Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 25, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-35624 | |
Entity Registrant Name | CENTERSPACE | |
Entity Incorporation, State or Country Code | ND | |
Entity Tax Identification Number | 45-0311232 | |
Entity Address, Address Line One | 3100 10th Street SW | |
Entity Address, Address Line Two | Post Office Box 1988 | |
Entity Address, City or Town | Minot | |
Entity Address, State or Province | ND | |
Entity Address, Postal Zip Code | 58702-1988 | |
City Area Code | 701 | |
Local Phone Number | 837-4738 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,280,535 | |
Entity Central Index Key | 0000798359 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Shares of Beneficial Interest, no par value | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Shares of Beneficial Interest, no par value | |
Trading Symbol | CSR | |
Security Exchange Name | NYSE | |
Series C Preferred Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Series C Cumulative Redeemable Preferred Shares | |
Trading Symbol | CSR-PRC | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Real estate investments | ||
Property owned | $ 2,203,606 | $ 1,812,557 |
Less accumulated depreciation | (426,926) | (399,249) |
Total property owned | 1,776,680 | 1,413,308 |
Mortgage loans receivable at fair value | 42,160 | 24,661 |
Total real estate investments | 1,818,840 | 1,437,969 |
Cash and cash equivalents | 20,816 | 392 |
Restricted cash | 2,376 | 6,918 |
Other assets | 34,919 | 18,904 |
TOTAL ASSETS | 1,876,951 | 1,464,183 |
LIABILITIES | ||
Accounts payable and accrued expenses | 58,092 | 55,609 |
Revolving lines of credit | 57,000 | 152,871 |
Notes payable, net of unamortized loan costs of $546 and $754 respectively | 299,454 | 269,246 |
Mortgages payable, net of unamortized loan costs of $3,258 and $1,371, respectively | 489,140 | 297,074 |
TOTAL LIABILITIES | 903,686 | 774,800 |
COMMITMENTS AND CONTINGENCIES (NOTE 10) | ||
EQUITY | ||
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 14,281 shares issued and outstanding at September 30, 2021 and 13,027 shares issued and outstanding at December 31, 2020) | 1,092,130 | 968,263 |
Accumulated distributions in excess of net income | (454,691) | (427,681) |
Accumulated other comprehensive income (loss) | (5,784) | (15,905) |
Total shareholders’ equity | 725,185 | 618,207 |
Noncontrolling interests – Operating Partnership and Series E preferred units | 225,850 | 53,930 |
Noncontrolling interests – consolidated real estate entities | 645 | 686 |
Total equity | 951,680 | 672,823 |
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY | 1,876,951 | 1,464,183 |
Series D Preferred Units | ||
LIABILITIES | ||
SERIES D PREFERRED UNITS (Cumulative convertible preferred units, $100 par value, 166 units issued and outstanding at September 30, 2021 and December 31, 2020, aggregate liquidation preference of $16,560) | 21,585 | 16,560 |
Series C Preferred Shares Of Beneficial Interest | ||
EQUITY | ||
Series C Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, $25 per share liquidation preference, 3,881 shares issued and outstanding at September 30, 2021 and December 31, 2020, aggregate liquidation preference of $97,036) | $ 93,530 | $ 93,530 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
EQUITY | ||
Preferred shares liquidation preference | $ 97,000 | |
Common shares of beneficial interest, shares issued (in shares) | 14,281,000 | 13,027,000 |
Common shares of beneficial interest, shares outstanding (in shares) | 14,281,000 | 13,027,000 |
Series D Preferred Units | ||
EQUITY | ||
Preferred units, par value (in dollars per share) | $ 100 | $ 100 |
Preferred units, shares issued (in shares) | 166,000 | 166,000 |
Preferred units, shares outstanding (in shares) | 166,000 | 166,000 |
Preferred units, liquidation preference | $ 16,560 | $ 16,560 |
Series C Preferred Shares Of Beneficial Interest | ||
EQUITY | ||
Preferred shares, liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred units, shares issued (in shares) | 3,881,000 | 3,881,000 |
Preferred shares of beneficial interest, shares outstanding (in shares) | 3,881,000 | 3,881,000 |
Preferred shares liquidation preference | $ 97,036 | $ 97,036 |
Term Loans | ||
LIABILITIES | ||
Unamortized loan costs | 546 | 754 |
Mortgages | ||
LIABILITIES | ||
Unamortized loan costs | $ 3,258 | $ 1,371 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
REVENUE | $ 50,413 | $ 44,138 | $ 143,717 | $ 132,454 |
EXPENSES | ||||
Property operating expenses, excluding real estate taxes | 14,434 | 13,129 | 40,901 | 38,957 |
Real estate taxes | 5,916 | 5,402 | 17,450 | 16,277 |
Property management expense | 2,203 | 1,442 | 6,055 | 4,341 |
Casualty (gain) loss | (10) | 91 | 64 | 1,331 |
Depreciation and amortization | 22,447 | 18,995 | 61,747 | 55,311 |
General and administrative expenses | 4,279 | 3,077 | 11,982 | 9,707 |
TOTAL EXPENSES | 49,269 | 42,136 | 138,199 | 125,924 |
Operating income | 1,144 | 2,002 | 5,518 | 6,530 |
Interest expense | (7,302) | (6,771) | (21,622) | (20,622) |
Interest and other income (loss) | (5,082) | 277 | (4,032) | (1,979) |
Income (loss) before gain (loss) on sale of real estate and other investments | (11,240) | (4,492) | (20,136) | (16,071) |
Gain (loss) on sale of real estate and other investments | 0 | 25,676 | 26,840 | 25,486 |
NET INCOME (LOSS) | (11,240) | 21,184 | 6,704 | 9,415 |
Dividends to Series D preferred unitholders | (160) | (160) | (480) | (480) |
Net (income) loss attributable to noncontrolling interests – Operating Partnership and Series E preferred units | 1,930 | (1,387) | 1,013 | (248) |
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities | (22) | (8) | (58) | 132 |
Net income (loss) attributable to controlling interests | (9,492) | 19,629 | 7,179 | 8,819 |
Dividends to preferred shareholders | (1,607) | (1,607) | (4,821) | (4,921) |
Discount (premium) on redemption of preferred shares | 0 | (1) | 0 | 297 |
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ (11,099) | $ 18,021 | $ 2,358 | $ 4,195 |
NET EARNINGS (LOSS) PER COMMON SHARE - BASIC (in dollars per share) | $ (0.79) | $ 1.40 | $ 0.17 | $ 0.33 |
NET EARNINGS (LOSS) PER COMMON SHARE - DILUTED (in dollars per share) | $ (0.81) | $ 1.38 | $ 0.12 | $ 0.33 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (11,240) | $ 21,184 | $ 6,704 | $ 9,415 |
Other comprehensive income: | ||||
Unrealized gain (loss) from derivative instrument | (70) | (210) | 1,555 | (11,314) |
(Gain) loss on derivative instrument reclassified into earnings | 6,350 | 1,093 | 8,566 | 1,665 |
Total comprehensive income (loss) | (4,960) | 22,067 | 16,825 | (234) |
Net comprehensive (income) loss attributable to noncontrolling interests – Operating Partnership and Series E preferred units | (3,055) | (1,451) | (2,389) | 516 |
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities | (22) | (8) | (58) | 132 |
Comprehensive income (loss) attributable to controlling interests | $ (8,037) | $ 20,608 | $ 14,378 | $ 414 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Series C Preferred Stock | Series E Preferred Units | PREFERRED SHARES | COMMON SHARES | COMMON SHARESSeries E Preferred Units | ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET INCOME | ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET INCOMESeries C Preferred Stock | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NONCONTROLLING INTERESTS | NONCONTROLLING INTERESTSSeries E Preferred Units |
Beginning balance at Dec. 31, 2019 | $ 679,902 | $ 99,456 | $ 917,400 | $ (390,196) | $ (7,607) | $ 60,849 | |||||
Beginning balance (in shares) at Dec. 31, 2019 | 12,098 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) attributable to controlling interests and noncontrolling interests | 8,935 | 8,819 | 116 | ||||||||
Change in fair value of derivatives | (9,649) | (9,649) | |||||||||
Distributions - common shares and units | (28,735) | (26,576) | (2,159) | ||||||||
Distributions - Series C preferred shares | (4,921) | $ (4,921) | $ (4,921) | ||||||||
Share-based compensation, net of forfeitures (in shares) | 20 | ||||||||||
Share-based compensation, net of forfeitures | 1,521 | $ 1,521 | |||||||||
Sale / issuance of stock, net (in shares) | 819 | ||||||||||
Sale / issuance of stock | 58,204 | $ 58,204 | |||||||||
Redemption of units for common shares (in shares) | 40 | ||||||||||
Redemption of units for common shares | 0 | $ (344) | 344 | ||||||||
Shares repurchased | (5,629) | (5,926) | 297 | ||||||||
Acquisition of redeemable noncontrolling interests | (12,221) | $ (7,584) | (4,637) | ||||||||
Other (in shares) | (1) | ||||||||||
Other | (896) | $ (761) | (135) | ||||||||
Ending balance at Sep. 30, 2020 | 686,511 | 93,530 | $ 968,436 | (412,577) | (17,256) | 54,378 | |||||
Ending balance (in shares) at Sep. 30, 2020 | 12,976 | ||||||||||
Beginning balance at Jun. 30, 2020 | 665,507 | 93,579 | $ 958,292 | (421,515) | (18,139) | 53,290 | |||||
Beginning balance (in shares) at Jun. 30, 2020 | 12,827 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) attributable to controlling interests and noncontrolling interests | 21,024 | 19,629 | 1,395 | ||||||||
Change in fair value of derivatives | 883 | 883 | |||||||||
Distributions - common shares and units | (9,796) | (9,083) | (713) | ||||||||
Distributions - Series C preferred shares | (1,607) | (1,607) | (1,607) | ||||||||
Share-based compensation, net of forfeitures | 554 | $ 554 | |||||||||
Sale / issuance of stock, net (in shares) | 145 | ||||||||||
Sale / issuance of stock | 10,063 | $ 10,063 | |||||||||
Redemption of units for common shares (in shares) | 4 | ||||||||||
Redemption of units for common shares | 0 | $ (462) | 462 | ||||||||
Shares repurchased | (50) | (49) | (1) | ||||||||
Other | (67) | (11) | (56) | ||||||||
Ending balance at Sep. 30, 2020 | 686,511 | 93,530 | $ 968,436 | (412,577) | (17,256) | 54,378 | |||||
Ending balance (in shares) at Sep. 30, 2020 | 12,976 | ||||||||||
Beginning balance at Dec. 31, 2020 | 672,823 | 93,530 | $ 968,263 | (427,681) | (15,905) | 54,616 | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 13,027 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) attributable to controlling interests and noncontrolling interests | 6,224 | 7,179 | (955) | ||||||||
Change in fair value of derivatives | 10,121 | 10,121 | |||||||||
Distributions - common shares and units | (31,259) | (29,368) | (1,891) | ||||||||
Distributions - Series C preferred shares | (4,821) | (4,821) | (4,821) | ||||||||
Distributions - Series E preferred stock | $ (585) | $ (585) | |||||||||
Share-based compensation, net of forfeitures (in shares) | 28 | ||||||||||
Share-based compensation, net of forfeitures | 2,088 | $ 2,088 | |||||||||
Sale / issuance of stock, net (in shares) | 1,095 | ||||||||||
Sale / issuance of stock | 85,864 | 217,513 | $ 85,864 | $ 44,905 | 172,608 | ||||||
Redemption of units for common shares (in shares) | 131 | ||||||||||
Redemption of units for common shares | 0 | $ (2,815) | 2,815 | ||||||||
Change in value of Series D preferred units | (5,025) | (5,025) | |||||||||
Other | (1,263) | (1,150) | (113) | ||||||||
Ending balance at Sep. 30, 2021 | 951,680 | 93,530 | $ 1,092,130 | (454,691) | (5,784) | 226,495 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 14,281 | ||||||||||
Beginning balance at Jun. 30, 2021 | 735,886 | 93,530 | $ 1,033,940 | (433,310) | (12,064) | 53,790 | |||||
Beginning balance (in shares) at Jun. 30, 2021 | 14,045 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) attributable to controlling interests and noncontrolling interests | (11,400) | (9,492) | (1,908) | ||||||||
Change in fair value of derivatives | 6,280 | 6,280 | |||||||||
Distributions - common shares and units | (10,891) | (10,282) | (609) | ||||||||
Distributions - Series C preferred shares | (1,607) | $ (1,607) | $ (1,607) | ||||||||
Distributions - Series E preferred stock | (585) | (585) | |||||||||
Share-based compensation, net of forfeitures (in shares) | 1 | ||||||||||
Share-based compensation, net of forfeitures | 600 | $ 600 | |||||||||
Sale / issuance of stock, net (in shares) | 199 | ||||||||||
Sale / issuance of stock | 19,508 | $ 217,513 | $ 19,508 | $ 44,905 | $ 172,608 | ||||||
Redemption of units for common shares (in shares) | 36 | ||||||||||
Redemption of units for common shares | 0 | $ (3,233) | 3,233 | ||||||||
Change in value of Series D preferred units | (3,563) | (3,563) | |||||||||
Other | (61) | (27) | (34) | ||||||||
Ending balance at Sep. 30, 2021 | $ 951,680 | $ 93,530 | $ 1,092,130 | $ (454,691) | $ (5,784) | $ 226,495 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 14,281 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Distributions - common shares and units (in dollars per share) | $ 0.72 | $ 0.70 | $ 2.12 | $ 2.10 |
Series C Preferred Stock | ||||
Distributions - preferred shares and units (in dollars per share) | 0.4140625 | $ 0.4140625 | 1.2421875 | $ 1.2421875 |
Series E Preferred Units | ||||
Distributions - preferred shares and units (in dollars per share) | $ 0.322917 | $ 0.322917 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 6,704 | $ 9,415 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization, including amortization of capitalized loan costs | 62,527 | 56,070 |
(Gain) loss on sale of real estate and other investments | (26,840) | (25,486) |
Realized (gain) loss on marketable securities | 0 | 3,378 |
Share-based compensation expense | 2,088 | 1,521 |
Loss on termination of interest rate swaps | 5,343 | 0 |
Other, net | 3,275 | 2,393 |
Changes in other assets and liabilities: | ||
Other assets | (4,550) | (1,632) |
Accounts payable and accrued expenses | 7,808 | 1,599 |
Net cash provided by (used by) operating activities | 56,355 | 47,258 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sale of marketable securities | 0 | 3,856 |
Proceeds from repayment of mortgage loans and notes receivable | 139 | 10,020 |
Increase in mortgages and notes receivable | (17,498) | (18,187) |
Proceeds from sale of real estate and other investments | 59,233 | 43,669 |
Payments for acquisitions of real estate investments | (209,669) | (168,411) |
Payments for improvements of real estate investments | (20,655) | (20,411) |
Other investing activities | (441) | 892 |
Net cash provided by (used by) investing activities | (188,891) | (148,572) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net proceeds from mortgages payable | 196,725 | 0 |
Principal payments on mortgages payable | (27,650) | (17,233) |
Proceeds from revolving lines of credit | 173,733 | 126,578 |
Principal payments on revolving lines of credit | (269,604) | (41,656) |
Net proceeds from notes payable | 174,544 | 0 |
Principal payments on notes payable | (145,000) | 0 |
Payment for termination of interest rate swap | (3,804) | 0 |
Payments for acquisition of noncontrolling interests – consolidated real estate entities | 0 | (12,221) |
Net proceeds from issuance of common shares | 85,864 | 58,204 |
Repurchase of Series C preferred shares | 0 | (5,629) |
Distributions paid to common shareholders | (28,205) | (25,962) |
Distributions paid to preferred shareholders | (4,821) | (4,921) |
Distributions paid to preferred unitholders | (480) | (480) |
Distributions paid to noncontrolling interests – Operating Partnership and Series E preferred units | (2,550) | (2,187) |
Other financing activities | (334) | (293) |
Net cash provided by (used by) financing activities | 148,418 | 74,200 |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 15,882 | (27,114) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD | 7,310 | 46,117 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD | 23,192 | 19,003 |
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Accrued capital expenditures | 1,239 | (297) |
Operating partnership units converted to shares | (2,815) | (344) |
Distributions declared but not paid to common shareholders | 10,891 | 9,796 |
Retirement of shares withheld for taxes | 929 | 0 |
Real estate assets acquired through assumption of debt | 20,000 | 0 |
Fair value adjustment to debt | 2,367 | 0 |
Real estate assets acquired through exchange of note receivable | 0 | 17,663 |
Note receivable exchanged through real estate acquisition | 0 | (17,663) |
Real estate assets acquired through issuance of Series E preferred units | 217,513 | 0 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 20,050 | 19,527 |
Cash and cash equivalents | 20,816 | 16,804 |
Restricted cash | 2,376 | 2,199 |
Total cash, cash equivalents and restricted cash | $ 23,192 | $ 19,003 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Centerspace, collectively with its consolidated subsidiaries (“Centerspace,” “the Company,” “we,” “us,” or “our”), is a North Dakota real estate investment trust (“REIT”) focused on the ownership, management, acquisition, redevelopment, and development of apartment communities. As of September 30, 2021, Centerspace owned interests in 79 apartment communities consisting of 14,275 apartment homes. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION Centerspace conducts a majority of its business activities through a consolidated operating partnership, Centerspace, LP (f/k/a IRET Properties), a North Dakota limited partnership (the “Operating Partnership”), as well as through a number of other consolidated subsidiary entities. The accompanying Condensed Consolidated Financial Statements include the Company’s accounts and the accounts of all its subsidiaries in which it maintains a controlling interest, including the Operating Partnership. All intercompany balances and transactions are eliminated in consolidation. The Condensed Consolidated Financial Statements also reflect the Operating Partnership’s ownership of a joint venture entity in which the Operating Partnership has a general partner or controlling interest. This entity is consolidated into the Company’s operations, with noncontrolling interests reflecting the noncontrolling partners’ share of ownership, income, and expenses. UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Centerspace’s interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with GAAP are omitted. The year-end balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for the fair presentation of financial position, results of operations, and cash flows for the interim periods, have been included. The current period’s results of operations are not necessarily indicative of results which ultimately may be achieved for the year. The interim Condensed Consolidated Financial Statements and accompanying notes thereto should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 22, 2021. USE OF ESTIMATES The preparation of 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. RECENT ACCOUNTING PRONOUNCEMENTS The following table provides a brief description of recent accounting standards updates (“ASUs”). Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. This ASU is optional and may be elected over time. Centerspace adopted the guidance in June 2021 on a prospective basis. This adoption did not have a material impact on the Condensed Consolidated Financial Statements. ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity's Own Equity This ASU simplifies accounting for convertible instruments and removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. This ASU also simplifies the diluted earnings per share calculation in certain areas and provides updated disclosure requirements. This ASU is effective for annual reporting periods beginning after December 15, 2021. Early adoption is permitted. Centerspace early adopted this guidance in the first quarter of 2021 using the modified retrospective method. The adoption did not have a material impact on the Condensed Consolidated Financial Statements. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH As of September 30, 2021 and December 31, 2020, restricted cash consisted primarily of real estate deposits and escrows held by lenders for real estate taxes, insurance, and capital additions. LEASES As a lessor, Centerspace primarily leases multifamily apartment homes which qualify as operating leases with terms that are generally one year or less. Rental revenues are recognized in accordance with ASC 842, Leases , using a method that represents a straight-line basis over the term of the lease. Rental income represents approximately 98.1% of total revenues and includes gross market rent less adjustments for concessions, vacancy loss, and bad debt. Other property revenues represent the remaining 1.9% of total revenues and are primarily driven by other fee income, which is typically recognized when earned, at a point in time. Some of the Company’s apartment communities have commercial spaces available for lease. Lease terms for these spaces typically range from three Beginning in April 2020, the Company abated rent, common area maintenance, and real estate taxes for commercial tenants that experienced government-mandated interruptions or closures of their businesses related to the COVID-19 pandemic. The Company elected to account for these accommodations as though enforceable rights and obligations existed without evaluating if such a right or obligation existed under the lease agreement, as allowed by the FASB Q&A released on April 10, 2020. The accommodations were recognized as variable lease payments. During the three months ended September 30, 2021, the Company did not recognize a reduction in revenue due to the abatement of amounts due from commercial tenants, compared to a reduction of $136,000 in the same period of the prior year. During the nine months ended September 30, 2021 and 2020, the Company recognized reductions of $47,000 and $538,000, respectively, due to the abatement of amounts due from commercial tenants. Many of the leases contain non-lease components for utility reimbursement from residents and common area maintenance from commercial tenants. Centerspace has elected the practical expedient to combine lease and non-lease components for all asset classes. The combined components are included in lease income and are accounted for under ASC 842. The aggregate amount of future scheduled lease income on commercial operating leases, excluding any variable lease income and non-lease components, as of September 30, 2021, was as follows: (in thousands) 2021 (remainder) $ 593 2022 2,339 2023 2,336 2024 2,323 2025 2,292 Thereafter 2,488 Total scheduled lease income - commercial operating leases $ 12,371 REVENUES Revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration to which the Company expects to be entitled for those goods and services. Revenue streams that are included in revenues from contracts with customers include: • O ther property revenue: Centerspace recognizes revenue for rental related income not included as a component of a lease, such as application fees, as earned. • Gains or losses on sales of real estate: A gain or loss is recognized when the criteria for derecognition of an asset are met, including when (1) a contract exists and (2) the buyer obtained control of the nonfinancial asset that was sold. The following table presents the disaggregation of revenue streams for the three and nine months ended September 30, 2021 and 2020: (in thousands) Three Months Ended September 30, Nine Months Ended September 30, Revenue Stream Applicable Standard 2021 2020 2021 2020 Fixed lease income - operating leases Leases $ 47,292 $ 41,712 $ 134,817 $ 125,555 Variable lease income - operating leases Leases 2,171 1,729 6,243 4,811 Other property revenue Revenue from contracts with customers 950 697 2,657 2,088 Total revenue $ 50,413 $ 44,138 $ 143,717 $ 132,454 IMPAIRMENT OF LONG-LIVED ASSETS The Company evaluates long-lived assets, including investments in real estate, for impairment indicators at least quarterly. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, expected holding period of each property, and legal and environmental concerns. If indicators exist, the Company compares the expected future undiscounted cash flows for the property against the carrying amount of that property. If the sum of the estimated undiscounted cash flows is less than the carrying amount, an impairment loss is recorded for the difference between the estimated fair value and the carrying amount. If the anticipated holding period for properties, the estimated fair value of properties, or other factors change based on market conditions or otherwise, the evaluation of impairment charges may be different and such differences could be material to the consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates, and capital requirements that could differ materially from actual results. Reducing planned property holding periods may increase the likelihood of recording impairment losses. During the three and nine months ended September 30, 2021 and 2020, the Company recorded no impairment charges. MORTGAGE LOANS RECEIVABLE AND NOTES RECEIVABLE In March 2020, in connection with the acquisition of Ironwood, an apartment community in New Hope, Minnesota, the Company acquired a tax increment financing note receivable (“TIF”) with a principal balance of $6.4 million at September 30, 2021 and December 31, 2020, which appears within other assets in the Condensed Consolidated Balance Sheets. The note bears an interest rate of 4.5% with payments due in February and August of each year. In December 2019, Centerspace originated a $29.9 million construction loan and a $15.3 million mezzanine loan for the development of a multifamily community located in Minneapolis, Minnesota. During the three months ended September 30, 2021, construction on the project was completed and the lease-up phase began. In conjunction with the loans, the Company received a guaranty for the substantial completion of the project improvements from an investment grade guarantor. The construction and mezzanine loans bear and accrue interest at 4.5% and 11.5%, respectively. As of September 30, 2021, the Company had fully funded the $29.9 million construction loan and $11.4 million of the mezzanine loan, both of which appear within mortgage loans receivable in the Condensed Consolidated Balance Sheets. As of September 30, 2021, the construction loan had accrued $813,000 of interest which is added to the $29.9 million original principal balance. As of December 31, 2020, the Company had funded $24.7 million of the construction loan. The loans are secured by mortgages and mature on December 31, 2023, and the agreement provides Centerspace with an option to purchase the development. The loans represent an investment in an unconsolidated variable interest entity (“VIE”). The Company is not the primary beneficiary of the VIE as it does not have the power to direct the activities that most significantly impact the entity’s economic performance nor does it have significant influence over the entity. VARIABLE INTEREST ENTITIES Centerspace has determined that its Operating Partnership and each of its less-than-wholly owned real estate partnerships are VIEs, as the limited partners or the functional equivalent of limited partners lack substantive kick-out rights and substantive participating rights. The Company is the primary beneficiary of the VIEs, and the VIEs are required to be consolidated on the balance sheet because the Company has a controlling financial interest in the VIEs and has both the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs as well as the obligation to absorb losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. Because the Operating Partnership is a VIE, all of the Company’s assets and liabilities are held through a VIE. MARKETABLE SECURITIES Marketable securities consisted of equity securities. Equity securities are reported at fair value based on quoted market prices (Level 1 inputs). Any unrealized gains or losses are included in interest and other income on the consolidated statements of operations. As of September 30, 2021 and December 31, 2020 the Company had no marketable securities. During the nine months ended September 30, 2020, the Company had a realized loss of $3.4 million arising from the disposal of such securities which appears in interest and other income (loss) in the Condensed Consolidated Statements of Operations. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares of beneficial interest (“common shares”) outstanding during the period. Centerspace has issued restricted stock units (“RSUs”) and incentive stock options (“ISOs”) under the 2015 Incentive Plan, Series D Convertible Preferred Units (“Series D preferred units”), and Series E Convertible Preferred Units (“Series E preferred units”), which could have a dilutive effect on the earnings per share upon exercise of the RSUs or ISOs or upon conversion of the Series D or Series E preferred units (refer to Note 4 for further discussion of the Series D and the Series E preferred units). Other than the issuance of RSUs, ISOs, Series D preferred units, and Series E preferred units, there are no outstanding options, warrants, convertible stock or other contractual obligations requiring issuance of additional shares that would result in dilution of earnings. Under the terms of the Operating Partnership’s Agreement of Limited Partnership, limited partners have the right to require the Operating Partnership to redeem their limited partnership units (“Units”) any time following the first anniversary of the date they acquired such Units (“Exchange Right”). Upon the exercise of Exchange Rights, and in Centerspace’s sole discretion, it may issue common shares in exchange for Units on a one-for-one basis. Performance-based RSUs of 31,821 for the three and nine months ended September 30, 2021 and 27,506 for the three and nine months ended September 30, 2020, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. For the nine months ended September 30, 2020, Series D preferred units of 228,000 and time-based RSUs of 13,000 were excluded from the calculation of diluted earnings per share because they were anti-dilutive. For the three and nine months ended September 30, 2020, weighted average stock options of 140,554 and 68,292, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted earnings per share reported in the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2021 and 2020: (in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 NUMERATOR Net income (loss) attributable to controlling interests $ (9,492) $ 19,629 $ 7,179 $ 8,819 Dividends to preferred shareholders (1,607) (1,607) (4,821) (4,921) Redemption of preferred shares — (1) — 297 Numerator for basic earnings (loss) per share – net income available to common shareholders (11,099) 18,021 2,358 4,195 Noncontrolling interests – Operating Partnership and Series E preferred units (1,930) 1,387 (1,013) 248 Dividends to preferred unitholders 160 160 480 480 Numerator for diluted earnings (loss) per share $ (12,869) $ 19,568 $ 1,825 $ 4,923 DENOMINATOR Denominator for basic earnings per share weighted average shares 14,065 12,885 13,501 12,424 Effect of redeemable operating partnership units 865 1,020 917 1,039 Effect of Series D preferred units 228 228 228 — Effect of Series E preferred units 705 — 239 — Effect of dilutive restricted stock units and stock options 59 10 32 — Denominator for diluted earnings per share 15,922 14,143 14,917 13,463 NET EARNINGS (LOSS) PER COMMON SHARE – BASIC $ (0.79) $ 1.40 $ 0.17 $ 0.33 NET EARNINGS (LOSS) PER COMMON SHARE – DILUTED $ (0.81) $ 1.38 $ 0.12 $ 0.33 |
EQUITY AND MEZZANINE EQUITY
EQUITY AND MEZZANINE EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
EQUITY AND MEZZANINE EQUITY | EQUITY AND MEZZANINE EQUITY Operating Partnership Units. The Operating Partnership had 845,000 and 977,000 outstanding Units at September 30, 2021 and December 31, 2020, respectively. Exchange Rights . Centerspace redeemed Units in exchange for common shares in connection with Unitholders exercising their exchange rights during the three and nine months ended September 30, 2021 and 2020 as detailed in the table below. (in thousands) Three Months Ended September 30, Number of Units Net Book Basis 2021 36 $ (3,233) 2020 4 $ (462) Nine Months Ended September 30, 2021 131 $ (2,815) 2020 40 $ (344) Series E Preferred Units (Noncontrolling interests). On September 1, 2021, Centerspace issued 1.8 million Series E preferred units with a par value of $100 per Series E preferred unit as partial consideration for the acquisition of 17 apartment communities. The Series E preferred unit holders receive a preferred distribution at the rate of 3.875% per year. Each Series E preferred unit is convertible, at the holder’s option, into 1.2048 Units, representing a conversion exchange rate of $83.00 per unit. The Series E preferred units have an aggregate liquidation preference of $181.4 million. The holders of the Series E preferred units do not have voting rights and are required to hold the units for one year before they may elect to convert. Common Shares and Equity Awards . Common shares outstanding on September 30, 2021 and December 31, 2020, totaled 14.3 million and 13.0 million, respectively. There were 578 and 26,764 shares issued upon the vesting of equity awards under the 2015 Incentive Plan during the three and nine months ended September 30, 2021, respectively, with a total grant-date fair value of $32,000 and $946,000, respectively. During the three and nine months ended September 30, 2020, the Company issued 297 and 20,998 shares, respectively, upon the vesting of equity awards under the 2015 Incentive Plan, with a total grant-date fair value of $17,000 and $1.0 million, respectively. These shares vest based on performance and service criteria. Equity Distribution Agreement. Centerspace had an equity distribution agreement in connection with an at-the-market offering (“2019 ATM Program”) through which it could offer and sell common shares having an aggregate sales price of up to $150.0 million. Under the 2019 ATM Program, we sold shares having an aggregate sales price of $149.9 million. During the three months ended September 30, 2021, the Company replaced the 2019 ATM Program with a new at-the-market offering (“2021 ATM Program”) through which it may offer and sell common shares having an aggregate sales price of up to $250.0 million, in amounts and at times determined by management. Under the 2021 ATM Program, the Company may enter into separate forward sale agreements. The proceeds from the sale of common shares under the 2021 ATM Program are intended to be used for general purposes, which may include the funding of acquisitions, construction or mezzanine loans, community renovations, and the repayment of indebtedness. The table below provides details on the sale of common shares during the three and nine months ended September 30, 2021 and 2020 under both the 2019 and 2021 ATM Programs. As of September 30, 2021, common shares having an aggregate offering price of up to $230.1 million remained available under the 2021 ATM Program. (in thousands, except per share amounts) Three Months Ended September 30, Number of Common Shares Net Consideration (1) Average Net Price Per Share 2021 199 $ 19,632 $ 98.58 2020 145 $ 10,218 $ 70.55 Nine Months Ended September 30, 2021 1,095 $ 86,127 $ 78.63 2020 819 $ 57,528 $ 70.23 (1) Total consideration is net of $299,000 and $1.0 million in commissions and issuance costs during the three and nine months ended September 30, 2021, respectively. Total consideration for the three and nine months ended September 30, 2020 is net of $156,000 and $890,000 in commissions, respectively, and issuance costs. Series C Preferred Shares. Series C preferred shares outstanding were 3.9 million shares at September 30, 2021 and December 31, 2020. The Series C preferred shares are nonvoting and redeemable for cash at $25.00 per share at Centerspace’s option after October 2, 2022. Holders of these shares are entitled to cumulative distributions, payable quarterly (as and if declared by the Board of Trustees). Distributions accrue at an annual rate of $1.65625 per share, which is equal to 6.625% of the $25.00 per share liquidation preference ($97.0 million liquidation preference in the aggregate). Series D Preferred Units (Mezzanine Equity). On February 26, 2019, Centerspace issued 165,600 newly created Series D preferred units at an issuance price of $100 per preferred unit as partial consideration for the acquisition of SouthFork Townhomes. The Series D preferred unit holders receive a preferred distribution at the rate of 3.862% per year. The Series D preferred units have a put option which allows the holder to redeem any or all of the Series D preferred units for cash equal to the issuance price. Each Series D preferred unit is convertible, at the holder’s option, into 1.37931 Units, representing a conversion exchange rate of $72.50 per unit. The Series D preferred units have an aggregate liquidation preference of $16.6 million. Changes in the redemption value are charged to common shares on the Condensed Consolidated Balance Sheets from period to period. The holders of the Series D preferred units do not have voting rights. Distributions to Series D unitholders are presented in the Condensed Consolidated Statements of Equity within net income (loss) attributable to controlling interests and noncontrolling interests. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT As of September 30, 2021, 46 apartment communities were not encumbered by mortgages and are available to provide credit support for the unsecured borrowings. The Company’s primary unsecured credit facility (“unsecured credit facility”) is a revolving, multi-bank line of credit, with the Bank of Montreal serving as administrative agent. The line of credit has total commitments and borrowing capacity of $250.0 million, based on the value of unencumbered properties. As of September 30, 2021, the additional borrowing availability was $193.0 million beyond the $57.0 million drawn. This unsecured credit facility was amended on September 30, 2021 to extend the maturity date to September 2025 and provide for a $400.0 million accordion option. Prior to the amendment, the unsecured credit facility also had unsecured term loans of $70.0 million and $75.0 million, included within notes payable on the Condensed Consolidated Balance Sheets. As of September 30, 2021, these term loans had been paid in full. The interest rates on the line of credit and term loans are based, at the Company’s option, on either the lender’s base rate plus a margin, ranging from 25-80 basis points, or the London Interbank Offered Rate (“LIBOR”), plus a margin that ranges from 125-180 basis points based on the consolidated leverage ratio, as defined under the Third Amended and Restated Credit Agreement. The unsecured credit facility and unsecured senior notes are subject to customary financial covenants and limitations. The Company believes that it is in compliance with all such financial covenants and limitations as of September 30, 2021. In January 2021, Centerspace amended and expanded its private shelf agreement to increase the aggregate amount available for issuance of unsecured senior promissory notes (“unsecured senior notes”) to $225.0 million. Under this agreement, the Company has issued $200.0 million unsecured senior notes with $25.0 million remaining available as of September 30, 2021. In September 2021, the Company entered into a note purchase agreement for the issuance of $125.0 million senior unsecured promissory notes. The following table shows the notes issued under both agreements. (in thousands) Amount Maturity Date Interest Rate Series A $ 75,000 September 13, 2029 3.84 % Series B $ 50,000 September 30, 2028 3.69 % Series C $ 50,000 June 6, 2030 2.70 % Series 2021-A $ 35,000 September 17, 2030 2.50 % Series 2021-B $ 50,000 September 17, 2031 2.62 % Series 2021-C $ 25,000 September 17, 2032 2.68 % Series 2021-D $ 15,000 September 17, 2034 2.78 % In September 2021, Centerspace entered into a $198.9 million Fannie Mae Credit Facility Agreement (the “FMCF”) for the financing of 16 apartment communities acquired during the quarter. The FMCF is currently secured by mortgages on those apartment communities. The notes are interest-only, have varying maturity dates of 7, 10, and 12 years, and a blended, weighted average interest rate of 2.78%. As of September 30, 2021, the FMCF had a balance of $198.9 million. The FMCF is included within mortgages payable on the Condensed Consolidated Balance Sheets. As of September 30, 2021, Centerspace owned 17 apartment communities that served as collateral for mortgage loans, in addition to the apartment communities secured by the FMCF. All of these mortgage loans were non-recourse to the Company other than for standard carve-out obligations. As of September 30, 2021, the Company believes that there are no material defaults or instances of noncompliance in regards to any of these mortgages payable. Centerspace also has a $6.0 million operating line of credit. This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances. This operating line matures on November 29, 2021, with pricing based on a market spread plus the one-month LIBOR index rate. The following table summarizes indebtedness: (in thousands) September 30, 2021 December 31, 2020 Weighted Average Maturity in Years at September 30, 2021 Lines of credit $ 57,000 $ 152,871 4.00 Term loans (1) — 145,000 Unsecured senior notes (1) 300,000 125,000 8.88 Unsecured debt 357,000 422,871 8.10 Mortgages payable - Fannie Mae credit facility 198,850 — 9.81 Mortgages payable - other 293,547 298,445 5.05 Total debt $ 849,397 $ 721,316 7.46 Weighted average interest rate on lines of credit (rate with swap) 2.79 % 2.85 % Weighted average interest rate on term loans (rate with swap) 3.52 % 4.15 % Weighted average interest rate on unsecured senior notes 3.12 % 3.78 % Weighted average interest rate on mortgages payable - Fannie Mae credit facility 2.78 % — Weighted average interest rate on mortgages payable - other 3.83 % 3.93 % Weighted average interest rate on total debt 3.23 % 3.62 % (1) Included within notes payable on the Condensed Consolidated Balance Sheets. The aggregate amount of required future principal payments on unsecured senior notes and mortgages payable as of September 30, 2021, was as follows: (in thousands) 2021 (remainder) $ 1,362 2022 34,284 2023 45,068 2024 4,054 2025 32,850 Thereafter 475,929 Total payments $ 593,547 |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS Centerspace’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate fluctuations. To accomplish this objective, the Company primarily uses interest rate swap contracts to fix the variable interest rate debt. Changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (“OCI”) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income for the interest rate swaps will be reclassified to interest expense as interest payments are incurred on the hedged variable rate debt. During the next twelve months, the Company estimates an additional $1.9 million will be reclassified as an increase to interest expense. At September 30, 2021, the Company had one interest rate swap contract designated as a cash flow hedge of interest rate risk with a total notional amount of $75.0 million to fix the interest rate on the line of credit. As of December 31, 2020 , Centerspace had three interest rate swap contracts designated as cash flow hedges of interest rate risk with a notional amount of $195.0 million and one additional interest rate swap that becomes effective on January 31, 2023, with a notional amount of $70.0 million. These interest rate swaps fixed the interest rate on the term loans and a portion of the line of credit. During the three months ended September 30, 2021, Centerspace paid $3.8 million to terminate its $50.0 million interest rate swap and its $70.0 million interest rate swap in connection with the pay down of the Company’s term loans (see Note 5 - Debt for additional details). The Company accelerated the reclassification of a $5.4 million loss from OCI into other income loss in the Condensed Consolidated Statement of Operations as a result of the hedged transactions becoming probable not to occur. Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the strict hedge accounting requirements. Changes in fair value of derivatives not designated in hedging relationships are recorded directly to earnings within other income loss in the Condensed Consolidated Statement of Operations. As of September 30, 2021, the Company had one interest rate swap with a notional amount of $70.0 million that is not effective until January 31, 2023 and was not designated as a hedge in a qualifying hedging relationship. For the three and nine months ended September 30, 2021, the Company recorded a gain of $60,000 related to the interest rate swap not designated in a hedging relationship. As of December 31, 2020, the Company did not have any outstanding interest rate derivatives that were not designated as hedges in a qualifying hedging relationships. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 . (in thousands) September 30, 2021 December 31, 2020 Balance Sheet Location Fair Value Fair Value Total derivative instruments designated as hedging instruments - interest rate swaps Accounts Payable and Accrued Expenses $ 6,012 $ 15,905 Total derivative instruments not designated as hedging instruments - interest rate swaps Accounts Payable and Accrued Expenses $ 1,457 $ — The table below presents the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations as of September 30, 2021 and 2020. (in thousands) Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Income Gain (Loss) Reclassified from Accumulated OCI into Income Three months ended September 30, 2021 2020 2021 2020 Total derivatives in cash flow hedging relationships - Interest rate contracts $ (70) $ (210) Interest expense $ (940) $ (1,093) Nine months ended September 30, Total derivatives in cash flow hedging relationships - Interest rate contracts $ 1,555 $ (11,314) Interest expense $ (3,156) $ (1,665) The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Cash and cash equivalents, restricted cash, accounts payable, accrued expenses, and other liabilities are carried at amounts that reasonably approximate their fair value due to their short-term nature. For variable rate line of credit debt that re-prices frequently, fair values are based on carrying values. In determining the fair value of other financial instruments, Centerspace applies FASB ASC 820, “ Fair Value Measurement and Disclosures. ” Fair value hierarchy under ASC 820 distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (Levels 1 and 2) and the reporting entity’s own assumptions about market participant assumptions (Level 3). Fair value estimates may differ from the amounts that may ultimately be realized upon sale or disposition of the assets and liabilities. Fair Value Measurements on a Recurring Basis (in thousands) Total Level 1 Level 2 Level 3 September 30, 2021 Assets Mortgages and notes receivable $ 48,364 — — $ 48,364 Liabilities Derivative instruments - interest rate swaps $ 7,469 — — $ 7,469 December 31, 2020 Assets Mortgages and notes receivable $ 30,994 — — $ 30,994 Liabilities Derivative instruments - interest rate swaps $ 15,905 $ — — $ 15,905 The fair value of the interest rate swaps is determined using the market standard methodology of netting discounted expected variable cash payments and receipts. The variable cash payments and receipts are based on an expectation of future interest rates (a forward curve) derived from observable market interest rate curves. The Company also considers both its own nonperformance risk and the counterparty’s nonperformance risk in the fair value measurement (Level 3). Centerspace utilizes an income approach with level 3 inputs based on expected future cash flows to value mortgages and notes receivable. The inputs include market transactions for similar instruments, management estimates of comparable interest rates (range of 3.75% to 10.75%), and instrument specific credit risk (range of 0.5% to 1.0%). Changes in the fair value of these receivables from period to period are reported in interest and other income on the Condensed Consolidated Statements of Operations. (in thousands) Fair Value Measurement at September 30, Other Gains (Losses) Interest Income Total Changes in Fair Value Included in Current-Period Earnings Nine months ended September 30, 2021 Mortgage loans and notes receivable $ 48,364 $ 11 $ 1,759 $ 1,770 Nine months ended September 30, 2020 Mortgage loans and notes receivable $ 24,315 $ 3 $ 260 $ 263 As of September 30, 2021, Centerspace has an investment of $604,000 in a real estate technology venture consisting of privately held entities that develop technology related to the real estate industry. This investment is measured at net asset value (“NAV”) as a practical expedient under ASC 820. As of September 30, 2021, the Company had unfunded commitments of $1.4 million. Fair Value Measurements on a Nonrecurring Basis There were no non-financial assets or liabilities measured at fair value on a nonrecurring basis at September 30, 2021 and December 31, 2020. Financial Assets and Liabilities Not Measured at Fair Value The fair value of mortgages payable are estimated based on the discounted cash flows of the loans using market research and management estimates of comparable interest rates (Level 3). The estimated fair values of the Company’s financial instruments as of September 30, 2021 and December 31, 2020, respectively, are as follows: (in thousands) September 30, 2021 December 31, 2020 Carrying Amount Fair Value Carrying Amount Fair Value FINANCIAL ASSETS Cash and cash equivalents $ 20,816 $ 20,816 $ 392 $ 392 Restricted cash $ 2,376 $ 2,376 $ 6,918 $ 6,918 FINANCIAL LIABILITIES Revolving lines of credit (1) $ 57,000 $ 57,000 $ 152,871 $ 152,871 Term loans (1) $ — $ — $ 145,000 $ 145,000 Unsecured senior notes $ 300,000 $ 308,560 $ 125,000 $ 133,181 Mortgages payable - Fannie Mae $ 198,850 $ 198,850 $ — $ — Mortgages payable - other $ 293,547 $ 297,988 $ 298,445 $ 308,855 (1) Excluding the effect of interest rate swap agreements. Refer to Note 6 for discussion on the fair value of the interest rate swap agreements. |
ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DISPOSITIONS | ACQUISITIONS AND DISPOSITIONS ACQUISITIONS Centerspace acquired 17 new apartment communities for an aggregate acquisition cost of $359.9 million during the three months ended September 30, 2021 compared to acquisitions of $144.8 million in the three months ended September 30, 2020. The acquisitions during the nine months ended September 30, 2021 and 2020 are detailed below. Nine Months Ended September 30, 2021 Date (in thousands) Total Acquisition Cost (1) Form of Consideration Investment Allocation Acquisitions Cash Units (2) Other (3) Land Building Intangible Other (4) 256 homes - Union Pointe - Longmont, CO January 6, 2021 $ 76,900 $ 76,900 $ — $ — $ 5,727 $ 69,966 $ 1,207 $ — 120 homes - Bayberry Place - Minneapolis, MN September 1, 2021 16,673 898 9,855 5,920 1,807 14,113 753 — 251 homes - Burgandy & Hillsboro Court - Minneapolis, MN September 1, 2021 35,569 2,092 22,542 10,935 2,834 31,148 1,587 — 97 homes - Venue on Knox - Minneapolis, MN September 1, 2021 18,896 500 11,375 7,021 3,438 14,743 715 — 120 homes - Gatewood - St. Cloud, MN September 1, 2021 7,781 378 3,388 4,015 327 6,858 596 — 84 homes - Grove Ridge - Minneapolis, MN September 1, 2021 12,060 121 8,579 3,360 1,250 10,271 539 — 119 homes - The Legacy - St. Cloud, MN September 1, 2021 10,560 229 5,714 4,617 412 9,556 592 — 151 homes - New Hope Garden & Village - Minneapolis, MN September 1, 2021 15,006 1,435 10,812 2,759 1,603 12,578 825 — 330 homes - Palisades - Minneapolis, MN September 1, 2021 53,354 2,884 30,470 20,000 6,919 46,577 2,211 (2,353) 96 homes - Plymouth Pointe - Minneapolis, MN September 1, 2021 14,450 370 9,061 5,019 1,042 12,809 599 — 93 homes - Pointe West - St. Cloud, MN September 1, 2021 7,558 91 3,605 3,862 246 6,849 463 — 301 homes - River Pointe - Minneapolis MN September 1, 2021 38,348 2,249 21,653 14,446 3,346 33,117 1,885 — 70 homes - Southdale Parc - Minneapolis, MN September 1, 2021 9,670 165 7,907 1,598 1,569 7,740 361 — 62 homes - Portage - Minneapolis, MN September 1, 2021 9,171 323 5,588 3,260 2,133 6,685 353 — 200 homes - Windsor Gates - Minneapolis, MN September 1, 2021 22,231 1,122 12,080 9,029 2,140 18,943 1,148 — 136 homes - Wingate - Minneapolis, MN September 1, 2021 15,784 723 10,246 4,815 1,480 13,530 774 — 178 homes - Woodhaven - Minneapolis, MN September 1, 2021 25,009 1,682 15,200 8,127 3,940 20,080 989 — 288 homes - Woodland Pointe - Minneapolis, MN September 1, 2021 47,796 437 29,438 17,921 5,367 40,422 2,007 — $ 436,816 $ 92,599 $ 217,513 $ 126,704 $ 45,580 $ 375,985 $ 17,604 $ (2,353) Total Acquisitions $ 436,816 $ 92,599 $ 217,513 $ 126,704 $ 45,580 $ 375,985 $ 17,604 $ (2,353) (1) Includes $36.1 million for additional fair value of Series E preferred units for the September 1, 2021 portfolio acquisition (2) Fair value of Series E preferred units at the acquisition date (3) Payoff of debt or assumption of seller's debt upon closing (4) Debt discount on assumed mortgage Nine Months Ended September 30, 2020 Date (in thousands) Total Form of Consideration Investment Allocation Acquisitions Cash Other (1) Land Building Intangible Other (2) 182 homes - Ironwood - New Hope, MN March 5, 2020 $ 46,263 $ 28,600 $ 17,663 $ 2,165 $ 36,869 $ 824 $ 6,405 465 homes - Parkhouse Apartment Homes - Thornton, CO September 22, 2020 144,750 144,750 — 10,474 132,105 2,171 — Total Acquisitions $ 191,013 $ 173,350 $ 17,663 $ 12,639 $ 168,974 $ 2,995 $ 6,405 (1) Payoff at closing of note receivable and accrued interest due from seller. (2) Consists of TIF note acquired. Refer to Note 2 for further discussion. DISPOSITIONS During the three months ended September 30, 2021, Centerspace disposed of no real estate. During the three months ended September 30, 2020, the Company disposed of four apartment communities and one commercial property for a total sale price of $43.0 million. The following tables detail the dispositions for the nine months ended had September 30, 2021 and 2020. Nine Months Ended September 30, 2021 (in thousands) Dispositions Date Sale Price Book Value and Sales Cost Gain/(Loss) Multifamily 76 homes - Crystal Bay-Rochester, MN May 25, 2021 $ 13,650 $ 10,255 $ 3,395 40 homes - French Creek-Rochester, MN May 25, 2021 6,700 4,474 2,226 182 homes - Heritage Manor-Rochester, MN May 25, 2021 14,125 4,892 9,233 140 homes - Olympik Village-Rochester, MN May 25, 2021 10,725 6,529 4,196 151 homes-Winchester/Village Green-Rochester, MN May 25, 2021 14,800 7,010 7,790 Total Dispositions $ 60,000 $ 33,160 $ 26,840 Nine Months Ended September 30, 2020 (in thousands) Dispositions Date Sale Price Book Value and Sales Cost Gain/(Loss) Multifamily 268 homes - Forest Park - Grand Forks, ND August 18, 2020 $ 19,625 $ 6,884 $ 12,741 90 homes - Landmark - Grand Forks, ND August 18, 2020 3,725 1,348 2,377 164 homes - Southwind - Grand Forks, ND August 18, 2020 10,850 4,573 6,277 168 homes - Valley Park - Grand Forks, ND August 18, 2020 8,300 4,059 4,241 $ 42,500 $ 16,864 $ 25,636 Other Dakota West August 7, 2020 $ 500 $ 474 $ 26 Unimproved Land Rapid City Land - Rapid City, SD June 29, 2020 $ 1,300 $ 1,490 $ (190) Total Dispositions $ 44,300 $ 18,828 $ 25,472 |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Centerspace operates in a single reportable segment which includes the ownership, management, development, redevelopment, and acquisition of apartment communities. Each of the operating properties is considered a separate operating segment because each property earns revenues, incurs expenses, and has discrete financial information. The chief operating decision-makers evaluate each property’s operating results to make decisions about resources to be allocated and to assess performance and do not group the properties based on geography, size, or type for this purpose. The apartment communities have similar long-term economic characteristics and provide similar products and services to residents. No apartment community comprises more than 10% of consolidated revenues, profits, or assets. Accordingly, the apartment communities are aggregated into a single reportable segment. “All other” includes non-multifamily components of mixed-use properties and apartment communities the Company has sold. The executive management team comprises the chief operating decision-makers. This team measures the performance of the reportable segment based on net operating income (“NOI”), which the Company defines as total real estate revenues less property operating expenses, including real estate taxes. Centerspace believes that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expense. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance. The following tables present NOI for the three and nine months ended September 30, 2021 and 2020, respectively, along with reconciliations to net income in the Condensed Consolidated Financial Statements. Segment assets are also reconciled to total assets as reported in the Condensed Consolidated Financial Statements. (in thousands) Three Months Ended September 30, 2021 Multifamily All Other Total Revenue $ 49,248 $ 1,165 $ 50,413 Property operating expenses, including real estate taxes 20,066 284 20,350 Net operating income $ 29,182 $ 881 $ 30,063 Property management (2,203) Casualty gain (loss) 10 Depreciation and amortization (22,447) General and administrative expenses (4,279) Interest expense (7,302) Interest and other income (5,082) Net income (loss) $ (11,240) (in thousands) Three Months Ended September 30, 2020 Multifamily All Other Total Revenue $ 40,688 $ 3,450 $ 44,138 Property operating expenses, including real estate taxes 16,900 1,631 18,531 Net operating income $ 23,788 $ 1,819 $ 25,607 Property management (1,442) Casualty gain (loss) (91) Depreciation and amortization (18,995) General and administrative expenses (3,077) Interest expense (6,771) Interest and other income 277 Income (loss) before gain (loss) on sale of real estate and other investments (4,492) Gain (loss) on sale of real estate and other investments 25,676 Net income (loss) $ 21,184 (in thousands) Nine Months Ended September 30, 2021 Multifamily All Other Total Revenue $ 138,447 $ 5,270 $ 143,717 Property operating expenses, including real estate taxes 55,907 2,444 58,351 Net operating income $ 82,540 $ 2,826 $ 85,366 Property management expenses (6,055) Casualty gain (loss) (64) Depreciation and amortization (61,747) General and administrative expenses (11,982) Interest expense (21,622) Interest and other income (4,032) Income (loss) before gain (loss) on sale of real estate and other investments (20,136) Gain (loss) on sale of real estate and other investments 26,840 Net income (loss) $ 6,704 (in thousands) Nine Months Ended September 30, 2020 Multifamily All Other Total Revenue $ 120,946 $ 11,508 $ 132,454 Property operating expenses, including real estate taxes 49,626 5,608 55,234 Net operating income $ 71,320 $ 5,900 $ 77,220 Property management expenses (4,341) Casualty gain (loss) (1,331) Depreciation and amortization (55,311) General and administrative expenses (9,707) Interest expense (20,622) Interest and other income (1,979) Income (loss) before gain (loss) on sale of real estate and other investments (16,071) Gain (loss) on sale of real estate and other investments 25,486 Net income (loss) $ 9,415 Segment Assets and Accumulated Depreciation Segment assets are summarized as follows as of September 30, 2021, and December 31, 2020, respectively, along with reconciliations to the Condensed Consolidated Financial Statements: (in thousands) As of September 30, 2021 Multifamily All Other Total Segment assets Property owned $ 2,170,321 $ 33,285 $ 2,203,606 Less accumulated depreciation (414,829) (12,097) (426,926) Total property owned $ 1,755,492 $ 21,188 $ 1,776,680 Mortgage loans receivable 42,160 Cash and cash equivalents 20,816 Restricted cash 2,376 Other assets 34,919 Total Assets $ 1,876,951 (in thousands) As of December 31, 2020 Multifamily All Other Total Segment assets Property owned $ 1,727,229 $ 85,328 $ 1,812,557 Less accumulated depreciation (368,717) (30,532) (399,249) Total property owned $ 1,358,512 $ 54,796 $ 1,413,308 Mortgage loans receivable 24,661 Cash and cash equivalents 392 Restricted cash 6,918 Other assets 18,904 Total Assets $ 1,464,183 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation. In the ordinary course of operations, Centerspace becomes involved in litigation. At this time, the Company knows of no material pending or threatened legal proceedings, or other proceedings contemplated by governmental authorities, that would have a material impact on it. Environmental Matters. Under various federal, state, and local laws, ordinances, and regulations, a current or previous owner or operator of real estate may be liable for the costs of removal of, or remediation of, certain hazardous or toxic substances in, on, around, or under the property. While the Company currently has no knowledge of any material violation of environmental laws, ordinances, or regulations at any of the properties, there can be no assurance that areas of contamination will not be identified at any of its properties or that changes in environmental laws, regulations, or cleanup requirements would not result in material costs. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 1 Months Ended |
May 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Share-based awards are provided to officers, non-officer employees, and trustees under the 2015 Incentive Plan approved by shareholders on September 15, 2015, as amended and restated on May 18, 2021 (the “2015 Incentive Plan”) which allows for awards in the form of cash, unrestricted and restricted common shares, stock options, stock appreciation rights, and RSUs up to an aggregate of 775,000 shares over the ten-year period in which the plan is in effect. Under the 2015 Incentive Plan, officers and non-officer employees may earn share awards under a long-term incentive plan, which is a forward-looking program that measures long-term performance over the stated performance period. These awards are payable to the extent deemed earned in shares. The terms of the long-term incentive awards granted under the revised program may vary from year to year. 2021 LTIP Awards Awards granted to employees on January 1, 2021, consist of an aggregate of 6,410 time-based RSU awards, 19,224 performance RSUs based on total shareholder return (“TSR”), and 43,629 stock options. The time-based awards vest as to one-third of the shares on each of January 1, 2022, January 1, 2023, and January 1, 2024. The stock options vest as to 25% on each of January 1, 2022, January 1, 2023, January 1, 2024, and January 1, 2025. The fair value of stock options was $7.383 per share and was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: 2021 Exercise price $ 70.64 Risk-free rate 0.65 % Expected term 6.25 years Expected volatility 21.08 % Dividend yield 3.963 % The TSR performance RSUs are earned based on the Company’s TSR as compared to the FTSE Nareit Apartment Index over a forward looking three-year period. The maximum number of RSUs eligible to be earned is 38,448 RSUs, which is 200% of the RSUs granted. Earned awards (if any) will fully vest as of the last day of the measurement period. These awards have market conditions in addition to service conditions that must be met for the awards to vest. Compensation expense is recognized ratably based on the grant date fair value, as determined using the Monte Carlo valuation model, regardless of whether the market conditions are achieved and the awards ultimately vest. Therefore, previously recorded compensation expense is not adjusted in the event that the market conditions are not achieved. The Company based the expected volatility on a weighted average of the historical volatility of the Company’s daily closing share price and a select peer average volatility, the risk-free interest rate on the interest rates on U.S. treasury bonds with a maturity equal to the remaining performance period of the award, and the expected term on the performance period of the award. The assumptions used to value the TSR performance RSUs were an expected volatility of 20.63%, a risk-free interest rate of 0.17%, and an expected life of 3 years. The share price at the grant date, January 1, 2021, was $70.64 per share. Awards granted to trustees in May 2021, consist of 6,948 time-based RSUs with a one-year vesting period. These awards are classified as equity awards. Share-Based Compensation Expense |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Centerspace conducts a majority of its business activities through a consolidated operating partnership, Centerspace, LP (f/k/a IRET Properties), a North Dakota limited partnership (the “Operating Partnership”), as well as through a number of other consolidated subsidiary entities. The accompanying Condensed Consolidated Financial Statements include the Company’s accounts and the accounts of all its subsidiaries in which it maintains a controlling interest, including the Operating Partnership. All intercompany balances and transactions are eliminated in consolidation. The Condensed Consolidated Financial Statements also reflect the Operating Partnership’s ownership of a joint venture entity in which the Operating Partnership has a general partner or controlling interest. This entity is consolidated into the Company’s operations, with noncontrolling interests reflecting the noncontrolling partners’ share of ownership, income, and expenses. |
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS | UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Centerspace’s interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with GAAP are omitted. The year-end balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for the fair presentation of financial position, results of operations, and cash flows for the interim periods, have been included. The current period’s results of operations are not necessarily indicative of results which ultimately may be achieved for the year. The interim Condensed Consolidated Financial Statements and accompanying notes thereto should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 22, 2021. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of 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. |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS The following table provides a brief description of recent accounting standards updates (“ASUs”). Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. This ASU is optional and may be elected over time. Centerspace adopted the guidance in June 2021 on a prospective basis. This adoption did not have a material impact on the Condensed Consolidated Financial Statements. ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity's Own Equity This ASU simplifies accounting for convertible instruments and removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. This ASU also simplifies the diluted earnings per share calculation in certain areas and provides updated disclosure requirements. This ASU is effective for annual reporting periods beginning after December 15, 2021. Early adoption is permitted. Centerspace early adopted this guidance in the first quarter of 2021 using the modified retrospective method. The adoption did not have a material impact on the Condensed Consolidated Financial Statements. |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | CASH, CASH EQUIVALENTS, AND RESTRICTED CASH As of September 30, 2021 and December 31, 2020, restricted cash consisted primarily of real estate deposits and escrows held by lenders for real estate taxes, insurance, and capital additions. |
LEASES | LEASES As a lessor, Centerspace primarily leases multifamily apartment homes which qualify as operating leases with terms that are generally one year or less. Rental revenues are recognized in accordance with ASC 842, Leases , using a method that represents a straight-line basis over the term of the lease. Rental income represents approximately 98.1% of total revenues and includes gross market rent less adjustments for concessions, vacancy loss, and bad debt. Other property revenues represent the remaining 1.9% of total revenues and are primarily driven by other fee income, which is typically recognized when earned, at a point in time. Some of the Company’s apartment communities have commercial spaces available for lease. Lease terms for these spaces typically range from three Beginning in April 2020, the Company abated rent, common area maintenance, and real estate taxes for commercial tenants that experienced government-mandated interruptions or closures of their businesses related to the COVID-19 pandemic. The Company elected to account for these accommodations as though enforceable rights and obligations existed without evaluating if such a right or obligation existed under the lease agreement, as allowed by the FASB Q&A released on April 10, 2020. The accommodations were recognized as variable lease payments. During the three months ended September 30, 2021, the Company did not recognize a reduction in revenue due to the abatement of amounts due from commercial tenants, compared to a reduction of $136,000 in the same period of the prior year. During the nine months ended September 30, 2021 and 2020, the Company recognized reductions of $47,000 and $538,000, respectively, due to the abatement of amounts due from commercial tenants. |
REVENUES | REVENUES Revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration to which the Company expects to be entitled for those goods and services. Revenue streams that are included in revenues from contracts with customers include: • O ther property revenue: Centerspace recognizes revenue for rental related income not included as a component of a lease, such as application fees, as earned. |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS The Company evaluates long-lived assets, including investments in real estate, for impairment indicators at least quarterly. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, expected holding period of each property, and legal and environmental concerns. If indicators exist, the Company compares the expected future undiscounted cash flows for the property against the carrying amount of that property. If the sum of the estimated undiscounted cash flows is less than the carrying amount, an impairment loss is recorded for the difference between the estimated fair value and the carrying amount. If the anticipated holding period for properties, the estimated fair value of properties, or other factors change based on market conditions or otherwise, the evaluation of impairment charges may be different and such differences could be material to the consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates, and capital requirements that could differ materially from actual results. Reducing planned property holding periods may increase the likelihood of recording impairment losses. |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES Centerspace has determined that its Operating Partnership and each of its less-than-wholly owned real estate partnerships are VIEs, as the limited partners or the functional equivalent of limited partners lack substantive kick-out rights and substantive participating rights. The Company is the primary beneficiary of the VIEs, and the VIEs are required to be consolidated on the balance sheet because the Company has a controlling financial interest in the VIEs and has both the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs as well as the obligation to absorb losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. Because the Operating Partnership is a VIE, all of the Company’s assets and liabilities are held through a VIE. |
MARKETABLE SECURITIES | MARKETABLE SECURITIESMarketable securities consisted of equity securities. Equity securities are reported at fair value based on quoted market prices (Level 1 inputs). Any unrealized gains or losses are included in interest and other income on the consolidated statements of operations. |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements | The following table provides a brief description of recent accounting standards updates (“ASUs”). Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. This ASU is optional and may be elected over time. Centerspace adopted the guidance in June 2021 on a prospective basis. This adoption did not have a material impact on the Condensed Consolidated Financial Statements. ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity's Own Equity This ASU simplifies accounting for convertible instruments and removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. This ASU also simplifies the diluted earnings per share calculation in certain areas and provides updated disclosure requirements. This ASU is effective for annual reporting periods beginning after December 15, 2021. Early adoption is permitted. Centerspace early adopted this guidance in the first quarter of 2021 using the modified retrospective method. The adoption did not have a material impact on the Condensed Consolidated Financial Statements. |
Future Scheduled Lease Income for Operating Leases | The aggregate amount of future scheduled lease income on commercial operating leases, excluding any variable lease income and non-lease components, as of September 30, 2021, was as follows: (in thousands) 2021 (remainder) $ 593 2022 2,339 2023 2,336 2024 2,323 2025 2,292 Thereafter 2,488 Total scheduled lease income - commercial operating leases $ 12,371 |
Schedule of Disaggregation of Revenue | The following table presents the disaggregation of revenue streams for the three and nine months ended September 30, 2021 and 2020: (in thousands) Three Months Ended September 30, Nine Months Ended September 30, Revenue Stream Applicable Standard 2021 2020 2021 2020 Fixed lease income - operating leases Leases $ 47,292 $ 41,712 $ 134,817 $ 125,555 Variable lease income - operating leases Leases 2,171 1,729 6,243 4,811 Other property revenue Revenue from contracts with customers 950 697 2,657 2,088 Total revenue $ 50,413 $ 44,138 $ 143,717 $ 132,454 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator Used To Calculate Basic and Diluted EPS | The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted earnings per share reported in the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2021 and 2020: (in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 NUMERATOR Net income (loss) attributable to controlling interests $ (9,492) $ 19,629 $ 7,179 $ 8,819 Dividends to preferred shareholders (1,607) (1,607) (4,821) (4,921) Redemption of preferred shares — (1) — 297 Numerator for basic earnings (loss) per share – net income available to common shareholders (11,099) 18,021 2,358 4,195 Noncontrolling interests – Operating Partnership and Series E preferred units (1,930) 1,387 (1,013) 248 Dividends to preferred unitholders 160 160 480 480 Numerator for diluted earnings (loss) per share $ (12,869) $ 19,568 $ 1,825 $ 4,923 DENOMINATOR Denominator for basic earnings per share weighted average shares 14,065 12,885 13,501 12,424 Effect of redeemable operating partnership units 865 1,020 917 1,039 Effect of Series D preferred units 228 228 228 — Effect of Series E preferred units 705 — 239 — Effect of dilutive restricted stock units and stock options 59 10 32 — Denominator for diluted earnings per share 15,922 14,143 14,917 13,463 NET EARNINGS (LOSS) PER COMMON SHARE – BASIC $ (0.79) $ 1.40 $ 0.17 $ 0.33 NET EARNINGS (LOSS) PER COMMON SHARE – DILUTED $ (0.81) $ 1.38 $ 0.12 $ 0.33 |
EQUITY AND MEZZANINE EQUITY (Ta
EQUITY AND MEZZANINE EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of Conversions of Stock | Centerspace redeemed Units in exchange for common shares in connection with Unitholders exercising their exchange rights during the three and nine months ended September 30, 2021 and 2020 as detailed in the table below. (in thousands) Three Months Ended September 30, Number of Units Net Book Basis 2021 36 $ (3,233) 2020 4 $ (462) Nine Months Ended September 30, 2021 131 $ (2,815) 2020 40 $ (344) |
Schedule of Sale of Common Shares | The table below provides details on the sale of common shares during the three and nine months ended September 30, 2021 and 2020 under both the 2019 and 2021 ATM Programs. As of September 30, 2021, common shares having an aggregate offering price of up to $230.1 million remained available under the 2021 ATM Program. (in thousands, except per share amounts) Three Months Ended September 30, Number of Common Shares Net Consideration (1) Average Net Price Per Share 2021 199 $ 19,632 $ 98.58 2020 145 $ 10,218 $ 70.55 Nine Months Ended September 30, 2021 1,095 $ 86,127 $ 78.63 2020 819 $ 57,528 $ 70.23 (1) Total consideration is net of $299,000 and $1.0 million in commissions and issuance costs during the three and nine months ended September 30, 2021, respectively. Total consideration for the three and nine months ended September 30, 2020 is net of $156,000 and $890,000 in commissions, respectively, and issuance costs. |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table shows the notes issued under both agreements. (in thousands) Amount Maturity Date Interest Rate Series A $ 75,000 September 13, 2029 3.84 % Series B $ 50,000 September 30, 2028 3.69 % Series C $ 50,000 June 6, 2030 2.70 % Series 2021-A $ 35,000 September 17, 2030 2.50 % Series 2021-B $ 50,000 September 17, 2031 2.62 % Series 2021-C $ 25,000 September 17, 2032 2.68 % Series 2021-D $ 15,000 September 17, 2034 2.78 % The following table summarizes indebtedness: (in thousands) September 30, 2021 December 31, 2020 Weighted Average Maturity in Years at September 30, 2021 Lines of credit $ 57,000 $ 152,871 4.00 Term loans (1) — 145,000 Unsecured senior notes (1) 300,000 125,000 8.88 Unsecured debt 357,000 422,871 8.10 Mortgages payable - Fannie Mae credit facility 198,850 — 9.81 Mortgages payable - other 293,547 298,445 5.05 Total debt $ 849,397 $ 721,316 7.46 Weighted average interest rate on lines of credit (rate with swap) 2.79 % 2.85 % Weighted average interest rate on term loans (rate with swap) 3.52 % 4.15 % Weighted average interest rate on unsecured senior notes 3.12 % 3.78 % Weighted average interest rate on mortgages payable - Fannie Mae credit facility 2.78 % — Weighted average interest rate on mortgages payable - other 3.83 % 3.93 % Weighted average interest rate on total debt 3.23 % 3.62 % (1) Included within notes payable on the Condensed Consolidated Balance Sheets. |
Aggregate Amount of Required Future Principal Payments on Mortgages Payable | The aggregate amount of required future principal payments on unsecured senior notes and mortgages payable as of September 30, 2021, was as follows: (in thousands) 2021 (remainder) $ 1,362 2022 34,284 2023 45,068 2024 4,054 2025 32,850 Thereafter 475,929 Total payments $ 593,547 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Instruments | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 . (in thousands) September 30, 2021 December 31, 2020 Balance Sheet Location Fair Value Fair Value Total derivative instruments designated as hedging instruments - interest rate swaps Accounts Payable and Accrued Expenses $ 6,012 $ 15,905 Total derivative instruments not designated as hedging instruments - interest rate swaps Accounts Payable and Accrued Expenses $ 1,457 $ — |
Schedule of Derivative Instruments | The table below presents the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations as of September 30, 2021 and 2020. (in thousands) Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from Accumulated OCI into Income Gain (Loss) Reclassified from Accumulated OCI into Income Three months ended September 30, 2021 2020 2021 2020 Total derivatives in cash flow hedging relationships - Interest rate contracts $ (70) $ (210) Interest expense $ (940) $ (1,093) Nine months ended September 30, Total derivatives in cash flow hedging relationships - Interest rate contracts $ 1,555 $ (11,314) Interest expense $ (3,156) $ (1,665) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Estimated Fair Values of Financial Instruments | Fair Value Measurements on a Recurring Basis (in thousands) Total Level 1 Level 2 Level 3 September 30, 2021 Assets Mortgages and notes receivable $ 48,364 — — $ 48,364 Liabilities Derivative instruments - interest rate swaps $ 7,469 — — $ 7,469 December 31, 2020 Assets Mortgages and notes receivable $ 30,994 — — $ 30,994 Liabilities Derivative instruments - interest rate swaps $ 15,905 $ — — $ 15,905 The estimated fair values of the Company’s financial instruments as of September 30, 2021 and December 31, 2020, respectively, are as follows: (in thousands) September 30, 2021 December 31, 2020 Carrying Amount Fair Value Carrying Amount Fair Value FINANCIAL ASSETS Cash and cash equivalents $ 20,816 $ 20,816 $ 392 $ 392 Restricted cash $ 2,376 $ 2,376 $ 6,918 $ 6,918 FINANCIAL LIABILITIES Revolving lines of credit (1) $ 57,000 $ 57,000 $ 152,871 $ 152,871 Term loans (1) $ — $ — $ 145,000 $ 145,000 Unsecured senior notes $ 300,000 $ 308,560 $ 125,000 $ 133,181 Mortgages payable - Fannie Mae $ 198,850 $ 198,850 $ — $ — Mortgages payable - other $ 293,547 $ 297,988 $ 298,445 $ 308,855 (1) Excluding the effect of interest rate swap agreements. Refer to Note 6 for discussion on the fair value of the interest rate swap agreements. |
Changes in Fair Value Receivables | Changes in the fair value of these receivables from period to period are reported in interest and other income on the Condensed Consolidated Statements of Operations. (in thousands) Fair Value Measurement at September 30, Other Gains (Losses) Interest Income Total Changes in Fair Value Included in Current-Period Earnings Nine months ended September 30, 2021 Mortgage loans and notes receivable $ 48,364 $ 11 $ 1,759 $ 1,770 Nine months ended September 30, 2020 Mortgage loans and notes receivable $ 24,315 $ 3 $ 260 $ 263 |
ACQUISITIONS AND DISPOSITIONS (
ACQUISITIONS AND DISPOSITIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Acquisitions | The acquisitions during the nine months ended September 30, 2021 and 2020 are detailed below. Nine Months Ended September 30, 2021 Date (in thousands) Total Acquisition Cost (1) Form of Consideration Investment Allocation Acquisitions Cash Units (2) Other (3) Land Building Intangible Other (4) 256 homes - Union Pointe - Longmont, CO January 6, 2021 $ 76,900 $ 76,900 $ — $ — $ 5,727 $ 69,966 $ 1,207 $ — 120 homes - Bayberry Place - Minneapolis, MN September 1, 2021 16,673 898 9,855 5,920 1,807 14,113 753 — 251 homes - Burgandy & Hillsboro Court - Minneapolis, MN September 1, 2021 35,569 2,092 22,542 10,935 2,834 31,148 1,587 — 97 homes - Venue on Knox - Minneapolis, MN September 1, 2021 18,896 500 11,375 7,021 3,438 14,743 715 — 120 homes - Gatewood - St. Cloud, MN September 1, 2021 7,781 378 3,388 4,015 327 6,858 596 — 84 homes - Grove Ridge - Minneapolis, MN September 1, 2021 12,060 121 8,579 3,360 1,250 10,271 539 — 119 homes - The Legacy - St. Cloud, MN September 1, 2021 10,560 229 5,714 4,617 412 9,556 592 — 151 homes - New Hope Garden & Village - Minneapolis, MN September 1, 2021 15,006 1,435 10,812 2,759 1,603 12,578 825 — 330 homes - Palisades - Minneapolis, MN September 1, 2021 53,354 2,884 30,470 20,000 6,919 46,577 2,211 (2,353) 96 homes - Plymouth Pointe - Minneapolis, MN September 1, 2021 14,450 370 9,061 5,019 1,042 12,809 599 — 93 homes - Pointe West - St. Cloud, MN September 1, 2021 7,558 91 3,605 3,862 246 6,849 463 — 301 homes - River Pointe - Minneapolis MN September 1, 2021 38,348 2,249 21,653 14,446 3,346 33,117 1,885 — 70 homes - Southdale Parc - Minneapolis, MN September 1, 2021 9,670 165 7,907 1,598 1,569 7,740 361 — 62 homes - Portage - Minneapolis, MN September 1, 2021 9,171 323 5,588 3,260 2,133 6,685 353 — 200 homes - Windsor Gates - Minneapolis, MN September 1, 2021 22,231 1,122 12,080 9,029 2,140 18,943 1,148 — 136 homes - Wingate - Minneapolis, MN September 1, 2021 15,784 723 10,246 4,815 1,480 13,530 774 — 178 homes - Woodhaven - Minneapolis, MN September 1, 2021 25,009 1,682 15,200 8,127 3,940 20,080 989 — 288 homes - Woodland Pointe - Minneapolis, MN September 1, 2021 47,796 437 29,438 17,921 5,367 40,422 2,007 — $ 436,816 $ 92,599 $ 217,513 $ 126,704 $ 45,580 $ 375,985 $ 17,604 $ (2,353) Total Acquisitions $ 436,816 $ 92,599 $ 217,513 $ 126,704 $ 45,580 $ 375,985 $ 17,604 $ (2,353) (1) Includes $36.1 million for additional fair value of Series E preferred units for the September 1, 2021 portfolio acquisition (2) Fair value of Series E preferred units at the acquisition date (3) Payoff of debt or assumption of seller's debt upon closing (4) Debt discount on assumed mortgage Nine Months Ended September 30, 2020 Date (in thousands) Total Form of Consideration Investment Allocation Acquisitions Cash Other (1) Land Building Intangible Other (2) 182 homes - Ironwood - New Hope, MN March 5, 2020 $ 46,263 $ 28,600 $ 17,663 $ 2,165 $ 36,869 $ 824 $ 6,405 465 homes - Parkhouse Apartment Homes - Thornton, CO September 22, 2020 144,750 144,750 — 10,474 132,105 2,171 — Total Acquisitions $ 191,013 $ 173,350 $ 17,663 $ 12,639 $ 168,974 $ 2,995 $ 6,405 (1) Payoff at closing of note receivable and accrued interest due from seller. (2) Consists of TIF note acquired. Refer to Note 2 for further discussion. |
Schedule of Dispositions | The following tables detail the dispositions for the nine months ended had September 30, 2021 and 2020. Nine Months Ended September 30, 2021 (in thousands) Dispositions Date Sale Price Book Value and Sales Cost Gain/(Loss) Multifamily 76 homes - Crystal Bay-Rochester, MN May 25, 2021 $ 13,650 $ 10,255 $ 3,395 40 homes - French Creek-Rochester, MN May 25, 2021 6,700 4,474 2,226 182 homes - Heritage Manor-Rochester, MN May 25, 2021 14,125 4,892 9,233 140 homes - Olympik Village-Rochester, MN May 25, 2021 10,725 6,529 4,196 151 homes-Winchester/Village Green-Rochester, MN May 25, 2021 14,800 7,010 7,790 Total Dispositions $ 60,000 $ 33,160 $ 26,840 Nine Months Ended September 30, 2020 (in thousands) Dispositions Date Sale Price Book Value and Sales Cost Gain/(Loss) Multifamily 268 homes - Forest Park - Grand Forks, ND August 18, 2020 $ 19,625 $ 6,884 $ 12,741 90 homes - Landmark - Grand Forks, ND August 18, 2020 3,725 1,348 2,377 164 homes - Southwind - Grand Forks, ND August 18, 2020 10,850 4,573 6,277 168 homes - Valley Park - Grand Forks, ND August 18, 2020 8,300 4,059 4,241 $ 42,500 $ 16,864 $ 25,636 Other Dakota West August 7, 2020 $ 500 $ 474 $ 26 Unimproved Land Rapid City Land - Rapid City, SD June 29, 2020 $ 1,300 $ 1,490 $ (190) Total Dispositions $ 44,300 $ 18,828 $ 25,472 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Revenues and Net Operating Income for Reportable Segments | The following tables present NOI for the three and nine months ended September 30, 2021 and 2020, respectively, along with reconciliations to net income in the Condensed Consolidated Financial Statements. Segment assets are also reconciled to total assets as reported in the Condensed Consolidated Financial Statements. (in thousands) Three Months Ended September 30, 2021 Multifamily All Other Total Revenue $ 49,248 $ 1,165 $ 50,413 Property operating expenses, including real estate taxes 20,066 284 20,350 Net operating income $ 29,182 $ 881 $ 30,063 Property management (2,203) Casualty gain (loss) 10 Depreciation and amortization (22,447) General and administrative expenses (4,279) Interest expense (7,302) Interest and other income (5,082) Net income (loss) $ (11,240) (in thousands) Three Months Ended September 30, 2020 Multifamily All Other Total Revenue $ 40,688 $ 3,450 $ 44,138 Property operating expenses, including real estate taxes 16,900 1,631 18,531 Net operating income $ 23,788 $ 1,819 $ 25,607 Property management (1,442) Casualty gain (loss) (91) Depreciation and amortization (18,995) General and administrative expenses (3,077) Interest expense (6,771) Interest and other income 277 Income (loss) before gain (loss) on sale of real estate and other investments (4,492) Gain (loss) on sale of real estate and other investments 25,676 Net income (loss) $ 21,184 (in thousands) Nine Months Ended September 30, 2021 Multifamily All Other Total Revenue $ 138,447 $ 5,270 $ 143,717 Property operating expenses, including real estate taxes 55,907 2,444 58,351 Net operating income $ 82,540 $ 2,826 $ 85,366 Property management expenses (6,055) Casualty gain (loss) (64) Depreciation and amortization (61,747) General and administrative expenses (11,982) Interest expense (21,622) Interest and other income (4,032) Income (loss) before gain (loss) on sale of real estate and other investments (20,136) Gain (loss) on sale of real estate and other investments 26,840 Net income (loss) $ 6,704 (in thousands) Nine Months Ended September 30, 2020 Multifamily All Other Total Revenue $ 120,946 $ 11,508 $ 132,454 Property operating expenses, including real estate taxes 49,626 5,608 55,234 Net operating income $ 71,320 $ 5,900 $ 77,220 Property management expenses (4,341) Casualty gain (loss) (1,331) Depreciation and amortization (55,311) General and administrative expenses (9,707) Interest expense (20,622) Interest and other income (1,979) Income (loss) before gain (loss) on sale of real estate and other investments (16,071) Gain (loss) on sale of real estate and other investments 25,486 Net income (loss) $ 9,415 |
Segment Assets and Accumulated Depreciation | Segment assets are summarized as follows as of September 30, 2021, and December 31, 2020, respectively, along with reconciliations to the Condensed Consolidated Financial Statements: (in thousands) As of September 30, 2021 Multifamily All Other Total Segment assets Property owned $ 2,170,321 $ 33,285 $ 2,203,606 Less accumulated depreciation (414,829) (12,097) (426,926) Total property owned $ 1,755,492 $ 21,188 $ 1,776,680 Mortgage loans receivable 42,160 Cash and cash equivalents 20,816 Restricted cash 2,376 Other assets 34,919 Total Assets $ 1,876,951 (in thousands) As of December 31, 2020 Multifamily All Other Total Segment assets Property owned $ 1,727,229 $ 85,328 $ 1,812,557 Less accumulated depreciation (368,717) (30,532) (399,249) Total property owned $ 1,358,512 $ 54,796 $ 1,413,308 Mortgage loans receivable 24,661 Cash and cash equivalents 392 Restricted cash 6,918 Other assets 18,904 Total Assets $ 1,464,183 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Fair Value of Stock Options | The fair value of stock options was $7.383 per share and was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: 2021 Exercise price $ 70.64 Risk-free rate 0.65 % Expected term 6.25 years Expected volatility 21.08 % Dividend yield 3.963 % |
ORGANIZATION (Details)
ORGANIZATION (Details) - Residential Real Estate | Sep. 30, 2021apartmentUnitapartmentProperty |
Real Estate Properties [Line Items] | |
Number of real estate properties | apartmentProperty | 79 |
Number of apartment units | apartmentUnit | 14,275 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Lessor, Lease, Description [Line Items] | |||
Reduction in revenue | $ 136 | $ 47 | $ 538 |
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | |||
2021 (remainder) | 593 | 593 | |
2022 | 2,339 | 2,339 | |
2023 | 2,336 | 2,336 | |
2024 | 2,323 | 2,323 | |
2025 | 2,292 | 2,292 | |
Thereafter | 2,488 | 2,488 | |
Total scheduled lease income - commercial operating leases | $ 12,371 | $ 12,371 | |
Minimum | |||
Lessor, Lease, Description [Line Items] | |||
Lease terms | 3 years | 3 years | |
Maximum | |||
Lessor, Lease, Description [Line Items] | |||
Lease terms | 15 years | 15 years | |
Rental Income | Revenue | Product Concentration Risk | |||
Lessor, Lease, Description [Line Items] | |||
Concentration risk | 98.10% | ||
Fee Income | Revenue | Product Concentration Risk | |||
Lessor, Lease, Description [Line Items] | |||
Concentration risk | 1.90% |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Fixed lease income - operating leases | $ 47,292 | $ 41,712 | $ 134,817 | $ 125,555 |
Variable lease income - operating leases | 2,171 | 1,729 | 6,243 | 4,811 |
Revenue from contracts with customers | 950 | 697 | 2,657 | 2,088 |
Total revenue | $ 50,413 | $ 44,138 | $ 143,717 | $ 132,454 |
BASIS OF PRESENTATION AND SIG_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Impairment of Long-Lived Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Impairment of real estate investments | $ 0 | $ 0 | $ 0 | $ 0 |
BASIS OF PRESENTATION AND SIG_7
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Mortgage Receivable and Notes Receivable (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Dec. 31, 2020 | |
MORTGAGE RECEIVABLE AND NOTES RECEIVABLE | ||||
Mortgage loans receivable at fair value | $ 42,160 | $ 24,661 | ||
Minneapolis, Minnesota | Construction Loans | ||||
MORTGAGE RECEIVABLE AND NOTES RECEIVABLE | ||||
Accrued interest | 813 | |||
Multi Family Same-Store | Ironwood Apartments - New Hope, MN | Tax Increment Financing | ||||
MORTGAGE RECEIVABLE AND NOTES RECEIVABLE | ||||
Loan commitment | 6,400 | 6,400 | ||
Multi-Family Residential | Ironwood Apartments - New Hope, MN | Tax Increment Financing | ||||
MORTGAGE RECEIVABLE AND NOTES RECEIVABLE | ||||
Interest rate | 4.50% | |||
Multi-Family Residential | Minneapolis, Minnesota | Construction Loans | ||||
MORTGAGE RECEIVABLE AND NOTES RECEIVABLE | ||||
Interest rate | 4.50% | |||
Mortgage loans receivable at fair value | $ 29,900 | 29,900 | $ 24,700 | |
Multi-Family Residential | Minneapolis, Minnesota | Mezzanine Loan | ||||
MORTGAGE RECEIVABLE AND NOTES RECEIVABLE | ||||
Interest rate | 11.50% | |||
Mortgage loans receivable at fair value | $ 15,300 | $ 11,400 |
BASIS OF PRESENTATION AND SIG_8
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Marketable Securities (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Marketable securities | $ 0 | $ 0 | |
Realized (gain) loss on marketable securities | $ 0 | $ 3,378,000 |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation of Numerator and Denominator Used To Calculate Basic and Dilutes EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
NUMERATOR | ||||
Net income (loss) attributable to controlling interests | $ (9,492) | $ 19,629 | $ 7,179 | $ 8,819 |
Dividends to preferred shareholders | (1,607) | (1,607) | (4,821) | (4,921) |
Redemption of preferred shares | 0 | (1) | 0 | 297 |
Numerator for basic earnings (loss) per share – net income available to common shareholders | (11,099) | 18,021 | 2,358 | 4,195 |
Noncontrolling interests – Operating Partnership and Series E preferred units | (1,930) | 1,387 | (1,013) | 248 |
Dividends to preferred unitholders | 160 | 160 | 480 | 480 |
Numerator for diluted earnings (loss) per share | $ (12,869) | $ 19,568 | $ 1,825 | $ 4,923 |
DENOMINATOR | ||||
Denominator for basic earnings per share weighted average shares (in shares) | 14,065 | 12,885 | 13,501 | 12,424 |
Effect of redeemable operating partnership units (in shares) | 865 | 1,020 | 917 | 1,039 |
Effect of dilutive restricted stock units and stock options (in shares) | 59 | 10 | 32 | 0 |
Denominator for diluted earnings per share (in shares) | 15,922 | 14,143 | 14,917 | 13,463 |
NET EARNINGS (LOSS) PER COMMON SHARE - BASIC (in dollars per share) | $ (0.79) | $ 1.40 | $ 0.17 | $ 0.33 |
NET EARNINGS (LOSS) PER COMMON SHARE - DILUTED (in dollars per share) | $ (0.81) | $ 1.38 | $ 0.12 | $ 0.33 |
Series D Preferred Stock | ||||
DENOMINATOR | ||||
Effect of preferred units (in shares) | 228 | 228 | 228 | 0 |
Series E Preferred Units | ||||
DENOMINATOR | ||||
Effect of preferred units (in shares) | 705 | 0 | 239 | 0 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021shares | Sep. 30, 2020shares | Sep. 30, 2021shares | Sep. 30, 2020shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Ratio of units exchanged for shares | 1 | |||
Performance Shares and Restricted Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 31,821 | 27,506 | 31,821 | 27,506 |
Series D Preferred Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 228,000 | |||
Restricted Stock Units (RSUs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 13,000 | |||
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 140,554 | 68,292 |
EQUITY AND MEZZANINE EQUITY - A
EQUITY AND MEZZANINE EQUITY - Additional Information (Details) | Sep. 01, 2021USD ($)apartmentUnit$ / sharesshares | Feb. 26, 2019USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($)shares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Noncontrolling interests - operating partnership (in shares) | shares | 845,000 | 845,000 | 977,000 | |||||
Preferred shares liquidation preference | $ 97,000,000 | $ 97,000,000 | ||||||
Common stock outstanding (in shares) | shares | 14,281,000 | 14,281,000 | 13,027,000 | |||||
Sale / issuance of stock | $ 19,508,000 | $ 10,063,000 | $ 85,864,000 | $ 58,204,000 | ||||
Preferred shares, annual distribution accrual rate (in dollars per share) | $ / shares | $ 1.65625 | |||||||
Preferred shares, dividend rate | 6.625% | |||||||
2021 Acquisitions | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of properties | apartmentUnit | 17 | |||||||
Series E Preferred Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Preferred units, shares issued (in shares) | shares | 1,800,000 | |||||||
Preferred units, par value (in dollars per share) | $ / shares | $ 100 | |||||||
Preferred units, conversion ratio | 1.2048 | |||||||
Preferred units, conversion exchange rate (in dollars per share) | $ / shares | $ 83 | |||||||
Preferred shares liquidation preference | $ 181,400,000 | |||||||
Sale / issuance of stock | $ 217,513,000 | $ 217,513,000 | ||||||
Preferred shares, dividend rate | 0.03875% | |||||||
Series C Preferred Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Preferred units, shares issued (in shares) | shares | 3,881,000 | 3,881,000 | 3,881,000 | |||||
Preferred shares liquidation preference | $ 97,036,000 | $ 97,036,000 | $ 97,036,000 | |||||
Preferred shares of beneficial interest, shares outstanding (in shares) | shares | 3,881,000 | 3,881,000 | 3,881,000 | |||||
Preferred shares, liquidation preference (in dollars per share) | $ / shares | $ 25 | $ 25 | $ 25 | |||||
Series D Preferred Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Preferred units, shares issued (in shares) | shares | 165,600 | 166,000 | 166,000 | 166,000 | ||||
Preferred units, par value (in dollars per share) | $ / shares | $ 100 | $ 100 | $ 100 | $ 100 | ||||
Distribution rate | 3.862% | |||||||
Units converted, ratio | 1.37931 | |||||||
Conversion price (in dollars per share) | $ / shares | $ 72.50 | |||||||
Preferred units, liquidation preference | $ 16,600,000 | $ 16,560,000 | $ 16,560,000 | $ 16,560,000 | ||||
At-The-Market Offering | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Aggregate gross sales price of common shares, authorized amount | 250,000,000 | 250,000,000 | $ 150,000,000 | |||||
Total consideration | 19,632,000 | $ 10,218,000 | 86,127,000 | $ 57,528,000 | $ 149,900,000 | |||
Aggregate gross sales price of common shares, remaining authorized amount | $ 230,100,000 | $ 230,100,000 | ||||||
2015 Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity awards issued (in shares) | shares | 578 | 297 | 26,764 | 20,998 | ||||
Sale / issuance of stock | $ 32,000 | $ 17,000 | $ 946,000 | $ 1,000,000 |
EQUITY AND MEZZANINE EQUITY - S
EQUITY AND MEZZANINE EQUITY - Schedule of Conversions of Common Stock (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Conversion of Stock [Line Items] | ||||
Net Book Basis | $ 0 | $ 0 | $ 0 | $ 0 |
Exercise of Exchange Rights | ||||
Conversion of Stock [Line Items] | ||||
Number of units (in shares) | 36 | 4 | 131 | 40 |
Net Book Basis | $ (3,233) | $ (462) | $ (2,815) | $ (344) |
EQUITY AND MEZZANINE EQUITY -_2
EQUITY AND MEZZANINE EQUITY - Sale of Common Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 20 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Commissions | $ 299 | $ 156 | $ 1,000 | $ 890 | |
At-The-Market Offering | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of common shares (in shares) | 199 | 145 | 1,095 | 819 | |
Total consideration | $ 19,632 | $ 10,218 | $ 86,127 | $ 57,528 | $ 149,900 |
Average net price per share (in dollars per share) | $ 98.58 | $ 70.55 | $ 78.63 | $ 70.23 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 9 Months Ended | ||
Sep. 30, 2021USD ($)apartmentPropertyloan | Jan. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Line of Credit Facility [Line Items] | |||
Number of real estate properties, unencumbered by mortgages | apartmentProperty | 46 | ||
Revolving lines of credit | $ 57,000,000 | $ 152,871,000 | |
Outstanding debt | $ 849,397,000 | $ 721,316,000 | |
Weighted average interest rate | 3.23% | 3.62% | |
2021 Acquisitions | |||
Line of Credit Facility [Line Items] | |||
Number of apartment units | apartmentProperty | 17 | ||
Line of Credit | Base Rate | Minimum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.25% | ||
Line of Credit | Base Rate | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.80% | ||
Line of Credit | London Interbank Offered Rate (LIBOR) | Minimum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.25% | ||
Line of Credit | London Interbank Offered Rate (LIBOR) | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.80% | ||
Operating Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 6,000,000 | ||
BMO Line of Credit | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 250,000,000 | ||
Remaining borrowing capacity | 193,000,000 | ||
Revolving lines of credit | 57,000,000 | ||
Accordion option | 400,000,000 | ||
Unsecured Senior Notes | Term Loan Maturing 2024 | |||
Line of Credit Facility [Line Items] | |||
Debt instrument face amount | 70,000,000 | ||
Unsecured Senior Notes | Term Loan Maturing 2025 | |||
Line of Credit Facility [Line Items] | |||
Debt instrument face amount | 75,000,000 | ||
Unsecured Senior Notes | Private Shelf Agreement | |||
Line of Credit Facility [Line Items] | |||
Debt available for issuance | 25,000,000 | $ 225,000,000 | |
Outstanding debt | $ 200,000,000 | ||
Unsecured Senior Notes | Note Purchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Debt instrument face amount | $ 125,000,000 | ||
Mortgages | |||
Line of Credit Facility [Line Items] | |||
Number of real estate properties, serving as collateral for mortgage loans | apartmentProperty | 17 | ||
Number of material defaults or instances of noncompliance | loan | 0 | ||
Mortgages | Mortgages payable - Fannie Mae | |||
Line of Credit Facility [Line Items] | |||
Debt instrument face amount | $ 198,900,000 | ||
Outstanding debt | $ 198,850,000 | $ 0 | |
Weighted average interest rate | 2.78% | 0.00% | |
Mortgages | Mortgages payable - Fannie Mae | Interest Only Payment Date One | |||
Line of Credit Facility [Line Items] | |||
Term | 7 years | ||
Mortgages | Mortgages payable - Fannie Mae | Interest Only Payment Date Two | |||
Line of Credit Facility [Line Items] | |||
Term | 10 years | ||
Mortgages | Mortgages payable - Fannie Mae | Interest Only Payment Date Three | |||
Line of Credit Facility [Line Items] | |||
Term | 12 years | ||
Mortgages | Mortgages payable - Fannie Mae | 2021 Acquisitions | |||
Line of Credit Facility [Line Items] | |||
Number of apartment units | apartmentProperty | 16 |
DEBT - September Note Purchase
DEBT - September Note Purchase Agreement, Schedule of Debt (Details) - Unsecured Debt - USD ($) | Sep. 30, 2021 | Jan. 31, 2021 |
Series A | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 75,000,000 | |
Unsecured loan, fixed rate | 3.84% | |
Series B | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 50,000,000 | |
Unsecured loan, fixed rate | 3.69% | |
Series C | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 50,000,000 | |
Unsecured loan, fixed rate | 2.70% | |
Series 2021-A | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 35,000,000 | |
Unsecured loan, fixed rate | 2.50% | |
Series 2021-B | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 50,000,000 | |
Unsecured loan, fixed rate | 2.62% | |
Series 2021-C | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 25,000,000 | |
Unsecured loan, fixed rate | 2.68% | |
Series 2021-D | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 15,000,000 | |
Unsecured loan, fixed rate | 2.78% |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Total debt | $ 849,397 | $ 721,316 |
Weighted average maturity (in years) | 7 years 5 months 15 days | |
Weighted average interest rate | 3.23% | 3.62% |
Mortgages payable - Fannie Mae | Mortgages | ||
Debt Instrument [Line Items] | ||
Total debt | $ 198,850 | $ 0 |
Weighted average maturity (in years) | 9 years 9 months 21 days | |
Weighted average interest rate | 2.78% | 0.00% |
Mortgages payable - other | Mortgages | ||
Debt Instrument [Line Items] | ||
Total debt | $ 293,547 | $ 298,445 |
Weighted average maturity (in years) | 5 years 18 days | |
Weighted average interest rate | 3.83% | 3.93% |
Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Total debt | $ 357,000 | $ 422,871 |
Weighted average maturity (in years) | 8 years 1 month 6 days | |
Unsecured Debt | Line of Credit | ||
Debt Instrument [Line Items] | ||
Total debt | $ 57,000 | 152,871 |
Weighted average maturity (in years) | 4 years | |
Unsecured Debt | Term Loans | ||
Debt Instrument [Line Items] | ||
Total debt | $ 0 | $ 145,000 |
Weighted average maturity (in years) | ||
Weighted average interest rate | 3.52% | 4.15% |
Unsecured Debt | Unsecured senior notes | ||
Debt Instrument [Line Items] | ||
Total debt | $ 300,000 | $ 125,000 |
Weighted average maturity (in years) | 8 years 10 months 17 days | |
Weighted average interest rate | 3.12% | 3.78% |
Unsecured Debt | Primary Line Of Credit | Line of Credit | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 2.79% | 2.85% |
DEBT - Schedule of future payme
DEBT - Schedule of future payments (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 (remainder) | $ 1,362 |
2022 | 34,284 |
2023 | 45,068 |
2024 | 4,054 |
2025 | 32,850 |
Thereafter | 475,929 |
Total payments | $ 593,547 |
DERIVATIVE INSTRUMENTS - Additi
DERIVATIVE INSTRUMENTS - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Jan. 31, 2023USD ($)derivativeInstrument | Dec. 31, 2020USD ($)derivativeInstrument | |
Derivative [Line Items] | |||||
Cash flow hedge gain (loss) to be reclassified within twelve months | $ 1,900,000 | ||||
Payments to terminate derivative | 3,804,000 | $ 0 | |||
Interest Rate Swap | Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Notional amount | $ 75,000,000 | 75,000,000 | $ 195,000,000 | ||
Number of instruments held | derivativeInstrument | 3 | ||||
Payments to terminate derivative | 3,800,000 | ||||
Notional amount of interest rate swaps | 50,000,000 | $ 50,000,000 | |||
Accelerated reclassification loss from OCI | 5,400,000 | ||||
Interest Rate Swap | Designated as Hedging Instrument | Scenario, Forecast | |||||
Derivative [Line Items] | |||||
Number of instruments held | derivativeInstrument | 1 | ||||
Interest Rate Swap | Not Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Gain on derivative | $ 60,000 | ||||
Interest Rate Swap | Not Designated as Hedging Instrument | Scenario, Forecast | |||||
Derivative [Line Items] | |||||
Notional amount | $ 70,000,000 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value of Derivative Financial Instruments (Details) - Interest Rate Swap - Accounts Payable and Accrued Expenses - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Total derivative instruments | $ 6,012 | $ 15,905 |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Total derivative instruments | $ 1,457 | $ 0 |
DERIVATIVE INSTRUMENTS - Deriva
DERIVATIVE INSTRUMENTS - Derivative Instruments on Statement of Operations (Details) - Interest Rate Contract - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative [Line Items] | ||||
Gain (Loss) Recognized in OCI | $ (70) | $ (210) | $ 1,555 | $ (11,314) |
Interest Expense | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from Accumulated OCI into Income | $ (940) | $ (1,093) | $ (3,156) | $ (1,665) |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value Measurements on a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mortgages and notes receivable | $ 48,364 | $ 30,994 | $ 24,315 |
Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative instruments - interest rate swaps | 7,469 | 15,905 | |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mortgages and notes receivable | 0 | 0 | |
Level 1 | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative instruments - interest rate swaps | 0 | 0 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mortgages and notes receivable | 0 | 0 | |
Level 2 | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative instruments - interest rate swaps | 0 | 0 | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mortgages and notes receivable | 48,364 | 30,994 | |
Level 3 | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative instruments - interest rate swaps | $ 7,469 | $ 15,905 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - Fair Value, Recurring $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate investment, unfunded commitments | $ 1,400 |
Level 3 | Interest Rate | Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Receivables, measurement input | 0.0375 |
Level 3 | Interest Rate | Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Receivables, measurement input | 0.1075 |
Level 3 | Credit Risk | Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Receivables, measurement input | 0.005 |
Level 3 | Credit Risk | Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Receivables, measurement input | 0.010 |
Fair Value Measured at Net Asset Value Per Share | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate investment, fair value disclosure | $ 604 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in Fair Value of Receivables (Details) - Fair Value, Recurring - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mortgages and notes receivable | $ 48,364 | $ 24,315 | $ 30,994 |
Change in fair value of receivables | 1,770 | 263 | |
Other Gains (Losses) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Change in fair value of receivables | 11 | 3 | |
Interest Income | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Change in fair value of receivables | $ 1,759 | $ 260 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Assets and Liabilities Not Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
FINANCIAL LIABILITIES | ||
Unsecured senior notes | $ 299,454 | $ 269,246 |
Mortgages payable | 593,547 | |
Carrying Amount | ||
FINANCIAL ASSETS | ||
Cash and cash equivalents | 20,816 | 392 |
FINANCIAL LIABILITIES | ||
Revolving lines of credit | 57,000 | 152,871 |
Term loans | 0 | 145,000 |
Unsecured senior notes | 300,000 | 125,000 |
Carrying Amount | Mortgages | Mortgages payable - Fannie Mae | ||
FINANCIAL LIABILITIES | ||
Mortgages payable | 198,850 | 0 |
Carrying Amount | Mortgages | Mortgages payable - other | ||
FINANCIAL LIABILITIES | ||
Mortgages payable | 293,547 | 298,445 |
Carrying Amount | Restricted cash | ||
FINANCIAL ASSETS | ||
Cash and cash equivalents | 2,376 | 6,918 |
Fair Value | ||
FINANCIAL ASSETS | ||
Cash and cash equivalents | 20,816 | 392 |
FINANCIAL LIABILITIES | ||
Revolving lines of credit | 57,000 | 152,871 |
Term loans | 0 | 145,000 |
Unsecured senior notes | 308,560 | 133,181 |
Fair Value | Mortgages | Mortgages payable - Fannie Mae | ||
FINANCIAL LIABILITIES | ||
Mortgages payable | 198,850 | 0 |
Fair Value | Mortgages | Mortgages payable - other | ||
FINANCIAL LIABILITIES | ||
Mortgages payable | 297,988 | 308,855 |
Fair Value | Restricted cash | ||
FINANCIAL ASSETS | ||
Cash and cash equivalents | $ 2,376 | $ 6,918 |
ACQUISITIONS AND DISPOSITIONS -
ACQUISITIONS AND DISPOSITIONS - Acquisitions (Details) $ in Thousands | Sep. 01, 2021USD ($) | Sep. 30, 2021USD ($)apartmentUnitapartmentProperty | Sep. 30, 2020USD ($)apartmentUnit | Sep. 30, 2021USD ($)apartmentUnitapartmentProperty | Sep. 30, 2020USD ($)apartmentUnit |
2021 Acquisitions | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentProperty | 17 | 17 | |||
Total Acquisition Cost | $ 359,900 | $ 436,816 | |||
Form of Consideration | |||||
Cash | 92,599 | ||||
Units | 217,513 | ||||
Other | 126,704 | ||||
Investment Allocation | |||||
Land | 45,580 | 45,580 | |||
Building | 375,985 | 375,985 | |||
Intangible Assets | 17,604 | 17,604 | |||
Other, Liabilities | $ (2,353) | $ (2,353) | |||
Union Pointe Apartment Homes - Longmont, CO | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 256 | 256 | |||
Total Acquisition Cost | $ 76,900 | ||||
Form of Consideration | |||||
Cash | 76,900 | ||||
Units | 0 | ||||
Other | 0 | ||||
Investment Allocation | |||||
Land | $ 5,727 | 5,727 | |||
Building | 69,966 | 69,966 | |||
Intangible Assets | 1,207 | 1,207 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Bayberry Place - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 120 | 120 | |||
Total Acquisition Cost | $ 16,673 | ||||
Form of Consideration | |||||
Cash | 898 | ||||
Units | 9,855 | ||||
Other | 5,920 | ||||
Investment Allocation | |||||
Land | $ 1,807 | 1,807 | |||
Building | 14,113 | 14,113 | |||
Intangible Assets | 753 | 753 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Burgandy & Hillsboro Court - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 251 | 251 | |||
Total Acquisition Cost | $ 35,569 | ||||
Form of Consideration | |||||
Cash | 2,092 | ||||
Units | 22,542 | ||||
Other | 10,935 | ||||
Investment Allocation | |||||
Land | $ 2,834 | 2,834 | |||
Building | 31,148 | 31,148 | |||
Intangible Assets | 1,587 | 1,587 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Venue on Knox - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 97 | 97 | |||
Total Acquisition Cost | $ 18,896 | ||||
Form of Consideration | |||||
Cash | 500 | ||||
Units | 11,375 | ||||
Other | 7,021 | ||||
Investment Allocation | |||||
Land | $ 3,438 | 3,438 | |||
Building | 14,743 | 14,743 | |||
Intangible Assets | 715 | 715 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Gatewood - St. Cloud, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 120 | 120 | |||
Total Acquisition Cost | $ 7,781 | ||||
Form of Consideration | |||||
Cash | 378 | ||||
Units | 3,388 | ||||
Other | 4,015 | ||||
Investment Allocation | |||||
Land | $ 327 | 327 | |||
Building | 6,858 | 6,858 | |||
Intangible Assets | 596 | 596 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Grove Ridge - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 84 | 84 | |||
Total Acquisition Cost | $ 12,060 | ||||
Form of Consideration | |||||
Cash | 121 | ||||
Units | 8,579 | ||||
Other | 3,360 | ||||
Investment Allocation | |||||
Land | $ 1,250 | 1,250 | |||
Building | 10,271 | 10,271 | |||
Intangible Assets | 539 | 539 | |||
Other, Liabilities | $ 0 | $ 0 | |||
The Legacy - St. Cloud, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 119 | 119 | |||
Total Acquisition Cost | $ 10,560 | ||||
Form of Consideration | |||||
Cash | 229 | ||||
Units | 5,714 | ||||
Other | 4,617 | ||||
Investment Allocation | |||||
Land | $ 412 | 412 | |||
Building | 9,556 | 9,556 | |||
Intangible Assets | 592 | 592 | |||
Other, Liabilities | $ 0 | $ 0 | |||
New Hope Garden & Village - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 151 | 151 | |||
Total Acquisition Cost | $ 15,006 | ||||
Form of Consideration | |||||
Cash | 1,435 | ||||
Units | 10,812 | ||||
Other | 2,759 | ||||
Investment Allocation | |||||
Land | $ 1,603 | 1,603 | |||
Building | 12,578 | 12,578 | |||
Intangible Assets | 825 | 825 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Palisades - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 330 | 330 | |||
Total Acquisition Cost | $ 53,354 | ||||
Form of Consideration | |||||
Cash | 2,884 | ||||
Units | 30,470 | ||||
Other | 20,000 | ||||
Investment Allocation | |||||
Land | $ 6,919 | 6,919 | |||
Building | 46,577 | 46,577 | |||
Intangible Assets | 2,211 | 2,211 | |||
Other, Liabilities | $ (2,353) | $ (2,353) | |||
Plymouth Pointe - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 96 | 96 | |||
Total Acquisition Cost | $ 14,450 | ||||
Form of Consideration | |||||
Cash | 370 | ||||
Units | 9,061 | ||||
Other | 5,019 | ||||
Investment Allocation | |||||
Land | $ 1,042 | 1,042 | |||
Building | 12,809 | 12,809 | |||
Intangible Assets | 599 | 599 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Pointe West - St. Cloud, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 93 | 93 | |||
Total Acquisition Cost | $ 7,558 | ||||
Form of Consideration | |||||
Cash | 91 | ||||
Units | 3,605 | ||||
Other | 3,862 | ||||
Investment Allocation | |||||
Land | $ 246 | 246 | |||
Building | 6,849 | 6,849 | |||
Intangible Assets | 463 | 463 | |||
Other, Liabilities | $ 0 | $ 0 | |||
River Pointe - Minneapolis MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 301 | 301 | |||
Total Acquisition Cost | $ 38,348 | ||||
Form of Consideration | |||||
Cash | 2,249 | ||||
Units | 21,653 | ||||
Other | 14,446 | ||||
Investment Allocation | |||||
Land | $ 3,346 | 3,346 | |||
Building | 33,117 | 33,117 | |||
Intangible Assets | 1,885 | 1,885 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Southdale Parc - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 70 | 70 | |||
Total Acquisition Cost | $ 9,670 | ||||
Form of Consideration | |||||
Cash | 165 | ||||
Units | 7,907 | ||||
Other | 1,598 | ||||
Investment Allocation | |||||
Land | $ 1,569 | 1,569 | |||
Building | 7,740 | 7,740 | |||
Intangible Assets | 361 | 361 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Portage - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 62 | 62 | |||
Total Acquisition Cost | $ 9,171 | ||||
Form of Consideration | |||||
Cash | 323 | ||||
Units | 5,588 | ||||
Other | 3,260 | ||||
Investment Allocation | |||||
Land | $ 2,133 | 2,133 | |||
Building | 6,685 | 6,685 | |||
Intangible Assets | 353 | 353 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Windsor Gates - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 200 | 200 | |||
Total Acquisition Cost | $ 22,231 | ||||
Form of Consideration | |||||
Cash | 1,122 | ||||
Units | 12,080 | ||||
Other | 9,029 | ||||
Investment Allocation | |||||
Land | $ 2,140 | 2,140 | |||
Building | 18,943 | 18,943 | |||
Intangible Assets | 1,148 | 1,148 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Wingate - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 136 | 136 | |||
Total Acquisition Cost | $ 15,784 | ||||
Form of Consideration | |||||
Cash | 723 | ||||
Units | 10,246 | ||||
Other | 4,815 | ||||
Investment Allocation | |||||
Land | $ 1,480 | 1,480 | |||
Building | 13,530 | 13,530 | |||
Intangible Assets | 774 | 774 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Woodhaven - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 178 | 178 | |||
Total Acquisition Cost | $ 25,009 | ||||
Form of Consideration | |||||
Cash | 1,682 | ||||
Units | 15,200 | ||||
Other | 8,127 | ||||
Investment Allocation | |||||
Land | $ 3,940 | 3,940 | |||
Building | 20,080 | 20,080 | |||
Intangible Assets | 989 | 989 | |||
Other, Liabilities | $ 0 | $ 0 | |||
Woodland Pointe - Minneapolis, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 288 | 288 | |||
Total Acquisition Cost | $ 47,796 | ||||
Form of Consideration | |||||
Cash | 437 | ||||
Units | 29,438 | ||||
Other | 17,921 | ||||
Investment Allocation | |||||
Land | $ 5,367 | 5,367 | |||
Building | 40,422 | 40,422 | |||
Intangible Assets | 2,007 | 2,007 | |||
Other, Liabilities | $ 0 | $ 0 | |||
2020 Acquisitions | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Total Acquisition Cost | $ 144,800 | $ 191,013 | |||
Form of Consideration | |||||
Cash | 173,350 | ||||
Other | 17,663 | ||||
Investment Allocation | |||||
Land | 12,639 | 12,639 | |||
Building | 168,974 | 168,974 | |||
Intangible Assets | 2,995 | 2,995 | |||
Other, Assets | $ 6,405 | $ 6,405 | |||
2020 Acquisitions | Series E Preferred Units | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Total Acquisition Cost | $ 36,100 | ||||
Ironwood Apartments - New Hope, MN | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 182 | 182 | |||
Total Acquisition Cost | $ 46,263 | ||||
Form of Consideration | |||||
Cash | 28,600 | ||||
Other | 17,663 | ||||
Investment Allocation | |||||
Land | $ 2,165 | 2,165 | |||
Building | 36,869 | 36,869 | |||
Intangible Assets | 824 | 824 | |||
Other, Assets | $ 6,405 | $ 6,405 | |||
Parkhouse Apartment Homes - Thornton, CO | |||||
Acquisitions and development projects placed in service [Abstract] | |||||
Number of homes | apartmentUnit | 465 | 465 | |||
Total Acquisition Cost | $ 144,750 | ||||
Form of Consideration | |||||
Cash | 144,750 | ||||
Other | 0 | ||||
Investment Allocation | |||||
Land | $ 10,474 | 10,474 | |||
Building | 132,105 | 132,105 | |||
Intangible Assets | 2,171 | 2,171 | |||
Other, Assets | $ 0 | $ 0 |
ACQUISITIONS AND DISPOSITIONS_2
ACQUISITIONS AND DISPOSITIONS - Dispositions (Details) - Disposed of by Sale $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)apartmentUnitapartmentProperty | Sep. 30, 2020USD ($)apartmentUnitapartmentProperty | Sep. 30, 2021USD ($)apartmentUnit | Sep. 30, 2020USD ($)apartmentUnit | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of properties sold | apartmentProperty | 0 | |||
Sale Price | $ 60,000 | $ 44,300 | $ 60,000 | $ 44,300 |
Book Value and Sales Cost | $ 33,160 | $ 18,828 | 33,160 | 18,828 |
Gain/(Loss) | $ 26,840 | 25,472 | ||
Multifamily | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of properties sold | apartmentProperty | 4 | |||
Sale Price | $ 42,500 | 42,500 | ||
Book Value and Sales Cost | $ 16,864 | 16,864 | ||
Gain/(Loss) | $ 25,636 | |||
Multifamily | Crystal Bay - Rochester, MN | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of apartment units | apartmentUnit | 76 | 76 | ||
Sale Price | $ 13,650 | $ 13,650 | ||
Book Value and Sales Cost | $ 10,255 | 10,255 | ||
Gain/(Loss) | $ 3,395 | |||
Multifamily | French Creek - Rochester, MN | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of apartment units | apartmentUnit | 40 | 40 | ||
Sale Price | $ 6,700 | $ 6,700 | ||
Book Value and Sales Cost | $ 4,474 | 4,474 | ||
Gain/(Loss) | $ 2,226 | |||
Multifamily | Heritage Manor- Rochester, MN | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of apartment units | apartmentUnit | 182 | 182 | ||
Sale Price | $ 14,125 | $ 14,125 | ||
Book Value and Sales Cost | $ 4,892 | 4,892 | ||
Gain/(Loss) | $ 9,233 | |||
Multifamily | Olympik Village - Rochester, MN | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of apartment units | apartmentUnit | 140 | 140 | ||
Sale Price | $ 10,725 | $ 10,725 | ||
Book Value and Sales Cost | $ 6,529 | 6,529 | ||
Gain/(Loss) | $ 4,196 | |||
Multifamily | Winchester/Village Green-Rochester, MN | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of apartment units | apartmentUnit | 151 | 151 | ||
Sale Price | $ 14,800 | $ 14,800 | ||
Book Value and Sales Cost | $ 7,010 | 7,010 | ||
Gain/(Loss) | $ 7,790 | |||
Multifamily | Forest Park - Grand Forks, ND | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of apartment units | apartmentUnit | 268 | 268 | ||
Sale Price | $ 19,625 | $ 19,625 | ||
Book Value and Sales Cost | $ 6,884 | 6,884 | ||
Gain/(Loss) | $ 12,741 | |||
Multifamily | Landmark - Grand Forks, ND | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of apartment units | apartmentUnit | 90 | 90 | ||
Sale Price | $ 3,725 | $ 3,725 | ||
Book Value and Sales Cost | $ 1,348 | 1,348 | ||
Gain/(Loss) | $ 2,377 | |||
Multifamily | Southwind - Grand Forks, ND | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of apartment units | apartmentUnit | 164 | 164 | ||
Sale Price | $ 10,850 | $ 10,850 | ||
Book Value and Sales Cost | $ 4,573 | 4,573 | ||
Gain/(Loss) | $ 6,277 | |||
Multifamily | Valley Park - Grand Forks, ND | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of apartment units | apartmentUnit | 168 | 168 | ||
Sale Price | $ 8,300 | $ 8,300 | ||
Book Value and Sales Cost | $ 4,059 | 4,059 | ||
Gain/(Loss) | 4,241 | |||
Other | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of properties sold | apartmentProperty | 1 | |||
Other | Dakota West | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale Price | $ 500 | 500 | ||
Book Value and Sales Cost | 474 | 474 | ||
Gain/(Loss) | 26 | |||
Real Estate Property Excluding Unimproved Land | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale Price | 43,000 | 43,000 | ||
Unimproved Land | Rapid City Land - Rapid City, SD | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale Price | 1,300 | 1,300 | ||
Book Value and Sales Cost | $ 1,490 | 1,490 | ||
Gain/(Loss) | $ (190) |
SEGMENT REPORTING - Revenues an
SEGMENT REPORTING - Revenues and Net Operating Income for Reportable Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 1 | |||
Segment revenues and net operating income [Abstract] | ||||
Revenue | $ 50,413 | $ 44,138 | $ 143,717 | $ 132,454 |
Property operating expenses, including real estate taxes | 20,350 | 18,531 | 58,351 | 55,234 |
Net operating income | 30,063 | 25,607 | 85,366 | 77,220 |
Property management | (2,203) | (1,442) | (6,055) | (4,341) |
Casualty gain (loss) | 10 | (91) | (64) | (1,331) |
Depreciation and amortization | (22,447) | (18,995) | (61,747) | (55,311) |
General and administrative expenses | (4,279) | (3,077) | (11,982) | (9,707) |
Interest expense | (7,302) | (6,771) | (21,622) | (20,622) |
Interest and other income (loss) | (5,082) | 277 | (4,032) | (1,979) |
Income (loss) before gain (loss) on sale of real estate and other investments | (11,240) | (4,492) | (20,136) | (16,071) |
Gain (loss) on sale of real estate and other investments | 0 | 25,676 | 26,840 | 25,486 |
Net income (loss) | (11,240) | 21,184 | 6,704 | 9,415 |
Multifamily | ||||
Segment revenues and net operating income [Abstract] | ||||
Revenue | 49,248 | 40,688 | 138,447 | 120,946 |
Property operating expenses, including real estate taxes | 20,066 | 16,900 | 55,907 | 49,626 |
Net operating income | 29,182 | 23,788 | 82,540 | 71,320 |
All Other | ||||
Segment revenues and net operating income [Abstract] | ||||
Revenue | 1,165 | 3,450 | 5,270 | 11,508 |
Property operating expenses, including real estate taxes | 284 | 1,631 | 2,444 | 5,608 |
Net operating income | $ 881 | $ 1,819 | $ 2,826 | $ 5,900 |
SEGMENT REPORTING - Segment Ass
SEGMENT REPORTING - Segment Assets and Accumulated Depreciation (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Segment Reporting Information [Line Items] | |||
Property owned | $ 2,203,606 | $ 1,812,557 | |
Less accumulated depreciation | (426,926) | (399,249) | |
Total property owned | 1,776,680 | 1,413,308 | |
Mortgage loans receivable at fair value | 42,160 | 24,661 | |
Cash and cash equivalents | 20,816 | 392 | $ 16,804 |
Restricted cash | 2,376 | 6,918 | $ 2,199 |
Other assets | 34,919 | 18,904 | |
TOTAL ASSETS | 1,876,951 | 1,464,183 | |
Multifamily | |||
Segment Reporting Information [Line Items] | |||
Property owned | 2,170,321 | 1,727,229 | |
Less accumulated depreciation | (414,829) | (368,717) | |
Total property owned | 1,755,492 | 1,358,512 | |
All Other | |||
Segment Reporting Information [Line Items] | |||
Property owned | 33,285 | 85,328 | |
Less accumulated depreciation | (12,097) | (30,532) | |
Total property owned | $ 21,188 | $ 54,796 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Subject to Restrictions on Taxable Dispositions | Sep. 30, 2021apartmentPropertyapartmentUnit |
Real Estate Properties [Line Items] | |
Number of properties | apartmentProperty | 34 |
Number of apartment units | apartmentUnit | 6,511 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 01, 2021 | May 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 2.1 | $ 1.5 | ||
2015 Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares (in shares) | 775,000 | |||
Term of award | 10 years | |||
2021 LTIP Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of award | 3 years | |||
2021 LTIP Awards | Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance RSUs eligible to be earned (in shares) | 38,448 | |||
Percentage of performance RSUs eligible to be earned over granted shares | 2 | |||
Expected volatility | 20.63% | |||
Risk-free rate | 0.17% | |||
Expected term | 3 years | |||
Exercise price (in dollars per share) | $ 70.64 | |||
2021 LTIP Awards | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 21.08% | |||
Risk-free rate | 0.65% | |||
Expected term | 6 years 3 months | |||
Exercise price (in dollars per share) | $ 70.64 | |||
2021 LTIP Awards | Tranche One | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares vesting percentage | 25.00% | |||
2021 LTIP Awards | Tranche Two | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares vesting percentage | 25.00% | |||
2021 LTIP Awards | Tranche Three | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares vesting percentage | 25.00% | |||
2021 LTIP Awards | Tranche Four | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares vesting percentage | 25.00% | |||
2021 LTIP Awards | Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted (in shares) | 43,629 | |||
Fair value of stock options (in dollars per share) | $ 7.383 | |||
2021 LTIP Awards | Employees | Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted (in shares) | 19,224 | |||
2021 LTIP Awards | Employees | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted (in shares) | 6,410 | |||
2021 LTIP Awards | Trustee | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted (in shares) | 6,948 | |||
Vesting period | 1 year |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Assumptions Used in Black-Scholes Pricing Model (Details) - Stock Options - 2021 LTIP Awards | 9 Months Ended |
Sep. 30, 2021$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price (in dollars per share) | $ 70.64 |
Risk-free rate | 0.65% |
Expected term | 6 years 3 months |
Expected volatility | 21.08% |
Dividend yield | 3.963% |