CENTERSPACE - FORM 8-K - EX-99.2 - SUPPLEMENTAL OPERATING AND FINANCIAL DATA - September 10, 2012

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Exhibit 99.2



First Quarter Fiscal 2013
Supplemental Operating and Financial Data
for the Quarter Ended July 31, 2012

 
 
 
 
 
CONTACT:
Lindsey Knoop-Anderson
Director of Investor Relations
Direct Dial: 701-837-4738
E-Mail: landerson@iret.com
 
 
 
1400 31st Avenue SW, Suite 60
Minot, ND 58701
Tel: 701.837.4738
Fax: 701.838.7785
www.iret.com





Supplemental Financial and Operating Data
Table of Contents
July 31, 2012

 
Page
 
 
Company Background and Highlights                                                                                                                                                                                                          
2
 
 
Property Cost by Segment                                                                                                                                                                                                          
5
 
 
Key Financial Data
 
Condensed Consolidated Balance Sheets                                                                                                                                                                                                  
6
Condensed Consolidated Statements of Operations                                                                                                                                                                                                  
7
Funds From Operations                                                                                                                                                                                                  
8
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)                                                                                                                                                                                                  
9
 
 
Capital Analysis
 
Long-Term Mortgage Debt Analysis                                                                                                                                                                                                  
10
Long-Term Mortgage Debt Detail                                                                                                                                                                                                  
11-13
Capital Analysis                                                                                                                                                                                                  
14
 
 
Portfolio Analysis
 
Stabilized Properties Net Operating Income Summary                                                                                                                                                                                                  
15
Net Operating Income Detail                                                                                                                                                                                                  
16-17
Stabilized Properties and Overall Physical Occupancy Levels by Segment                                                                                                                                                                                                  
18
 
 
Tenant Analysis
 
Commercial Leasing Summary                                                                                                                                                                                                  
19-20
Multi-Family Residential Summary                                                                                                                                                                                                  
21
10 Largest Commercial Tenants - Based on Annualized Base Rent                                                                                                                                                                                                  
22
Lease Expirations                                                                                                                                                                                                  
23
 
 
Growth and Strategy
 
Acquisition Summary                                                                                                                                                                                                  
24
Development Summary                                                                                                                                                                                                  
25
 
 
Definitions                                                                                                                                                                                                        
26
1



Company Background and Highlights
First Quarter Fiscal 2013
Investors Real Estate Trust is a self-administered, equity real estate investment trust (REIT) investing in a portfolio of income-producing properties located primarily in the upper Midwest.  IRET's portfolio is diversified among multi-family residential, commercial office, commercial medical (including senior housing), commercial industrial and commercial retail segments.
During the first quarter of fiscal year 2013, the Company closed on its acquisitions of:
·
a 308-unit multi-family residential property in Topeka, Kansas, on approximately 18.3 acres of land, for a purchase price of approximately $17.7 million, of which $5.2 million was paid in cash with assumed debt of $12.5 million;
·
a 232-unit multi-family residential property in Lincoln, Nebraska, on approximately 14.7 acres of land, for a purchase price of approximately $17.5 million, of which $14.2 million was paid in cash and the remainder in limited partnership units of the Operating Partnership valued at $3.3 million; and
·
a 208-unit multi-family residential property in Lincoln, Nebraska, on approximately 11.5 acres of land, for a purchase price of approximately $17.3 million, of which $13.8 million was paid in cash and the remainder in limited partnership units of the Operating Partnership valued at $3.5 million.
Also during the first quarter of fiscal year 2013, the Company placed in service its 159-unit Quarry Ridge Apartment Homes development in Rochester, Minnesota, and placed in service buildings 3 and 4 (totaling 73 units) of its four-building, 145-unit Williston Garden multi-family residential development in Williston, North Dakota. The Company is the majority member of the joint venture entity that owns the Williston Garden development, with a 60% interest. As of July 31, 2012, project costs incurred for the Quarry Ridge development totaled approximately $15.6 million; the total estimated construction costs (excluding the value of the land) for the project are $17.3 million. Estimated total project costs for the Williston Garden development are approximately $19.5 million, of which the joint venture entity had incurred approximately $17.8 million as of July 31, 2012.
The Company sold two small properties in the first quarter of fiscal year 2013, in Kentwood, Michigan and Fox River, Wisconsin, for sales prices of $625,000 and $330,000, respectively.
The Company's revenues in the first quarter of fiscal year 2013 continued to be affected by low occupancy levels in its commercial office segment. Despite signs of economic recovery and renewed commercial leasing interest, the Company believes the continued elevated vacancy in its commercial office segment reflects continuing challenging economic conditions in certain of the Company's markets. IRET's multi-family residential portfolio continued to improve in occupancy and real estate revenue compared to the year-earlier period.
In the first quarter of fiscal year 2013, IRET paid its 165th consecutive quarterly distribution. The $0.1300 per share/unit distribution was payable on July 2, 2012. Subsequent to the end of the first quarter of fiscal year 2013, the Company declared a quarterly distribution of $0.1300 per share and unit payable on October 1, 2012 to shareholder and unitholders of record on September 17, 2012. The Board of Trustees also declared a quarterly distribution of $0.5156 per share on the Company's Series A preferred shares, payable October 1, 2012 to Series A preferred shareholders of record on September 17, 2012, and declared an initial, pro-rated distribution of $0.3312 per share on the Company's Series B preferred shares of beneficial interest, payable October 1, 2012 to Series B preferred shareholders of record on September 17, 2012. Subsequent distributions on the Series B preferred shares are payable quarterly in arrears in the amount of $0.4968 per share.
As of July 31, 2012, IRET owns a diversified portfolio of 269 properties consisting of 87 multi-family residential properties, 68 commercial office properties, 65 commercial medical properties (including senior housing), 19 commercial industrial properties and 30 commercial retail properties.  IRET's common shares are publicly traded on the NASDAQ Global Select Market (NASDAQ:  IRET).
2



Company Snapshot
(as of July 31, 2012)
Company Headquarters                                                                                              
  
Minot, North Dakota
  
Fiscal Year-End                                                                                              
  
April 30
  
Reportable Segments                                                                                              
  
Multi-Family Residential, Commercial Office, Commercial Medical, Commercial Industrial, Commercial Retail
  
Total Properties                                                                                              
   269  
Total Square Feet
        
(commercial properties)                                                                                          
  
12.3 million
  
Total Units
        
(multi-family residential properties)                                                                                          
    
10,143
  
Common Shares Outstanding (thousands)                                                                                              
    
91,812
  
Limited Partnership Units Outstanding (thousands)
  
21,171
  
Common Share Distribution - Quarter/Annualized
  
$0.13/$0.52
  
Dividend Yield                                                                                              
    6.4%
 
Total Capitalization (see p.14 for detail)                                                                                              
  
$2.1 billion
  


Investor Information
Board of Trustees
Jeffrey L. Miller                                                            
Trustee and Chairman
Stephen L. Stenehjem                                                            
Trustee and Vice Chairman
John D. Stewart                                                            
Trustee, Chair of Audit Committee
John T. Reed                                                            
Trustee, Chair of Nominating and Governance Committee
W. David Scott                                                            
Trustee, Chair of Compensation Committee
Jeffrey K. Woodbury                                                            
Trustee
Linda Hall Keller                                                            
Trustee
Thomas A. Wentz, Jr.                                                            
Trustee, Executive Vice President and Chief Operating Officer
Timothy P. Mihalick                                                            
Trustee, President and Chief Executive Officer


Management
Timothy P. Mihalick                                                            
President and Chief Executive Officer; Trustee
Thomas A. Wentz, Jr                                                            
Executive Vice President and Chief Operating Officer; Trustee
Diane K. Bryantt                                                            
Executive Vice President and Chief Financial Officer
Michael A. Bosh                                                            
Executive Vice President, General Counsel and Assistant Secretary
Mark Reiling                                                            
Executive Vice President of Asset Management
Charles A. Greenberg                                                            
Senior Vice President, Commercial Asset Management
Ted E. Holmes                                                            
Senior Vice President, Finance
Andrew Martin                                                            
Senior Vice President, Residential Property Management


Corporate Headquarters:
1400 31st Avenue SW, Suite 60
Post Office Box 1988
Minot, North Dakota 58702-1988
Trading Symbol:  IRET
Stock Exchange Listing:  NASDAQ
Investor Relations:
Lindsey Knoop-Anderson
landerson@iret.com
3



Common Share Data (NASDAQ: IRET)
 
  
1st Quarter
Fiscal Year 2013
    
4th Quarter
Fiscal Year 2012
    
3rd Quarter
Fiscal Year 2012
    
2nd Quarter
Fiscal Year 2012
    
1st Quarter
Fiscal Year 2012
  
High Closing Price
  
$
8.31
    
$
7.97
    
$
7.64
    
$
8.12
    
$
9.69
  
Low Closing Price
  
$
7.05
    
$
7.22
    
$
6.89
    
$
6.92
    
$
8.07
  
Average Closing Price
  
$
7.57
    
$
7.56
    
$
7.27
    
$
7.46
    
$
8.87
  
Closing Price at end of quarter
  
$
8.16
    
$
7.22
    
$
7.42
    
$
7.41
    
$
8.13
  
Common Share Distributions—annualized
  
$
0.520
    
$
0.520
    
$
0.520
    
$
0.520
    
$
0.686
  
Closing Dividend Yield - annualized
    
6.4
%
    
7.2
%
    
7.0
%
    
7.0
%
    
8.4
%
Closing common shares outstanding (thousands)
    
91,812
      
89,474
      
85,744
      
83,682
      
81,259
  
Closing limited partnership units outstanding (thousands)
    
21,171
      
20,332
      
19,596
      
19,534
      
19,958
  
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)
  
$
921,941
    
$
792,799
    
$
781,623
    
$
764,831
    
$
822,894
  

Certain statements in these supplemental disclosures are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from projected results. Such risks, uncertainties and other factors include, but are not limited to: intentions and expectations regarding future distributions on our common shares and units, fluctuations in interest rates, the effect of government regulation, the availability of capital, changes in general and local economic and real estate market conditions, competition, our ability to attract and retain skilled personnel, and those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including our 2012 Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
First Quarter Fiscal 2013 Acquisitions and Development Projects Placed in Service
 
Lakeside Village Apartment Homes
701 Lakeside Dr.
 Lincoln, NE  68528
Quarry Ridge Apartments
1823 Quarry Ridge Place NW
 Rochester, MN  55901
 
 
 
 
Villa West Apartment Homes
2744 SW Villa West Drive
 Topeka, KS  66614
The Colony Apartment Homes
3751 Faulkner Dr.
 Lincoln, NE  68516
 
 
 
 

4



Property Cost by Segment – First Quarter Fiscal 2013
With investments in the multi-family residential and commercial office, commercial medical, commercial industrial and commercial retail segments, IRET's diversified portfolio helps to provide stability during market fluctuations in returns from specific property types.


5



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)

 
  
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
    
07/31/2011
  
ASSETS
  
   
   
   
   
 
Real estate investments
  
   
   
   
   
 
Property owned
  
$
1,979,099
    
$
1,892,009
    
$
1,861,321
    
$
1,844,654
    
$
1,777,485
  
Less accumulated depreciation
    
(387,286
)
    
(373,490
)
    
(364,190
)
    
(351,174
)
    
(339,293
)
 
    
1,591,813
      
1,518,519
      
1,497,131
      
1,493,480
      
1,438,192
  
Development in progress
    
10,498
      
27,599
      
22,281
      
14,124
      
12,697
  
Unimproved land
    
10,990
      
10,990
      
6,390
      
6,558
      
6,550
  
Mortgage loans receivable, net of allowance
    
0
      
0
      
0
      
155
      
156
  
Total real estate investments
    
1,613,301
      
1,557,108
      
1,525,802
      
1,514,317
      
1,457,595
  
Real estate held for sale
    
1,131
      
2,067
      
0
      
0
      
0
  
Cash and cash equivalents
    
37,002
      
39,989
      
35,502
      
32,697
      
37,307
  
Other investments
    
635
      
634
      
633
      
628
      
627
  
Receivable arising from straight-lining of rents, net of allowance
    
24,127
      
23,273
      
21,965
      
20,905
      
19,331
  
Accounts receivable, net of allowance
    
6,448
      
7,052
      
3,977
      
8,243
      
7,935
  
Real estate deposits
    
4
      
263
      
578
      
451
      
458
  
Prepaid and other assets
    
3,070
      
3,703
      
4,107
      
1,718
      
1,997
  
Intangible assets, net of accumulated amortization
    
43,796
      
44,588
      
49,055
      
50,322
      
48,108
  
Tax, insurance, and other escrow
    
13,161
      
11,669
      
11,427
      
11,315
      
15,198
  
Property and equipment, net of accumulated depreciation
    
1,332
      
1,454
      
1,464
      
1,986
      
1,687
  
Goodwill
    
1,120
      
1,120
      
1,120
      
1,127
      
1,127
  
Deferred charges and leasing costs, net of accumulated amortization
    
21,932
      
21,447
      
22,014
      
21,255
      
20,304
  
TOTAL ASSETS
  
$
1,767,059
    
$
1,714,367
    
$
1,677,644
    
$
1,664,964
    
$
1,611,674
  
 
                                        
LIABILITIES AND EQUITY
                                        
LIABILITIES
                                        
Accounts payable and accrued expenses
  
$
41,084
    
$
47,403
    
$
43,439
    
$
39,002
    
$
34,547
  
Revolving line of credit
    
44,500
      
39,000
      
49,000
      
47,000
      
34,000
  
Mortgages payable
    
1,080,655
      
1,048,689
      
1,038,717
      
1,039,625
      
1,002,962
  
Other
    
25,094
      
14,012
      
6,326
      
1,164
      
6,369
  
TOTAL LIABILITIES
    
1,191,333
      
1,149,104
      
1,137,482
      
1,126,791
      
1,077,878
  
 
                                        
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES
    
0
      
0
      
0
      
1,005
      
1,263
  
EQUITY
                                        
Investors Real Estate Trust shareholders' equity
                                        
Preferred Shares of Beneficial Interest
    
27,317
      
27,317
      
27,317
      
27,317
      
27,317
  
Common Shares of Beneficial Interest
    
701,431
      
684,049
      
657,304
      
643,022
      
627,722
  
Accumulated distributions in excess of net income
    
(289,025
)
    
(278,377
)
    
(269,942
)
    
(260,535
)
    
(250,585
)
Total Investors Real Estate Trust shareholders' equity
    
439,723
      
432,989
      
414,679
      
409,804
      
404,454
  
Noncontrolling interests – Operating Partnership
    
122,373
      
118,710
      
114,852
      
116,550
      
119,382
  
Noncontrolling interests – consolidated real estate entities
    
13,630
      
13,564
      
10,631
      
10,814
      
8,697
  
Total equity
    
575,726
      
565,263
      
540,162
      
537,168
      
532,533
  
TOTAL LIABILITIES AND EQUITY
  
$
1,767,059
    
$
1,714,367
    
$
1,677,644
    
$
1,664,964
    
$
1,611,674
  

6



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)

 
  
Three Months Ended
  
OPERATING RESULTS
  
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
    
07/31/2011
  
Real estate revenue
  
$
62,410
    
$
60,621
    
$
60,981
    
$
60,629
    
$
59,557
  
Real estate expenses
    
25,068
      
22,851
      
24,807
      
25,761
      
24,859
  
Gain on involuntary conversion
    
0
      
274
      
0
      
0
      
0
  
Net operating income
    
37,342
      
38,044
      
36,174
      
34,868
      
34,698
  
Depreciation/amortization
    
(16,286
)
    
(15,210
)
    
(15,245
)
    
(14,936
)
    
(14,873
)
Administrative expenses, advisory and trustee services
    
(2,096
)
    
(1,437
)
    
(1,659
)
    
(2,104
)
    
(2,181
)
Other expenses
    
(519
)
    
(389
)
    
(359
)
    
(835
)
    
(315
)
Interest
    
(16,517
)
    
(16,430
)
    
(16,511
)
    
(16,291
)
    
(15,881
)
Interest and other income
    
142
      
141
      
279
      
213
      
153
  
Income from continuing operations
    
2,066
      
4,719
      
2,679
      
915
      
1,601
  
(Loss) income from discontinued operations
    
(70
)
    
(598
)
    
(158
)
    
576
      
(28
)
Net income
  
$
1,996
    
$
4,121
    
$
2,521
    
$
1,491
    
$
1,573
  
 
                                        
Net (income) loss attributable to noncontrolling interest – Operating Partnership
    
(251
)
    
(636
)
    
(351
)
    
(194
)
    
(178
)
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities
    
(66
)
    
(106
)
    
(43
)
    
(12
)
    
26
  
Net income attributable to Investors Real Estate Trust
    
1,679
      
3,379
      
2,127
      
1,285
      
1,421
  
Dividends to preferred shareholders
    
(593
)
    
(593
)
    
(593
)
    
(593
)
    
(593
)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
  
$
1,086
    
$
2,786
    
$
1,534
    
$
692
    
$
828
  
 
                                        
Per Share Data
                                        
Earnings (loss) per common share from continuing operations – Investors Real Estate Trust – basic & diluted
  
$
.01
    
$
.04
    
$
.02
    
$
.00
    
$
.01
  
Earnings (loss) per common share from discontinued operations – Investors Real Estate Trust – basic & diluted
    
.00
      
(.01
)
    
.00
      
.01
      
.00
  
Net income (loss) per common share – basic & diluted
  
$
.01
    
$
.03
    
$
.02
    
$
.01
    
$
.01
  
 
                                        
Percentage of Revenues
                                        
Real estate expenses
    
40.2
%
    
37.7
%
    
40.7
%
    
42.5
%
    
41.7
%
Depreciation/amortization
    
26.1
%
    
25.1
%
    
25.0
%
    
24.6
%
    
25.0
%
General and administrative
    
3.4
%
    
2.4
%
    
2.7
%
    
3.5
%
    
3.7
%
Interest
    
26.5
%
    
27.1
%
    
27.1
%
    
26.9
%
    
26.7
%
(Loss) income from discontinued operations
    
0.1
%
    
1.0
%
    
0.3
%
    
1.0
%
    
0.0
%
Net income
    
3.2
%
    
6.8
%
    
4.1
%
    
2.5
%
    
2.6
%
 
                                        
Ratios
                                        
EBITDA(1)/Interest expense
    
2.09
x
    
2.17
x
    
2.07
x
    
1.97
x
    
2.03
x
EBITDA(1)/Interest expense plus preferred distributions
    
2.02
x
    
2.09
x
    
2.00
x
    
1.90
x
    
1.95
x
(1) See Definitions on page 26.  EBITDA is a non-GAAP measure; see page 9 for a reconciliation of EBITDA to net income (loss).
7



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
FUNDS FROM OPERATIONS (unaudited)
(in thousands, except per share and unit data)

 
  
Three Months Ended
  
 
  
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
    
07/31/2011
  
Funds From Operations(1)
  
   
   
   
   
 
Net income attributable to Investors Real Estate Trust
  
$
1,679
    
$
3,379
    
$
2,127
    
$
1,285
    
$
1,421
  
Less dividends to preferred shareholders
    
(593
)
    
(593
)
    
(593
)
    
(593
)
    
(593
)
Net income available to common shareholders
    
1,086
      
2,786
      
1,534
      
692
      
828
  
Adjustments:
                                        
Noncontrolling interests – Operating Partnership
    
251
      
636
      
351
      
194
      
178
  
Depreciation and amortization
    
16,187
      
15,165
      
15,179
      
14,890
      
14,823
  
Real estate impairment
    
0
      
293
      
135
      
0
      
0
  
Loss (gain) on depreciable property sales
    
73
      
240
      
0
      
(589
)
    
0
  
Funds from operations applicable to common shares and Units
  
$
17,597
    
$
19,120
    
$
17,199
    
$
15,187
    
$
15,829
  
 
                                        
FFO per share and unit - basic and diluted
  
$
0.16
    
$
0.18
    
$
0.16
    
$
0.15
    
$
0.16
  
 
                                        
Adjusted funds from operations(1)
                                        
Funds from operations applicable to common shares and Units
  
$
17,597
    
$
19,120
    
$
17,199
    
$
15,187
    
$
15,829
  
Adjustments:
                                        
Tenant improvements
    
(2,206
)
    
(4,846
)
    
(2,007
)
    
(2,021
)
    
(1,435
)
Leasing commissions
    
(1,335
)
    
701
      
(1,589
)
    
(1,182
)
    
(703
)
Recurring capital expenditures(1)
    
(1,987
)
    
(1,451
)
    
(1,411
)
    
(1,872
)
    
(1,969
)
Straight-line rents
    
(864
)
    
(1,330
)
    
(1,059
)
    
(1,597
)
    
(398
)
Non-real estate depreciation
    
136
      
78
      
114
      
90
      
127
  
Adjusted funds from operations applicable to common shares and Units
  
$
11,341
    
$
12,272
    
$
11,247
    
$
8,605
    
$
11,451
  
 
                                        
AFFO per share and unit - basic and diluted
    
0.10
      
0.11
      
0.11
      
0.09
      
0.11
  
 
                                        
Weighted average shares and units
    
111,292
      
107,316
      
103,935
      
101,669
      
100,844
  
(1) See Definitions on page 26.

8



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) (unaudited)
(in thousands)

 
  
Three Months Ended
  
 
  
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
    
07/31/2011
  
EBITDA(1)
  
   
   
   
   
 
Net income attributable to Investors Real Estate Trust
  
$
1,679
    
$
3,379
    
$
2,127
    
$
1,285
    
$
1,421
  
Adjustments:
                                        
Noncontrolling interests – Operating Partnership
    
251
      
636
      
351
      
194
      
178
  
Income before noncontrolling interests – Operating Partnership
    
1,930
      
4,015
      
2,478
      
1,479
      
1,599
  
Add:
                                        
Interest
    
16,517
      
16,454
      
16,533
      
16,318
      
15,925
  
Depreciation/amortization related to real estate investments
    
15,453
      
14,390
      
14,359
      
14,193
      
14,166
  
Amortization related to non-real estate investments
    
833
      
821
      
903
      
758
      
734
  
Amortization related to real estate revenues(2)
    
37
      
30
      
31
      
29
      
51
  
Less:
                                        
Interest income
    
(18
)
    
(33
)
    
(25
)
    
(37
)
    
(53
)
Gain on sale of real estate, land and other investments
    
73
      
240
      
0
      
(589
)
    
0
  
Gain on involuntary conversion
    
0
      
(274
)
    
0
      
0
      
0
  
EBITDA
  
$
34,825
    
$
35,643
    
$
34,279
    
$
32,151
    
$
32,422
  
(1)
See Definitions on page 26.
(2)
Included in real estate revenue in the Statement of Operations.

9



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LONG-TERM MORTGAGE DEBT ANALYSIS
(in thousands)
Debt Maturity Schedule
Annual Expirations
 
Total Mortgage Debt
 

 
 
  
Future Maturities of Mortgage Debt
  
Fiscal Year
  
Fixed Debt
    
Variable Debt
    
Total Debt
    
Weighted
Average(1)
    
% of
Total Debt
  
2013
  
$
19,196
    
$
0
    
$
19,196
      
5.59
%
    
1.8
%
2014
    
47,383
      
677
      
48,060
      
5.76
%
    
4.4
%
2015
    
75,072
      
9,750
      
84,822
      
5.62
%
    
7.9
%
2016
    
71,178
      
0
      
71,178
      
5.90
%
    
6.6
%
2017
    
188,742
      
0
      
188,742
      
6.14
%
    
17.5
%
2018
    
64,125
      
0
      
64,125
      
5.70
%
    
5.9
%
2019
    
98,586
      
5,664
      
104,250
      
5.92
%
    
9.6
%
2020
    
116,098
      
0
      
116,098
      
5.86
%
    
10.7
%
2021
    
137,409
      
0
      
137,409
      
5.44
%
    
12.7
%
2022
    
140,138
      
0
      
140,138
      
5.63
%
    
13.0
%
Thereafter
    
106,637
      
0
      
106,637
      
5.05
%
    
9.9
%
Total maturities
  
$
1,064,564
    
$
16,091
    
$
1,080,655
      
5.72
%
    
100.0
%
(1)
Weighted average interest rate of debt that matures in fiscal year.
 
  
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
    
07/31/2011
  
Balances Outstanding
  
   
   
   
   
 
Mortgage
  
   
   
   
   
 
Fixed rate
  
$
1,064,564
    
$
1,032,543
    
$
1,028,198
    
$
1,033,550
    
$
996,256
  
Variable rate
    
16,091
      
16,146
      
10,519
      
6,075
      
6,706
  
Mortgage total
  
$
1,080,655
    
$
1,048,689
    
$
1,038,717
    
$
1,039,625
    
$
1,002,962
  
 
                                        
Weighted Average Interest Rates
                                        
Secured
    
5.72
%
    
5.78
%
    
5.84
%
    
5.86
%
    
5.90
%
10



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LONG-TERM MORTGAGE DEBT* DETAIL AS OF JULY 31, 2012
(in thousands)
Property
Maturity Date
  
Fiscal 2013
    
Fiscal 2014
    
Fiscal 2015
    
Fiscal 2016
    
Thereafter
    
Total(1)
  
 
 
  
   
   
   
   
   
 
Multi-Family Residential
 
  
   
   
   
   
   
 
 Monticello Village - Monticello, MN
3/1/2013
  
$
2,941
    
$
0
    
$
0
    
$
0
    
$
0
    
$
2,941
  
 Quarry Ridge - Rochester, MN
10/1/2013
    
0
      
11,808
      
0
      
0
      
0
      
11,808
  
 East Park - Sioux Falls, SD
12/1/2013
    
0
      
1,488
      
0
      
0
      
0
      
1,488
  
 Sycamore Village - Sioux Falls, SD
12/1/2013
    
0
      
837
      
0
      
0
      
0
      
837
  
 Candlelight - Fargo, ND
3/1/2014
    
0
      
1,263
      
0
      
0
      
0
      
1,263
  
 Evergreen II - Isanti, MN
11/1/2014
    
0
      
0
      
2,176
      
0
      
0
      
2,176
  
 Campus Center - St Cloud, MN
6/1/2015
    
0
      
0
      
0
      
1,333
      
0
      
1,333
  
 Campus Knoll - St Cloud, MN
6/1/2015
    
0
      
0
      
0
      
889
      
0
      
889
  
 Landmark - Grand Forks, ND
8/24/2015
    
0
      
0
      
0
      
1,744
      
0
      
1,744
  
 Regency Park Estates - St Cloud, MN
1/1/2016
    
0
      
0
      
0
      
7,065
      
0
      
7,065
  
 Summary of Debt due after Fiscal 2016
 
    
0
      
0
      
0
      
0
      
318,364
      
318,364
  
Sub-Total Multi-Family Residential
 
  
$
2,941
    
$
15,396
    
$
2,176
    
$
11,031
    
$
318,364
    
$
349,908
  
 
 
                                                
Commercial Office
 
                                                
 Great Plains - Fargo, ND
10/1/2013
  
$
0
    
$
1,636
    
$
0
    
$
0
    
$
0
    
$
1,636
  
 Whitewater Plaza - Minnetonka, MN
3/1/2014
    
0
      
2,557
      
0
      
0
      
0
      
2,557
  
 Whitewater Plaza - Minnetonka, MN
3/1/2014
    
0
      
1,326
      
0
      
0
      
0
      
1,326
  
 Viromed - Eden Prairie, MN
4/1/2014
    
0
      
552
      
0
      
0
      
0
      
552
  
 Wirth Corporate Center - Golden Valley, MN
4/1/2014
    
0
      
3,538
      
0
      
0
      
0
      
3,538
  
 TCA Building - Eagan, MN
5/1/2014
    
0
      
0
      
7,424
      
0
      
0
      
7,424
  
 Brenwood - Hennepin County, MN
7/15/2014
    
0
      
0
      
5,250
      
0
      
0
      
5,250
  
 Burnsville Bluffs II - Burnsville, MN
8/8/2014
    
0
      
0
      
1,747
      
0
      
0
      
1,747
  
 Plymouth IV - Plymouth, MN
8/8/2014
    
0
      
0
      
3,222
      
0
      
0
      
3,222
  
 Plymouth V - Plymouth, MN
8/8/2014
    
0
      
0
      
3,766
      
0
      
0
      
3,766
  
 Plaza VII - Boise, ID
9/1/2014
    
0
      
0
      
1,037
      
0
      
0
      
1,037
  
 Crosstown Centre - Eden Prairie, MN
12/1/2014
    
0
      
0
      
3,393
      
0
      
0
      
3,393
  
 Crosstown Centre - Eden Prairie, MN
12/1/2014
    
0
      
0
      
10,178
      
0
      
0
      
10,178
  
 Northgate I - Maple Grove, MN
12/10/2014
    
0
      
0
      
5,296
      
0
      
0
      
5,296
  
 Plymouth I - Plymouth, MN
12/10/2014
    
0
      
0
      
1,187
      
0
      
0
      
1,187
  
 Plymouth II - Plymouth, MN
12/10/2014
    
0
      
0
      
1,187
      
0
      
0
      
1,187
  
 Plymouth III - Plymouth, MN
12/10/2014
    
0
      
0
      
1,461
      
0
      
0
      
1,461
  
 Benton Business Park - Sauk Rapids, MN
1/1/2015
    
0
      
0
      
610
      
0
      
0
      
610
  
 West River Business Park - Waite Park, MN
1/1/2015
    
0
      
0
      
610
      
0
      
0
      
610
  
 Highlands Ranch I - Highlands Ranch, CO
3/1/2015
    
0
      
0
      
8,383
      
0
      
0
      
8,383
  
 Highlands Ranch II - Highlands Ranch, CO
3/1/2015
    
0
      
0
      
8,111
      
0
      
0
      
8,111
  
 US Bank Financial Center - Bloomington, MN
7/1/2015
    
0
      
0
      
0
      
13,654
      
0
      
13,654
  
 Rapid City 900 Concourse Drive - Rapid City, SD
8/1/2015
    
0
      
0
      
0
      
1,503
      
0
      
1,503
  
 Westgate I - Boise, ID
8/1/2015
    
0
      
0
      
0
      
1,224
      
0
      
1,224
  
 Westgate II - Boise, ID
8/1/2015
    
0
      
0
      
0
      
2,998
      
0
      
2,998
  
 Brook Valley I - LaVista, NE
1/1/2016
    
0
      
0
      
0
      
1,334
      
0
      
1,334
  
 Spring Valley IV - Omaha, NE
1/1/2016
    
0
      
0
      
0
      
794
      
0
      
794
  
 Spring Valley V - Omaha, NE
1/1/2016
    
0
      
0
      
0
      
873
      
0
      
873
  
 Spring Valley X - Omaha, NE
1/1/2016
    
0
      
0
      
0
      
810
      
0
      
810
  
 Spring Valley XI - Omaha, NE
1/1/2016
    
0
      
0
      
0
      
794
      
0
      
794
  
 Summary of Debt due after Fiscal 2016
 
    
0
      
0
      
0
      
0
      
254,040
      
254,040
  
Sub-Total Commercial Office
 
  
$
0
    
$
9,609
    
$
62,862
    
$
23,984
    
$
254,040
    
$
350,495
  

11




 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LONG-TERM MORTGAGE DEBT* DETAIL AS OF JULY 31, 2012 (continued)
(in thousands)

Property
Maturity Date
  
Fiscal 2013
    
Fiscal 2014
    
Fiscal 2015
    
Fiscal 2016
    
Thereafter
    
Total(1)
  
 
 
  
   
   
   
   
   
 
Commercial Medical
 
  
   
   
   
   
   
 
 High Pointe Health Campus - Lake Elmo, MN
4/1/2014
  
$
0
    
$
5,400
    
$
0
    
$
0
    
$
0
    
$
5,400
  
 Edgewood Vista - Billings, MT
12/10/2014
    
0
      
0
      
1,952
      
0
      
0
      
1,952
  
 Edgewood Vista - East Grand Forks, MN
12/10/2014
    
0
      
0
      
2,974
      
0
      
0
      
2,974
  
 Edgewood Vista - Sioux Falls, SD
12/10/2014
    
0
      
0
      
1,118
      
0
      
0
      
1,118
  
 Garden View Medical - St Paul, MN
8/1/2015
    
0
      
0
      
0
      
1,695
      
0
      
1,695
  
 2800 Medical Building - Minneapolis, MN
9/1/2015
    
0
      
0
      
0
      
5,540
      
0
      
5,540
  
 2828 Medical Building - Minneapolis, MN
9/1/2015
    
0
      
0
      
0
      
8,492
      
0
      
8,492
  
 Edina 6405 France Medical - Edina, MN
9/1/2015
    
0
      
0
      
0
      
9,002
      
0
      
9,002
  
 Ritchie Medical Plaza - St Paul, MN
9/1/2015
    
0
      
0
      
0
      
6,631
      
0
      
6,631
  
 Summary of Debt due after Fiscal 2016(2)
 
    
0
      
0
      
0
      
0
      
233,768
      
233,768
  
Sub-Total Commercial Medical
 
  
$
0
    
$
5,400
    
$
6,044
    
$
31,360
    
$
233,768
    
$
276,572
  
 
 
                                                
Commercial Industrial
 
                                                
 Dixon Avenue Industrial Park - Des Moines, IA
1/1/2013
  
$
6,959
    
$
0
    
$
0
    
$
0
    
$
0
    
$
6,959
  
 Bloomington 2000 West 94th Street - Bloomington, MN
3/1/2013
    
3,763
      
0
      
0
      
0
      
0
      
3,763
  
 Roseville 2929 Long Lake Road - Roseville, MN
3/1/2013
    
5,533
      
0
      
0
      
0
      
0
      
5,533
  
 Bodycote Industrial Building - Eden Prairie, MN
9/1/2013
    
0
      
1,100
      
0
      
0
      
0
      
1,100
  
 Cedar Lake Business Center - St. Louis Park, MN
11/1/2013
    
0
      
2,320
      
0
      
0
      
0
      
2,320
  
 Woodbury 1865 Woodlane - Woodbury, MN
11/1/2013
    
0
      
2,730
      
0
      
0
      
0
      
2,730
  
 Stone Container - Roseville, MN
7/14/2014
    
0
      
0
      
4,500
      
0
      
0
      
4,500
  
 Clive 2075 NW 94th St - Clive, IA
9/30/2014
    
0
      
0
      
2,204
      
0
      
0
      
2,204
  
 Metal Improvement Company - New Brighton, MN
9/30/2014
    
0
      
0
      
1,477
      
0
      
0
      
1,477
  
 Winsted Industrial Building
9/30/2014
    
0
      
0
      
390
      
0
      
0
      
390
  
 Stone Container - Fargo, ND
12/1/2015
    
0
      
0
      
0
      
787
      
0
      
787
  
 Stone Container - Fargo, ND
12/1/2015
    
0
      
0
      
0
      
994
      
0
      
994
  
 Summary of Debt due after Fiscal 2016
 
    
0
      
0
      
0
      
0
      
23,477
      
23,477
  
Sub-Total Commercial Industrial
 
  
$
16,255
    
$
6,150
    
$
8,571
    
$
1,781
    
$
23,477
    
$
56,234
  

12



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LONG-TERM MORTGAGE DEBT* DETAIL AS OF JULY 31, 2012 (continued)
(in thousands)

Property
Maturity Date
  
Fiscal 2013
    
Fiscal 2014
    
Fiscal 2015
    
Fiscal 2016
    
Thereafter
    
Total(1)
  
 
 
  
   
   
   
   
   
 
Commercial Retail
 
  
   
   
   
   
   
 
 Burnsville I Strip Center - Burnsville, MN
6/30/2013
  
$
0
    
$
377
    
$
0
    
$
0
    
$
0
    
$
377
  
 Burnsville II Strip Center - Burnsville, MN
6/30/2013
    
0
      
300
      
0
      
0
      
0
      
300
  
 St Cloud Westgate - St Cloud, MN
10/10/2013
    
0
      
3,151
      
0
      
0
      
0
      
3,151
  
 Eagan I Retail Center - Eagan, MN(3)
12/22/2013
    
0
      
1,327
      
0
      
0
      
0
      
1,327
  
 Forest Lake Westlake Center - Forest Lake, MN(3)
12/22/2013
    
0
      
4,243
      
0
      
0
      
0
      
4,243
  
 Pine City C-Store  - Pine City, MN(3)
4/20/2014
    
0
      
295
      
0
      
0
      
0
      
295
  
 Pine City Evergreen Square - Pine City, MN(3)
4/20/2014
    
0
      
1,812
      
0
      
0
      
0
      
1,812
  
 Omaha Barnes & Noble - Omaha, NE
6/1/2014
    
0
      
0
      
2,525
      
0
      
0
      
2,525
  
 Jamestown Buffalo Mall - Jamestown, ND
9/1/2014
    
0
      
0
      
693
      
0
      
0
      
693
  
 Fargo Express Center - Fargo, ND
10/1/2014
    
0
      
0
      
978
      
0
      
0
      
978
  
 Lakeville Strip Center - Lakeville, MN
10/1/2014
    
0
      
0
      
973
      
0
      
0
      
973
  
 Grand Forks MedPark Mall - Grand Forks, ND(3)
5/21/2015
    
0
      
0
      
0
      
3,022
      
0
      
3,022
  
 Summary of Debt due after Fiscal 2016
 
    
0
      
0
      
0
      
0
      
27,750
      
27,750
  
Sub-Total Commercial Retail
 
  
$
0
    
$
11,505
    
$
5,169
    
$
3,022
    
$
27,750
    
$
47,446
  
 
 
                                                
Total
 
  
$
19,196
    
$
48,060
    
$
84,822
    
$
71,178
    
$
857,399
    
$
1,080,655
  
* Mortgage debt does not include the Company's multi-bank line of credit or construction loans.  The line of credit has a maturity date of August 12, 2013; as of July 31, 2012, the Company had borrowings of $44.5 million outstanding under this line. Construction loans totaled $25.0 million as of July 31, 2012.
(1) Totals are principal balances as of July 31, 2012.
(2) Subsequent to the end of the first quarter of fiscal year 2013, the Company paid off, without penalty, $20.1 million of commercial mortgage debt with an original maturity date in fiscal year 2023.
(3) Mortgage loan was paid off without penalty subsequent to the end of the first quarter of fiscal year 2013.


13




 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CAPITAL ANALYSIS
(in thousands, except per share and unit amounts)

 
  
Three Months Ended
  
 
  
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
    
07/31/2011
  
Equity Capitalization
  
   
   
   
   
 
Common shares outstanding
    
91,812
      
89,474
      
85,744
      
83,682
      
81,259
  
Operating partnership (OP) units outstanding
    
21,171
      
20,332
      
19,596
      
19,534
      
19,958
  
Total common shares and OP units outstanding
    
112,983
      
109,806
      
105,340
      
103,216
      
101,217
  
Market price per common share (closing price at end of period)
  
$
8.16
    
$
7.22
    
$
7.42
    
$
7.41
    
$
8.13
  
Equity capitalization-common shares and OP units
  
$
921,941
    
$
792,799
    
$
781,623
    
$
764,831
    
$
822,894
  
Recorded book value of preferred shares
  
$
27,317
    
$
27,317
    
$
27,317
    
$
27,317
    
$
27,317
  
Total equity capitalization
  
$
949,258
    
$
820,116
    
$
808,940
    
$
792,148
    
$
850,211
  
 
                                        
Debt Capitalization
                                        
Total debt
  
$
1,150,123
    
$
1,101,564
    
$
1,095,416
    
$
1,087,625
    
$
1,043,152
  
Total capitalization
  
$
2,099,381
    
$
1,621,680
    
$
1,604,356
    
$
1,879,773
    
$
1,893,363
  
 
                                        
Total debt to total capitalization
  
0.55:1
    
0.57:1
    
0.58:1
    
0.58:1
    
0.55:1
  
 
                                        


 
  
Three Months Ended
  
 
  
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
    
07/31/2011
  
Earnings to fixed charges(1)
    
1.11
x
    
1.25
x
    
1.15
x
    
1.05
x
    
1.10
x
Earnings to combined fixed charges and preferred distributions(1)
    
1.07
x
    
1.21
x
    
1.11
x
    
1.02
x
    
1.06
x
Debt service coverage ratio(1)
    
1.45
x
    
1.49
x
    
1.43
x
    
1.37
x
    
1.41
x
 
                                        
Distribution Data
                                        
Common shares and units outstanding at record date
    
111,525
      
106,642
      
103,761
      
101,439
      
100,725
  
Total common distribution paid
  
$
14,413
    
$
13,809
    
$
13,486
    
$
13,186
    
$
17,275
  
Common distribution per share and unit
  
$
.1300
    
$
.1300
    
$
.1300
    
$
.1300
    
$
.1715
  
Payout ratio (FFO per share and unit basis)(1)
    
81.3
%
    
72.2
%
    
81.3
%
    
86.7
%
    
107.2
%
Payout ratio (AFFO per share and unit basis)(1)
    
130.0
%
    
118.2
%
    
118.2
%
    
144.4
%
    
155.9
%
(1)
See Definitions on page 26.
14



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
STABILIZED PROPERTIES NET OPERATING INCOME SUMMARY
(in thousands)

 
  
Stabilized Properties(1)
  
 
  
Three Months Ended
July 31,
  
Segment
  
2012
    
2011
    
%
Change
  
Multi-Family Residential
  
$
10,038
    
$
9,072
      
10.6
%
Commercial Office
    
9,349
      
9,871
      
(5.3
)%
Commercial Medical
    
10,371
      
11,097
      
(6.5
)%
Commercial Industrial
    
2,440
      
2,469
      
(1.2
)%
Commercial Retail
    
2,195
      
2,145
      
2.3
%
 
  
$
34,393
    
$
34,654
      
(0.8
)%
(1)
See list of properties excluded from stabilized properties on page ii.
15


INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
NET OPERATING INCOME DETAIL
(in thousands)
 
  
Three Months Ended July 31, 2012
  
 
  
Reporting Segments
    
   
 
 
  
Multi-Family
Residential
    
Commercial
Office
    
Commercial
Medical
    
Commercial
Industrial
    
Commercial
Retail
    
Corporate and
Other
    
Total
  
Real estate rental revenue
  
   
   
   
   
   
   
 
Stabilized(1)
  
$
18,331
    
$
18,638
    
$
14,331
    
$
3,459
    
$
3,351
    
$
0
    
$
58,110
  
Non-Stabilized
    
3,304
      
0
      
996
      
0
      
0
      
0
      
4,300
  
Total
    
21,635
      
18,638
      
15,327
      
3,459
      
3,351
      
0
      
62,410
  
 
                                                        
Real estate expenses
                                                        
Stabilized(1)
    
8,293
      
9,289
      
3,960
      
1,019
      
1,156
      
0
      
23,717
  
Non-Stabilized
    
1,229
      
0
      
122
      
0
      
0
      
0
      
1,351
  
Total
    
9,522
      
9,289
      
4,082
      
1,019
      
1,156
      
0
      
25,068
  
 
                                                        
Gain on involuntary conversion
                                                        
Stabilized(1)
    
0
      
0
      
0
      
0
      
0
      
0
      
0
  
Total
    
0
      
0
      
0
      
0
      
0
      
0
      
0
  
 
                                                        
Stabilized(1)
    
10,038
      
9,349
      
10,371
      
2,440
      
2,195
      
0
      
34,393
  
Non-Stabilized
    
2,075
      
0
      
874
      
0
      
0
      
0
      
2,949
  
Net operating income
  
$
12,113
    
$
9,349
    
$
11,245
    
$
2,440
    
$
2,195
    
$
0
    
$
37,342
  
 
                                                        
Reconciliation of NOI to net income (loss) available to common shareholders
                                                        
Depreciation/amortization
  
$
(4,588
)
  
$
(5,211
)
  
$
(4,477
)
  
$
(940
)
  
$
(934
)
  
$
(136
)
  
$
(16,286
)
Administrative, advisory and trustee fees
    
0
      
0
      
0
      
0
      
0
      
(2,096
)
    
(2,096
)
Other expenses
    
0
      
0
      
0
      
0
      
0
      
(519
)
    
(519
)
Interest expense
    
(4,909
)
    
(5,270
)
    
(4,099
)
    
(874
)
    
(707
)
    
(658
)
    
(16,517
)
Interest and other income
    
0
      
0
      
0
      
0
      
0
      
142
      
142
  
Income(loss)from continuing operations
    
2,616
      
(1,132
)
    
2,669
      
626
      
554
      
(3,267
)
    
2,066
  
Income(loss) from discontinued operations
    
0
      
0
      
0
      
0
      
(64
)
    
(6
)
    
(70
)
Net income (loss)
    
2,616
      
(1,132
)
    
2,669
      
626
      
490
      
(3,273
)
    
1,996
  
Net income attributable to noncontrolling interests – Operating Partnership
    
0
      
0
      
0
      
0
      
0
      
(251
)
    
(251
)
Net income attributable to noncontrolling interests – consolidated real estate entities
    
0
      
0
      
0
      
0
      
0
      
(66
)
    
(66
)
Net income (loss) attributable to Investors Real Estate Trust
    
2,616
      
(1,132
)
    
2,669
      
626
      
490
      
(3,590
)
    
1,679
  
Dividends to preferred shareholders
    
0
      
0
      
0
      
0
      
0
      
(593
)
    
(593
)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
  
$
2,616
      
(1,132
)
    
2,669
      
626
      
490
    
$
(4,183
)
  
$
1,086
  
(1)
See list of properties excluded from stabilized properties on page ii.
16




 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
NET OPERATING INCOME DETAIL
(in thousands)

 
  
Three Months Ended July 31, 2011
  
 
  
Reporting Segments
    
   
 
 
  
Multi-Family
Residential
    
Commercial
Office
    
Commercial
Medical
    
Commercial
Industrial
    
Commercial
Retail
    
Corporate and
Other
    
Total
  
Real estate rental revenue
  
   
   
   
   
   
   
 
Stabilized(1)
  
$
17,387
    
$
18,815
    
$
16,617
    
$
3,435
    
$
3,208
    
$
0
    
$
59,462
  
Non-Stabilized
    
95
      
0
      
0
      
0
      
0
      
0
      
95
  
Total
    
17,482
      
18,815
      
16,617
      
3,435
      
3,208
      
0
      
59,557
  
 
                                                        
Real estate expenses
                                                        
Stabilized(1)
    
8,315
      
8,944
      
5,520
      
966
      
1,063
      
0
      
24,808
  
Non-Stabilized
    
51
      
0
      
0
      
0
      
0
      
0
      
51
  
Total
    
8,366
      
8,944
      
5,520
      
966
      
1,063
      
0
      
24,859
  
 
                                                        
Net Operating Income (NOI)
                                                        
Stabilized(1)
    
9,072
      
9,871
      
11,097
      
2,469
      
2,145
      
0
      
34,654
  
Non-Stabilized
    
44
      
0
      
0
      
0
      
0
      
0
      
44
  
Net operating income
  
$
9,116
    
$
9,871
    
$
11,097
    
$
2,469
    
$
2,145
    
$
0
    
$
34,698
  
 
                                                        
Reconciliation of NOI to net income (loss) available to common shareholders
                                                        
Depreciation/amortization
  
$
(3,519
)
  
$
(5,361
)
  
$
(4,193
)
  
$
(880
)
  
$
(821
)
  
$
(99
)
  
$
(14,873
)
Administrative, advisory and trustee services
    
0
      
0
      
0
      
0
      
0
      
(2,181
)
    
(2,181
)
Other expenses
    
0
      
0
      
0
      
0
      
0
      
(315
)
    
(315
)
Interest expense
    
(4,521
)
    
(5,198
)
    
(3,940
)
    
(936
)
    
(768
)
    
(518
)
    
(15,881
)
Interest and other income
    
0
      
0
      
0
      
0
      
0
      
153
      
153
  
Income (loss) from continuing operations
    
1,076
      
(688
)
    
2,964
      
653
      
556
      
(2,960
)
    
1,601
  
Income from discontinued operations
    
0
      
0
      
(24
)
    
0
      
(4
)
    
0
      
(28
)
Net income (loss)
    
1,076
      
(688
)
    
2,940
      
653
      
552
      
(2,960
)
    
1,573
  
Net income attributable to noncontrolling interests – Operating Partnership
    
0
      
0
      
0
      
0
      
0
      
(178
)
    
(178
)
Net loss attributable to noncontrolling interests – consolidated real estate entities
    
0
      
0
      
0
      
0
      
0
      
26
      
26
  
Net income (loss) attributable to Investors Real Estate Trust
    
1,076
      
(688
)
    
2,940
      
653
      
552
      
(3,112
)
    
1,421
  
Dividends to preferred shareholders
    
0
      
0
      
0
      
0
      
0
      
(593
)
    
(593
)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
  
$
1,076
    
$
(688
)
  
$
2,940
    
$
653
    
$
552
    
$
(3,705
)
  
$
828
  
(1)
See list of properties excluded from stabilized properties on page ii.
17



 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
STABILIZED PROPERTIES AND ALL PROPERTIES PHYSICAL OCCUPANCY LEVELS BY SEGMENT
1st Quarter Fiscal 2013 vs. 1st Quarter Fiscal 2012

Segments
Stabilized Properties
All Properties
 
1st Quarter
1st Quarter
1st Quarter
1st Quarter
 
Fiscal 2013
Fiscal 2012
Fiscal 2013
Fiscal 2012
Multi-Family Residential
93.5%
91.5%
92.8%
91.5%
Commercial Office
78.8%
78.4%
78.8%
78.4%
Commercial Medical
95.0%
95.7%
95.3%
95.7%
Commercial Industrial
90.0%
94.7%
90.0%
94.7%
Commercial Retail
87.5%
86.0%
87.5%
86.0%


18



 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
COMMERCIAL LEASING SUMMARY
for the three months ended July 31, 2012

 
  
Three Months Ended July 31, 2012
  
 
  
New(1)
    
Renew(2)
    
Total
    
Expiring(3)
    
Net Change
    
Percentage
Change
  
Gross Square Footage
  
   
   
   
   
   
 
Commercial Office
    
34,640
      
64,179
      
98,819
      
243,502
      
(144,683
)
  
 
Commercial Medical
    
6,887
      
1,468
      
8,355
      
9,803
      
(1,448
)
  
 
Commercial Industrial
    
0
      
9,702
      
9,702
      
32,717
      
(23,015
)
  
 
Commercial Retail
    
9,070
      
2,420
      
11,490
      
23,292
      
(11,802
)
  
 
Total All Segments
    
50,597
      
77,769
      
128,366
      
309,314
      
(180,948
)
  
 
 
                                          
 
Weighted Average Rental Rates(3)
                                          
 
Commercial Office
  
$
15.71
    
$
16.10
    
$
15.96
    
$
13.51
    
$
2.45
      
18.2
%
Commercial Medical
    
22.41
      
23.16
      
22.54
      
21.83
      
0.71
      
3.3
%
Commercial Industrial
    
0.00
      
5.84
      
5.84
      
3.88
      
1.96
      
50.5
%
Commercial Retail
    
12.40
      
16.62
      
13.29
      
9.37
      
3.92
      
41.8
%
Total All Segments
  
$
16.03
    
$
14.97
    
$
15.39
    
$
12.44
    
$
2.95
      
23.7
%
 
                                                


 
Three Months Ended July 31, 2012
 
New(1)
Renew(2)
Total
Weighted Average Term of New/Renewed Leased(4)
 
 
 
 
 
 
Commercial Office
 
3.5
 
2.9
 
3.1
Commercial Medical
 
5.4
 
5.0
 
5.3
Commercial Industrial
 
0.0
 
3.3
 
3.3
Commercial Retail
 
3.7
 
4.0
 
3.8
Total All Segments
 
4.1
 
3.2
 
3.6
(1)
Does not include leases in place on acquired properties.
(2)
Renewals may include leases that have renewed prior to expiration date.  Square footage or rental rate changes on renewals are included in calculation.
(3)
Expired leases include leases with tenants who have vacated or renewed. Excluded from expired leases are leases that have been amended to extend the term, including leases on a month-to-month basis.
(4) Term in years.

19



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
COMMERCIAL LEASING COMMITMENTS
for the three months ended July 31, 2012
 
  
1st Quarter Fiscal 2013 Total
  
 
  
(dollars in thousands)
  
 
  
New
    
Renew
    
Total Dollars
  
Tenant Improvements
  
   
   
 
Commercial Office
  
$
489
    
$
121
    
$
610
  
Commercial Medical
    
373
      
37
      
410
  
Commercial Industrial
    
0
      
5
      
5
  
Commercial Retail
    
3
      
0
      
3
  
Subtotal
  
$
865
    
$
163
    
$
1,028
  
 
                        
Tenant Improvements per square foot
                        
Commercial Office
  
$
14.12
    
$
1.89
    
$
6.18
  
Commercial Medical
    
54.15
      
25.00
      
49.03
  
Commercial Industrial
    
0.00
      
0.52
      
0.52
  
Commercial Retail
    
0.33
      
0.00
      
0.26
  
All Segments
  
$
17.10
    
$
2.09
    
$
8.01
  
 
                        
Leasing Costs
                        
Commercial Office
  
$
264
    
$
108
    
$
372
  
Commercial Medical
    
48
      
4
      
52
  
Commercial Industrial
    
0
      
19
      
19
  
Commercial Retail
    
6
      
3
      
9
  
Subtotal
  
$
318
    
$
134
    
$
452
  
 
                        
Leasing Costs per square foot
                        
Commercial Office
  
$
7.62
    
$
1.68
    
$
3.76
  
Commercial Medical
    
7.05
      
2.85
      
6.31
  
Commercial Industrial
    
0.00
      
1.98
      
1.98
  
Commercial Retail
    
0.62
      
1.21
      
0.74
  
All Segments
  
$
6.29
    
$
1.72
    
$
3.52
  
 
                        
Tenant Improvements and Leasing Costs
                        
Commercial Office
  
$
753
    
$
229
    
$
982
  
Commercial Medical
    
421
      
41
      
462
  
Commercial Industrial
    
0
      
24
      
24
  
Commercial Retail
    
9
      
3
      
12
  
Total
  
$
1,183
    
$
297
    
$
1,480
  
 
                        
Tenant Improvements and Leasing Costs per square foot
                        
Commercial Office
  
$
21.74
    
$
3.57
    
$
9.94
  
Commercial Medical
    
61.20
      
27.85
      
55.34
  
Commercial Industrial
    
0.00
      
2.50
      
2.50
  
Commercial Retail
    
0.95
      
1.21
      
1.00
  
All Segments
  
$
23.38
    
$
3.82
    
$
11.53
  

20



 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
MULTI-FAMILY RESIDENTIAL SUMMARY

 
  
Three Months Ended
  
 
  
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
    
07/31/2011
  
Number of Units
    
10,143
      
9,161
      
8,921
      
8,885
      
8,664
  
Average Investment Per Unit
                                        
Stabilized
  
$
57,255
    
$
56,983
    
$
56,955
    
$
56,615
    
$
56,151
  
Non-Stabilized
    
83,113
      
81,277
      
75,465
      
65,675
      
55,365
  
 
  
$
60,724
    
$
58,518
    
$
57,762
    
$
56,926
    
$
56,140
  
 
                                        
Average Scheduled Rent(1) per Unit
                                        
Stabilized
  
$
721
    
$
713
    
$
711
    
$
705
    
$
700
  
Non-Stabilized
    
889
      
887
      
841
      
949
      
785
  
 
  
$
743
    
$
724
    
$
716
    
$
714
    
$
701
  
 
                                        
Total Receipts per Unit
                                        
Stabilized
  
$
711
    
$
704
    
$
700
    
$
696
    
$
674
  
Non-Stabilized
    
831
      
831
      
826
      
814
      
793
  
 
  
$
727
    
$
712
    
$
705
    
$
700
    
$
675
  
 
                                        
Total Recurring Capital Expenditures per Unit(1)
                                        
Stabilized
  
$
207
    
$
156
    
$
155
    
$
213
    
$
228
  
Non-Stabilized
    
123
      
119
      
179
      
110
      
320
  
 
  
$
194
    
$
154
    
$
156
    
$
209
    
$
229
  
 
                                        
Physical Occupancy%
                                        
Stabilized
    
93.5
%
    
94.2
%
    
93.9
%
    
95.2
%
    
91.4
%
Non-Stabilized
    
88.7
%
    
86.8
%
    
77.4
%
    
82.2
%
    
97.0
%
 
    
92.8
%
    
93.7
%
    
93.2
%
    
94.6
%
    
91.5
%
 
                                        
Operating Expenses as a % of Scheduled Rent
                                        
Stabilized
    
44.9
%
    
46.4
%
    
45.9
%
    
47.1
%
    
46.3
%
Non-Stabilized
    
34.8
%
    
39.0
%
    
40.5
%
    
36.5
%
    
43.1
%
Total
    
43.3
%
    
45.8
%
    
45.6
%
    
46.6
%
    
46.2
%
(1) See Definitions on page 26.
21


INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
10 LARGEST COMMERCIAL TENANTS – BASED ON ANNUALIZED BASE RENT(1)
as of July 1, 2012

Tenant
Number of
Properties
Average
Remaining
Lease Term
in Months
% of Total
Commercial
Segments'
Minimum
Rents
Aggregate
Rentable
Square Feet
% of Aggregate
Occupied
Square
Feet
Affiliates of Edgewood Vista
32
94
12.4%
1,450,585
13.6%
St. Luke's Hospital of Duluth, Inc.
6
42
3.5%
198,775
1.9%
Fairview Health Services
9
75
3.4%
243,581
2.3%
Applied Underwriters
3
55
2.2%
141,724
1.3%
Affiliates of Siemens USA (NYSE: SI)
2
56
1.6%
112,848
1.1%
HealthEast Care System
1
79
1.6%
114,316
1.1%
Nebraska Orthopedic Hospital
1
200
1.3%
61,758
0.6%
Microsoft (NASDAQ: MSFT)
1
77
1.3%
122,040
1.1%
Arcadis Corporate Services, Inc.
1
48
1.2%
71,430
0.7%
State of Idaho Department of Health and Welfare
2
67
1.1%
103,342
1.0%
Total/Weighted Average
 
80
29.6%
2,620,399
24.7%
(1) See Definitions on page 26.
22



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LEASE EXPIRATIONS
as of July 31, 2012

 
  
(dollars in thousands except average rental rates)
  
Fiscal Year
  
Number of
Leases
    
Rentable
Square Feet
    
% of Rentable
Square Feet
    
Annualized
Rent*
    
Average
Rental
Rate
    
% of
Annualized
Base Rent
  
Commercial Office
  
   
   
   
   
   
 
2013
    
35
      
255,473
      
6.7
%
  
$
3,474
    
$
13.60
      
6.3
%
2014
    
57
      
547,111
      
14.4
%
    
6,919
      
12.65
      
12.6
%
2015
    
74
      
506,293
      
13.4
%
    
7,333
      
14.48
      
13.3
%
2016
    
42
      
559,085
      
14.8
%
    
8,854
      
15.84
      
16.1
%
2017
    
44
      
827,259
      
21.8
%
    
13,828
      
16.72
      
25.2
%
2018 and thereafter
    
47
      
1,093,541
      
28.9
%
    
14,565
      
13.32
      
26.5
%
 
    
299
      
3,788,762
      
100.0
%
  
$
54,973
    
$
14.51
      
100.0
%
 
                                                
Commercial Medical
                                                
2013
    
19
      
111,711
      
4.0
%
  
$
2,335
    
$
20.90
      
4.9
%
2014
    
24
      
395,597
      
14.3
%
    
6,856
      
17.33
      
14.4
%
2015
    
15
      
59,362
      
2.2
%
    
1,428
      
24.06
      
3.0
%
2016
    
24
      
175,113
      
6.3
%
    
3,590
      
20.50
      
7.6
%
2017
    
20
      
133,237
      
4.8
%
    
2,812
      
21.11
      
5.9
%
2018 and thereafter
    
85
      
1,893,228
      
68.4
%
    
30,475
      
16.10
      
64.2
%
 
    
187
      
2,768,248
      
100.0
%
  
$
47,496
    
$
17.16
      
100.0
%
 
                                                
Commercial Industrial
                                                
2013
    
4
      
193,988
      
7.5
%
  
$
505
    
$
2.60
      
4.9
%
2014
    
10
      
321,629
      
12.5
%
    
1,217
      
3.78
      
11.8
%
2015
    
6
      
344,493
      
13.4
%
    
1,398
      
4.06
      
13.5
%
2016
    
9
      
689,564
      
26.7
%
    
2,976
      
4.32
      
28.8
%
2017
    
5
      
311,141
      
12.1
%
    
1,175
      
3.78
      
11.4
%
2018 and thereafter
    
7
      
716,095
      
27.8
%
    
3,060
      
4.27
      
29.6
%
 
    
41
      
2,576,910
      
100.0
%
  
$
10,331
    
$
4.01
      
100.0
%
 
                                                
Commercial Retail
                                                
2013
    
23
      
125,275
      
10.8
%
  
$
801
    
$
6.39
      
8.2
%
2014
    
41
      
209,011
      
18.0
%
    
1,320
      
6.32
      
13.6
%
2015
    
34
      
296,123
      
25.5
%
    
2,269
      
7.66
      
23.4
%
2016
    
23
      
97,266
      
8.4
%
    
1,160
      
11.93
      
11.9
%
2017
    
22
      
102,084
      
8.8
%
    
1,094
      
10.72
      
11.3
%
2018 and thereafter
    
24
      
331,120
      
28.5
%
    
3,070
      
9.27
      
31.6
%
 
    
167
      
1,160,879
      
100.0
%
  
$
9,714
    
$
8.37
      
100.0
%
 
                                                
Commercial Total
                                                
2013
    
81
      
686,447
      
6.7
%
  
$
7,115
    
$
10.36
      
5.8
%
2014
    
132
      
1,473,348
      
14.3
%
    
16,312
      
11.07
      
13.3
%
2015
    
129
      
1,206,271
      
11.7
%
    
12,428
      
10.30
      
10.2
%
2016
    
98
      
1,521,028
      
14.8
%
    
16,580
      
10.90
      
13.5
%
2017
    
91
      
1,373,721
      
13.3
%
    
18,909
      
13.76
      
15.4
%
2018 and thereafter
    
163
      
4,033,984
      
39.2
%
    
51,170
      
12.68
      
41.8
%
 
    
694
      
10,294,799
      
100.0
%
  
$
122,514
    
$
11.90
      
100.0
%
* Annualized Base Rent is monthly scheduled rent as of July 1, 2012 (cash basis), multiplied by 12.
23


INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
FISCAL 2013 ACQUISITION SUMMARY
as of July 31, 2012
($'s in thousands)
 
 
Property
Location
Segment Type
Acquisition
Date
  
Square
Feet/Units
    
Leased
Percentage
At
Acquisition
    
July 31,
2012 Leased
Percentage
    
Acquisition
Cost
  
 
 
 
 
  
   
   
   
 
Villa West
Topeka, KS
Multi-Family Residential
May 8, 2012
    
308
      
98.1
%
    
94.8
%
  
$
17,650
  
Colony
Lincoln, NE
Multi-Family Residential
June 4, 2012
    
232
      
98.3
%
    
99.1
%
    
17,500
  
Lakeside Village
Lincoln, NE
Multi-Family Residential
June 4, 2012
    
208
      
86.5
%
    
83.7
%
    
17,250
  
Quarry Ridge II(1)
Rochester, MN
Multi-Family Residential
June 29, 2012
    
161
      
33.3
%
    
50.0
%
    
3,543
  
Williston Garden Buildings 3 and 4(2)
Williston, ND
Multi-Family Residential
July 31, 2012
    
72
      
98.6
%
    
98.6
%
    
4,158
  
Total Square Feet
 0 $ 60,101
Total Units
 981
(1)
Development property placed in service June 29, 2012. Additional costs paid in fiscal years 2012 and 2011, and land acquired in fiscal year 2007, totaled $13.0 million, for a total project cost at July 31, 2012 of $16.5 million.
(2)
Development property placed in service July 31, 2012. Buildings 1 and 2 were placed in service in fiscal year 2012. Additional costs paid in fiscal year 2012 totaled $12.1 million, for a total project cost at July 31, 2012 of $16.2 million.
24



INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
FISCAL 2013 DEVELOPMENT IN PROGESS SUMMARY
as of July 31, 2012
($'s in thousands)

Property and Location
Total Rentable
Square Feet
or # of Units
  
Percentage
Leased
or Committed
    
Anticipated
Total
Cost
    
Cost to
Date
  
Anticipated
Construction
Completion
Spring Wind - Laramie, WY
29 assisted living units and 16 memory care units
    
100
%
    
3,800
      
3,107
  
2nd Quarter Fiscal 2013
Industrial-Office Build-to-Suit - Minot, ND
28,000 sf. commercial industrial building
    
100
%
    
5,799
      
3,647
  
2nd Quarter Fiscal 2013
Jamestown Medical Office Building – Jamestown, ND(1)
45,000 square foot medical office building
    
88
%
    
9,200
      
3,022
  
3rd Quarter Fiscal 2013
Multi-Family Conversion - Minot, ND
Convert 15,000 sf. commercial office to 20 multi-family residential units
    
0
%
    
3,000
      
647
  
4th Quarter Fiscal 2013
Branch Bank Building – Minot, ND
3,700 square foot commercial office building
    
100
%
    
1,700
      
75
  
4th Quarter Fiscal 2013
 
 
          
$
23,499
    
$
10,498
  
 
(1)
The Company is a 51% partner in the joint venture entity constructing this property; the anticipated total cost amount given is the total cost to the joint venture entity.
25


Definitions
July 31, 2012
Adjusted funds from operations (AFFO) is calculated by subtracting from Funds from operations (FFO) (1) tenant improvements and leasing commissions and recurring capital expenditures that are capitalized and amortized and are necessary to maintain our properties and revenue stream and (2) straight line rents, then adding (3) non-real estate depreciation and amortization.  AFFO is included herein because we consider it to be a measure of a REIT's ability to incur and service debt and to pay distributions to its shareholders. AFFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.
Annualized base rent (ABR) is calculated as monthly base rent (cash basis) per the lease, as of the reporting period, multiplied by 12.
Debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet plus the market value of shares outstanding at the end of the period.
Debt service coverage ratio is computed by dividing earnings before interest income and expense, depreciation, amortization and gain on sale of real estate by interest expense and principal amortization.
EBITDA is earnings before interest, taxes, depreciation and amortization. We consider EBITDA to be an appropriate supplemental performance measure because it eliminates depreciation, interest and the gain/loss from property dispositions, which permits investors to view income from operations without the effect of non-cash depreciation or the cost of debt; however, EBIDTA as we calculate it has not been adjusted for the effect of nonrecurring events such as asset impairment and gain/loss on involuntary conversion.  EBITDA is a non-GAAP measure. EBITDA as calculated by us is not comparable to EBITDA reported by other REITs that do not define EBITDA exactly as we do.
Funds from operations (FFO) - The National Association of Real Estate Investment Trusts, Inc. (NAREIT) defines FFO as "net income (computed in accordance with generally accepted accounting principles, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis." In addition, NAREIT recently clarified its computation of FFO to exclude impairment charges for all periods presented. FFO is a non-GAAP measure1.  We consider FFO, which is a standard supplemental measure for equity real estate investment trusts, helpful to investors because it facilitates an understanding of the operating performance of properties without giving effect to impairment write-downs and to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time.  Since real estate values instead historically rise or fall with market conditions, we believe that FFO provides investors and management with a more accurate indication of our financial and operating results.
Net Operating Income is total real estate revenues less real estate expenses (which consist of utilities, maintenance, real estate taxes, insurance and property management expenses).
Payout ratio (FFO per share and unit basis) - The ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual FFO per share and unit.
Ratio of earnings to fixed charges - 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 plus fixed charges and preferred distributions, less adjustments for noncontrolling interests - consolidated real estate entities, capitalized interest and preferred distributions. Fixed charges consist of mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest.
Ratio of earnings to combined fixed charges and preferred distributions - The ratio of earnings to combined fixed charges and preferred distributions is computed by dividing earnings by combined fixed charges and preferred distributions. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests - consolidated real estate entities, capitalized interest and preferred distributions. Combined fixed charges and preferred distributions consist of fixed charges (mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest) and preferred distributions.
Recurring capital expenditures are expenditures (excluding capital expenditures recoverable from tenants) made on a regular or recurring basis to maintain a property's competitive position within its market, generally with a depreciable life of 5 to 12 years, but excluding (a) capital expenditures made in the year of acquisition and the following two years (i.e., excluding capital expenditures on non-stabilized properties), (b) improvements associated with the expansion or re-development of a building, (c) renovations to a building which change the underlying classification of the building (for example, from industrial to office or Class C office to Class A office) or (d) capital improvements that represent the addition of something new to a property, rather than the replacement of an existing item.
Scheduled rent revenue is the total possible revenue from all leasable units and square footage, with occupied space valued at contract rates pursuant to leases and vacant units or square footage at market rates.
Stabilized properties are those properties owned for the entirety of both periods being compared, and, in the case of development or re-development properties, which have achieved a target level of occupancy.
26

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