Centerspace(CSR) - 2023 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2023 Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Centerspace and its subsidiaries for the quarter ended March 31, 2023, including balance sheets, statements of operations, comprehensive income (loss), equity, and cash flows, along with detailed notes explaining the company's organization, accounting policies, and specific financial line items Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time, reflecting its financial position | Metric | March 31, 2023 (Unaudited) (in thousands) | December 31, 2022 (Audited) (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | ASSETS | | | | Total real estate investments | $1,901,744 | $1,998,723 | | Cash and cash equivalents | $8,939 | $10,458 | | Restricted cash | $48,903 | $1,433 | | Other assets | $19,298 | $22,687 | | TOTAL ASSETS | $1,978,884 | $2,033,301 | | LIABILITIES | | | | Accounts payable and accrued expenses | $56,639 | $58,812 | | Revolving lines of credit | $143,469 | $113,500 | | Notes payable, net | $299,412 | $399,007 | | Mortgages payable, net | $474,999 | $495,126 | | TOTAL LIABILITIES | $974,519 | $1,066,445 | | EQUITY | | | | Total shareholders' equity | $759,252 | $729,537 | | Noncontrolling interests | $228,553 | $220,759 | | TOTAL EQUITY | $987,805 | $950,296 | | TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY | $1,978,884 | $2,033,301 | - Total assets decreased by $54.4 million from December 31, 2022, to March 31, 2023, primarily driven by a reduction in real estate investments[12] - Total liabilities decreased by $91.9 million, mainly due to significant reductions in notes payable and mortgages payable[12] - Total equity increased by $37.5 million, reflecting an improvement in the company's financial position[12] Condensed Consolidated Statements of Operations This statement details the company's revenues, expenses, and net income or loss over a period, indicating its operational profitability | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | :----------- | | Revenue | $67,897 | $60,314 | +12.6% | | Total Expenses | $65,459 | $64,225 | +1.9% | | Gain (loss) on sale of real estate and other investments | $60,159 | — | N/A | | Operating income (loss) | $62,597 | $(3,911) | N/A | | Interest expense | $(10,319) | $(7,715) | +33.8% | | Interest and other income (loss) | $49 | $1,063 | -95.4% | | NET INCOME (LOSS) | $52,327 | $(10,563) | N/A | | Net income (loss) attributable to controlling interests | $43,571 | $(8,589) | N/A | | NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $41,964 | $(10,196) | N/A | | NET INCOME (LOSS) PER COMMON SHARE – BASIC | $2.79 | $(0.68) | N/A | | NET INCOME (LOSS) PER COMMON SHARE – DILUTED | $2.76 | $(0.68) | N/A | - The company reported a significant turnaround from a net loss of $10.6 million in Q1 2022 to a net income of $52.3 million in Q1 2023, primarily driven by a $60.2 million gain on the sale of real estate[15] - Revenue increased by 12.6% year-over-year, while total expenses saw a modest increase of 1.9%[15] - Diluted EPS improved substantially from $(0.68) in Q1 2022 to $2.76 in Q1 2023[15] Condensed Consolidated Statements of Comprehensive Income (Loss) This statement presents net income or loss alongside other comprehensive income items, providing a complete view of changes in equity from non-owner sources | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :-------------------------------------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net income (loss) | $52,327 | $(10,563) | | Other comprehensive income (loss): | | | | Unrealized gain (loss) from derivative instrument | — | $1,581 | | (Gain) loss on derivative instrument reclassified into earnings | $138 | $304 | | Total comprehensive income (loss) | $52,465 | $(8,678) | | Comprehensive income (loss) attributable to controlling interests | $43,892 | $(6,221) | - Total comprehensive income (loss) significantly improved from a loss of $8.7 million in Q1 2022 to an income of $52.5 million in Q1 2023, mirroring the net income trend[17] Condensed Consolidated Statements of Equity This statement tracks changes in the company's equity accounts, including net income, distributions, and share transactions, over a period | Metric | Balance at December 31, 2022 (in thousands) | Net income (loss) attributable to controlling interests and noncontrolling interests (in thousands) | Distributions - common shares and Units (in thousands) | Shares repurchased (in thousands) | Balance at March 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------------------- | :------------------------------------------------------------------------------------------------ | :--------------------------------------------------- | :-------------------------------- | :--------------------------------------- | | Total Equity | $950,296 | $52,167 | $(11,668) | $(1,022) | $987,805 | - Total equity increased from $950.3 million at December 31, 2022, to $987.8 million at March 31, 2023, primarily due to net income, partially offset by distributions and share repurchases[20] - Common shares outstanding increased slightly from 15,020 at December 31, 2022, to 15,032 at March 31, 2023, despite share repurchases, due to share-based compensation and unit conversions[20] Condensed Consolidated Statements of Cash Flows This statement categorizes cash inflows and outflows from operating, investing, and financing activities, showing liquidity and solvency | Cash Flow Activity | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net cash provided by (used by) operating activities | $21,804 | $11,598 | | Net cash provided by (used by) investing activities | $131,184 | $(12,731) | | Net cash provided by (used by) financing activities | $(107,037) | $(21,770) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $45,951 | $(22,903) | | Cash, cash equivalents, and restricted cash at end of period | $57,842 | $15,722 | - Net cash from operating activities increased by $10.2 million year-over-year, reaching $21.8 million in Q1 2023[22] - Investing activities generated $131.2 million in Q1 2023, a significant improvement from a $12.7 million outflow in Q1 2022, primarily due to proceeds from the sale of real estate[22] - Financing activities resulted in a net cash outflow of $107.0 million in Q1 2023, largely due to principal payments on notes and mortgages payable, and distributions[22] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements, clarifying accounting policies and specific line items NOTE 1 • ORGANIZATION This note describes Centerspace's business as a REIT focused on apartment communities and its operational structure - Centerspace is a North Dakota real estate investment trust (REIT) focused on owning, managing, acquiring, redeveloping, and developing apartment communities[27] - As of March 31, 2023, Centerspace owned interests in 75 apartment communities, comprising 13,497 apartment homes[27] NOTE 2 • BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES This note outlines the accounting principles used in preparing the financial statements and details key revenue recognition and expense policies - The financial statements are prepared in accordance with GAAP for interim financial information and SEC regulations, omitting certain annual disclosures[30] - Rental income constituted approximately 98.3% of total revenues for the three months ended March 31, 2023[37] Revenue Stream Disaggregation (Three Months Ended March 31) | Revenue Stream | 2023 (in thousands) | 2022 (in thousands) | | :--------------------------------- | :------------------ | :------------------ | | Fixed lease income - operating leases | $63,265 | $56,673 | | Variable lease income - operating leases | $3,500 | $2,523 | | Other property revenue | $1,132 | $1,118 | | Total revenue | $67,897 | $60,314 | - A gain of $60.2 million on the sale of real estate and other assets was recognized for the three months ended March 31, 2023, compared to no gain in the prior year[43] - The company incurred $2.2 million in cash severance and benefits, $737 thousand in accelerated share-based compensation, and $306 thousand in other transition-related expenses due to the former CEO's departure[51] NOTE 3 • EARNINGS PER SHARE This note provides the calculation and reconciliation of basic and diluted earnings per share, including factors affecting the denominator Earnings Per Share Reconciliation (Three Months Ended March 31) | Metric | 2023 (in thousands, except per share data) | 2022 (in thousands, except per share data) | | :------------------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Net income (loss) attributable to controlling interests | $43,571 | $(8,589) | | Numerator for basic earnings (loss) per share | $41,964 | $(10,196) | | Numerator for diluted earnings (loss) per share | $50,690 | $(12,193) | | Denominator for basic earnings per share weighted average shares | 15,025 | 15,097 | | Denominator for diluted earnings per share | 18,359 | 15,097 | | NET INCOME (LOSS) PER COMMON SHARE – BASIC | $2.79 | $(0.68) | | NET INCOME (LOSS) PER COMMON SHARE – DILUTED | $2.76 | $(0.68) | - Diluted EPS significantly improved to $2.76 in Q1 2023 from a loss of $0.68 in Q1 2022[58] - Performance-based RSUs of 36 thousand were excluded from diluted EPS calculation in Q1 2023 as they were anti-dilutive[54] NOTE 4 • EQUITY AND MEZZANINE EQUITY This note details changes in equity and mezzanine equity, including operating partnership units, preferred units, and share repurchase activities - Operating Partnership Units outstanding were 967 thousand at March 31, 2023, down from 971 thousand at December 31, 2022[59] - Series E preferred units outstanding decreased from 1.8 million at December 31, 2022, to 1.7 million at March 31, 2023, with 13 thousand units redeemed for 16 thousand common shares valued at $935 thousand in Q1 2023[62][63] - The company repurchased 19,464 common shares for $1.0 million at an average price of $52.51 per share during Q1 2023, with $19.9 million remaining authorized under the Share Repurchase Program[67][68] - As of March 31, 2023, $126.6 million remained available under the 2021 ATM Program for common share offerings[65] NOTE 5 • DEBT This note provides a comprehensive breakdown of the company's debt obligations, including lines of credit, notes, and mortgages, with associated interest rates and maturities Debt Summary (in thousands) | Debt Type | March 31, 2023 Carrying Amount (in thousands) | March 31, 2023 Weighted Average Interest Rate | December 31, 2022 Carrying Amount (in thousands) | December 31, 2022 Weighted Average Interest Rate | Weighted Average Maturity in Years at March 31, 2023 | | :------------------------------------ | :-------------------------------------------- | :------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :--------------------------------------------------- | | Lines of credit | $143,469 | 6.39% | $113,500 | 4.12% | 2.00 | | Term loans | — | — | $100,000 | 5.57% | — | | Unsecured senior notes | $300,000 | 3.12% | $300,000 | 3.12% | 8.01 | | Mortgages payable - Fannie Mae credit facility | $198,850 | 2.78% | $198,850 | 2.78% | 7.99 | | Mortgages payable - other | $279,340 | 3.85% | $299,427 | 3.85% | 5.09 | | Total debt | $921,659 | 3.71% | $1,011,777 | 3.62% | 6.06 | - Total debt decreased by $90.1 million from December 31, 2022, to March 31, 2023, primarily due to the full repayment of a $100.0 million term loan[72][79] - The weighted average interest rate on total debt increased slightly from 3.62% to 3.71% due to rising interest rates affecting variable rate lines of credit[72] - As of March 31, 2023, $110.5 million in additional borrowing availability remained under its $250.0 million unsecured credit facility[74] NOTE 6 • DERIVATIVE INSTRUMENTS This note explains the company's use of derivative instruments, primarily interest rate swaps, to manage exposure to interest rate fluctuations - The company uses interest rate derivatives to manage exposure to interest rate fluctuations, primarily through interest rate swap contracts to fix variable interest rate debt[83] - In February 2022, the company terminated its $75.0 million interest rate swap and $70.0 million forward swap, incurring a $3.2 million payment[85] - As of March 31, 2023, and December 31, 2022, the company had no remaining interest rate swaps[85] NOTE 7 • FAIR VALUE MEASUREMENTS This note details the fair value measurements of financial instruments, including notes receivable and investments, using various valuation techniques and inputs Fair Value Measurements on a Recurring Basis (Notes Receivable) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------- | :---------------------------- | :---------------------------- | | Notes receivable | $5,661 | $5,871 | - Notes receivable are valued using an income approach with Level 3 inputs, including market transactions, comparable interest rates (3.75% to 5.00%), and instrument-specific credit risk (0.5% to 1.0%)[91] - Investments in real estate technology venture funds, measured at NAV, totaled $1.5 million at March 31, 2023, with unfunded commitments of $1.4 million[92][114] NOTE 8 • ACQUISITIONS AND DISPOSITIONS This note summarizes the company's real estate acquisition and disposition activities, including sales proceeds and recognized gains or losses - Centerspace did not acquire new real estate during the three months ended March 31, 2023[96] - During Q1 2023, Centerspace disposed of nine apartment communities across four transactions for an aggregate sales price of $144.3 million, realizing a gain of $60.2 million[100][102] Dispositions (Three Months Ended March 31, 2023) | Dispositions | Sale Price (in thousands) | Book Value and Sales Cost (in thousands) | Gain/(Loss) (in thousands) | | :-------------------------------------- | :------------------------ | :--------------------------------------- | :------------------------- | | 115 homes - Boulder Court - Eagan, MN | $14,605 | $4,970 | $9,635 | | 498 homes - 2 Nebraska apartment communities | $48,500 | $14,975 | $33,525 | | 892 homes - 5 Minnesota apartment communities | $74,500 | $55,053 | $19,447 | | 62 homes - Portage - Minneapolis, MN | $6,650 | $9,098 | $(2,448) | | Total Dispositions | $144,255 | $84,096 | $60,159 | NOTE 9 • SEGMENTS This note identifies the company's reportable operating segments and provides financial information, including Net Operating Income, for each segment - Centerspace operates in a single reportable segment: ownership, management, development, redevelopment, and acquisition of apartment communities[103] - Net Operating Income (NOI) for the multifamily segment increased to $36.6 million in Q1 2023 from $31.8 million in Q1 2022[106][108] Net Operating Income (NOI) Reconciliation (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :----------------------------------- | :------------------ | :------------------ | | Total Revenue | $67,897 | $60,314 | | Property operating expenses, including real estate taxes | $28,923 | $25,873 | | Net operating income | $38,974 | $34,441 | | Net income (loss) | $52,327 | $(10,563) | NOTE 10 • COMMITMENTS AND CONTINGENCIES This note discloses the company's various commitments and potential liabilities, including legal proceedings and unfunded investment commitments - Centerspace is involved in a lawsuit regarding water damage from a retaining wall, with an unpredictable outcome and potential settlement[110] - Thirty-two properties (6,115 apartment homes) are subject to restrictions on taxable dispositions, which the company manages through tax-deferred transactions (Section 1031) to avoid indemnification payments[112][113] - Unfunded commitments in real estate technology venture funds totaled $1.4 million as of March 31, 2023[114] NOTE 11 • SHARE-BASED COMPENSATION This note details the nature and amount of share-based compensation expense, including information on RSU and stock option awards - Share-based compensation expense was $1.5 million for Q1 2023, up from $719 thousand in Q1 2022[117] - The vesting of unvested time-based RSUs and stock options for the former CEO, Mark Decker, was accelerated on March 31, 2023, resulting in an additional $737 thousand in share-based compensation expense[118] - 2023 LTIP awards included 14,256 time-based RSUs, 20,497 performance RSUs (TSR-based), and 45,955 stock options, with specific vesting schedules and valuation assumptions[116] NOTE 12 • SUBSEQUENT EVENTS This note reports significant events that occurred after the balance sheet date but before the financial statements were issued - Through May 1, 2023, Centerspace repurchased 104,503 common shares for $5.7 million at an average price of $54.51 per share[120] - On April 26, 2023, the company closed on a $90.0 million secured note payable with a 5.04% interest rate and a 12-year term[121] - Subsequent to March 31, 2023, $47.8 million of net tax-deferred exchange proceeds were released from restricted cash[122] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an executive summary, detailed analysis of the company's financial performance for the three months ended March 31, 2023, compared to 2022, including GAAP and non-GAAP measures like NOI, FFO, and Core FFO. It also discusses liquidity, capital resources, debt, equity, and potential risks such as inflation and supply chain issues - Centerspace is a REIT focused on owning, managing, acquiring, redeveloping, and developing apartment communities, with 75 communities and 13,497 apartment homes as of March 31, 2023[128] - The company sold nine non-core apartment communities for $144.3 million, realizing a $60.2 million gain, and used proceeds to pay down a $100.0 million term loan[132] Key Financial Performance Highlights (Three Months Ended March 31) | Metric | 2023 | 2022 | Change (YoY) | | :------------------------------------------------ | :--------- | :--------- | :----------- | | Revenue | $67.9 million | $60.3 million | +12.6% | | Total Expenses | $65.5 million | $64.2 million | +1.9% | | Net income (loss) per diluted share | $2.76 | $(0.68) | N/A | | Core FFO applicable to common shares and Units | $19.5 million | $17.9 million | +8.9% | | Same-store revenue growth | 10.5% | N/A | N/A | | Same-store NOI growth | 11.0% | N/A | N/A | | Weighted Average Occupancy (Same-store) | 94.8% | 94.1% | +0.7 pp | | General and administrative expenses | $7.7 million | $4.5 million | +71.6% | | Interest expense | $10.3 million | $7.7 million | +33.8% | Executive Summary This summary provides a high-level overview of Centerspace's business model, strategic focus, and key financial highlights for the period - Centerspace is a REIT focused on apartment communities, aiming to maximize resident satisfaction and retention through high-quality assets and resident-centered operations[128][129] - Property owned at historical cost was $2.4 billion at March 31, 2023, down from $2.5 billion at December 31, 2022[128] Overview of the Three Months Ended March 31, 2023 This section highlights the significant operational and financial achievements and challenges during the first quarter of 2023 - Sold nine non-core apartment communities for $144.3 million, realizing a $60.2 million gain, and used proceeds to pay down a $100.0 million term loan[132] - Revenue increased by 12.6% to $67.9 million, driven by 10.5% growth from same-store communities[132] - Net income per diluted share was $2.76, a significant improvement from a net loss of $0.68 in the prior year[132] - Core FFO increased by $1.6 million to $19.5 million, primarily due to increased NOI, offset by higher interest expense and lower other income[133] Results of Operations This section provides a detailed analysis of the company's revenues, expenses, and profitability metrics, including same-store performance and non-GAAP measures - Same-store revenue increased by 10.5% ($5.6 million) due to 9.6% growth in average monthly revenue per occupied home and a 0.7% increase in weighted average occupancy to 94.8%[142] - Same-store Net Operating Income (NOI) increased by 11.0% ($3.4 million) to $34.3 million[142] - General and administrative expenses surged by 71.6% ($3.2 million) to $7.7 million, mainly due to executive severance and transition costs related to the CEO departure[148] - Interest expense rose by 33.8% ($2.6 million) to $10.3 million, attributed to larger debt balances from 2022 acquisitions and rising interest rates[150] Funds from Operations (FFO) and Core FFO (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :----------------------------------------- | :------------------ | :------------------ | | FFO applicable to common shares and Units | $16,254 | $18,526 | | Core FFO applicable to common shares and Units | $19,542 | $17,922 | | FFO per share and Unit - diluted | $0.89 | $1.01 | | Core FFO per share and Unit - diluted | $1.07 | $0.98 | - FFO decreased by 12.3% to $16.3 million, impacted by severance costs and increased interest expense, while Core FFO increased by 8.9% to $19.5 million[159][160] Acquisitions and Dispositions This section summarizes the company's activities related to acquiring and selling real estate properties during the reporting period - No acquisitions were made during Q1 2023[162] - Nine apartment communities were disposed of in Q1 2023 for an aggregate sales price of $144.3 million[162] Distributions Declared This section outlines the common and preferred share distributions declared by the company for the reported quarter - Distributions of $0.73 per common share and Unit were declared for Q1 2023 and Q1 2022[163] - Preferred share distributions were $0.4140625 per Series C preferred share and $0.96875 per Series E preferred unit for both periods[163] Liquidity and Capital Resources This section assesses the company's ability to meet its short-term and long-term financial obligations, detailing sources and uses of capital - Total liquidity as of March 31, 2023, was approximately $121.4 million, including $112.5 million available on lines of credit and $8.9 million in cash and cash equivalents[168] - The company's primary liquidity sources include cash from operations, unsecured lines of credit, property dispositions, and offerings of preferred/common shares and long-term debt[165] - Key liquidity demands include operating expenses, debt service, capital improvements, distributions, and acquisitions[166] - During Q1 2023, capital was generated from $141.6 million in net proceeds from property sales and $30.0 million from lines of credit[186] - Capital was used for $100.0 million repayment on a term loan, $20.7 million in mortgage principal payments, $14.9 million in distributions, $1.0 million in share repurchases, and $11.2 million for capital improvements[186] Inflation and Supply Chain This section discusses the potential impacts of macroeconomic factors like inflation and supply chain disruptions on the company's operations and financial performance - Short-term apartment leases (one year or less) allow for rent increases in an inflationary environment, subject to market conditions[181] - Inflation and supply chain pressures are expected to increase operating expenses, particularly energy, salary, and construction material costs, potentially impacting returns on value-add projects[182] - Prolonged market disruption or declining credit conditions could negatively affect access to capital and refinancing efforts, while rising interest rates could increase borrowing costs[183] Off-Balance Sheet Arrangements This section discloses any significant transactions, agreements, or other contractual arrangements not recorded on the balance sheet - As of March 31, 2023, Centerspace had no significant off-balance sheet arrangements[184] Critical Accounting Policies This section describes the accounting policies that require management's most difficult, subjective, or complex judgments and estimates - Management's estimates and assumptions in financial statements affect reported asset/liability amounts and revenue/expense disclosures[185] - No significant changes to critical accounting policies occurred during the three months ended March 31, 2023[185] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section addresses the company's exposure to market risk, primarily from fluctuations in interest rates on its debt obligations. Centerspace uses derivative instruments to manage interest rate exposure but not for speculative purposes - Centerspace's market risk primarily stems from fluctuations in interest rates (LIBOR and SOFR) affecting current and future fixed and variable rate debt[188] - The company uses derivative instruments to stabilize interest expense and manage interest rate exposure, but not for trading or speculative purposes[188] Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures, concluding they were effective as of March 31, 2023. No material changes to internal controls over financial reporting were identified during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2023, ensuring timely and accurate reporting[191] - No material changes to internal controls over financial reporting occurred during the quarter ended March 31, 2023[192] PART II. OTHER INFORMATION This section provides additional disclosures on legal proceedings, risk factors, equity sales, and other relevant information not covered in the financial statements Item 1. Legal Proceedings Centerspace is involved in routine litigation incidental to its business and is currently a defendant in a lawsuit concerning water damage from a retaining wall. The company does not anticipate a material adverse effect on its financial statements from these proceedings - The company is a defendant in a lawsuit regarding water damage from a retaining wall, with an uncertain outcome and potential settlement[110] - No material pending legal proceedings, other than ordinary routine litigation, are known to the company[195] Item 1A. Risk Factors The company highlights a new risk factor related to potential losses from cash and cash equivalents held in deposit accounts exceeding FDIC insurance limits, particularly in light of recent financial institution failures. No other material changes to previously disclosed risk factors were noted - A new risk factor identifies potential loss or delayed access to funds exceeding FDIC insurance limits if financial institutions holding cash and cash equivalents fail[196][197] - The company has not experienced losses from cash held in bank accounts and has no exposure to recently failed financial institutions like SVB or Signature Bank[197] - No other material changes to the risk factors discussed in the Annual Report on Form 10-K for 2022 were reported[198] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the issuance of unregistered common shares to limited partners of the Operating Partnership and the company's share repurchase activities under its authorized program - On January 31, 2023, 3,526 unregistered Common Shares were issued to limited partners of the Operating Partnership in exchange for their Units[199] Issuer Purchases of Equity Securities (Q1 2023) | Period | Total Number of Shares and Units Purchased | Average Price Paid per Share and Unit | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Plans or Programs | | :-------------------- | :--------------------------------------- | :------------------------------------ | :--------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------- | | January 1 - 31, 2023 | — | — | — | $20.9 million | | February 1 - 28, 2023 | — | — | — | $20.9 million | | March 1 - 31, 2023 | 19,464 | $52.51 | 19,464 | $19.9 million | | Total | 19,464 | $52.51 | 19,464 | | - As of March 31, 2023, $19.9 million remained authorized for purchase under the $50.0 million share repurchase program approved on March 10, 2022[201] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[202] Item 4. Mine Safety Disclosures This item is not applicable to Centerspace - Mine Safety Disclosures are not applicable to the registrant[202] Item 5. Other Information No other information was reported under this item - No other information was reported[202] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q report, including organizational documents, employment agreements, severance agreements, and various certifications and XBRL documents - Exhibits include Articles of Amendment, Trustee's Regulations, Articles Supplementary, Employment Agreement with Anne Olson, Change in Control Severance Agreement, and Separation Agreement with Mark Decker, Jr[205] - Certifications under Sections 302 and 906 by the CEO and CFO are filed, along with various XBRL documents for financial statements[205] Signatures The report is duly signed on behalf of Centerspace by Anne Olson, President and Chief Executive Officer, and Bhairav Patel, Executive Vice President and Chief Financial Officer, as of May 1, 2023 - The report was signed by Anne Olson, President and CEO, and Bhairav Patel, Executive Vice President and CFO, on May 1, 2023[207]