csr-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 001-35624

CENTERSPACE

(Exact name of registrant as specified in its charter)

North Dakota

45-0311232

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

3100 10th Street SW

Post Office Box 1988

Minot

58702-1988

(Address of principal executive offices)

(Zip code)

(701) 837-4738

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days.

Yes

☑

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes

☑

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller Reporting Company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☑

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares of Beneficial Interest, no par value	CSR	New York Stock Exchange
Series C Cumulative Redeemable Preferred Shares	CSR-PRC	New York Stock Exchange

The number of common shares of beneficial interest outstanding as of April 22, 2024, was 14,912,055.

Table of Contents

TABLE OF CONTENTS


			Page
Part I. Financial Information
Item 1. Financial Statements - First Quarter - 202 4 :			3
Condensed Consolidated Balance Sheets Marc h 31 , 202 4 (unaudited) and December 31, 202 3			3
Condensed Consolidated Statements of Operations (unaudited) For the Three Months ended March 31, 2024 and 20 23			4
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) For the Three Months ended March 31, 2024 and 20 23			5
Condensed Consolidated Statements of Equity (unaudited) For the Three Months ended March 31, 2024 and 20 23			6
Condensed Consolidated Statements of Cash Flows (unaudited) For the Three Months ended March 31, 2024 and 20 23			7
Notes to Condensed Consolidated Financial Statements (unaudited)			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosures About Market Risk			30
Item 4. Controls and Procedures			31

Part II. Other Information
Item 1. Legal Proceedings			32
Item 1A. Risk Factors			32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			32
Item 3. Defaults Upon Senior Securities			32
Item 4. Mine Safety Disclosures			32
Item 5. Other Information			32
Item 6. Exhibits			33
Signatures			34

Table of Contents

PART I

Item 1. Financial Statements.

CENTERSPACE AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	(in thousands, except per share data)
	March 31, 2024		December 31, 2023
ASSETS	(Unaudited)
Real estate investments
Property owned	$	2,413,488	$	2,420,146
Less accumulated depreciation	(553,231)		(530,703)



Total real estate investments	1,860,257		1,889,443
Cash and cash equivalents	12,682		8,630
Restricted cash	1,066		639
Other assets	29,468		27,649
TOTAL ASSETS	$	1,903,473	$	1,926,361
LIABILITIES, MEZZANINE EQUITY, AND EQUITY
LIABILITIES
Accounts payable and accrued expenses	$	54,614	$	62,754
Revolving lines of credit	40,357		30,000

Notes payable, net of unamortized loan costs of $525 and $541, respectively	299,475		299,459
Mortgages payable, net of unamortized loan costs of $3,342 and $3,427, respectively	585,382		586,563
TOTAL LIABILITIES	$	979,828	$	978,776
COMMITMENTS AND CONTINGENCIES (NOTE 10)

SERIES D PREFERRED UNITS (Cumulative convertible preferred units, $100 par value, 166 units issued and outstanding at March 31, 2024 and December 31, 2023, aggregate liquidation preference of $16,560)	$	16,560	$	16,560
EQUITY
Series C Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, $25 per share liquidation preference, 3,881 shares issued and outstanding at March 31, 2024 and December 31, 2023, aggregate liquidation preference of $97,036)	93,530		93,530
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 14,912 shares issued and outstanding at March 31, 2024 and 14,963 shares issued and outstanding at December 31, 2023)	1,160,492		1,165,694
Accumulated distributions in excess of net income	(564,951)		(548,273)
Accumulated other comprehensive loss	(922)		(1,119)
Total shareholders’ equity	$	688,149	$	709,832
Noncontrolling interests – Operating Partnership and Series E preferred units	218,255		220,544
Noncontrolling interests – consolidated real estate entities	681		649
TOTAL EQUITY	$	907,085	$	931,025
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY	$	1,903,473	$	1,926,361

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

CENTERSPACE AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)


	(in thousands, except per share data)
	Three Months Ended March 31,
	2024		2023
REVENUE	$	64,506	$	67,897
EXPENSES
Property operating expenses, excluding real estate taxes	18,764		21,342
Real estate taxes	6,305		7,581
Property management expense	2,330		2,568
Casualty loss	820		252
Depreciation and amortization	27,012		25,993

General and administrative expenses	4,623		7,723

TOTAL EXPENSES	$	59,854	$	65,459
Gain (loss) on sale of real estate and other investments	(577)		60,159

Operating income	4,075		62,597
Interest expense	(9,207

SEC Form 10-Q filed by D/B/A Centerspace