DEBT

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

DEBT

DEBT

The following table summarizes the Company’s secured and unsecured debt at March 31, 2024 and December 31, 2023.

	(in thousands)
	March 31, 2024				December 31, 2023
	Carrying Amount		Weighted Average Interest Rate		Carrying Amount		Weighted Average Interest Rate		Weighted Average Maturity in Years at March 31, 2024
Lines of credit (1)	$	40,357	6.68	%	$	30,000	6.74	%	1.49
Unsecured senior notes (2)(5)	300,000		3.12	%	300,000		3.12	%	6.38
Unsecured debt	340,357				330,000				5.80
Mortgages payable - Fannie Mae credit facility (5)	198,850		2.78	%	198,850		2.78	%	7.31
Mortgages payable - other (3)(5)	389,874		4.05	%	391,140		4.05	%	5.55
Total debt (4)	$	929,081	3.59	%	$	919,990	3.54	%	6.01

(1)Interest rates on lines of credit are variable and exclude any unused facility fees and amounts reclassified from accumulated other comprehensive income (loss) into interest expense from terminated interest rate swaps.

(2)Included within notes payable on the Condensed Consolidated Balance Sheets.

(3)Represents apartment communities encumbered by mortgages; 14 at March 31, 2024 and December 31, 2023.

(4)Excludes deferred financing costs and premiums or discounts.

(5)Interest rate is fixed.

As of March 31, 2024, 45 apartment communities were not encumbered by mortgages and were available to provide credit support for the unsecured borrowings. The Company’s primary unsecured credit facility (“Unsecured Credit Facility” or “Facility”) is a revolving, multi-bank line of credit, with the Bank of Montreal serving as administrative agent. The line of credit has total commitments and borrowing capacity of $250.0 million, based on the value of unencumbered properties. As of March 31, 2024, there was $40.0 million outstanding on this line of credit, therefore the additional borrowing availability was $210.0 million. This unsecured credit facility matures in September 2025, with an option to extend maturity for up to two additional six-month periods and has an accordion option to increase borrowing capacity up to $400.0 million.

On May 31, 2023, the Unsecured Credit Facility was amended to replace the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”) as the benchmark alternative reference rate under the Facility. The interest rates on the line of credit are based on the consolidated leverage ratio, at the Company’s option, on either the lender’s base rate plus a margin, ranging from 25-80 basis points, or daily or term SOFR, plus a margin that ranges from 125-180 basis points with the consolidated leverage ratio described under the Third Amended and Restated Credit Agreement, as amended. Prior to the amendment, interest rates on the line of credit were based on the consolidated leverage ratio applying the same margins to LIBOR. The unsecured credit facility and unsecured senior notes are subject to customary financial covenants and limitations. The Company believes that it was in compliance with all such financial covenants and limitations as of March 31, 2024.

Centerspace also has a $6.0 million operating line of credit. As of March 31, 2024, there was $357,000 outstanding on this line of credit. As of December 31, 2023, there was no outstanding balance on this line of credit. This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances. This operating line matures on September 30, 2024, with pricing based on SOFR.

Centerspace has a private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc. (collectively, “PGIM”) under which the Company has issued $200.0 million in unsecured senior promissory notes (“unsecured senior notes”). The Company also has a separate note purchase agreement for the issuance of $125.0 million senior unsecured promissory notes, of which $25.0 million was issued under the private shelf agreement with PGIM. The following table shows the notes issued under both agreements as of March 31, 2024 and December 31, 2023.

	(in thousands)
	Amount		Maturity Date	Interest Rate
Series A	$	75,000	September 13, 2029	3.84	%
Series B	$	50,000	September 30, 2028	3.69	%
Series C	$	50,000	June 6, 2030	2.70	%
Series 2021-A	$	35,000	September 17, 2030	2.50	%
Series 2021-B	$	50,000	September 17, 2031	2.62	%
Series 2021-C	$	25,000	September 17, 2032	2.68	%
Series 2021-D	$	15,000	September 17, 2034	2.78	%

Centerspace has a $198.9 million Fannie Mae Credit Facility Agreement (the “FMCF”). The FMCF is secured by mortgages on 11 apartment communities. The notes are interest-only, with varying maturity dates of 7, 10, and 12 years, and a blended, weighted average interest rate of 2.78%. As of March 31, 2024 and December 31, 2023, the FMCF had a balance of $198.9 million. The FMCF is included within mortgages payable on the Condensed Consolidated Balance Sheets.

As of March 31, 2024, Centerspace owned 14 apartment communities that served as collateral for mortgage loans, in addition to the apartment communities secured by the FMCF. All of these mortgage loans were non-recourse to the Company other than for standard carve-out obligations. As of March 31, 2024, the Company believes that there were no material defaults or instances of material noncompliance in regard to any of these mortgage loans.

The aggregate amount of required future principal payments on lines of credit, notes payable, and mortgages payable as of March 31, 2024, was as follows:

	(in thousands)
2024 (remainder)	$	5,688
2025	76,290
2026	99,499
2027	48,666
2028	118,363
Thereafter	580,575
Total payments	$	929,081