SEGMENTS

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

SEGMENTS

SEGMENTS 

Centerspace operates in a single reportable segment which includes the ownership, management, development, redevelopment, and acquisition of apartment communities. Each of the operating properties is considered a separate operating segment because each property earns revenues, incurs expenses, and has discrete financial information. The chief operating decision-makers evaluate each property’s operating results to make decisions about resources to be allocated and to assess performance and do not group the properties based on geography, size, or type for this purpose. The apartment communities have similar long-term economic characteristics and provide similar products and services to residents. No apartment community comprises more than 10% of consolidated revenues, profits, or assets. Accordingly, the apartment communities are aggregated into a single reportable segment. “All other” includes non-multifamily components of mixed-use properties and apartment communities the Company has disposed or designated as held for sale. During the six months ended June 30, 2023, nine sold apartment communities were reclassified from the multifamily segment to all other for all periods presented.

The members of the executive management team are the chief operating decision-makers. This team measures the performance of the reportable segment based on net operating income (“NOI”), a non-GAAP 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, amortization, financing, property management overhead, casualty losses, and general and administrative expense. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance.

The following tables present NOI for the three and six months ended June 30, 2023 and 2022, respectively, along with reconciliations to net income in the Condensed Consolidated Financial Statements. Segment assets are also reconciled to total assets as reported in the Condensed Consolidated Financial Statements.

	(in thousands)
Three Months Ended June 30, 2023	Multifamily		All Other		Total
Revenue	$	63,733	$	1,043	$	64,776
Property operating expenses, including real estate taxes	24,730		316		25,046
Net operating income	$	39,003	$	727	$	39,730
Property management					(2,247)
Casualty loss					(53)
Depreciation and amortization					(24,371)
General and administrative expenses					(4,162)
Loss on sale of real estate and other investments					(67)
Loss on litigation settlement					(2,864)
Interest expense					(8,641)
Interest and other income					295
Net loss					$	(2,380)

	(in thousands)
Three Months Ended June 30, 2022	Multifamily		All Other		Total
Revenue	$	57,436	$	5,680	$	63,116
Property operating expenses, including real estate taxes	23,398		2,818		26,216
Net operating income	$	34,038	$	2,862	$	36,900
Property management					(2,721)
Casualty loss					(382)
Depreciation and amortization					(24,768)
General and administrative expenses					(5,221)
Gain on sale of real estate and other investments					27
Interest expense					(7,561)
Interest and other loss					(17)
Net loss					$	(3,743)

	(in thousands)
Six Months Ended June 30, 2023	Multifamily		All Other		Total
Revenue	$	126,230	$	6,443	$	132,673
Property operating expenses, including real estate taxes	50,633		3,336		53,969
Net operating income	$	75,597	$	3,107	$	78,704
Property management					(4,815)
Casualty loss					(305)
Depreciation and amortization					(50,364)
General and administrative expenses					(11,885)
Gain on sale of real estate and other investments					60,092
Loss on litigation settlement					(2,864)
Interest expense					(18,960)
Interest and other income					344
Net income					$	49,947

	(in thousands)
Six Months Ended June 30, 2022	Multifamily		All Other		Total
Revenue	$	112,352	$	11,078	$	123,430
Property operating expenses, including real estate taxes	46,478		5,611		52,089
Net operating income	$	65,874	$	5,467	$	71,341
Property management					(4,974)
Casualty loss					(980)
Depreciation and amortization					(55,769)
General and administrative expenses					(9,721)
Gain on sale of real estate and other investments					27
Interest expense					(15,276)
Interest and other income					1,046
Net loss					$	(14,306)

Segment Assets and Accumulated Depreciation

Segment assets are summarized as follows as of June 30, 2023, and December 31, 2022, respectively, along with reconciliations to the Condensed Consolidated Financial Statements:

	(in thousands)
As of June 30, 2023	Multifamily		All Other		Total
Segment assets
Property owned	$	2,407,300	$	26,838	$	2,434,138
Less accumulated depreciation	(534,566)		(8,698)		(543,264)
Total property owned	$	1,872,734	$	18,140	$	1,890,874
Cash and cash equivalents					9,745
Restricted cash					566
Other assets					18,992
Total Assets					$	1,920,177

	(in thousands)
As of December 31, 2022	Multifamily		All Other		Total
Segment assets
Property owned	$	2,385,351	$	148,773	$	2,534,124
Less accumulated depreciation	(487,129)		(48,272)		(535,401)
Total property owned	$	1,898,222	$	100,501	$	1,998,723
Cash and cash equivalents					10,458
Restricted cash					1,433
Other assets					22,687
Total Assets					$	2,033,301