Basic net income 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 its 2015 Incentive Plan, RSUs under its 2025 Incentive Plan (as defined below), 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 net income per share upon the vesting of the RSUs, exercise of ISOs, or 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).

Certain of the Company’s time-based RSUs receive nonforfeitable dividend equivalents prior to vesting that are similar to the common shares. These unvested RSUs are participating securities. We include the effect of participating securities in the basic and diluted net income per share using the two-class method of allocating distributed and undistributed earnings when the two-class method is more dilutive than the treasury stock method.

The Company calculates diluted net income per share using the treasury stock method for nonparticipating RSUs and ISOs and the if converted method for Series D preferred units and Series E preferred units. Other than the issuance of RSUs, ISOs, Units, 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 common shares that would result in a dilution of net income.

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.

The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted net income per share reported in the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2026 and 2025.


	(in thousands, except per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
NUMERATOR


Net income attributable to controlling interests	$	123,328	$	53,783	$	109,419	$	35,534

Amount allocated to participating securities	(409)		—		(489)		—

Numerator for basic income per share – net income available to common shareholders	$	122,919	$	53,783	$	108,930	$	35,534
Noncontrolling interests – Operating Partnership and Series E preferred units (1)	—		9,197		5,719		6,071

Distributions to Series D preferred unitholders	57		109		172		429
Numerator for diluted income per share (1)	$	122,976	$	63,089	$	114,821	$	42,034

DENOMINATOR
Denominator for basic earnings per share weighted average shares	16,796		16,726		16,793		16,731
Effect of operating partnership units(1)	—		966		897		972
Effect of Series D preferred units	82		155		82		204
Effect of Series E preferred units(1)	—		1,898		—		1,903
Effect of dilutive restricted stock units and stock options	5		26		8		25
Denominator for diluted income per share	16,883		19,771		17,780		19,835



NET INCOME PER COMMON SHARE – BASIC	$	7.32	$	3.22	$	6.49	$	2.12



NET INCOME PER COMMON SHARE – DILUTED	$	7.28	$	3.19	$	6.46	$	2.12

(1)For the three months ended September 30, 2026, the impact of Units, and for the three and nine months ended September 30, 2026 the impact of Series E preferred units, were excluded from the calculation of net income per common share - diluted as they were anti-dilutive.

For the three months ended September 30, 2026, weighted average operating partnership units of 881,000 and Series E preferred units of 1.9 million, as converted, were excluded from the calculation of diluted net income per share because including these items would have improved net income per share, therefore having an anti-dilutive impact.

For the nine months ended September 30, 2026, weighted average Series E preferred units of 1.9 million, as converted, were excluded from the calculation of diluted net income per share because including these items would have improved net income per share, therefore having an anti-dilutive impact.