CENTERSPACE
For the period ended Sep 30, 2026. Filed Nov 2, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 2, 2026
CSR$57.22-2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-03.
0000798359-26-000078
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-02.
0000798359-26-000094
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 148 previous paragraphs and 164 current paragraphs.
75 unchanged; 61 reworded; 25 added; 10 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
•IRT’s and Centerspace’s ability to complete the transaction on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the necessary stockholder approvals and satisfaction of other closing conditions to consummate the transaction;
Current report
•the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the Merger Agreement between Centerspace and IRT;
Current report
•the outcome of any legal proceedings that may be instituted against Centerspace or IRT;
Current report
•delays in completing the proposed transaction involving Centerspace and IRT;
Current report
•the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Centerspace and IRT do business;
Current report
•the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events;
Current report
•the ability of Centerspace and IRT to meet expectations regarding the timing, completion and accounting and tax treatment of the transaction;
Current report
•diversion of IRT’s and Centerspace’s management’s attention from ongoing business operations and opportunities;
Current report
•potential adverse reactions or changes to business, customer or employee relationships, including those resulting from the announcement or completion of the transaction;
Current report
•the ability to complete the transaction and integration of Centerspace and IRT successfully;
Current report
•the dilution caused by IRT’s issuance of additional shares of its capital stock in connection with the transaction;
Current report
Transaction with IRT
Current report
On September 8, 2026, we entered into the Merger Agreement to combine with IRT. Under the terms of the Merger Agreement, each issued and outstanding Centerspace Common Share will be converted into the right to receive a number of shares of IRT Common Stock equal to the Exchange Ratio. The Company Merger, which may close as early as the end of the fourth quarter of 2026, is subject to approval by Centerspace shareholders and IRT stockholders and other customary closing conditions. Subject to the terms of the Merger Agreement, IRT may elect to defer Closing until the earlier of (x) ten business days after consents to the transactions contemplated by the Merger Agreement are obtained from certain of Centerspace’s existing lenders and (y) the tenth business day prior to June 30, 2027. In some circumstances, upon termination of the Merger Agreement, Centerspace may be required to pay IRT a termination fee of $45.0 million, or IRT may be required to pay Centerspace a termination fee of $60.0 million.
Current report
For additional information regarding the pending business combination with IRT, see Note 1—Organization—“Pending IRT Business Combination” to the Condensed Consolidated Financial Statements and Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.
Current report
•Disposed of thirteen apartment communities consisting of 1,634 homes for an aggregate sales price of $288.8 million, bringing total aggregate sales price on dispositions during the year to $318.8 million.
Current report
•Fully repaid the line of credit balances and reduced the borrowing capacity by $150.0 million to $250.0 million, contributing to a $4.6 million decrease in interest expense compared to the same period in the prior year.
Current report
•Same-store revenues were flat year over year, while property operating expenses increased by 4.2%, partially due to a large one-time utility expense of $200,000, resulting in a 2.7% decrease in same-store NOI compared to the same period of the prior year.
Current report
Merger related costs. Merger related costs were $5.0 million for the three and nine months ended September 30, 2026. These costs include professional and advisory fees related to the Merger Agreement with IRT. For additional information regarding the pending business combination with IRT, see Note 1—Organization—“Pending IRT Business Combination” to the Condensed Consolidated Financial Statements and Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.
Current report
Gain on sale of real estate and other investments for the nine months ended September 30, 2026 was $150.6 million compared to a $79.5 million gain in the same period of the prior year. The gain on sale was due to the disposition of 14 apartment communities and associated commercial space and TIF note receivable in the current period compared to five dispositions in the same period of the prior year. See Note 8 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.
Current report
Net income available to common shareholders was $109.4 million for the nine months ended September 30, 2026, compared to a net income of $35.5 million for the nine months ended September 30, 2025.
Current report
(3)Includes participating and non participating restricted stock units.
Current report
On September 8, 2026, we entered into the Merger Agreement, which, subject to specified exceptions and IRT’s consent rights, restricts our ability to undertake certain financing and capital allocation activities, including incurring or modifying indebtedness, issuing securities, repurchasing shares and making distributions. For additional information regarding the pending business combination with IRT, see Note 1—Organization—“Pending IRT Business Combination” to the Condensed Consolidated Financial Statements and Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.
Current report
In connection with the proposed merger, we entered into arrangements with financial and legal advisors under which aggregate success-based fees of approximately $17.5 million will become payable only upon consummation of the merger. Because the merger had not been consummated as of November 2, 2026 and no amounts are payable if the merger is not completed, no liability for these fees was recognized as of that date. If the merger is completed, we expect to pay these fees at or shortly before closing and recognize the related expense at that time.
Current report
•Repaying $154.9 million on our lines of credit, net of draws;
Current report
Except as described in Note 1—Organization—“Pending IRT Business Combination,” Note 5—Debt and Note 10—Commitments and Contingencies, there have been no material changes to the contractual obligations and other commitments described in our Annual Report on Form 10-K for the year ended December 31, 2025.
Removed paragraphs (10)
Previous report
•the ability of the Company to complete its proposed dispositions on a timely basis, or at all;
Previous report
•risks that the Company’s recently completed or proposed dispositions disrupt current plans and operations;
Previous report
•the anticipated costs related to the Company’s recently completed and proposed dispositions;
Previous report
•Disposed of an apartment community consisting of 176 homes in Denver, Colorado for an aggregate sales price of $30.0 million.
Previous report
•Same-store revenues and expenses remained relatively unchanged with a 0.3% increase in same-store NOI compared to the same period of the prior year.
Previous report
(1)Number of apartment homes related to properties classified as held for sale as of June 30, 2026.
Previous report
Net loss available to common shareholders was $13.9 million for the six months ended June 30, 2026, compared to a net loss of $18.2 million for the six months ended June 30, 2025.
Previous report
Repurchase Program.
Previous report
•Receiving $21.1 million in net draws on our lines of credit.
Previous report
Contractual obligations and other commitments were disclosed in our Form 10-K for the year ended December 31, 2025. Refer to Note 10 of the Notes to the Condensed Consolidated Financial Statements in this report for additional details. There have been no material changes to our contractual obligations and other commitments since that report was filed.
Reworded paragraphs (61)
Previous wording
The following discussion and analysis should be read in conjunction with the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 (the “Report”), the audited financial statements for the year ended December 31, 2025, which are included in our Annual Report on Form 10-K filed with the SEC on February 17, 2026, and the risk factors in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
The following discussion and analysis should be read in conjunction with the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 (the “Report”); the audited financial statements for the year ended December 31, 2025, which are included in Part IV, Item 15 of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 17, 2026; the risk factors in Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q, the risk factors included under the heading “Risk Factors” in our Proxy Statement on Schedule 14A filed with the SEC on October 7, 2026; and the risk factors in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 17, 2026.
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. Forward-looking statements are typically identified by the use of terms such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “assumes,” “may,” “projects,” “outlook,” “future,” and variations of those words and similar expressions. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial 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
“plans,” “believes,” “seeks,” “estimates,” “will,” “assumes,” “may,” “projects,” “outlook,” “future,” and variations of those words and similar expressions. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial 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
•the ability of the Company to realize the anticipated benefits of its recently completed and proposed dispositions and the intended use of proceeds therefrom, as well as the Company’s strategic review;
Current wording
•Centerspace’s ability to realize the anticipated benefits of its recently completed dispositions;
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 economic conditions, strong employment, and an attractive quality of life that we believe, in combination, lead to higher demand for our apartment homes and retention of our residents. As of June 30, 2026, we owned 60 apartment communities containing 12,090 apartment homes. Property owned, as presented in our Condensed Consolidated Balance Sheets at historical cost and excluding assets held for sale, was $2.3 billion at June 30, 2026 and $2.5 billion at December 31, 2025.
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 economic conditions, strong employment, and an attractive quality of life that we believe, in combination, lead to higher demand for our apartment homes and retention of our residents. As of September 30, 2026, we owned 47 apartment communities containing 10,456 apartment homes. Property owned, as presented in our Condensed Consolidated Balance Sheets at historical cost was $2.3 billion at September 30, 2026 and $2.5 billion at December 31, 2025.
Previous wording
•For the three months ended June 30, 2026, revenue decreased by $2.8 million or 4.0% to $65.8 million, compared to $68.5 million for the three months ended June 30, 2025, primarily due to the sale of 12 apartment communities in the prior year, offset by increased revenue from non-same-store communities.
Current wording
•For the three months ended September 30, 2026, revenue decreased by $11.9 million or 16.6% to $59.5 million, compared to $71.4 million for the three months ended September 30, 2025, primarily due to the sale of 14 apartment communities during the nine months ended September 30, 2026 and 12 apartment communities in the prior year, offset by increased revenue from non-same-store communities.
Previous wording
•Net loss was $0.07 per diluted share for the three months ended June 30, 2026, compared to net loss of $0.87 per diluted share for the same period of the prior year.
Current wording
•Net income was $7.28 per diluted share for the three months ended September 30, 2026, compared to net income of $3.19 per diluted share for the same period of the prior year primarily due to the higher gain on sale of real estate and other investments of $150.3 million compared to $79.5 million in the same period of the prior year.
Previous wording
•Non-GAAP Core Funds from Operations (“Core FFO”) per diluted share decreased to $1.27 for the three months ended June 30, 2026, compared to $1.28 for the three months ended June 30, 2025. See the description of Core FFO on page 32 and the reconciliation of net loss available to common shareholders to FFO and Core FFO on page 33. This decrease was primarily due to decreased NOI as a result of dispositions, along with increases in general and administrative expenses, offset by increased NOI on 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”) per diluted share decreased to $1.11 for the three months ended September 30, 2026, compared to $1.19 for the three months ended September 30, 2025. See the description of Core FFO on pages 33 and 34 and the reconciliation of net income available to common shareholders to FFO and Core FFO on page 35. This decrease was primarily due to decreased NOI as a result of dispositions, offset by increased NOI on non-same-store communities and decreased interest expense from lower debt balances. 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 (loss) below. We believe that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that excludes gain (loss) on the sale of real estate and other investments, impairment, depreciation and amortization, financing costs, including interest and other income, losses on extinguishment of debt, and interest expense, property management expenses, casualty losses net of recoveries, 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 excludes gain (loss) on the sale of real estate and other investments, impairment, depreciation and amortization, financing costs, including interest and other income, losses on extinguishment of debt, and interest expense, property management expenses, casualty losses net of recoveries, loss on litigation settlement, merger related costs 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, 2026 and 2025, 44 apartment communities were same-store and three apartment communities and two apartment community were non-same-store, respectively. Communities designated as held for sale are included in “Non-same-store and held for sale.” For the six months ended June 30, 2026, 13 apartment communities were designated as held for sale and included in “Non-same-store and held for sale.” 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 three and six months ended June 30, 2026, we disposed of one apartment community consisting of 176 apartment homes. During the year ended December 31, 2025, we disposed of 12 apartment communities consisting of 1,511 apartment homes.
Current wording
For the comparison of the nine months ended September 30, 2026 and 2025, 44 apartment communities were same-store and three apartment communities were 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 three and nine months ended September 30, 2026, we disposed of 13 and 14 apartment communities consisting of 1,634 and 1,810 apartment homes, respectively. During the year ended December 31, 2025, we disposed of 12 apartment communities consisting of 1,511 apartment homes.
Previous wording
Reconciliation of Operating Income (Loss) to Net Operating Income (non-GAAP)
Current wording
Reconciliation of Operating Income to Net Operating Income (non-GAAP)
Previous wording
The following table provides a reconciliation of operating income (loss) to NOI (non-GAAP), which is defined above.
Current wording
The following table provides a reconciliation of operating income to NOI (non-GAAP), which is defined above.
Previous wording
The following consolidated results of operations, including GAAP and non-GAAP metrics, cover the three and six months ended June 30, 2026 and 2025.
Current wording
The following consolidated results of operations, including GAAP and non-GAAP metrics, cover the three and nine months ended September 30, 2026 and 2025.
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, net income 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 remained consistent in the three months ended June 30, 2026, compared to the same period in the prior year. The average monthly revenue per occupied home for the three months ended June 30, 2026 remained consistent with comparable periods while weighted average occupancy increased 0.1% from 95.9% for the three months ended June 30, 2025 to 96.0% for the three months ended June 30, 2026. Property operating expenses, including real estate taxes, at same-store communities decreased by 0.1% or $19,000 in the three months ended June 30, 2026, compared to the same period in the prior year. At same-store communities, controllable expenses (which exclude insurance and real estate taxes) increased by $23,000, primarily due to an increase in utilities, on-site compensation, and administrative and marketing expenses, offset by a decrease in repairs and maintenance. Non-controllable expenses at same-store communities decreased by $42,000, due to a decrease in real estate taxes, offset by an increase in insurance-related losses. Same-store NOI increased by $84,000 to $31.2 million for the three months ended June 30, 2026, compared to $31.1 million in the same period of the prior year.
Current wording
Same-store analysis. Revenue from same-store communities remained consistent in the three months ended September 30, 2026, compared to the same period in the prior year. The average monthly revenue per occupied home increased by 0.8% for the three months ended September 30, 2026 while weighted average occupancy decreased 0.7% from 95.7% for the three months ended September 30, 2025 to 95.0% for the three months ended September 30, 2026. Property operating expenses, including real estate taxes, at same-store communities increased by 4.2% or $818,000 in the three months ended September 30, 2026, compared to the same period in the prior year. At same-store communities, controllable expenses (which exclude insurance and real estate taxes) increased by $487,000, primarily due to an increase in utilities and on-site compensation, offset by a decrease in administrative and marketing. Non-controllable expenses at same-store communities increased by $331,000, due to an increase in real estate taxes, offset by a decrease in insurance costs. Same-store NOI decreased by $809,000 to $29.7 million for the three months ended September 30, 2026, compared to $30.5 million in the same period of the prior year.
Previous wording
Revenue from same-store communities remained consistent in the six months ended June 30, 2026, compared to the same period in the prior year. The average monthly revenue per occupied home for the six months ended June 30, 2026 remained consistent with comparable periods while weighted average occupancy decreased from 95.9% for the six months ended June 30, 2025 to 95.7% for six months ended June 30, 2026. Property operating expenses, including real estate taxes, at same-store communities increased by 2.0% or $752,000 in the six months ended June 30, 2026, compared to the same period in the prior year. At same-store communities, controllable expenses (which exclude insurance and real estate taxes) increased by $665,000, primarily due to an increase in administrative and marketing costs, utilities, and repairs and maintenance. Non-controllable expenses at same-store communities increased by $87,000, due to insurance-related losses and offset by real estate taxes. Same-store NOI decreased by $790,000 to $61.0 million for the six months ended June 30, 2026, compared to $61.8 million in the same period of the prior year.
Current wording
Revenue from same-store communities remained consistent in the nine months ended September 30, 2026, compared to the same period in the prior year. The average monthly revenue per occupied home increased by 0.4% for the nine months ended September 30, 2026 while weighted average occupancy decreased from 95.8% for the nine months ended September 30, 2025 to 95.5% for the nine months ended September 30, 2026. Property operating expenses, including real estate taxes, at same-store communities increased by 2.7% or $1.6 million in the nine months ended September 30, 2026, compared to the same period in the prior year. At same-store communities, controllable expenses (which exclude insurance and real estate taxes) increased by $1.2 million, primarily due to an increase in administrative and marketing costs, utilities, compensation costs, and repairs and maintenance. Non-controllable expenses at same-store communities increased by $418,000, due to insurance-related losses and real estate taxes. Same-store NOI decreased by $1.6 million to $90.7 million for the nine months ended September 30, 2026, compared to $92.3 million in the same period of the prior year.
Previous wording
Non-same-store and held for sale analysis. Revenue from non-same-store and held for sale communities increased by $4.3 million in the three months ended June 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes at non-same-store and held for sale communities increased by $1.4 million. NOI at non-same-store and held for sale communities increased by $2.9 million for the three months ended June 30, 2026, compared to the same period of the prior year. The increase in revenue, property operating expenses, and NOI from non-same-store and held for sale communities is primarily due to the addition of two apartment communities, one during the second quarter of the prior year and one during the third quarter of the prior year.
Current wording
Non-same-store analysis. Revenue from non-same-store communities increased by $1.2 million in the three months ended September 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes at non-same-store communities increased by $148,000. NOI at non-same-store communities increased by $1.1 million for the three months ended September 30, 2026, compared to the same period of the prior year. The increase in revenue, property operating expenses, and NOI from non-same-store communities is primarily due to the addition of two apartment communities, one during the second quarter of the prior year and one during the third quarter of the prior year.
Previous wording
Revenue from non-same-store and held for sale communities increased by $9.3 million in the six months ended June 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes at non-same-store and held for sale communities increased by $2.9 million for the six months ended June 30, 2026, compared to the same period in the prior year. NOI at non-same-store and held for sale communities increased by $6.5 million for the six months ended June 30, 2026, compared to the same period of the prior year. The increase in revenue, property operating expenses, and NOI from non- same-store and held for sale communities is primarily due to the addition of two apartment communities, one during the second quarter of the prior year and one during the third quarter of the prior year.
Current wording
Revenue from non-same-store communities increased by $10.1 million in the nine months ended September 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes at non-same-store communities increased by $3.3 million for the nine months ended September 30, 2026, compared to the same period in the prior year. NOI at non-same-store communities increased by $6.8 million for the nine months ended September 30, 2026, compared to the same period of the prior year. The increase in revenue, property operating expenses, and NOI from non-same-store communities is primarily due to the addition of two apartment communities, one during the second quarter of the prior year and one during the third quarter of the prior year.
Previous wording
Other properties analysis. Revenue from other properties, which encompasses our commercial and mixed-use activity, increased by $138,000 in the three months ended June 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes, at other properties increased by $58,000, compared to the same period in the prior year. NOI at other properties increased by $80,000, compared to the same period in the prior year. The increase in revenue and NOI on other properties is primarily due to increased occupancy in the current period.
Current wording
Other properties analysis. Revenue from other properties, which encompasses our commercial and mixed-use activity, increased by $4,000 in the three months ended September 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes, at other properties decreased by $39,000, compared to the same period in the prior year. NOI at other properties increased by $43,000, compared to the same period in the prior year. The increase in revenue and NOI on other properties is primarily due to increased occupancy in the current period.
Previous wording
Revenue from other properties increased by $248,000 in the six months ended June 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes, at other properties increased by $32,000, compared to the same period in the prior year. NOI at other properties increased by $216,000, compared to the same period in the prior year. The increase in revenue and NOI on other properties is primarily due to increased occupancy in the current period.
Current wording
Revenue from other properties increased by $234,000 in the nine months ended September 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes, at other properties decreased by $6,000, compared to the same period in the prior year. NOI at other properties increased by $240,000, compared to the same period in the prior year. The increase in revenue and NOI on other properties is primarily due to increased occupancy in the current period.
Previous wording
Dispositions analysis. Revenue from dispositions decreased by $7.3 million in the three months ended June 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes, decreased by $3.3 million on dispositions, compared to the same period in the prior year. NOI on dispositions decreased $4.0 million, compared to the same period in the prior year. We disposed of five apartment communities during the third quarter of 2025 and seven apartment communities in the fourth quarter 2025 compared to one apartment community in the second quarter of 2026.
Current wording
Dispositions analysis. Revenue from dispositions decreased by $13.1 million in the three months ended September 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes, decreased by $5.6 million on dispositions, compared to the same period in the prior year. NOI on dispositions decreased $7.5 million, compared to the same period in the prior year. We disposed of five apartment communities during the third quarter of 2025, seven apartment communities in the fourth quarter 2025, one apartment community in the second quarter of 2026, and thirteen apartment communities in the third quarter of 2026.
Previous wording
Revenue from dispositions decreased by $14.3 million in the six months ended June 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes, decreased by $6.7 million on dispositions, compared to the same period in the prior year. NOI on dispositions decreased by $7.6 million, compared to the same period in the prior year. We disposed of five apartment communities during the third quarter of 2025 and seven apartment communities in the fourth quarter 2025 compared to one apartment community in the second quarter of 2026.
Current wording
Revenue from dispositions decreased by $27.0 million in the nine months ended September 30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes, decreased by $12.6 million on dispositions, compared to the same period in the prior year. NOI on dispositions decreased by $14.4 million, compared to the same period in the prior year. We disposed of five apartment communities during the third quarter of 2025, seven apartment communities in the fourth quarter 2025, one apartment community in the second quarter of 2026, and thirteen apartment communities in the third quarter of 2026.
Previous wording
Property management expenses. Property management expenses, consisting of property management overhead and property management fees paid to third parties, decreased by 12.5% to $2.1 million in the three months ended June 30, 2026. The decrease was primarily due to reduced compensation related costs and administrative costs resulting from a reduction in headcount and number of communities compared to the same period of the prior year.
Current wording
Property management expenses. Property management expenses, consisting of property management overhead and property management fees paid to third parties, decreased by 20.2% to $2.0 million in the three months ended September 30, 2026. The decrease was primarily due to reduced compensation related costs and technology related costs resulting from a reduction in headcount and number of communities compared to the same period of the prior year.
Previous wording
Property management expenses, consisting of property management overhead and property management fees paid to third parties, decreased by $353,000 to $4.5 million in the six months ended June 30, 2026, compared to $4.8 million in the same period of the prior year. The decrease was primarily due to reduced compensation related costs resulting from a reduction in headcount compared to the same period of the prior year, offset by an increase in fees paid to third parties for management of an apartment community we acquired in the second quarter of 2025.
Current wording
Property management expenses, consisting of property management overhead and property management fees paid to third parties, decreased by $856,000 to $6.5 million in the nine months ended September 30, 2026, compared to $7.3 million in the same period of the prior year. The decrease was primarily due to reduced compensation related costs resulting from a reduction in headcount and fewer apartment communities compared to the same period of the prior year, offset by an increase in fees paid to third parties for management of an apartment community we acquired in the second quarter of 2025.
Previous wording
Casualty loss, net of recoveries. Casualty activity was a net recovery of $206,000 in the three months ended June 30, 2026, compared to a net casualty loss of $399,000 in the same period of the prior year. The change is primarily due to fewer large loss claims, along with increases in insurance recoveries and subrogation proceeds compared to the prior year. See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.
Current wording
Casualty loss, net of recoveries. Casualty activity was a net recovery of $441,000 in the three months ended September 30, 2026, compared to a net casualty loss of $127,000 in the same period of the prior year. The change is primarily due to fewer large loss claims, along with increases in insurance recoveries and subrogation proceeds compared to the prior year. See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.
Previous wording
Casualty activity was a net recovery of $227,000 in the six months ended June 30, 2026, compared to a net casualty loss of $931,000 in the same period of the prior year. The change is primarily due to fewer large losses in the current period, settlement of multi-year claims in excess of our deductible along with subrogation proceeds compared to the same period of the prior year. See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.
Current wording
Casualty activity was a net recovery of $668,000 in the nine months ended September 30, 2026, compared to a net casualty loss of $1.1 million in the same period of the prior year. The change is primarily due to fewer large losses in the current period, settlement of multi-year claims in excess of our deductible along with subrogation proceeds compared to the same period of the prior year. 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 decreased by 7.5% to $25.1 million in the three months ended June 30, 2026, compared to $27.1 million in the same period of the prior year, primarily attributable to a decrease of $3.3 million in depreciation from dispositions that occurred in the prior year and a decrease of $455,000 on communities classified as held for sale during the current period, offset by an increase of $1.2 million on non-same-store driven by the addition of two apartment communities, one during the second quarter of the prior year and one in the third quarter of the prior year, along with value add and acquisition capital projects.
Current wording
Depreciation and amortization. Depreciation and amortization decreased by 20.4% to $23.1 million in the three months ended September 30, 2026, compared to $29.1 million in the same period of the prior year, primarily attributable to a decrease of $2.6 million in depreciation from dispositions and $3.5 million from amortization of in-place leases on non-same-store communities that did not recur in the current year offset by an increase of $400,000 on non-same-store depreciation driven by the addition of an apartment community in the third quarter of the prior year.
Previous wording
Depreciation and amortization decreased by $3.2 million to $51.6 million in the six months ended June 30, 2026, compared to $54.8 million in the same period of the prior year, primarily attributable to a decrease of $6.3 million in depreciation from dispositions that occurred in the prior year, a decrease of $1.0 million on same-store communities primarily due to amortization of in-place leases in the prior year that did not occur in the current year, and $410,000 from communities classified as held for sale during the current period, offset by an increase of $4.3 million on non-same-store driven by the addition of two apartment communities, one during the second quarter of the prior year and one in the third quarter of the prior year, along with value add and acquisition capital projects and amortization of in-place leases.
Current wording
Depreciation and amortization decreased by $9.1 million to $74.7 million in the nine months ended September 30, 2026, compared to $83.8 million in the same period of the prior year, primarily attributable to a decrease of $9.3 million in depreciation from dispositions and $1.3 million on same-store communities, along with a decrease of $3.5 million from amortization of in-place leases on non-same-store communities that did not recur in the current year, offset by an increase of $4.7 million on non-same-store driven by the addition of two apartment communities, one during the second quarter of the prior year and one in the third quarter of the prior year, along with value add and acquisition capital projects.
Previous wording
Impairment of real estate investments. There was no impairment of real estate investments in the three months ended June 30, 2026, compared to $14.5 million in the three months ended June 30, 2025. Impairment during the three months ended June 30, 2025 was the result of five apartment communities that were written down to estimated fair value in connection with their reclassification to assets held for sale. See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.
Current wording
Impairment of real estate investments. There was no impairment of real estate investments in the three months ended September 30, 2026, compared to $8.7 million in the three months ended September 30, 2025. Impairment during the three months ended September 30, 2025 was the result of six apartment communities that were written down to estimated fair value in connection with their reclassification to assets held for sale. See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.
Previous wording
Impairment of real estate investments was $9.7 million in the six months ended June 30, 2026, compared to $14.5 million in the six months ended June 30, 2025. Impairment during the six months ended June 30, 2026, was due to one apartment community written down to estimated fair value and the impairment during the six months ended June 30, 2025 was the result of five apartment communities that were written down to estimated fair value in connection with their reclassification to assets held for sale. See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.
Current wording
Impairment of real estate investments was $9.7 million in the nine months ended September 30, 2026, compared to $23.2 million in the nine months ended September 30, 2025. Impairment during the nine months ended September 30, 2026, was due to one apartment community written down to estimated fair value and the impairment during the nine months ended September 30, 2025 was the result of six apartment communities that were written down to estimated fair value in connection with their reclassification to assets held for sale. See Note 2 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.
Previous wording
General and administrative expenses. General and administrative expenses increased by $1.3 million to $5.7 million in the three months ended June 30, 2026, compared to $4.4 million in the same period of the prior year. The increase was primarily due to $835,000 from severance and related costs, $278,000 in professional and legal fees, and increased compensation costs from higher share-based compensation costs in the three months ended June 30, 2026, compared to the same period of the prior year.
Current wording
General and administrative expenses. General and administrative expenses were flat in the three months ended September 30, 2026, compared to the same period of the prior year. We incurred increased compensation costs from higher share-based compensation costs, $197,000 in severance and related costs from dispositions, and $130,000 in professional and legal fees in the three months ended September 30, 2026, offset by lower consulting expenses and salary related costs compared to the same period of the prior year.
Previous wording
General and administrative expenses increased by $2.6 million to $12.0 million in the six months ended June 30, 2026, compared to $9.4 million in the same period of the prior year. The increase was primarily due to $1.1 million in fees related to strategic review, $835,000 from severance and related costs, increased compensation costs from higher share-based compensation costs, and $172,000 in professional and legal fees in the six months ended June 30, 2026, compared to the same period of the prior year.
Current wording
General and administrative expenses increased by $2.6 million to $17.0 million in the nine months ended September 30, 2026, compared to $14.4 million in the same period of the prior year. The increase was primarily due to $1.2 million in fees related to the strategic review, increased compensation costs from higher share-based compensation costs, $1.1 million in severance and related costs from dispositions, and $282,000 in professional and legal fees in the nine months ended September 30, 2026, compared to the same period of the prior year.
Previous wording
Gain (loss) on sale of real estate. Gain on sale of real estate for the three and six months ended June 30, 2026 was $271,000 compared to no gain or loss in the same periods of the prior year. The gain on sale was due to the disposition of one apartment community and associated commercial space in the current period compared to no dispositions in the same periods of the prior year. See Note 8 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.
Current wording
Gain on sale of real estate and other investments. Gain on sale of real estate for the three months ended September 30, 2026 was $150.3 million compared to a $79.5 million gain in the same period of the prior year. The gain on sale was due to the disposition of 13 apartment communities and associated commercial space and TIF note receivable in the current period compared to five dispositions in the same periods of the prior year. See Note 8 of the Notes to the Condensed Consolidated Financial Statements in the report for more details.
Previous wording
Interest expense. Interest expense decreased by 0.9% to $10.6 million in the three months ended June 30, 2026, compared to $10.7 million in the same period of the prior year, primarily due to a reduction in interest on mortgages payable, offset by an increase in interest on our lines of credit due to higher outstanding balances resulting from the acquisitions of two apartment communities in the prior year, one in the second quarter and one in the third quarter of the prior year, along with use of the line of credit to payoff mortgages and higher amortization of debt discount resulting from the assumption of mortgages in connection with an acquisition in the third quarter of the prior year.
Current wording
Interest expense. Interest expense decreased by 35.2% to $8.4 million in the three months ended September 30, 2026, compared to $13.0 million in the same period of the prior year, primarily due to lower interest on our lines of credit and a reduction in interest on mortgages payable, offset by higher amortization of debt discount resulting from the assumption of mortgages in connection with an acquisition in the third quarter of the prior year.
Previous wording
Interest expense increased by $734,000 to $21.1 million in the six months ended June 30, 2026, compared to $20.4 million in the same period of the prior year, primarily due to a higher outstanding balance on our lines of credit resulting from the acquisitions of two apartment communities, one in the second quarter and one in the third quarter of the prior year, along with use of the line of credit to payoff mortgages and amortization of debt discount resulting from the assumption of mortgages in connection with an acquisition in the third quarter of the prior year, offset by a reduction in mortgage interest.
Current wording
Interest expense decreased by 11.5% to $29.5 million in the nine months ended September 30, 2026, compared to $33.3 million in the same period of the prior year, primarily due to lower interest on our lines of credit and a reduction in mortgage interest, offset by higher amortization of debt discount resulting from the assumption of mortgages in connection with an acquisition in the third quarter of the prior year.
Previous wording
Interest and other income. Interest and other income decreased to $709,000 in the three months ended June 30, 2026, compared to $735,000 in the same period of the prior year. The decrease was primarily due to lower interest income on cash balances in the current period compared to the same period of the prior year.
Current wording
Interest and other income. Interest and other income decreased to $1.1 million in the three months ended September 30, 2026, compared to $1.2 million in the same period of the prior year. The decrease was primarily due to a higher unrealized gain on investments in the prior year compared to the same period of the current year, offset by an increase on interest income on cash balances due to retaining cash after dispositions.
Previous wording
Interest and other income increased to $1.6 million in the six months ended June 30, 2026, compared to $1.4 million in the same period of the prior year. The increase was primarily due to an unrealized gain on investments and interest income from a real estate related note receivable which has a higher principal balance in the current period compared to the same period of the prior year.
Current wording
Interest and other income increased to $2.7 million in the nine months ended September 30, 2026, compared to $2.6 million in the same period of the prior year. The increase was primarily due to an increase in interest income on cash balances due to retaining cash after dispositions and interest on a real estate related note receivable which has a higher principal balance in the current period compared to the same period of the prior year, offset by a higher unrealized gain on investments in the prior year compared to the same period of the current year.
Previous wording
Net loss available to common shareholders. Net loss available to common shareholders was $1.0 million for the three months ended June 30, 2026, compared to a net loss of $14.5 million in the three months ended June 30, 2025.
Current wording
Net income available to common shareholders. Net income available to common shareholders was $123.3 million for the three months ended September 30, 2026, compared to a net income of $53.8 million in the three months ended September 30, 2025.
Previous wording
Net loss available to common shareholders for the three months ended June 30, 2026, was $1.0 million compared to net loss of $14.5 million for the same period of the prior year. FFO applicable to common shares and Units for the three months ended June 30, 2026, decreased to $23.5 million compared to $24.5 million for the comparable period of the prior year, representing a decrease of 4.0%. This FFO decrease was primarily due to decreased NOI from dispositions along with an increase in general and administrative expense, offset by increased NOI from non-same-store communities and decreased casualty loss, net of recoveries.
Current wording
Net income available to common shareholders for the three months ended September 30, 2026, was $123.3 million compared to net income of $53.8 million for the same period of the prior year. FFO applicable to common shares and Units for the three months ended September 30, 2026, decreased to $16.2 million compared to $23.3 million for the comparable period of the prior year, representing a decrease of 30.7%. This FFO decrease was primarily due to decreased NOI from dispositions and same-store communities, along with $5.0 million in professional fees related to the Merger Agreement, offset by increased NOI from non-same-store communities, a decrease in interest expense from lower debt balances, and more interest income.
Previous wording
Net loss available to common shareholders for the six months ended June 30, 2026, was $13.9 million compared to net loss of $18.2 million for the same period of the prior year. FFO applicable to common shares and Units for the six months ended June 30, 2026, decreased to $44.7 million compared to $47.7 million for the comparable period of the prior year, representing a decrease of 6.4%. This FFO decrease was primarily due to decreased NOI from dispositions and same-store communities along with increases in general and administrative expenses and interest expense, offset by increased NOI from non-same-store communities and decreased casualty loss, net of recoveries.
Current wording
Net income available to common shareholders for the nine months ended September 30, 2026, was $109.4 million compared to net income of $35.5 million for the same period of the prior year. FFO applicable to common shares and Units for the nine months ended September 30, 2026, decreased to $60.8 million compared to $71.1 million for the comparable period of the prior year, representing a decrease of 14.4%. This FFO decrease was primarily due to decreased NOI from dispositions and same-store communities along with increases in general and administrative expenses from fees related to the strategic review and $5.0 million in professional fees related to the Merger Agreement and, offset by increased NOI from non-same-store communities, decreased interest expense from lower debt balances, decreased property management expense and interest income.
Previous wording
Reconciliation of Net Loss Available to Common Shareholders to Funds from Operations and Core Funds from Operations
Current wording
Reconciliation of Net Income Available to Common Shareholders to Funds from Operations and Core Funds from Operations
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
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. Forward-looking statements are typically identified by the use of terms such as “expects,” “anticipates,” “intends,”
Current report — wording carried from elsewhere
•financing risks, including IRT’s and Centerspace’s potential inability to meet existing covenants in IRT’s and Centerspace’s existing credit facilities or to obtain new debt or equity financing on favorable terms, or at all;
Current report — wording carried from elsewhere
As of September 30, 2026, 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” or “Facility”). As of
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
•Repurchased 45,310 common shares for an average of $55.54 per share.
Previous report — wording carried elsewhere
We have a private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc. (collectively, “PGIM”) under which we have issued $175.0 million in unsecured senior promissory notes (“Unsecured