Centerspace — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income per diluted share was $7.28 for the three months ended September 30, 2026, compared to $3.19 in the prior year period; for the nine months ended September 30, 2026, it was $6.46 compared to $2.12.
• FFO per diluted share was $0.83 for the three months ended September 30, 2026, down from $1.19 in the prior year; for the nine months, it was $3.10 compared to $3.60.
• Core FFO per diluted share was $1.11 for the three months ended September 30, 2026, a 6.7% decrease from $1.19 in the prior year; for the nine months, it was $3.51 compared to $3.68.
• Total revenue was $59.5 million for the three months ended September 30, 2026, a 16.6% decrease from $71.4 million in the prior year; for the nine months, revenue was $190.4 million compared to $207.0 million.
• Same-store revenues were flat year-over-year for the three and nine-month periods.
• Same-store property operating expenses increased 4.2% for the three months and 2.7% for the nine months compared to the prior year.
• Same-store Net Operating Income (NOI) decreased 2.7% for the three months and 1.7% for the nine months compared to the prior year.
• Net income was primarily driven by a gain on sale of real estate and other investments of $150.3 million for the three months ended September 30, 2026, compared to $79.5 million in the prior year.
• Interest expense decreased by $4.6 million in the three-month period compared to the prior year.
• Total liquidity at the end of the third quarter was $366.2 million, consisting of $250.0 million available under the line of credit and $116.2 million in cash and cash equivalents.
• Net debt to Adjusted EBITDA was 6.3x.

Guidance and Future Outlook:

• Centerspace will no longer provide guidance nor affirm past guidance due to the proposed merger with Independence Realty Trust, Inc. (IRT) announced on September 8, 2026.

Business Segments and Product Lines:

• The company disposed of 13 apartment communities (1,634 homes) for an aggregate sales price of $288.8 million during the third quarter.
• Total aggregate sales price on dispositions for the year reached $318.8 million.
• During the nine months ended September 30, 2026, the company disposed of 14 apartment communities.
• Same-store results cover 44 apartment communities.
• Weighted average occupancy for same-store properties was 95.0% for the three months ended September 30, 2026, compared to 95.7% in the prior year period.
• Effective new lease rate growth was (1.9)% for the three months ended September 30, 2026, compared to (3.7)% in the prior year.
• Effective renewal lease rate growth was 3.4% for the three months ended September 30, 2026, compared to 2.8% in the prior year.
• Effective blended lease rate growth was 1.7% for the three months ended September 30, 2026, compared to 0.5% in the prior year.
• Resident retention rate was 61.5% for the three months ended September 30, 2026, compared to 61.9% in the prior year.

Market and Competitive Landscape:

• The company owns 47 apartment communities consisting of 10,456 homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and Utah as of September 30, 2026.

Risks and Challenges:

• Risks include the ability to complete the proposed business combination with IRT, obtaining shareholder approvals, and satisfying closing conditions.
• Potential risks involve IRT's right to defer closing, changes in the market price of IRT common stock, adjustments to the exchange ratio, and substantial transaction costs or termination fees.
• Operational risks include restrictions on capital allocation, disruption of business relationships, employee recruitment and retention issues, and diversion of management attention.
• Risks also include the potential for adverse effects on business, financial condition, and reputation if the business combination is delayed or not completed.

Management Commentary and Tone:

• Management highlighted the full repayment of line of credit balances and a reduction in borrowing capacity by $150.0 million to $250.0 million.
• The reduction in borrowing capacity contributed to a decrease in interest expense and drove net debt to Adjusted EBITDA to 6.3x.
• Core FFO per diluted share decrease was attributed to dispositions in 2026 and 2025, partially offset by higher NOI from non-same-store communities, lower casualty loss, and lower interest expense.

Other Key Points:

• On September 8, 2026, Centerspace entered into a merger agreement with Independence Realty Trust, Inc. (IRT).
• Under the agreement, each outstanding Centerspace common share (excluding specified excluded shares) will be converted into the right to receive 3.8 shares of IRT common stock, subject to adjustments, with cash paid in lieu of fractional shares.
• A special meeting of shareholders is scheduled for November 10, 2026.
• Common share distributions were $0.77 per share and unit for the quarter, with an annualized distribution of $3.08.
• The payout ratio on a Core FFO per diluted share basis was 69.4% for the three months ended September 30, 2026.
• Merger-related costs of $5.02 million were recorded for the three months ended September 30, 2026.
• A one-time utility expense of $200,000 contributed to the increase in same-store property operating expenses for the quarter.