PR Newswire | Feb 22, 2021 04:31PM EST

December 31, 2020 and Provides 2021 Financial Outlook

02/22 15:30 CST

Centerspace Announces Financial and Operating Results for the Year Ended December 31, 2020 and Provides 2021 Financial Outlook MINNEAPOLIS, Feb. 22, 2021

MINNEAPOLIS, Feb. 22, 2021 /PRNewswire/ -- Centerspace (NYSE: CSR) announced today its financial and operating results for the year ended December 31, 2020. The tables below show Net Income (Loss), Funds from Operations ("FFO")1, and Core FFO1, all on a per share basis, for the year ended December 31, 2020; Same-Store Revenues, Expenses, and Net Operating Income ("NOI")1 over comparable periods; and Same-Store Weighted Average Occupancy for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019 and the twelve months ended December 31, 2020 and 2019.

Three Months Ended December 31, Twelve Months Ended December 31,

Per Share 2020 2019 2020 2019

Earnings (loss) per share - diluted$ (0.46) $ 3.95 $ (0.15) $6.00

FFO - diluted 0.97 0.90 3.47 4.05

Core FFO - diluted 1.02 0.96 3.78 3.72

Year-Over-YearSequential YTD Comparison Comparison Comparison

Same-Store Results 4Q20 vs 4Q19 4Q20 vs. 3Q20CY20 vs. CY19

Revenues 2.3 % 1.4 % 2.1 %

Expenses (0.4) % (5.1) % 2.6 %

Net Operating Income ("NOI")4.2 % 6.3 % 1.8 %

Three months ended Twelve months ended

Same-Store Results December 31, September 30, December 31,December 31,December 31, 2020 2020 2019 2020 2019

Weighted Average Occupancy95.0 % 94.4 % 94.0 % 94.8 % 94.4 %



Net operating income, Funds from Operations, and Core FFO are non-GAAP financial measures. For more information on their usage and presentation,(1) and a reconciliation to the most directly comparable GAAP measures, refer to "Non-GAAP Financial Measures and Reconciliations" in the Supplemental Financial and Operating Data below.

Highlights for the Year Ended December 31, 2020

* Rebranded the Company as Centerspace in December 2020 to reflect both the transformation of the company and its vision for the future; * Net Loss was $(0.15) per diluted share for the year ended December 31, 2020, compared to Net Income of $6.00 per diluted share for the year ended December 31, 2019; * Core FFO increased to $3.78 per diluted share compared to $3.72 for the year ended December 31, 2019; * Total collections for the year ended December 31, 2020 were 99.1% of expected residential revenue compared to 99.6% for the year ended December 31, 2019 while total collections for the quarter ended December 31, 2020 were 98.6% compared to 99.7% for the same period of 2019; * Same-store revenue increased 2.1% driven by 1.7% growth in rental revenue and 0.4% increase in occupancy; * Same-store operating expenses increased 2.6% year-over-year with a decline of 2.9% in same-store controllable expenses, offset by a increase of 13.6% in same-store non-controllable expenses; * Same-store NOI growth of 1.8% for the year ended December 31, 2020; * Acquired two new apartment communities in key growth markets of Minneapolis and Denver in the first and third quarter of 2020 consisting of 647 homes for an aggregate purchase price of $191.0 million; * Funded $18.5 million of mezzanine/construction loans; * Acquired the remaining noncontrolling interest in 71 France in the first quarter of 2020; * Sold four apartment communities consisting of 690 homes in Grand Forks, North Dakota for an aggregate sale price of $42.5 million in the third quarter of 2020; * Announced Nashville as one of our target markets in June 2020; * Maintained an annual dividend of $2.80 per share to common shareholders and unitholders; * Continued to strengthen the balance sheet by issuing 829,000 common shares at an average price of $71.39 per share for total consideration, net of commissions and issuance costs, of approximately $59.2 million in the year ended December 31, 2020; and * Repurchased and retired approximately 237,000 of our 6.625% Series C preferred shares for an aggregate cost of $5.6 million or an average share price of $23.75.

Subsequent Events

Subsequent to December 31, 2020, Centerspace acquired Union Pointe Apartment Homes in Longmont, Colorado for an aggregate purchase price of $76.9 million. The company also issued $50.0 million of 2.7% unsecured Series C notes, due June 6, 2030. In concert with this issuance, Centerspace amended and expanded its Note Purchase Private Shelf Agreement (the "Agreement") with Prudential to increase the aggregate amount available under the Agreement from $150.0 million to $225.0 million. After the issuance of Series C notes, the company has $50.0 million remaining under the Agreement, which is excluded for purposes of reporting liquidity.

Balance Sheet

At December 31, 2020, Centerspace had $97.5 million of total liquidity on its balance sheet, including $97.1 million available on its lines of credit.

2021 Financial Overview

Centerspace is providing the following guidance for its 2021 calendar year performance.

2021 Calendar Year Financial Outlook

Range for 2021

2020 ActualLow High

Earnings per Share - diluted$ (0.15) $(0.18)$0.45

FFO per Share - diluted $ 3.47 $3.17 $3.52

Core FFO per Share - diluted$ 3.78 $3.29 $3.62

Additional assumptions:

* Same-store capital expenditures of $912 per home to $1,012 per home * Value-add expenditures of $15.0 million to $20.0 million * Investments of $145.0 million to $170.0 million, which includes the January 2021 acquisition of Union Pointe in Longmont, Colorado * Dispositions of $55.0 million to $75.0 million * Proceeds of $50.0 million to $70.0 million from equity issuance

FFO and Core FFO are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, please refer to "2021 Financial Outlook" in the Supplemental Financial and Operating Data below.

COVID-19 Developments

The COVID-19 pandemic, including the associated economic disruptions, has continued to impact business and operations since March 2020. The company continues to prioritize the health and well-being of its residents, team members, and the communities it serves.

A discussion of the ongoing and potential effects of the COVID-19 pandemic on financial condition, results of operations, and cash flows can be found in "Management's Discussion and Analysis of Financial Conditions and Results of Operations" presented in the company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 22, 2021. For a more detailed description of the risks and uncertainties affecting business, see the risk factors presented in Item 1A in the company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 22, 2021.

Upcoming Events

Centerspace is scheduled to participate in the Raymond James & Associates' 42nd Annual Institutional Investors Conference, which will be held virtually on March 1-3, 2021.

Earnings Call

Live webcast and replay: https://ir.centerspacehomes.com



Live Conference Call Conference Call Replay

Tuesday, February 23, 2021 at 10:00 AMReplay available until March 9, 2021 ET

USA Toll Free Number 1-877-509-9785USA Toll Free Number 1-877-344-7529

International Toll Free1-412-902-4132International Toll Free1-412-317-0088Number Number

Canada Toll Free Number1-855-669-9657Canada Toll Free Number1-855-669-9658

Conference Number 10145476

Supplemental Information

Supplemental Operating and Financial Data for the year ended December 31, 2020, is available in the Investors section on Centerspace's website at https://www.centerspacehomes.com or by calling Investor Relations at 701-837-7104. Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined and reconciled in the Supplemental Financial and Operating Data, which accompanies this earnings release.

About Centerspace

Centerspace is an owner andoperator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of December 31, 2020, Centerspace owned 67 apartment communities consisting of 11,910 homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for 2020 by theMinneapolis Star Tribune. For more information, please visit www.centerspacehomes.com.

Forward-Looking Statements

Certain statements in this press release are based on the company's current expectations and assumptions, and are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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 such 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 conditions, or plans expressed or implied by the forward-looking statements. Although the company believes the expectations reflected in its forward-looking statements are based upon reasonable assumptions, it can give no assurance that the 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 the company's control and could differ materially from actual results and performance. Such risks and uncertainties are detailed from time to time in filings with the SEC, including the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" contained in the company's Annual Report on Form 10-K, in quarterly reports on Form 10-Q, and in other reports the company files with the SEC from time to time. The company assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.

Contact InformationInvestor RelationsEmily MillerPhone: 701-837-7104E-mail: IR@centerspacehomes.com

Marketing & MediaKelly WeberPhone: 701-837-7104kweber@centerspacehomes.com

Common Share Data (NYSE: CSR)



Three Months Ended

December 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019

High closing price $ 74.55 $73.53 $76.82 $84.68 $ 78.91

Low closing price $ 65.79 $61.87 $44.36 $52.55 $ 71.74

Average closing price $ 70.30 $70.15 $63.91 $71.62 $ 74.67

Closing price at end of quarter $ 70.64 $65.17 $70.49 $55.00 $ 72.50

Common share distributions-annualized $ 2.80 $2.80 $2.80 $2.80 $ 2.80

Closing price dividend yield - annualized 4.0 % 4.3 % 4.0 %5.1 %3.9 %

Closing common shares outstanding (thousands) 13,027 12,976 12,827 12,164 12,099

Closing limited partnership units outstanding (thousands)977 1,018 1,022 1,044 1,058

Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited $ 989,243 $911,989 $976,216 $726,440 $ 953,883 partnership units (thousands)

CENTERSPACE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share amounts)



Three Months Ended Twelve months ended

12/31/20209/30/20206/30/2020 3/31/2020 12/31/201912/31/202012/31/2019

REVENUE $45,540 $44,138$43,910 $44,406 $45,777 $177,994$185,755

EXPENSES

Property operating expenses, excluding real estate taxes 12,668 13,129 12,360 13,468 14,018 51,625 57,249

Real estate taxes 5,256 5,402 5,410 5,465 4,835 21,533 21,066

Property management expenses 1,460 1,442 1,345 1,554 1,634 5,801 6,186

Casualty loss 331 91 913 327 205 1,662 1,116

Depreciation/amortization 20,282 18,995 18,156 18,160 18,972 75,593 74,271

General and administrative expenses 3,733 3,077 3,202 3,428 3,647 13,440 14,450

TOTAL EXPENSES $43,730 $42,136$41,386 $42,402 $43,311 $169,654$174,338

Operating income (loss) 1,810 2,002 2,524 2,004 2,466 8,340 11,417

Interest expense (6,903) (6,771) (6,940) (6,911) (7,357) (27,525) (30,537)

Loss on extinguishment of debt (2) (4) (17) - (864) (23) (2,360)

Interest and other income (loss) 406 281 538 (2,777) 702 (1,552) 2,092

Income (loss) before gain (loss) on sale of real estate and other investments, (4,689) (4,492) (3,895) (7,684) (5,053) (20,760) (19,388) and gain (loss) on litigation settlement

Gain (loss) on sale of real estate and other investments 17 25,676 (190) - 57,850 25,503 97,624

Gain (loss) on litigation settlement - - - - - - 6,586

Net income (loss) $(4,672)$21,184$(4,085)$(7,684)$52,797 $4,743 $84,822

Dividends to preferred unitholders (160) (160) (160) (160) (160) (640) (537)

Net (income) loss attributable to noncontrolling interest - Operating 460 (1,387) 447 692 (4,202) 212 (6,752) Partnership

Net (income) loss attributable to noncontrolling interests - consolidated real (6) (8) (5) 145 223 126 1,136 estate entities

Net income (loss) attributable to controlling interests (4,378) 19,629 (3,803) (7,007) 48,658 4,441 78,669

Dividends to preferred shareholders (1,607) (1,607) (1,609) (1,705) (1,705) (6,528) (6,821)

Discount (premium) on redemption of preferred shares - (1) 25 273 - 297 -

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $(5,985)$18,021$(5,387)$(8,439)$46,953 $(1,790)$71,848



Per Share Data - Basic

Net earnings (loss) per common share - basic $(0.46) $1.40 $(0.44) $(0.69) $3.95 $(0.15) $6.06



Per Share Data - Diluted

Net earnings (loss) per common share - diluted $(0.46) $1.38 $(0.44) $(0.67) $3.89 $(0.15) $6.00

CENTERSPACE

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019

ASSETS

Real estate investments

Property owned $ 1,812,557 $ 1,805,390 $ 1,694,033 $ 1,687,436 $ 1,643,078

Less accumulated depreciation (399,249) (380,392) (383,917) (366,307) (349,122)

1,413,308 1,424,998 1,310,116 1,321,129 1,293,956

Unimproved land - - - 1,376 1,376

Mortgage loans receivable 24,661 17,986 10,961 16,775 16,140

Total real estate investments 1,437,969 1,442,984 1,321,077 1,339,280 1,311,472

Cash and cash equivalents 392 16,804 52,714 26,338 26,579

Restricted cash 6,918 2,199 2,535 2,344 19,538

Other assets 18,904 16,947 16,484 21,124 34,829

TOTAL ASSETS $ 1,464,183 $ 1,478,934 $ 1,392,810 $ 1,389,086 $ 1,392,418

LIABILITIES, MEZZANINE EQUITY, AND EQUITY

LIABILITIES

Accounts payable and accrued expenses $ 55,609 $ 58,596 $ 54,883 $ 52,337 $ 47,155

Revolving line of credit 152,871 135,000 63,000 83,000 50,079

Notes payable, net of loan costs 269,246 269,202 269,155 269,106 269,058

Mortgages payable, net of loan costs 297,074 313,065 323,705 328,367 329,664

TOTAL LIABILITIES $ 774,800 $ 775,863 $ 710,743 $ 732,810 $ 695,956

SERIES D PREFERRED UNITS $ 16,560 $ 16,560 $ 16,560 $ 16,560 $ 16,560

EQUITY

Series C Preferred Shares of Beneficial Interest 93,530 93,530 93,579 96,046 99,456

Common Shares of Beneficial Interest 968,263 968,436 958,292 912,653 917,400

Accumulated distributions in excess of net income (427,681) (412,577) (421,515) (407,150) (390,196)

Accumulated other comprehensive income (loss) (15,905) (17,256) (18,139) (17,360) (7,607)

Total shareholders' equity $ 618,207 $ 632,133 $ 612,217 $ 584,189 $ 619,053

Noncontrolling interests - Operating Partnership 53,930 53,669 52,558 54,777 55,284

Noncontrolling interests - consolidated real estate entities 686 709 732 750 5,565

TOTAL EQUITY $ 672,823 $ 686,511 $ 665,507 $ 639,716 $ 679,902

TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY $ 1,464,183 $ 1,478,934 $ 1,392,810 $ 1,389,086 $ 1,392,418

CENTERSPACENON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (unaudited)

This release contains certain non-GAAP financial measures. The non-GAAP financial measures should not be considered a substitute for operating results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The definitions and calculations of these non-GAAP financial measures, as calculated by the company may not be comparable to non-GAAP measures reported by other REITs that do not define each of the non-GAAP financial measures exactly as Centerspace does.

The company provides certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or in service for substantially all of the periods being compared, and, in the case of development properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, Centerspace determines the composition of the same-store pool for that year and adjusts the previous year, to evaluate full period-over-period operating comparisons for existing apartment communities and their contribution to net operating income. Measuring performance on a same-store basis allows investors to evaluate how a fixed pool of communities are performing year-over-year. Centerspace uses this measure to assess success in increasing NOI, renewing leases on existing residents, controlling operating costs, and making prudent capital improvements.

Reconciliation of Operating Income (Loss) to Net Operating Income

Net operating income, or NOI, is a non-GAAP financial measure which the company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation and amortization, financing costs, property management expenses, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.

(dollars in thousands)

Three Months Ended Sequential Year-Over-Year

12/31/202009/30/202012/31/2019$ Change% Change$ Change% Change



Operating income (loss) $1,810 $2,002 $2,466 $(192)(9.6) %$(656)(26.6)%

Adjustments:

Property management expenses 1,460 1,442 1,634 18 1.2 %(174) (10.6)%

Casualty loss 331 91 205 240 263.7 %126 61.5 %

Depreciation and amortization 20,282 18,995 18,972 1,287 6.8 %1,310 6.9 %

General and administrative expenses 3,733 3,077 3,647 656 21.3 %86 2.4 %

Net operating income $27,616 $25,607 $26,924 $2,0097.8 %$692 2.6 %



Revenue

Same-store $38,582 $38,043 $37,718 $539 1.4 %$864 2.3 %

Non-same-store 6,353 4,420 3,191 1,933 43.7 %3,162 99.1 %

Other properties and dispositions 605 1,675 4,868 (1,070)(63.9)%(4,263)(87.6)%

Total 45,540 44,138 45,777 1,402 3.2 %(237) (0.5) %



Property operating expenses, including real estate taxes

Same-store 15,370 16,198 15,432 (828) (5.1) %(62) (0.4) %

Non-same-store 2,271 1,712 1,090 559 32.7 %1,181 108.3 %

Other properties and dispositions 283 621 2,331 (338) (54.4)%(2,048)(87.9)%

Total 17,924 18,531 18,853 (607) (3.3) %(929) (4.9) %



Net operating income

Same-store 23,212 21,845 22,286 1,367 6.3 %926 4.2 %

Non-same-store 4,082 2,708 2,101 1,374 50.7 %1,981 94.3 %

Other properties and dispositions 322 1,054 2,537 (732) (69.4)%(2,215)(87.3)%

Total $27,616 $25,607 $26,924 $2,0097.8 %$692 2.6 %

(dollars in thousands)

Twelve Months Ended December 31,

2020 2019 $ Change % Change



Operating income (loss) $8,340 $11,417 $(3,077)(27.0)%

Adjustments:

Property management expenses 5,801 6,186 (385) (6.2) %

Casualty loss 1,662 1,116 546 48.9 %

Depreciation and amortization 75,593 74,271 1,322 1.8 %

General and administrative expenses 13,440 14,450 (1,010) (7.0) %

Net operating income $104,836$107,440$(2,604)(2.4) %



Revenue

Same-store $152,790$149,615$3,175 2.1 %

Non-same-store 18,441 6,020 12,421 206.3 %

Other properties and dispositions 6,763 30,120 (23,357) (77.5)%

Total 177,994 185,755 (7,761) (4.2) %



Property operating expenses, including real estate taxes

Same-store 63,227 61,622 1,605 2.6 %

Non-same-store 6,817 2,287 4,530 198.1 %

Other properties and dispositions 3,114 14,406 (11,292) (78.4)%

Total 73,158 78,315 (5,157) (6.6) %



Net operating income

Same-store 89,563 87,993 1,570 1.8 %

Non-same-store 11,624 3,733 7,891 211.4 %

Other properties and dispositions 3,649 15,714 (12,065) (76.8)%

Total $104,836$107,440$(2,604)(2.4) %

Reconciliation of Same-Store Controllable Expenses to Property Operating Expenses, Including Real Estate Taxes

Same-store controllable expenses exclude real estate taxes and insurance, in order to provide a measure of expenses that are within management's control, and is used for the purposes of budgeting, business planning, and performance evaluation. This is a non-GAAP financial measure and should not be considered an alternative to total expenses or total property operating expenses and real estate taxes.

(dollars in thousands)

Three Months Ended December 31, Twelve Months Ended December 31,

2020 2019 $ Change % Change2020 2019 $ Change % Change



Controllable expenses

On-site compensation ^(1) $4,356 $4,035 $321 8.0 %$17,059$15,814$1,245 7.9 %

Repairs and maintenance 2,068 2,945 (877) (29.8)%9,499 11,358 (1,859) (16.4)%

Utilities 2,579 2,453 126 5.1 %10,096 10,336 (240) (2.3) %

Administrative and marketing 763 891 (128) (14.4)%3,265 3,594 (329) (9.2) %

Total $9,766 $10,324$(558) (5.4) %$39,919$41,102$(1,183) (2.9) %



Non-controllable expenses

Real estate taxes $4,350 $4,067 $283 7.0 %$18,379$16,805$1,574 9.4 %

Insurance 1,254 1,041 213 20.5 %4,929 3,715 1,214 32.7 %

Total 5,604 5,108 496 9.7 %23,308 20,520 2,788 13.6 %



Property operating expenses, including real estate taxes - non-same-store $2,271 $1,090 $1,181 108.3 %$6,817 $2,287 $4,530 198.1 %

Property operating expenses, including real estate taxes - other properties and $283 $2,331 $(2,048)(87.9)%$3,114 $14,406$(11,292)(78.4)%dispositions

Total property operating expenses, including real estate taxes $17,924$18,853$(929) (4.9) %$73,158$78,315$(5,157) (6.6) %

(1) On-site compensation for administration, leasing, and maintenance personnel.

Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations

Centerspace believes that FFO, which is a non-GAAP financial measurement used as a supplemental measure for equity real estate investment trusts, is helpful to investors in understanding operating performance, primarily because its calculation does not assume that the value of real estate assets diminishes predictably over time as implied by the historical cost convention of GAAP and the recording of depreciation.

Centerspace uses the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. ("Nareit"). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding:

* depreciation and amortization related to real estate; * gains and losses from the sale of certain real estate assets; and * impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.

The exclusion in Nareit's definition of FFO of impairment write-downs and gains and losses from the sale of real estate assets helps to identify the operating results of the long-term assets that form the base of the company's investments, and assists management and investors in comparing those operating results between periods.

Due to the limitations of the Nareit FFO definition, Centerspace has made certain interpretations in applying the definition. The company believes that all such interpretations not specifically provided for in the Nareit definition are consistent with the definition. Nareit's FFO White Paper - 2018 Restatement clarified that impairment write-downs of land related to a REIT's main business are excluded from FFO, and a REIT has the option to exclude impairment write-downs of assets that are incidental to the main business.

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

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

(in thousands, except per share amounts)

Three Months Ended Twelve Months Ended

12/31/20209/30/20206/30/2020 3/31/2020 12/31/201912/31/202012/31/2019

Net (loss) income available to common shareholders $(5,985)$18,021$(5,387)$(8,439)$46,953 $(1,790)$71,848

Adjustments:

Noncontrolling interests - Operating Partnership (460) 1,387 (447) (692) 4,202 (212) 6,752

Depreciation and amortization 20,282 18,995 18,156 18,160 18,972 75,593 74,271

Less depreciation - non real estate (87) (85) (88) (93) (88) (353) (322)

Less depreciation - partially owned entities (33) (31) (33) (282) (454) (379) (2,059)

Gain on sale of real estate (17) (25,676)190 - (57,850) (25,503) (97,624)

FFO applicable to common shares and Units $13,700 $12,611$12,391 $8,654 $11,735 $47,356 $52,866



Adjustments to Core FFO:

Casualty loss (recovery) 204 545 - - - 749 -

Loss on extinguishment of debt 2 4 17 - 864 23 2,360

Rebranding costs 402 - - - - 402 -

Gain on litigation settlement - - - - - - (6,586)

(Gain) loss on marketable securities - - (175) 3,553 (113) 3,378 -

(Discount) premium on redemption of preferred shares - 1 (25) (273) - (297) (113)

Core FFO applicable to common shares and Units $14,308 $13,161$12,208 $11,934 $12,486 $51,611 $48,527



FFO applicable to common shares and Units $13,700 $12,611$12,391 $8,654 $11,735 $47,356 $52,866

Dividends to preferred unitholders 160 160 160 160 160 640 537

FFO applicable to common shares and Units - diluted $13,860 $12,771$12,551 $8,814 $11,895 $47,996 $53,403



Core FFO applicable to common shares and Units $14,308 $13,161$12,208 $11,934 $12,486 $51,611 $48,527

Dividends to preferred unitholders 160 160 160 160 160 640 537

Core FFO applicable to common shares and Units - diluted$14,468 $13,321$12,368 $12,094 $12,646 $52,251 $49,064



Per Share Data

Earnings (loss) per share and unit - diluted $(0.46) $1.38 $(0.44) $(0.67) $3.89 $(0.15) $6.00

FFO per share and unit - diluted $0.97 $0.90 $0.93 $0.66 $0.90 $3.47 $4.05

Core FFO per share and unit - diluted $1.02 $0.94 $0.91 $0.90 $0.96 $3.78 $3.72



Weighted average shares and units - diluted 14,222 14,143 13,558 13,401 13,188 13,835 13,182

Reconciliation of Net Income (Loss) Available to Common Shareholders to Adjusted EBITDA

Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain or loss on sale of real estate and other investments, impairment of real estate investments, gain or loss on extinguishment of debt, gain on litigation settlement, and gain/loss from involuntary conversion. Adjusted EBITDA is a non-GAAP financial measure and should not be considered a substitute for operating results determined in accordance with GAAP. The company considers Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, financing costs, or non-operating gains and losses.

(in thousands)

Three Months Ended Twelve Months Ended

12/31/20209/30/20206/30/2020 3/31/2020 12/31/201912/31/202012/31/2019

Net income (loss) attributable to controlling interests $(4,378)$19,629$(3,803)$(7,007)$48,658 $4,441 $78,669

Adjustments:

Dividends to preferred unitholders 160 160 160 160 160 640 537

Noncontrolling interests - Operating Partnership (460) 1,387 (447) (692) 4,202 (212) 6,752

Income (loss) before noncontrolling interests - Operating Partnership(4,678) 21,176 (4,090) (7,539) 53,020 4,869 85,958

Adjustments:

Interest expense 6,888 6,756 6,926 6,764 7,112 27,334 29,461

Loss on extinguishment of debt 2 4 17 - 864 23 2,360

Depreciation/amortization related to real estate investments 20,250 18,964 18,123 17,878 18,518 75,215 72,213

Casualty loss (recovery) 204 545 - - - 749 -

Interest income (328) (256) (331) (597) (415) (1,512) (1,626)

Gain (loss) on sale of real estate and other investments (17) (25,676)190 - (57,850) (25,503) (97,624)

Gain on litigation settlement - - - - - - (6,586)

(Gain) loss on marketable securities - - (175) 3,553 (113) 3,378 (113)

Adjusted EBITDA $22,321 $21,513$20,660 $20,059 $21,136 $84,553 $84,043

CENTERSPACE

DEBT ANALYSIS

(in thousands)



Debt Maturity Schedule

Annual Expirations



Future Maturities of Debt

Secured Unsecured Unsecured Weighted Fixed Fixed Variable Total % of Debt Debt Debt Total DebtAverage Interest Debt^(1) Rate^(2)

2021 $20,270 $- $5,871 $26,141 3.6 % 5.16 %

2022 33,515 50,000 97,000 180,515 25.0 % 2.66 %

2023 43,721 - - 43,721 6.1 % 4.02 %

2024 - 70,000 - 70,000 9.7 % 3.65 %

2025 32,915 75,000 - 107,915 15.0 % 4.34 %

Thereafter168,024 125,000 - 293,024 40.6 % 3.74 %

Total debt$298,445$320,000$102,871$721,316100.0 % 3.62 %

Term loans have variable interest rates that are fixed with interest rate(1) swaps and $50.0 million of the variable interest rate, primary line of credit is fixed with an interest rate swap.

Weighted average interest rate of debt that matures during the year,(2) including the effect of interest rate swaps on the term loans and line of credit.

12/31/2020 9/30/20206/30/20203/31/202012/31/2019

Debt Balances Outstanding

Secured fixed rate $298,445 $314,511$325,230$329,988$ 331,376

Unsecured fixed rate line of credit^(1) 50,000 50,000 50,000 50,000 50,000

Unsecured variable rate line of credit 102,871 85,000 13,000 33,000 79

Unsecured term loans 145,000 145,000 145,000 145,000 145,000

Unsecured senior notes 125,000 125,000 125,000 125,000 125,000

Debt total $721,316 $719,511$658,230$682,988$ 651,455



Quarterly Weighted Average Interest Rates

Mortgage debt 3.93 %3.99% 4.01% 4.01% 4.02%

Lines of credit (rate with swap)^(1) 2.35 %3.35% 2.97% 3.18% 3.52%

Term loan (rate with swap) 4.18 %4.18% 4.12% 4.13% 4.19%

Senior notes 3.78 %3.78% 3.78% 3.78% 3.78%

Total debt 3.62 %3.68% 3.87% 3.92% 3.97%



(1) A portion of the primary line of credit is fixed through an interest rate swap.

Debt Maturity by Quarter for the Next Two Years

Year First Second Third Fourth Total Quarter Quarter Quarter Quarter

2021 $ - $ 1,997 $ 24,144 $ - $ 26,141

2022^(1) 2,508 4,866 173,141 - 180,515

$ 206,656

(1) Includes primary line of credit with a balance of $147.0 million which has a 12-month extension available, subject to customary terms.

CENTERSPACE

CAPITAL ANALYSIS

(in thousands, except per share and unit amounts)

12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019

Equity Capitalization

Common shares outstanding 13,027 12,976 12,827 12,164 12,099

Operating partnership units outstanding 977 1,018 1,022 1,044 1,058

Total common shares and units outstanding 14,004 13,994 13,849 13,208 13,157

Market price per common share (closing price at end of period) $ 70.64 $ 65.17 $ 70.49 $ 55.00 $ 72.50

Equity capitalization-common shares and units $ 989,243 $ 911,989 $ 976,216 $ 726,440 $ 953,883

Recorded book value of preferred shares $ 93,530 $ 93,530 $ 93,579 $ 96,046 $ 99,456

Total equity capitalization $ 1,082,773 $ 1,005,519 $ 1,069,795 $ 822,486 $ 1,053,339

Series D preferred units $ 16,560 $ 16,560 $ 16,560 $ 16,560 16,560

Debt capitalization

Total debt 721,317 719,511 658,230 682,988 651,455

Total capitalization $ 1,820,650 $ 1,741,590 $ 1,744,585 $ 1,522,034 $ 1,721,354

Total debt to total capitalization^(1) 39.6 % 41.3 % 37.7 % 44.9 % 37.8 %

Debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet, market value of(1) common shares and operating partnership units, and book value of Series C preferred shares and Series D preferred units outstanding at the end of the period.

Three Months Ended Twelve Months Ended

12/31/20209/30/2020 6/30/2020 3/31/2020 12/31/201912/31/2020 12/31/2019

Debt service coverage ratio^(1) 2.73 x 2.65 x2.48 x 2.42 x2.39 x2.57 x 2.18 x

Adjusted EBITDA/Interest expense plus preferred distributions 2.28 x2.21 x2.05 x1.97 x1.98 x2.13 x1.83 xand principal amortization

Net debt/Adjusted EBITDA^(2) 8.07 x8.17 x7.33 x8.18 x7.19 x8.53 x7.23 x

Net debt and preferred equity/Adjusted EBITDA^(2) 9.31 x9.45 x8.66 x9.59 x8.56 x9.83 x8.61 x



Distribution Data

Common shares and units outstanding at record date 14,004 13,994 13,849 13,208 13,157 14,004 13,157

Total common distribution declared $9,803 $9,796 $9,694 $9,245 $9,210 $38,538 $36,438

Common distribution per share and unit $0.70 $0.70 $0.70 $0.70 $0.70 $2.80 $2.80

Payout ratio (Core FFO per diluted share and unit basis)^(3) 68.6 % 74.5 % 76.9 % 77.8 % 72.9 % 74.1 % 75.3 %

(1) Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization.

Net debt is the total debt balance less cash and cash equivalents and net tax deferred exchange proceeds (included within restricted cash). For the quarterly period presented, adjusted EBITDA is annualized. Net debt and(2) adjusted EBITDA are non-GAAP measures and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.

Payout ratio (Core FFO per diluted share and unit basis) is the current quarterly or annual distribution rate per common share and unit divided by(3) quarterly or annual Core FFO per diluted share and unit. This term is a non-GAAP measure and should not be considered a substitute for operating results determined in accordance with GAAP.

CENTERSPACE

SAME-STORE FOURTH QUARTER COMPARISONS

(dollars in thousands)



Homes Revenues Expenses NOI IncludedRegions Q42020 Q42019 % ChangeQ42020 Q42019 % ChangeQ42020 Q42019 % Change

Denver, CO 664 $3,777 $3,820 (1.1)% $1,115 $1,134 (1.7)% $2,662 $2,686 (0.9)%

Minneapolis, MN 1,987 8,978 8,867 1.3 % 3,893 3,907 (0.4)% 5,085 4,960 2.5 %

North Dakota 2,422 8,011 7,724 3.7 % 3,070 2,987 2.8 % 4,941 4,737 4.3 %

Omaha, NE 1,370 3,891 3,751 3.7 % 1,648 1,721 (4.2)% 2,243 2,030 10.5 %

Rochester, MN 1,711 6,357 6,385 (0.4)% 2,771 2,571 7.8 % 3,586 3,814 (6.0)%

St. Cloud, MN 1,190 3,656 3,550 3.0 % 1,602 1,719 (6.8)% 2,054 1,831 12.2 %

Other Markets^(1)1,223 3,912 3,621 8.0 % 1,271 1,393 (8.8)% 2,641 2,228 18.5 %

Same-Store Total 10,567 $38,582$37,7182.3 % $15,370$15,432(0.4)% $23,212$22,2864.2 %

Average Monthly Average Monthly Weighted Average Occupancy ^(2) % of NOI Rental Rate^ (3) Revenue per Occupied Home^ (4) Regions Q42020 Q42019 GrowthQ42020 Q42019 % ChangeQ42020 Q42019 % Change

Denver, CO 11.5 % 94.1 % 93.2 % 0.9% $1,776$1,846(3.8)% $2,015$2,057 (2.0) %

Minneapolis, MN 21.8 % 93.9 % 92.0 % 1.9% 1,490 1,497 (0.5)% 1,604 1,616 (0.7) %

North Dakota 21.3 % 95.8 % 95.7 % 0.1% 1,061 1,040 2.0 % 1,151 1,111 3.6 %

Omaha, NE 9.7 % 93.8 % 93.5 % 0.3% 912 897 1.7 % 1,010 977 3.4 %

Rochester, MN 15.4 % 95.0 % 94.5 % 0.5% 1,242 1,251 (0.7)% 1,304 1,316 (0.9) %

St. Cloud, MN 8.9 % 94.6 % 94.0 % 0.6% 973 950 2.4 % 1,082 1,058 2.3 %

Other Markets^(1)11.4 % 98.1 % 95.7 % 2.4% 980 945 3.7 % 1,087 1,031 5.4 %

Same-Store Total 100.0% 95.0 % 94.0 % 1.0% $1,177$1,1710.5 % $1,282$1,266 1.3 %

(1) Includes apartment communities in Billings, Montana and Rapid City, South Dakota.

Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rent. Scheduled rent represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at(2) estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.

(3) Average monthly rental rate is scheduled rent divided by the total number of apartment homes.

Average monthly revenue per occupied home is defined as total rental(4) revenues divided by the weighted average occupied apartment homes for the period.

CENTERSPACE

SAME-STORE SEQUENTIAL QUARTER COMPARISONS

(dollars in thousands)



Homes Revenues Expenses NOI IncludedRegions Q42020 Q32020 % ChangeQ42020 Q32020 % ChangeQ42020 Q32020 % Change

Denver, CO 664 $3,777 $3,724 1.4 % $1,115 $1,298 (14.1)%$2,662 $2,426 9.7 %

Minneapolis, MN 1,987 8,978 8,892 1.0 % 3,893 3,859 0.9 %5,085 5,033 1.0 %

North Dakota 2,422 8,011 7,853 2.0 % 3,070 3,146 (2.4) %4,941 4,707 5.0 %

Omaha, NE 1,370 3,891 3,884 0.2 % 1,648 1,790 (7.9) %2,243 2,094 7.1 %

Rochester, MN 1,711 6,357 6,351 0.1 % 2,771 3,074 (9.9) %3,586 3,277 9.4 %

St. Cloud, MN 1,190 3,656 3,548 3.0 % 1,602 1,603 (0.1) %2,054 1,945 5.6 %

Other Markets 1,223 3,912 3,791 3.2 % 1,271 1,428 (11.0)%2,641 2,363 11.8 %

Same-Store Total10,567 $38,582$38,0431.4 % $15,370$16,198(5.1) %$23,212$21,8456.3 %

Weighted Average OccupancyAverage Monthly Average Monthly Rental Rate Revenue per Occupied Home % of NOIRegions Q42020 Q32020 GrowthQ42020 Q32020 % ChangeQ42020 Q32020 % Change

Denver, CO 11.5 % 94.1 % 92.8 % 1.4% $1,776$1,801(1.4)% $2,015$2,014-

Minneapolis, MN 21.8 % 93.9 % 93.4 % 0.5% 1,490 1,496 (0.4)% 1,604 1,596 0.5 %

North Dakota 21.3 % 95.8 % 95.5 % 0.3% 1,061 1,054 0.7 % 1,151 1,131 1.8 %

Omaha, NE 9.7 % 93.8 % 93.8 % - 912 913 (0.1)% 1,010 1,008 0.2 %

Rochester, MN 15.4 % 95.0 % 94.1 % 1.0% 1,242 1,249 (0.6)% 1,304 1,315 (0.8)%

St. Cloud, MN 8.9 % 94.6 % 94.4 % 0.2% 973 965 0.8 % 1,082 1,053 2.8 %

Other Markets 11.4 % 98.1 % 97.1 % 1.0% 980 970 1.0 % 1,087 1,064 2.2 %

Same-Store Total100.0% 95.0 % 94.4 % 0.6% $1,177$1,178(0.1)% $1,282$1,2710.9 %

CENTERSPACE

SAME-STORE YEAR-TO-DATE COMPARISONS

(dollars in thousands)



Homes Revenues Expenses NOI IncludedRegions 2020 2019 % Change2020 2019 % Change2020 2019 % Change

Denver, CO 664 $15,129 $15,154 (0.2)% $4,767 $4,748 0.4 % $10,362$10,406(0.4)%

Minneapolis, MN 1,987 36,050 35,407 1.8 % 15,148 15,103 0.3 % 20,902 20,304 2.9 %

North Dakota 2,422 31,342 30,475 2.8 % 12,861 12,874 (0.1)% 18,481 17,601 5.0 %

Omaha, NE 1,370 15,427 14,949 3.2 % 6,846 6,870 (0.3)% 8,581 8,079 6.2 %

Rochester, MN 1,711 25,617 25,346 1.1 % 11,471 9,861 16.3 % 14,146 15,485 (8.6)%

St. Cloud, MN 1,190 14,362 14,127 1.7 % 6,485 6,609 (1.9)% 7,877 7,518 4.8 %

Other Markets 1,223 14,863 14,157 5.0 % 5,649 5,557 1.7 % 9,214 8,600 7.1 %

Same-Store Total10,567 $152,790$149,6152.1 % $63,227$61,6222.6 % $89,563$87,9931.8 %

Weighted Average OccupancyAverage Monthly Average Monthly Rental Rate Revenue per Occupied Home % of NOIRegions 2020 2019 Growth 2020 2019 % Change2020 2019 % Change

Denver, CO 11.6 % 93.7% 94.1% (0.4)% $1,812$1,834(1.2)% $2,026$2,0220.2 %

Minneapolis, MN 23.3 % 93.9% 92.7% 1.2 % 1,491 1,480 0.7 % 1,611 1,601 0.6 %

North Dakota 20.6 % 95.9% 95.2% 0.7 % 1,049 1,040 0.9 % 1,125 1,101 2.1 %

Omaha, NE 9.6 % 94.2% 93.8% 0.4 % 905 889 1.8 % 996 970 2.8 %

Rochester, MN 15.8 % 95.3% 95.2% 0.1 % 1,244 1,237 0.6 % 1,309 1,296 1.0 %

St. Cloud, MN 8.8 % 94.4% 94.7% (0.3)% 959 950 0.9 % 1,065 1,044 2.0 %

Other Markets 10.3 % 96.5% 95.8% 0.7 % 961 935 2.8 % 1,050 1,007 4.3 %

Same-Store Total100.0% 94.8% 94.4% 0.4 % $1,173$1,1630.9 % $1,270$1,2501.7 %

CENTERSPACE

PORTFOLIO SUMMARY ^(1)



Three Months Ended

12/31/2020 9/30/20206/30/20203/31/202012/31/2019

Number of Apartment Homes at Period End

Same-Store 10,567 10,567 11,257 11,257 10,402

Non-Same-Store 1,343 1,343 878 878 1,551

All Communities 11,910 11,910 12,135 12,135 11,953



Average Monthly Rental Rate^(2)

Same-Store $ 1,177 $1,178 $1,142 $1,135 $ 1,085

Non-Same-Store 1,599 1,597 1,594 1,572 1,722

All Communities $ 1,225 $1,210 $1,175 $1,163 $ 1,168



Average Monthly Revenue per Occupied Apartment Home^(3)

Same-Store $ 1,282 $1,271 $1,232 $1,237 $ 1,169

Non-Same-Store 1,708 1,729 1,681 1,658 1,869

All Communities $ 1,330 $1,307 $1,264 $1,263 $ 1,260



Weighted Average Occupancy^(4)

Same-Store 95.0 % 94.4 %94.6 %95.4 %94.0 %

Non-Same-Store 92.3 % 93.9 %93.9 %93.3 %93.0 %

All Communities 94.6 % 94.3 %94.5 %95.2 %93.8 %



Operating Expenses as a % of Scheduled Rent

Same-Store 41.2 % 43.4 %41.5 %45.0 %43.5 %

Non-Same-Store 35.3 % 39.7 %36.1 %37.0 %33.8 %

All Communities 40.3 % 43.0 %41.0 %44.3 %41.6 %



Capital Expenditures

Total Capital Expenditures per Apartment Home - Same-Store$ 326 $293 $262 $151 $ 427

(1) Previously reported amounts are not revised for changes in the composition of the same-store properties pool.

Average monthly rental rate is scheduled rent divided by the total number of apartment homes. Scheduled rent represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When(2) calculating actual rents for occupied apartment homes and market rents for vacant apartment homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.

Average monthly revenue per occupied apartment home is defined as total(3) rental revenues divided by the weighted average occupied apartment homes for the period.

Weighted average occupancy is the percentage resulting from dividing actual rental revenue by scheduled rent. The company believes that weighted average occupancy is a meaningful measure of occupancy because it considers(4) the value of each vacant unit at its estimated market rate. Weighted average occupancy may not completely reflect short-term trends in physical occupancy, and calculation of weighted average occupancy may not be comparable to that disclosed by other real estate companies.

CENTERSPACE

CAPITAL EXPENDITURES

(dollars in thousands, except per home amounts)



Three Months Ended Twelve Months Ended

12/31/2020 12/31/2019 12/31/202012/31/2019

Total Same-Store Apartment Homes 10,567 10,567 10,567 10,567



Building - Exterior^(1) $ 1,510 $ 1,287 $3,106 $1,802

Building - Interior^(1) 32 191 234 340

Mechanical, Electrical, & Plumbing^(1) 436 762 1,888 1,408

Furniture & Equipment 73 146 316 365

Landscaping & Grounds 357 713 1,523 1,546

Turnover 1,033 836 3,586 2,992

Capital Expenditures - Same-Store $ 3,441 $ 3,935 $10,653 $8,453

Capital Expenditures per Apartment Home - Same-Store$ 326 $ 372 $1,008 $800



Value Add $ 2,975 $ 1,712 $10,280 $4,090

Total Capital Spend - Same-Store $ 6,416 $ 5,647 $20,933 $12,543

Total Capital Spend per Apartment Home - Same Store $ 607 $ 534 $1,981 $1,187



All Properties - Weighted Average Homes 11,910 11,909 11,570 12,862



Capital Expenditures $ 3,968 $ 4,939 $12,159 $11,128

Capital Expenditures per Apartment Home $ 333 $ 415 $1,051 $865



Value Add 3,496 2,014 13,901 5,011

Acquisition Capital 302 $ 1,814 1,567 3,713

Total Capital Spend $ 7,766 $ 8,767 $27,627 $19,852

Total Capital Spend per Apartment Home $ 652 $ 736 $2,388 $1,543



Value Add Capital Expenditures

Interior - Units

Same-Store $ 875 $ 1,072 $4,321 $2,501

Non-Same-Store 390 18 1,684 67

Total Interior Units $ 1,265 $ 1,090 $6,005 $2,568

Expected Year 1 Annual ROI 16.0 % 17.3 % 17.0 %16.7 %



Common Areas and Exteriors

Same-Store $ 2,100 $ 640 $5,959 $1,589

Non-Same-Store 131 284 1,937 854

Total Common Areas and Exteriors $ 2,231 $ 924 $7,896 $2,443

Expected Year 1 Annual ROI 9.0 % 14.6 % 11.2 %14.7 %



Total Value-Add Capital Expenditures

Same-Store $ 2,975 $ 1,712 $10,280 $4,090

Non-Same-Store 521 302 3,621 921

Total Portfolio Value-Add $ 3,496 $ 2,014 $13,901 $5,011

Expected Year 1 Annual ROI 11.5 % 16.1 % 13.7 %15.7 %

Previously disclosed amounts for capital expenditures related to(1) mechanical, electrical, and plumbing were reclassified from Building - Exterior and Building - Interior into Mechanical, Electrical, & Plumbing.

CENTERSPACE

2021 Financial Outlook

(in thousands, except per share amounts)



Centerspace is providing guidance for 2021.



12 Months Ended 2021 Full-Year Guidance Range

December 31, 2020Low High

Actuals Amount Amount

Same-store growth ^(1)

Revenue $ 165,807 (0.5) % 3.0 %



Controllable expenses $ 42,902 5.0 % 8.5 %

Non-controllable expenses $ 24,990 2.5 % 6.0 %

Total Expenses $ 67,892 4.0 % 7.5 %

Same-store NOI ^(1) $ 97,915 (3.5) % (0.5) %



Components of NOI

Same-store NOI ^(1) $ 97,915 $ 94,200 $ 97,600

Non-same-store NOI ^(1) $ 3.272 $ 7,900 $ 8,200

Other Commercial NOI $ 1,770 $ 1,700 $ 1,800

Other Sold NOI $ 1,879 - -



Total NOI $ 104,836 $ 103,800 $ 107,600



Accretion from investments and capital market activity, excluding impact from change in share $ - 1,300 990 count



Interest expense $ (27,525)(28,650) (30,000)

Preferred dividends $ (6,528) (6,430) (6,430)



Recurring income and expenses

Interest and other income $ (1,657) 2,580 2,580

General and administrative and property management$ (19,241)(23,670) (22,000)

Casualty losses $ (1,662) (1,750) (1,250)

Non-real estate depreciation and amortization $ (353) (280) (280)

Non-controlling interest $ 126 (65) (70)

Total recurring income and expenses $ (22,787)(23,185) $ (21,020)



FFO $ 47,996 $ 46,835 $ 51,140

FFO per diluted share $ 3.47 $ 3.17 $ 3.52



Non-core income and expenses

Casualty loss $ 749 $ 580 $ 420

Technology implementation costs - 1,190 990

Other miscellaneous items 3,507 - -

Total non-core income and expenses $ 4,256 $ 1,770 $ 1,410



Core FFO $ 52,252 $ 48,605 $ 52,550

Core FFO per diluted share $ 3.78 $ 3.29 $ 3.62



EPS - Diluted $ (0.15) $ (0.18) $ 0.45

Weighted average shares outstanding - diluted 13,835 14,773 14,515

(1) Amounts for the year ended December 31, 2020 reflect the 2021 same-store pool.

Additional assumptions:

* Same-store capital expenditures of $912 per home to $1,012 per home * Value-add expenditures of $15.0 million to $20.0 million * Investments of $145.0 million to $170.0 million, which includes the January 2021 acquisition of Union Pointe in Longmont, Colorado * Dispositions of $55.0 million to $75.0 million * Proceeds of $50.0 million to $70.0 million from equity issuance

Reconciliation of Net Income (Loss) Available to Common Shareholders to FFO and Core FFO

The following table presents reconciliations of Net income (loss) available to common shareholders to FFO and Core FFO, which are non-GAAP financial measures described in greater detail under "Non-GAAP Financial Measures and Reconciliations." They should not be considered as alternatives to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO and Core FFO also do not represent cash generated from operating activities in accordance with GAAP, nor are they indicative of funds available to fund all cash needs, including the ability to service indebtedness or make distributions to shareholders. The outlook and projections provided below are based on current expectations and are forward-looking.

Outlook

12 Months Ended 12 Months Ended

December 31, 2020December 31, 2021

Amount Low High

Net income (loss) available to common shareholders $(1,790) $(1,274)$8,031

Noncontrolling interests - Operating Partnership (212) (1,456) (1,456)

Depreciation and amortization 75,593 71,424 71,424

Less depreciation - non real estate (353) (280) (280)

Less depreciation - partially owned entities (379) (95) (95)

(Gain) loss on sale of real estate (25,503) (22,124) (27,124)

Dividends to preferred unitholders $640 $640 $640

FFO applicable to common shares and Units $47,996 $46,835 $51,140



Adjustments to Core FFO:

Casualty loss write off 749 580 420

Loss on extinguishment of debt 23 - -

Rebranding costs 402 - -

(Gain) loss on marketable securities 3,378 - -

(Discount) premium on redemption of preferred shares(297) - -

Technology implementation costs - 1,190 990

Core FFO applicable to common shares and Units $52,251 $48,605 $52,550



Earnings per share - diluted $(0.15) $(0.18) $0.45

FFO per share - diluted $3.47 $3.17 $3.52

Core FFO per share - diluted $3.78 $3.29 $3.62

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SOURCE Centerspace