Sterling Real Estate Trust 10-Q9 Nov 222022 Q3 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Nov. 07, 2022
Document And Entity Information [Abstract]
Entity Registrant Name	Sterling Real Estate Trust
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	000-54295
Entity Incorporation, State or Country Code	ND
Entity Tax Identification Number	90-0115411
Entity Address, Address Line One	4340 18th Ave S., Suite 200
Entity Address, City or Town	Fargo
Entity Address, State or Province	ND
Entity Address, Postal Zip Code	58103
City Area Code	701
Local Phone Number	353-2720
Title of 12(b) Security	Common Shares, par value $0.01 per share
No Trading Symbol Flag	true
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,811,038
Entity Central Index Key	0001412502
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
ASSETS
Land and land improvements	$ 125,408	$ 125,338
Building and improvements	789,974	763,003
Construction in progress	6,277	8,361
Real estate investments	921,659	896,702
Less accumulated depreciation	(191,016)	(179,155)
Real estate investments, net	730,643	717,547
Cash and cash equivalents	20,464	51,507
Restricted deposits	9,267	9,149
Investment in securities	42,062
Investment in unconsolidated affiliates	26,176	18,658
Notes receivable	7,749	7,457
Lease intangible assets, less accumulated amortization	5,556	6,246
Other assets, net	25,868	10,302
Total Assets	867,785	820,866
LIABILITIES
Mortgage notes payable, net	511,990	493,142
Dividends payable	8,451	7,567
Tenant security deposits payable	6,305	5,225
Lease intangible liabilities, less accumulated amortization	684	811
Accrued expenses and other liabilities	14,778	18,604
Total Liabilities	542,208	525,349
COMMITMENTS and CONTINGENCIES - Note 13
SHAREHOLDERS' EQUITY
Beneficial interest	122,821	116,856
Operating partnership	185,758	176,954
Partially owned properties	2,642	2,657
Accumulated other comprehensive income (loss)	14,356	(950)
Total Shareholders' Equity	325,577	295,517
Total liabilities and shareholders' equity	$ 867,785	$ 820,866

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income from rental operations
Real estate rental income	$ 34,531	$ 33,053	$ 101,264	$ 96,736
Expenses from rental operations
Operating expenses	14,363	14,184	42,209	37,956
Real estate taxes	3,565	3,489	10,700	10,123
Depreciation and amortization	6,120	5,551	17,865	16,634
Interest	5,081	4,671	14,882	13,261
Total expenses from rental operations	29,129	27,895	85,656	77,974
Administration of REIT
Administration of REIT	1,471	1,007	4,087	3,267
Total expenses	30,600	28,902	89,743	81,241
Income from operations	3,931	4,151	11,521	15,495
Other income
Equity in losses of unconsolidated affiliates	(499)	(67)	(1,923)	(183)
Other income	271	1,085	714	1,574
Gain on sale or conversion of real estate investments	6,557		9,897	1,710
Gain on involuntary conversion	56	549	603	1,236
Total other income	6,385	1,567	9,291	4,337
Net income	10,316	5,718	20,812	19,832
Net income attributable to noncontrolling interest in operating partnership	6,601	3,753	13,277	12,861
Net income attributable to noncontrolling interest in partially owned properties	(53)	(139)	(15)	(148)
Net income attributable to Sterling Real Estate Trust	$ 3,768	$ 2,104	$ 7,550	$ 7,119
Net income attributable to Sterling Real Estate Trust per common share, basic	$ 0.35	$ 0.21	$ 0.71	$ 0.71
Net income attributable to Sterling Real Estate Trust per common share, diluted	$ 0.35	$ 0.21	$ 0.71	$ 0.71
Comprehensive income:
Net income	$ 10,316	$ 5,718	$ 20,812	$ 19,832
Other comprehensive gain (loss) - change in fair value of interest rate swaps	4,967	(66)	15,306	1,473
Comprehensive income	15,283	5,652	36,118	21,305
Comprehensive income attributable to noncontrolling interest	9,707	3,571	23,021	13,661
Comprehensive income attributable to Sterling Real Estate Trust	$ 5,576	$ 2,081	$ 13,097	$ 7,644
Weighted average Common Shares outstanding, basic	10,685,000	10,215,000	10,572,000	10,095,000
Weighted average Common Shares outstanding, diluted	10,685,000	10,215,000	10,572,000	10,095,000

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Shares	Paid-in Capital	Accumulated Distributions in Excess of Earnings	Total Beneficial Interest	Noncontrolling Interest in Operating Partnership	Noncontrolling Interest in Partially Owned Properties	Accumulated Other Comprehensive Income (Loss)	Total
Beginning Balance at Dec. 31, 2020		$ 139,105	$ (29,739)	$ 109,366	$ 181,621	$ 2,346	$ (1,805)	$ 291,528
Beginning Balance (in shares) at Dec. 31, 2020	9,855
Shares/units redeemed		(777)		(777)	(628)			(1,405)
Shares/units redeemed (in shares)	(41)
Dividends and distributions declared			(2,642)	(2,642)	(4,835)			(7,477)
Dividends reinvested - stock dividend		1,686		1,686				1,686
Dividends reinvested - stock dividend (in shares)	89
Issuance of shares under optional purchase plan		1,307		1,307				1,307
Issuance of shares under optional purchase plan (in shares)	65
Change in fair value of interest rate swaps							2,384	2,384
Net income (loss)			2,052	2,052	3,753	31		5,836
Ending balance at Mar. 31, 2021		141,321	(30,329)	110,992	179,911	2,377	579	293,859
Ending balance (in shares) at Mar. 31, 2021	9,968
Beginning Balance at Dec. 31, 2020		139,105	(29,739)	109,366	181,621	2,346	(1,805)	291,528
Beginning Balance (in shares) at Dec. 31, 2020	9,855
Change in fair value of interest rate swaps								1,473
Net income (loss)								19,832
Ending balance at Sep. 30, 2021		146,109	(30,641)	115,468	179,582	2,198	(332)	296,916
Ending balance (in shares) at Sep. 30, 2021	10,215
Beginning Balance at Mar. 31, 2021		141,321	(30,329)	110,992	179,911	2,377	579	293,859
Beginning Balance (in shares) at Mar. 31, 2021	9,968
Contribution of assets in exchange for the issuance of noncontrolling interest shares					890			890
Shares/units redeemed		(292)		(292)	(1,853)			(2,145)
Shares/units redeemed (in shares)	(15)
Dividends and distributions declared			(2,672)	(2,672)	(4,821)			(7,493)
Dividends reinvested - stock dividend		1,679		1,679				1,679
Dividends reinvested - stock dividend (in shares)	88
Issuance of shares under optional purchase plan		820		820				820
Issuance of shares under optional purchase plan (in shares)	41
Change in fair value of interest rate swaps							(845)	(845)
Net income (loss)			2,963	2,963	5,355	(40)		8,278
Ending balance at Jun. 30, 2021		143,528	(30,038)	113,490	179,482	2,337	(266)	295,043
Ending balance (in shares) at Jun. 30, 2021	10,082
Contribution of assets in exchange for the issuance of noncontrolling interest shares					1,993			1,993
Shares issued under trustee compensation plan		57		57				57
Shares issued under trustee compensation plan (in shares)	3
Shares/units redeemed		(105)		(105)	(810)			(915)
Shares/units redeemed (in shares)	(6)
Dividends and distributions declared			(2,707)	(2,707)	(4,836)			(7,543)
Dividends reinvested - stock dividend		1,743		1,743				1,743
Dividends reinvested - stock dividend (in shares)	92
Issuance of shares under optional purchase plan		886		886				886
Issuance of shares under optional purchase plan (in shares)	44
Change in fair value of interest rate swaps							(66)	(66)
Net income (loss)			2,104	2,104	3,753	(139)		5,718
Ending balance at Sep. 30, 2021		146,109	(30,641)	115,468	179,582	2,198	(332)	296,916
Ending balance (in shares) at Sep. 30, 2021	10,215
Beginning Balance at Dec. 31, 2021		148,562	(31,706)	116,856	176,954	2,657	(950)	295,517
Beginning Balance (in shares) at Dec. 31, 2021	10,342,000
Contribution of assets in exchange for the issuance of noncontrolling interest shares					10,180			10,180
Shares/units redeemed		(401)		(401)	(335)			(736)
Shares/units redeemed (in shares)	(18,000)
Dividends and distributions declared			(3,007)	(3,007)	(5,359)			(8,366)
Dividends reinvested - stock dividend		1,716		1,716				1,716
Dividends reinvested - stock dividend (in shares)	79,000
Issuance of shares under optional purchase plan		1,313		1,313				1,313
Issuance of shares under optional purchase plan (in shares)	57,000
Change in fair value of interest rate swaps							6,524	6,524
Net income (loss)			1,214	1,214	2,145	30		3,389
Ending balance at Mar. 31, 2022		151,190	(33,499)	117,691	183,585	2,687	5,574	309,537
Ending balance (in shares) at Mar. 31, 2022	10,460,000
Beginning Balance at Dec. 31, 2021		148,562	(31,706)	116,856	176,954	2,657	(950)	295,517
Beginning Balance (in shares) at Dec. 31, 2021	10,342,000
Change in fair value of interest rate swaps								15,306
Net income (loss)								20,812
Ending balance at Sep. 30, 2022		156,091	(33,270)	122,821	185,758	2,642	14,356	325,577
Ending balance (in shares) at Sep. 30, 2022	10,680,000
Beginning Balance at Mar. 31, 2022		151,190	(33,499)	117,691	183,585	2,687	5,574	309,537
Beginning Balance (in shares) at Mar. 31, 2022	10,460,000
Shares/units redeemed		(386)		(386)	(138)			(524)
Shares/units redeemed (in shares)	(18,000)
Dividends and distributions declared			(3,037)	(3,037)	(5,357)			(8,394)
Dividends reinvested - stock dividend		1,877		1,877				1,877
Dividends reinvested - stock dividend (in shares)	86,000
Issuance of shares under optional purchase plan		806		806				806
Issuance of shares under optional purchase plan (in shares)	35,000
Change in fair value of interest rate swaps							3,815	3,815
Net income (loss)			2,568	2,568	4,531	8		7,107
Ending balance at Jun. 30, 2022		153,487	(33,968)	119,519	182,621	2,695	9,389	314,224
Ending balance (in shares) at Jun. 30, 2022	10,563,000
Contribution of assets in exchange for the issuance of noncontrolling interest shares					2,210			2,210
Shares issued under trustee compensation plan		65		65				65
Shares issued under trustee compensation plan (in shares)	3,000
Shares/units redeemed		(310)		(310)	(293)			(603)
Shares/units redeemed (in shares)	(14,000)
Dividends and distributions declared			(3,070)	(3,070)	(5,381)			(8,451)
Dividends reinvested - stock dividend		1,910		1,910				1,910
Dividends reinvested - stock dividend (in shares)	87,000
Issuance of shares under optional purchase plan		939		939				939
Issuance of shares under optional purchase plan (in shares)	41,000
Change in fair value of interest rate swaps							4,967	4,967
Net income (loss)			3,768	3,768	6,601	(53)		10,316
Ending balance at Sep. 30, 2022		$ 156,091	$ (33,270)	$ 122,821	$ 185,758	$ 2,642	$ 14,356	$ 325,577
Ending balance (in shares) at Sep. 30, 2022	10,680,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
OPERATING ACTIVITIES
Net income	$ 20,812	$ 19,832
Adjustments to reconcile net income to net cash provided by operating activities
Gain on sale of real estate investments	(9,897)	(1,710)
Gain on involuntary conversion	(603)	(1,236)
Change in fair value of securities	(62)
Equity in loss of unconsolidated affiliates	1,923	183
Distributions of earnings of unconsolidated affiliates	219	174
Allowance for uncollectible accounts receivable	(164)	502
Depreciation	16,445	15,665
Amortization	1,420	971
Amortization of debt issuance costs	506	402
Effects on operating cash flows due to changes in
Other assets	(1,426)	(1,160)
Tenant security deposits payable	1,080	298
Accrued expenses and other liabilities	(1,496)	(1,081)
NET CASH PROVIDED BY OPERATING ACTIVITIES	28,757	32,840
INVESTING ACTIVITIES
Purchase of securities	(42,000)
Purchase of real estate investment properties	(26,365)	(35,893)
Capital expenditures and tenant improvements	(8,251)	(13,629)
Proceeds from sale of real estate investments and non-real estate investments	22,441	5,590
Proceeds from involuntary conversion	1,049	4,095
Investment in unconsolidated affiliates	(10,068)	(5,845)
Distributions in excess of earnings received from unconsolidated affiliates	408
Notes receivable issued net of payments received	(292)	(3,430)
NET CASH USED IN INVESTING ACTIVITIES	(63,078)	(49,112)
FINANCING ACTIVITIES
Payments for financing, debt issuance	(305)	(700)
Payments on investment certificates and subordinated debt		(25)
Proceeds from issuance of mortgage notes payable and subordinated debt	37,569	71,530
Principal payments on mortgage notes payable	(16,239)	(30,360)
Proceeds from issuance of shares under optional purchase plan	3,058	3,013
Shares/units redeemed	(1,863)	(4,465)
Dividends/distributions paid	(18,824)	(17,309)
NET CASH PROVIDED BY FINANCING ACTIVITIES	3,396	21,684
NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS	(30,925)	5,412
CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS AT BEGINNING OF PERIOD	60,656	27,635
CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS AT END OF PERIOD	$ 29,731	$ 33,047

CONSOLIDATED STATEMENTS OF CA_2

CONSOLIDATED STATEMENTS OF CASH FLOWS - Supplemental Disclosures - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS AT END OF PERIOD
Cash and cash equivalents	$ 20,464	$ 22,168
Restricted deposits	9,267	10,879
TOTAL CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS, END OF PERIOD	29,731	33,047
SCHEDULE OF CASH FLOW INFORMATION
Cash paid during the period for interest, net of capitalized interest	14,412	12,812
SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Dividends reinvested	5,503	5,108
Dividends declared and not paid	3,070	2,707
UPREIT distributions declared and not paid	5,381	4,836
Shares issued pursuant to trustee compensation plan	65	57
Acquisition of assets in exchange for the issuance of noncontrolling interest units in UPREIT	12,390	2,883
Increase in land improvements due to increase in special assessments payable	217	204
Unrealized gain on interest rate swaps	15,306	1,473
Acquisition of assets through assumption of debt and liabilities	38,755	569
Capitalized interest and real estate taxes related to construction in progress	$ 68	$ 200

ORGANIZATION

ORGANIZATION	9 Months Ended
ORGANIZATION	Sep. 30, 2022
ORGANIZATION
ORGANIZATION	Note 1 - Organization Sterling Real Estate Trust d/b/a Sterling Multifamily Trust (“Sterling”, “the Trust” or “the Company”) is a registered, but unincorporated business trust organized in North Dakota in December 2002. Sterling has elected to be taxed as a Real Estate Investment Trust (“REIT”) under Sections 856-860 of the Internal Revenue Code. Sterling previously established an Operating Partnership (“Sterling Properties, LLLP” or the “Operating Partnership”) and transferred all of its assets and liabilities to the operating partnership in exchange for general partnership units. As the general partner of Sterling Properties, LLLP, Sterling has management responsibility for all activities of the Operating Partnership. As of September 30, 2022 and December 31, 2021, Sterling owned approximately 36.33% and 36.22%, respectively, of the Operating Partnership.

PRINCIPAL ACTIVITY AND SIGNIFIC

PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES	Sep. 30, 2022
PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES
PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 – PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2021, which have previously been filed with the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted from this report on Form 10-Q pursuant to the rules and regulations of the SEC. The results for the interim periods shown in this report are not necessarily indicative of future financial results. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly our consolidated financial statements as of and for the three and nine months ended September 30, 2022. These adjustments are of a normal recurring nature. Principles of Consolidation The consolidated financial statements include the accounts of , Properties, LLLP, and wholly-owned limited liability companies. All significant intercompany transactions and balances have been eliminated in consolidation. As of September 30, 2022 the Trust owned approximately 36.33% of the partnership interests (“OP Units”) of the Operating Partnership. The remaining OP Units, consisting exclusively of limited partner interests, are held by persons who contributed their interests in properties to the Operating Partnership in exchange for OP Units. Under the partnership agreement, these persons have the right to tender their OP Units for redemption to the Operating Partnership at any time following a specified restricted period for cash equal to the fair value of an equivalent number of common shares of the Trust. In lieu of delivering cash, however, the Trust, as the Operating Partnership’s general partner, may, at its option, choose to acquire any OP Units so tendered by issuing common shares in exchange for the tendered OP Units. If the Trust so chooses, its common shares will be exchanged for OP Units on a one-for-one basis. This one-for-one exchange ratio is subject to adjustment to prevent dilution. With each such exchange or redemption, the Trust’s percentage ownership in the Operating Partnership will increase. In addition, whenever the Trust issues common or other classes of its shares, it contributes the net proceeds it receives from the issuance to the Operating Partnership and the Operating Partnership issues to the Trust an equal number of OP Units or other partnership interests having preferences and rights that mirror the preferences and rights of the shares issued. This structure is commonly referred to as an umbrella partnership REIT or “UPREIT.” Additionally, we evaluate the need to consolidate affiliates based on standards set forth in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”). In determining whether we have a requirement to consolidate the accounts of an entity, management considers factors such as our ownership interest, our authority to make decisions and contractual and substantive participating rights of the limited partners and shareholders, as well as whether the entity is a variable interest entity (“VIE”) for which we have both: a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and b) the obligation to absorb losses or the right to receive benefits from the VIE that could be potentially significant to the VIE. The Trust will consolidate the operations of a joint venture if the Trust determines that it is the primary beneficiary of a variable interest entity (VIE) and has substantial influence and control of the entity. In instances where the Trust determines that it is not the primary beneficiary of a VIE and the Trust does not control the joint venture but can exercise influence over the entity with respect to its operations and major decisions, the Trust will use the equity method of accounting. Under the equity method, the operations of a joint venture will not be consolidated with the Trust’s operations but instead its share of operations will be reflected as equity in earnings (losses) of unconsolidated affiliates on its consolidated statements of operations and comprehensive loss. Additionally, the Trust’s net investment in the joint venture will be reflected as investment in unconsolidated entity on the consolidated balance sheets. See Note 5 for additional details regarding variable interest entities where the Trust uses the equity method of investing. The Operating Partnership meets the criteria as a variable interest entity (“VIE”). The Trust’s sole significant asset is its investment in the Operating Partnership. As a result, substantially all of the Trust’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Trust’s debt is an obligation of the Operating Partnership, and the Trust guarantees the unsecured debt obligations of the Operating Partnership. Sterling may also acquire property using a reverse like-kind exchange structure (a “Reverse 1031 Like-Kind Exchange”) under Section 1031 of the Internal Revenue Code of 1986, as amended, to defer taxable gains on the subsequent sale of real estate property. As such, the acquired property (the “Parked Property”) is in the possession of a qualified intermediary engaged to execute the Reverse 1031 Like-Kind Exchange until the subsequent sale transaction and the Reverse 1031 Like-Kind Exchange are completed. Sterling retains essentially all of the legal and economic benefits and obligations related to the Parked Property prior to the completion of the Reverse 1031 Like-Kind Exchange. As such, a Parked Property is included in Sterling’s consolidated financial statements as a consolidated VIE until legal title is transferred to the Operating Partnership upon completion of the Reverse 1031 Like-Kind Exchange. Sterling may also dispose of property under Section 1033 (an involuntary conversion) in which case taxable gains are also deferred. Concentration of Credit Risk Our cash balances are maintained in various bank deposit accounts. The bank deposit amounts in these accounts may exceed federally insured limits at various times throughout the year. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Real Estate Investments Real estate investments are recorded at cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred. The Trust allocates the purchase price of each acquired investment property accounted for as an asset acquisition based upon the relative fair value at acquisition date of the individual assets acquired and liabilities assumed, which generally include (i) land, (ii) building and other improvements, (iii) in-place lease intangibles, (iv) acquired above and below market lease intangibles, and (v) assumed financing that is determined to be above or below market, if any. Transaction costs related to acquisitions accounted for as asset acquisitions are capitalized as a cost of the property. For tangible assets acquired, including land, building and other improvements, the Trust considers available comparable market and industry information in estimating acquisition date fair value. Key factors considered in the calculation of fair value of both real property and intangible assets include the current market rent values, “dark” periods (building in vacant status), direct costs estimated with obtaining a new tenant, discount rates, escalation factors, standard lease terms, and tenant improvement costs. Furniture and fixtures are stated at cost less accumulated depreciation. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for routine maintenance and repairs, which do not add to the value or extend useful lives, are expensed as incurred. Depreciation is provided for over the estimated useful lives of the individual assets using the straight-line method over the following estimated useful lives: Buildings and improvements 40 years Furniture, fixtures and equipment 5 The Trust’s investment properties are reviewed for potential impairment at the end of each reporting period or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. At the end of each reporting period, the Trust separately determines whether impairment indicators exist for each property. Based on evaluation, there were no impairment losses during the nine months ended September 30, 2022 and 2021. Federal Income Taxes We have elected to be taxed as a REIT under the Internal Revenue Code, as amended. A REIT calculates taxable income similar to other domestic corporations, with the major difference being a REIT is entitled to a deduction for dividends paid. A REIT is generally required to distribute each year at least 90% of its taxable income. If it chooses to retain the remaining 10% of taxable income, it may do so, but it will be subject to a corporate tax on such income. REIT shareholders are taxed on REIT distributions of ordinary income in generally the same manner as they are taxed on other corporate distributions. We intend to continue to qualify as a REIT and, provided we maintain such status, will not be taxed on the portion of the income that is distributed to shareholders. In addition, we intend to distribute all of our taxable income; therefore, no provisions or liabilities for income taxes have been recorded in the financial statements. We follow FASB ASC Topic 740, Income Taxes, Revenue Recognition The Trust is the lessor for its residential and commercial leases. Leases are analyzed on an individual basis to determine lease classification. As of September 30, 2022 all leases analyzed under the Trust’s lease classification process were determined to be operating leases. Earnings per Common Share Basic earnings per common share is computed by dividing net income available to common shareholders (the “numerator”) by the weighted average number of common shares outstanding (the “denominator”) during the period. Sterling had no dilutive potential common shares during the nine months ended September 30, 2022 and therefore, basic earnings per common share was equal to diluted earnings per common share for both periods. For the nine months ended September 30, 2022 and 2021, Sterling’s denominators for the basic and diluted earnings per common share were approximately 10,572,000 and 10,095,000 , respectively.

SEGMENT REPORTING

SEGMENT REPORTING	9 Months Ended
SEGMENT REPORTING	Sep. 30, 2022
SEGMENT REPORTING
SEGMENT REPORTING	NOTE 3 – segment reporting We report our results in two reportable segments: residential and commercial properties. Our residential properties include multifamily properties. Our commercial properties include retail, office, industrial, restaurant and medical properties. We assess and measure operating results based on net operating income (“NOI”), which we define as total real estate segment revenues less real estate expenses (which consist of real estate taxes, property management fees, utilities, repairs and maintenance, insurance, and property administrative and management fees). We believe NOI is an important measure of operating performance even though it should not be considered an alternative to net income or cash flow from operating activities. NOI is unaffected by financing, depreciation, amortization, legal and professional fees, and certain general and administrative expenses. The accounting policies of each segment are consistent with those described in Note 2 of this report. Segment Revenues and Net Operating Income The revenues and net operating income for the reportable segments (residential and commercial) are summarized as follows for the three and nine months ended September 30, 2022 and 2021, along with reconciliations to the consolidated financial statements. Segment assets are also reconciled to Total Assets as reported in the consolidated financial statements. Three months ended September 30, 2022 Three months ended September 30, 2021 Residential Commercial Total Residential Commercial Total (in thousands) (in thousands) Income from rental operations $ 29,226 $ 5,305 $ 34,531 $ 27,838 $ 5,215 $ 33,053 Expenses from rental operations 16,211 1,717 17,928 15,352 2,321 17,673 Net operating income $ 13,015 $ 3,588 $ 16,603 $ 12,486 $ 2,894 $ 15,380 Depreciation and amortization 6,120 5,551 Interest 5,081 4,671 Administration of REIT 1,471 1,007 Other income (6,385) (1,567) Net income $ 10,316 $ 5,718 Nine months ended September 30, 2022 Nine months ended September 30, 2021 Residential Commercial Total Residential Commercial Total (in thousands) (in thousands) Income from rental operations $ 85,222 $ 16,042 $ 101,264 $ 80,028 $ 16,708 $ 96,736 Expenses from rental operations 47,964 4,945 52,909 42,564 5,515 48,079 Net operating income $ 37,258 $ 11,097 $ 48,355 $ 37,464 $ 11,193 $ 48,657 Depreciation and amortization 17,865 16,634 Interest 14,882 13,261 Administration of REIT 4,087 3,267 Other income (9,291) (4,337) Net income $ 20,812 $ 19,832 Segment Assets and Accumulated Depreciation As of September 30, 2022 Residential Commercial Total (in thousands) Real estate investments $ 728,010 $ 193,649 $ 921,659 Accumulated depreciation (144,226) (46,790) (191,016) Total real estate investments, net $ 583,784 $ 146,859 $ 730,643 Lease intangible assets, less accumulated amortization 209 5,347 5,556 Cash and cash equivalents 20,464 Restricted deposits 9,267 Investment in securities 42,062 Investment in unconsolidated affiliates 26,176 Notes receivable 7,749 Other assets, net 25,868 Total Assets $ 867,785 As of December 31, 2021 Residential Commercial Total (in thousands) Real estate investments $ 692,722 $ 203,980 $ 896,702 Accumulated depreciation (133,100) (46,055) (179,155) Total real estate investments, net $ 559,622 $ 157,925 $ 717,547 Lease intangible assets, less accumulated amortization — 6,246 6,246 Cash and cash equivalents 51,507 Restricted deposits 9,149 Investment in unconsolidated affiliates 18,658 Notes receivable 7,457 Other assets, net 10,302 Total Assets $ 820,866

RESTRICTED DEPOSITS AND FUNDED

RESTRICTED DEPOSITS AND FUNDED RESERVES	9 Months Ended
RESTRICTED DEPOSITS AND FUNDED RESERVES	Sep. 30, 2022
RESTRICTED DEPOSITS AND FUNDED RESERVES
RESTRICTED DEPOSITS AND FUNDED RESERVES	NOTE 4 – Restricted deposits and FUNDED reserves The following table summarizes the Trust’s restricted deposits and funded reserves. As of September 30, As of December 31, 2022 2021 (in thousands) Tenant security deposits $ 6,218 $ 5,165 Real estate tax and insurance escrows 1,154 1,355 Replacement reserves 1,895 1,791 Other funded reserves — 838 $ 9,267 $ 9,149

INVESTMENT IN UNCONSOLIDATED AF

INVESTMENT IN UNCONSOLIDATED AFFILIATES	9 Months Ended
INVESTMENT IN UNCONSOLIDATED AFFILIATES	Sep. 30, 2022
INVESTMENT IN UNCONSOLIDATED AFFILIATES
INVESTMENT IN UNCONSOLIDATED AFFILIATES	NOTE 5 – Investment in unconsolidated affiliates The Company’s investments in unconsolidated real estate ventures, are summarized as follows (in thousands): Total Investment in Unconsolidated Affiliates at Unconsolidated Affiliates Date Acquired Trust Ownership Interest September 30, 2022 December 31, 2021 Banner Building 2007 66.67% $ (608) $ 60 Grand Forks INREIT, LLC 2003 50% 3,635 2,493 SE Savage, LLC 2019 60% 1,892 2,946 SE Maple Grove, LLC 2019 60% 1,859 2,823 SE Rogers, LLC 2020 60% 2,546 2,986 ST Oak Cliff, LLC 2021 70% 9,214 4,324 SE Brooklyn Park, LLC 2021 60% 2,995 3,026 SE Fossil Creek, LLC 2022 70% 4,643 - $ 26,176 $ 18,658 The Operating Partnership owns a 66.67% interest as tenant in common in an office building in Fargo, North Dakota. The property is encumbered by a first mortgage with a balance at September 30, 2022 and December 31, 2021 of $6,951 and $6,329, respectively. The Trust is jointly and severally liable for the full mortgage balance. The Operating Partnership owns 50% interest as tenant in common through 100% ownership in a limited liability company. The property is located in Grand Forks, North Dakota. The property is encumbered by a non-recourse first mortgage with a balance at September 30, 2022 and December 31, 2021 of $9,606 and $9,794, respectively. The Trust is jointly and severally liable for the full mortgage balance. The Operating Partnership owns a 60% interest in a limited liability company that holds a multifamily property. The property is encumbered by a first mortgage with a balance of $30,829 at September 30, 2022. The Trust is jointly and severally liable for the full mortgage balance. At December 31, 2021, the property was encumbered by a first mortgage of $26,210, and a second mortgage to Sterling Properties, LLLP of $6,129. Additionally, at September 30, 2022, SE Savage, LLC has an outstanding Promissory Note with Sterling Properties, LLLP, for $1,397, and is an unsecured obligation of SE Savage, LLC. The note is considered to be additional at-risk funds to the Operating Partnership, in SE Savage, LLC, and is included in Notes Receivable on the Consolidated Balance Sheet at September 30, 2022. The Operating Partnership owns a 60% interest in a limited liability company that holds a multifamily property. The entity is encumbered by a first mortgage with a balance at both September 30, 2022 and December 31, 2021 of $24,788. The property is also encumbered by a second mortgage to Sterling Properties, LLLP with a balance at September 30, 2022 and December 31, 2021 of $3,643 and $727, respectively. The Operating Partnership owns a 60% interest in a limited liability company that is currently developing a multifamily property. The LLC holds land located in Rogers, Minnesota, with total assets of $32,516 and $22,847 at September 30, 2022 and December 31, 2021, respectively. The entity encumbered by a first mortgage has a balance of $25,742 and $15,688 at September 30, 2022 and December 31, 2021, respectively. The Company is jointly and severally liable for the full mortgage balance. The property is also encumbered by a second mortgage to Sterling Properties, LLLP with a balance at September 30, 2022 of $2,216. The Operating Partnership owns a 70% interest in a limited liability company, with a related party. The entity is currently developing a multifamily property. As of September 30, 2022, the Operating Partnership has contributed $4,939 in cash to the entity. The entity holds land located in Dallas, Texas with total assets of $32,608 and $7,394 at September 30, 2022 and December 31, 2021, respectively. The entity is encumbered by a construction mortgage with a balance of $15,348 at September 30, 2022. There was no balance outstanding related to the construction mortgage at December 31, 2021. The Company is jointly and severally liable for the full mortgage balance. The Operating Partnership owns a 60% interest in a limited liability company, with an unrelated third party. The entity is currently developing a multifamily property. As of both September 30, 2022, the Operating Partnership has contributed $3,042 in cash to the LLC. The entity is located in Brooklyn Park, Minnesota, with total assets of $27,382 and $5,478 at September 30, 2022 and December 31, 2021, respectively. The entity is encumbered by a first mortgage that has a balance of $20,007 at September 30, 2022. There was no balance outstanding related to the first mortgage at December 31, 2021. The Company is jointly and severally liable for the full mortgage balance. During the second quarter of 2022, the Operating Partnership entered into a joint venture arrangement. Through the joint venture, the Operating Partnership owns a 70% interest in a limited liability company, with a related party. The entity is currently developing a multifamily property. As of September 30, 2022, the Operating Partnership has contributed $4,664 in cash to the entity. The entity holds land located in Fort Worth, Texas with total assets of $8,272 at September 30, 2022. The following is a summary of the financial position of the unconsolidated affiliates at September 30, 2022 and December 31, 2021. September 30, 2022 December 31, 2021 (in thousands) ASSETS Real estate investments $ 202,492 $ 134,839 Accumulated depreciation (15,158) (10,940) 187,334 123,899 Cash and cash equivalents 2,054 1,131 Restricted deposits 856 650 Intangible assets, less accumulated amortization 349 41 Other assets, net 740 909 Total Assets $ 191,333 $ 126,630 LIABILITIES Mortgage notes payable, net $ 139,087 $ 87,996 Tenant security deposits payable 192 108 Accrued expenses and other liabilities 10,415 8,029 Total Liabilities $ 149,694 $ 96,133 SHAREHOLDERS' EQUITY Total Shareholders' Equity $ 41,639 $ 30,497 Total liabilities and shareholders' equity $ 191,333 $ 126,630 The following is a summary of results of operations of the unconsolidated affiliates for the three and nine months ended September 30, 2022 Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (in thousands) (in thousands) Income from rental operations $ 2,638 $ 1,296 $ 6,444 $ 3,109 Expenses from rental operations 957 417 2,451 999 Net operating income $ 1,681 $ 879 $ 3,993 $ 2,110 Depreciation and Amortization 1,316 358 4,331 871 Interest 1,178 644 2,854 1,524 Other expense 2 (9) 13 (9) Net loss $ (815) $ (114) $ (3,205) $ (276)

LEASE INTANGIBLES

LEASE INTANGIBLES	9 Months Ended
LEASE INTANGIBLES	Sep. 30, 2022
LEASE INTANGIBLES
LEASE INTANGIBLES	NOTE 6 - Lease intangibles The following table summarizes the net value of other intangible assets and liabilities and the accumulated amortization for each class of intangible: Lease Accumulated Lease As of September 30, 2022 Intangibles Amortization Intangibles, net Lease Intangible Assets (in thousands) In-place leases $ 15,305 $ (10,758) $ 4,547 Above-market leases 2,466 (1,457) 1,009 $ 17,771 $ (12,215) $ 5,556 Lease Intangible Liabilities Below-market leases $ (2,380) $ 1,696 $ (684) Lease Accumulated Lease As of December 31, 2021 Intangibles Amortization Intangibles, net Lease Intangible Assets (in thousands) In-place leases $ 15,455 $ (10,381) $ 5,074 Above-market leases 2,617 (1,445) 1,172 $ 18,072 $ (11,826) $ 6,246 Lease Intangible Liabilities Below-market leases $ (2,525) $ 1,714 $ (811) The estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter is as follows: Intangible Intangible Years ending December 31, Assets Liabilities (in thousands) 2022 (October 1, 2022 - December 31, 2022) $ 388 $ 38 2023 857 151 2024 827 151 2025 827 151 2026 676 80 Thereafter 1,981 113 $ 5,556 $ 684

LINES OF CREDIT

LINES OF CREDIT	9 Months Ended
LINES OF CREDIT	Sep. 30, 2022
LINES OF CREDIT
LINES OF CREDIT	NOTE 7 – LINES OF CREDIT We have a $4,915 variable rate (floating SOFR plus 2.00%) line of credit agreement with Bremer Bank, which expires in December 2026 December 2026 Certain lines of credit agreements include covenants that, in part, impose maintenance of certain debt service coverage and debt to net worth ratios.

MORTGAGE NOTES PAYABLE

MORTGAGE NOTES PAYABLE	9 Months Ended
MORTGAGE NOTES PAYABLE	Sep. 30, 2022
MORTGAGE NOTES PAYABLE
MORTGAGE NOTES PAYABLE	NOTE 8 - MORTGAGE NOTES PAYABLE The following table summarizes the Trust’s mortgage notes payable. Principal Balance At September 30, December 31, 2022 2021 (in thousands) Fixed rate mortgage notes payable (a) $ 514,297 $ 490,413 Variable rate mortgage notes payable - 5,237 Mortgage notes payable 514,297 495,650 Less unamortized debt issuance costs 2,307 2,508 $ 511,990 $ 493,142 (a) Includes $106,717 and $108,734 of variable rate mortgage debt that was swapped to a fixed rate at September 30, 2022 and December 31, 2021, respectively. We are required to make the following principal payments on our outstanding mortgage notes payable for each of the five succeeding fiscal years and thereafter as follows: Years ending December 31, Amount (in thousands) 2022 (October 1, 2022 - December 31, 2022) $ 6,055 2023 53,006 2024 22,653 2025 53,130 2026 45,546 Thereafter 333,907 Total payments $ 514,297

DERIVATIVES AND HEDGING ACTIVIT

DERIVATIVES AND HEDGING ACTIVITIES	9 Months Ended
DERIVATIVES AND HEDGING ACTIVITIES	Sep. 30, 2022
DERIVATIVES AND HEDGING ACTIVITIES
DERIVATIVES AND HEDGING ACTIVITIES	NOTE 9 – DERIVATIVES AND HEDGING ACTIVITIES As part of our interest rate risk management strategy, we have used derivative instruments to manage our exposure to interest rate movements and add stability to interest expense. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty. In exchange, the Trust makes fixed rate payments over the life of the agreement without exchange of the underlying notional amount. As of September 30, 2022, the Trust used 12 interest rate swaps to hedge the variable cash flows associated with variable rate debt. Changes in fair value of the derivatives that are designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss) and are reclassified into interest expense as interest payments are made on the Trust’s variable rate debt. Over the next twelve months, the Trust estimates that an additional $758 will be reclassified as a decrease to interest expense. The following table summarizes the Trust’s interest rate swaps as of September 30, 2022, which effectively convert one month floating rate LIBOR or 30-day average SOFR to a fixed rate: Fixed Effective Date Notional Interest Rate Maturity Date November 1, 2019 $ 6,627 3.15% November 1, 2029 November 1, 2019 $ 4,607 3.28% November 1, 2029 January 10, 2020 $ 3,001 3.39% January 10, 2030 July 1, 2020 $ 4,771 2.79% June 10, 2030 December 2, 2020 $ 12,452 2.91% December 2, 2027 July 1, 2021 $ 25,844 2.99% July 1, 2031 November 10, 2021 $ 28,187 3.54% August 1, 2029 December 1, 2021 $ 10,885 3.32% December 1, 2031 August 15, 2022 $ 1,502 3.07% June 15, 2030 August 15, 2022 $ 2,910 3.07% June 15, 2030 August 15, 2022 $ 1,627 2.94% June 15, 2030 August 15, 2022 $ 4,304 2.94% June 15, 2030 The following table summarizes the Trust’s interest rate swaps that were designated as cash flow hedges of interest rate risk: Number of Instruments Notional Interest Rate Derivatives September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Interest rate swaps 12 12 $ 106,717 $ 108,734 The table below presents the estimated fair value of the Trust’s derivative financial instruments as well as their classification in the accompanying consolidated balance sheets. The valuation techniques are described in Note 10 to the consolidated financial statements. Derivatives Derivatives designated as September 30, 2022 December 31, 2021 cash flow hedges: Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest rate swaps Other assets, net $ 14,356 Other assets, net $ 698 Interest rate swaps Accrued expenses and other liabilities $ — Accrued expenses and other liabilities $ 1,648 The carrying amounts of the swaps have been adjusted to their fair value at the end of the quarter, which because of changes in forecasted levels of LIBOR and 30-day average SOFR, resulted in reporting an asset and liability for the fair value of the future net payments forecasted under the swap. Accounting for interest rate swaps is considered an effective hedge in accordance with ASC 815-20 whereby it is recorded at fair value and changes in fair value are recorded to comprehensive income. The following table presents the effect of the Trust’s derivative financial instruments on the accompanying consolidated statements of operations and other comprehensive loss (income) for the three months ended September 30, 2022 and 2021: Location of Gain Amount of (Gain)/Loss Reclassified from Derivatives in Recognized in Other Accumulated other Amount of (Gain)/Loss Cash Flow Hedging Comprehensive Income Comprehensive Income Reclassified from Relationships on Derivatives (AOCI) into Income AOCI into Income 2022 2022 Interest rate swaps $ (4,967) Interest expense $ (71) 2021 2021 Interest rate swaps $ 66 Interest expense $ 199 The following table presents the effect of the Trust’s derivative financial instruments on the accompanying consolidated statements of operations and other comprehensive loss (income) for the nine months ended September 30, 2022 and 2021: Location of Gain Amount of (Gain)/Loss Reclassified from Derivatives in Recognized in Other Accumulated other Amount of (Gain)/Loss Cash Flow Hedging Comprehensive Income Comprehensive Income Reclassified from Relationships on Derivatives (AOCI) into Income AOCI into Income 2022 2022 Interest rate swaps $ (15,306) Interest expense $ 548 2021 2021 Interest rate swaps $ (1,473) Interest expense $ 433 Credit-risk-related Contingent Features The Trust’s agreements with each of its derivative counterparties also contain a provision whereby if the Trust consolidates with, merges with or into, or transfers all or substantially all of its assets to another entity and the creditworthiness of the resulting, surviving or transferee entity, is materially weaker than the Trust’s, the counterparty has the right to terminate the derivative obligations. .

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT	9 Months Ended
FAIR VALUE MEASUREMENT	Sep. 30, 2022
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT	NOTE 10 - FAIR VALUE MEASUREMENT The following table presents the carrying value and estimated fair value of the Company’s financial instruments: September 30, 2022 December 31, 2021 Carrying Carrying Value Fair Value Value Fair Value (in thousands) Financial assets: Investment in securities $ 42,062 $ 42,062 $ — $ — Notes receivable $ 7,749 $ 9,073 $ 7,457 $ 9,840 Derivative assets $ 14,356 $ 14,356 $ 698 $ 698 Financial liabilities: Mortgage notes payable $ 514,297 $ 493,082 $ 495,650 $ 508,285 Derivative liabilities $ — $ — $ 1,648 $ 1,648 ASC 820-10 established a three-level valuation hierarchy for fair value measurement. Management uses these valuation techniques to establish the fair value of the assets at the measurement date. These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect management’s assumptions. These two types of inputs create the following fair value hierarchy: ● Level 1 – Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities as well as certain U.S. Treasury securities that are highly liquid and are actively traded in secondary markets; ● Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose significant inputs are observable; ● Level 3 – Instruments whose significant inputs are unobservable. The guidance requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Recurring Fair Value Measurements The following table presents the Company’s financial instruments, which are measured at fair value on a recurring basis, by the level in the fair value hierarchy within which those measurements fall. Methods and assumptions used to estimate the fair value of these instruments are described after the table. Level 1 Level 2 Level 3 Total (in thousands) September 30, 2022 Derivative assets $ — $ 14,356 $ — $ 14,356 December 31, 2021 Derivative assets $ — $ 698 $ — $ 698 Derivative liabilities $ — $ 1,648 $ — $ 1,648 Derivatives: Securities: Fair Value Disclosures The following table presents the Trust’s financial assets and liabilities, which are measured at fair value for disclosure purposes, by the level in the fair value hierarchy within which they fall. Methods and assumptions used to estimate the fair value of these instruments are described after the table. Level 1 Level 2 Level 3 Total (in thousands) September 30, 2022 Mortgage notes payable $ — $ — $ 493,082 $ 493,082 Notes receivable $ — $ — $ 9,073 $ 9,073 December 31, 2021 Mortgage notes payable $ — $ — $ 508,285 $ 508,285 Notes receivable $ — $ — $ 9,840 $ 9,840 Mortgage notes payable: Notes receivable:

LEASES

LEASES	9 Months Ended
LEASES	Sep. 30, 2022
LEASES
LEASES	NOTE 11 – LEASES As of September 30, 2022, we derived 83.6% of our revenues from residential leases that are generally for terms of one year or less. The residential leases may include lease income related items such as parking, storage and non-refundable deposits that we treat as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. The collection of lease payments at lease commencement is probable and therefore we subsequently recognize lease income over the lease term on a straight-line basis. Residential leases are renewable upon consent of both parties on an annual or monthly basis. As of September 30, 2022, we derived 16.4% of our revenues from commercial leases primarily under long-term lease agreements. Substantially all commercial leases contain fixed escalations or, in some instances, changes based on the Consumer Price Index, which occur at specified times during the term of the lease. In certain commercial leases, variable lease income, such as percentage rent, is recognized when rents are earned. We recognize rental income and rental abatements from our commercial leases on a straight-line basis over the lease term. Recognition of rental income commences when control of the leased space has been transferred to the tenant. We recognize variable income from pass-through expenses on an accrual basis over the periods in which the expenses were incurred. Pass-through expenses are comprised of real estate taxes, operating expenses and common area maintenance costs which are reimbursed by tenants in accordance with specific allowable costs per tenant lease agreements. When we pay pass-through expenses, subject to reimbursement by the tenant, they are included within operating expenses, excluding real estate taxes, and reimbursements are included within “real estate rental income” along with the associated base rent in the accompanying consolidated financial statements. Lease income related to the Company’s operating leases is comprised of the following: Three months ended September 30, 2022 Residential Commercial Total (in thousands) Lease income related to fixed lease payments $ 27,993 $ 4,057 $ 32,050 Lease income related to variable lease payments — 1,113 1,113 Other (a) (150) 113 (37) Lease Income (b) $ 27,843 $ 5,283 $ 33,126 Three months ended September 30, 2021 Residential Commercial Total (in thousands) Lease income related to fixed lease payments $ 26,748 $ 3,879 $ 30,627 Lease income related to variable lease payments — 1,130 1,130 Other (a) (35) 174 139 Lease Income (b) $ 26,713 $ 5,183 $ 31,896 (a) For the three months ended September 30, 2022 and 2021, “Other” is comprised of revenue adjustments related to changes in collectability and amortization of above and below market lease intangibles and lease inducements. (b) Excludes other rental income for the three months ended September 30, 2022 and 2021 of $1,405 and $1,157 , respectively, which is accounted for under the revenue recognition standard. Nine months ended September 30, 2022 Residential Commercial Total (in thousands) Lease income related to fixed lease payments $ 81,928 $ 12,240 $ 94,168 Lease income related to variable lease payments — 3,401 3,401 Other (a) (513) 277 (236) Lease Income (b) $ 81,415 $ 15,918 $ 97,333 Nine months ended September 30, 2021 Residential Commercial Total (in thousands) Lease income related to fixed lease payments $ 76,722 $ 12,531 $ 89,253 Lease income related to variable lease payments — 3,424 3,424 Other (c) (212) 432 220 Lease Income (d) $ 76,510 $ 16,387 $ 92,897 (a) For the nine months ended September 30, 2022 and 2021, “Other” is comprised of revenue adjustments related to changes in collectability and amortization of above and below market lease intangibles and lease inducements. (b) Excludes other rental income for the nine months ended September 30, 2022 and 2021 of $3,931 and $3,839 , respectively, which is accounted for under the revenue recognition standard. As of September 30, 2022, non-cancelable commercial operating leases provide for future minimum rental income as follows. Residential leases are not included, as the terms are generally for one year or less. Years ending December 31, Amount (in thousands) 2022 (October 1, 2022- December 31, 2022) $ 3,897 2023 15,738 2024 15,060 2025 14,789 2026 13,541 Thereafter 57,397 $ 120,422

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
RELATED PARTY TRANSACTIONS	Sep. 30, 2022
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	NOTE 12 – RELATED PARTY TRANSACTIONS Effective January 1, 2021, Alloy Enterprises, Inc. was formed to act as the holding company for Sterling Management, LLC and GOLDMARK Property Management, Inc. In connection with this restructuring transaction, the owners of Alloy Enterprises, Inc. indirectly own Sterling Management, LLC and GOLDMARK Property Management, Inc. Alloy Enterprises, Inc. is owned in part by the Trust’s Chief Executive Officer and Trustee Mr. Kenneth P. Regan, by Trustee Mr. James S. Wieland, and by President Joel S. Thomsen. In addition, Mr. Regan serves as the Executive Chairman of the Advisor, and Messrs. Wieland, and Thomsen serve on the Board of Governors of both the Advisor and GOLDMARK Property Management, Inc. Sterling Management, LLC (the “Advisor”), is a North Dakota limited liability company formed in November 2002. The Advisor is responsible for managing day-to-day affairs, overseeing capital projects, and identifying, acquiring, and disposing investments on behalf of the trust. GOLDMARK Property Management, Inc., is a North Dakota corporation formed in 1981. GOLDMARK Property Management, Inc. performs property management services for the Trust. We have a historical and ongoing relationship with Bell Bank. Bell Bank has provided the Trust certain financial services throughout the relationship. Mr. Wieland, a Trustee, also serves as a Board Member of Bell Bank. Mr. Wieland could have an indirect material interest in any such engagement and related transactions. The Trust has a historical and ongoing relationship with Trumont Group and Trumont Construction. Trumont Group provides development services for current joint venture projects in which the Operating Partnership is an investor. Trumont Construction has been engaged to construct the properties associated with these joint ventures. Mr. Regan, Chief Executive Officer and trustee, is a partner in both Trumont Group and Trumont Construction and has a direct material interest in any engagement or related transaction, the Trust enters into, with these entities. Property Management Fees During the nine months ended September 30, 2022 and 2021, we paid property management and administrative fees to GOLDMARK Property Management, Inc. of $10,485, and $9,634, respectively. Management fees which approximate 5% of net collected rents, account for $4,107 and $3,862 of these fees during the nine months ended September 30, 2022 and 2021. In addition, during the nine months ended September 30, 2022 and 2021, we paid repair and maintenance expenses, and payroll related expenses to GOLDMARK Property Management, Inc. totaling $5,578 and $5,012, respectively. Advisory Agreement We are an externally managed trust and as such, although we have a Board of Trustees and executive officers responsible for our management, we have no paid employees. The Advisor may receive fees related to management of the Trust, acquiring, disposing, or developing real estate property, project management fees, and financing fees related to lending relationships, under the Advisory Agreement, which must be renewed on an annual basis and approved by a majority of the independent trustees. The Advisory Agreement was approved by the Board of Trustees (including all the independent Trustees) on March 24, 2022, and is effective until March 31, 2023. The below table summarizes the fees incurred to our Advisor. Nine Months ended September 30, 2022 2021 (in thousands) Fee: Advisory $ 2,739 $ 2,474 Acquisition $ 934 $ 375 Disposition $ 631 $ 146 Financing $ 83 $ 146 Project Management $ 420 $ 409 The below table summarizes the fees payable to our Advisor. Payable at September 30, December 31, 2022 2021 (in thousands) Fee: Advisory $ 313 $ 296 Acquisition $ 58 $ - Development $ - $ 79 Disposition $ 30 $ - Financing $ 4 $ 38 Project Management $ 3 $ 98 Operating Partnership Units Issued in Connection with Acquisitions During the nine months ended September 30, 2022, 510,000 Operating Partnership units were issued to an entity affiliated with Messrs. Regan and Wieland, two of our trustees, in connection with the acquisition of various properties. The aggregate value of these units was $11,741. During the nine months ended September 30, 2021, there were no Operating Partnership units issued directly or indirectly, to affiliated entities. Commissions During the nine months ended September 30, 2022 and 2021, we incurred real estate commissions of $371 and $297, respectively, to GOLDMARK Commercial Real Estate, Inc., in which Messrs. Regan and Wieland jointly own a controlling interest. As of September 30, 2022 total commissions payable to Goldmark Commercial Real Estate was $29. As of December 30, 2021, there were no unpaid commissions to GOLDMARK Commercial Real Estate. During the nine months ended September 30, 2022 and 2021, we incurred real estate commissions of $319 and $217, respectively, to GOLDMARK Property Management. As of September 30, 2022 total commissions payable to Goldmark Property Management was $59. As of December 30, 2021, there were no unpaid commissions to GOLDMARK Property Management. Rental Income During the nine months ended September 30, 2022 and 2021, we received rental income of $97 and $77, respectively, under an operating lease agreement with our Advisor. During the nine months ended September 30, 2022 and 2021, we received rental income of $- and $19, respectively, under an operating lease agreement with GOLDMARK Commercial Real Estate, Inc. During the nine months ended September 30, 2022 and 2021, we received rental income of $200 and $224, respectively, under operating lease agreements with GOLDMARK Property Management, Inc. During the nine months ended September 30, 2022 and 2021, we received rental income of $639 and $278, respectively, under operating lease agreements with Bell Bank. Other operational costs During the nine months ended September 30, 2022 and 2021, the Trust incurred $420 and $187, respectively, for general costs related to business operations as well as capital expenditures related to construction in progress that were paid to related parties. At September 30, 2022 and December 31, 2021, operational outstanding liabilities were $3 and $-, respectively. Other operational receipts At September 30, 2022 and December 31, 2021, operational outstanding receivables from related parties were $42 and $128, respectively. Debt Financing At September 30, 2022 and December 31, 2021, the Trust had $64,691 and $66,365, respectively, of outstanding principal on loans entered into with Bell Bank. During the nine months ended September 30, 2022 and 2021, the Trust incurred interest expense on debt held with Bell Bank of $491 and $1,511, respectively. Accrued interest as of September 30, 2022 and December 31, 2021, related to this debt was $125 and $148, respectively. Development Arrangements During the nine months ended September 30, 2022 and 2021, the Trust incurred $717 and $51 , respectively, in development fees to Trumont Group. At September 30, 2022 and December 31, 2021, the Trust owed $103 and $51 , respectively, for development fees to Trumont Group. During the nine months ended September 30, 2022 and 2021, the Trust incurred $734 and $12 , respectively, in construction fees to Trumont Construction. At September 30, 2022 and December 31, 2021, the Trust owed $94 and $29 , respectively for construction fees to Trumont Construction. During the nine months ended September 30, 2022 and 2021, the Trust incurred $284 and $41 , respectively, in general construction costs to Trumont Construction. At September 30, 2022 and December 31, 2021, the Trust owed $49 and $- , respectively, for general construction costs.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2022
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	NOTE 13 - COMMITMENTS AND CONTINGENCIES Environmental Matters Federal law (and the laws of some states in which we own or may acquire properties) imposes liability on a landowner for the presence on the premises of hazardous substances or wastes (as defined by present and future federal and state laws and regulations). This liability is without regard to fault or knowledge of the presence of such substances and may be imposed jointly and severally upon all succeeding landowners. If such hazardous substance is discovered on a property acquired by us, we could incur liability for the removal of the substances and the cleanup of the property. There can be no assurance that we would have effective remedies against prior owners of the property. In addition, we may be liable to tenants and may find it difficult or impossible to sell the property either prior to or following such a cleanup. Risk of Uninsured Property Losses We maintain property damage, fire loss, and liability insurance. However, there are certain types of losses (generally of a catastrophic nature) which may be either uninsurable or not economically insurable. Such excluded risks may include war, earthquakes, tornados, certain environmental hazards, and floods. Should such events occur, (i) we might suffer a loss of capital invested, (ii) tenants may suffer losses and may be unable to pay rent for the spaces, and (iii) we may suffer a loss of profits which might be anticipated from one or more properties. Litigation The Trust is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the financial statements of the Trust.

DISPOSITIONS

DISPOSITIONS	9 Months Ended
DISPOSITIONS	Sep. 30, 2022
DISPOSITIONS
DISPOSITIONS	NOTE 14 – DISPOSITIONS During the nine months ended September 30, 2022, the Operating Partnership disposed of four properties. One property located in Savage, Minnesota was disposed of for $2,700 with a recognized gain of $1,328 . One property located in Moorhead, Minnesota was disposed of for $6,400 with a recognized gain of $2,012 . One property located in Edina, Minnesota was disposed of for $15,320 with a recognized gain of $6,728 . The other property located in East Grand Forks, MN was disposed of for $1,200 with a recognized loss of $171 . During the nine months ended September 30, 2021, the Operating Partnership disposed of two properties for a total of $5,850 and recognized gain of $1,710 .

ACQUISITIONS

ACQUISITIONS	9 Months Ended
ACQUISITIONS	Sep. 30, 2022
ACQUISITIONS
ACQUISITIONS	NOTE 15 – ACQUISITIONS The Trust had six acquisitions during the nine months ended September 30, 2022. Date Property Name Location Property Type Units/ Square Footage/ Acres Total Acquisition Cost 2/28/22 Deer Park Hutchinson, MN Apartment Complex 138 units $ 15,073 5/31/22 Desoto Estates Grand Forks, ND Apartment Complex 68 units 5,863 5/31/22 Desoto Townhomes Grand Forks, ND Townhomes 24 units 3,226 5/31/22 Desoto Apartments East Grand Forks, MN Apartment Complex 24 units 1,230 6/10/22 Diamond Bend Mandan, ND Apartment Complex 78 units 10,919 9/13/22 Newgate Apartments Bismarck, ND Apartment Complex 46 units 2,444 $ 38,755 Total consideration given for acquisitions through September 30, 2022 was completed through issuing approximately 539,000 limited partnership units of the Operating Partnership valued at $23.00 per unit for an aggregate consideration of approximately $12,390. The value of units issued in exchange for property is determined through a value established annually by our Board of Trustees and reflects the fair value at the time of issuance. In 2022, cash flows were reclassified to updated presentation resulting prior period to be updated to align with reclassification. The following table summarizes the acquisition date fair values, before pro-rations, the Company recorded in conjunction with the acquisitions discussed above: Nine months ended September 30, 2022 2021 Real estate investment acquired $ 38,296 $ 39,344 Acquired lease intangible assets 749 - Assumed Assets 3 23 Total Assets Acquired $ 39,048 $ 39,367 Other liabilities (293) (569) Net assets acquired 38,755 38,798 Equity/limited partnership unit consideration (12,390) (2,883) Net cash consideration $ 26,365 $ 35,915

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2022
SUBSEQUENT EVENTS.
SUBSEQUENT EVENTS	NOTE 16 - SUBSEQUENT EVENTS On October 17, 2022, we paid a dividend or distribution of $0.2875 per share on our common shares of beneficial interest or limited partnership units, respectively, to common shareholders and limited partnership unit holders of record on September 30, 2022. As of September, 2022, we had certain acquisitions and dispositions in process. Pending acquisitions and dispositions are subject to numerous conditions and contingencies and there are no assurances that the transactions will be completed. We have evaluated subsequent events through the date of this filing. We are not aware of any other subsequent events which would require recognition or disclosure in the consolidated financial statements.

PRINCIPAL ACTIVITY AND SIGNIF_2

PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2022
PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2021, which have previously been filed with the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted from this report on Form 10-Q pursuant to the rules and regulations of the SEC. The results for the interim periods shown in this report are not necessarily indicative of future financial results. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly our consolidated financial statements as of and for the three and nine months ended September 30, 2022. These adjustments are of a normal recurring nature.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of , Properties, LLLP, and wholly-owned limited liability companies. All significant intercompany transactions and balances have been eliminated in consolidation. As of September 30, 2022 the Trust owned approximately 36.33% of the partnership interests (“OP Units”) of the Operating Partnership. The remaining OP Units, consisting exclusively of limited partner interests, are held by persons who contributed their interests in properties to the Operating Partnership in exchange for OP Units. Under the partnership agreement, these persons have the right to tender their OP Units for redemption to the Operating Partnership at any time following a specified restricted period for cash equal to the fair value of an equivalent number of common shares of the Trust. In lieu of delivering cash, however, the Trust, as the Operating Partnership’s general partner, may, at its option, choose to acquire any OP Units so tendered by issuing common shares in exchange for the tendered OP Units. If the Trust so chooses, its common shares will be exchanged for OP Units on a one-for-one basis. This one-for-one exchange ratio is subject to adjustment to prevent dilution. With each such exchange or redemption, the Trust’s percentage ownership in the Operating Partnership will increase. In addition, whenever the Trust issues common or other classes of its shares, it contributes the net proceeds it receives from the issuance to the Operating Partnership and the Operating Partnership issues to the Trust an equal number of OP Units or other partnership interests having preferences and rights that mirror the preferences and rights of the shares issued. This structure is commonly referred to as an umbrella partnership REIT or “UPREIT.” Additionally, we evaluate the need to consolidate affiliates based on standards set forth in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”). In determining whether we have a requirement to consolidate the accounts of an entity, management considers factors such as our ownership interest, our authority to make decisions and contractual and substantive participating rights of the limited partners and shareholders, as well as whether the entity is a variable interest entity (“VIE”) for which we have both: a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and b) the obligation to absorb losses or the right to receive benefits from the VIE that could be potentially significant to the VIE. The Trust will consolidate the operations of a joint venture if the Trust determines that it is the primary beneficiary of a variable interest entity (VIE) and has substantial influence and control of the entity. In instances where the Trust determines that it is not the primary beneficiary of a VIE and the Trust does not control the joint venture but can exercise influence over the entity with respect to its operations and major decisions, the Trust will use the equity method of accounting. Under the equity method, the operations of a joint venture will not be consolidated with the Trust’s operations but instead its share of operations will be reflected as equity in earnings (losses) of unconsolidated affiliates on its consolidated statements of operations and comprehensive loss. Additionally, the Trust’s net investment in the joint venture will be reflected as investment in unconsolidated entity on the consolidated balance sheets. See Note 5 for additional details regarding variable interest entities where the Trust uses the equity method of investing. The Operating Partnership meets the criteria as a variable interest entity (“VIE”). The Trust’s sole significant asset is its investment in the Operating Partnership. As a result, substantially all of the Trust’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Trust’s debt is an obligation of the Operating Partnership, and the Trust guarantees the unsecured debt obligations of the Operating Partnership. Sterling may also acquire property using a reverse like-kind exchange structure (a “Reverse 1031 Like-Kind Exchange”) under Section 1031 of the Internal Revenue Code of 1986, as amended, to defer taxable gains on the subsequent sale of real estate property. As such, the acquired property (the “Parked Property”) is in the possession of a qualified intermediary engaged to execute the Reverse 1031 Like-Kind Exchange until the subsequent sale transaction and the Reverse 1031 Like-Kind Exchange are completed. Sterling retains essentially all of the legal and economic benefits and obligations related to the Parked Property prior to the completion of the Reverse 1031 Like-Kind Exchange. As such, a Parked Property is included in Sterling’s consolidated financial statements as a consolidated VIE until legal title is transferred to the Operating Partnership upon completion of the Reverse 1031 Like-Kind Exchange. Sterling may also dispose of property under Section 1033 (an involuntary conversion) in which case taxable gains are also deferred.
Concentration of Credit Risk	Concentration of Credit Risk Our cash balances are maintained in various bank deposit accounts. The bank deposit amounts in these accounts may exceed federally insured limits at various times throughout the year.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Real Estate Investments	Real Estate Investments Real estate investments are recorded at cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred. The Trust allocates the purchase price of each acquired investment property accounted for as an asset acquisition based upon the relative fair value at acquisition date of the individual assets acquired and liabilities assumed, which generally include (i) land, (ii) building and other improvements, (iii) in-place lease intangibles, (iv) acquired above and below market lease intangibles, and (v) assumed financing that is determined to be above or below market, if any. Transaction costs related to acquisitions accounted for as asset acquisitions are capitalized as a cost of the property. For tangible assets acquired, including land, building and other improvements, the Trust considers available comparable market and industry information in estimating acquisition date fair value. Key factors considered in the calculation of fair value of both real property and intangible assets include the current market rent values, “dark” periods (building in vacant status), direct costs estimated with obtaining a new tenant, discount rates, escalation factors, standard lease terms, and tenant improvement costs. Furniture and fixtures are stated at cost less accumulated depreciation. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for routine maintenance and repairs, which do not add to the value or extend useful lives, are expensed as incurred. Depreciation is provided for over the estimated useful lives of the individual assets using the straight-line method over the following estimated useful lives: Buildings and improvements 40 years Furniture, fixtures and equipment 5 The Trust’s investment properties are reviewed for potential impairment at the end of each reporting period or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. At the end of each reporting period, the Trust separately determines whether impairment indicators exist for each property. Based on evaluation, there were no impairment losses during the nine months ended September 30, 2022 and 2021.
Federal Income Taxes	Federal Income Taxes We have elected to be taxed as a REIT under the Internal Revenue Code, as amended. A REIT calculates taxable income similar to other domestic corporations, with the major difference being a REIT is entitled to a deduction for dividends paid. A REIT is generally required to distribute each year at least 90% of its taxable income. If it chooses to retain the remaining 10% of taxable income, it may do so, but it will be subject to a corporate tax on such income. REIT shareholders are taxed on REIT distributions of ordinary income in generally the same manner as they are taxed on other corporate distributions. We intend to continue to qualify as a REIT and, provided we maintain such status, will not be taxed on the portion of the income that is distributed to shareholders. In addition, we intend to distribute all of our taxable income; therefore, no provisions or liabilities for income taxes have been recorded in the financial statements. We follow FASB ASC Topic 740, Income Taxes,
Revenue Recognition	Revenue Recognition The Trust is the lessor for its residential and commercial leases. Leases are analyzed on an individual basis to determine lease classification. As of September 30, 2022 all leases analyzed under the Trust’s lease classification process were determined to be operating leases.
Earnings per Common Share	Earnings per Common Share Basic earnings per common share is computed by dividing net income available to common shareholders (the “numerator”) by the weighted average number of common shares outstanding (the “denominator”) during the period. Sterling had no dilutive potential common shares during the nine months ended September 30, 2022 and therefore, basic earnings per common share was equal to diluted earnings per common share for both periods. For the nine months ended September 30, 2022 and 2021, Sterling’s denominators for the basic and diluted earnings per common share were approximately 10,572,000 and 10,095,000 , respectively.

PRINCIPAL ACTIVITY AND SIGNIF_3

PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Sep. 30, 2022
PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES
Summary of Estimated Useful Life	Buildings and improvements 40 years Furniture, fixtures and equipment 5

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)	9 Months Ended
SEGMENT REPORTING (Tables)	Sep. 30, 2022
SEGMENT REPORTING
Summary of Segment Revenues and Net Operating Income	Three months ended September 30, 2022 Three months ended September 30, 2021 Residential Commercial Total Residential Commercial Total (in thousands) (in thousands) Income from rental operations $ 29,226 $ 5,305 $ 34,531 $ 27,838 $ 5,215 $ 33,053 Expenses from rental operations 16,211 1,717 17,928 15,352 2,321 17,673 Net operating income $ 13,015 $ 3,588 $ 16,603 $ 12,486 $ 2,894 $ 15,380 Depreciation and amortization 6,120 5,551 Interest 5,081 4,671 Administration of REIT 1,471 1,007 Other income (6,385) (1,567) Net income $ 10,316 $ 5,718 Nine months ended September 30, 2022 Nine months ended September 30, 2021 Residential Commercial Total Residential Commercial Total (in thousands) (in thousands) Income from rental operations $ 85,222 $ 16,042 $ 101,264 $ 80,028 $ 16,708 $ 96,736 Expenses from rental operations 47,964 4,945 52,909 42,564 5,515 48,079 Net operating income $ 37,258 $ 11,097 $ 48,355 $ 37,464 $ 11,193 $ 48,657 Depreciation and amortization 17,865 16,634 Interest 14,882 13,261 Administration of REIT 4,087 3,267 Other income (9,291) (4,337) Net income $ 20,812 $ 19,832
Summary of Segment Assets and Accumulated Depreciation	As of September 30, 2022 Residential Commercial Total (in thousands) Real estate investments $ 728,010 $ 193,649 $ 921,659 Accumulated depreciation (144,226) (46,790) (191,016) Total real estate investments, net $ 583,784 $ 146,859 $ 730,643 Lease intangible assets, less accumulated amortization 209 5,347 5,556 Cash and cash equivalents 20,464 Restricted deposits 9,267 Investment in securities 42,062 Investment in unconsolidated affiliates 26,176 Notes receivable 7,749 Other assets, net 25,868 Total Assets $ 867,785 As of December 31, 2021 Residential Commercial Total (in thousands) Real estate investments $ 692,722 $ 203,980 $ 896,702 Accumulated depreciation (133,100) (46,055) (179,155) Total real estate investments, net $ 559,622 $ 157,925 $ 717,547 Lease intangible assets, less accumulated amortization — 6,246 6,246 Cash and cash equivalents 51,507 Restricted deposits 9,149 Investment in unconsolidated affiliates 18,658 Notes receivable 7,457 Other assets, net 10,302 Total Assets $ 820,866

RESTRICTED DEPOSITS AND FUNDE_2

RESTRICTED DEPOSITS AND FUNDED RESERVES (Tables)	9 Months Ended
RESTRICTED DEPOSITS AND FUNDED RESERVES (Tables)	Sep. 30, 2022
RESTRICTED DEPOSITS AND FUNDED RESERVES
Schedule of restricted deposits	As of September 30, As of December 31, 2022 2021 (in thousands) Tenant security deposits $ 6,218 $ 5,165 Real estate tax and insurance escrows 1,154 1,355 Replacement reserves 1,895 1,791 Other funded reserves — 838 $ 9,267 $ 9,149

INVESTMENT IN UNCONSOLIDATED _2

INVESTMENT IN UNCONSOLIDATED AFFILIATES (Tables)	9 Months Ended
INVESTMENT IN UNCONSOLIDATED AFFILIATES (Tables)	Sep. 30, 2022
INVESTMENT IN UNCONSOLIDATED AFFILIATES
Schedule of investments in unconsolidated real estate ventures	Total Investment in Unconsolidated Affiliates at Unconsolidated Affiliates Date Acquired Trust Ownership Interest September 30, 2022 December 31, 2021 Banner Building 2007 66.67% $ (608) $ 60 Grand Forks INREIT, LLC 2003 50% 3,635 2,493 SE Savage, LLC 2019 60% 1,892 2,946 SE Maple Grove, LLC 2019 60% 1,859 2,823 SE Rogers, LLC 2020 60% 2,546 2,986 ST Oak Cliff, LLC 2021 70% 9,214 4,324 SE Brooklyn Park, LLC 2021 60% 2,995 3,026 SE Fossil Creek, LLC 2022 70% 4,643 - $ 26,176 $ 18,658
Schedule of financial information of unconsolidated entities	The following is a summary of the financial position of the unconsolidated affiliates at September 30, 2022 and December 31, 2021. September 30, 2022 December 31, 2021 (in thousands) ASSETS Real estate investments $ 202,492 $ 134,839 Accumulated depreciation (15,158) (10,940) 187,334 123,899 Cash and cash equivalents 2,054 1,131 Restricted deposits 856 650 Intangible assets, less accumulated amortization 349 41 Other assets, net 740 909 Total Assets $ 191,333 $ 126,630 LIABILITIES Mortgage notes payable, net $ 139,087 $ 87,996 Tenant security deposits payable 192 108 Accrued expenses and other liabilities 10,415 8,029 Total Liabilities $ 149,694 $ 96,133 SHAREHOLDERS' EQUITY Total Shareholders' Equity $ 41,639 $ 30,497 Total liabilities and shareholders' equity $ 191,333 $ 126,630 The following is a summary of results of operations of the unconsolidated affiliates for the three and nine months ended September 30, 2022 Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (in thousands) (in thousands) Income from rental operations $ 2,638 $ 1,296 $ 6,444 $ 3,109 Expenses from rental operations 957 417 2,451 999 Net operating income $ 1,681 $ 879 $ 3,993 $ 2,110 Depreciation and Amortization 1,316 358 4,331 871 Interest 1,178 644 2,854 1,524 Other expense 2 (9) 13 (9) Net loss $ (815) $ (114) $ (3,205) $ (276)

LEASE INTANGIBLES (Tables)

LEASE INTANGIBLES (Tables)	9 Months Ended
LEASE INTANGIBLES (Tables)	Sep. 30, 2022
LEASE INTANGIBLES
Schedule of Intangible Assets, Liabilities and Accumulated Amortization	Lease Accumulated Lease As of September 30, 2022 Intangibles Amortization Intangibles, net Lease Intangible Assets (in thousands) In-place leases $ 15,305 $ (10,758) $ 4,547 Above-market leases 2,466 (1,457) 1,009 $ 17,771 $ (12,215) $ 5,556 Lease Intangible Liabilities Below-market leases $ (2,380) $ 1,696 $ (684) Lease Accumulated Lease As of December 31, 2021 Intangibles Amortization Intangibles, net Lease Intangible Assets (in thousands) In-place leases $ 15,455 $ (10,381) $ 5,074 Above-market leases 2,617 (1,445) 1,172 $ 18,072 $ (11,826) $ 6,246 Lease Intangible Liabilities Below-market leases $ (2,525) $ 1,714 $ (811)
Schedule of Estimated Aggregate Amortization Expense	Intangible Intangible Years ending December 31, Assets Liabilities (in thousands) 2022 (October 1, 2022 - December 31, 2022) $ 388 $ 38 2023 857 151 2024 827 151 2025 827 151 2026 676 80 Thereafter 1,981 113 $ 5,556 $ 684

MORTGAGE NOTES PAYABLE (Tables)

MORTGAGE NOTES PAYABLE (Tables)	9 Months Ended
MORTGAGE NOTES PAYABLE (Tables)	Sep. 30, 2022
MORTGAGE NOTES PAYABLE
Schedule of Mortgage Notes Payable	Principal Balance At September 30, December 31, 2022 2021 (in thousands) Fixed rate mortgage notes payable (a) $ 514,297 $ 490,413 Variable rate mortgage notes payable - 5,237 Mortgage notes payable 514,297 495,650 Less unamortized debt issuance costs 2,307 2,508 $ 511,990 $ 493,142 (a) Includes $106,717 and $108,734 of variable rate mortgage debt that was swapped to a fixed rate at September 30, 2022 and December 31, 2021, respectively.
Scheduled Maturities of Mortgage Notes Payable	Years ending December 31, Amount (in thousands) 2022 (October 1, 2022 - December 31, 2022) $ 6,055 2023 53,006 2024 22,653 2025 53,130 2026 45,546 Thereafter 333,907 Total payments $ 514,297

DERIVATIVES AND HEDGING ACTIV_2

DERIVATIVES AND HEDGING ACTIVITIES (Tables)	9 Months Ended
DERIVATIVES AND HEDGING ACTIVITIES (Tables)	Sep. 30, 2022
DERIVATIVES AND HEDGING ACTIVITIES
Schedule of interest rate swaps	The following table summarizes the Trust’s interest rate swaps as of September 30, 2022, which effectively convert one month floating rate LIBOR or 30-day average SOFR to a fixed rate: Fixed Effective Date Notional Interest Rate Maturity Date November 1, 2019 $ 6,627 3.15% November 1, 2029 November 1, 2019 $ 4,607 3.28% November 1, 2029 January 10, 2020 $ 3,001 3.39% January 10, 2030 July 1, 2020 $ 4,771 2.79% June 10, 2030 December 2, 2020 $ 12,452 2.91% December 2, 2027 July 1, 2021 $ 25,844 2.99% July 1, 2031 November 10, 2021 $ 28,187 3.54% August 1, 2029 December 1, 2021 $ 10,885 3.32% December 1, 2031 August 15, 2022 $ 1,502 3.07% June 15, 2030 August 15, 2022 $ 2,910 3.07% June 15, 2030 August 15, 2022 $ 1,627 2.94% June 15, 2030 August 15, 2022 $ 4,304 2.94% June 15, 2030 The following table summarizes the Trust’s interest rate swaps that were designated as cash flow hedges of interest rate risk: Number of Instruments Notional Interest Rate Derivatives September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Interest rate swaps 12 12 $ 106,717 $ 108,734
Schedule of the estimated fair value of derivatives	Derivatives Derivatives designated as September 30, 2022 December 31, 2021 cash flow hedges: Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest rate swaps Other assets, net $ 14,356 Other assets, net $ 698 Interest rate swaps Accrued expenses and other liabilities $ — Accrued expenses and other liabilities $ 1,648
Schedule of the effect of the derivatives	Location of Gain Amount of (Gain)/Loss Reclassified from Derivatives in Recognized in Other Accumulated other Amount of (Gain)/Loss Cash Flow Hedging Comprehensive Income Comprehensive Income Reclassified from Relationships on Derivatives (AOCI) into Income AOCI into Income 2022 2022 Interest rate swaps $ (4,967) Interest expense $ (71) 2021 2021 Interest rate swaps $ 66 Interest expense $ 199 The following table presents the effect of the Trust’s derivative financial instruments on the accompanying consolidated statements of operations and other comprehensive loss (income) for the nine months ended September 30, 2022 and 2021: Location of Gain Amount of (Gain)/Loss Reclassified from Derivatives in Recognized in Other Accumulated other Amount of (Gain)/Loss Cash Flow Hedging Comprehensive Income Comprehensive Income Reclassified from Relationships on Derivatives (AOCI) into Income AOCI into Income 2022 2022 Interest rate swaps $ (15,306) Interest expense $ 548 2021 2021 Interest rate swaps $ (1,473) Interest expense $ 433

FAIR VALUE MEASUREMENT (Tables)

FAIR VALUE MEASUREMENT (Tables)	9 Months Ended
FAIR VALUE MEASUREMENT (Tables)	Sep. 30, 2022
FAIR VALUE MEASUREMENT
Carrying Value and Estimated Fair Value of Company's Financial Instruments	September 30, 2022 December 31, 2021 Carrying Carrying Value Fair Value Value Fair Value (in thousands) Financial assets: Investment in securities $ 42,062 $ 42,062 $ — $ — Notes receivable $ 7,749 $ 9,073 $ 7,457 $ 9,840 Derivative assets $ 14,356 $ 14,356 $ 698 $ 698 Financial liabilities: Mortgage notes payable $ 514,297 $ 493,082 $ 495,650 $ 508,285 Derivative liabilities $ — $ — $ 1,648 $ 1,648
Schedule of Fair Value of Liabilities on Recurring Basis	Level 1 Level 2 Level 3 Total (in thousands) September 30, 2022 Derivative assets $ — $ 14,356 $ — $ 14,356 December 31, 2021 Derivative assets $ — $ 698 $ — $ 698 Derivative liabilities $ — $ 1,648 $ — $ 1,648
Fair Value of Company's Financial Assets and Liabilities	Level 1 Level 2 Level 3 Total (in thousands) September 30, 2022 Mortgage notes payable $ — $ — $ 493,082 $ 493,082 Notes receivable $ — $ — $ 9,073 $ 9,073 December 31, 2021 Mortgage notes payable $ — $ — $ 508,285 $ 508,285 Notes receivable $ — $ — $ 9,840 $ 9,840

LEASES (Tables)

LEASES (Tables)	9 Months Ended
LEASES (Tables)	Sep. 30, 2022
LEASES
Schedule of lease Income related to the Company's operating leases	Lease income related to the Company’s operating leases is comprised of the following: Three months ended September 30, 2022 Residential Commercial Total (in thousands) Lease income related to fixed lease payments $ 27,993 $ 4,057 $ 32,050 Lease income related to variable lease payments — 1,113 1,113 Other (a) (150) 113 (37) Lease Income (b) $ 27,843 $ 5,283 $ 33,126 Three months ended September 30, 2021 Residential Commercial Total (in thousands) Lease income related to fixed lease payments $ 26,748 $ 3,879 $ 30,627 Lease income related to variable lease payments — 1,130 1,130 Other (a) (35) 174 139 Lease Income (b) $ 26,713 $ 5,183 $ 31,896 (a) For the three months ended September 30, 2022 and 2021, “Other” is comprised of revenue adjustments related to changes in collectability and amortization of above and below market lease intangibles and lease inducements. (b) Excludes other rental income for the three months ended September 30, 2022 and 2021 of $1,405 and $1,157 , respectively, which is accounted for under the revenue recognition standard. Nine months ended September 30, 2022 Residential Commercial Total (in thousands) Lease income related to fixed lease payments $ 81,928 $ 12,240 $ 94,168 Lease income related to variable lease payments — 3,401 3,401 Other (a) (513) 277 (236) Lease Income (b) $ 81,415 $ 15,918 $ 97,333 Nine months ended September 30, 2021 Residential Commercial Total (in thousands) Lease income related to fixed lease payments $ 76,722 $ 12,531 $ 89,253 Lease income related to variable lease payments — 3,424 3,424 Other (c) (212) 432 220 Lease Income (d) $ 76,510 $ 16,387 $ 92,897 (a) For the nine months ended September 30, 2022 and 2021, “Other” is comprised of revenue adjustments related to changes in collectability and amortization of above and below market lease intangibles and lease inducements. (b) Excludes other rental income for the nine months ended September 30, 2022 and 2021 of $3,931 and $3,839 , respectively, which is accounted for under the revenue recognition standard.
Schedule of future minimum rental income	Years ending December 31, Amount (in thousands) 2022 (October 1, 2022- December 31, 2022) $ 3,897 2023 15,738 2024 15,060 2025 14,789 2026 13,541 Thereafter 57,397 $ 120,422

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	9 Months Ended
RELATED PARTY TRANSACTIONS (Tables)	Sep. 30, 2022
RELATED PARTY TRANSACTIONS
Schedule of fees incurred and payable to Advisor	Nine Months ended September 30, 2022 2021 (in thousands) Fee: Advisory $ 2,739 $ 2,474 Acquisition $ 934 $ 375 Disposition $ 631 $ 146 Financing $ 83 $ 146 Project Management $ 420 $ 409 Payable at September 30, December 31, 2022 2021 (in thousands) Fee: Advisory $ 313 $ 296 Acquisition $ 58 $ - Development $ - $ 79 Disposition $ 30 $ - Financing $ 4 $ 38 Project Management $ 3 $ 98

ACQUISITIONS (Tables)

ACQUISITIONS (Tables)	9 Months Ended
ACQUISITIONS (Tables)	Sep. 30, 2022
ACQUISITIONS
Schedule of acquisitions	Date Property Name Location Property Type Units/ Square Footage/ Acres Total Acquisition Cost 2/28/22 Deer Park Hutchinson, MN Apartment Complex 138 units $ 15,073 5/31/22 Desoto Estates Grand Forks, ND Apartment Complex 68 units 5,863 5/31/22 Desoto Townhomes Grand Forks, ND Townhomes 24 units 3,226 5/31/22 Desoto Apartments East Grand Forks, MN Apartment Complex 24 units 1,230 6/10/22 Diamond Bend Mandan, ND Apartment Complex 78 units 10,919 9/13/22 Newgate Apartments Bismarck, ND Apartment Complex 46 units 2,444 $ 38,755
Schedule of acquisition date fair values, before prorations recorded in conjunction with acquisitions	Nine months ended September 30, 2022 2021 Real estate investment acquired $ 38,296 $ 39,344 Acquired lease intangible assets 749 - Assumed Assets 3 23 Total Assets Acquired $ 39,048 $ 39,367 Other liabilities (293) (569) Net assets acquired 38,755 38,798 Equity/limited partnership unit consideration (12,390) (2,883) Net cash consideration $ 26,365 $ 35,915

Organization - Additional Infor

Organization - Additional Information (Details)	Sep. 30, 2022	Dec. 31, 2021
ORGANIZATION
Ownership in operating partnership (as a percent)	36.33%	36.22%

Principal Activity and Signif_4

Principal Activity and Significant Accounting Policies - Principles of Consolidation (Details)	Sep. 30, 2022	Dec. 31, 2021
PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES
Ownership in operating partnership (as a percent)	36.33%	36.22%

Principal Activity and Signif_5

Principal Activity and Significant Accounting Policies - Real Estate Investments (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Real Estate Investments
Loss on impairment of property	$ 0	$ 0
Building and improvements
Real Estate Investments
Estimated useful life	40 years
Furniture and fixtures \| Minimum
Real Estate Investments
Estimated useful life	5 years
Furniture and fixtures \| Maximum
Real Estate Investments
Estimated useful life	9 years

Principal Activity and Signif_6

Principal Activity and Significant Accounting Policies - Federal Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES
Taxable income to be distributed	90%		90%
Retainable taxable income	10%		10%
Provisions or liabilities for income taxes	$ 0	$ 0	$ 0	$ 0

Principal Activity and Signif_7

Principal Activity and Significant Accounting Policies - Earnings Per Common Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings per Common Share
Dilutive potential common shares			0
Weighted average common shares outstanding, basic	10,685,000	10,215,000	10,572,000	10,095,000
Weighted average common shares outstanding, diluted	10,685,000	10,215,000	10,572,000	10,095,000

Segment Reporting - Additional

Segment Reporting - Additional Information (Details)	9 Months Ended
Segment Reporting - Additional Information (Details)	Sep. 30, 2022 segment
SEGMENT REPORTING
Number of reportable segments	2

Segment Reporting - Summary of

Segment Reporting - Summary of Segment Revenues and Net Operating Income (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
SEGMENT REPORTING
Income from rental operations	$ 34,531			$ 33,053			$ 101,264	$ 96,736
Expenses from rental operations	17,928			17,673			52,909	48,079
Net operating income	16,603			15,380			48,355	48,657
Depreciation and amortization	6,120			5,551			17,865	16,634
Interest	5,081			4,671			14,882	13,261
Administration of REIT	1,471			1,007			4,087	3,267
Other income	(6,385)			(1,567)			(9,291)	(4,337)
Net income	10,316	$ 7,107	$ 3,389	5,718	$ 8,278	$ 5,836	20,812	19,832
Residential
SEGMENT REPORTING
Income from rental operations	29,226			27,838			85,222	80,028
Expenses from rental operations	16,211			15,352			47,964	42,564
Net operating income	13,015			12,486			37,258	37,464
Commercial
SEGMENT REPORTING
Income from rental operations	5,305			5,215			16,042	16,708
Expenses from rental operations	1,717			2,321			4,945	5,515
Net operating income	$ 3,588			$ 2,894			$ 11,097	$ 11,193

Segment Reporting - Summary o_2

Segment Reporting - Summary of Segment Assets and Accumulated Depreciation (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021
SEGMENT REPORTING
Real estate investments	$ 921,659	$ 896,702
Accumulated depreciation	(191,016)	(179,155)
Total real estate investments, net	730,643	717,547
Lease intangible assets, less accumulated amortization	5,556	6,246
Cash and cash equivalents	20,464	51,507	$ 22,168
Restricted deposits	9,267	9,149	$ 10,879
Investment in securities	42,062
Investment in unconsolidated affiliates	26,176	18,658
Notes receivable	7,749	7,457
Other assets, net	25,868	10,302
Total Assets	867,785	820,866
Residential
SEGMENT REPORTING
Real estate investments	728,010	692,722
Accumulated depreciation	(144,226)	(133,100)
Total real estate investments, net	583,784	559,622
Lease intangible assets, less accumulated amortization	209
Commercial
SEGMENT REPORTING
Real estate investments	193,649	203,980
Accumulated depreciation	(46,790)	(46,055)
Total real estate investments, net	146,859	157,925
Lease intangible assets, less accumulated amortization	$ 5,347	$ 6,246

Restricted Deposits And Funde_3

Restricted Deposits And Funded Reserves - Summary of Restricted Deposits and Funded Reserves (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021
RESTRICTED DEPOSITS AND FUNDED RESERVES
Tenant security deposits	$ 6,218	$ 5,165
Real estate tax and insurance escrows	1,154	1,355
Replacement reserves	1,895	1,791
Other funded reserves		838
Restricted deposits , Total	$ 9,267	$ 9,149	$ 10,879

Investment in Unconsolidated _3

Investment in Unconsolidated Affiliates - Total investments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Investment in Unconsolidated Affiliates
Investment in unconsolidated affiliates	$ 26,176	$ 18,658
Operating Partnership
Investment in Unconsolidated Affiliates
Investment in unconsolidated affiliates	$ 26,176	18,658
Operating Partnership \| Banner Building
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	66.67%
Investment in unconsolidated affiliates		60
Investment in unconsolidated affiliates	$ (608)
Operating Partnership \| Grand Forks Market Place Retail Center
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	50%
Investment in unconsolidated affiliates	$ 3,635	2,493
Operating Partnership \| SE Savage, LLC
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	60%
Investment in unconsolidated affiliates	$ 1,892	2,946
Operating Partnership \| SE Maple Grove, LLC
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	60%
Investment in unconsolidated affiliates	$ 1,859	2,823
Operating Partnership \| SE Rogers
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	60%
Investment in unconsolidated affiliates	$ 2,546	2,986
Operating Partnership \| ST Oak Cliff, LLC
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	70%
Investment in unconsolidated affiliates	$ 9,214	4,324
Operating Partnership \| SE Brooklyn Park, LLC
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	60%
Investment in unconsolidated affiliates	$ 2,995	$ 3,026
Operating Partnership \| SE Fossil Creek, LLC
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	70%
Investment in unconsolidated affiliates	$ 4,643

Investment in Unconsolidated _4

Investment in Unconsolidated Affiliates - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
SE Savage, LLC \| First Mortgage
Investment in Unconsolidated Affiliates
Mortgage balance	$ 30,829	$ 26,210
SE Savage, LLC \| Second Mortgage
Investment in Unconsolidated Affiliates
Mortgage balance		6,129
SE Savage, LLC \| Promissory Note
Investment in Unconsolidated Affiliates
Face amount of debt	1,397
SE Maple Grove, LLC \| First Mortgage
Investment in Unconsolidated Affiliates
Mortgage balance	24,788	24,788
SE Maple Grove, LLC \| Second Mortgage
Investment in Unconsolidated Affiliates
Mortgage balance	3,643	727
SE Rogers
Investment in Unconsolidated Affiliates
Assets of unconsolidated investee	32,516	22,847
Mortgage balance	15,348
SE Rogers \| First Mortgage
Investment in Unconsolidated Affiliates
Mortgage balance	25,742	15,688
ST Oak Cliff, LLC
Investment in Unconsolidated Affiliates
Assets of unconsolidated investee	32,608	7,394
Mortgage balance		0
SE Brooklyn Park, LLC
Investment in Unconsolidated Affiliates
Assets of unconsolidated investee	27,382	5,478
SE Brooklyn Park, LLC \| First Mortgage
Investment in Unconsolidated Affiliates
Mortgage balance	20,007	0
Sterling Properties LLLP \| Second Mortgage
Investment in Unconsolidated Affiliates
Mortgage balance	2,216
SE Fossil Creek, LLC
Investment in Unconsolidated Affiliates
Assets of unconsolidated investee	$ 8,272
Operating Partnership \| Banner Building
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	66.67%
Mortgage balance	$ 6,951	6,329
Operating Partnership \| Grand Forks Market Place Retail Center
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	50%
Percentage of interest	100%
Mortgage balance	$ 9,606	$ 9,794
Operating Partnership \| SE Savage, LLC
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	60%
Operating Partnership \| SE Maple Grove, LLC
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	60%
Operating Partnership \| SE Rogers
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	60%
Operating Partnership \| ST Oak Cliff, LLC
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	70%
Operating Partnership \| SE Brooklyn Park, LLC
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	60%
Cash contribution	$ 3,042
Operating Partnership \| Sterling Properties LLLP
Investment in Unconsolidated Affiliates
Cash contribution	$ 4,939
Operating Partnership \| SE Fossil Creek, LLC
Investment in Unconsolidated Affiliates
Ownership interest (as a percent)	70%
Cash contribution	$ 4,664

Investment in Unconsolidated _5

Investment in Unconsolidated Affiliates - Summary of financial position (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020
ASSETS
Real estate investments	$ 921,659			$ 896,702
Accumulated depreciation	(191,016)			(179,155)
Total real estate investments, net	730,643			717,547
Cash and cash equivalents	20,464			51,507	$ 22,168
Restricted deposits	9,267			9,149	10,879
Intangible assets, less accumulated amortization	5,556			6,246
Other assets, net	25,868			10,302
Total Assets	867,785			820,866
LIABILITIES
Mortgage notes payable, net	511,990			493,142
Tenant security deposits payable	6,305			5,225
Accrued expenses and other liabilities	14,778			18,604
Total Liabilities	542,208			525,349
SHAREHOLDERS' EQUITY
Total Shareholders' Equity	325,577	$ 314,224	$ 309,537	295,517	$ 296,916	$ 295,043	$ 293,859	$ 291,528
Total liabilities and shareholders' equity	867,785			820,866
Unconsolidated Affiliates
ASSETS
Real estate investments	202,492			134,839
Accumulated depreciation	(15,158)			(10,940)
Total real estate investments, net	187,334			123,899
Cash and cash equivalents	2,054			1,131
Restricted deposits	856			650
Intangible assets, less accumulated amortization	349			41
Other assets, net	740			909
Total Assets	191,333			126,630
LIABILITIES
Mortgage notes payable, net	139,087			87,996
Tenant security deposits payable	192			108
Accrued expenses and other liabilities	10,415			8,029
Total Liabilities	149,694			96,133
SHAREHOLDERS' EQUITY
Total Shareholders' Equity	41,639			30,497
Total liabilities and shareholders' equity	$ 191,333			$ 126,630

Investment in Unconsolidated _6

Investment in Unconsolidated Affiliates - Summary of results of operations (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Investment in Unconsolidated Affiliates
Income from rental operations	$ 34,531			$ 33,053			$ 101,264	$ 96,736
Expenses from rental operations	29,129			27,895			85,656	77,974
Income from operations	3,931			4,151			11,521	15,495
Depreciation and amortization	6,120			5,551			17,865	16,634
Interest	5,081			4,671			14,882	13,261
Net income	10,316	$ 7,107	$ 3,389	5,718	$ 8,278	$ 5,836	20,812	19,832
Unconsolidated Affiliates
Investment in Unconsolidated Affiliates
Income from rental operations	2,638			1,296			6,444	3,109
Expenses from rental operations	957			417			2,451	999
Income from operations	1,681			879			3,993	2,110
Depreciation and amortization	1,316			358			4,331	871
Interest	1,178			644			2,854	1,524
Other expense	2			(9)			13	(9)
Net income	$ (815)			$ (114)			$ (3,205)	$ (276)

Lease Intangibles - Schedule of

Lease Intangibles - Schedule of Intangible Assets and Liabilities and Accumulated Amortization (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Intangible Assets
Lease Intangibles	$ 17,771	$ 18,072
Accumulated Amortization	(12,215)	(11,826)
Total	5,556	6,246
Intangible Liabilities
Below-market lease	(2,380)	(2,525)
Below-market lease, accumulated amortization	1,696	1,714
Below-market lease, net	(684)	(811)
In-place leases
Intangible Assets
Lease Intangibles	15,305	15,455
Accumulated Amortization	(10,758)	(10,381)
Total	4,547	5,074
Above-market leases
Intangible Assets
Lease Intangibles	2,466	2,617
Accumulated Amortization	(1,457)	(1,445)
Total	$ 1,009	$ 1,172

Lease Intangibles - Schedule _2

Lease Intangibles - Schedule of Estimated Aggregate Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Intangible Assets
2022 (October 1, 2022 - December 31, 2022)	$ 388
2023	857
2024	827
2025	827
2026	676
Thereafter	1,981
Total	5,556	$ 6,246
Intangible Liabilities
2022 (October 1, 2022 - December 31, 2022)	38
2023	151
2024	151
2025	151
2026	80
Thereafter	113
Total	$ 684	$ 811

Lines of Credit - Additional In

Lines of Credit - Additional Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) item	Dec. 31, 2021 USD ($)
Bremer Bank
Lines of Credit
Number of letters of credit secured \| item	1
Letters of credit total	$ 50
Unused line of credit	9,865
Line of credit outstanding	0	$ 0
Bremer Bank Agreement One
Lines of Credit
Agreed line of credit	$ 4,915
Expiration date	Dec. 01, 2026
Bremer Bank Agreement One \| SOFR
Lines of Credit
Variable interest rate of line of credit	2%
Bremer Bank Agreement Two
Lines of Credit
Agreed line of credit	$ 5,000
Expiration date	Dec. 01, 2026
Bremer Bank Agreement Two \| SOFR
Lines of Credit
Variable interest rate of line of credit	2%

Mortgage Notes Payable - Summar

Mortgage Notes Payable - Summary (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
MORTGAGE NOTES PAYABLE
Long-term debt, gross	$ 514,297
Mortgage Notes Payable
MORTGAGE NOTES PAYABLE
Long-term debt, gross	514,297	$ 495,650
Less unamortized debt issuance costs	2,307	2,508
Long-term debt, net	511,990	493,142
Fixed rate mortgage notes payable \| Mortgage Notes Payable
MORTGAGE NOTES PAYABLE
Long-term debt, gross	514,297	490,413
Debt swapped from variable to fixed rate	$ 106,717	108,734
Variable rate mortgage notes payable \| Mortgage Notes Payable
MORTGAGE NOTES PAYABLE
Long-term debt, gross		$ 5,237

Mortgage Notes Payable - Schedu

Mortgage Notes Payable - Scheduled Maturities of Mortgage Notes Payable (Details) $ in Thousands	Sep. 30, 2022 USD ($)
MORTGAGE NOTES PAYABLE
2022 (October 1, 2022 - December 31, 2022)	$ 6,055
2023	53,006
2024	22,653
2025	53,130
2026	45,546
Thereafter	333,907
Total payments	$ 514,297

Derivatives and Hedging Activ_3

Derivatives and Hedging Activities - Other (Details) - Interest rate swap $ in Thousands	Sep. 30, 2022 USD ($) instrument	Dec. 31, 2021 instrument
Derivatives and Hedging Activities
Estimated amount to be reclassified over the next 12 months, as a increase to interest expense \| $	$ 758
Designated as Hedging Instrument \| Cash Flow Hedging
Derivatives and Hedging Activities
Number of instruments \| instrument	12	12

Derivatives and Hedging Activ_4

Derivatives and Hedging Activities - Summary (Details) - Designated as Hedging Instrument - Cash Flow Hedging $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) instrument	Dec. 31, 2021 USD ($) instrument
Interest rate swap
Derivatives and Hedging Activities
Notional amount	$ 106,717	$ 108,734
Number of instruments \| instrument	12	12
Interest Rate Swap, one, November 2029
Derivatives and Hedging Activities
Notional amount	$ 6,627
Fixed interest rate (as a percent)	3.15%
Derivative maturity date	Nov. 01, 2029
Interest Rate Swap, two, November 2029
Derivatives and Hedging Activities
Notional amount	$ 4,607
Fixed interest rate (as a percent)	3.28%
Derivative maturity date	Nov. 01, 2029
Interest Rate Swap, January 2030
Derivatives and Hedging Activities
Notional amount	$ 3,001
Fixed interest rate (as a percent)	3.39%
Derivative maturity date	Jan. 10, 2030
Interest Rate Swap, one, June 2030
Derivatives and Hedging Activities
Notional amount	$ 4,771
Fixed interest rate (as a percent)	2.79%
Derivative maturity date	Jun. 10, 2030
Interest Rate Swap, December 2027
Derivatives and Hedging Activities
Notional amount	$ 12,452
Fixed interest rate (as a percent)	2.91%
Derivative maturity date	Dec. 02, 2027
Interest Rate Swap, July 2031
Derivatives and Hedging Activities
Notional amount	$ 25,844
Fixed interest rate (as a percent)	2.99%
Derivative maturity date	Jul. 01, 2031
Interest Rate Swap, August 2029
Derivatives and Hedging Activities
Notional amount	$ 28,187
Fixed interest rate (as a percent)	3.54%
Derivative maturity date	Aug. 01, 2029
Interest Rate Swap, Dec 2031
Derivatives and Hedging Activities
Notional amount	$ 10,885
Fixed interest rate (as a percent)	3.32%
Derivative maturity date	Dec. 01, 2031
Interest Rate Swap, two, June 2030
Derivatives and Hedging Activities
Notional amount	$ 1,502
Fixed interest rate (as a percent)	3.07%
Derivative maturity date	Jun. 15, 2030
Interest Rate Swap, three, June 2030
Derivatives and Hedging Activities
Notional amount	$ 2,910
Fixed interest rate (as a percent)	3.07%
Derivative maturity date	Jun. 15, 2030
Interest Rate Swap, four, June 2030
Derivatives and Hedging Activities
Notional amount	$ 1,627
Fixed interest rate (as a percent)	2.94%
Derivative maturity date	Jun. 15, 2030
Interest Rate Swap, five, June 2030
Derivatives and Hedging Activities
Notional amount	$ 4,304
Fixed interest rate (as a percent)	2.94%
Derivative maturity date	Jun. 15, 2030

Derivatives and Hedging Activ_5

Derivatives and Hedging Activities - Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Other assets, net
Derivatives and Hedging Activities
Fair value, derivative assets	$ 14,356	$ 698
Accrued expenses and other liabilities
Derivatives and Hedging Activities
Fair value, derivative liabilities		$ 1,648

Derivatives and Hedging Activ_6

Derivatives and Hedging Activities - Gain-Loss (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivatives and Hedging Activities
Amount of (Gain)/Loss Recognized in Other Comprehensive Income on Derivatives	$ (4,967)	$ (3,815)	$ (6,524)	$ 66	$ 845	$ (2,384)	$ (15,306)	$ (1,473)
Interest expense
Derivatives and Hedging Activities
Amount of (Gain)/Loss Recognized in Other Comprehensive Income on Derivatives	(71)			199			548	433
Interest rate swap
Derivatives and Hedging Activities
Amount of (Gain)/Loss Recognized in Other Comprehensive Income on Derivatives	$ (4,967)			$ 66			$ (15,306)	$ (1,473)

Derivatives and Hedging Activ_7

Derivatives and Hedging Activities - Credit-Risk Related Contingent Features (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Credit-risk-related Contingent Features
Termination value of interest rate derivatives in asset position	$ 14,356

Fair Value Measurement - Carryi

Fair Value Measurement - Carrying Value and Estimated Fair Value of Company's Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Carrying Value
Financial assets:
Investment in securities	$ 42,062
Notes receivable	7,749	$ 7,457
Derivative assets	14,356	698
Financial liabilities:
Mortgage notes payable	514,297	495,650
Derivative liabilities		1,648
Fair Value
Financial assets:
Investment in securities	42,062
Notes receivable	9,073	9,840
Derivative assets	14,356	698
Financial liabilities:
Mortgage notes payable	$ 493,082	508,285
Derivative liabilities		$ 1,648

Fair Value Measurement - Schedu

Fair Value Measurement - Schedule of Fair Value of Assets on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value Measurements
Derivative assets	$ 14,356	$ 698
Derivative liabilities		1,648
Level 2
Fair Value Measurements
Derivative assets	$ 14,356	698
Derivative liabilities		$ 1,648

Fair Value Measurement - Fair V

Fair Value Measurement - Fair Value of Company's Financial Assets and Liabilities (Details) - Fair Value - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value Measurements
Mortgage notes payable	$ 493,082	$ 508,285
Notes receivable	9,073	9,840
Level 3
Fair Value Measurements
Mortgage notes payable	493,082	508,285
Notes receivable	$ 9,073	$ 9,840

Fair Value Measurement - Additi

Fair Value Measurement - Additional Information (Details) - Measurement Input, Discount Rate	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Minimum
Fair Value Disclosures
Discount rates used to estimate fair value of mortgages and notes payable	0.0485	0.0325
Receivables, measurement input	0.0325	0.0325
Maximum
Fair Value Disclosures
Discount rates used to estimate fair value of mortgages and notes payable	0.0490	0.0335
Receivables, measurement input	0.0725	0.0725

Leases - Other (Details)

Leases - Other (Details)	Sep. 30, 2022
Residential
Revenue from leases
Percentage of revenue from leases that are generally for terms of one year or less	83.60%
Commercial
Revenue from leases
Percentage of revenue from leases primarily under long-term lease agreements	16.40%

Leases - Lease Income (Details)

Leases - Lease Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Leases - Lease Income (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lease income:
Lease income related to fixed lease payments	$ 32,050	$ 30,627	$ 94,168	$ 89,253
Lease income related to variable lease payments	1,113	1,130	3,401	3,424
Other	(37)	139	(236)	220
Lease income	33,126	31,896	97,333	92,897
Rental income accounted for under revenue recognition standard:
Other rental income	1,405	1,157	3,931	3,839
Residential
Lease income:
Lease income related to fixed lease payments	27,993	26,748	81,928	76,722
Other	(150)	(35)	(513)	(212)
Lease income	27,843	26,713	81,415	76,510
Commercial
Lease income:
Lease income related to fixed lease payments	4,057	3,879	12,240	12,531
Lease income related to variable lease payments	1,113	1,130	3,401	3,424
Other	113	174	277	432
Lease income	$ 5,283	$ 5,183	$ 15,918	$ 16,387

Leases - Future minimum rental

Leases - Future minimum rental income (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Future minimum rental income:
2022 (October 1, 2022- December 31, 2022)	$ 3,897
2023	15,738
2024	15,060
2025	14,789
2026	13,541
Thereafter	57,397
Total	$ 120,422

Related Party Transactions - Pr

Related Party Transactions - Property Management and Board of Trustee Fees (Details) - GOLDMARK Property Management - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Related Party Transactions
Management fee, amount paid	$ 10,485	$ 9,634
Management fees paid expressed as a percentage of net collected rents	5%	5%
Management fees as percent of net collected rents	$ 4,107	$ 3,862
Repair and maintenance related payroll and payroll related expenses	$ 5,578	$ 5,012

Related Party Transactions - Ad

Related Party Transactions - Advisory Agreement and Other (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) employee shares	Sep. 30, 2021 USD ($) shares	Dec. 31, 2021 USD ($)
Related Party Transactions
Number of paid employees \| employee			0
Operation receivables outstanding	$ 42		$ 42		$ 128
Rental income	32,050	$ 30,627	94,168	$ 89,253
Costs and expenditures incurred due to construction in progress			420	187
Operational liabilities outstanding	3		3
Sterling Management, LLC
Related Party Transactions
Advisory management fees			2,739	2,474
Advisory management fees outstanding	313		313		296
Acquisition fees			934	375
Acquisition fees outstanding	58		58
Development fees outstanding					79
Disposition fees			631	146
Disposition fees outstanding	30		30
Financing fees			83	146
Financing fees outstanding	4		4		38
Project management fee			420	409
Project management fee outstanding	3		3		98
Rental income			97	77
GOLDMARK Property Management
Related Party Transactions
Real estate commissions			319	217
Real estate commissions outstanding	59		59		0
Rental income			200	224
GOLDMARK SCHLOSSMAN Commercial Real Estate Services
Related Party Transactions
Real estate commissions			371	297
Real estate commissions outstanding	29		$ 29		0
Rental income				19
Entity Affiliated With Messrs Regan and Wieland
Related Party Transactions
Number of operating partnership (OP) units issued in connection with the acquisition of various properties \| shares			510,000
Value of operating partnership (OP) units issued in connection with the acquisition of various properties			$ 11,741
Trumont Group, LLC
Related Party Transactions
Development fee			717	51
Development fees outstanding	103		103		51
Trumont Construction, LLC
Related Party Transactions
Construction fees			734	12
Construction fees payable	94		94		29
General construction costs			284	41
General construction costs payable	49		49
Bell Bank
Related Party Transactions
Rental income			639	278
Outstanding on principal loans	64,691		64,691		66,365
Interest expense incurred			491	$ 1,511
Accrued interest	$ 125		$ 125		$ 148
Affiliated Entities
Related Party Transactions
Number of operating partnership (OP) units issued in connection with the acquisition of various properties \| shares				0

Dispositions (Details)

Dispositions (Details) $ in Thousands	9 Months Ended
Dispositions (Details) $ in Thousands	Sep. 30, 2022 USD ($) property	Sep. 30, 2021 USD ($) property
Dispositions
Gain on sale of real estate	$ 9,897	$ 1,710
Disposed of by Sale
Dispositions
Number of dispositions \| property	4	2
Sale price		$ 5,850
Gain on sale of real estate		$ 1,710
Property, Savage, MN \| Disposed of by Sale
Dispositions
Number of dispositions \| property	1
Sale price	$ 2,700
Gain on sale of real estate	$ 1,328
Property, Moorhead, MN \| Disposed of by Sale
Dispositions
Number of dispositions \| property	1
Sale price	$ 6,400
Gain on sale of real estate	$ 2,012
Property, Edina Minnesota \| Disposed of by Sale
Dispositions
Number of dispositions \| property	1
Sale price	$ 15,320
Gain on sale of real estate	6,728
Property, East Grand Forks, MN \| Disposed of by Sale
Dispositions
Sale price	1,200
Gain on sale of real estate	$ (171)

Acquisitions - Purchases, Curre

Acquisitions - Purchases, Current Year (Details) $ / shares in Units, $ in Thousands					9 Months Ended
	Sep. 13, 2022 USD ($) item	Jun. 10, 2022 USD ($) item	May 31, 2022 USD ($) item	Feb. 28, 2022 USD ($) item	Sep. 30, 2022 USD ($) item $ / shares shares
Acquisitions
Acquisition price					$ 38,755
Number of acquisitions \| item					6
Aggregate number of limited partnership units issued for acquisition \| shares					539,000
Price per limited partnership unit issued for acquisition, price one \| $ / shares					$ 23
Aggregate value of limited partnership units issued for acquisition					$ 12,390
Deer Park, Hutchinson, MN
Acquisitions
Units acquired \| item				138
Acquisition price				$ 15,073
Desota Estates, Grand Forks, ND
Acquisitions
Units acquired \| item			68
Acquisition price			$ 5,863
Desota Townhomes, Grand Forks, ND
Acquisitions
Units acquired \| item			24
Acquisition price			$ 3,226
Desota Apartments, East Grand Forks, MN
Acquisitions
Units acquired \| item			24
Acquisition price			$ 1,230
Diamond Bend, Mandan, ND
Acquisitions
Units acquired \| item		78
Acquisition price		$ 10,919
Newgate Apartments, Bismarck, ND
Acquisitions
Units acquired \| item	46
Acquisition price	$ 2,444

Acquisitions - Summary of Acqui

Acquisitions - Summary of Acquisition Date Fair Values (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Acquisition date fair values
Real estate investment acquired	$ 730,643		$ 717,547
Acquired lease intangible assets	5,556		6,246
Total Assets	867,785		$ 820,866
Equity/limited partnership unit consideration	(12,390)
Asset Acquisitions
Acquisition date fair values
Real estate investment acquired	38,296	$ 39,344
Acquired lease intangible assets	749
Assumed assets	3	23
Total Assets	39,048	39,367
Other liabilities	(293)	(569)
Net assets acquired	38,755	38,798
Equity/limited partnership unit consideration	(12,390)	(2,883)
Net cash consideration	$ 26,365	$ 35,915

Subsequent Events - Additional

Subsequent Events - Additional Information (Details)	Oct. 17, 2022 $ / shares
Subsequent Event
Subsequent Events
Dividend or distribution paid	$ 0.2875