriptionSeptember 30, 2024December 31, 2023September 30, 2023
Cash and cash equivalents$14,453 $8,630 $29,701 
Restricted cash2,794 639 22,496 
Total cash, cash equivalents and restricted cash$17,247 $9,269 $52,197 
See accompanying Notes to Condensed Consolidated Financial Statements.
9

CENTERSPACE AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2024
NOTE 1 • ORGANIZATION 
Centerspace, collectively with its consolidated subsidiaries (“Centerspace,” the “Company,” “we,” “us,” or “our”), is a North Dakota real estate investment trust (“REIT”) focused on the ownership, management, acquisition, redevelopment, and development of apartment communities. As of September 30, 2024, Centerspace owned interests in 70 apartment communities consisting of 12,883 apartment homes.
NOTE 2 • BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES 
BASIS OF PRESENTATION
Centerspace conducts a majority of its business activities through a consolidated operating partnership, Centerspace, LP, a North Dakota limited partnership (the “Operating Partnership”), as well as through a number of other consolidated subsidiary entities. The accompanying Condensed Consolidated Financial Statements include the Company’s accounts and the accounts of all its subsidiaries in which it maintains a controlling interest, including the Operating Partnership. All intercompany balances and transactions are eliminated in consolidation.
The Condensed Consolidated Financial Statements also reflect the Operating Partnership’s ownership of a joint venture entity in which the Operating Partnership has a general partner or controlling interest. This entity is consolidated into the Company’s operations, with noncontrolling interests reflecting the noncontrolling partners’ share of ownership, income, and expenses.
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Centerspace’s unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with GAAP are omitted. The year-end balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for the fair presentation of financial position, results of operations, and cash flows for the interim periods, have been included.
The current period’s results of operations are not necessarily indicative of results which ultimately may be achieved for the year. The interim Condensed Consolidated Financial Statements and accompanying notes thereto should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 20, 2024.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain previously reported amounts have been reclassified to conform to the current financial statement presentation. These reclassifications had no impact on net income (loss) as reported in the Condensed Consolidated Statements of Operations, total assets, liabilities or equity as reported in the Condensed Consolidated Balance Sheets and the classifications within the Condensed Consolidated Statements of Cash Flows. Centerspace reclassified certain items within the disaggregated revenue table included in Note 2 to conform to the current year presentation.
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
Cash and cash equivalents include all cash and highly liquid investments purchased with maturities of three months or less. Cash and cash equivalents consist of bank deposits and deposits in a money market mutual fund. The Company is potentially exposed to credit risk for cash deposited with FDIC-insured financial institutions in accounts which, at times, may exceed
10

federally insured limits. Although past bank failures have increased the risk of loss in such accounts, the Company has not experienced any losses in such accounts.
As of September 30, 2024 and December 31, 2023, restricted cash consisted of $2.8 million and $639,000, respectively, for real estate deposits and escrows held by lenders. Escrows include funds deposited with a lender for payment of real estate taxes and insurance and reserves to be used for replacement of structural elements and mechanical equipment at certain communities. The funds are under the control of the lender. Disbursements are made after supplying written documentation to the lender.
LEASES
As a lessor, Centerspace primarily leases multifamily apartment homes which qualify as operating leases with terms that are generally one year or less. Rental revenues are recognized in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 842, Leases, using a method that represents a straight-line basis over the term of the lease. For the three months ended September 30, 2024 and 2023, rental income represented approximately 98.1% and 97.9% of total revenues, respectively, and included gross market rent less adjustments for gain or loss to lease, concessions, vacancy loss, and bad debt. For the three months ended September 30, 2024 and 2023, other property revenues represented the remaining 1.9% and 2.1% of total revenues, respectively, and were primarily driven by other fee income, which is typically recognized when earned, at a point in time. For the nine months ended September 30, 2024 and 2023, rental income represented approximately 98.2% and 98.1% of total revenues, respectively. For the nine months ended September 30, 2024 and 2023, other property revenues represented the remaining 1.8% and 1.9% of total revenues, respectively.
Some of the Company’s apartment communities have commercial spaces available for lease. Lease terms for these spaces typically range from three to fifteen years. The leases for commercial spaces generally include options to extend the lease for additional terms.
Many of the leases contain non-lease components for utility reimbursement from residents and common area maintenance from commercial tenants. Centerspace has elected the practical expedient to combine lease and non-lease components for all asset classes. The combined components are included in lease income and are accounted for under ASC 842.
The aggregate amount of future scheduled lease income on commercial operating leases, excluding any variable lease income and non-lease components, as of September 30, 2024, was as follows:
(in thousands)
2024 (remainder)
$668 
20252,690 
20262,576 
20272,308 
20281,943 
Thereafter7,681 
Total scheduled lease income - commercial operating leases$17,866 
REVENUES AND GAINS ON SALE OF REAL ESTATE
Revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration to which the Company expects to be entitled for those goods and services.
Revenue streams that are included in revenues from contracts with customers include other property revenues such as application fees and other miscellaneous items. Centerspace recognizes revenue, for rental related items not included as a component of a lease, as earned.
The following table presents the disaggregation of revenue streams for the three and nine months ended September 30, 2024 and 2023:
(in thousands)
Three Months Ended September 30,Nine Months Ended September 30,
Revenue StreamApplicable Standard2024202320242023
Fixed lease income - operating leasesLeases$60,637 $60,181 $181,066 $183,882 
Variable lease income - operating leasesLeases3,172 3,006 10,017 9,523 
Other property revenueRevenue from contracts with customers1,216 1,381 3,491 3,836 
Total revenue$65,025 $64,568 $194,574 $197,241 
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In addition to lease income and other property revenue, the Company recognizes gains or losses on the sale of real estate when the criteria for derecognition of an asset are met, including when (1) a contract exists and (2) the buyer obtained control of the nonfinancial asset that was sold. During the three months ended September 30, 2024, the Company did not recognize a gain or loss on the sale of real estate and other investments, compared to a gain of $11.2 million during the three months ended September 30, 2023. During the nine months ended September 30, 2024, the Company recognized a loss of $577,000 on the sale of real estate and other investments, compared to a gain of $71.3 million during the nine months ended September 30, 2023. Any gain or loss on real estate dispositions is net of certain closing and other costs associated with the disposition.
IN-PLACE LEASE AMORTIZATION
The Company records in-place lease assets at the time of acquisition. The amortization periods reflects the average remaining term of in-place leases acquired, which are generally less than one year. During the three months ended September 30, 2024 and 2023, the Company recognized $37,000 and $48,000, respectively, of amortization expense related to intangibles. During the nine months ended September 30, 2024 and 2023, the Company recognized $1.7 million and $941,000, respectively, of amortization expense related to intangibles, included within depreciation and amortization in the Condensed Consolidated Statements of Operations.

MARKET CONCENTRATION RISK
The Company is subject to increased exposure from economic and other competitive factors specific to markets where it holds a significant percentage of the carrying value of its real estate portfolio. As of September 30, 2024, Centerspace held more than 10% of the carrying value of its real estate portfolio in each of the Minneapolis, Minnesota and Denver, Colorado markets.
IMPAIRMENT OF LONG-LIVED ASSETS
The Company evaluates long-lived assets, including real estate investments, for impairment indicators at least quarterly. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, expected holding period of each property, and legal and environmental concerns. If indicators exist, the Company compares the estimated future undiscounted cash flows for the property against the carrying amount of that property. If the sum of the estimated undiscounted cash flows is less than the carrying amount, an impairment loss is generally recorded for the difference between the estimated fair value and the carrying amount. If the anticipated holding period for properties, the estimated fair value of properties, or other factors change based on market conditions or otherwise, the evaluation of impairment charges may be different and such differences could be material to the consolidated financial statements. The evaluation of estimated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates, and capital requirements that could differ materially from actual results. Plans to hold properties over longer periods decreases the likelihood of recording impairment losses.
During the three and nine months ended September 30, 2024 and 2023, the Company recorded no impairment charges.
VARIABLE INTEREST ENTITIES
Centerspace has determined that its Operating Partnership and each of its less-than-wholly owned real estate partnerships are variable interest entities (each, a “VIE”), as the limited partners or the functional equivalent of limited partners lack substantive kick-out rights and substantive participating rights. The Company is the primary beneficiary of the VIEs, and the VIEs are required to be consolidated on the balance sheet because the Company has a controlling financial interest in the VIEs and has both the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs as well as the obligation to absorb losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. Because the Operating Partnership is a VIE, all of the Company’s assets and liabilities are held through a VIE.
REAL ESTATE RELATED NOTES RECEIVABLE
The Company has a tax increment financing note receivable (“TIF”) with a principal balance of $5.2 million and $5.7 million at September 30, 2024 and December 31, 2023, respectively, which appears within other assets in the Condensed Consolidated Balance Sheets at fair value. The note bears an interest rate of 4.5% with payments due in February and August of each year. The note matures February 1, 2039 and may be prepaid in whole or in part at any time.
12

In 2023, the Company originated a $15.1 million mezzanine loan for the development of an apartment community located in Inver Grove Heights, Minnesota. The mezzanine loan bears interest at 10.0% per annum. As of September 30, 2024 and December 31, 2023, the Company had funded $15.1 million and $1.6 million of the mezzanine loan, respectively. The loan matures in December 2027 unless extended to December 2028 in accordance with the terms of the mezzanine loan agreement. The loan is secured by a pledge of and first priority security interest against 100% of the membership interests in the mezzanine borrower and the agreement provides the Company with an option to purchase the development at a discount to future appraised value. The loan represents an investment in an unconsolidated variable interest entity. The Company is not the primary beneficiary of the VIE as Centerspace does not have the power to direct the activities which most significantly impact the entity’s economic performance nor does Centerspace have significant influence over the entity. The note receivable appears within other assets in the Condensed Consolidated Balance Sheets at fair value.
ADVERTISING COSTS
Advertising costs are expensed as incurred and reported on the Condensed Consolidated Statements of Operations within the property operating expenses, excluding real estate taxes line item. During the three months ended September 30, 2024 and 2023, total advertising expense was $899,000 and $878,000, respectively. During the nine months ended September 30, 2024 and 2023, total advertising expense was $2.4 million and $2.3 million, respectively.
SEVERANCE AND TRANSITION
On March 23, 2023, the Company entered into a Separation and General Release Agreement (the “Separation Agreement”) in connection with the departure of former CEO, Mark Decker, Jr. During the nine months ended September 30, 2023, the Company incurred total severance costs of $2.2 million for the cash severance and benefits for Mr. Decker, $737,000 in share-based compensation expense for the acceleration of certain equity awards, and $306,000 in other CEO transition related expenses.
INVOLUNTARY CONVERSION OF ASSETS
During the three and nine months ended September 30, 2024, Centerspace recorded a $981,000 write-down of an apartment community asset along with an insurance receivable of $2.1 million within other assets on the Condensed Consolidated Balance Sheets due to storm damage at one apartment community.
During the three months ended September 30, 2024, Centerspace also recognized casualty losses of $546,000 resulting from two new insurance events and updated loss estimates on six previously reported events. During the nine months ended September 30, 2024, Centerspace recognized $1.3 million in casualty losses from two new insurance events and updated loss estimates on six previously reported events, excluding the storm damage claim discussed above. Any business interruption insurance proceeds will be recognized when received in accordance with ASC 610-30.
In April 2023, a portion of an apartment community was destroyed by fire. The Company recorded a write-down of the apartment community asset, in accordance with ASC 610-30 on involuntary conversion of non-monetary assets, totaling $1.3 million with an offsetting insurance receivable recorded within other assets on the Condensed Consolidated Balance Sheets. During the nine months ended September 30, 2024, the claim was settled for $1.6 million, including remediation and other operating expenses.
NOTE 3 • NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares of beneficial interest (“common shares”) outstanding during the period. Centerspace has issued restricted stock units (“RSUs”) and incentive stock options (“ISOs”) under the 2015 Incentive Plan, Series D Convertible Preferred Units (“Series D preferred units”), and Series E Convertible Preferred Units (“Series E preferred units”), which could have a dilutive effect on net income (loss) per share upon vesting of the RSUs, upon exercising of ISOs, or upon conversion of the Series D or Series E preferred units (refer to Note 4 for further discussion of the Series D and the Series E preferred units). The Company calculates diluted net income (loss) per share using the treasury stock method for RSUs and ISOs and the if converted method for Series D preferred units and Series E preferred units. Other than the issuance of RSUs, ISOs, Series D preferred units, and Series E preferred units, there are no outstanding options, warrants, convertible stock, or other contractual obligations requiring issuance of additional common shares that would result in a dilution of net income (loss). Under the terms of the Operating Partnership’s Agreement of Limited Partnership, limited partners have the right to require the Operating Partnership to redeem their limited partnership units (“Units”) any time following the first anniversary of the date they acquired such Units (“Exchange Right”). Upon the exercise of Exchange Rights, and in Centerspace’s sole discretion, it may issue common shares in exchange for Units on a one-for-one basis.
13

The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted net income (loss) per share reported in the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2024 and 2023.  
 (in thousands, except per share data)
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
NUMERATOR  
Net income (loss) attributable to controlling interests
$(1,048)$7,774 $(6,249)$49,482 
Dividends to preferred shareholders(1,607)(1,607)(4,821)(4,821)
Redemption of preferred shares(3,511) (3,511) 
Numerator for basic income (loss) per share – net income (loss) available to common shareholders
(6,166)6,167 (14,581)44,661 
Noncontrolling interests – Operating Partnership and Series E preferred units (1)
 1,204  6,233 
Dividends to Series D preferred unitholders (2)
   480 
Numerator for diluted income (loss) per share
$(6,166)$7,371 $(14,581)$51,374 
DENOMINATOR    
Denominator for basic income (loss) per share weighted average shares15,528 14,989 15,143 14,988 
Effect of redeemable operating partnership units 908   
Effect of Series D preferred units   228 
Effect of Series E preferred units 2,093  2,105 
Effect of dilutive restricted stock units and stock options 28  23 
Denominator for diluted income (loss) per share15,528 18,018 15,143 17,344 
NET INCOME (LOSS) PER COMMON SHARE – BASIC
$(0.40)$0.41 $(0.96)$2.98 
NET INCOME (LOSS) PER COMMON SHARE – DILUTED
$(0.40)$0.41 $(0.96)$2.96 
(1)For the three and nine months ended September 30, 2024, the impact of Units and Series E preferred units was excluded from the calculation of net income (loss) per common share - diluted as they were anti-dilutive.
(2)For the three and nine months ended September 30, 2024 and the three months ended September 30, 2023, dividends to preferred unitholders are excluded from the calculation of net income (loss) per common share - diluted as they were anti-dilutive.
For the three months ended September 30, 2024, operating partnership units of 818,000, Series D preferred units of 228,000, as converted, Series E preferred units of 2.1 million, as converted, time-based RSUs and options of 49,000, and performance-based RSUs of 41,000 were excluded from the calculation of diluted net income (loss) per share because they were anti-dilutive as including these items would have improved net loss per share.
For the three months ended September 30, 2023, Series D preferred units of 228,000, as converted and performance-based RSUs of 26,000 were excluded from the calculation of diluted income (loss) per share because they were anti-dilutive as including these items would have improved net income per share.
For the nine months ended September 30, 2024, operating partnership units of 836,000, Series D preferred units of 228,000, as converted, Series E preferred units of 2.1 million, as converted, time-based RSUs and options of 32,000, and performance-based RSUs of 41,000 were excluded from the calculation of diluted net income (loss) per share because they were anti-dilutive as including these items would have improved net loss per share.
For the nine months ended September 30, 2023, operating partnership units of 943,000 and performance-based RSUs of 26,000 were excluded from the calculation of diluted net income per share because they were anti-dilutive as including these items would have improved net income per share.
14

NOTE 4 • EQUITY AND MEZZANINE EQUITY
Series D Preferred Units (Mezzanine Equity). Series D preferred units outstanding were 165,600 preferred units at September 30, 2024 and December 31, 2023. The Series D preferred units have a par value price of $100 per preferred unit. The Series D preferred unit holders receive a preferred distribution at the rate of 3.862% per year. The Series D preferred units have a put option which allows the holder to redeem any or all of the Series D preferred units for cash equal to the issuance price. Each Series D preferred unit is convertible, at the holder’s option, into 1.37931 Units. The Series D preferred units have an aggregate liquidation value of $16.6 million. Changes in the redemption value are based on changes in the trading value of common shares and are charged to common shares on the Condensed Consolidated Balance Sheets each quarter. The holders of the Series D preferred units do not have voting rights. Distributions to Series D unitholders are presented in the Condensed Consolidated Statements of Equity within net income (loss) attributable to controlling interests and noncontrolling interests.
Series C Preferred Shares. On August 21, 2024, our Board of Trustees authorized the redemption of all of the Series C preferred shares. On August 30, 2024, we delivered notice to holders of the Series C preferred shares that we intended to redeem all 3.9 million Series C preferred shares at a redemption price equal to $25 per share plus any accrued but unpaid distributions per share up to and including the redemption date of September 30, 2024. On September 30, 2024, the Company completed the redemption of all the outstanding Series C preferred shares for an aggregate redemption price of $97.0 million, excluding distributions, which was $3.5 million in excess of the carrying value and is included in redemption of preferred shares on the Condense Consolidated Statement of Operations. Such shares were no longer outstanding as of September 30, 2024. Series C preferred shares outstanding were 3.9 million shares at December 31, 2023. The Series C preferred shares were nonvoting and redeemable for cash at $25 per share at Centerspace’s option. Holders of these shares were entitled to cumulative distributions, payable quarterly (as and if declared by the Board of Trustees). Distributions accrued at an annual rate of $1.65625 per share, which is equal to 6.625% of the $25 per share liquidation preference.
Operating Partnership Units. The Operating Partnership had 809,000 and 861,000 outstanding Units at September 30, 2024 and December 31, 2023, respectively.
Exchange Rights. Centerspace redeemed Units in exchange for common shares in connection with Unitholders exercising their exchange rights during the three and nine months ended September 30, 2024 and 2023 as detailed in the table below.
(in thousands)
Three Months Ended September 30,Number of UnitsNet Book Basis
202419 $845 
202397 $898 
Nine Months Ended September 30,
202452 $2,212 
2023107 $1,919 
Series E Preferred Units (Noncontrolling Interests). Centerspace had 1.7 million Series E preferred units outstanding on September 30, 2024 and December 31, 2023. 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 1.2048 Units. Centerspace has the option, at its sole election, to convert Series E preferred units into Units if its stock has traded at or above $83 per share for 15 of 30 consecutive trading days and it has made at least three consecutive quarters of distributions with a rate of at least $0.804 per Unit. The Series E preferred units have an aggregate liquidation preference of $169.1 million as of September 30, 2024. The holders of the Series E preferred units do not have voting rights.
(in thousands)
Number of Series ENumber ofTotal
Three Months Ended September 30,Preferred Units RedeemedCommon Shares IssuedValue
202412 15 $1,051 
20235 6 $176 
Nine Months Ended September 30,
202433 40 $2,271 
202325 31 $2,296 
Common Shares and Equity Awards. Common shares outstanding on September 30, 2024 and December 31, 2023, totaled 16.6 million and 15.0 million, respectively.
15

During the three and nine months ended September 30, 2024, Centerspace issued approximately 46 and 13,511 common shares, respectively, with a total grant-date fair value of $4,000 and $1.0 million, respectively, as share-based compensation for employees and trustees under its 2015 Incentive Plan. During the three and nine months ended September 30, 2023, Centerspace issued approximately 64 and 19,014 common shares, respectively, with a total grant-date fair value of $5,000 and $1.7 million, respectively, as share-based compensation for employees and trustees under its 2015 Incentive Plan. These shares vested based on performance and service criteria. Refer to Note 11 for additional details on share-based compensation.
Equity Distribution Agreement. On September 9, 2024 Centerspace amended its equity distribution agreement in connection with the at-the-market offering (“ATM Program”) through which it may offer and sell common shares in amounts and at times determined by management. The amendment increased the maximum aggregate offering price of common shares available for offer and sale thereunder from $250.0 million to $500.0 million. Under the ATM Program, the Company may enter into separate forward sale agreements. The proceeds from the sale of common shares under the ATM Program may be used for general corporate purposes, including the funding of acquisitions, construction or mezzanine loans, community renovations, and the repayment of indebtedness. The table below provides details on the sale of common shares during the three and nine months ended September 30, 2024 under the ATM Program. There were no sales of common shares under the ATM Program during the three and nine months ended September 30, 2023. As of September 30, 2024, common shares having an aggregate offering price of up to $262.9 million remained available under the ATM Program.
(in thousands, except per share amounts)
Three Months Ended September 30,
Number of Common Shares
Net Consideration(1)
Average Net Price Per Share
20241,477 $105,052 $71.12 
Nine Months Ended September 30,
20241,587 $112,613 $71.66 
(1)Includes 869,000 shares sold on a forward basis for $62.7 million which were physically settled during the three months ended September 30, 2024.
(2)Total consideration is net of $1.0 million and $1.1 million in commissions during the three and nine months ended September 30, 2024, respectively.
Share Repurchase Program. On March 10, 2022, the Board of Trustees approved a share repurchase program (the “Share Repurchase Program”), providing for the repurchase of up to an aggregate of $50.0 million of the Company’s outstanding common shares. Under the Share Repurchase Program, the Company is authorized to repurchase common shares through open market purchases, privately-negotiated transactions, block trades or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities and Exchange Act of 1934, as amended. The repurchases have no time limit and may be suspended or discontinued completely at any time. 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. There were no common shares repurchased during the three months ended September 30, 2024 and 2023. The table below provides details on the shares repurchased during the nine months ended September 30, 2024 and 2023. As of September 30, 2024, the Company had $4.7 million remaining authorized for purchase under this program.
(in thousands, except per share amounts)
Nine Months Ended September 30,Number of Common Shares
Aggregate Cost(1)
Average Price Per Share(1)
202488 $4,703 $53.62 
2023124 $6,718 $54.19 
(1)Amount includes commissions.
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NOTE 5 • DEBT
The following table summarizes the Company’s secured and unsecured debt at September 30, 2024 and December 31, 2023.
(in thousands)
September 30, 2024December 31, 2023
Carrying AmountWeighted Average Interest RateCarrying AmountWeighted Average Interest RateWeighted Average Maturity in Years at September 30, 2024
Lines of credit (1)
$39,0006.70 %$30,000 6.74 %3.82
Unsecured senior notes (2)(4)
300,0003.12 %300,000 3.12 %5.87
Unsecured debt339,000330,000 5.64
Mortgages payable - Fannie Mae credit facility (4)
198,8502.78 %198,850 2.78 %6.81
Mortgages payable - other (3)(4)
387,2944.05 %392,274 4.05 %5.03
Secured debt586,144591,124 5.63
Subtotal925,1443.59 %921,124 3.54 %5.63
Premiums and discounts, net(345)(1,134)
Deferred financing costs, net(3,533)(3,968)
Total debt$921,266$916,022 
(1)Interest rates on lines of credit are variable and exclude any unused facility fees and amounts reclassified from accumulated other comprehensive income (loss) into interest expense from terminated interest rate swaps.
(2)Included within notes payable on the Condensed Consolidated Balance Sheets.
(3)Represents apartment communities encumbered by mortgages; 14 at September 30, 2024 and December 31, 2023.
(4)Interest rate is fixed.
As of September 30, 2024, 45 apartment communities were not encumbered by mortgages and were available to provide credit support for the unsecured borrowings. The Company’s primary unsecured credit facility (“Unsecured Credit Facility” or “Facility”) is a revolving, multi-bank line of credit, with the Bank of Montreal serving as administrative agent. The line of credit has total commitments and borrowing capacity of $250.0 million, based on the value of unencumbered properties. As of September 30, 2024, there was $39.0 million outstanding on this line of credit. Therefore the additional borrowing availability was $211.0 million. 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 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. On July 26, 2024, the Unsecured Credit Facility was amended to extend the maturity of the facility to July 2028 and to modify the leverage-based margin rates applicable to borrowings. As amended, the interest rates on the line of credit are based on the consolidated leverage ratio, at the Company’s 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. The Unsecured Credit Facility and unsecured senior notes are subject to customary financial covenants and limitations. The Company believes that it was in compliance with all such financial covenants and limitations as of September 30, 2024.
In September 2024, Centerspace entered into a line of credit agreement with 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. Centerspace had a $6.0 million operating line of credit with pricing based on SOFR that matured on August 31, 2024. As of September 30, 2024 and December 31, 2023, there was no outstanding balance on these lines of credit.
Centerspace had a private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc. (collectively, “PGIM”) under which the Company 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 Centerspace may borrow money to October 2027 and to increase the borrowing capacity to $300.0 million. The Company also has 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. The following table shows the notes issued under both agreements as of September 30, 2024 and December 31, 2023.
17

(in thousands)
AmountMaturity DateInterest Rate
Series A$75,000 September 13, 20293.84 %
Series B$50,000 September 30, 20283.69 %
Series C$50,000 June 6, 20302.70 %
Series 2021-A$35,000 September 17, 20302.50 %
Series 2021-B$50,000 September 17, 20312.62 %
Series 2021-C$25,000 September 17, 20322.68 %
Series 2021-D$15,000 September 17, 20342.78 %
Centerspace has a $198.9 million Fannie Mae Credit Facility Agreement (the “FMCF”). The FMCF is 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 interest rate of 2.78%. As of September 30, 2024 and December 31, 2023, the FMCF had a balance of $198.9 million. The FMCF is included within mortgages payable on the Condensed Consolidated Balance Sheets.
As of September 30, 2024, Centerspace owned 14 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 the Company other than for standard carve-out obligations. As of September 30, 2024, the Company believes that there were no material defaults or instances of material noncompliance in regard to any of these mortgage loans. As of September 30, 2024 and December 31, 2023, the mortgage loans had a balance of $387.3 million and $392.3 million, respectively, excluding unamortized premiums and discounts. The mortgage loans are included within mortgages payable on the Condensed Consolidated Balance Sheets.
The aggregate amount of required future principal payments on lines of credit, notes payable, and mortgages payable as of September 30, 2024, was as follows:
(in thousands)
2024 (remainder)$1,880 
202536,290 
2026102,809 
202748,666 
2028157,321 
Thereafter578,178 
Total payments
925,144 
Premiums and discounts, net(345)
Deferred financing costs, net(3,533)
Total
$921,266 
NOTE 6 • DERIVATIVE INSTRUMENTS
Centerspace had, in the past, used interest rate derivatives to stabilize interest expense and to manage its exposure to interest rate fluctuations. To accomplish this objective, the Company primarily used interest rate swap contracts to fix variable interest rate debt.
Changes in the fair value of derivatives designated and that qualified as cash flow hedges were recorded in accumulated other comprehensive income (loss) (“OCI”) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income (loss) will be reclassified to interest expense in the periods in which interest payments are incurred on variable rate debt. During the next twelve months, the Company estimates an additional $578,000 will be reclassified as an increase to interest expense. As of September 30, 2024 and December 31, 2023 the Company had no remaining interest rate swaps.
The table below presents the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations as of September 30, 2024 and 2023.
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(in thousands)
Gain Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into IncomeLoss Reclassified from Accumulated OCI into Income (Loss)
Three months ended September 30,2024202320242023
Total derivatives in cash flow hedging relationships - Interest rate contracts$ $ Interest expense$(171)$(324)
Nine months ended September 30,
Total derivatives in cash flow hedging relationships - Interest rate contracts$ $ Interest expense$(541)$(621)
NOTE 7 • FAIR VALUE MEASUREMENTS
Cash and cash equivalents, restricted cash, accounts payable, accrued expenses, and other liabilities are carried at amounts that reasonably approximate their fair value due to their short-term nature. For variable rate line of credit debt that re-prices frequently, fair values are based on carrying values.
In determining the fair value of other financial instruments, Centerspace applies FASB ASC 820, “Fair Value Measurement and Disclosures.” Fair value hierarchy under ASC 820 distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (Levels 1 and 2) and the reporting entity’s own assumptions about market participant assumptions (Level 3). Fair value estimates may differ from the amounts that may ultimately be realized upon sale or disposition of the assets and liabilities.
Fair Value Measurements on a Recurring Basis
(in thousands)
Balance Sheet LocationTotalLevel 1Level 2Level 3
September 30, 2024
Assets
Real estate related notes receivableOther assets$20,878   $20,878 
December 31, 2023    
Assets
Real estate related notes receivableOther assets$7,039   $7,039 
Centerspace utilizes an income approach with Level 3 inputs based on expected future cash flows to value the notes receivable. The unobservable inputs include market transactions for similar instruments, management estimates of comparable interest rates (range of 5.00% to 9.00%), and instrument specific credit risk (range of 0.5% to 1.0%). Changes in the fair value of these receivables from period to period are reported in interest and other income on the Condensed Consolidated Statements of Operations.
(in thousands)
Fair Value MeasurementOther GainsInterest IncomeTotal Changes in Fair Value Included in Current-Period Earnings
Nine months ended September 30, 2024
Real estate related notes receivable$20,878 $14 $1,022 $1,036 
Nine months ended September 30, 2023
Real estate related notes receivable$5,455 $14 $197 $211 
As of September 30, 2024 and December 31, 2023, Centerspace had investments totaling $2.2 million and $2.1 million, respectively, in real estate technology venture funds consisting of privately held entities that develop technology related to the real estate industry. These investments appear within other assets on our Condensed Consolidated Balance Sheets. The investments are measured at net asset value (“NAV”) as a practical expedient under ASC 820. As of September 30, 2024, the Company had further unfunded commitments of $950,000.
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Fair Value Measurements on a Nonrecurring Basis
There were no non-financial assets or liabilities measured at fair value on a nonrecurring basis at September 30, 2024. Non-financial assets measured at fair value on a nonrecurring basis at December 31, 2023 consisted of real estate investments that were written-down to estimated fair value during the year ended December 31, 2023.
(in thousands)
Balance Sheet LocationTotalLevel 1Level 2Level 3
December 31, 2023    
Assets
Real estate investments measured at fair value
Property owned
$19,250 $ $19,250 $ 
As of December 31, 2023, the Company estimated the fair value of real estate investments using market offers to purchase and other market data.
Financial Assets and Liabilities Not Measured at Fair Value
The fair value of unsecured senior notes and mortgages payable are estimated based on the discounted cash flows of the loans using market research and management estimates of comparable interest rates, excluding any prepayment penalties (Level 3).
The estimated fair values of the Company’s financial instruments as of September 30, 2024 and December 31, 2023, respectively, are as follows:
(in thousands)
September 30, 2024December 31, 2023
Balance Sheet LocationCarrying AmountFair ValueCarrying AmountFair Value
FINANCIAL ASSETS    
Cash and cash equivalentsCash and cash equivalents$14,453 $14,453 $8,630 $8,630 
Restricted cashRestricted cash$2,794 $2,794 $639 $639 
FINANCIAL LIABILITIES    
Revolving lines of creditRevolving lines of credit$39,000 $39,000 $30,000 $30,000 
Unsecured senior notesNotes payable$300,000 $259,103 $300,000 $252,108 
Mortgages payable - Fannie Mae credit facilityMortgages payable$198,850 $172,708 $198,850 $168,555 
Mortgages payable - otherMortgages payable$386,949 $369,209 $391,140 $367,080 
NOTE 8 • ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS
Centerspace did not acquire new real estate during the three and nine months ended September 30, 2024 and 2023.
DISPOSITIONS
Centerspace did not dispose of any real estate during the three months ended September 30, 2024. During the three months ended September 30, 2023, Centerspace disposed of four apartment communities and associated commercial space, in one transaction for an aggregate sales price of $82.5 million. During the nine months ended September 30, 2024, Centerspace disposed of two apartment communities in two exchange transactions for an aggregate sales price of $19.0 million. During the nine months ended September 30, 2023, Centerspace disposed of 13 apartment communities and associated commercial space, in five transactions for an aggregate sales price of $226.8 million. The dispositions for the nine months ended September 30, 2024 and 2023 are detailed below.
Nine Months Ended September 30, 2024
(in thousands)
DispositionsDate
Disposed
Sale Price
Net Book Value and Transaction Costs
Gain/(Loss)
69 homes - Southdale Parc - Richfield, MN
February 29, 2024$6,200 $6,497 $(297)
136 homes - Wingate - New Hope, MN
February 29, 2024$12,800 $13,080 $(280)
Total Dispositions$19,000 $19,577