Centerspace

Overview

Centerspace is a real estate investment trust (REIT) organized under North Dakota law and structured as an Umbrella Partnership REIT (UPREIT). It conducts business primarily through Centerspace, LP (the Operating Partnership), with Centerspace, Inc. as the sole general partner holding an 85.6% interest as of December 31, 2025.

The company focuses on ownership, management, acquisition, development, and redevelopment of apartment communities. Its strategy emphasizes operational improvements, redevelopment of existing communities, and acquisitions in large markets, including Minneapolis–St. Paul; Denver; Boulder/Fort Collins; and Salt Lake City. Centerspace targets markets with stable or growing economies, strong employment, and a high quality of life, and it prioritizes delivering a quality home experience, disciplined capital allocation, and ESG initiatives.

Portfolio

• Total apartment communities owned for investment: 61
• Total homes/units: 12,262
• Real estate investments (net of accumulated depreciation): $1.9 billion (as of 12/31/2025)
• Initial cost plus improvements (less impairment):
  • Same-store homes: 11,084 homes; $2,148.6 million
  • Non-same-store homes: 1,178 homes; $359.1 million
  • Total multifamily initial cost plus improvements less impairment: $2,507.7 million
• Gross real estate investments by state:
  • Minnesota: $1,038.9 million
  • Colorado: $940.4 million
  • North Dakota: $213.6 million
  • Utah: $145.9 million
  • Nebraska: $95.0 million
  • Montana: $47.7 million
  • South Dakota: $42.5 million
  • Total gross real estate investments: $2,524.0 million
• Encumbrances:
  • 44 unencumbered communities (provide credit support for unsecured borrowings)
  • 17 communities encumbered by mortgages
• Selected properties in the portfolio include Civic Lofts (Denver, CO), Lugano at Cherry Creek (Denver, CO), Noko Apartments (Minneapolis, MN), Oxbo Urban Rentals (St. Paul, MN), Red 20 Apartments (Minneapolis, MN), Park Place Apartments (Plymouth, MN), and River Pointe (Fridley, MN).

Residents and Occupancy

Residents are tenants who pay rent at the company’s communities. Many communities report occupancy above 90%; occupancy rates for the listed properties are provided in the portfolio table.

Financing and Capital Structure

• ATM program: equity distribution facility with a maximum aggregate offering price of $500 million; approximately $262.9 million remained available under the ATM as of 12/31/2025.
• Unsecured revolving credit facility: capacity up to $400 million (expanded in May 2025 from $250 million). As of 12/31/2025, $154.0 million was drawn with $246.0 million of additional borrowing availability. Interest rates are tied to a base rate or SOFR plus margin. Maturity is July 2028, with potential extensions of up to two six-month periods.
• Unsecured senior notes (private placement/PGIM): $300.0 million outstanding across series:
  • Series A: $75.0M at 3.84%
  • Series B: $50.0M at 3.69%
  • Series C: $50.0M at 2.70%
  • 2021-A: $35.0M at 2.50%
  • 2021-B: $50.0M at 2.62%
  • 2021-C: $25.0M at 2.68%
  • 2021-D: $15.0M at 2.78%
• Fannie Mae Credit Facility (FMCF): $198.9 million secured by mortgages on seven communities; notes are interest-only with 7-, 10-, and 12-year terms and a blended fixed rate of 2.78%. Balance was $198.9 million as of 12/31/2025.
• Mortgage debt: 17 properties encumbered by mortgages; rates range from 2.78% to 5.04% with maturities from 2026 to 2060. Additionally, 10 communities serve as collateral for mortgage loans aside from those secured by the FMCF; those loans are non-recourse with standard carve-outs.
• Leverage: total indebtedness to total gross real estate investments ratio was 41.8% as of 12/31/2025.
• Other debt facilities: a U.S. Bank operating line of credit up to $10.0 million to support treasury management; outstanding balance $0.925 million as of 12/31/2025; rate 5.91%; line terminates September 2026.
• Covenants and credit risk: debt agreements include covenants such as fixed charge coverage and debt/asset ratios; default could accelerate debt and affect liquidity.

Distributions and Tax

• The REIT targets distributions to common shareholders and Operating Partnership unitholders of approximately 65% to 90% of funds from operations (FFO). For the years ended 2025 and 2024, distributions were approximately 65% and 67% of FFO per share/unit, respectively.
• As a REIT, Centerspace is subject to REIT qualification rules and related tax considerations, including Section 1031 exchanges and tax protection agreements with property contributors.

People and Governance

• Employees: 349 total (334 full-time, 15 part-time) as of 12/31/2025
• Average tenure: 4.7 years
• Diversity and inclusion (as of 12/31/2025):
  • Race/ethnicity: 79.7% White; 7.7% Hispanic/Latino; 2.9% Black or African American; 9.7% Other
  • Gender identity: 47.0% of total staff identify as female; 57.0% of senior management and 57.1% of the Board of Trustees identify as female
• Training and community engagement:
  • Partnered with Interplay Learning for maintenance training
  • Volunteer hours in 2025: over 2,700
  • Training activity in 2025: approximately 14,800 courses and nearly 6,600 online training events
• Governance: Centerspace publishes ESG reporting and maintains programs for training and volunteerism.

Operations and Geographic Footprint

• Headquarters: Minot, North Dakota
• Additional corporate office: Minneapolis, Minnesota
• Property management: day-to-day operations are conducted primarily by Centerspace employees; some properties are managed by third-party firms under short-term contracts (typically one year or less) with compensation generally ranging from 2.5% to 5.0% of gross rent collections.

Risk and Security

Key business and operational risks discussed include strategic alternatives, property operations and occupancy, macroeconomic conditions, inflation, climate risk, insurance costs, regulatory and rent control changes, competition for properties and capital, cybersecurity, and REIT-specific tax risks. The company reported a past ransomware incident that did not have a material impact and maintains ongoing cybersecurity governance and controls.

Corporate and Securities

• Centerspace maintains a shelf registration for equity and other securities and may issue additional classes or series that could have rights senior to common shares.
• The company monitors potential impacts from changes in tax law affecting REITs and considers Section 1031 implications when handling dispositions.