SEGMENTS

3 Months Ended

Mar. 31, 2024

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 three months ended March 31, 2024, two 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 excludes gain (loss) on the sale of real estate and other assets, impairment, 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 months ended March 31, 2024 and 2023, respectively, along with reconciliations to net income (loss) 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 March 31, 2024	Multifamily		All Other		Total
Revenue	$	63,339	$	1,167	$	64,506
Property operating expenses, including real estate taxes	24,561		508		25,069
Net operating income	$	38,778	$	659	$	39,437
Property management expense					(2,330)
Casualty loss					(820)
Depreciation and amortization					(27,012)
General and administrative expenses					(4,623)
Loss on sale of real estate and other investments					(577)
Interest expense					(9,207)
Interest and other income					340
Net loss					$	(4,792)

	(in thousands)
Three Months Ended March 31, 2023	Multifamily		All Other		Total
Revenue	$	59,439	$	8,458	$	67,897
Property operating expenses, including real estate taxes	24,526		4,397		28,923
Net operating income	$	34,913	$	4,061	$	38,974
Property management expense					(2,568)
Casualty loss					(252)
Depreciation and amortization					(25,993)
General and administrative expenses					(7,723)
Gain on sale of real estate and other investments					60,159
Interest expense					(10,319)
Interest and other income					49
Net income					$	52,327

Segment Assets and Accumulated Depreciation

Segment assets are summarized as follows as of March 31, 2024, and December 31, 2023, respectively, along with reconciliations to the Condensed Consolidated Financial Statements:

	(in thousands)
As of March 31, 2024	Multifamily		All Other		Total
Segment assets
Property owned	$	2,396,195	$	17,293	$	2,413,488
Less accumulated depreciation	(549,160)		(4,071)		(553,231)
Total real estate investments	$	1,847,035	$	13,222	$	1,860,257
Cash and cash equivalents					12,682
Restricted cash					1,066
Other assets					29,468
Total Assets					$	1,903,473

	(in thousands)
As of December 31, 2023	Multifamily		All Other		Total
Segment assets
Property owned	$	2,381,461	$	38,685	$	2,420,146
Less accumulated depreciation	(524,364)		(6,339)		(530,703)
Total real estate investments	$	1,857,097	$	32,346	$	1,889,443
Cash and cash equivalents					8,630
Restricted cash					639
Other assets					27,649
Total Assets					$	1,926,361