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CONTACT:						1775 Eye Street, NW, Suite 1000
Amy Hopkins						Washington, DC 20006
Vice President, Investor Relations						Tel 202-774-3198
E-Mail: ahopkins@elmecommunities.com						Fax 301-984-9610
						www.elmecommunities.com
						February 16, 2023
Elme Communities Announces Fourth Quarter and Full Year 2022 Results

Elme Communities (the “Company”) (NYSE: ELME), a multifamily REIT with properties in the Washington DC metro area and the Sunbelt, reported financial and operating results today for the quarter and year ended December 31, 2022:

Full-Year 2022 Financial and Operational Results

•Net loss was $30.9 million, or $0.36 per diluted share

•NAREIT FFO was $60.9 million, or $0.69 per diluted share

•Core FFO was $77.3 million, or $0.88 per diluted share

•Net Operating Income (NOI) was $135.4 million

•Same-store Multifamily NOI increased by 8.8% for the year

•Effective blended Lease Rate Growth increased to 9.4% compared to 1.3% in the prior year

•Average Effective Monthly Rent per Home increased 7.6% compared to the prior year

•Same-store retention was 63%, up 3% compared to the prior year

•Same-store multifamily Average Occupancy was 95.6%, representing an increase of 30 basis points compared to the prior year

Fourth Quarter Financial Results

•Net loss was $3.5 million, or $0.04 per diluted share

•NAREIT FFO was $18.3 million, or $0.21 per diluted share

•Core FFO was $21.5 million, or $0.24 per diluted share

•NOI was $36.9 million

Fourth Quarter Operational Highlights

•Same-store multifamily NOI increased by 11.6% compared to the prior year period

•Effective blended Lease Rate Growth was 5.7% during the quarter for our same-store portfolio, comprised of Effective new Lease Rate Growth of 1.1% and Effective renewal Lease Rate Growth of 10.1%

•Effective blended Lease Rate Growth was 7.0% during the quarter for our non-same-store portfolio, comprised of Effective new Lease Rate Growth of 3.0% and Effective renewal Lease Rate Growth of 13.3%

•Average Effective Monthly Rent per Home increased 9.7% compared to the prior year period

•Same-store retention was 62%, up 2% from the prior quarter, while achieving double-digit renewal lease rate growth

•Same-store multifamily Average Occupancy was 95.0%, in line with our targeted range

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YTD Highlights

•The Board of Trustees increased our quarterly dividend by approximately 6% to $0.18 per share to be paid on April 5, 2023 to shareholders of record on March 22, 2023

•On January 10, 2023, the Company executed a new $125 million two-year term loan with two one-year extension options, using the proceeds to repay the previous $100 million term loan and a portion of the line of credit. The new term loan has an interest rate of adjusted SOFR plus 95 basis points. A $100 million portion of the new term loan will be effectively fixed at 2.16% by our interest rate swap through the swap’s expiration date of July 21, 2023.

•Effective blended Lease Rate Growth was 5.0% in January and 5.8% thus far in February for our same-store portfolio, reflecting an upward monthly trend that is in line with our expectations

•Same-store occupancy grew to 95.6% as of February 10, 2023

Transformation Update

•Expect to transition community-level operations for approximately 40% of our portfolio to Elme management by next week and expect to have nearly 55% of our homes internally managed by the end of the first quarter. The Company remains on track to complete the transition to Elme management by the summer of 2023.

Liquidity Position

•Available liquidity was more than $650 million as of December 31, 2022, consisting of availability under the Company's revolving credit facility and cash on hand

•Annualized fourth quarter net debt to EBITDA was 4.8x

•The Company has no scheduled debt maturities until 2025

"We ended the year with solid fourth quarter performance and 2023 is off to a good start, with strong operating fundamentals supported by favorable forward-looking demand indicators," said Paul T. McDermott, President and CEO. "We are reiterating our 2023 guidance for the highest annual NOI and FFO growth we've had in recent history, and looking forward, we are optimistic about the performance of our strategy across cycles. We believe our mid-level rents do not compete with new supply, and our portfolio allocation to the Washington metro provides employment loss insulation based on historic patterns. Given our strong position with historically high embedded growth, and our confidence in our outlook for this year and beyond, we are increasing our quarterly dividend by approximately 6%."

Fourth Quarter Operating Results

▪Multifamily Same-store NOI - Same-store NOI increased 11.6% compared to the corresponding prior year period driven primarily by higher base rent and lower concessions. Average occupancy for the quarter decreased 90 basis points from the prior year period to 95.0%.

▪Other Same-store NOI - The Other same-store portfolio is comprised of one asset, Watergate 600. Other same-store NOI increased by 7.1% compared to the corresponding prior year period due to higher rental income and lower operating expenses. Watergate 600 was 92.6% occupied and 92.6% leased at quarter end.

"Nearly 70% of our expected same store rental rate growth for the year is already locked in, and we are reiterating our very strong 2023 NOI growth expectations," said Stephen E. Riffee, Executive Vice President and CFO. "Our balance sheet is in excellent shape, with an annualized fourth quarter net debt to EBITDA of 4.8x, over $650 million of liquidity, no secured debt, and no debt maturities until 2025. As we head into the important spring and summer leasing seasons, we feel good about our ability to deliver double digit Core FFO growth in 2023 while continuing to execute on our long term strategy."

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2023 Guidance

Management is reaffirming its 2023 Core FFO, which is expected to range from $0.96 to $1.04 per fully diluted share. The following assumptions are included in the Core FFO guidance for 2023:

Full Year 2023 Outlook on Key Assumptions and Metrics

•Same-store multifamily NOI growth is expected to range from 9.0% to 11.0%, which reflects year-over-year growth of 10% at the midpoint further building on the double-digit NOI growth achieved in the second half of 2022

•Non-same-store multifamily NOI is expected to range from $12.75 million to $13.75 million

•Other same-store NOI, which consists solely of Watergate 600, is expected to range from $13.0 million to $13.75 million

•Property management expense is expected to range from $8.0 million to $8.5 million

•G&A, net of core adjustments, is now expected to range from $25.75 million to $27.0 million, reflecting a $0.25 million decline compared to our prior guidance range

•Interest expense is now expected to range from $29.0 million to $30.0 million, which incorporates a higher interest rate outlook, as federal reserve funds expectations have shifted since we initially announced our 2023 guidance last year. Our revised interest expense assumption also incorporates the impact of our new term loan.

•No acquisitions are assumed in 2023. The Company has acquisition capacity and will update guidance if an acquisition is identified.

			Full Year 2023
Core FFO per diluted share			$0.96 - $1.04
Net Operating Income Assumptions
Same-store multifamily NOI growth			9.0% - 11.0%
Non-same-store multifamily NOI (a)			$12.75 million - $13.75 million
Non-residential NOI (b)			~$0.75 million
Other same-store NOI (c)			$13.0 million - $13.75 million
Expenses
Property management expense			$8.0 million - $8.5 million
G&A, net of core adjustments			$25.75 million - $27.0 million
Interest expense			$29.0 million - $30.0 million
Transformation Costs (d)			$3.0 million - $4.0 million

(a) Includes Carlyle of Sandy Springs, Alder Park, Marietta Crossing, and Riverside Development. Guidance does not contemplate any additional acquisitions or dispositions.

(b) Includes revenues and expenses from retail operations at multifamily communities

(c) Consists of Watergate 600

(d) Represents the expected final costs in 2023 related to the internalization of community-level operations

Elme Communities' 2023 Core FFO guidance and outlook are based on a number of factors, many of which are outside the Company's control and all of which are subject to change. Elme Communities may change the guidance provided during the year as actual and anticipated results vary from these assumptions, but Elme Communities undertakes no obligation to do so.

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2023 Guidance Reconciliation Table

A reconciliation of projected net loss per diluted share to projected Core FFO per diluted share for the full year ending December 31, 2023 is as follows:

			Low			High
Net loss per diluted share			$(0.07)			$0.00
Real estate depreciation and amortization			1.00			1.00
NAREIT FFO per diluted share			0.93			1.00
Core adjustments			0.03			0.04
Core FFO per diluted share			$0.96			$1.04

Dividends

On January 5, 2023, Elme Communities paid a quarterly dividend of $0.17 per share.

Elme Communities announced today that its Board of Trustees has declared a quarterly dividend of $0.18 per share to be paid on April 5, 2023 to shareholders of record on March 22, 2023.

Presentation Webcast and Conference Call Information

The Fourth Quarter 2022 Earnings Call is scheduled for Friday, February 17, 2023 at 10:00 A.M. Eastern Time. Conference Call access information is as follows:

USA Toll Free Number:            1-888-506-0062

International Toll Number:        1-973-528-0011

Conference ID:                611448

The instant replay of the Earnings Call will be available until Friday, March 3, 2023. Instant replay access information is as follows:

USA Toll Free Number:            1-877-481-4010

International Toll Number:        1-919-882-2331

Conference ID:                47323

The live on-demand webcast of the Conference Call with presentation slides will be available on the Investor section of Elme Communities' website at www.elmecommunities.com. Online playback of the webcast and presentation slides will be available following the Conference Call.

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About Elme Communities

Elme Communities (formerly known as Washington Real Estate Investment Trust or WashREIT) is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The company is a multifamily real estate investment trust that owns and operates approximately 8,900 apartment homes in the Washington, DC metro and the Sunbelt, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.

Note: Elme Communities' press releases and supplemental financial information are available on the Company website at www.elmecommunities.com or by contacting Investor Relations at (202) 774-3200.

Forward Looking Statements

Certain statements in our earnings release and on our conference call are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Elme Communities to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Additional factors which may cause the actual results, performance, or achievements of Elme Communities to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements include, but are not limited to: risks associated with our ability to execute on our strategies, including new strategies with respect to our operations and our portfolio, including our ability to realize any anticipated operational benefits from our internalization of property management functions; the risks associated with ownership of real estate in general and our real estate assets in particular; whether actual Core FFO, Core FFO Growth and NOI growth will be consistent with expectations; the economic health of the areas in which our properties are located, particularly with respect to greater Washington, DC metro region and Sunbelt region; the risk of failure to enter into and/or complete contemplated acquisitions and dispositions, or at all, within the price ranges anticipated and on the terms and timing anticipated; changes in the composition of our portfolio, including the acquisition of apartment homes in the Sunbelt markets; risks related to changes in interest rates, including the future of the reference rate used in our existing floating rate debt instruments; reductions in or actual or threatened changes to the timing of federal government spending; the risks related to use of third-party providers; the economic health of our residents; the ultimate duration of the COVID-19 global pandemic, including any mutations thereof, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, the effectiveness and willingness of people to take COVID-19 vaccines, and the duration of associated immunity and efficacy of the vaccines against emerging variants of COVID-19; the impact from macroeconomic factors (including inflation, increases in interest rates, potential economic slowdown or a recession and geopolitical conflicts); compliance with applicable laws and corporate social responsibility goals, including those concerning the environment and access by persons with disabilities; the risks related to not having adequate insurance to cover potential losses; changes in the market value of securities; terrorist attacks or actions and/or cyber-attacks; whether we will succeed in the day-to-day property management and leasing activities that we have previously outsourced; the availability and terms of financing and capital and the general volatility of securities markets; the risks related to our organizational structure and limitations of share ownership; failure to qualify and maintain our qualification as a REIT and the risks of changes in laws affecting REITs; and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2021 Form 10-K filed on February 18, 2022. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We undertake no obligation to update our forward-looking statements or risk factors to reflect new information, future events, or otherwise.

This Earnings Release also includes certain forward-looking non-GAAP information. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these estimates, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable efforts.

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ELME COMMUNITIES AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
(Unaudited)
			Three Months Ended December 31,												Twelve Months Ended December 31,
OPERATING RESULTS			2022						2021						2022						2021
Revenue
Real estate rental revenue			$	55,593					$	44,748					$	209,380					$	169,151
Expenses
Property operating and maintenance			12,126						10,086						47,530						38,741
Real estate taxes and insurance			6,578						5,516						26,471						22,041
Property management			1,974						1,685						7,436						6,133
General and administrative			7,260						7,700						28,258						27,538
Transformation costs			3,041						1,839						9,686						6,635
Depreciation and amortization			21,851						20,114						91,722						72,656
			52,830						46,940						211,103						173,744
Real estate operating income (loss)			2,763						(2,192)						(1,723)						(4,593)
Other income (expense)
Interest expense			(6,552)						(5,676)						(24,940)						(34,063)
Loss on interest rate derivatives			—						—						—						(5,866)
Loss on extinguishment of debt			—						—						(4,917)						(12,727)
Other income			258						1,072						712						4,109
			(6,294)						(4,604)						(29,145)						(48,547)
Loss from continuing operations			(3,531)						(6,796)						(30,868)						(53,140)
Discontinued operations:
Income from operations of properties sold or held for sale			—						—						—						23,083
Gain on sale of real estate, net			—						—						—						46,441
Income from discontinued operations			—						—						—						69,524
Net (loss) income			$	(3,531)					$	(6,796)					$	(30,868)					$	16,384
Loss from continuing operations			$	(3,531)					$	(6,796)					$	(30,868)					$	(53,140)
Depreciation and amortization			21,851						20,114						91,722						72,656
Funds from continuing operations			18,320						13,318						60,854						19,516
Income from discontinued operations			—						—						—						69,524
Discontinued operations real estate depreciation and amortization			—						—						—						22,904
Gain on sale of real estate, net			—						—						—						(46,441)
Funds from discontinued operations			—						—						—						45,987
NAREIT funds from operations			$	18,320					$	13,318					$	60,854					$	65,503
Non-cash loss on extinguishment of debt			$	—					$	—					$	4,873					$	833
Tenant improvements and incentives, net of reimbursements			—						(642)						(1,025)						(1,546)
Leasing commissions capitalized			(16)						(24)						(16)						(2,808)
Recurring capital improvements			(2,656)						(1,366)						(7,682)						(4,874)
Straight-line rents, net			(55)						(218)						(492)						(1,738)
Non-cash fair value interest expense			—						—						210						—
Non-real estate depreciation & amortization of debt costs			1,147						1,241						4,664						5,265
Amortization of lease intangibles, net			(337)						(172)						(945)						368
Amortization and expensing of restricted share and unit compensation			1,831						2,075						7,988						8,553
Adjusted funds from operations			$	18,234					$	14,212					$	68,429					$	69,556

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						Three Months Ended December 31,												Twelve Months Ended December 31,
Per share data:						2022						2021						2022						2021
Loss from continuing operations			(Basic)			$	(0.04)					$	(0.08)					$	(0.36)					$	(0.63)
			(Diluted)			$	(0.04)					$	(0.08)					$	(0.36)					$	(0.63)
Net (loss) income			(Basic)			$	(0.04)					$	(0.08)					$	(0.36)					$	0.19
			(Diluted)			$	(0.04)					$	(0.08)					$	(0.36)					$	0.19
NAREIT FFO			(Basic)			$	0.21					$	0.16					$	0.69					$	0.77
			(Diluted)			$	0.21					$	0.16					$	0.69					$	0.77
Dividends paid						$	0.17					$	0.17					$	0.68					$	0.94
Weighted average shares outstanding - basic						87,491						84,804						87,388						84,544
Weighted average shares outstanding - diluted						87,491						84,804						87,388						84,544
Weighted average shares outstanding - diluted (for NAREIT FFO)						87,622						84,911						87,491						84,629

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ELME COMMUNITIES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
			December 31, 2022						December 31, 2021
Assets
Land			$	373,171					$	322,623
Income producing property			1,897,835						1,642,147
			2,271,006						1,964,770
Accumulated depreciation and amortization			(481,588)						(402,560)
Net income producing property			1,789,418						1,562,210
Properties under development or held for future development			31,260						30,631
Total real estate held for investment, net			1,820,678						1,592,841
Cash and cash equivalents			8,389						233,600
Restricted cash			1,463						620
Rents and other receivables			16,346						15,067
Prepaid expenses and other assets			25,730						33,866
Total assets			$	1,872,606					$	1,875,994
Liabilities
Notes payable, net			$	497,359					$	496,946
Line of credit			55,000						—
Accounts payable and other liabilities			34,386						40,585
Dividend payable			14,934						14,650
Advance rents			1,578						2,082
Tenant security deposits			5,563						4,669
Total liabilities			608,820						558,932
Equity
Shareholders' equity
Preferred shares; $0.01 par value; 10,000 shares authorized; no shares issued or outstanding			—						—
Shares of beneficial interest, $0.01 par value; 150,000 shares authorized: 87,534 and 86,261 shares issued and outstanding, as of December 31, 2022 and December 31, 2021, respectively			875						863
Additional paid in capital			1,729,854						1,697,477
Distributions in excess of net income			(453,008)						(362,494)
Accumulated other comprehensive loss			(14,233)						(19,091)
Total shareholders' equity			1,263,488						1,316,755
Noncontrolling interests in subsidiaries			298						307
Total equity			1,263,786						1,317,062
Total liabilities and equity			$	1,872,606					$	1,875,994

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The following tables contain reconciliations of net (loss) income to NOI for the periods presented (in thousands):
			Three Months Ended December 31,												Twelve Months Ended December 31,
			2022						2021						2022						2021
Net (loss) income			$	(3,531)					$	(6,796)					$	(30,868)					$	16,384
Adjustments:
Property management expense			1,974						1,685						7,436						6,133
General and administrative expense			7,260						7,700						28,258						27,538
Transformation costs			3,041						1,839						9,686						6,635
Real estate depreciation and amortization			21,851						20,114						91,722						72,656
Interest expense			6,552						5,676						24,940						34,063
Loss on interest rate derivatives			—						—						—						5,866
Loss on extinguishment of debt, net			—						—						4,917						12,727
Other income			(258)						(1,072)						(712)						(4,109)
Discontinued operations:
Income from operations of properties sold or held for sale			—						—						—						(23,083)
Gain on sale of real estate, net			—						—						—						(46,441)
Total Net Operating Income (NOI)			$	36,889					$	29,146					$	135,379					$	108,369
Multifamily NOI:
Same-store portfolio			$	25,824					$	23,137					$	98,098					$	90,189
Acquisitions			5,393						1,121						16,062						1,397
Development			1,891						1,385						6,813						3,117
Non-residential			199						160						792						735
Total			33,307						25,803						121,765						95,438
Other NOI (Watergate 600)			3,582						3,343						13,614						12,931
Total NOI			$	36,889					$	29,146					$	135,379					$	108,369

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The following table contains a reconciliation of net loss to core funds from operations for the periods presented (in thousands, except per share data):
						Three Months Ended December 31,												Twelve Months Ended December 31,
						2022						2021						2022						2021
Net (loss) income						$	(3,531)					$	(6,796)					$	(30,868)					$	16,384
Add:
Real estate depreciation and amortization						21,851						20,114						91,722						72,656
Discontinued operations:
Gain on sale of real estate, net						—						—						—						(46,441)
Real estate depreciation and amortization						—						—						—						22,904
NAREIT funds from operations						18,320						13,318						60,854						65,503
Add:
Structuring expenses						60						—						1,161						—
Loss on extinguishment of debt, net						—						—						4,917						12,727
Loss on interest rate derivatives						—						—						—						5,866
Severance expense						—						—						474						173
Transformation costs						3,041						1,839						9,686						6,635
Insurance gain						—						(1,026)						—						(1,026)
Write-off of pursuit costs						—						—						174						—
Relocation expense						74						—						74						—
Core funds from operations						$	21,495					$	14,131					$	77,340					$	89,878
						Three Months Ended December 31,												Twelve Months Ended December 31,
Per share data:						2022						2021						2022						2021
NAREIT FFO			(Basic)			$	0.21					$	0.16					$	0.69					$	0.77
			(Diluted)			$	0.21					$	0.16					$	0.69					$	0.77
Core FFO			(Basic)			$	0.25					$	0.17					$	0.88					$	1.06
			(Diluted)			$	0.24					$	0.17					$	0.88					$	1.06
Weighted average shares outstanding - basic						87,491						84,804						87,388						84,544
Weighted average shares outstanding - diluted (for NAREIT and Core FFO)						87,622						84,911						87,491						84,629

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Non-GAAP Financial Measures

Adjusted EBITDA is earnings before interest expense, taxes, depreciation, amortization, gain/loss on sale of real estate, casualty gain/loss, real estate impairment, gain/loss on extinguishment of debt, gain/loss on interest rate derivatives, severance expense, acquisition expenses and gain from non-disposal activities and transformation costs. Adjusted EBITDA is included herein because we believe it helps investors and lenders understand our ability to incur and service debt and to make capital expenditures. Adjusted EBITDA is a non-GAAP and non-standardized measure and may be calculated differently by other REITs.

Adjusted Funds From Operations (“AFFO”) is a non-GAAP measure. It is calculated by subtracting from FFO (1) recurring improvements, tenant improvements and leasing costs, that are capitalized and amortized and are necessary to maintain our properties and revenue stream (excluding items contemplated prior to acquisition or associated with development / redevelopment of a property) and (2) straight line rents, then adding (3) non-real estate depreciation and amortization, (4) non-cash fair value interest expense and (5) amortization of restricted share compensation, then adding or subtracting the (6) amortization of lease intangibles, (7) real estate impairment and (8) non-cash gain/loss on extinguishment of debt, as appropriate. AFFO is included herein, because we consider it to be a performance measure of a REIT’s ability to incur and service debt and to distribute dividends to its shareholders. AFFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.

Core Adjusted Funds From Operations ("Core AFFO") is calculated by adjusting AFFO for the following items (which we believe are not indicative of the performance of Elme Communities' operating portfolio and affect the comparative measurement of Elme Communities' operating performance over time): (1) gains or losses on extinguishment of debt and gains or losses on interest rate derivatives, (2) expenses related to acquisition and structuring activities, (3) non-share-based executive transition costs, severance expenses and other expenses related to corporate restructuring and executive retirements or resignations, (4) property impairments, casualty gains and losses, and gains or losses on sale not already excluded from Core AFFO, as appropriate, (5) relocation expense, (6) transformation costs and (7) write-off of pursuit costs. These items can vary greatly from period to period, depending upon the volume of our acquisition activity and debt retirements, among other factors. We believe that by excluding these items, Core AFFO serves as a useful, supplementary performance measure of Elme Communities' ability to incur and service debt, and distribute dividends to its shareholders. Core AFFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.

Core Funds From Operations (“Core FFO”) is calculated by adjusting NAREIT FFO for the following items (which we believe are not indicative of the performance of Elme Communities' operating portfolio and affect the comparative measurement of Elme Communities' operating performance over time): (1) gains or losses on extinguishment of debt and gains or losses on interest rate derivatives, (2) expenses related to acquisition and structuring activities, (3) executive transition costs, severance expenses and other expenses related to corporate restructuring and executive retirements or resignations, (4) property impairments, casualty gains and losses, and gains or losses on sale not already excluded from NAREIT FFO, as appropriate, (5) relocation expense, (6) transformation costs and (7) write-off of pursuit costs. These items can vary greatly from period to period, depending upon the volume of our acquisition activity and debt retirements, among other factors. We believe that by excluding these items, Core FFO serves as a useful, supplementary measure of Elme Communities' ability to incur and service debt, and distribute dividends to its shareholders. Core FFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.

NAREIT Funds From Operations (“FFO”) is defined by 2018 National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) FFO White Paper Restatement, as net income (computed in accordance with generally accepted accounting principles (“GAAP”)) excluding gains (or losses) associated with sales of properties, impairments of depreciable real estate and real estate depreciation and amortization. We consider NAREIT FFO to be a standard supplemental measure for equity real estate investment trusts (“REITs”) because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which historically assumes that the value of real estate assets diminishes predictably over time. Since real estate values have instead historically risen or fallen with market conditions, we believe that NAREIT FFO more accurately provides investors an indication of our ability to incur and service debt, make capital expenditures and fund other needs. Our FFO may not be comparable to FFO reported by other real estate investment trusts. These other REITs may not define the term in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently. NAREIT FFO is a non-GAAP measure.

Net Operating Income (“NOI”), defined as real estate rental revenue less direct real estate operating expenses, is a non-GAAP measure. NOI is calculated as net income, less non-real estate revenue and the results of discontinued operations (including the gain or loss on sale, if any), plus interest expense, depreciation and amortization, lease origination expenses, general and administrative expenses, acquisition costs, real estate impairment, casualty gain and losses and gain or loss on extinguishment of debt. NOI does not include management expenses, which consist of corporate property management costs and property management fees paid to third parties. NOI is the primary performance measure we use to assess the results of our operations at the property level. We believe that NOI is a useful performance measure because, when compared across periods, it reflects the impact on operations of trends in occupancy rates, rental rates and operating costs on an unleveraged basis, providing perspective not immediately apparent from net income. NOI excludes certain components from net income in order to provide results more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort

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operating performance at the property level. As a result of the foregoing, we provide NOI as a supplement to net income, calculated in accordance with GAAP. NOI does not represent net income or income from continuing operations calculated in accordance with GAAP. As such, NOI should not be considered an alternative to these measures as an indication of our operating performance.

Other Definitions

Average Effective Monthly Rent Per Home represents the average of effective rent (net of concessions) for in-place leases and the market rent for vacant homes.

Average Occupancy is based on average daily occupied apartment homes as a percentage of total apartment homes.

Current Strategy represents the class of each community in our portfolio based on a set of criteria. Our strategies consist of the following subcategories: Class A, Class A-, Class B Value-Add and Class B. A community's class is dependent on a variety of factors, including its vintage, site location, amenities and services, rent growth drivers and rent relative to the market.

•Class A communities are recently-developed, well-located, have competitive amenities and services and command average rental rates well above market median rents.

•Class A- communities have been developed within the past 20 years and feature operational improvements and unit upgrades and command rents at or above median market rents.

•Class B Value-Add communities are over 20 years old but feature operational improvements and strong potential for unit renovations. These communities command average rental rates below median market rents for units that have not been renovated.

•Class B communities are over 20 years old, feature operational improvements and command average rental rates below median market rents.

Debt Service Coverage Ratio is computed by dividing earnings attributable to the controlling interest before interest expense, taxes, depreciation, amortization, real estate impairment, gain on sale of real estate, gain/loss on extinguishment of debt, severance expense, relocation expense, acquisition and structuring expenses and gain/loss from non-disposal activities by interest expense (including interest expense from discontinued operations) and principal amortization.

Debt to Total Market Capitalization is total debt divided by the sum of total debt plus the market value of shares outstanding at the end of the period.

Earnings to Fixed Charges Ratio is computed by dividing earnings attributable to the controlling interest by fixed charges. For this purpose, earnings consist of income from continuing operations (or net income if there are no discontinued operations) plus fixed charges, less capitalized interest. Fixed charges consist of interest expense (excluding interest expense from discontinued operations), including amortized costs of debt issuance, plus interest costs capitalized.

Ending Occupancy is calculated as occupied homes as a percentage of total homes as of the last day of that period.

Lease Rate Growth is defined as the average percentage change in either gross (excluding the impact of concessions) or effective rent (net of concessions) for a new or renewed multifamily lease compared to the prior lease based on the move-in date. The "blended" rate represents the weighted average of new and renewal lease rate growth achieved.

Recurring Capital Improvements represent non-accretive building improvements required to maintain a property's income and value. Recurring capital improvements do not include acquisition capital that was taken into consideration when underwriting the purchase of a building or which are incurred to bring a building up to "operating standard". This category includes improvements made as needed upon vacancy of an apartment. Aside from improvements related to apartment turnover, these improvements include facade repairs, installation of new heating and air conditioning equipment, asphalt replacement, permanent landscaping, new lighting and new finishes.

Retention represents the percentage of multifamily leases renewed that were set to expire in the period presented.

Relocation expenses represent costs associated with the relocation of the corporate headquarters to a new location in the DC metro region.

Same-store Portfolio Properties include properties that were owned for the entirety of the years being compared, and exclude properties under redevelopment or development and properties acquired, sold or classified as held for sale during the years being compared. We categorize our properties as "same-store" or "non-same-store" for purposes of evaluating comparative operating performance. We define development properties as those for which we have planned or ongoing major construction activities on existing or acquired land pursuant to an authorized development plan. Development properties are categorized as same-store when they have reached stabilized occupancy (90%) before the start of the prior year. We define redevelopment properties as those for which we have planned or ongoing significant development and construction activities on existing or acquired 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 a higher economic return on the property. We categorize a redevelopment property as same-store when redevelopment activities have been complete for

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the majority of each year being compared. We currently have two same-store portfolios: "Same-store multifamily" which is comprised of our same-store apartment communities and "Other same-store" which is comprised of our Watergate 600 commercial property.

Transformation Costs include costs related to the strategic shift away from the commercial sector to the residential sector, including the allocation of internal costs, consulting, advisory and termination benefits.

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Table of Contents
December 31, 2022

Schedule						Page
Key Financial Data
			Consolidated Statements of Operations			15
			Consolidated Balance Sheets			16
			Funds From Operations/ Adjusted Funds From Operations			17-18
Portfolio Analysis
			Net Operating Income (NOI) - Multifamily			19
			Same-Store Operating Results - Multifamily			20
			Same-Store Operating Expenses - Multifamily			21
Growth and Strategy
			Acquisition and Disposition Summary			22
			Schedule of Communities			23-25
Capital Analysis
			Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)			26
			Long Term Debt Analysis			27
			Long Term Debt Maturities			28
			Debt Covenant Compliance			29
			Capital Analysis			30
Reconciliations
			Net (Loss) Income to NOI Reconciliations			31

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Consolidated Statements of Operations (In thousands, except per share data) (Unaudited)

			Twelve Months Ended												Three Months Ended
OPERATING RESULTS			December 31, 2022						December 31, 2021						December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Revenues
Real estate rental revenue			$	209,380					$	169,151					$	55,593					$	54,603					$	51,380					$	47,804					$	44,748
Expenses
Property operating and maintenance			(47,530)						(38,741)						(12,126)						(13,092)						(11,747)						(10,565)						(10,086)
Real estate taxes and insurance			(26,471)						(22,041)						(6,578)						(6,469)						(6,837)						(6,587)						(5,516)
Property management			(7,436)						(6,133)						(1,974)						(1,916)						(1,796)						(1,750)						(1,685)
General and administrative			(28,258)						(27,538)						(7,260)						(6,403)						(7,656)						(6,939)						(7,700)
Transformation costs			(9,686)						(6,635)						(3,041)						(2,399)						(2,023)						(2,223)						(1,839)
Depreciation and amortization			(91,722)						(72,656)						(21,851)						(23,632)						(24,039)						(22,200)						(20,114)
			(211,103)						(173,744)						(52,830)						(53,911)						(54,098)						(50,264)						(46,940)
Real estate operating (loss) income			(1,723)						(4,593)						2,763						692						(2,718)						(2,460)						(2,192)
Other income (expense)
Interest expense			(24,940)						(34,063)						(6,552)						(6,582)						(6,156)						(5,650)						(5,676)
Loss on interest rate derivatives			—						(5,866)						—						—						—						—						—
Loss on extinguishment of debt			(4,917)						(12,727)						—						(4,917)						—						—						—
Other income			712						4,109						258						68						—						386						1,072
Loss from continuing operations			(30,868)						(53,140)						(3,531)						(10,739)						(8,874)						(7,724)						(6,796)
Discontinued operations:
Income from operations of properties sold or held for sale			—						23,083						—						—						—						—						—
Gain on sale of real estate, net			—						46,441						—						—						—						—						—
Income from discontinued operations			—						69,524						—						—						—						—						—
Net (loss) income			$	(30,868)					$	16,384					$	(3,531)					$	(10,739)					$	(8,874)					$	(7,724)					$	(6,796)
Per Share Data:
Net (loss) income			$	(0.36)					$	0.19					$	(0.04)					$	(0.12)					$	(0.10)					$	(0.09)					$	(0.08)
Fully diluted weighted average shares outstanding			87,388						84,544						87,491						87,453						87,392						87,214						84,804
Percentage of Revenues:
General and administrative expenses			13.5		%				16.3		%				13.1		%				11.7		%				14.9		%				14.5		%				17.2		%
Net (loss) income			(14.7)		%				9.7		%				(6.4)		%				(19.7)		%				(17.3)		%				(16.2)		%				(15.2)		%
Ratios:
Adjusted EBITDA(1) / Interest expense			4.1		x				3.7		x				4.3		x				4.1		x				4.0		x				4.1		x				3.6		x
______________________________
(1) Adjusted EBITDA is a non-GAAP measure. See "Definitions" on page 11 for the definition of Adjusted EBITDA and page 26 for a reconciliation of Net (loss) income to Adjusted EBITDA.

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Consolidated Balance Sheets (In thousands, except per share data) (Unaudited)

			December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Assets
Land			$	373,171					$	373,171					$	373,171					$	340,046					$	322,623
Income producing property			1,897,835						1,882,235						1,875,307						1,733,326						1,642,147
			2,271,006						2,255,406						2,248,478						2,073,372						1,964,770
Accumulated depreciation and amortization			(481,588)						(461,293)						(441,105)						(421,663)						(402,560)
Net income producing property			1,789,418						1,794,113						1,807,373						1,651,709						1,562,210
Properties under development or held for future development			31,260						31,232						31,220						31,157						30,631
Total real estate held for investment, net			1,820,678						1,825,345						1,838,593						1,682,866						1,592,841
Cash and cash equivalents			8,389						8,436						44,787						139,711						233,600
Restricted cash			1,463						1,437						1,984						636						620
Rents and other receivables			16,346						16,088						16,644						16,120						15,067
Prepaid expenses and other assets			25,730						28,228						32,865						37,391						33,866
Total assets			$	1,872,606					$	1,879,534					$	1,934,873					$	1,876,724					$	1,875,994
Liabilities
Notes payable, net			$	497,359					$	497,247					$	497,135					$	497,093					$	496,946
Mortgage notes payable, net			—						—						71,576						—						—
Line of credit			55,000						43,000						—						—						—
Accounts payable and other liabilities			34,386						36,219						39,890						33,184						40,585
Dividend payable			14,934						14,919						14,916						14,924						14,650
Advance rents			1,578						1,489						1,821						1,463						2,082
Tenant security deposits			5,563						5,461						5,439						4,817						4,669
Total liabilities			608,820						598,335						630,777						551,481						558,932
Equity
Preferred shares; $0.01 par value; 10,000 shares authorized			—						—						—						—						—
Shares of beneficial interest, $0.01 par value; 150,000 shares authorized			875						875						874						874						863
Additional paid-in capital			1,729,854						1,728,840						1,727,031						1,725,828						1,697,477
Distributions in excess of net income			(453,008)						(434,539)						(408,882)						(385,108)						(362,494)
Accumulated other comprehensive loss			(14,233)						(14,278)						(15,229)						(16,656)						(19,091)
Total shareholders' equity			1,263,488						1,280,898						1,303,794						1,324,938						1,316,755
Noncontrolling interests in subsidiaries			298						301						302						305						307
Total equity			1,263,786						1,281,199						1,304,096						1,325,243						1,317,062
Total liabilities and equity			$	1,872,606					$	1,879,534					$	1,934,873					$	1,876,724					$	1,875,994

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Funds from Operations/ Adjusted Funds From Operations (In thousands, except per share data) (Unaudited)

			Twelve Months Ended												Three Months Ended
			December 31, 2022						December 31, 2021						December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Funds from operations (FFO)
Net (loss) income			$	(30,868)					$	16,384					$	(3,531)					$	(10,739)					$	(8,874)					$	(7,724)					$	(6,796)
Real estate depreciation and amortization			91,722						72,656						21,851						23,632						24,039						22,200						20,114
Discontinued operations:
Gain on sale of depreciable real estate, net			—						(46,441)						—						—						—						—						—
Real estate depreciation and amortization			—						22,904						—						—						—						—						—
NAREIT funds from operations (FFO)(1)			60,854						65,503						18,320						12,893						15,165						14,476						13,318
Loss on extinguishment of debt			4,917						12,727						—						4,917						—						—						—
Loss on interest rate derivatives			—						5,866						—						—						—						—						—
Severance expense			474						173						—						—						—						474						—
Transformation costs			9,686						6,635						3,041						2,399						2,023						2,223						1,839
Insurance gain			—						(1,026)						—						—						—						—						(1,026)
Relocation expense			74						—						74						—						—						—						—
Structuring expenses			1,161						—						60						121						980						—						—
Write-off of pursuit costs			174						—						—						174						—						—						—
Core FFO(1)			$	77,340					$	89,878					$	21,495					$	20,504					$	18,168					$	17,173					$	14,131
Allocation to participating securities(2)			(232)						(393)						(41)						(68)						(51)						(72)						(44)
NAREIT FFO per share - basic			$	0.69					$	0.77					$	0.21					$	0.15					$	0.17					$	0.17					$	0.16
NAREIT FFO per share - fully diluted			$	0.69					$	0.77					$	0.21					$	0.15					$	0.17					$	0.17					$	0.16
Core FFO per share - fully diluted			$	0.88					$	1.06					$	0.24					$	0.23					$	0.21					$	0.20					$	0.17
Common dividend per share			$	0.68					$	0.94					$	0.17					$	0.17					$	0.17					$	0.17					$	0.17
Average shares - basic			87,388						84,544						87,491						87,453						87,392						87,214						84,804
Average shares - fully diluted (for NAREIT FFO and Core FFO)			87,491						84,629						87,622						87,564						87,521						87,253						84,911

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Funds from Operations/ Adjusted Funds From Operations (continued) (In thousands, except per share data) (Unaudited)

			Twelve Months Ended												Three Months Ended
			December 31, 2022						December 31, 2021						December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
NAREIT FFO(1)			$	60,854					$	65,503					$	18,320					$	12,893					$	15,165					$	14,476					$	13,318
Non-cash loss on extinguishment of debt			4,873						833						—						4,873						—						—						—
Tenant improvements and incentives, net of reimbursements			(1,025)						(1,546)						—						—						(476)						(549)						(642)
Leasing commissions capitalized			(16)						(2,808)						(16)						—						—						—						(24)
Recurring capital improvements			(7,682)						(4,874)						(2,656)						(2,404)						(1,384)						(1,238)						(1,366)
Straight-line rent, net			(492)						(1,738)						(55)						(112)						(135)						(190)						(218)
Non-cash fair value interest expense			210						—						—						105						105						—						—
Non-real estate depreciation and amortization of debt costs			4,664						5,265						1,147						1,158						1,151						1,208						1,241
Amortization of lease intangibles, net			(945)						368						(337)						(227)						(209)						(172)						(172)
Amortization and expensing of restricted share and unit compensation(3)			7,988						8,553						1,831						1,917						2,159						2,081						2,075
AFFO(1)			68,429						69,556						18,234						18,203						16,376						15,616						14,212
Cash loss on extinguishment of debt			44						11,894						—						44						—						—						—
Loss on interest rate derivatives			—						5,866						—						—						—						—						—
Non-share-based severance expense			202						103						—						—						—						202						—
Relocation expense			74						—						74						—						—						—						—
Structuring expenses			1,161						—						60						121						980						—						—
Transformation costs(4)			9,378						6,179						3,041						2,399						1,776						2,162						1,802
Insurance gain			—						(1,026)						—						—						—						—						(1,026)
Write-off of pursuit costs			174						—						—						174						—						—						—
Core AFFO(1)			$	79,462					$	92,572					$	21,409					$	20,941					$	19,132					$	17,980					$	14,988
______________________________
(1) See "Definitions" on page 11 for the definitions of non-GAAP measures: NAREIT FFO, Core FFO, AFFO, and Core AFFO.
(2) Adjustment to the numerators for FFO and Core FFO per share calculations when applying the two-class method for calculating EPS.
(3) Includes share award modifications related to transformation costs.
(4) Excludes share award modifications related to transformation costs.

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Net Operating Income (NOI) - Multifamily (Dollars In thousands)

			Apartment Homes as of 12/31/2022						Twelve Months Ended												Three Months Ended
									December 31, 2022						December 31, 2021						December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Rental and other property revenues
Same-store			6,658						$	151,547					$	141,301					$	38,845					$	38,771					$	37,198					$	36,733					$	35,660
Acquisitions			1,809						27,370						2,262						8,652						8,150						6,643						3,925						1,774
Development			401						10,510						6,375						2,868						2,711						2,500						2,431						2,223
Non-residential(1)			N/A						1,073						1,027						266						257						305						245						233
Total rental and other property revenues(2)			8,868						190,500						150,965						50,631						49,889						46,646						43,334						39,890
Property operating expenses
Same-store									53,449						51,112						13,021						14,031						13,259						13,138						12,523
Acquisitions									11,308						865						3,259						3,157						3,049						1,843						653
Development									3,697						3,258						977						941						934						845						838
Non-residential									281						292						67						69						70						75						73
Total property operating expenses									68,735						55,527						17,324						18,198						17,312						15,901						14,087
Net Operating Income (NOI)(3)
Same-store									98,098						90,189						25,824						24,740						23,939						23,595						23,137
Acquisitions									16,062						1,397						5,393						4,993						3,594						2,082						1,121
Development									6,813						3,117						1,891						1,770						1,566						1,586						1,385
Non-residential									792						735						199						188						235						170						160
Total NOI									$	121,765					$	95,438					$	33,307					$	31,691					$	29,334					$	27,433					$	25,803
Same-store metrics
Operating margin(4)									65%						64%						66%						64%						64%						64%						65%
Retention									63%						60%						62%						60%						63%						71%						72%
Same-store effective lease rate growth
New									8.4%						(3.0)%						1.1%						10.5%						11.7%						10.0%						8.7%
Renewal									10.1%						4.8%						10.1%						10.1%						10.9%						9.2%						8.2%
Blended									9.4%						1.3%						5.7%						10.3%						11.2%						9.5%						8.4%

______________________________

(1)     Includes revenues and expenses from retail operations at multifamily communities.

(2)    Utility costs reimbursed by residents are included in real estate rental revenue on our consolidated statements of operations. Utility reimbursements totaled $7.3 million and $5.8 million for the twelve months ended December 31, 2022 and 2021, respectively, and $1.9 million, $1.9 million, $1.8 million, $1.8 million and $1.5 million for the three months ended December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively.

(3)     NOI is a non-GAAP measure. See "Definitions" on page 11 for the definition of NOI and reconciliation of Net (loss) income to NOI on page 31.

(4) Operating margin is calculated by dividing the same-store NOI (non-GAAP) by same-store rental and other property revenues.

19

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Same-Store Operating Results - Multifamily (Dollars in thousands, except Average Effective Monthly Rent per Home)

												Rental and Other Property Revenue																		Property Operating Expenses																		Net Operating Income (1)																		Average Occupancy																		Average Effective Monthly Rent per Home
Quarter-to-Date Comparison						Apt Homes						Q4 2022						Q4 2021						% Chg						Q4 2022						Q4 2021						% Chg						Q4 2022						Q4 2021						% Chg						Q4 2022						Q4 2021						% Chg						Q4 2022						Q4 2021						% Chg
Virginia						5,138						$	30,407					$	27,875					9.1		%				$	9,981					$	9,574					4.3		%				$	20,426					$	18,301					11.6		%				94.9		%				95.8		%				(0.9)		%				$	1,880					$	1,710					9.9		%
DC / Maryland						1,520						8,438						7,785						8.4		%				3,040						2,949						3.1		%				5,398						4,836						11.6		%				95.3		%				96.0		%				(0.7)		%				1,857						1,703						9.0		%
DC Metro Total						6,658						$	38,845					$	35,660					8.9		%				$	13,021					$	12,523					4.0		%				$	25,824					$	23,137					11.6		%				95.0		%				95.9		%				(0.9)		%				$	1,874					$	1,708					9.7		%
Sequential Comparison						Apt Homes						Q4 2022						Q3 2022						% Chg						Q4 2022						Q3 2022						% Chg						Q4 2022						Q3 2022						% Chg						Q4 2022						Q3 2022						% Chg						Q4 2022						Q3 2022						% Chg
Virginia						5,138						$	30,407					$	30,454					(0.2)		%				$	9,981					$	10,840					(7.9)		%				$	20,426					$	19,614					4.1		%				94.9		%				95.4		%				(0.5)		%				$	1,880					$	1,855					1.3		%
DC / Maryland						1,520						8,438						8,317						1.5		%				3,040						3,191						(4.7)		%				5,398						5,126						5.3		%				95.3		%				96.5		%				(1.2)		%				1,857						1,801						3.1		%
DC Metro Total						6,658						$	38,845					$	38,771					0.2		%				$	13,021					$	14,031					(7.2)		%				$	25,824					$	24,740					4.4		%				95.0		%				95.6		%				(0.6)		%				$	1,874					$	1,843					1.7		%
Year-to-Date Comparison						Apt Homes						YTD 2022						YTD 2021						% Chg						YTD 2022						YTD 2021						% Chg						YTD 2022						YTD 2021						% Chg						YTD 2022						YTD 2021						% Chg						YTD 2022						YTD 2021						% Chg
Virginia						5,138						$	118,651					$	110,341					7.5		%				$	41,297					$	39,311					5.1		%				$	77,354					$	71,030					8.9		%				95.4		%				95.5		%				(0.1)		%				$	1,816					$	1,676					8.4		%
DC / Maryland						1,520						32,896						30,960						6.3		%				12,152						11,801						3.0		%				20,744						19,159						8.3		%				96.1		%				94.5		%				1.6		%				1,783						1,693						5.3		%
DC Metro Total						6,658						$	151,547					$	141,301					7.3		%				$	53,449					$	51,112					4.6		%				$	98,098					$	90,189					8.8		%				95.6		%				95.3		%				0.3		%				$	1,808					$	1,680					7.6		%
______________________________
(1) NOI is a non-GAAP measure. See "Definitions" on page 11 for the definition of NOI and reconciliation of Net (loss) income to NOI on page 31.

20

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Same-Store Operating Expenses - Multifamily (In thousands)

Quarter-to-Date Comparison			Q4 2022						Q4 2021						$ Change						% Change									% of Q4 2022 Total
Controllable(1)			$	6,596					$	6,489					$	107					1.6		%							50.7		%
Non-Controllable(2)			6,425						6,034						391						6.5		%							49.3		%
Total same-store operating expenses			13,021						12,523						498						4.0		%							100.0		%
Utility reimbursements			(1,437)						(1,423)						(14)						1.0		%
Total same-store operating expenses, net of utility reimbursements			$	11,584					$	11,100					$	484					4.4		%

Sequential Comparison			Q4 2022						Q3 2022						$ Change						% Change									% of Q4 2022 Total
Controllable			$	6,596					$	7,355					$	(759)					(10.3)		%							50.7		%
Non-Controllable			6,425						6,676						(251)						(3.8)		%							49.3		%
Total same-store operating expenses			13,021						14,031						(1,010)						(7.2)		%							100.0		%
Utility reimbursements			(1,437)						(1,461)						24						(1.6)		%
Total same-store operating expenses, net of utility reimbursements			$	11,584					$	12,570					$	(986)					(7.8)		%

Year-to-Date Comparison			YTD 2022						YTD 2021						$ Change						% Change									% of YTD 2022 Total
Controllable			$	27,031					$	26,089					$	942					3.6		%							50.6		%
Non-Controllable			26,418						25,023						1,395						5.6		%							49.4		%
Total same-store operating expenses			53,449						51,112						2,337						4.6		%							100.0		%
Utility reimbursements			(5,890)						(5,631)						(259)						4.6		%
Total same-store operating expenses, net of utility reimbursements			$	47,559					$	45,481					$	2,078					4.6		%

______________________________
(1) Controllable operating expenses consist of:
Payroll, Repairs & Maintenance, Marketing, Administrative and other
(2) Non-Controllable operating expenses consist of:
Utilities, Insurance and Real Estate Taxes

21

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Acquisition and Disposition Summary (Dollars in thousands)

Acquisitions
			Location						Acquisition Date												Number of Homes						Ending Occupancy (as of December 31, 2022)						Contract Purchase Price
Carlyle of Sandy Springs			Sandy Springs, GA						February 1, 2022												389						95.1%						$	105,586
Alder Park			Smyrna, GA						May 5, 2022												270						93.7%						69,750
Marietta Crossing			Marietta, GA						May 5, 2022												420						95.5%						107,900
									Total 2022												1,079												$	283,236
The Oxford			Conyers, GA						August 10, 2021												240						94.6%						$	48,000
Assembly Eagles Landing(1)			Stockbridge, GA						November 19, 2021												490						94.3%						106,000
									Total 2021												730												$	154,000
Dispositions
			Location						Disposition Date												Square Feet						Contract Sales Price (in thousands)						GAAP (Loss) Gain on Sale
Office Portfolio(2)			VA, DC						July 26, 2021												2,370,000						$	766,000					$	(11,220)
Retail Portfolio(3)			VA, DC, MD						September 22, 2021												693,000						168,314						57,661
									Total 2021												3,063,000						$	934,314					$	46,441

______________________________

(1)    Reflects the acquisitions of 860 South and 900 Dwell in Henry County, Georgia.

(2)    Office Portfolio consists of twelve office properties: 1901 Pennsylvania Avenue, 515 King Street, 1220 19th Street, 1600 Wilson Boulevard, Silverline Center, Courthouse Square, 2000 M Street, 1140 Connecticut Avenue, Army Navy Club, 1775 Eye Street, Fairgate at Ballston and Arlington Tower.

(3)    Retail Portfolio consists of eight retail properties: Takoma Park, Westminster, Concord Centre, Chevy Chase Metro Plaza, 800 S. Washington Street, Randolph Shopping Center, Montrose Shopping Center and Spring Valley Village.

22

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Multifamily Communities
December 31, 2022

Community						Location			Apartment Homes			Current Strategy			Year Acquired			Year Built			Average Occupancy(1)						Ending Occupancy						% of Total Portfolio NOI(1,2)
Virginia
Assembly Alexandria						Alexandria, VA			532			B Value-Add			2019			1990			95.2%						95.3%						5%
Cascade at Landmark						Alexandria, VA			277			B Value-Add			2019			1988			95.2%						92.8%						3%
Clayborne						Alexandria, VA			74			A-			N/A			2008			95.9%						94.6%						1%
Riverside Apartments						Alexandria, VA			1,222			B Value-Add			2016			1971			95.0%						96.1%						12%
Bennett Park						Arlington, VA			224			A-			N/A			2007			96.4%						94.6%						4%
Park Adams						Arlington, VA			200			B			1969			1959			96.2%						96.5%						2%
The Maxwell						Arlington, VA			163			A-			N/A			2014			95.9%						96.3%						2%
The Paramount						Arlington, VA			135			B			2013			1984			95.4%						96.3%						2%
The Wellington						Arlington, VA			711			B Value-Add			2015			1960			95.4%						94.9%						7%
Roosevelt Towers						Falls Church, VA			191			B			1965			1964			94.9%						91.6%						2%
Assembly Dulles						Herndon, VA			328			B Value-Add			2019			2000			95.1%						96.3%						4%
Assembly Herndon						Herndon, VA			283			B Value-Add			2019			1991			96.0%						95.4%						3%
Assembly Leesburg						Leesburg, VA			134			B			2019			1986			96.4%						97.0%						2%
Assembly Manassas						Manassas, VA			408			B Value-Add			2019			1986			95.5%						95.1%						4%
The Ashby at McLean						McLean, VA			256			B			1996			1982			95.5%						94.9%						4%
Washington, DC
3801 Connecticut Avenue						Washington, DC			307			B Value-Add			1963			1951			96.2%						94.5%						3%
Kenmore Apartments						Washington, DC			374			B Value-Add			2008			1948			96.0%						94.1%						3%
Yale West						Washington, DC			216			A-			2014			2011			95.9%						95.4%						3%
Maryland
Bethesda Hill Apartments						Bethesda, MD			195			B			1997			1986			95.3%						93.8%						3%
Assembly Watkins Mill						Gaithersburg, MD			210			B			2019			1975			96.3%						96.2%						2%
Assembly Germantown						Germantown, MD			218			B Value-Add			2019			1990			96.6%						95.9%						2%
Total same-store communities									6,658												95.6%						95.2%						73%

23

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Multifamily Communities (continued)
December 31, 2022

Community						Location			Apartment Homes			Current Strategy			Year Acquired			Year Built			Average Occupancy(1)						Ending Occupancy						% of Total Portfolio NOI(1,2)
Virginia
Trove						Arlington, VA			401			A			N/A			2020			95.0%						96.8%						5%
Georgia
The Oxford						Conyers, GA			240			B			2021			1999			94.9%						94.6%						1%
Marietta Crossing						Marietta, GA			420			B Value-Add			2022			1975			93.4%						95.5%						2%
Carlyle of Sandy Springs						Sandy Springs, GA			389			B Value-Add			2022			1972			94.6%						95.1%						3%
Alder Park						Smyrna, GA			270			B Value-Add			2022			1982			93.9%						93.7%						2%
Assembly Eagles Landing						Stockbridge, GA			490			B			2021			2000			94.6%						94.3%						4%
Total non same-store communities									2,210												94.5%						95.1%						17%
Total multifamily communities									8,868												95.3%						95.2%						90%

______________________________

(1)     For the twelve months ended December 31, 2022.

(2)     NOI is a non-GAAP measure. See "Definitions" on page 11 for the definition of NOI and reconciliation of Net (loss) income to NOI on page 31.

24

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Office Property
December 31, 2022

Property

Location

Year Acquired

Year Built

Net Rentable Square Feet

Leased %(1)

Ending Occupancy(1)

% of Total Portfolio NOI(2,3)

Washington, DC

Watergate 600

Washington, DC

2017

1972/1997

300,000

92.6%

92.6%

10%

______________________________

(1)     The leased and occupied square footage includes short-term lease agreements.

(2)     For the twelve months ended December 31, 2022.

(3)     See "Definitions" on page 11 for the definition of NOI (non-GAAP) and page 31 for the reconciliation of Net (loss) income to NOI.

25

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Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) (In thousands) (Unaudited)

			Twelve Months Ended												Three Months Ended
			December 31, 2022						December 31, 2021						December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Adjusted EBITDA(1)
Net (loss) income			$	(30,868)					$	16,384					$	(3,531)					$	(10,739)					$	(8,874)					$	(7,724)					$	(6,796)
Add/(deduct):
Interest expense			24,940						34,063						6,552						6,582						6,156						5,650						5,676
Real estate depreciation and amortization			91,722						95,560						21,851						23,632						24,039						22,200						20,114
Income tax expense			—						526						—						—						—						—						526
Non-real estate depreciation			822						940						178						189						248						207						239
Severance expense			474						173						—						—						—						474						—
Transformation costs			9,686						6,635						3,041						2,399						2,023						2,223						1,839
Relocation expense			74						—						74						—						—						—						—
Structuring expenses			1,161						—						60						121						980						—						—
Gain on sale of depreciable real estate, net			—						(46,441)						—						—						—						—						—
Loss on extinguishment of debt			4,917						12,727						—						4,917						—						—						—
Loss on interest rate derivatives			—						5,866						—						—						—						—						—
Insurance gain			—						(1,026)						—						—						—						—						(1,026)
Adjusted EBITDA			$	102,928					$	125,407					$	28,225					$	27,101					$	24,572					$	23,030					$	20,572
______________________________
(1) Adjusted EBITDA is a non-GAAP measure. See "Definitions" on page 11 for the definition of Adjusted EBITDA.

26

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Long Term Debt Analysis (Dollars in thousands)

			December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Balances Outstanding
Secured
Mortgage note payable, net(1)			$	—					$	—					$	71,576					$	—					$	—
Unsecured
Fixed rate bonds			$	397,413					$	397,324					$	397,236					$	397,147					$	397,058
Term loan(2)			99,946						99,923						99,900						99,946						99,888
Credit facility			55,000						43,000						—						—						—
Total			$	552,359					$	540,247					$	568,712					$	497,093					$	496,946
Weighted Average Interest Rates
Secured
Mortgage note payable, net			—		%				—		%				4.3		%				—		%				—		%
Unsecured
Fixed rate bonds			4.5		%				4.5		%				4.5		%				4.5		%				4.5		%
Term loan(3)			2.3		%				2.3		%				2.3		%				2.3		%				2.3		%
Credit facility			5.2		%				4.0		%				—		%				—		%				—		%
Weighted Average			4.2		%				4.1		%				4.1		%				4.1		%				4.1		%
______________________________
(1) Elme Communities assumed mortgages of $42.8 million and $33.7 million in the acquisitions of Marietta Crossing and Alder Park, respectively, during the second quarter of 2022. The mortgages were extinguished through a defeasance process on September 1, 2022.
(2) Subsequent to the end of 2022, we executed a $125.0 million unsecured term loan ("2023 Term Loan") with an interest rate of SOFR (subject to a credit spread adjustment of 10 basis points) plus a margin of 95 basis points. The 2023 Term Loan has a two-year term ending in January 2025, with two one year extension options. We used the proceeds to prepay the 2018 Term Loan in full and a portion of our borrowings under our unsecured credit facility.
(3) (3) Elme Communities has entered into an interest rate swap to effectively fix the floating interest rate on its total $100.0 million aggregate principal of its term loan outstanding as of December 31, 2022 (see page 28).
Note: The current debt balances outstanding are shown net of discounts, premiums and unamortized debt costs (see page 28).

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Long Term Debt Maturities (in thousands, except average interest rates)
December 31, 2022

									Future Maturities of Debt
Year									Unsecured Debt						Credit Facility						Total Debt						Avg Interest Rate
2023									$	100,000		(1)			$	—					$	100,000					2.3%
2024									—						—						—						—%
2025									—						55,000			(2)			55,000						5.2%
2026									—						—						—						—%
2027									—						—						—						—%
Thereafter									400,000						—						400,000						4.5%
Scheduled principal payments									$	500,000					$	55,000					$	555,000					4.2%
Net discounts/premiums									(116)						—						(116)
Loan costs, net of amortization									(2,525)						—						(2,525)
Total maturities									$	497,359					$	55,000					$	552,359					4.2%

Weighted average maturity = 5.9 years

______________________________

(1)    Elme Communities entered into an interest rate swap to effectively fix a LIBOR plus 110 basis points floating interest rate to a 2.31% all-in fixed rate for the remaining $100.0 million portion of the 2018 Term Loan. The interest rate was fixed through the term loan maturity of July 2023. Subsequent to the end of 2022, we executed a $125.0 million unsecured term loan ("2023 Term Loan") with an interest rate of SOFR (subject to a credit spread adjustment of 10 basis points) plus a margin of 95 basis points. The 2023 Term Loan has a two-year term ending in January 2025, with two one year extension options. We used the proceeds to prepay the 2018 Term Loan in full and a portion of our borrowings under our unsecured credit facility. The interest rate swap effectively fixes a $100.0 million portion of the 2023 Term Loan at 2.16% through the interest rate swap's expiration date of July 21, 2023. .

(2)     The credit facility's term ends in August 2025, with two six-month extension options.

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Debt Covenant Compliance

Unsecured Public Debt Covenants

Unsecured Private Debt Covenants

Notes Payable

Line of Credit and Term Loans

Notes Payable

Quarter Ended December 31, 2022

Covenant

Quarter Ended December 31, 2022

Covenant

Quarter Ended December 31, 2022

Covenant

% of Total Indebtedness to Total Assets(1)

28.4

%

≤ 65.0%

N/A

N/A

N/A

N/A

Ratio of Income Available for Debt Service to Annual Debt Service

3.6

≥ 1.5

N/A

N/A

N/A

N/A

% of Secured Indebtedness to Total Assets(1)

0%

≤ 40.0%

N/A

N/A

N/A

N/A

Ratio of Total Unencumbered Assets(2) to Total Unsecured Indebtedness

3.5

≥ 1.5

N/A

N/A

N/A

N/A

% of Net Consolidated Total Indebtedness to Consolidated Total Asset Value(3)

N/A

N/A

21.6

%

≤ 60.0%

21.6

%

≤ 60.0%

Ratio of Consolidated Adjusted EBITDA(4) to Consolidated Fixed Charges(5)

N/A

N/A

4.95

≥ 1.50

4.95

≥ 1.50

% of Consolidated Secured Indebtedness to Consolidated Total Asset Value(3)

N/A

N/A

0%

≤ 40.0%

0%

≤ 40.0%

% of Consolidated Unsecured Indebtedness to Unencumbered Pool Value(6)

N/A

N/A

21.6

%

≤ 60.0%

21.6

%

≤ 60.0%

______________________________

(1)    Total Assets is calculated by applying a capitalization rate of 7.50% to the EBITDA(4) from the last four consecutive quarters, excluding EBITDA from acquired, disposed, and non-stabilized development properties.

(2)    Total Unencumbered Assets is calculated by applying a capitalization rate of 7.50% to the EBITDA(4) from unencumbered properties from the last four consecutive quarters, excluding EBITDA from acquired, disposed, and non-stabilized development properties.

(3)    Consolidated Total Asset Value is the sum of unrestricted cash plus the quotient of applying a capitalization rate to the annualized NOI from the most recently ended quarter for each asset class, excluding NOI from disposed properties, acquisitions during the past 6 quarters, development, major redevelopment and low occupancy properties. To this amount, we add the purchase price of acquisitions during the past 6 quarters plus values for development, major redevelopment and low occupancy properties.

(4)    Consolidated Adjusted EBITDA is defined as earnings before noncontrolling interests, depreciation, amortization, interest expense, income tax expense, acquisition costs, extraordinary, unusual or nonrecurring transactions including sale of assets, impairment, gains and losses on extinguishment of debt and other non-cash charges.

(5)    Consolidated Fixed Charges consist of interest expense excluding capitalized interest and amortization of deferred financing costs, principal payments and preferred dividends, if any.

(6)    Unencumbered Pool Value is the sum of unrestricted cash plus the quotient of applying a capitalization rate to the annualized NOI from unencumbered properties from the most recently ended quarter for each asset class excluding NOI from disposed properties, acquisitions during the past 6 quarters, development, major redevelopment and low occupancy properties. To this we add the purchase price of unencumbered acquisitions during the past 6 quarters and values for unencumbered development, major redevelopment and low occupancy properties.

29

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Capital Analysis (In thousands, except per share amounts)

															Three Months Ended
															December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Market Data
Shares Outstanding															87,534						87,504						87,392						87,414						86,261
Market Price per Share															$	17.80					$	17.56					$	21.31					$	25.50					$	25.85
Equity Market Capitalization															$	1,558,105					$	1,536,570					$	1,862,324					$	2,229,057					$	2,229,847
Total Debt															$	552,359					$	540,247					$	568,712					$	497,093					$	496,946
Total Market Capitalization															$	2,110,464					$	2,076,817					$	2,431,036					$	2,726,150					$	2,726,793
Total Debt to Market Capitalization															0.26		:1				0.26		:1				0.23		:1				0.18		:1				0.18		:1
Earnings to Fixed Charges(1)															0.5x						-0.6x						-0.4x						-0.4x						-0.2x
Debt Service Coverage Ratio(2)															4.3x						4.1x						4.0x						4.1x						3.6x
Dividend Data			Twelve Months Ended												Three Months Ended
			December 31, 2022						December 31, 2021						December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Total Dividends Declared			$	59,646					$	80,018					$	14,938					$	14,918					$	14,900					$	14,890					$	14,646
Common Dividend Declared per Share			$	0.68					$	0.94					$	0.17					$	0.17					$	0.17					$	0.17					$	0.17
Payout Ratio (Core FFO basis)(3)			77.3		%				88.7		%				70.8		%				73.9		%				81.0		%				85.0		%				100.0		%
Payout Ratio (Core AFFO basis)(4)			74.7		%				86.2		%
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(1) The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations attributable to the controlling interests plus fixed charges, less capitalized interest. Fixed charges consist of interest expense, including amortized costs of debt issuance, plus interest costs capitalized. The earnings to fixed charges ratio includes loss on extinguishment of debt of $4.9 million for the three months ended September 30, 2022.
(2) Debt service coverage ratio is calculated by dividing Adjusted EBITDA by interest expense and principal amortization. Adjusted EBITDA is a non-GAAP measure. See "Definitions" on page 11 for the definition of Adjusted EBITDA.
(3) Payout Ratio (Core FFO basis) is calculated by dividing the common dividend per share by the core FFO per share. Core FFO is a non-GAAP measure. See "Definitions" on page 11 for the definition of Core FFO.
(4) Payout Ratio (Core AFFO basis) is calculated by dividing the common dividend per share by the core AFFO per share. Core AFFO is a non-GAAP measure. See "Definitions" on page 11 for the definition of Core AFFO.

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Net (Loss) Income to NOI Reconciliations (In thousands)

			Twelve Months Ended												Three Months Ended
			December 31, 2022						December 31, 2021						December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Net (loss) income			$	(30,868)					$	16,384					$	(3,531)					$	(10,739)					$	(8,874)					$	(7,724)					$	(6,796)
Adjustments:
Property management expense			7,436						6,133						1,974						1,916						1,796						1,750						1,685
General and administrative expense			28,258						27,538						7,260						6,403						7,656						6,939						7,700
Transformation costs			9,686						6,635						3,041						2,399						2,023						2,223						1,839
Real estate depreciation and amortization			91,722						72,656						21,851						23,632						24,039						22,200						20,114
Interest expense			24,940						34,063						6,552						6,582						6,156						5,650						5,676
Loss on interest rate derivatives			—						5,866						—						—						—						—						—
Loss on extinguishment of debt, net			4,917						12,727						—						4,917						—						—						—
Other income			(712)						(4,109)						(258)						(68)						—						(386)						(1,072)
Discontinued operations:
Income from operations of properties sold or held for sale			—						(23,083)						—						—						—						—						—
Gain on sale of real estate, net			—						(46,441)						—						—						—						—						—
Total Net operating income (NOI)(1)			$	135,379					$	108,369					$	36,889					$	35,042					$	32,796					$	30,652					$	29,146
Multifamily NOI:
Same-store portfolio			$	98,098					$	90,189					$	25,824					$	24,740					$	23,939					$	23,595					$	23,137
Acquisitions			16,062						1,397						5,393						4,993						3,594						2,082						1,121
Development			6,813						3,117						1,891						1,770						1,566						1,586						1,385
Non-residential			792						735						199						188						235						170						160
Total			121,765						95,438						33,307						31,691						29,334						27,433						25,803
Other NOI (Watergate 600)			13,614						12,931						3,582						3,351						3,462						3,219						3,343
Total NOI			$	135,379					$	108,369					$	36,889					$	35,042					$	32,796					$	30,652					$	29,146
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(1) NOI is a non-GAAP measure. See "Definitions" on page 11 for the definition of NOI and reconciliation of Net (loss) income to NOI on the current page.

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