CSR 10-K & 10-Q changes, risk factors and insider trading

We depend on residents for rental payments, which accountsaccount for most of our revenue, and low occupancy rates or lease terminations could reduce our revenues from rents. The value of our properties and our ability to make distributions depend on the ability of our residents to generate enough income to pay their rents on time. The success of our properties depends on the occupancy levels, rental income and operating expenses of our properties and our business. Residents’ inability to timely or fully pay their rents may be impacted by their employment prospects and other constraints on their personal finances, including debts, purchases and other factors. These and other changes beyond our control may adversely affect our residents’ ability to make their required lease payments. If residents default on their leases or fail to renew their leases, we may be unable to re-lease the property for the rent previously received. Our apartment leases are generally for a term of 12 months or less. The short-term nature of these leases generally serves to reduce our risk to adverse effects of inflation,inflation and increases in operating costs, as our leases allow for adjustments in the rental rate at the time of renewal, which may enable us to seek increases. However, because these leases generally allow residents to leave at the expiration of the lease term without penalty, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms. Furthermore, we may be unable to increase rents, whether due to market conditions or applicable law, at a rate consistent with inflation.inflation or our increased operating costs. In addition, we may be unable to sell a property with low occupancy without incurring a loss. These events and others could cause us to reduce the amount of distributions we make to shareholders and may also cause the value of our common shares to decline.

Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition. Our results of operations are materially affected by economic and political conditions in the United States and internationally, including inflation, deflation, interest rates, recession, availability of capital, and the effects of governmental initiatives to manage economic conditions. TheActual currentor conflictsthreatened wars or other international conflicts, such as those in Ukraine andUkraine, the Middle East, and South America, resulting sanctions and related countermeasures by the United States and other countries, could lead to market disruptions, including significant volatility in the credit and capital markets and the economy in general, which could weaken our operations and financial performance. Any development or escalation of these conflicts, or any new conflicts, including those resulting from the policies of the U.S. Presidential Administration, could significantly affect worldwide political stability and cause turmoil in the capital markets and generally in the global financial system. Additionally, geopolitical and macroeconomic consequences of these events cannot be predicted but could severely impact the world economy.

There is also substantial uncertainty surrounding tariffs and international trade relations, and it is difficult for us to predict future trade measures and the impact they will have on our business and operations. In early 2025, the new Administration imposed and threatened additional tariffs on imports from various countries. In response, some of these countries imposed and threatened additional tariffs on imports from the U.S. How long current tariffs will remain in place, and whether the new Administration will enact the threatened tariffsNew or impose entirely new ones is uncertain. The newexisting tariffs, along with any additional tariffs or trade restrictions that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries, could result in reduced economic activity, increased costs in operating our business, reduced spending on housing, limits on trade with the U.S. or other potentially adverse economic outcomes.

In addition, there may be political crises, civil unrest, or another outbreak or escalation of hostilities among various actors in the markets in which we operate, including Minneapolis, which could threaten the safety of our residents, subject our communities to increased risk of damage and could worsen the long-term attractiveness of our communities if they persist. The occurrence of any of these could cause current or potential residents to delay or decrease spending on housing as their budgets are impacted by economic or political conditions. The inability of current and potential residents to pay market rents may adversely affect our earnings and cash flows. In addition, deterioration of conditions in worldwide credit markets could limit our ability to obtain financing to fund our operations and capital expenditures.

Our financial performance is subject to risks associated with the real estate industry and ownership of apartment communities. Our financial performanceThese risks include, but are not limited to, the following:

•competition from other apartment communities and alternative housing;

•we may be unable to identify suitable properties or other assets that meet our acquisition or development criteria or in consummatingconsummate acquisitions or developments on satisfactory terms, or at all;

We depend on a concentration of our investments in a single asset class, making our results of operations more vulnerable to a downturn or slowdown in the sector or other economic factors. Substantially all of our investments are concentrated in the multifamily housing sector. As a result, we are subject to risks inherent in investments in a single asset class. A downturn or slowdown in the demand for multifamily housing may have more pronounced effects on our business and results of operations or on the value of our assets than if weour investments were more diversified in our investments into more than one asset class.

Inflation and price volatility in the global economy could hurt our business and results of operations. During the past several years, inflation in the United States rose to levels not experienced in recent decades, including rising energy prices, prices for consumer goods, interest rates, wages, and currency volatility. These increases and any fiscal or other policy interventions by the U.S. government in reaction to such events could harm our business by increasing our operating costs and our borrowing costs, as well as decreasing the capital available to our residents and prospective residents who wish to rent in our communities. Although we believe that we could increase rent to combat inflation, the cost to operate and maintain communities could increase faster or at a rate greater than our ability to increase rents, which could adversely affect our results of operations. We may also be limited by law in our ability to increase rents. See “Multifamily residential properties may be subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts.” See “Adverse changes in taxestax laws and other laws may affect our liabilities relating to our properties and operations.”

Catastrophic weather, natural events, and climate change could adversely affect our business. Some of our apartment communities are located in areas that may experience catastrophic weather and other natural events from time to time, including snow or ice storms, fires, flooding, tornadoes, or other severe or inclement weather. These natural events could cause damage or losses that may be greater than insured levels. If a loss occurs in excess of insured limits, we could lose all or a portion of our investment in an affected property as well as future revenue from that apartment community. We may continue to be obligated to repay mortgage indebtedness or other obligations related to an affected apartment community.

Our current or future insurance may not protect us against possible losses. We carry comprehensive liability, fire, cyber, extended coverage, and other insurance covering our properties and our business at levels that we believe to be adequate and comparable to coverage customarily obtained by others in our industry. However, the coverage limits of our current or future policies may be insufficient to cover the full cost of repair or replacement of all potential losses, or our level of coverage may not remain available in the future or, if available, may be available only at unacceptable cost or with unacceptable terms. We also do not maintain coverage for certain catastrophic events like hurricanes and earthquakes because the cost of such insurance is deemed by management to be higher than the risk of loss due to the location of our properties. In most cases, we have to renew our insurance policies annually and negotiate acceptable terms for coverage, exposing us to the volatility of the insurance markets, including the possibility of rate increases. In addition, a reduction of the number of insurance providers or the unwillingness of existing insurance providers to write insurance for multifamily properties may reduce the potential availability and increase the cost for obtaining insurance on our properties. Any material increases in insurance rates or decrease in available coverage in the future could adversely affect our results of operations.

Multifamily residential properties may be subject to rent stabilization regulations and other restritctionsrestrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts. Rent control or rent stabilization laws and other regulatory restrictions may limit our ability to increase rents and otherwise charge residents fees and pass through new or increased operating costs to our residents. There has been a recent increase in municipalities and other local governments, including those in whichlocations where we own properties, considering or being urged by advocacy groups to consider rent control or rent stabilization laws and regulations or take other actions which could limit our ability to raise rents based solely on market conditions. In addition, the multifamily housing industry has faced increased scrutiny over fees charged to residents. In January 2025, the Federal Trade Commission filed a lawsuit against the nation’s largest landlord for deceiving consumers about rent prices by charging “numerous mandatory fees” in addition to monthly rent. These restrictions, initiatives, government enforcement actions and any other future enactments of rent control or rent stabilization laws or other laws regulating multifamily housing, as well as any lawsuits against us arising from such rent control or other laws, may reduce rental revenues or increase operating costs. Such laws and regulations would limit our ability to charge market rents and fees, increase rents, evict residents, or recover increases in our operating expenses and could reduce the value of our multifamily properties or make it more difficult for us to dispose of properties in certain circumstances. Expenses associated with our investment in these multifamily properties, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances reduce rental income from the community. Furthermore, such regulations may impair our ability to attract higher-paying residents to such multifamilyour properties.

Because real estate investments are relatively illiquid and various other factors limit our ability to dispose of assets, we may be unable to sell properties when appropriate. We may have limited ability to change our portfolio ofby selling properties quickly in response to our strategic plan and changes in economic or other conditions, the prohibitions under the federal income tax laws on REITs holding property for sale, and related regulations may affect our ability to sell properties.regulations. In some cases, the Code imposes penalties on a REIT that sells property held for less than two years and limits the number of properties it can sell in a given year. Our ability to dispose of assets also may be limited by constraints on our ability to use disposition proceeds to make acquisitions on financially attractive terms. Some of our properties were acquired using limited partnership Units of Centerspace, LP, our operating partnership, and are subject to certain tax-protection agreements that restrict our ability to sell these properties in transactions that would create current taxable income to the former owners. As a result, we are motivated to structure the sale of these assets as tax-free exchanges, the requirements of which are technical and may be difficult to achieve.

Adverse changes in taxestax laws and other laws may affect our liabilities relating to our properties and operations. Increases in real estate taxes, including recent property tax increases in several of the markets in which we operate, and service and transfer taxes may adversely affect our cash available for distributions and our ability to service our debt. Similarly, changes in laws that increase the potential liability for environmental conditions or that affect development, construction, and safety requirements may result in significant unanticipated costs. Future enactment of rent control or rent stabilization laws or other laws regulating apartment communities may reduce rental revenues or increase operating costs. See “Multifamily residential properties may be subject to rent stabilization regulations and other restrictions which limit our ability to raise rents above specified maximum amounts and could give rise to claims by residents that their rents exceed such specified maximum amounts.” The Inflation Reduction Act of 2022 may also increase our tax burden. See “Legislative or regulatory actions affecting REITs could have an adverse effect on us or our shareholders.”

We may be unable to retain or attract qualified management. We depend on our senior officers for essentially all aspects of our business operations. Our senior officers have experience in the real estate industry, and the loss of any one of them would likely have a significant adverse effect on our operations and could adversely impact our relationships with lenders and industry personnel. Except for our Chief Executive Officer and Chief Financial Officer, we do not have employment contracts with any of our senior officers. AsThe aemployment result,contracts anyrequire between 30 and 60 days’ advance notice before termination by our Chief Executive Officer or Chief Financial Officer. Any other senior officer may terminate his or her relationship with us at any time, without providing advance notice. If we fail to effectively manage a transition to new personnel, or if we fail to attract and retain qualified and experienced personnel on acceptable terms, it could adversely affect our business.

We may be unable to attract and retain qualified employees. StrongWe economic growth in recent years has created aface tight labor marketmarkets in many markets in which we operate, and we depend on employees at our apartment communities to provide attractive homes for our residents. Further, inflation may necessitate increasing employee wages and salaries to retain our employees. The loss of key personnel at these apartment communities, or the inability or cost of replacing such personnel at such communities, could hurt our business and results of operations.

Even the most well-protected information, networks, systems, and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target. In some cases, these breaches are designed to be undetected and, in fact, may not be detected. Accordingly, we and our service providers may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, thereby making it impossible to entirely mitigate this risk. The risk of a breach or security failure, particularly through cyber-attacks or cyber-intrusion, has generally increased because of the rise in new technologiestechnologies, including artificial intelligence, and the increased sophistication and activities of the perpetrators of attempted attacks and intrusions. A security breach or other significant disruption involving computer networks and related systems could cause substantial costs and other negative effects, including litigation, remediation costs, costs to deploy additional protection strategies, compromising of confidential information, and reputational damage adversely affecting investor confidence.

We may be responsible for potential liabilities under environmental laws. Under various federal, state and local laws, ordinances, and regulations, we, as a current or previous owner or operator of real estate, may be liable for the costs of removal or remediation of hazardous or toxic substances in, on, around, or under that property. These laws may impose liability without regard to whether we knew of, or were responsible for, the presence of the hazardous or toxic substances. The presence of these substances, or the failure to properly remediate any property containing these substances, may adversely affect our ability to sell or rent the affected property or to borrow funds using the property as collateral. In arranging for the disposal or treatment of hazardous or toxic substances, we also may be liable for the costs of removal or remediation of these substances at that disposal or treatment facility, whether or not we own or operate the facility. In connection with our current or former ownership (direct or indirect), operation, management, development, and control of real properties, we may be potentially liable for removal or remediation costs for hazardous or toxic substances at those properties, as well as certain other costs, including governmental fines and claims for injuries to persons and property. Although we are unaware of any such claims associated with our existing properties that would have a significant adverse effect on our business, potential future costs, and damage claims may be substantial and could exceed any insurance coverage we may have for such events or such coverage may not exist. The presence of such substances, or the failure to properly remediate any such impacts, may adversely affect our ability to borrow against, develop, sell, or rent the affected property. Some environmental laws create or allow a government agency to impose a lien on the impacted property in favor of the government for damages and costs it incurs as a result of responding to hazardous or toxic substances.

Environmental laws also govern the presence, maintenance, and removal of asbestos, and require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos; notify and train those who may come into contact with asbestos; and undertake special precautions if asbestos would be disturbed during renovation or demolition of a building. Indoor air quality issues may also require special investigation and remediation. These air quality issues can result from inadequate ventilation, chemical contaminants from indoor or outdoor sources, or natural or biological contaminants such as radon, molds, pollen, viruses, and bacteria. Asbestos or air quality remediation programs could be costly, necessitate the temporary relocation of some or all of the property’s residents, or require rehabilitation of an affected property.

The COVID-19 pandemic affected our business in the past, and theA potential future pandemic or other outbreak of othera highly infectious or contagious diseases may materially and adversely impact and disrupt our business, income, cash flow, results of operations, financial condition, liquidity, prospects, and ability to service our debt obligations, and our ability to pay dividends and other distributions to our equityholders. The COVID-19 pandemic had, and any future pandemic may have, an impact on our financial condition, results of operations, and cash flows, as well as an adverse effect our residents and commercial tenants, the real estate market, and the global economy and financial markets generally. The effects of any such outbreak are highly uncertain and cannot be predicted with confidence, including the scope, severity, and duration of the epidemic, pandemic, or other outbreak, the actions taken to contain it or mitigate its impact, and the direct and indirect economic effects of the outbreak and containment measures. Global outbreaks of infectious diseases may also exacerbate certain of the other risks described in this “Risk Factors” section.

•our cash flow will be insufficient to meet required payments of principal and interest, particularly if net operating income is reduced significantly due to the effects of the uncertain global macroeconomic and political conditions including inflation, and price volatility and the COVID-19 pandemic;

Restrictive covenants in our debt agreements may limit our operating and financial flexibility, and our inability to comply with these covenants could have significant implications. Our indebtedness, which at December 31, 20242025 totaled outstanding borrowings of approximately $966.6$1.1 million,billion, contains significant restrictions and covenants. These restrictions and covenants include financial covenants relating to fixed charge coverage ratios, maximum secured debt, maintenance of unencumbered asset value, and total debt to total asset value, among others and certain non-financial covenants. These may limit our ability to make future investments and dispositions, add incremental secured and recourse debt, and add overall leverage. Our ability to comply with these covenants will depend on our future performance, which may be affected by events beyond our control. Our failure to comply with these covenants would be an event of default. An event of default under the terms of our indebtedness would permit the lenders to accelerate indebtedness under effected agreements, which would include agreements that contain cross-acceleration provisions with respect to other indebtedness.

Our future growth depends, in part, on our ability to raise additional equity capital, which could dilute the interests of our common shareholders. Our future growth depends on, among other things, our ability to raise equity capital, including through our ATM Program, and issue limited partnership Units of our Operating Partnership. Sales of substantial amounts of our common or preferred shares in the public market,shares, or the perception that such sales or issuances might occur, may dilute the interests of the current common shareholders and could adversely affect the market price of our common shares. In addition, as a REIT, we are required to make distributions to holders of our equity securities of at least 90% of our REIT taxable income, determined before a deduction for dividends paid and excluding any net capital gain. This limits our ability to retain cash or earnings to fund future growth and makes us more dependent on raising funds through other means, which may include raising additional equity capital. Future sales of common shares, preferred shares, or other securities may dilute current shareholders and could have an adverse impact on the market price of our common shares.

We may issue additional classes or series of our shares of beneficial interest with rights and preferences that are superior to the rights and preferences of our common shares. Our Declaration of Trust provides for an unlimited number of shares of beneficial interest. Without the approval of our common shareholders, our Board of Trustees may establish additional classes or series of our shares of beneficial interest, and such classes or series may have dividend rights, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences, or other rights and preferences that are superior to the rights of the holders of our common shares. We have a shelf registration statement that enables us to sell an undetermined number of equity and other securities listed in the prospectus. Future sales of preferred shares or other securities may adversely affect the rights onof common shareholders and have an adverse impact on the market price of our common shares.

If the transaction is not void, then the shares in violation of the foregoing conditions will automatically be exchanged for an equal number of excess shares, and these excess shares will be transferred to an excess share trustee for the exclusive benefit of the charitable beneficiaries named by our Board of Trustees. The Trust’s Declaration of Trust also forbids a Personperson from owning in excess of the ownership limit of 9.8%, in number or value, of the Trust’s outstanding shares, although the Board of Trustees retains the ability to make exceptions to this ownership threshold. This ownership limit as well as other restrictions on ownership and transfer of our stock in our charter may discourage a tender offeroffer, takeover, or other transactionstransaction in which holders of our common shares might receive a premium for their shares over the then prevailing market price or awhich changeholders might believe to be otherwise in managementtheir orbest of control or result in transferring shares acquired in excess of the restrictions to a charitable trust.interests.

Failure of ourthe operatingOperating partnershipPartnership to qualify as a partnership would lead to corporate taxation and significantly reduce the amount of cash available for distribution. We believe that Centerspace,the LP,Operating our operating partnership,Partnership, qualifies as a partnership for federal income tax purposes. However, we can provide no assurance that the IRS will not challenge its status as a partnership for federal income tax purposes or that a court would not sustain such a challenge. If the IRS were to treat Centerspace,the LPOperating Partnership as an entity taxable as a corporation (such as a publicly traded partnership taxable as a corporation), we would no longer qualify as a REIT because the value of our ownership interest in Centerspace,the LPOperating Partnership would exceed 5% of our assets and because we would be considered to hold more than 10% of the voting securities and value of the outstanding securities of another corporation. The imposition of a corporate tax on Centerspace,the LPOperating Partnership would significantly reduce the amount of cash available for distribution.

Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations, which could reduce the net cash received by our shareholders and may harm our ability to raise additional funds through any future sale of our stock. Dividends paid by REITs to U.S. shareholders that are individuals, trusts, or estates are generally not eligible for the reduced tax rate applicable to qualified dividends received from non-REIT corporations. For taxable yearyears beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6% on such income. Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate is still higher than the tax rate applicable to regular corporate qualified dividends. This may cause investors to view REIT investments as less attractive than investments in non-REIT corporations, which in turn may adversely affect the value of stock in REITs, including our stock. Investors should consult with their tax advisers about the U.S. tax consequences of an investment in our stock or Units.

We may face risks in connection with Section 1031 exchanges. From time to time, we dispose of properties in transactions intended to qualify as “like-kind exchanges” under Section 1031 of the Code. If a transaction intended to qualify as a Section 1031 exchange is later determined to be taxable, we may face adverse consequences, and if the laws applicable to such transactions are amended or repealed, we may be unable to dispose of properties on a tax-deferred basis. If we cannot meet the technical requirements of a desired Section 1031 exchange, we may have to make a special dividend payment to our shareholders if we cannot mitigate the taxable gains realized. The failure to reinvest proceeds from sales of properties into tax-deferred exchanges could necessitate payments to certain Operating Partnership unitholders with tax protection agreements.

We have tax protection agreements in place on twenty-eight21 properties. If these properties are sold in a taxable transaction, we must make the unitholders associated with these particular properties whole through the payment of their related tax. We dispose of properties in transactions intended to qualify as “like-kind exchanges” under Section 1031 of the Code whenever possible. If we cannot satisfy all of the technical requirements of Section 1031, or if Section 1031 is repealed, selling a property with a tax protection agreement could trigger a material obligation to make the associated Operating Partnership unitholders whole.

Federal, state and foreign income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions affecting REITs could have a negative effect on us. The REIT rules are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S. Treasury Department, which may result in revisions to regulations and interpretations as well as statutory changes.

This and other sections of this Report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. See “Special Note Regarding Forward-Looking Statements.”

We are a real estate investment trust, or REIT that owns, manages, acquires, redevelops, and develops apartment communities. We primarily focus on investing in markets characterized by stable and growing economic conditions, strong employment, and an attractive quality of life that we believe, in combination, lead to higher demand for our apartment homes and retention of our residents. As of December 31, 2024,2025, we owned interests in 7161 apartment communities consisting of 13,01212,262 homes as detailed in Item 2 - Properties. Property owned, as presented in the Consolidated Balance Sheets, was $2.5 billion at December 31, 2024,2025 comparedand to $2.4 billion at December 31, 2023.2024.

•Core funds from operations (“CFFO”) per diluted share, a non-GAAP measure, increased 2.1%1.0% to $4.93 from $4.88 (refer to reconciliations of Funds from Operations and Core Funds from Operations beginning on page 32 for additional detail) to $4.88 from $4.78;

•Operating income decreasedincreased to $20.5$64.5 million for the year ended December 31, 20242025 compared to $84.5$20.5 million for the prior year; and

•Disposed of twotwelve non-core apartment communities throughout Minnesota and one corporate office building for an aggregate sales price of $19.0$215.5 million; and

•Acquired TheRailway Lydian,Flats ain 129Loveland, homeColorado, an apartment community inconsisting Denver,of Colorado420 homes for an aggregate purchase price of $54$132.2 million.million, Thewhich acquisition was financed throughincluded the assumption of $76.5 million in mortgage debt, issuance of common operating partnership units,debt; and cash.

On the first day of each calendar year, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate the performance of existing apartment communities and their contribution to net income.income (loss). Management believes that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of communities are performing year-over-year. Management uses this measure to assess whether or not it has been successful in increasing NOI, raising average rental revenue, renewing the leases of existing residents, controlling operating costs, and making prudent capital improvements. The discussion below focuses on the main factors affecting real estate revenue and real estate expenses from same-store apartment communities because changes from one year to another in real estate revenue and expenses from non-same-store communities are generally due to the addition of those communities to our real estate portfolio, and accordingly provide less useful information for evaluating the ongoing operational performance of our real estate portfolio.

For the comparison of the years ended December 31, 20242025 and 2023,2024, 6957 apartment communities were classified as same-store and four apartment communities and two apartment communitiescommunities, respectively, were non-same-store. See Item 2 - Properties for the list of communities classified as same-store and non-same-store. Sold communities are included in “Dispositions,” for all periods presented, while “Other properties” includes non-multifamily properties and the non-multifamily components of mixed-use properties. During the years ended December 31, 20242025 and 2023,2024, we disposed of twotwelve and thirteentwo apartment communities, respectively, consisting of 2051,511 and 2,279205 apartment homes, respectively.

Same-store analysis. Revenue from same-store communities increased by 3.3%,2.4%, or $7.9$5.4 million, in the year ended December 31, 2024,2025, compared to the year ended December 31, 2023.2024. Approximately 2.9%2.0% of the increase was due to higher average monthly revenue per occupied home and 0.3% from an increase in occupancy as weighted average occupancy increased from 94.9%95.4% to 95.2%95.7% for the years ended December 31, 20232024 and 2024,2025, respectively. Property operating expenses at same-store communities increased by 2.7%0.6% or $2.6 million$541,000 in the year ended December 31, 2024,2025, compared to the same period in the prior year. At same-store communities, controllable expenses (which exclude insurance and real estate taxes), increased by $2.1 million,$417,000, primarily due to increased repairsutilities, andturnover maintenance, technology costs related to smart home technology,expense, and compensation costs, offset by decreased utilitiesrepairs and turnovermaintenance costs.and marketing expense. Non-controllable expenses at same-store communities increased by $438,000$124,000 primarily due to insurancean premiumsincrease andin deductiblesreal onestate claimstaxes primarily due to fewer tax appeal refunds in 2025 compared to the prior year, offset by a decrease in realinsurance estate taxes resulting from successful real estate tax appeals.premiums. Same-store NOI increased by $5.3$4.8 million to $150.5$143.7 million for the year ended December 31, 20242025 compared to $145.2$138.9 million in the same period in the prior year.

Non-same-store analysis. Revenue from non-same-store apartment communities increased by $6.5$11.4 million in the year ended December 31, 2024,2025, compared to the same period in the prior year. Property operating expenses from non-same-store apartment communities increased by $2.1$4.7 million. Net operating income from non-same-store communities increased by $4.3$6.7 million. The increase in revenue, property operating expenses, and NOI from non-same-store communities is primarily due to the addition of three apartment communitiescommunities, one during the fourth quarter of 20232024, one during the second quarter of 2025, and 2024.one during the third quarter of 2025, offset by a $978,000 decrease in NOI from repositioning a community by making full unit upgrades, resulting in lower occupancy, and requiring relocation of residents.

Other properties and dispositions analysis. Revenue from other,other properties, which encompasses our commercial and mixed use activity, decreasedincreased by 0.4%40.8% or $11,000$1.0 million while revenue from dispositions decreased by $14.7$5.1 million. Property operating expenses from other properties increased by 21.5%17.5% or $171,000$164,000 while property operating expenses from dispositions decreased by $7.5$2.4 million due to sold properties. The increase in NOI on other properties is driven by the acquisition of an apartment community with commercial space during the fourth quarter of 2024. We disposed of 12 apartment communities during the year ended December 31, 2025 and two apartment communities during the year ended December 31, 20242024, andresulting 13in apartment$2.8 communitiesmillion andless associatedNOI commercial space duringover the yearprior ended December 31, 2023.year.

Property management expense. Property management expense, consisting of property management overhead and property management fees paid to third parties decreasedincreased by 2.4%5.6% to $9.6 million in the year ended December 31, 2025, compared to $9.1 million in the year ended December 31, 2024, compared to $9.4 million in the year ended December 31, 2023.2024. The decreaseincrease was primarily due to decreasedincreased headcountcompensation withcosts fewer properties duecompared to dispositionsthe prior year and a decrease in third party management fees.fees for management of an apartment community we acquired in the second quarter of the current year.

Casualty loss. Casualty loss increaseddecreased to $816,000 in the year ended December 31, 2025, compared to $3.3 million in the year ended December 31, 2024, compared to $2.1 million in the year ended December 31, 2023.2024. The increasedecrease was primarily due to increaseddecreases in insurance claims activity and increases in insurance recoveries throughout 20242025 compared to the prior year period. Refer to Involuntary Conversion of Assets in Note 2 of the Notes to the Consolidated Financial Statements in thethis reportReport for more details.

Depreciation and amortization. Depreciation and amortization increased by 4.7%6.4% to $113.2 million in the year ended December 31, 2025, compared to $106.5 million in the year ended December 31, 2024, compared to $101.7 million in the year ended December 31, 2023, attributable to an increase of $5.6 million from same-store communities and $3.8$14.0 million from non-same-store communities driven by the addition of anthree apartment communitycommunities, one in the fourth quarter of both 2024 and 2023two alongin with value add and acquisition capital projects,2025, offset by a decrease of $5.1$5.9 million from dispositions.dispositions of 12 apartment communities during the year and $695,000 from same store communities.

Impairment of real estate investments. There was no$37.7 million of impairment ofon real estate investments in the year ended December 31, 2024,2025, compared to $5.2no millionsuch impairment in 2023.2024. TheseThe impairmentsimpairment werewas the result of twosix apartment communities that were written down to estimated fair value based onin theconnection receipt and acceptance ofwith market offers tofor purchasecommunities thethat were held for sale and subsequently sold during 2025 and one apartment communities.community written down to fair value based upon an independent appraisal. Refer to Real Estate Investments in NoteNotes 2 and 9 of the Notes to the Consolidated Financial Statements in thethis reportReport for more details.

General and administrative expenses. General and administrative expenses decreasedincreased by 11.3%17.5% to $20.9 million in the year ended December 31, 2025, compared to $17.8 million in the year ended December 31, 2024, compared to $20.1 million in the year ended December 31, 2023, primarily attributable to $3.2$1.3 million in executiveone-time severance and transition costs related to the CEO departure in 2023 and lower legalprofessional fees dueassociated towith a litigationshareholder settlementrelations frommatter 2023 both of which did not occur in 2024, offset byand $1.2 million in increased incentive related compensation.

Gain (loss) on sale of real estate and other investments. In the years ended December 31, 20242025 and 2023,2024, we recorded a gain on the sale of real estate and other investments of $79.5 million and a loss on the sale of real estate and other investments of $577,000$577,000, andrespectively. aThe gainincrease onwas due to the sale of real12 estateapartment andcommunities otherfor investmentsa ofnet $71.2gain million,in respectively.2025 The decrease was duecompared to the sale of two apartment communities for a loss in 2024 compared to the saleprior of 13 apartment communities for a gain and associated commercial space during 2023.year. Refer to Note 9 in the Notes to the Consolidated Financial Statements.

Operating income. Operating income decreasedincreased byto 75.8%$64.5 million in the year ended December 31, 2025, compared to $20.5 million in the year ended December 31, 2024, compared to $84.5 million in the year ended December 31, 2023.2024.

Interest expense. Interest expense increased 2.3%20.4% to $44.9 million in the year ended December 31, 2025, compared to $37.3 million in the year ended December 31, 2024, comparedprimarily due to $36.4an millionincrease in the yearaverage endeddaily Decemberbalance 31,on 2023,our primarilylines dueof credit in order to fund acquisitions of apartment communities, the assumption of mortgages upon acquisition of The Lydian in the fourth quarter of 2024 and LakeRailway VistaFlats in the fourththird quarter of 2023,2025, offsetand by lower interest on linesamortization of creditdebt indiscounts 2024for andassumed a higher rate term loan that was paid off early in 2023.mortgages.

Interest and other income. Interest and other income increased to $2.6$3.4 million in the year ended December 31, 2024,2025, compared to $1.2$2.6 million in the same period of the prior year, primarily due to interest income on two real estate related notes receivable,receivable offsetand by a decreaseinterest from interestfunds received on escrow fundsheld in 2023 that did not occur in 2024. One of the notes receivable originated in December 2023 and the other was acquired during the fourth quarter of 2024 in connection with the acquisition of The Lydian.escrow.

Net income (loss) available to common shareholders. Net income (loss) available to common shareholders decreasedincreased to a net income of $17.1 million compared to a net loss of $19.7 million compared to a net income of $34.9 million in 2023.2024.

While FFO is widely used by us as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO the same way. Accordingly, FFO presented here is not necessarily comparable to FFO presented by other real estate companies. FFO should not be considered as an alternative to net income (loss) or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash needs, including the ability to service indebtedness or make distributions to shareholders.

Core funds from operations (“Core FFO”), a non-GAAP measure, is FFO adjusted for non-routine items or items not considered core to business operations. By further adjusting for items that are not considered part of core business operations, we believe that Core FFO provides investors with additional information to compare core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income (loss) or as any other GAAP measurement of performance, but rather should be considered an additional supplemental measure. Core FFO also does not represent cash generated from operating activities in accordance with GAAP, nor is it indicative of funds available to fund all cash needs, including the ability to service indebtedness or make distributions to shareholders. Core FFO is a non-GAAP and non-standardized financial measure that may be calculated differently by other REITs and that should not be considered a substitute for operating results determined in accordance with GAAP.

Net lossincome available to common shareholders for the year ended December 31, 20242025 decreasedincreased to $19.7$17.1 million compared to a net incomeloss of $34.9$19.7 million for the year ended December 31, 2023.2024. FFO applicable to common shares and Units for the year ended December 31, 2024,2025, increased to $83.3$93.4 million compared to $77.3$83.3 million for the year ended December 31, 2023,2024, a change of 7.8%,12.1%, primarily due to $3.2 million in severance and transition expenses related to the departure of our former CEO in 2023 and a $3.9 million loss on litigation settlement in 2023, both of which did not occur in 2024, along with increased NOI from same-store and non-same-store communities along with distributions to preferred shareholders that occurred in the prior year that did not occur in the year ended December 31, 2024,2025, offset by theincreased redemptioninterest of our Series C preferred shares during 2024expense and increasedgeneral casualtyand lossadministrative claimexpense and decreased NOI from dispositions.

(21)Consists of (gain) loss on investments and one-time professional fees.investments.

As of December 31, 2024,2025, we had aaccess multibank,to revolvingthe Unsecured Credit Facility. In May 2025, we exercised the accordion feature of the Facility, expanding the borrowing capacity by $150.0 million to $400.0 million. Prior to the exercise of the accordion feature, the line of credit withhad total commitments and borrowing capacity of up to $250.0 million, based on the value of unencumbered properties,properties. (As of December 31, 2025, the “Unsecuredadditional Creditborrowing Facility”).availability was $246.0 million beyond the $154.0 million drawn, priced at an interest rate of 5.12%. As of December 31, 2024, the Company had additional borrowing availability wasof $206.0 million beyond the $44.0 million drawn.drawn Asunder the Facility, priced at an interest rate of December 31, 2023, the line of credit borrowing capacity was $250.0 million based on the value of our unencumbered properties, of which $30.0 million was drawn on the line.5.81%. The line of credit is utilized to refinance existing indebtedness, to finance property acquisitions, to finance capital expenditures, and for general corporate purposes. On July 26, 2024, the Unsecured CreditThis Facility was amended to extend maturity and to modify the leverage-based margin ratios applicable to borrowings. As amended, this credit facility matures in July 2028, with an option to extend maturity for up to two additional six-month periods and has an accordion option to increase borrowing capacity up to $400.0 million.periods.

SOFR is the benchmark alternative reference rate under the Facility. As amended, the interest rates on the line of credit are based on the consolidated leverage ratio, at our option, on either the lender’s base rate plus a margin, ranging from 20-80 basis points, or the daily or term Secured Overnight Financing Rate (“SOFR”),SOFR, plus a margin that ranges from 120-180 basis points,points with the consolidated leverage ratio described under the Third Amended and Restated Credit Agreement, as amended.

InWe September 2024, we entered intohave an operating line of credit agreement with US Bank, N.A. which has a borrowing capacity of up to $10.0 million and pricing based on SOFR. This operating line of credit terminates in September 20252026 and is designed to enhance treasury management activities and more effectively manage cash balances. As of December 31, 2024,2025, there was $3.4 million$925,000 outstanding on this line of credit.credit, Wepriced previouslyat hadan ainterest $6.0rate of 5.91%, compared to $3.4 million operatingoutstanding line of credit with Wells Fargo Bank, N.A. with pricing based on SOFR that matured on August 31, 2024. Asas of December 31, 2023,2024, therepriced wasat noan outstandinginterest balance on this linerate of credit.6.56%.

We hadhave a private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc. (collectively, "PGIM") under which we have issued $175.0 million in unsecured senior promissory notes (“Unsecured Shelf Notes”).Notes. On October 28, 2024, the shelf agreement was amended to extend the period of time during which we may borrow money to October 2027 and to increase the borrowing capacity to $300.0 million. We alsoissued had$125.0 million of Unsecured Club Notes under a separate private note purchase agreement with PGIM and certain other lenders for the issuance of $125.0 million of senior unsecured promissory notes (“Unsecured Club Notes”, and, collectively with the Unsecured Shelf Notes, the “unsecured senior notes”), of which all $125.0 million was issued in September 2021.lenders. The following table shows the notes issued under both agreements as of December 31, 20242025 and 2023.2024.

We have a $198.9 million Fannie Mae Credit Facility Agreement (“FMCF”).FMCF. The FMCF is currently secured by mortgages on 117 apartment communities. The notes are interest-only, with varying maturity dates of 7, 10, and 12 years, and a blended weighted average fixed interest rate of 2.78%. As of December 31, 20242025 and 2023,2024, the FMCF had a balance of $198.9 million. The FMCF is included within mortgages payable on the Consolidated Balance Sheets.

We amendedhave ourentered into an equity distribution agreement in connection with the at-the-market offering (“ATM Program”) through which we may offer and sell common shares in amounts and at times determined by management. The amendment increased the maximum aggregate offering price of common shares available for offer and sale thereunder from $250.0 million tois $500.0 million. Under the ATM Program, we may enter into separate forward sale agreements. The proceeds from the sale of common shares under the ATM Program may be used for general corporate purposes, including the funding of acquisitions, construction or mezzanine loans, community renovations, and the repayment of indebtedness. As of December 31, 2024,2025, common shares having an aggregate offering price of up to $262.9 million remained available under the ATM program. Further information can be found in Note 4 of our Consolidated Financial Statements contained in this Report.

We havehad a share repurchase program, providing for the repurchase of up to an aggregate of $50.0 million of our outstanding common shares. This program expired on March 10, 2025. Effective July 31, 2025, the Board of Trustees authorized a new share repurchase program (the “Share Repurchase Program”), providing for the repurchase of up to an aggregate of $50.0$100 million of our outstanding common shares. Under the Share Repurchase Program, we are authorized to repurchase common shares through open-market purchases, privately-negotiated transactions, block trades, or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities and Exchange Act of 1934, as amended. The specific timing and amount of repurchases will vary based on available capital resources or other financial and operational performance, market conditions, securities law limitations, and other factors. The table below provides details on the shares repurchased during the years ended December 31, 20242025 and 2023.2024. As of December 31, 2024,2025, we had $4.7$96.5 million remaining authorized for purchase under this program.

We had 1.6 million and 1.7 million Series E preferred units (noncontrolling interests) outstanding on December 31, 20242025 and 2023, respectively.2024. Each Series E preferred unit has a par value of $100. 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 1.20482 common Units. The Series E preferred units havehad an aggregate liquidation preference of $157.0 million and $158.2 million.million as of December 31, 2025 and 2024, respectively The holders of the Series E preferred units do not have voting rights.

•Receiving $18.3$212.2 million in net proceeds from the sale of twotwelve apartment communities and corporate office space; and

•Receiving $17.4$107.6 million in net draws on our linelines of credit, net of repayments;credit.

•Repurchasing of 87,72262,973 common shares for $4.7$3.5 million, net of fees and expenses;

The following discussion and analysis should be read in conjunction with the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for the quarter ended MarchJune 31,30, 2026 (the “Report”), the audited financial statements for the year ended December 31, 2025, which are included in our Annual Report on Form 10-K filed with the SEC on February 17, 2026, and the risk factors in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2025.

We are a real estate investment trust, or REIT, that owns, manages, acquires, redevelops, and develops apartment communities. We primarily focus on investing in markets characterized by stable and growing economic conditions, strong employment, and an attractive quality of life that we believe, in combination, lead to higher demand for our apartment homes and retention of our residents. As of MarchJune 31,30, 2026, we owned 6160 apartment communities containing 12,26312,090 apartment homes. Property owned, as presented in our Condensed Consolidated Balance Sheets at historical cost and excluding assets held for sale, was $2.3 billion at June 30, 2026 and $2.5 billion at March 31, 2026 and December 31, 2025.

Overview of the Three Months Ended MarchJune 31,30, 2026

•For the three months ended MarchJune 31,30, 2026, revenue decreased by $2.0$2.8 million or 3.0%4.0% to $65.1$65.8 million, compared to $67.1$68.5 million for the three months ended MarchJune 31,30, 2025, primarily due to the sale of 12 apartment communities in the prior year, offset by increased revenue from non-same-store communities.

•Same-store revenues remained consistent year over year, while property operatingand expenses increased,remained drivingrelatively unchanged with a 1.1%0.3% decreaseincrease in same-store NOI compared to the same period of the prior year.

•Net loss was $0.77$0.07 per diluted share for the three months ended MarchJune 31,30, 2026, compared to net loss of $0.22$0.87 per diluted share for the same period of the prior year.

•Non-GAAP Core Funds from Operations (“Core FFO”) per diluted share decreased to $1.12$1.27 for the three months ended MarchJune 31,30, 2026, compared to $1.21$1.28 for the three months ended MarchJune 31,30, 2025. See the description of Core FFO on pagespage 25 and 2632 and the reconciliation of net loss available to common shareholders to FFO and Core FFO on page 27.33. This decrease was primarily due to decreased NOI dueas toa dispositionsresult andof same-store communities,dispositions, along with increases in general and administrative expenses and interest expense,expenses, offset by increased NOI on non-same-store communities. The drivers of these changes are discussed in more detail in the “Results of Operations” section below.

Net operating income (“NOI”) is a non-GAAP financial measure, which we define as total real estate revenues less property operating expenses, including real estate taxes and is reconciled to operating income (loss) below. We believe that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that isexcludes unaffectedgain by(loss) saleson the sale of real estate and other investments, impairment, depreciation,depreciation and amortization, financing costs, including interest and other income, losses on extinguishment of debt, and interest expense, property management expenses, casualty losses net of recoveries, loss on litigation settlement, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income,income (loss), net income (loss) available for common shareholders, or cash flow from operating activities as a measure of financial performance.

We have provided certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or stabilized for substantially all of the periods being compared and, in the case of newly-acquired or constructed communities, have achieved a target level of physical occupancy of 90%, or re-positionedrepositioned communities when they have achieved stabilized operations. We define re-positioned communities as having significant development and construction activity on existing buildings pursuant to an authorized plan, which has an impact on current operating results, occupancy and the ability to lease space with the intended result of improved community cash flow and competitive position through extensive unit and amenity upgrades. We categorize a re-positioned community as same-store when the development and construction activity has been completed, and operations have stabilized. This is typically reaching an overall occupancy of 90%. Not all communities undergoing value add are considered a re-positioned community. Non-same-store communities are communities not owned or stabilized as of the beginning of the previous year, including re-positioned communities, and excluding communities held for sale and the non-multifamily components of mixed-use properties.

For the comparison of the threesix months ended MarchJune 31,30, 2026 and 2025, 5844 apartment communities were same-store and three apartment communities and onetwo apartment community were non-same-store, respectively. Communities designated as held for sale are included in “Non-same-store and held for sale.” For the six months ended June 30, 2026, 13 apartment communities were designated as held for sale and included in “Non-same-store and held for sale.” Sold communities are included in “Dispositions,” for all periods presented, while “Other properties” includes non-multifamily properties and the non-multifamily components of mixed-use properties. During the three and six months ended June 30, 2026, we disposed of one apartment community consisting of 176 apartment homes. During the year ended December 31, 2025, we disposed of 12 apartment communities consisting of 1,511 apartment homes.

The following consolidated results of operations, including GAAP and non-GAAP metrics, cover the three and six months ended MarchJune 31,30, 2026 and 2025.

Same-store analysis. Revenue from same-store communities remained consistent in the three months ended MarchJune 31,30, 2026, compared to the same period in the prior year. The average monthly revenue per occupied home for the three months ended MarchJune 31,30, 2026 remained consistent with comparable periods while weighted average occupancy decreasedincreased 0.4%0.1% from 95.8%95.9% for the three months ended MarchJune 31,30, 2025 to 95.4%96.0% for the three months ended MarchJune 31,30, 2026. Property operating expenses, including real estate taxes, at same-store communities increaseddecreased by 1.7%0.1% or $393,000$19,000 in the three months ended MarchJune 31,30, 2026, compared to the same period in the prior year. At same-store communities, controllable expenses (which exclude insurance and real estate taxes) increased by $490,000,$23,000, primarily due to an increase in repairsutilities, andon-site maintenance, utilities,compensation, and administrative and marketing expenses.expenses, offset by a decrease in repairs and maintenance. Non-controllable expenses at same-store communities decreased by $97,000,$42,000, due to a decrease in real estate taxes.taxes, offset by an increase in insurance-related losses. Same-store NOI decreasedincreased by $388,000$84,000 to $35.3$31.2 million for the three months ended MarchJune 31,30, 2026, compared to $35.7$31.1 million in the same period of the prior year.

Non-same-store and held for sale analysis. Revenue from non-same-store and held for sale communities increased by $4.7$4.3 million in the three months ended MarchJune 31,30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes at non-same-store and held for sale communities increased by $1.7$1.4 million. NOI at non-same-store and held for sale communities increased by $3.0$2.9 million for the three months ended MarchJune 31,30, 2026, compared to the same period of the prior year. The increase in revenue, property operating expenses, and NOI from non-same-store and held for sale communities is primarily due to the addition of two apartment communities, one during the second quarter of the prior year and one during the third quarter of the prior year, offset by a $149,000 decrease in NOI from a community that experienced an increase in expenses resulting from the cancellation of contracts and uninsured loss events.year.

Other properties analysis. Revenue from other properties, which encompasses our commercialnon-same-store and mixed-useheld activity,for sale communities increased by $104,000$9.3 million in the threesix months ended MarchJune 31,30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes,taxes at othernon-same-store propertiesand decreasedheld for sale communities increased by $27,000,$2.9 million for the six months ended June 30, 2026, compared to the same period in the prior year. NOI at othernon-same-store propertiesand held for sale communities increased by $131,000,$6.5 million for the six months ended June 30, 2026, compared to the same period inof the prior year. The increase in revenuerevenue, property operating expenses, and NOI onfrom othernon-same-store propertiesand held for sale communities is primarily due to increasedthe occupancyaddition inof two apartment communities, one during the currentsecond period.quarter of the prior year and one during the third quarter of the prior year.

DispositionsOther properties analysis. Revenue from dispositionsother decreasedproperties, which encompasses our commercial and mixed-use activity, increased by $6.9 million$138,000 in the three months ended MarchJune 31,30, 2026, compared to the same period in the prior year. Property operating expenses, including real estate taxes, decreasedat other properties increased by $3.3 million on dispositions,$58,000, compared to the same period in the prior year. NOI onat dispositionsother decreasedproperties $3.6increased million,by $80,000, compared to the same period in the prior year. WeThe disposedincrease ofin five apartment communities during the third quarter of 2025revenue and sevenNOI apartmenton communitiesother properties is primarily due to increased occupancy in the fourthcurrent quarter 2025.period.

Property management expenses. Property management expenses, consisting of property management overhead and property management fees paid to third parties, decreased by 2.2%12.5% to $2.4$2.1 million in the three months ended MarchJune 31,30, 2026. The decrease was primarily due to reduced compensation related costs and administrative costs resulting from a reduction in headcount and number of communities compared to the same period of the prior year, offset by an increase in fees paid to third parties for management of an apartment community we acquired in the second quarter of 2025.year.

GeneralProperty management expenses, consisting of property management overhead and administrativeproperty expenses.management Generalfees andpaid administrativeto expensesthird increasedparties, decreased by $1.3 million$353,000 to $6.3$4.5 million in the threesix months ended MarchJune 31,30, 2026, compared to $5.0$4.8 million in the same period of the prior year. The increasedecrease was primarily due to $977,000 in fees related to strategic review and increased compensation costs from higher share-based compensation and otherreduced compensation related costs resulting from a reduction in the three months ended March 31, 2026,headcount compared to the same period of the prior year.year, offset by an increase in fees paid to third parties for management of an apartment community we acquired in the second quarter of 2025.

InterestDepreciation expense.and Interestamortization. expenseDepreciation increasedand amortization decreased by 8.7%7.5% to $10.5$25.1 million in the three months ended MarchJune 31,30, 2026, compared to $9.6$27.1 million in the same period of the prior year, primarily dueattributable to a higherdecrease outstandingof balance$3.3 million in depreciation from dispositions that occurred in the prior year and a decrease of $455,000 on ourcommunities linesclassified as held for sale during the current period, offset by an increase of credit$1.2 resultingmillion fromon non-same-store driven by the acquisitionsaddition of two apartment communities, one induring the second quarter of the prior year and one in the third quarter of the prior year, along with highervalue mortgage interestadd and amortization of debt discount resulting from the assumption of mortgages in connection with an acquisition incapital the third quarter of the prior year.projects.

InterestGeneral and otheradministrative income.expenses. InterestGeneral and otheradministrative incomeexpenses increased by $1.3 million to $890,000$5.7 million in the three months ended MarchJune 31,30, 2026, compared to $708,000$4.4 million in the same period of the prior year. The increase was primarily due to an$835,000 unrealizedfrom gain on investmentsseverance and interestrelated incomecosts, $278,000 in professional and legal fees, and increased compensation costs from a real estate related note receivable which has a higher principalshare-based balancecompensation costs in the currentthree periodmonths ended June 30, 2026, compared to the same period of the prior year.

Net loss available to common shareholders. Net loss available to common shareholders was $12.9$1.0 million for the three months ended MarchJune 31,30, 2026, compared to a net loss of $3.7$14.5 million in the three months ended MarchJune 31,30, 2025.

Due to limitations of the Nareit FFO definition, we have made certain interpretations in applying this definition. We believe that all such interpretations not specifically provided foridentified in the Nareit definition are consistent with this definition. Nareit’s FFO White Paper 2018 Restatement clarified that impairment write-downs of land related to a REIT’s main business are excluded from FFO and a REIT has the option to exclude impairment write-downs of assets that are incidental to the main business.

Net loss available to common shareholders for the three months ended MarchJune 31,30, 2026, was $12.9$1.0 million compared to net loss of $3.7$14.5 million for the same period of the prior year. FFO applicable to common shares and Units for the three months ended MarchJune 31,30, 2026, decreased to $21.1$23.5 million compared to $23.2$24.5 million for the comparable period of the prior year, representing a decrease of 8.9%.4.0%. This FFO decrease was primarily due to decreased NOI from dispositions and same-store communities along with increasesan increase in general and administrative expenses and interest expense, offset by increased NOI from non-same-store communities.communities and decreased casualty loss, net of recoveries.

Distributions of $0.77 and $1.54 per common share and Unit were declared during the three and six months ended MarchJune 31,30, 2026 and 2025. Distributions of $0.9655 and $1.931 per Series D preferred unit were declared during the three and six months ended MarchJune 31,30, 2026 and 2025. Distributions of $0.96875 and $1.9375 per Series E preferred unit were declared during the three and six months ended MarchJune 31,30, 2026 and 2025.

As of MarchJune 31,30, 2026, we had total liquidity of approximately $267.1$242.6 million, which included $259.6$234.0 million available on the lines of credit based on the value of unencumbered properties and $7.6$8.6 million of cash and cash equivalents. As of December 31, 2025, we had total liquidity of approximately $267.9 million, which included $255.1 million available on the lines of credit based on the value of unencumbered properties and $12.8 million of cash and cash equivalents.

As of MarchJune 31,30, 2026, we had a multibank, revolving line of credit with total commitments and borrowing capacity of $400.0 million, based on the value of unencumbered properties, (the “Unsecured Credit Facility” or “Facility”). In May 2025, we exercised the accordion feature of the Facility, expanding the borrowing capacity by $150.0 million to $400.0 million. Prior to the exercise of the accordion feature, the line of credit had total commitments and borrowing capacity of up to $250.0 million, based on the value of unencumbered properties. As of MarchJune 31,30, 2026, there was $150.0$176.0 million outstanding on this line of credit, bearing interest at a rate of 4.88%,4.87%, and additional borrowing availability was $250.0$224.0 million. As of December 31, 2025, there was $154.0 million outstanding, bearing interest at a rate of 5.12%, and additional borrowing availability was $246.0 million. The line of credit is utilized to refinance existing indebtedness, to finance property acquisitions, to finance capital expenditures, and for general corporate purposes. This Facility matures in July 2028, with an option to extend maturity for up to two additional six-month periods.

We have an operating line of credit agreement with US Bank, N.A. which has a borrowing capacity of up to $10.0 million and pricing based on SOFR. This operating line of credit terminates in September 2026 and is designed to enhance treasury management activities and more effectively manage cash balances. As of MarchJune 31,30, 2026 therethe wasinterest $429,000 outstanding balancerate on this line of credit,credit bearingwas interest5.87% atand athere ratewas ofno 5.88%,outstanding balance, compared to $925,000 outstanding as of December 31, 2025, bearing interest at a rate of 5.91%.

We have a private shelf agreement with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc. (collectively, “PGIM”) under which we have issued $175.0 million in unsecured senior promissory notes (“Unsecured Shelf Notes”). On October 28, 2024, the shelf agreement was amended to extend the period of time during which we may borrow money to October 2027 and to increase the borrowing capacity to $300.0 million. We also issued $125.0 million of senior unsecured promissory notes (the “Unsecured Club Notes”, and collectively with the Unsecured Shelf Notes, the “unsecured senior notes”), under a separate private note purchase agreement with PGIM and certain other lenders. The following table shows the notes issued under both agreements as of MarchJune 31,30, 2026 and December 31, 2025.

We have a $198.9 million Fannie Mae Credit Facility Agreement (the “FMCF”). The FMCF is currently secured by mortgages on 7 apartment communities. The notes are interest-only, with varying maturity dates ofbetween 7,September 10,2028 and 12September years,2033, and a blended, weighted average fixed interest rate of 2.78%. As of MarchJune 31,30, 2026 and December 31, 2025, the FMCF had a balance of $198.9 million. The FMCF is included within mortgages payable on the Condensed Consolidated Balance Sheets.

Mortgage loan indebtedness, excluding unamortized premiums and discounts and the FMCF, was $398.6$346.3 million on 109 apartment communities at MarchJune 31,30, 2026 and $400.1 million on 10 apartment communities at December 31, 2025. All of our mortgage debt is collateralized by apartment communities and is non-recourse at fixed rates of interest, with staggered maturities. This reduces the exposure to changes in interest rates, which minimizes the effect of interest rate fluctuations on our results of operations and cash flows. As of MarchJune 31,30, 2026 and December 31, 2025, the weighted average interest rate on mortgage debt was 3.88%.3.94% and 3.88%, respectively. Further information, including principal payments due on our mortgage indebtedness and other tabular information, can be found in Note 5 - Debt in the Condensed Consolidated notes.

Our borrowings are subject to customary covenants and limitations. We believe that we were in compliance with all such covenants and limitations as of MarchJune 31,30, 2026.