CENTERSPACE

Previous wording

We are a real estate investment trust, or REIT, that owns, manages, acquires, redevelops, and develops apartment communities. We primarily focus on investing in markets characterized by stable and growing economies, strong employment, and an attractive quality of life that we believe, in combination, lead to higher demand for apartment homes and retention of our residents. As of March 31, 2024, we owned interests in 70 apartment communities consisting of 12,883 apartment homes. Property owned, as presented in our Condensed Consolidated Balance Sheets at historical cost, was $2.4 billion at March 31, 2024 and $2.4 billion at December 31, 2023.

Current wording

We are a real estate investment trust, or REIT, that owns, manages, acquires, redevelops, and develops apartment communities. We primarily focus on investing in markets characterized by stable and growing economies, strong employment, and an attractive quality of life that we believe, in combination, lead to higher demand for apartment homes and retention of our residents. As of June 30, 2024, we owned interests in 70 apartment communities consisting of 12,883 apartment homes. Property owned, as presented in our Condensed Consolidated Balance Sheets at historical cost, was $2.4 billion at June 30, 2024 and December 31, 2023.

Previous wording

•For the three months ended March 31, 2024, revenue decreased by $3.4 million or 5.0% to $64.5 million, compared to $67.9 million for the three months ended March 31, 2023, due to decreased revenue from dispositions, offset by a 3.5% increase from same-store communities and an increase from non-same-store communities.

Current wording

•For the three months ended June 30, 2024, revenue increased by $267,000 or 0.4% to $65.0 million, compared to $64.8 million for the three months ended June 30, 2023, due to increased revenue from same-store and non-same-store communities, offset by decreased revenue from dispositions.

Previous wording

•Same-store revenues increased by 3.5% for the three months ended March 31, 2024, compared to the same period of the prior year, driving a 7.5% increase in same-store NOI compared to the same period of the prior year.

Current wording

•Same-store revenues increased by 3.4% for the three months ended June 30, 2024, compared to the same period of the prior year, driving a 2.4% increase in same-store NOI compared to the same period of the prior year.

Previous wording

•Net loss was $0.37 per diluted share for the three months ended March 31, 2024, compared to net income of $2.76 per diluted share for the same period of the prior year.

Current wording

•Net loss was $0.19 per diluted share for the three months ended June 30, 2024, compared to net loss of $0.23 per diluted share for the same period of the prior year.

Previous wording

•Non-GAAP Core Funds from Operations (“Core FFO”) applicable to common shares and Units for the three months ended March 31, 2024 increased by $2.5 million or 12.8% to $22.0 million compared to $19.5 million for the three months ended March 31, 2023. See the description of Core FFO on page 25 and the reconciliation of net income (loss) available to common shareholders to FFO and Core FFO on page 26. This increase was primarily due to increased NOI from same-store and non-same-store communities and expense savings in property management and interest expense, offset by decreased NOI from dispositions. The drivers of these changes are discussed in more detail in the “Results of Operations” section below.

Current wording

•Non-GAAP Core Funds from Operations (“Core FFO”) applicable to common shares and Units for the three months ended June 30, 2024 decreased by $502,000 or 2.2% to $22.8 million compared to $23.3 million for the three months ended June 30, 2023. See the description of Core FFO on pages 30 and 31 and the reconciliation of net income (loss) available to common shareholders to FFO and Core FFO on page 32. This decrease was primarily due to decreased NOI from dispositions and increased casualty loss and interest expense, offset by increased NOI from same-store and non-same-store communities. The drivers of these changes are discussed in more detail in the “Results of Operations” section below.

Previous wording

Net operating income (“NOI”) is a non-GAAP financial measure, which we define as total real estate revenues less property operating expenses, including real estate taxes and is reconciled to operating income below. We believe that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by sales of real estate and other investments, impairment, depreciation, amortization, financing costs, property management expenses, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance.

Current wording

Net operating income (“NOI”) is a non-GAAP financial measure, which we define as total real estate revenues less property operating expenses, including real estate taxes and is reconciled to operating income below. We believe that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by sales of real estate and other investments, impairment, depreciation, amortization, financing costs, property management expenses, casualty losses, loss on litigation settlement, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance.

Previous wording

We have provided certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or in service for substantially all of the periods being compared, and, in the case of newly-constructed properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, 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. We believe that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of communities are performing year-over-year. We use this measure to assess whether or not we have been successful in increasing NOI, raising average rental revenue, renewing the leases with existing residents, controlling operating costs, and making prudent capital improvements. The discussion below focuses on the main factors affecting real estate revenue and expenses from same-store apartment communities because changes from one year to another in real estate revenue and expenses from non-same-store apartment communities are generally due to the addition of those properties to the real estate portfolio, and accordingly provide less useful information for evaluating ongoing operational performance of the real estate portfolio.

Current wording

We have provided certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or in service for substantially all of the periods being compared, and, in the case of newly-constructed properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, 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). We believe that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of communities are performing year-over-year. We use this measure to assess whether or not we have been successful in increasing NOI, raising average rental revenue, renewing the leases with existing residents, controlling operating costs, and making prudent capital improvements. The discussion below focuses on the main factors affecting real estate revenue and expenses from same-store apartment communities because changes from one year to another in real estate revenue and expenses from non-same-store apartment communities are generally due to the addition of those properties to the real estate portfolio, and accordingly provide less useful information for evaluating ongoing operational performance of the real estate portfolio.

Previous wording

For the comparison of the three months ended March 31, 2024 and 2023, one apartment community was non-same-store. Sold communities are included in “Dispositions,” while “Other properties” includes non-multifamily properties and the non-multifamily components of mixed-use properties. During the three months ended March 31, 2024 and 2023, we disposed of two and nine apartment communities, respectively, consisting of 205 and 1,567 apartment homes, respectively.

Current wording

For the comparison of the six months ended June 30, 2024 and 2023, one apartment community was non-same-store. 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 six months ended June 30, 2024 and 2023, we disposed of two and nine apartment communities, respectively, consisting of 205 and 1,567 apartment homes, respectively.

Previous wording

The following consolidated results of operations, including GAAP and non-GAAP metrics, cover the three months ended March 31, 2024 and 2023.

Current wording

The following consolidated results of operations, including GAAP and non-GAAP metrics, cover the three and six months ended June 30, 2024 and 2023.

Previous wording

(1)This is a Non-GAAP financial measure which is a component of NOI (non-GAAP), as defined above. Refer to the reconciliation of Operating Income (Loss) 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.

Current wording

(1)This is a Non-GAAP financial measure which is a component of NOI (non-GAAP), as defined above. 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.

Previous wording

Same-store analysis. Revenue from same-store communities increased 3.5% or $2.1 million in the three months ended March 31, 2024, compared to the same period in the prior year. The increase was attributable to 3.9% growth in average monthly revenue per occupied home for the three months ended March 31, 2024 offset by a decrease of 0.3% in occupancy as weighted average occupancy decreased from 94.9% in the three months ended March 31, 2023 to 94.6% for the three months ended March 31, 2024. Property operating expenses, including real estate taxes, at same-store communities decreased by 2.2% or $531,000 in the three months ended March 31, 2024, compared to the same period in the prior year. At same-store communities, controllable expenses (which exclude insurance and real estate taxes) decreased by $181,000, primarily due to lower utilities costs and offset by increases in compensation costs and administrative and marketing costs. Non-controllable expenses at same-store communities decreased by $350,000, due to successful real estate tax appeals and offset by higher insurance premiums. Same-store NOI increased by $2.6 million to $37.5 million for the three months ended March 31, 2024 compared to $34.9 million in the same period of the prior year.

Current wording

Same-store analysis. Revenue from same-store communities increased 3.4% or $2.1 million in the three months ended June 30, 2024, compared to the same period in the prior year. The increase was attributable to 3.3% growth in average monthly revenue per occupied home for the three months ended June 30, 2024 and an increase of 0.1% in occupancy as weighted average occupancy increased from 95.2% in the three months ended June 30, 2023 to 95.3% for the three months ended June 30, 2024. Property operating expenses, including real estate taxes, at same-store communities increased by 5.1% or $1.2 million in the three months ended June 30, 2024, compared to the same period in the prior year. At same-store communities, controllable expenses (which exclude insurance and real estate taxes) increased by $767,000, primarily due to increases in repairs and maintenance costs and administrative and marketing costs. Non-controllable expenses at same-store communities increased by $421,000, due to higher insurance premiums and real estate taxes. Same-store NOI increased by $880,000 to $38.2 million for the three months ended June 30, 2024 compared to $37.3 million in the same period of the prior year.

Previous wording

Non-same-store analysis. Revenue from non-same-store communities increased by $1.8 million in the three months ended March 31, 2024, compared to the same period in the prior year. Property operating expenses, including real estate taxes at non-same-store communities increased by $566,000. NOI at non-same-store communities increased by $1.2 million for the three months ended March 31, 2024 compared to the same period of the prior year. The increase in revenue, property operating expenses, and NOI from non-same-store communities is due to the addition of an apartment community during the fourth quarter of the prior year.

Current wording

Non-same-store analysis. Revenue from non-same-store communities increased by $1.9 million in the three months ended June 30, 2024, compared to the same period in the prior year. Property operating expenses, including real estate taxes at non-same-store communities increased by $537,000. NOI at non-same-store communities increased by $1.3 million for the three months ended June 30, 2024 compared to the same period of the prior year. The increase in revenue, property operating expenses, and NOI from non-same-store communities is due to the addition of an apartment community during the fourth quarter of the prior year.

Previous wording

Other properties and dispositions analysis. Revenue from dispositions decreased by $7.3 million while revenue from other properties decreased by $37,000 in the three months ended March 31, 2024, compared to the same period in the prior year. Property operating expenses, including real estate taxes, at other properties increased by $95,000 while such expenses decreased by $4.0 million for dispositions, compared to the same period in the prior year. NOI at other properties decreased by $132,000 and NOI on dispositions decreased $3.3 million, compared to the same period in the prior year. We disposed of nine apartment communities in the first quarter of 2023, an additional four apartment communities and associated commercial space in the third quarter of 2023, and two apartment communities in the first quarter of 2024.

Current wording

Revenue from dispositions decreased by $10.8 million while revenue from other properties decreased by $124,000 in the six months ended June 30, 2024, compared to the same period in the prior year. Property operating expenses, including real estate taxes, at other properties increased by $142,000 while such expenses decreased by $5.6 million for dispositions, compared to the same period in the prior year. NOI at other properties decreased by $266,000 and NOI on dispositions decreased $5.2 million, compared to the same period in the prior year. We disposed of nine apartment communities in the first quarter of 2023, an additional four apartment communities and associated commercial space in the third quarter of 2023, and two apartment communities in the first quarter of 2024.

Previous wording

Property management expenses. Property management expense, consisting of property management overhead and property management fees paid to third parties decreased by 9.3% to $2.3 million in the three months ended March 31, 2024, compared to $2.6 million in the same period of the prior year. The decrease is primarily due to fewer properties and a lower number of apartment homes due to dispositions.

Current wording

Property management expense, consisting of property management overhead and property management fees paid to third parties decreased by 5.5% to $4.6 million in the six months ended June 30, 2024, compared to $4.8 million in the same period of the prior year. The decrease is primarily due to fewer properties and a lower number of apartment homes due to dispositions.

Previous wording

Casualty loss. Casualty loss increased to $820,000 in the three months ended March 31, 2024, compared to $252,000 in the same period of the prior year. The increase is primarily due to increased claim activity that was not in the same period of the prior year combined with revised loss estimates from previous casualty events. See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.

Current wording

Casualty loss. Casualty loss increased to $510,000 in the three months ended June 30, 2024, compared to $53,000 in the same period of the prior year. The increase is primarily due to increased claim activity that was not in the same period of the prior year combined with revised loss estimates from previous casualty events. See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.

Previous wording

Depreciation and amortization. Depreciation and amortization increased by 3.9% to $27.0 million in the three months ended March 31, 2024, compared to $26.0 million in the same period of the prior year, primarily attributable to an increase in depreciation on same-store and non-same-store apartment communities driven by the addition of an apartment community in the fourth quarter of the prior year with in-place lease amortization along with value add and acquisition capital projects; offset by a decrease in depreciation from sold properties.

Current wording

Depreciation and amortization increased by 4.7% to $52.7 million in the six months ended June 30, 2024, compared to $50.4 million in the same period of the prior year, primarily attributable to an increase in depreciation on same-store and non-same-store apartment communities driven by the addition of an apartment community in the fourth quarter of the prior year with in-place lease amortization along with value add and acquisition capital projects; offset by a decrease in depreciation from sold properties.

Previous wording

General and administrative expenses. General and administrative expenses decreased by 40.1% to $4.6 million in the three months ended March 31, 2024, compared to $7.7 million in the same period of the prior year, primarily attributable to $3.2 million in severance and related costs from the CEO transition in the prior year that did not occur in the first quarter of 2024.

Current wording

General and administrative expenses decreased by 25.6% to $8.8 million in the six months ended June 30, 2024, compared to $11.9 million in the same period of the prior year, primarily attributable to $3.2 million in severance and related costs from the CEO transition in the prior year that did not occur in the six months ended June 30, 2024 and legal expenses in the six months ended June 30, 2024 compared to the same period of the prior year due to a litigation settlement in the prior year that did not occur in the current quarter, offset by higher incentive compensation costs.

Previous wording

Gain (loss) on sale of real estate and other investments. Gain (loss) on sale of real estate and other investments decreased to a loss of $577,000 in the three months ended March 31, 2024, compared to a gain of $60.2 million in the same period of the prior year. The decrease was primarily due to the sale of two apartment communities in the current period for a loss compared to the sale of nine apartment communities for a gain in the prior year. Refer to Note 8 in the Notes to the Condensed Consolidated Financial Statements.

Current wording

Gain (loss) on sale of real estate and other investments decreased to a loss of $577,000 in the six months ended June 30, 2024, compared to a gain of $60.1 million in the same period of the prior year. The decrease was primarily due to the sale of two apartment communities in the current period for a loss compared to the sale of nine apartment communities for a gain in the prior year. Refer to Note 8 in the Notes to the Condensed Consolidated Financial Statements.

Previous wording

Interest expense. Interest expense decreased by 10.8% to $9.2 million in the three months ended March 31, 2024, compared to $10.3 million in the same period of the prior year, primarily due to a higher rate term loan held during the prior year that was paid off prior to its original maturity date.

Current wording

Interest expense decreased by 2.2% to $18.5 million in the six months ended June 30, 2024, compared to $19.0 million in the same period of the prior year, primarily due to a higher rate term loan held during the prior year that was paid off prior to its original maturity date along with a lower average balance on our line of credit during the six months ended June 30, 2024 compared to the same period of the prior year, partially offset by an increase in mortgage interest.

Previous wording

Interest and other income. Interest and other income increased to $340,000 in the three months ended March 31, 2024, compared to $49,000 in the same period of the prior year. The increase was primarily due to interest income on a note receivable in the first quarter of 2024 that did not exist in the same period of the prior year combined with a gain on investments in the first quarter of 2024 compared to a loss on investments in the same period of the prior year.

Current wording

Interest and other income. Interest and other income increased to $477,000 in the three months ended June 30, 2024, compared to $295,000 in the same period of the prior year. The increase was primarily due to interest income on a real estate related note receivable in the in the current period that did not exist in the same period of the prior year.

Previous wording

Net income (loss)available to common shareholders. Net loss available to common shareholders decreased $5.5 million for the three months ended March 31, 2024, compared to a net income of $42.0 million in the three months ended March 31, 2023.

Current wording

Net income (loss) available to common shareholders. Net loss available to common shareholders increased to $2.9 million for the three months ended June 30, 2024, compared to a net loss of $3.5 million in the three months ended June 30, 2023.

Previous wording

While FFO is widely used by us as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO the same way. Accordingly, FFO presented here is not necessarily comparable to FFO presented by other real estate companies. FFO should not be considered as an alternative to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash flow needs, including our ability to service indebtedness or make distributions to shareholders.

Current wording

While FFO is widely used by us as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO the same way. Accordingly, FFO presented here is not necessarily comparable to FFO presented by other real estate companies. 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. FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash flow needs, including our ability to service indebtedness or make distributions to shareholders.

Previous wording

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. By further adjusting for items that are not considered part of core business operations, we believe that Core FFO provides investors with additional information to compare core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income or as any other GAAP measurement of performance, but rather should be considered an additional supplemental measure. Core FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash flow needs, including the ability to service indebtedness or make distributions to shareholders. Core FFO is a non-GAAP and non-standardized financial measure that may be calculated differently by other REITs and that should not be considered a substitute for operating results determined in accordance with GAAP.

Current wording

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. By further adjusting for items that are not considered part of core business operations, we believe that Core FFO provides investors with additional information to compare core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income (loss) or as any other GAAP measurement of performance, but rather should be considered an additional supplemental measure. Core FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash flow needs, including the ability to service indebtedness or make distributions to shareholders. Core FFO is a non-GAAP and non-standardized financial measure that may be calculated differently by other REITs and that should not be considered a substitute for operating results determined in accordance with GAAP.

Previous wording

Net loss available to common shareholders for the three months ended March 31, 2024, decreased to a net loss of $5.5 million compared to a net income of $42.0 million for the same period of the prior year. FFO applicable to common shares and Units for the three months ended March 31, 2024, increased to $20.9 million compared to $16.3 million for the comparable period of the prior year, an increase of 28.5%. This increase was primarily due to increased NOI from same-store communities and non-same-store communities, and decreases in property management and general and administrative expenses and interest expense, offset by decreased NOI from dispositions.

Current wording

Net loss available to common shareholders for the three months ended June 30, 2024, increased to a net loss of $2.9 million compared to a net loss of $3.5 million for the same period of the prior year. FFO applicable to common shares and Units for the three months ended June 30, 2024, increased to $22.1 million compared to $20.2 million for the comparable period of the prior year, representing an increase of 9.9%. This FFO increase was primarily due to increased NOI from same-store communities and non-same-store communities, and a decrease from a litigation settlement in the prior year that did not occur in the current year, offset by decreased NOI from dispositions.

Previous wording

(1)Consists of $37,000 in one-time trial costs related to the litigation matter during the three months ended March 31, 2024.

Current wording

(1)Consists of $37,000 in associated trial costs related to the litigation matter for the six months ended June 30, 2024. Consists of a $2.9 million loss on litigation settlement for a trial judgment entered against the Company and $340,000 in associated trial costs related to the litigation matter for the three and six months ended June 30, 2023

Previous wording

During the three months ended March 31, 2024, we disposed of two apartment communities located in Minnesota in two transactions for an aggregate sales price of $19.0 million. We had no acquisitions during the three months ended March 31, 2024.

Current wording

During the six months ended June 30, 2024, we disposed of two apartment communities located in Minnesota in two transactions for an aggregate sales price of $19.0 million. We had no acquisitions during the six months ended June 30, 2024.

Previous wording

Distributions of $0.75 and $0.73 per common share and Unit were declared during the three months ended March 31, 2024 and 2023, respectively. Distributions of $0.4140625 per Series C preferred share were declared during the three months ended March 31, 2024 and 2023. Distributions of $0.9655 per Series D preferred unit were declared during the three months ended

Current wording

Distributions of $0.75 and $0.73 per common share and Unit were declared during the three months ended June 30, 2024 and 2023, respectively. Distributions of $1.50 and $1.46 were declared during the six months ended June 30, 2024 and 2023, respectively. Distributions of $0.4140625 per Series C preferred share were declared during the three months ended June 30, 2024 and 2023 and $0.828125 per Series C preferred share for the six months ended June 30, 2024 and 2023. Distributions of

Previous wording

Our primary sources of liquidity are cash and cash equivalents on hand and cash flows generated from operations. Other sources include availability under the unsecured lines of credit, proceeds from property dispositions, including restricted cash related to net tax deferred proceeds, offerings of preferred and common shares, including offerings of common shares under a 2021 at-the-market offering program (“2021 ATM Program”), and long-term unsecured debt and secured mortgages.

Current wording

Our primary sources of liquidity are cash and cash equivalents on hand and cash flows generated from operations. Other sources include availability under the unsecured lines of credit, proceeds from property dispositions, including restricted cash related to net tax deferred proceeds, offerings of preferred and common shares, including offerings of common shares under the ATM Program, and long-term unsecured debt and secured mortgages.

Previous wording

As of March 31, 2024, we had total liquidity of approximately $228.3 million, which included $215.6 million available on the lines of credit based on the value of unencumbered properties and $12.7 million of cash and cash equivalents. As of December 31, 2023, we had total liquidity of approximately $234.6 million, which included $226.0 million available on the lines of credit based on the value of unencumbered properties and $8.6 million of cash and cash equivalents.

Current wording

As of June 30, 2024, we had total liquidity of approximately $222.3 million, which included $208.0 million available on the lines of credit based on the value of unencumbered properties and $14.3 million of cash and cash equivalents. As of December 31, 2023, we had total liquidity of approximately $234.6 million, which included $226.0 million available on the lines of credit based on the value of unencumbered properties and $8.6 million of cash and cash equivalents.

Previous wording

As of March 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. As of March 31, 2024, there was $40.0 million outstanding on this line of credit and additional borrowing availability was $210.0 million. At December 31, 2023, the line of credit borrowing capacity was $250.0 million based on the value of unencumbered properties, of which $30.0 million was drawn on the line. The line of credit is utilized to refinance existing indebtedness, to finance property acquisitions, to finance capital expenditures, and for general corporate purposes. This credit facility matures in September 2025, 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.

Current wording

As of June 30, 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 June 30, 2024, there was $48.0 million outstanding on this line of credit and additional borrowing availability was $202.0 million. At December 31, 2023, the line of credit borrowing capacity was $250.0 million based on the value of unencumbered properties, of which $30.0 million was drawn on the line. The line of credit is utilized to refinance existing indebtedness, to finance property acquisitions, to finance capital expenditures, and for general corporate purposes. 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.

Previous wording

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 25-80 basis points, or the daily or term Secured Overnight Financing Rate (“SOFR”), plus a margin that ranges from 125-180 basis points, with the consolidated leverage ratio described under the Third Amended and Restated Credit Agreement, as amended.

Current wording

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 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.

Previous wording

We also have a $6.0 million operating line of credit. As of March 31, 2024, there was $357,000 outstanding on this line of credit. As of December 31, 2023, there was no balance outstanding on this line of credit. This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances. This operating line matures on September 30, 2024, with pricing based on SOFR.

Current wording

We also have a $6.0 million operating line of credit. As of June 30, 2024 and December 31, 2023, there was no balance outstanding on this line of credit. This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances. This operating line matures on September 30, 2024, with pricing based on SOFR.

Previous wording

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 $200.0 million in unsecured senior promissory notes (“unsecured senior notes”). We also have a separate note purchase agreement for the issuance of $125.0 million senior unsecured promissory notes, of which $25.0 million was issued under the private shelf agreement with PGIM. The following table shows the notes issued under both agreements as of March 31, 2024 and December 31, 2023.

Current wording

We had a private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc. (collectively, “PGIM”) under which we issued $200.0 million in unsecured senior promissory notes (“unsecured senior notes”). We also have a separate note purchase agreement for the issuance of $125.0 million senior unsecured promissory notes, of which $25.0 million was issued under the private shelf agreement with PGIM. The following table shows the notes issued under both agreements as of June 30, 2024 and December 31, 2023.

Previous wording

Mortgage loan indebtedness, excluding the FMCF, was $389.9 million and $391.1 million at March 31, 2024 and December 31, 2023, respectively, on 14 apartment communities. All of our mortgage debt is collateralized by apartment communities and is non-recourse at fixed rates of interest, with staggered maturities. This decreases the exposure to changes in interest rates, which reduces the effect of interest rate fluctuations on our results of operations and cash flows. As of March 31, 2024 and December 31, 2023, the weighted average interest rate on mortgage debt was 4.05%. Further information can be found in Note 5 - Debt in the Condensed Consolidated notes.

Current wording

Mortgage loan indebtedness, excluding the FMCF and unamortized premiums and discounts, was $389.1 million and $392.3 million at June 30, 2024 and December 31, 2023, respectively, on 14 apartment communities. All of our mortgage debt is collateralized by apartment communities and is non-recourse at fixed rates of interest, with staggered maturities. This decreases the exposure to changes in interest rates, which reduces the effect of interest rate fluctuations on our results of operations and cash flows. As of June 30, 2024 and December 31, 2023, the weighted average interest rate on mortgage debt was 4.05%. Further information can be found in Note 5 - Debt in the Condensed Consolidated notes.

Previous wording

We have an equity distribution agreement in connection with the 2021 ATM Program through which we may offer and sell common shares having an aggregate gross sales price of up to $250.0 million, in amounts and at times determined by management. The proceeds from the sale of common shares under the 2021 ATM program may be used for general corporate purposes, including the funding of acquisitions, construction or mezzanine loans, community renovations, and the repayment of indebtedness. As of March 31, 2024, common shares having an aggregate offering price of up to $126.6 million remained available under the 2021 ATM Program. Further information can be found in Note 4 - Equity and Mezzanine Equity in the Condensed Consolidated notes.

Current wording

We have an equity distribution agreement in connection with the ATM Program through which we may offer and sell common shares having an aggregate gross sales price of up to $250.0 million, in amounts and at times determined by management. 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 shares sold during the three and six months ended June 30, 2024. As of June 30, 2024, common shares having an aggregate offering price of up to $118.9 million remained available under the ATM Program. Further information can be found in Note 4 - Equity and Mezzanine Equity in the Condensed Consolidated notes.

Previous wording

We have a share repurchase program (the “Share Repurchase Program”), providing for the repurchase of up to an aggregate of $50.0 million of the our 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. The table below provides details on the shares repurchased during the three months ended March 31, 2024 and 2023. As of March 31, 2024, the Company had $4.7 million remaining authorized for purchase under this program.

Current wording

We have a share repurchase program (the “Share Repurchase Program”), providing for the repurchase of up to an aggregate of $50.0 million of the our outstanding common shares. Under the Share Repurchase Program, we are 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. The table below provides details on the shares repurchased during the three and six months ended June 30, 2024 and 2023. As of June 30, 2024, we had $4.7 million remaining authorized for purchase under this program.

Previous wording

As of March 31, 2024, we had cash and cash equivalents of $12.7 million and restricted cash consisting of $1.1 million of escrows held by lenders for real estate taxes, insurance, and capital additions.

Current wording

As of June 30, 2024, we had cash and cash equivalents of $14.3 million and restricted cash consisting of $1.1 million of escrows held by lenders for real estate taxes, insurance, and capital additions.

Previous wording

In addition to cash flow from operations, during the three months ended March 31, 2024, we generated capital from various activities, including:

Current wording

In addition to cash flow from operations, during the six months ended June 30, 2024, we generated capital from various activities, including:

Previous wording

•Receiving $10.4 million in net draws on the line of credit; and

Current wording

•Receiving $18.0 million in net draws on the lines of credit;

Previous wording

•Receiving $1.6 million in net insurance proceeds primarily due to one large casualty event that was settled during the quarter.

Current wording

•Receiving $1.9 million in net insurance proceeds primarily due to one large casualty event that was settled.