CENTERSPACE

Previous wording

This discussion and analysis and other sections of this Report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “assumes,” “may,” “projects,” “outlook,” “future,” and variations of those words and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial condition, or plans expressed or implied by the forward-looking statements. Although we believe the expectations reflected in these forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be achieved. Any statements contained herein that are not statements of historical fact should be deemed forward-looking statements. As a result, reliance should not be placed on these forward-looking statements, as these statements are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from actual results and performance.

Current wording

“may,” “projects,” “outlook,” “future,” and variations of those words and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial condition, or plans expressed or implied by the forward-looking statements. Although we believe the expectations reflected in these forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be achieved. Any statements contained herein that are not statements of historical fact should be deemed forward-looking statements. As a result, reliance should not be placed on these forward-looking statements, as these statements are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from actual results and performance.

Previous wording

•inflation and price volatility in the global economy;

Current wording

•price volatility in the global economy;

Previous 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.

Current wording

•For the three months ended September 30, 2024, revenue increased by $457,000 or 0.7% to $65.0 million, compared to $64.6 million for the three months ended September 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 3.4% 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.

Current wording

•Same-store revenues increased by 3.0% for the three months ended September 30, 2024, compared to the same period of the prior year, driving a 2.8% increase in same-store NOI compared to the same period of the prior year.

Previous wording

•We issued approximately 110,000 common shares for gross consideration of $7.7 million, or $7.6 million, net of commissions, and an average gross price of $69.82 per share under our at-the-market offering program (the “ATM Program”).

Current wording

•During the three months ended September 30, 2024, we issued approximately 1.5 million common shares for $105.1 million, net of commissions, and an average net price of $71.12 per share under our at-the-market offering program (the “ATM Program”) and used the proceeds to redeem all outstanding Series C preferred shares for $97.0 million.

Previous 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.

Current wording

•Net loss was $0.40 per diluted share for the three months ended September 30, 2024, compared to net income of $0.41 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 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.

Current wording

•Non-GAAP Core Funds from Operations (“Core FFO”) applicable to common shares and Units for the three months ended September 30, 2024 increased by $245,000 or 1.1% to $22.0 million compared to $21.7 million for the three months ended September 30, 2023. See the description of Core FFO on pages 31 and 32 and the reconciliation of net income (loss) available to common shareholders to FFO and Core FFO on page 33. This increase was primarily due to increased NOI from same-store and non-same-store communities and interest income on a real estate related note receivable that did not exist in the same period of the prior year, offset by decreased NOI from dispositions. 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, 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.

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 gains (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

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.

Current wording

For the comparison of the nine months ended September 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 nine months ended September 30, 2024 and 2023, we disposed of two and thirteen apartment communities, respectively, consisting of 205 and 2,279 apartment homes, respectively.

Previous 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.

Current wording

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

Previous 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.

Current wording

Same-store analysis. Revenue from same-store communities increased 3.0%, or $1.8 million, in the three months ended September 30, 2024, compared to the same period in the prior year. The increase was attributable to 2.2% growth in average monthly revenue per occupied home for the three months ended September 30, 2024 and an increase of 0.7% in occupancy as weighted average occupancy increased from 94.6% for the three months ended September 30, 2023 to 95.3% for the three months ended September 30, 2024. Property operating expenses, including real estate taxes, at same-store communities increased by 3.2% or $807,000 in the three months ended September 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 $124,000, primarily due to increases in administrative and marketing costs and utilities, offset by decreases in compensation and repairs and maintenance. Non-controllable expenses at same-store communities increased by $683,000, due to higher insurance premiums and real estate taxes. Same-store NOI increased by $1.0 million to $36.8 million for the three months ended September 30, 2024 compared to $35.8 million in the same period of the prior year.

Previous wording

Revenue from same-store communities increased 3.5% or $4.2 million in the six months ended June 30, 2024, compared to the same period in the prior year. The increase was attributable to 3.6% growth in average monthly revenue per occupied home for the six months ended June 30, 2024 offset by a decrease of 0.1% in occupancy as weighted average occupancy decreased from 95.0% in the six months ended June 30, 2023 to 94.9% for the six months ended June 30, 2024. Property operating expenses, including real estate taxes, at same-store communities increased by 1.4% or $658,000 in the six 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 $587,000, primarily due to increased compensation costs, repair and maintenance, and administrative and marketing expense, offset by lower utilities costs. Non-controllable expenses at same-store communities increased by $71,000, due to increased insurance premiums, offset by lower real estate taxes from successful real estate tax appeals. Same-store NOI increased by $3.5 million to $75.7 million for the six months ended June 30, 2024 compared to $72.2 million in the same period of the prior year.

Current wording

Revenue from same-store communities increased 3.3%, or $6.0 million, in the nine months ended September 30, 2024, compared to the same period in the prior year. The increase was attributable to 3.1% growth in average monthly revenue per occupied home for the nine months ended September 30, 2024 and an increase of 0.2% in occupancy as weighted average occupancy increased from 94.9% for the nine months ended September 30, 2023 to 95.1% for the nine months ended September 30, 2024. Property operating expenses, including real estate taxes, at same-store communities increased by 2.0% or $1.5 million in the nine months ended September 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 $711,000, primarily due to increased administrative and marketing expense, compensation costs, and repairs and maintenance, offset by lower utilities costs. Non-controllable expenses at same-store communities increased by $754,000, due to increased insurance premiums, offset by lower real estate taxes from successful real estate tax appeals. Same-store NOI increased by $4.5 million to $112.5 million for the nine months ended September 30, 2024 compared to $108.0 million in the same period of the prior year.

Previous 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.

Current wording

Non-same-store analysis. Revenue from non-same-store communities increased by $1.8 million in the three months ended September 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 $605,000. NOI at non-same-store communities increased by $1.2 million for the three months ended September 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

Revenue from non-same-store communities increased by $3.7 million 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 non-same-store communities increased by $1.1 million. NOI at non-same-store communities increased by $2.6 million for the six 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.

Current wording

Revenue from non-same-store communities increased by $5.5 million in the nine months ended September 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 $1.7 million. NOI at non-same-store communities increased by $3.8 million for the nine months ended September 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 $3.6 million while revenue from other properties decreased by $86,000 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 other properties increased by $47,000 while such expenses decreased by $1.6 million for dispositions, compared to the same period in the prior year. NOI at other properties decreased by

Current wording

Other properties and dispositions analysis. Revenue from dispositions decreased by $3.1 million while revenue from other properties decreased by $108,000 in the three months ended September 30, 2024, compared to the same period in the prior year. Property operating expenses, including real estate taxes, at other properties decreased by $42,000 while such expenses decreased by $1.5 million for dispositions, compared to the same period in the prior year. NOI at other properties decreased by $66,000 and NOI on dispositions decreased $1.6 million, compared to the same period in the prior year. We disposed of 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

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.

Current wording

Revenue from dispositions decreased by $13.9 million while revenue from other properties decreased by $231,000 in the nine months ended September 30, 2024, compared to the same period in the prior year. Property operating expenses, including real estate taxes, at other properties increased by $101,000 while such expenses decreased by $7.1 million for dispositions, compared to the same period in the prior year. NOI at other properties decreased by $332,000 and NOI on dispositions decreased $6.9 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 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.

Current wording

Property management expense, consisting of property management overhead and property management fees paid to third parties decreased by 3.1% to $6.8 million in the nine months ended September 30, 2024, compared to $7.0 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 $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.

Current wording

Casualty gain (loss). Casualty gain (loss) was a gain of $412,000 in the three months ended September 30, 2024, compared to a loss of $937,000 in the same period of the prior year. The decrease is primarily due to increased claim activity with losses in excess of our deductibles resulting in higher estimated recoveries in the current period compared to 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

Casualty loss increased to $1.3 million in the six months ended June 30, 2024, compared to $305,000 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 was $918,000 in the nine months ended September 30, 2024, compared to $1.2 million in the same period of the prior year. The decrease is primarily due to increased claim activity with losses in excess of our deductibles resulting in estimated recoveries in the current period compared to 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 5.5% to $25.7 million in the three months ended June 30, 2024, compared to $24.4 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 along with value add and acquisition capital projects; offset by a decrease in depreciation from sold properties.

Current wording

Depreciation and amortization. Depreciation and amortization increased by 5.6% to $26.1 million in the three months ended September 30, 2024, compared to $24.7 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 along with value add and acquisition capital projects, offset by a decrease in depreciation from sold properties.

Previous 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.

Current wording

Depreciation and amortization increased by 5.0% to $78.8 million in the nine months ended September 30, 2024, compared to $75.1 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 were comparable at $4.2 million in the three months ended June 30, 2024 and 2023. Compensation costs and consulting fees increased in the three months ended June 30, 2024 compared to the same period of the prior year. These increases were offset by lower legal expenses in the three 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.

Current wording

General and administrative expenses. General and administrative expenses increased by $270,000 to $4.1 million in the three months ended September 30, 2024, compared to $3.8 million in the same period of the prior year. Compensation costs, legal and consulting fees increased in the three months ended September 30, 2024 compared to the same period of the prior year.

Previous 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.

Current wording

General and administrative expenses decreased by 17.7% to $12.9 million in the nine months ended September 30, 2024, compared to $15.7 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 nine months ended September 30, 2024 and legal expenses in the nine months ended September 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. There was no gain (loss) on sale of real estate and other investments in the three months ended June 30, 2024, compared to a loss of $67,000 in the same period of the prior year.

Current wording

Gain (loss) on sale of real estate and other investments. There was no gain (loss) on sale of real estate and other investments in the three months ended September 30, 2024, compared to a gain of $11.2 million in the same period of the prior year. Refer to Note 8 in the Condensed Consolidated Financial Statements for more information.

Previous 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.

Current wording

Gain (loss) on sale of real estate and other investments decreased to a loss of $577,000 in the nine months ended September 30, 2024, compared to a gain of $71.3 million in the same period of the prior year. The decrease was primarily due to the sale of two apartment communities in the current year for a loss compared to the sale of 13 apartment communities and associated commercial space for a gain in the prior year. Refer to Note 8 in the Notes to the Condensed Consolidated Financial Statements.

Previous wording

Loss on Litigation Settlement. There was no loss on litigation settlement in the three and six months ended June 30, 2024, compared to a $2.9 million loss on litigation settlement for the three and six months ended June 30, 2023 due to a trial judgment against Centerspace for property damage and monetary losses to a neighboring property in the prior year that did not occur in the current year. Refer to Note 10 in the Condensed Consolidated Financial Statements.

Current wording

Loss on Litigation Settlement. There was no loss on litigation settlement in the nine months ended September 30, 2024, compared to a $2.9 million loss on litigation settlement for the nine months ended September 30, 2023 due to a trial judgment against Centerspace for property damage and monetary losses to a neighboring property in the prior year that did not occur in the current year. Refer to Note 10 in the Condensed Consolidated Financial Statements.

Previous wording

Interest expense. Interest expense increased by 8.0% to $9.3 million in the three months ended June 30, 2024, compared to $8.6 million in the same period of the prior year, primarily due to a higher mortgage interest resulting from the assumption of a mortgage in connection with an acquisition in the fourth quarter of the prior year.

Current wording

Interest expense. Interest expense increased by 4.6% to $8.9 million in the three months ended September 30, 2024, compared to $8.6 million in the same period of the prior year, primarily due to higher mortgage interest and amortization of debt discount resulting from the assumption of a mortgage in connection with an acquisition in the fourth quarter of the prior year, offset by lower interest on our line of credit due to lower average outstanding balance.

Previous 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.

Current wording

Interest and other income. Interest and other income increased to $645,000 in the three months ended September 30, 2024, compared to $330,000 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 current period that did not exist in the same period of the prior year.

Previous wording

Interest and other income increased to $817,000 in the six months ended June 30, 2024, compared to $344,000 in the same period of the prior year. The increase was primarily due to interest income on a note receivable in the in the current period that did not exist in the same period of the prior year, offset by a decrease from interest received on escrow funds in the prior year that did not occur in the six months ended June 30, 2024.

Current wording

Interest and other income increased to $1.5 million in the nine months ended September 30, 2024, compared to $674,000 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 current period that did not exist in the same period of the prior year, offset by a decrease from interest received on escrow funds in the prior year that did not occur in the nine months ended September 30, 2024.

Previous 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.

Current wording

Net income (loss) available to common shareholders. Net loss available to common shareholders decreased to $6.2 million for the three months ended September 30, 2024, compared to a net income of $6.2 million in the three months ended September 30, 2023.

Previous wording

Net loss available to common shareholders decreased to $8.4 million for the six months ended June 30, 2024, compared to a net income of $38.5 million in the six months ended June 30, 2023.

Current wording

Net loss available to common shareholders decreased to $14.6 million for the nine months ended September 30, 2024, compared to a net income of $44.7 million in the nine months ended September 30, 2023.

Previous 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.

Current wording

Net loss available to common shareholders for the three months ended September 30, 2024, decreased to $6.2 million compared to net income of $6.2 million for the same period of the prior year. FFO applicable to common shares and Units for the three months ended September 30, 2024, decreased to $18.7 million compared to $20.8 million for the comparable period of the prior year, representing a decrease of 9.8%. This FFO decrease was primarily due to the redemption of our Series C preferred shares during the current period, increased general and administrative expense and interest expense, and decreased NOI from dispositions, offset by increased NOI from same-store communities and non-same-store communities and casualty gain activity.

Previous wording

Net loss available to common shareholders for the six months ended June 30, 2024, decreased to a net loss of $8.4 million compared to net income of $38.5 million for the same period of the prior year. FFO applicable to common shares and Units for the six months ended June 30, 2024, increased to $43.0 million compared to $36.4 million for the comparable period of the prior year, representing an increase of 18.2%. This FFO increase was primarily due to increased NOI from same-store communities and non-same-store communities, and decreases in general and administrative expense related to the departure of Mark Decker, former CEO, and a litigation settlement in the prior year that did not occur in the current year, offset by decreased NOI from dispositions and an increase in casualty loss.

Current wording

Net loss available to common shareholders for the nine months ended September 30, 2024, decreased to $14.6 million compared to net income of $44.7 million for the same period of the prior year. FFO applicable to common shares and Units for the nine months ended September 30, 2024, increased to $61.7 million compared to $57.2 million for the comparable period of the prior year, representing an increase of 8.0%. This FFO increase was primarily due to increased NOI from same-store communities and non-same-store communities and increased interest on a new real estate related note receivable, decreases in general and administrative expense related to the departure of Mark Decker, former CEO, and a litigation settlement in the prior year that did not occur in the current year, offset by decreased NOI from dispositions and the redemption of our Series C preferred shares.

Previous 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

Current wording

(1)Consists of $37,000 in associated trial costs related to the litigation matter for the nine months ended September 30, 2024. Consists of a $2.9 million loss on litigation settlement for a trial judgment entered against the Company and $371,000 in associated trial costs related to the litigation matter for the nine months ended September 30, 2023

Previous wording

(2)Consists of (gain) loss on investments and pursuit costs.

Current wording

(2)Consists of (gain) loss on investments and one-time professional fees.

Previous 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.

Current wording

During the nine months ended September 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 nine months ended September 30, 2024.

Previous 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

Current wording

Distributions of $0.75 and $0.73 per common share and Unit were declared during the three months ended September 30, 2024 and 2023, respectively. Distributions of $2.25 and $2.19 were declared during the nine months ended September 30, 2024 and 2023, respectively. Distributions of $0.4140625 per Series C preferred share were declared during the three months ended September 30, 2024 and 2023 and $1.2421875 per Series C preferred share for the nine months ended September 30, 2024 and 2023. Distributions of $0.9655 per Series D preferred unit were declared during the three months ended September 30, 2024 and 2023 and $2.8965 per Series D preferred unit for the nine months ended September 30, 2024 and 2023. Distributions of $0.96875 per Series E preferred unit were declared during the three months ended September 30, 2024 and 2023 and $2.90625 per Series E preferred unit for the nine months ended September 30, 2024 and 2023.

Previous wording

Our primary liquidity demands are normally-recurring operating and overhead expenses, debt service and repayments, capital improvements to communities, distributions to the holders of preferred shares, common shares, Series D and Series E preferred units, and Units, value-add redevelopment, common and preferred share buybacks and Unit redemptions, funding of mezzanine loans, and acquisitions of additional communities.

Current wording

Our primary liquidity demands are normally-recurring operating and overhead expenses, debt service and repayments, capital improvements to communities, distributions to the holders of preferred shares, common shares, Series D and Series E preferred units, and Units, value-add redevelopment, common and preferred share buybacks and Unit redemptions, funding of mezzanine loans or real estate related notes, and acquisitions of additional communities.

Previous 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.

Current wording

As of September 30, 2024, we had total liquidity of approximately $235.5 million, which included $221.0 million available on the lines of credit based on the value of unencumbered properties and $14.5 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 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.

Current wording

As of September 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 September 30, 2024, there was $39.0 million outstanding on this line of credit and additional borrowing availability was $211.0 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.