CENTERSPACE - FORM 8-K - EX-99.2 - EXHIBIT 99.2 SUPPLEMENTAL OPERATING AND FINANCIAL DATA - March 12, 2013

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8-K - IRET FORM 8-K CURRENT REPORT - CENTERSPACEiretform8k-03122013.htm
EX-99.1 - EXHIBIT 99.1 EARNINGS RELEASE - CENTERSPACEiretexhibit991-03122013.htm

Exhibit 99.2



Third Quarter Fiscal 2013
Supplemental Operating and Financial Data
for the Quarter Ended January 31, 2013

 
 
 
 
 
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
January 31, 2013

 
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                                                                                                                                                                                                  
16-19
Stabilized Properties and Overall Physical Occupancy Levels by Segment                                                                                                                                                                                                  
20
 
 
Tenant Analysis
 
Commercial Leasing Summary                                                                                                                                                                                                  
21-22
Multi-Family Residential Summary                                                                                                                                                                                                  
23
10 Largest Commercial Tenants - Based on Annualized Base Rent                                                                                                                                                                                                  
24
Lease Expirations                                                                                                                                                                                                  
25
 
 
Growth and Strategy
 
Acquisition Summary                                                                                                                                                                                                  
26
Development Summary                                                                                                                                                                                                  
27
 
 
Definitions                                                                                                                                                                                                        
28
-


Company Background and Highlights
Third 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 third quarter of fiscal year 2013, the Company closed on its acquisitions of:
·
two parcels of vacant land in Rochester, Minnesota, acquired for possible future development, of approximately 20.1 acres and 3.8 acres, respectively, for purchase prices of $775,000 and $275,000, paid in cash;
·
an approximately 48.4 acre parcel of vacant land in Grand Forks, North Dakota, acquired for possible future development, for  a purchase price of approximately $4.3 million, of which approximately $2.3 million was paid in cash and the remainder in limited partnership units of the Operating Partnership valued at $2.0 million;
·
an approximately 51% interest in a joint venture entity currently constructing the Southgate Apartments project in Minot, North Dakota, which project is expected to be completed in two phases, with a total of approximately 341 units, for a currently-estimated total cost of $52.2 million; and
·
a parcel of vacant land in Minot, North Dakota, acquired for possible future development for a purchase price of approximately $1.9 million; the approximately 2.2 acre parcel is adjacent to the Southgate multi-family residential project currently under development.
During the third quarter of fiscal year 2013, the Company placed in service an additional 29 assisted living units, and completed the conversion of 16 existing units to memory care units, at the Company's Spring Wind senior housing facility in Laramie Wyoming; completed an approximately 45,000 square foot medical office building in Jamestown, North Dakota; and completed an approximately 28,000 square foot industrial building in Minot, North Dakota.
During the third quarter of fiscal year 2013, the Company sold one multi-family residential property, for a sales price of approximately $2.0 million.
Effective December 18, 2012, the Company transferred the listing of its common shares and Series A preferred shares from the NASDAQ Global Select Market to the New York Stock Exchange, where the Company's Series B preferred shares were already trading.
IRET's multi-family residential portfolio continued its strong performance in the third quarter of fiscal year 2013, with real estate revenue and physical occupancy levels increasing compared to the year-earlier period. However, despite indications of an increase in tenant interest in commercial office space, results in the commercial office segment continue to be affected by low occupancy levels. The Company believes that increases in occupancy levels in its commercial office segment will depend on a strengthened and sustained economic recovery.
In the third quarter of fiscal year 2013, IRET paid its 167th consecutive quarterly distribution. The $0.1300 per share/unit distribution was payable on January 15, 2013. Subsequent to the end of the third quarter of fiscal year 2013, on March 6, 2013, the Company's Board of Trustees declared a regular quarterly distribution of $0.1300 per share and unit on the Company's common shares of beneficial interest and the limited partnership units of IRET Properties, payable April 1, 2013 to common shareholders and unitholders of record on March 18, 2013. Also on March 6, 2013, the Company's Board of Trustees' declared a distribution of $0.5156 per share on the Company's Series A preferred shares of beneficial interest, payable April 1, 2013 to Series A preferred shareholders of record on March 18, 2013, and declared a distribution of $0.4968 per share on the Company's Series B preferred shares of beneficial interest, payable April 1, 2013 to Series B preferred shareholders of record on March 18, 2013.
As of January 31, 2013, IRET owns a diversified portfolio of 269 properties consisting of 85 multi-family residential properties, 68 commercial office properties, 66 commercial medical properties (including senior housing), 20 commercial industrial properties and 30 commercial retail properties.  IRET's common shares are publicly traded on the New York Stock Exchange (NYSE: IRET).





Company Snapshot
(as of January 31, 2013)
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)                                                                                          
12.4 million
Total Units
 
(multi-family residential properties)                                                                                          
9,924
Common Shares Outstanding (thousands)                                                                                              
94,386
Limited Partnership Units Outstanding (thousands)
21,489
Common Share Distribution - Quarter/Annualized
$0.13/$0.52
Dividend Yield                                                                                              
5.6%
Total Capitalization (see p.14 for detail)                                                                                              
$2.3 billion


Investor Information
Board of Trustees
Jeffrey L. Miller                                                            
Trustee and Chairman
Stephen L. Stenehjem                                                            
Trustee
John D. Stewart                                                            
Trustee, Vice Chairman, and 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 J. Hall                                                            
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:  NYSE
Investor Relations:
Lindsey Knoop-Anderson
landerson@iret.com





Common Share Data (NYSE: IRET)*
 
3rd Quarter
Fiscal Year 2013
2nd Quarter
Fiscal Year 2013
1st Quarter
Fiscal Year 2013
4th Quarter
Fiscal Year 2012
3rd Quarter
Fiscal Year 2012
High Closing Price
$
9.40
$
8.49
$
8.31
$
7.97
$
7.64
Low Closing Price
$
7.73
$
7.92
$
7.05
$
7.22
$
6.89
Average Closing Price
$
8.70
$
8.25
$
7.57
$
7.56
$
7.27
Closing Price at end of quarter
$
9.36
$
8.42
$
8.16
$
7.22
$
7.42
Common Share Distributions—annualized
$
0.520
$
0.520
$
0.520
$
0.520
$
0.520
Closing Dividend Yield - annualized
 
5.6%
 
6.2%
 
6.4%
 
7.2%
 
7.0%
Closing common shares outstanding (thousands)
 
94,386
 
93,161
 
91,812
 
89,474
 
85,744
Closing limited partnership units outstanding (thousands)
 
21,489
 
21,336
 
21,171
 
20,332
 
19,596
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)
$
1,084,590
$
964,065
$
921,941
$
792,799
$
781,623

*Effective December 18, 2012, IRET transferred the listing of its common shares and Series A preferred shares to the New York Stock Exchange from the NASDAQ Global Select Market.

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.
Third Quarter Fiscal 2013 Development Projects Placed in Service
 
Minot IPS
6500 2nd Ave SE
Minot, ND 58701
Jamestown Medical Office Building
2428 20th Street
Jamestown, ND 58401
 
 
 
 
 
 






Property Cost by Segment – Third 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.







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

 
  
1/31/2013
    
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
  
ASSETS
  
   
   
   
   
 
Real estate investments
  
   
   
   
   
 
Property owned
  
$
2,007,832
    
$
1,983,978
    
$
1,979,099
    
$
1,892,009
    
$
1,861,321
  
Less accumulated depreciation
    
(408,400
)
    
(394,256
)
    
(387,286
)
    
(373,490
)
    
(364,190
)
 
    
1,599,432
      
1,589,722
      
1,591,813
      
1,518,519
      
1,497,131
  
Development in progress
    
20,127
      
23,218
      
10,498
      
27,599
      
22,281
  
Unimproved land
    
18,879
      
11,670
      
10,990
      
10,990
      
6,390
  
Total real estate investments
    
1,638,438
      
1,624,610
      
1,613,301
      
1,557,108
      
1,525,802
  
Real estate held for sale
    
733
      
1,844
      
1,131
      
2,067
      
0
  
Cash and cash equivalents
    
62,302
      
84,258
      
37,002
      
39,989
      
35,502
  
Other investments
    
638
      
637
      
635
      
634
      
633
  
Receivable arising from straight-lining of rents, net of allowance
    
25,471
      
24,895
      
24,127
      
23,273
      
21,965
  
Accounts receivable, net of allowance
    
3,560
      
2,854
      
6,448
      
7,052
      
3,977
  
Real estate deposits
    
165
      
55
      
4
      
263
      
578
  
Prepaid and other assets
    
5,545
      
2,101
      
3,070
      
3,703
      
4,107
  
Intangible assets, net of accumulated amortization
    
41,009
      
42,281
      
43,796
      
44,588
      
49,055
  
Tax, insurance, and other escrow
    
13,306
      
12,177
      
13,161
      
11,669
      
11,427
  
Property and equipment, net of accumulated depreciation
    
1,288
      
1,351
      
1,332
      
1,454
      
1,464
  
Goodwill
    
1,106
      
1,110
      
1,120
      
1,120
      
1,120
  
Deferred charges and leasing costs, net of accumulated amortization
    
22,513
      
21,164
      
21,932
      
21,447
      
22,014
  
TOTAL ASSETS
  
$
1,816,074
    
$
1,819,337
    
$
1,767,059
    
$
1,714,367
    
$
1,677,644
  
 
                                        
LIABILITIES AND EQUITY
                                        
LIABILITIES
                                        
Accounts payable and accrued expenses
  
$
44,540
    
$
38,762
    
$
41,084
    
$
47,403
    
$
43,439
  
Revolving line of credit
    
10,000
      
10,000
      
44,500
      
39,000
      
49,000
  
Mortgages payable
    
1,041,623
      
1,045,197
      
1,080,655
      
1,048,689
      
1,038,717
  
Other
    
21,632
      
32,889
      
25,094
      
14,012
      
6,326
  
TOTAL LIABILITIES
    
1,117,795
      
1,126,848
      
1,191,333
      
1,149,104
      
1,137,482
  
 
                                        
EQUITY
                                        
Investors Real Estate Trust shareholders' equity
                                        
Series A Preferred Shares of Beneficial Interest
    
27,317
      
27,317
      
27,317
      
27,317
      
27,317
  
Series B Preferred Shares of Beneficial Interest
    
111,357
      
111,357
      
0
      
0
      
0
  
Common Shares of Beneficial Interest
    
721,742
      
711,880
      
701,431
      
684,049
      
657,304
  
Accumulated distributions in excess of net income
    
(305,145
)
    
(295,396
)
    
(289,025
)
    
(278,377
)
    
(269,942
)
Total Investors Real Estate Trust shareholders' equity
    
555,271
      
555,158
      
439,723
      
432,989
      
414,679
  
Noncontrolling interests – Operating Partnership
    
121,940
      
122,357
      
122,373
      
118,710
      
114,852
  
Noncontrolling interests – consolidated real estate entities
    
21,068
      
14,974
      
13,630
      
13,564
      
10,631
  
Total equity
    
698,279
      
692,489
      
575,726
      
565,263
      
540,162
  
TOTAL LIABILITIES AND EQUITY
  
$
1,816,074
    
$
1,819,337
    
$
1,767,059
    
$
1,714,367
    
$
1,677,644
  






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

 
  
Nine Months Ended
    
Three Months Ended
  
OPERATING RESULTS
  
1/31/2013
    
1/31/2012
    
1/31/2013
    
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
  
Real estate revenue
  
$
193,160
    
$
179,910
    
$
66,231
    
$
64,943
    
$
61,986
    
$
60,188
    
$
60,546
  
Real estate expenses
    
76,020
      
74,759
      
26,375
      
24,804
      
24,841
      
22,634
      
24,590
  
Gain on involuntary conversion
    
2,263
      
0
      
0
      
2,263
      
0
      
274
      
0
  
Net operating income
    
119,403
      
105,151
      
39,856
      
42,402
      
37,145
      
37,828
      
35,956
  
Depreciation/amortization
    
(49,028
)
    
(44,865
)
    
(16,300
)
    
(16,506
)
    
(16,222
)
    
(15,146
)
    
(15,183
)
Administrative expenses, advisory and trustee services
    
(6,402
)
    
(5,944
)
    
(2,245
)
    
(2,061
)
    
(2,096
)
    
(1,437
)
    
(1,659
)
Other expenses
    
(1,496
)
    
(1,509
)
    
(464
)
    
(513
)
    
(519
)
    
(389
)
    
(359
)
Interest expense
    
(48,448
)
    
(48,389
)
    
(15,725
)
    
(16,300
)
    
(16,423
)
    
(16,333
)
    
(16,411
)
Interest and other income
    
600
      
645
      
255
      
203
      
142
      
141
      
279
  
Income from continuing operations
    
14,629
      
5,089
      
5,377
      
7,225
      
2,027
      
4,664
      
2,623
  
Income (loss) from discontinued operations
    
3,530
      
496
      
776
      
2,785
      
(31
)
    
(543
)
    
(102
)
Net income
  
$
18,159
    
$
5,585
    
$
6,153
    
$
10,010
    
$
1,996
    
$
4,121
    
$
2,521
  
 
                                                        
Net income attributable to noncontrolling interest – Operating Partnership
    
(2,097
)
    
(723
)
    
(556
)
    
(1,290
)
    
(251
)
    
(636
)
    
(351
)
Net income attributable to noncontrolling interests – consolidated real estate entities
    
(547
)
    
(29
)
    
(273
)
    
(208
)
    
(66
)
    
(106
)
    
(43
)
Net income attributable to Investors Real Estate Trust
    
15,515
      
4,833
      
5,324
      
8,512
      
1,679
      
3,379
      
2,127
  
Dividends to preferred shareholders
    
(6,350
)
    
(1,779
)
    
(2,879
)
    
(2,878
)
    
(593
)
    
(593
)
    
(593
)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
  
$
9,165
    
$
3,054
    
$
2,445
    
$
5,634
    
$
1,086
    
$
2,786
    
$
1,534
  
 
                                                        
Per Share Data
                                                        
Earnings per common share from continuing operations – Investors Real Estate Trust – basic & diluted
  
$
.07
    
$
.03
    
$
.02
    
$
.04
    
$
.01
    
$
.04
    
$
.02
  
Earnings (loss) per common share from discontinued operations – Investors Real Estate Trust – basic & diluted
    
.03
      
.01
      
.01
      
.02
      
.00
      
(.01
)
    
.00
  
Net income per common share – basic & diluted
  
$
.10
    
$
.04
    
$
.03
    
$
.06
    
$
.01
    
$
.03
    
$
.02
  
 
                                                        
Percentage of Revenues
                                                        
Real estate expenses
    
39.4
%
    
41.6
%
    
39.8
%
    
38.2
%
    
40.1
%
    
37.6
%
    
40.6
%
Depreciation/amortization
    
25.4
%
    
24.9
%
    
24.6
%
    
25.4
%
    
26.2
%
    
25.2
%
    
25.1
%
General and administrative
    
3.3
%
    
3.3
%
    
3.4
%
    
3.2
%
    
3.4
%
    
2.4
%
    
2.7
%
Interest
    
25.1
%
    
26.9
%
    
23.7
%
    
25.1
%
    
26.5
%
    
27.1
%
    
27.1
%
Income (loss) from discontinued operations
    
1.8
%
    
0.3
%
    
1.2
%
    
4.3
%
    
(0.1
)%
    
(0.9
)%
    
(0.2
)%
Net income
    
9.4
%
    
3.1
%
    
9.3
%
    
15.4
%
    
3.2
%
    
6.8
%
    
4.2
%
 
                                                        
Ratios
                                                        
EBITDA(1)/Interest expense
    
2.23
x
    
2.02
x
    
2.34
x
    
2.28
x
    
2.09
x
    
2.17
x
    
2.07
x
EBITDA(1)/Interest expense plus preferred distributions
    
1.98
x
    
1.95
x
    
1.98
x
    
1.95
x
    
2.02
x
    
2.09
x
    
2.00
x
(1) See Definitions on page 28.  EBITDA is a non-GAAP measure; see page 9 for a reconciliation of EBITDA to net income.





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

 
  
Nine Months Ended
    
Three Months Ended
  
 
  
1/31/2013
    
1/31/2012
    
1/31/2013
    
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
  
Funds From Operations(1)
  
   
   
   
   
   
   
 
Net income attributable to Investors Real Estate Trust
  
$
15,515
    
$
4,833
    
$
5,324
    
$
8,512
    
$
1,679
    
$
3,379
    
$
2,127
  
Less dividends to preferred shareholders
    
(6,350
)
    
(1,779
)
    
(2,879
)
    
(2,878
)
    
(593
)
    
(593
)
    
(593
)
Net income available to common shareholders
    
9,165
      
3,054
      
2,445
      
5,634
      
1,086
      
2,786
      
1,534
  
Adjustments:
                                                        
Noncontrolling interests – Operating Partnership
    
2,097
      
723
      
556
      
1,290
      
251
      
636
      
351
  
Depreciation and amortization
    
48,971
      
44,892
      
16,263
      
16,520
      
16,187
      
15,165
      
15,179
  
Impairment of real estate investments
    
0
      
135
      
0
      
0
      
0
      
293
      
135
  
(Gain) loss on depreciable property sales
  
$
(3,452
)
  
$
(589
)
    
(772
)
    
(2,753
)
    
73
      
240
      
0
  
Funds from operations applicable to common shares and Units
    
56,781
      
48,215
    
$
18,492
    
$
20,691
    
$
17,597
    
$
19,120
    
$
17,199
  
 
                                                        
FFO per share and unit - basic and diluted
  
$
0.50
    
$
0.47
    
$
0.16
    
$
0.18
    
$
0.16
    
$
0.18
    
$
0.16
  
 
                                                        
Adjusted funds from operations(1)
                                                        
Funds from operations applicable to common shares and Units
  
$
56,781
    
$
48,215
    
$
18,492
    
$
20,691
    
$
17,597
    
$
19,120
    
$
17,199
  
Adjustments:
                                                        
Tenant improvements at stabilized properties
    
(6,747
)
    
(5,463
)
    
(3,156
)
    
(1,385
)
    
(2,206
)
    
(4,846
)
    
(2,007
)
Leasing commissions at stabilized properties
    
(4,517
)
    
(3,468
)
    
(2,231
)
    
(951
)
    
(1,335
)
    
(807
)
    
(1,589
)
Recurring capital expenditures(1)
    
(5,303
)
    
(5,252
)
    
(1,614
)
    
(1,893
)
    
(1,796
)
    
(1,451
)
    
(1,411
)
Straight-line rents
    
(2,208
)
    
(3,054
)
    
(576
)
    
(768
)
    
(864
)
    
(1,330
)
    
(1,059
)
Non-real estate depreciation
    
299
      
331
      
80
      
83
      
136
      
78
      
114
  
Gain on involuntary conversion
    
(2,263
)
    
0
      
0
      
(2,263
)
    
0
      
(274
)
    
0
  
Adjusted funds from operations applicable to common shares and Units
  
$
36,042
    
$
31,309
    
$
10,995
    
$
13,514
    
$
11,532
    
$
10,490
    
$
11,247
  
 
                                                        
AFFO per share and unit - basic and diluted
    
0.32
      
0.31
      
0.10
      
0.12
      
0.10
      
0.10
      
0.11
  
 
                                                        
Weighted average shares and units
    
113,358
      
102,176
      
115,207
      
113,690
      
111,292
      
107,316
      
103,935
  
(1)
See Definitions on page 28.






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

 
  
Nine Months Ended
    
Three Months Ended
  
 
  
1/31/2013
    
1/31/2012
    
1/31/2013
    
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
  
EBITDA(1)
  
   
   
   
   
   
   
 
Net income attributable to Investors Real Estate Trust
  
$
15,515
    
$
4,833
    
$
5,324
    
$
8,512
    
$
1,679
    
$
3,379
    
$
2,127
  
Adjustments:
                                                        
Noncontrolling interests – Operating Partnership
    
2,097
      
723
      
556
      
1,290
      
251
      
636
      
351
  
Income before noncontrolling interests – Operating Partnership
    
17,612
      
5,556
      
5,880
      
9,802
      
1,930
      
4,015
      
2,478
  
Add:
                                                        
Interest
    
48,617
      
48,776
      
15,731
      
16,369
      
16,517
      
16,454
      
16,533
  
Depreciation/amortization related to real estate investments
    
46,716
      
42,718
      
15,506
      
15,757
      
15,453
      
14,390
      
14,359
  
Amortization related to non-real estate investments
    
2,426
      
2,395
      
794
      
799
      
833
      
821
      
903
  
Amortization related to real estate revenues(2)
    
126
      
111
      
43
      
46
      
37
      
30
      
31
  
Less:
                                                        
Interest income
    
(176
)
    
(115
)
    
(70
)
    
(88
)
    
(18
)
    
(33
)
    
(25
)
Gain on sale of real estate, land and other investments
    
(3,452
)
    
(589
)
    
(772
)
    
(2,753
)
    
73
      
240
      
0
  
Gain on involuntary conversion
    
(2,263
)
    
0
      
0
      
(2,263
)
    
0
      
(274
)
    
0
  
EBITDA
  
$
109,606
    
$
98,852
    
$
37,112
    
$
37,669
    
$
34,825
    
$
35,643
    
$
34,279
  
(1) Definitions on page 28.
(2) Included in real estate revenue in the Statement of Operations.






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

 
 
  
Future Maturities of Mortgage Debt
  
Fiscal Year
  
Fixed Debt
    
Variable Debt
    
Total Debt
    
Weighted
Average(1)
    
% of
Total Debt
  
2013
  
$
2,907
    
$
0
    
$
2,907
      
5.29
%
    
0.3
%
2014
    
36,263
      
618
      
36,881
      
5.40
%
    
3.6
%
2015
    
73,567
      
17,209
      
90,776
      
5.47
%
    
8.7
%
2016
    
76,589
      
0
      
76,589
      
5.55
%
    
7.4
%
2017
    
187,308
      
0
      
187,308
      
6.14
%
    
18.0
%
2018
    
67,498
      
13,620
      
81,118
      
5.59
%
    
7.8
%
2019
    
96,558
      
5,609
      
102,167
      
5.90
%
    
9.8
%
2020
    
123,367
      
0
      
123,367
      
5.90
%
    
11.8
%
2021
    
125,527
      
0
      
125,527
      
5.35
%
    
12.0
%
2022
    
135,932
      
0
      
135,932
      
5.62
%
    
13.0
%
Thereafter
    
79,051
      
0
      
79,051
      
4.76
%
    
7.6
%
Total maturities
  
$
1,004,567
    
$
37,056
    
$
1,041,623
      
5.65
%
    
100.0
%
(1)
Weighted average interest rate of debt that matures in fiscal year.
 
1/31/2013
10/31/2012
07/31/2012
04/30/2012
01/31/2012
Balances Outstanding
 
 
 
 
 
 
 
 
 
 
Mortgage
 
 
 
 
 
 
 
 
 
 
Fixed rate
$
1,004,567
$
1,021,661
$
1,064,564
$
1,032,543
$
1,028,198
Variable rate
 
37,056
 
23,536
 
16,091
 
16,146
 
10,519
Mortgage total
$
1,041,623
$
1,045,197
$
1,080,655
$
1,048,689
$
1,038,717
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Interest Rates
 
 
 
 
 
 
 
 
 
 
Secured
 
5.65%
 
5.66%
 
5.72%
 
5.78%
 
5.84%





INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LONG-TERM MORTGAGE DEBT* DETAIL AS OF JANUARY 31, 2013
(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
 
$
2,907
$
0
$
0
$
0
$
0
$
2,907
 Quarry Ridge - Rochester, MN
10/1/2013
 
 
0
 
11,672
 
0
 
0
 
0
 
11,672
 East Park - Sioux Falls, SD
12/1/2013
 
 
0
 
1,468
 
0
 
0
 
0
 
1,468
 Sycamore Village - Sioux Falls, SD
12/1/2013
 
 
0
 
826
 
0
 
0
 
0
 
826
 Evergreen II - Isanti, MN
11/1/2014
 
 
0
 
0
 
2,157
 
0
 
0
 
2,157
 Campus Center - St Cloud, MN
6/1/2015
 
 
0
 
0
 
0
 
1,298
 
0
 
1,298
 Campus Knoll - St Cloud, MN
6/1/2015
 
 
0
 
0
 
0
 
865
 
0
 
865
 Landmark - Grand Forks, ND
8/24/2015
 
 
0
 
0
 
0
 
1,715
 
0
 
1,715
 Regency Park Estates - St Cloud, MN
1/1/2016
 
 
0
 
0
 
0
 
7,001
 
0
 
7,001
 Summary of Debt due after Fiscal 2016
 
 
 
0
 
0
 
0
 
0
 
328,512
 
328,512
Sub-Total Multi-Family Residential
 
 
$
2,907
$
13,966
$
2,157
$
10,879
$
328,512
$
358,421
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Whitewater Plaza - Minnetonka, MN
3/1/2014
 
 
0
 
2,536
 
0
 
0
 
0
 
2,536
 Whitewater Plaza - Minnetonka, MN
3/1/2014
 
 
0
 
1,314
 
0
 
0
 
0
 
1,314
 Viromed - Eden Prairie, MN
4/1/2014
 
 
0
 
401
 
0
 
0
 
0
 
401
 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
 
7,197
 
0
 
0
 
7,197
 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
 
1,729
 
0
 
0
 
1,729
 Plymouth IV - Plymouth, MN
8/8/2014
 
 
0
 
0
 
3,189
 
0
 
0
 
3,189
 Plymouth V - Plymouth, MN
8/8/2014
 
 
0
 
0
 
3,726
 
0
 
0
 
3,726
 Plaza VII - Boise, ID
9/1/2014
 
 
0
 
0
 
1,008
 
0
 
0
 
1,008
 Crosstown Centre - Eden Prairie, MN
12/1/2014
 
 
0
 
0
 
3,333
 
0
 
0
 
3,333
 Crosstown Centre - Eden Prairie, MN
12/1/2014
 
 
0
 
0
 
9,999
 
0
 
0
 
9,999
 Northgate I - Maple Grove, MN
12/10/2014
 
 
0
 
0
 
5,208
 
0
 
0
 
5,208
 Plymouth I - Plymouth, MN
12/10/2014
 
 
0
 
0
 
1,167
 
0
 
0
 
1,167
 Plymouth II - Plymouth, MN
12/10/2014
 
 
0
 
0
 
1,167
 
0
 
0
 
1,167
 Plymouth III - Plymouth, MN
12/10/2014
 
 
0
 
0
 
1,437
 
0
 
0
 
1,437
 Benton Business Park - Sauk Rapids, MN
1/1/2015
 
 
0
 
0
 
577
 
0
 
0
 
577
 West River Business Park - Waite Park, MN
1/1/2015
 
 
0
 
0
 
577
 
0
 
0
 
577
 Highlands Ranch I - Highlands Ranch, CO
3/1/2015
 
 
0
 
0
 
8,275
 
0
 
0
 
8,275
 Highlands Ranch II - Highlands Ranch, CO
3/1/2015
 
 
0
 
0
 
7,970
 
0
 
0
 
7,970
 US Bank Financial Center - Bloomington, MN
7/1/2015
 
 
0
 
0
 
0
 
13,502
 
0
 
13,502
 Rapid City 900 Concourse Drive - Rapid City, SD
8/1/2015
 
 
0
 
0
 
0
 
1,284
 
0
 
1,284
 Westgate I - Boise, ID
8/1/2015
 
 
0
 
0
 
0
 
1,206
 
0
 
1,206
 Westgate II - Boise, ID
8/1/2015
 
 
0
 
0
 
0
 
2,952
 
0
 
2,952
 Brook Valley I - LaVista, NE
1/1/2016
 
 
0
 
0
 
0
 
1,312
 
0
 
1,312
 Spring Valley IV - Omaha, NE
1/1/2016
 
 
0
 
0
 
0
 
781
 
0
 
781
 Spring Valley V - Omaha, NE
1/1/2016
 
 
0
 
0
 
0
 
859
 
0
 
859
 Spring Valley X - Omaha, NE
1/1/2016
 
 
0
 
0
 
0
 
797
 
0
 
797
 Spring Valley XI - Omaha, NE
1/1/2016
 
 
0
 
0
 
0
 
781
 
0
 
781
 Summary of Debt due after Fiscal 2016
 
 
 
0
 
0
 
0
 
0
 
252,372
 
252,372
Sub-Total Commercial Office
 
 
$
0
$
7,789
$
61,809
$
23,474
$
252,372
$
345,444







 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LONG-TERM MORTGAGE DEBT* DETAIL AS OF JANUARY 31, 2013 (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
 
1,921
 
0
 
0
 
1,921
 Edgewood Vista - East Grand Forks, MN
12/10/2014
 
 
0
 
0
 
2,927
 
0
 
0
 
2,927
 Edgewood Vista - Sioux Falls, SD
12/10/2014
 
 
0
 
0
 
1,100
 
0
 
0
 
1,100
 Garden View Medical - St Paul, MN
8/1/2015
 
 
0
 
0
 
0
 
1,448
 
0
 
1,448
 Edina 6363 France Medical - St Paul, MN
8/6/2015
 
 
0
 
0
 
0
 
10,000
 
0
 
10,000
 2800 Medical Building - Minneapolis, MN
9/1/2015
 
 
0
 
0
 
0
 
5,447
 
0
 
5,447
 2828 Medical Building - Minneapolis, MN
9/1/2015
 
 
0
 
0
 
0
 
8,417
 
0
 
8,417
 Edina 6405 France Medical - Edina, MN
9/1/2015
 
 
0
 
0
 
0
 
8,857
 
0
 
8,857
 Ritchie Medical Plaza - St Paul, MN
9/1/2015
 
 
0
 
0
 
0
 
6,520
 
0
 
6,520
 Summary of Debt due after Fiscal 2016
 
 
 
0
 
0
 
0
 
0
 
209,202
 
209,202
Sub-Total Commercial Medical
 
 
$
0
$
5,400
$
5,948
$
40,689
$
209.202
$
261,239
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Industrial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Bodycote Industrial Building - Eden Prairie, MN
9/1/2013
 
 
0
 
1,064
 
0
 
0
 
0
 
1,064
 Cedar Lake Business Center - St. Louis Park, MN
11/1/2013
 
 
0
 
2,292
 
0
 
0
 
0
 
2,292
 Woodbury 1865 Woodlane - Woodbury, MN
11/1/2013
 
 
0
 
2,696
 
0
 
0
 
0
 
2,696
 Stone Container - Roseville, MN
7/14/2014
 
 
0
 
0
 
4,500
 
0
 
0
 
4,500
 Brooklyn Park 7401 Boone Avenue - Brooklyn Park, MN
9/28/2014
 
 
 
 
 
 
7,458
 
 
 
 
 
7,458
 Clive 2075 NW 94th St - Clive, IA
9/30/2014
 
 
0
 
0
 
2,186
 
0
 
0
 
2,186
 Metal Improvement Company - New Brighton, MN
9/30/2014
 
 
0
 
0
 
1,444
 
0
 
0
 
1,444
 Winsted Industrial Building
9/30/2014
 
 
0
 
0
 
381
 
0
 
0
 
381
 Stone Container - Fargo, ND
12/1/2015
 
 
0
 
0
 
0
 
686
 
0
 
686
 Stone Container - Fargo, ND
12/1/2015
 
 
0
 
0
 
0
 
861
 
0
 
861
 Summary of Debt due after Fiscal 2016
 
 
 
0
 
0
 
0
 
0
 
17,212
 
17,212
Sub-Total Commercial Industrial
 
 
$
0
$
6,052
$
15,969
$
1,547
$
17,212
$
40,780






INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LONG-TERM MORTGAGE DEBT* DETAIL AS OF JANUARY 31, 2013 (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
$
346
$
0
$
0
$
0
$
346
 Burnsville II Strip Center - Burnsville, MN
6/30/2013
 
 
0
 
272
 
0
 
0
 
0
 
272
 St Cloud Westgate - St Cloud, MN
10/10/2013
 
 
0
 
3,056
 
0
 
0
 
0
 
3,056
 Omaha Barnes & Noble - Omaha, NE
6/1/2014
 
 
0
 
0
 
2,454
 
0
 
0
 
2,454
 Jamestown Buffalo Mall - Jamestown, ND
9/1/2014
 
 
0
 
0
 
540
 
0
 
0
 
540
 Fargo Express Center - Fargo, ND
10/1/2014
 
 
0
 
0
 
952
 
0
 
0
 
952
 Lakeville Strip Center - Lakeville, MN
10/1/2014
 
 
0
 
0
 
946
 
0
 
0
 
946
 Summary of Debt due after Fiscal 2016
 
 
 
0
 
0
 
0
 
0
 
27,173
 
27,173
Sub-Total Commercial Retail
 
 
$
0
$
3,674
$
4,892
$
0
$
27,173
$
35,739
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
$
2,907
$
36,881
$
90,775
$
76,589
$
834,471
$
1,041,623
* 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, 2014; as of January 31, 2013, the Company had borrowings of $10.0 million outstanding under this line. Construction loans and other debt totaled $21.5 million as of January 31, 2013.
(1) Totals are principal balances as of January 31, 2013.








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

 
Three Months Ended
 
1/31/2013
10/31/2012
07/31/2012
04/30/2012
01/31/2012
Equity Capitalization
 
 
 
 
 
 
 
 
 
 
Common shares outstanding
 
94,386
 
93,161
 
91,812
 
89,474
 
85,744
Operating partnership (OP) units outstanding
 
21,489
 
21,336
 
21,171
 
20,332
 
19,596
Total common shares and OP units outstanding
 
115,875
 
114,497
 
112,983
 
109,806
 
105,340
Market price per common share (closing price at end of period)
$
9.36
$
8.42
$
8.16
$
7.22
$
7.42
Equity capitalization-common shares and OP units
$
1,084,590
$
964,065
$
921,941
$
792,799
$
781,623
Recorded book value of preferred shares
$
138,674
$
138,674
$
27,317
$
27,317
$
27,317
Total equity capitalization
$
1,223,264
$
1,102,739
$
949,258
$
820,116
$
808,940
 
 
 
 
 
 
 
 
 
 
 
Debt Capitalization
 
 
 
 
 
 
 
 
 
 
Total debt
$
1,073,152
$
1,087,972
$
1,150,123
$
1,101,564
$
1,095,416
Total capitalization
$
2,296,416
$
2,190,711
$
2,099,381
$
1,921,680
$
1,904,356
 
 
 
 
 
 
 
 
 
 
 
Total debt to total capitalization
 
0.47:1
 
0.50:1
 
0.55:1
 
0.57:1
 
0.58:1
 
 
 
 
 
 
 
 
 
 
 


 
Nine Months Ended
Three Months Ended
 
1/31/2013
1/31/2012
1/31/2013
10/31/2012
07/31/2012
04/30/2012
01/31/2012
Earnings to fixed charges(1)
 
1.28x
 
1.10x
 
1.31x
 
1.42x
 
1.11x
 
1.25x
 
1.15x
Earnings to combined fixed charges and preferred distributions(1)
 
1.13x
 
1.06x
 
1.11x
 
1.21x
 
1.07x
 
1.21x
 
1.11x
Debt service coverage ratio(1)
 
1.56x
 
1.40x
 
1.63x
 
1.60x
 
1.45x
 
1.49x
 
1.43x
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common shares and units outstanding at record date
 
115,284
 
103,761
 
115,284
 
113,516
 
111,525
 
106,642
 
103,761
Total common distribution paid
$
44,126
$
43,947
$
14,956
$
14,757
$
14,413
$
13,809
$
13,486
Common distribution per share and unit
$
.3900
$
.4315
$
.1300
$
.1300
$
.1300
$
.1300
$
.1300
Payout ratio (FFO per share and unit basis)(1)
 
78.0%
 
91.8%
 
81.3%
 
72.2%
 
81.3%
 
72.2%
 
81.3%
Payout ratio (AFFO per share and unit basis)(1)
 
121.9%
 
139.2%
 
130.0%
 
108.3%
 
130.0%
 
130.0%
 
118.2%
(1) See Definitions on page 28.





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

 
Stabilized Properties(1)
Stabilized Properties(1)
 
Three Months Ended
January 31,
Nine Months Ended
January 31,
Segment
2013
2012
%
Change
2013
2012
%
Change
Multi-Family Residential
$
9,558
$
9,484
0.8%
$
30,205
$
27,617
9.4%
Commercial Office
 
9,939
 
9,847
0.9%
 
29,024
 
29,272
(0.8)%
Commercial Medical
 
11,037
 
10,516
5.0%
 
31,843
 
32,291
(1.4)%
Commercial Industrial
 
2,705
 
2,518
7.4%
 
7,787
 
7,419
5.0%
Commercial Retail
 
2,358
 
2,253
4.7%
 
6,885
 
6,553
5.1%
 
$
35,597
$
34,618
2.8%
$
105,744
$
103,152
2.5%
(1) See list of properties excluded from stabilized properties on page ii.




INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
NET OPERATING INCOME DETAIL
(in thousands)
 
Three Months Ended January 31, 2013
 
Reporting Segments
 
 
 
Multi-Family
Residential
Commercial
Office
Commercial
Medical
Commercial
Industrial
Commercial
Retail
Corporate and
Other
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
$
18,254
$
19,338
$
14,927
$
3,800
$
3,766
$
0
$
60,085
Non-Stabilized
 
4,813
 
0
 
1,280
 
53
 
0
 
0
 
6,146
Total
 
23,067
 
19,338
 
16,207
 
3,853
 
3,766
 
0
 
66,231
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
 
8,696
 
9,399
 
3,890
 
1,095
 
1,408
 
0
 
24,488
Non-Stabilized
 
1,648
 
0
 
239
 
0
 
0
 
0
 
1,887
Total
 
10,344
 
9,399
 
4,129
 
1,095
 
1,408
 
0
 
26,375
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
 
9,558
 
9,939
 
11,037
 
2,705
 
2,358
 
0
 
35,597
Non-Stabilized
 
3,165
 
0
 
1,041
 
53
 
0
 
0
 
4,259
Net operating income
$
12,723
$
9,939
$
12,078
$
2,758
$
2,358
$
0
$
39,856
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of NOI to net income (loss) available to common shareholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation/amortization
$
(4,586)
$
(5,216)
$
(4,543)
$
(898)
$
(977)
$
(80)
$
(16,300)
Administrative, advisory and trustee fees
 
0
 
0
 
0
 
0
 
0
 
(2,245)
 
(2,245)
Other expenses
 
0
 
0
 
0
 
0
 
0
 
(464)
 
(464)
Interest expense
 
(5,328)
 
(5,269)
 
(3,793)
 
(701)
 
(527)
 
(107)
 
(15,725)
Interest and other income
 
0
 
0
 
0
 
0
 
0
 
255
 
255
Income (loss) from continuing operations
 
2,809
 
(546)
 
3,742
 
1,159
 
854
 
(2,641)
 
5,377
Income from discontinued operations
 
776
 
0
 
0
 
0
 
0
 
0
 
776
Net income (loss)
 
3,585
 
(546)
 
3,742
 
1,159
 
854
 
(2,641)
 
6,153
Net income attributable to noncontrolling interests – Operating Partnership
 
0
 
0
 
0
 
0
 
0
 
(556)
 
(556)
Net income attributable to noncontrolling interests – consolidated real estate entities
 
0
 
0
 
0
 
0
 
0
 
(273)
 
(273)
Net income (loss) attributable to Investors Real Estate Trust
 
3,585
 
(546)
 
3,742
 
1,159
 
854
 
(3,470)
 
5,324
Dividends to preferred shareholders
 
0
 
0
 
0
 
0
 
0
 
(2,879)
 
(2,879)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$
3,585
 
(546)
 
3,742
 
1,159
 
854
$
(6,349)
$
2,445
(1)
See list of properties excluded from stabilized properties on page ii.






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

 
Three Months Ended January 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)
$
17,620
$
18,541
$
15,654
$
3,596
$
3,399
$
0
$
58,810
Non-Stabilized
 
780
 
0
 
956
 
0
 
0
 
0
 
1,736
Total
 
18,400
 
18,541
 
16,610
 
3,596
 
3,399
 
0
 
60,546
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
 
8,136
 
8,694
 
5,138
 
1,078
 
1,146
 
0
 
24,192
Non-Stabilized
 
316
 
0
 
82
 
0
 
0
 
0
 
398
Total
 
8,452
 
8,694
 
5,220
 
1,078
 
1,146
 
0
 
24,590
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
 
9,484
 
9,847
 
10,516
 
2,518
 
2,253
 
0
 
34,618
Non-Stabilized
 
464
 
0
 
874
 
0
 
0
 
0
 
1,338
Net operating income
$
9,948
$
9,847
$
11,390
$
2,518
$
2,253
$
0
$
35,956
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of NOI to net income (loss) available to common shareholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation/amortization
$
(3,586)
$
(5,242)
$
(4,352)
$
(1,016)
$
(882)
$
(105)
$
(15,183)
Administrative, advisory and trustee services
 
0
 
0
 
0
 
0
 
0
 
(1,659)
 
(1,659)
Other expenses
 
0
 
0
 
0
 
0
 
0
 
(359)
 
(359)
Interest expense
 
(4,445)
 
(5,388)
 
(4,186)
 
(910)
 
(738)
 
 
(744)
 
(16,411)
Interest and other income
 
0
 
0
 
0
 
0
 
0
 
279
 
279
Income (loss) from continuing operations
 
1,917
 
(783)
 
2,852
 
592
 
633
 
(2,588)
 
2,623
Income (loss) from discontinued operations
 
57
 
0
 
(24)
 
0
 
(135)
 
0
 
(102)
Net income (loss)
 
1,974
 
(783)
 
2,828
 
592
 
498
 
(2,588)
 
2,521
Net income attributable to noncontrolling interests – Operating Partnership
 
0
 
0
 
0
 
0
 
0
 
(351)
 
(351)
Net income attributable to noncontrolling interests – consolidated real estate entities
 
0
 
0
 
0
 
0
 
0
 
(43)
 
(43)
Net income (loss) attributable to Investors Real Estate Trust
 
1,974
 
(783)
 
2,828
 
592
 
498
 
(2,982)
 
2,127
Dividends to preferred shareholders
 
0
 
0
 
0
 
0
 
0
 
(593)
 
(593)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$
1,974
$
(783)
$
2,828
$
592
$
498
$
(3,575)
$
1,534
(1)
See list of properties excluded from stabilized properties on page ii.




INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
NET OPERATING INCOME DETAIL
(in thousands)
 
Nine Months Ended January 31, 2013
 
Reporting Segments
 
 
 
Multi-Family
Residential
Commercial
Office
Commercial
Medical
Commercial
Industrial
Commercial
Retail
Corporate and
Other
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
$
54,480
$
57,105
$
43,748
$
10,837
$
10,733
$
0
$
176,903
Non-Stabilized
 
12,901
 
0
 
3,303
 
53
 
0
 
0
 
16,257
Total
 
67,381
 
57,105
 
47,051
 
10,890
 
10,733
 
0
 
193,160
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
 
24,275
 
28,081
 
11,905
 
3,050
 
3,848
 
0
 
71,159
Non-Stabilized
 
4,371
 
0
 
490
 
0
 
0
 
0
 
4,861
Total
 
28,646
 
28,081
 
12,395
 
3,050
 
3,848
 
0
 
76,020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on involuntary conversion
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Non-stabilized
 
2,263
 
0
 
0
 
0
 
0
 
0
 
2,263
Total
 
2,263
 
0
 
0
 
0
 
0
 
0
 
2,263
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
 
30,205
 
29,024
 
31,843
 
7,787
 
6,885
 
0
 
105,744
Non-Stabilized
 
10,793
 
0
 
2,813
 
53
 
0
 
0
 
13,659
Net operating income
$
40,998
$
29,024
$
34,656
$
7,840
$
6,885
$
0
$
119,403
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of NOI to net income (loss) available to common shareholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation/amortization
$
(13,943)
$
(15,637)
$
(13,520)
$
(2,747)
$
(2,882)
$
(299)
$
(49,028)
Administrative, advisory and trustee fees
 
0
 
0
 
0
 
0
 
0
 
(6,402)
 
(6,402)
Other expenses
 
0
 
0
 
0
 
0
 
0
 
(1,496)
 
(1,496)
Interest expense
 
(15,372)
 
(15,845)
 
(12,052)
 
(2,428)
 
(1,865)
 
(886)
 
(48,448)
Interest and other income
 
0
 
0
 
0
 
0
 
0
 
600
 
600
Income (loss) from continuing operations
 
11,683
 
(2,458)
 
9,084
 
2,665
 
2,138
 
(8,483)
 
14,629
Income (loss) from discontinued operations
 
3,653
 
0
 
(59)
 
0
 
(64)
 
0
 
3,530
Net income (loss)
 
15,336
 
(2,458)
 
9,025
 
2,665
 
2,074
 
(8,483)
 
18,159
Net income attributable to noncontrolling interests – Operating Partnership
 
0
 
0
 
0
 
0
 
0
 
(2,097)
 
(2,097)
Net income attributable to noncontrolling interests – consolidated real estate entities
 
0
 
0
 
0
 
0
 
0
 
(547)
 
(547)
Net income (loss) attributable to Investors Real Estate Trust
 
15,336
 
(2,458)
 
9,025
 
2,665
 
2,074
 
(11,127)
 
15,515
Dividends to preferred shareholders
 
0
 
0
 
0
 
0
 
0
 
(6,350)
 
(6,350)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$
15,336
$
(2,458)
$
9,025
$
2,665
$
2,074
$
(17,477)
$
9,165
(1)
See list of properties excluded from stabilized properties on page ii.




INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
NET OPERATING INCOME DETAIL
(in thousands)
 
Nine Months Ended January 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)
$
52,147
$
55,723
$
48,829
$
10,597
$
9,850
$
0
$
177,146
Non-Stabilized
 
1,294
 
0
 
1,470
 
0
 
0
 
0
 
2,764
Total
 
53,441
 
55,723
 
50,299
 
10,597
 
9,850
 
0
 
179,910
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
 
24,530
 
26,451
 
16,538
 
3,178
 
3,297
 
0
 
73,994
Non-Stabilized
 
594
 
0
 
171
 
0
 
0
 
0
 
765
Total
 
25,124
 
26,451
 
16,709
 
3,178
 
3,297
 
0
 
74,759
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilized(1)
 
27,617
 
29,272
 
32,291
 
7,419
 
6,553
 
0
 
103,152
Non-Stabilized
 
700
 
0
 
1,299
 
0
 
0
 
0
 
1,999
Net operating income
$
28,317
$
29,272
$
33,590
$
7,419
$
6,553
$
0
$
105,151
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of NOI to net income (loss) available to common shareholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation/amortization
$
(10,554)
$
(15,753)
$
(12,865)
$
(2,822)
$
(2,566)
$
(305)
$
(44,865)
Administrative, advisory and trustee fees
 
0
 
0
 
0
 
0
 
0
 
(5,944)
 
(5,944)
Other expenses
 
0
 
0
 
0
 
0
 
0
 
(1,509)
 
(1,509)
Interest expense
 
(13,261)
 
(15,986)
 
(12,217)
 
(2,754)
 
(2,308)
 
(1,863)
 
(48,389)
Interest and other income
 
0
 
0
 
0
 
0
 
0
 
645
 
645
Income (loss) from continuing operations
 
4,502
 
(2,467)
 
8,508
 
1,843
 
1,679
 
(8,976)
 
5,089
Income (loss) from discontinued operations
 
107
 
0
 
(72)
 
0
 
461
 
0
 
496
Net income (loss)
 
4,609
 
(2,467)
 
8,436
 
1,843
 
2,140
 
(8,976)
 
5,585
Net income attributable to noncontrolling interests – Operating Partnership
 
0
 
0
 
0
 
0
 
0
 
(723)
 
(723)
Net income attributable to noncontrolling interests – consolidated real estate entities
 
0
 
0
 
0
 
0
 
0
 
(29)
 
(29)
Net income (loss) attributable to Investors Real Estate Trust
 
4,609
 
(2,467)
 
8,436
 
1,843
 
2,140
 
(9,728)
 
4,833
Dividends to preferred shareholders
 
0
 
0
 
0
 
0
 
0
 
(1,779)
 
(1,779)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$
4,609
$
(2,467)
$
8,436
$
1,843
$
2,140
$
(11,507)
$
3,054
(1)
See list of properties excluded from stabilized properties on page ii.





INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
STABILIZED PROPERTIES AND ALL PROPERTIES PHYSICAL OCCUPANCY LEVELS BY SEGMENT
3rd Quarter Fiscal 2013 vs. 3rd Quarter Fiscal 2012

Segments
Stabilized Properties
All Properties
 
3rd Quarter
3rd Quarter
3rd Quarter
3rd Quarter
 
Fiscal 2013
Fiscal 2012
Fiscal 2013
Fiscal 2012
Multi-Family Residential
94.0%
93.9%
93.6%
93.2%
Commercial Office
78.4%
77.9%
78.4%
77.9%
Commercial Medical
94.6%
94.2%
94.9%
94.5%
Commercial Industrial
95.8%
94.5%
95.9%
94.5%
Commercial Retail
87.9%
87.5%
87.9%
87.5%







 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
COMMERCIAL LEASING SUMMARY
for the three and nine months ended January 31, 2013

 
Three Months Ended January 31, 2013
 
New(1)
Renew(2)
Total
Expiring(3)
Net Change
Percentage
Change
Gross Square Footage
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
 
34,280
 
32,055
 
66,335
 
57,563
 
8,772
 
 
Commercial Medical
 
12,080
 
0
 
12,080
 
74,993
 
(62,913)
 
 
Commercial Industrial
 
0
 
0
 
0
 
63,240
 
(63,240)
 
 
Commercial Retail
 
24,925
 
16,457
 
41,382
 
71,942
 
(30,560)
 
 
Total All Segments
 
71,285
 
48,512
 
119,797
 
267,738
 
(147,941)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Rental Rates(3)
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
$
11.54
$
11.07
$
11.31
$
14.14
$
(2.83)
 
(20.0)%
Commercial Medical
 
14.49
 
0.00
 
14.49
 
20.91
 
(6.42)
 
(30.7)%
Commercial Industrial
 
0.00
 
0.00
 
0.00
 
5.44
 
(5.44)
 
0.00%
Commercial Retail
 
13.14
 
8.16
 
11.16
 
4.40
 
6.76
 
153.6%
Total All Segments
$
12.60
$
10.08
$
10.90
$
11.36
$
(0.46)
 
(4.1)%
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Nine Months Ended January 31, 2013
 
New(1)
Renew(2)
Total
Expiring(3)
Net Change
Percentage
Change
Gross Square Footage
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
 
144,145
 
127,032
 
271,177
 
351,608
 
(80,431)
 
 
Commercial Medical
 
22,692
 
11,456
 
34,148
 
94,364
 
(60,216)
 
 
Commercial Industrial
 
0
 
9,702
 
9,702
 
95,957
 
(86,255)
 
 
Commercial Retail
 
64,202
 
55,987
 
120,189
 
107,715
 
12,474
 
 
Total All Segments
 
231,039
 
204,177
 
435,216
 
649,644
 
(214,428)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Rental Rates(3)
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
$
12.85
$
15.22
$
13.96
$
13.59
$
0.37
 
2.7%
Commercial Medical
 
18.07
 
22.08
 
19.41
 
20.85
 
(1.44)
 
(6.9)%
Commercial Industrial
 
0.00
 
5.84
 
5.84
 
4.91
 
0.93
 
18.9%
Commercial Retail
 
9.41
 
5.23
 
7.46
 
6.57
 
0.89
 
13.6%
Total All Segments
$
12.40
$
12.42
$
12.41
$
12.20
$
0.21
 
1.7%
 
 
 
 
 
 
 
 
 
 
 
 
 


 
Three Months Ended January 31, 2013
Nine Months Ended January 31, 2013
 
New(1)
Renew(2)
Total
New(1)
Renew(2)
Total
Weighted Average Term of New/Renewed Leases(4)
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
 
5.4
 
1.8
 
3.6
 
4.8
 
3.2
 
4.0
Commercial Medical
 
3.1
 
0.0
 
3.1
 
4.9
 
5.3
 
5.1
Commercial Industrial
 
0.0
 
0.0
 
0.0
 
0.0
 
3.3
 
3.3
Commercial Retail
 
5.9
 
3.2
 
5.0
 
4.9
 
3.3
 
4.3
Total All Segments
 
5.2
 
2.3
 
4.1
 
4.8
 
3.6
 
4.2
(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) Expiring leases include leases with tenants who have vacated or renewed. Excluded from expiring leases are leases that have been amended to extend the term, including leases on a month-to-month basis.
(4) Term in years.






INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
COMMERCIAL LEASING COMMITMENTS (All Properties)
for the three and nine months ended January 31, 2013

 
3rd Quarter Fiscal 2013 Total
Year-To-Date Total
 
(dollars in thousands)
(dollars in thousands)
 
New
Renew
Total Dollars
New
Renew
Total Dollars
Tenant Improvements
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
$
301
$
0
$
301
$
1,227
$
592
$
1,819
Commercial Medical
 
0
 
0
 
0
 
438
 
136
 
574
Commercial Industrial
 
0
 
0
 
0
 
0
 
5
 
5
Commercial Retail
 
589
 
14
 
603
 
635
 
14
 
649
Subtotal
$
890
$
14
$
904
$
2,300
$
747
$
3,047
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant Improvements per square foot
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
$
8.76
$
0.00
$
4.53
$
8.51
$
4.66
$
6.71
Commercial Medical
 
0.00
 
0.00
 
0.00
 
19.33
 
11.85
 
16.82
Commercial Industrial
 
0.00
 
0.00
 
0.00
 
0.00
 
0.52
 
0.52
Commercial Retail
 
23.64
 
0.85
 
14.57
 
9.89
 
0.25
 
5.40
All Segments
$
12.48
$
0.29
$
7.54
$
9.96
$
3.66
$
7.00
 
 
 
 
 
 
 
 
 
 
 
 
 
Leasing Costs
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
$
319
$
17
$
336
$
889
$
517
$
1,406
Commercial Medical
 
0
 
0
 
0
 
102
 
45
 
147
Commercial Industrial
 
0
 
0
 
0
 
0
 
19
 
19
Commercial Retail
 
127
 
9
 
136
 
142
 
14
 
156
Subtotal
$
446
$
26
$
472
$
1,133
$
595
$
1,728
 
 
 
 
 
 
 
 
 
 
 
 
 
Leasing Costs per square foot
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
$
9.31
$
0.54
$
5.00
$
6.17
$
4.07
$
5.18
Commercial Medical
 
0.00
 
0.00
 
0.00
 
4.52
 
3.91
 
4.31
Commercial Industrial
 
0.00
 
0.00
 
0.00
 
0.00
 
1.98
 
1.98
Commercial Retail
 
5.09
 
0.57
 
3.29
 
2.21
 
0.26
 
1.30
All Segments
$
6.26
$
0.55
$
3.95
$
4.90
$
2.92
$
3.97
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant Improvements and Leasing Costs
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
$
620
$
17
$
637
$
2,116
$
1,109
$
3,225
Commercial Medical
 
0
 
0
 
0
 
540
 
181
 
721
Commercial Industrial
 
0
 
0
 
0
 
0
 
24
 
24
Commercial Retail
 
716
 
23
 
739
 
777
 
28
 
805
Total
$
1,336
$
40
$
1,376
$
3,433
$
1,342
$
4,775
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant Improvements and Leasing Costs per square foot
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
$
18.08
$
0.54
$
9.60
$
14.68
$
8.73
$
11.89
Commercial Medical
 
0.00
 
0.00
 
0.00
 
23.84
 
15.76
 
21.13
Commercial Industrial
 
0.00
 
0.00
 
0.00
 
0.00
 
2.50
 
2.50
Commercial Retail
 
28.72
 
1.42
 
17.87
 
12.09
 
0.51
 
6.70
All Segments
$
18.74
$
0.84
$
11.49
$
14.86
$
3.08
$
10.97






INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
MULTI-FAMILY RESIDENTIAL SUMMARY

 
Three Months Ended
 
1/31/2013
10/31/2012
07/31/2012
04/30/2012
01/31/2012
Number of Units
 
9,924
 
9,934
 
9,876
 
8,894
 
8,654
Average Investment Per Unit
 
 
 
 
 
 
 
 
 
 
Stabilized
$
58,506
$
58,308
$
58,012
$
57,776
$
57,738
Non-Stabilized
 
87,083
 
85,580
 
83,113
 
83,758
 
78,203
All Properties
$
63,107
$
62,614
$
61,472
$
59,268
$
58,497
 
 
 
 
 
 
 
 
 
 
 
Average Scheduled Rent(1) per Unit
 
 
 
 
 
 
 
 
 
 
Stabilized
$
742
$
734
$
726
$
718
$
716
Non-Stabilized
 
994
 
967
 
889
 
908
 
866
All Properties
$
782
$
771
$
749
$
729
$
721
 
 
 
 
 
 
 
 
 
 
 
Total Receipts per Unit
 
 
 
 
 
 
 
 
 
 
Stabilized
$
731
$
733
$
716
$
709
$
705
Non-Stabilized
 
1,004
 
996
 
831
 
845
 
851
All Properties
$
775
$
774
$
732
$
717
$
710
 
 
 
 
 
 
 
 
 
 
 
Total Recurring Capital Expenditures per Unit(1)
$
134
$
193
$
209
$
157
$
155
 
 
 
 
 
 
 
 
 
 
 
Physical Occupancy%
 
 
 
 
 
 
 
 
 
 
Stabilized
 
94.0%
 
94.8%
 
93.7%
 
94.2%
 
93.9%
Non-Stabilized
 
91.4%
 
93.4%
 
88.7%
 
85.4%
 
74.5%
All Properties
 
93.6%
 
94.6%
 
93.0%
 
93.7%
 
93.2%
 
 
 
 
 
 
 
 
 
 
 
Operating Expenses as a % of Scheduled Rent
 
 
 
 
 
 
 
 
 
 
Stabilized
 
47.3%
 
41.3%
 
44.8%
 
46.4%
 
45.8%
Non-Stabilized
 
38.7%
 
36.9%
 
34.8%
 
37.3%
 
38.6%
All Properties
 
45.5%
 
40.4%
 
43.1%
 
45.8%
 
45.5%
(1) See Definitions on page 28.




INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
10 LARGEST COMMERCIAL TENANTS – BASED ON ANNUALIZED BASE RENT(1)
as of January 31, 2013

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
88
13.1%
1,481,647
13.6%
St. Luke's Hospital of Duluth, Inc.
6
36
3.4%
198,775
1.8%
Fairview Health Services
9
47
3.3%
236,831
2.2%
Applied Underwriters
3
49
2.2%
141,724
1.3%
HealthEast Care System
1
73
1.6%
114,316
1.1%
Affiliates of Siemens USA (NYSE: SI)
2
50
1.3%
112,848
1.0%
Nebraska Orthopaedic Hospital
1
194
1.3%
61,758
0.6%
Arcadis Corporate Services, Inc.
1
42
1.2%
71,430
0.7%
Microsoft (NASDAQ: MSFT)
1
71
1.2%
122,040
1.1%
State of Idaho Department of Health and Welfare
2
61
1.1%
103,342
0.9%
Total/Weighted Average
 
65
29.7%
2,644,711
24.3%
(1) See Definitions on page 28.





INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LEASE EXPIRATIONS
as of January 31, 2013

 
(dollars in thousands except average rental rates)
Fiscal Year
Number of
Leases
Rentable
Square Feet(1)
% of Rentable
Square Feet
Annualized
Rent(2)
Average
Rental
Rate
% of
Annualized
 Base Rent
Commercial Office
 
 
 
 
 
 
 
 
2013
15
173,848
4.4%
$
2,130
$
12.25
3.7%
2014
59
471,654
12.1%
 
5,933
 
12.58
10.2%
2015
73
495,169
12.7%
 
7,881
 
15.92
13.6%
2016
49
653,984
16.7%
 
10,086
 
15.42
17.4%
2017
46
828,738
21.2%
 
14,156
 
17.08
24.4%
2018 and thereafter
68
1,288,817
32.9%
 
17,768
 
13.79
30.7%
 
310
3,912,210
100.0%
$
57,954
$
14.63
100.0%
 
 
 
 
 
 
 
 
 
Commercial Medical
 
 
 
 
 
 
 
 
2013
7
25,737
0.9%
$
519
$
20.15
1.1%
2014
25
421,750
15.2%
 
6,868
 
16.29
14.4%
2015
16
60,120
2.2%
 
1,549
 
25.76
3.2%
2016
24
175,113
6.3%
 
3,618
 
20.66
7.6%
2017
20
133,237
4.8%
 
2,840
 
21.32
6.0%
2018 and thereafter
95
1,953,772
70.6%
 
32,226
 
16.49
67.7%
 
187
2,769,729
100.0%
$
47,620
$
17.19
100.0%
 
 
 
 
 
 
 
 
 
Commercial Industrial
 
 
 
 
 
 
 
 
2013
2
160,100
5.8%
$
317
$
1.98
2.9%
2014
9
247,948
8.9%
 
1,008
 
4.06
9.2%
2015
6
344,493
12.4%
 
1,402
 
4.07
12.7%
2016
11
783,414
28.3%
 
3,140
 
4.01
28.5%
2017
5
311,141
11.2%
 
1,180
 
3.79
10.7%
2018 and thereafter
8
925,439
33.4%
 
3,957
 
4.28
36.0%
 
41
2,772,535
100.0%
$
11,004
$
3.97
100.0%
 
 
 
 
 
 
 
 
 
Commercial Retail
 
 
 
 
 
 
 
 
2013
9
63,516
5.4%
$
380
$
5.99
3.8%
2014
43
213.976
18.1%
 
1,362
 
6.36
13.7%
2015
40
628.827
27.9%
 
2,375
 
7.22
24.0%
2016
25
98,814
8.4%
 
1,199
 
12.13
12.1%
2017
24
106.822
9.0%
 
1,124
 
10.52
11.3%
2018 and thereafter
38
368,306
31.2%
 
3,480
 
9.45
35.1%
 
179
1,180,261
100.0%
$
9,920
$
8.41
100.0%
 
 
 
 
 
 
 
 
 
Commercial Total
 
 
 
 
 
 
 
 
2013
33
423,201
4.0%
$
3,346
$
7.91
2.6%
2014
136
1,355,328
12.7%
 
15,171
 
11.19
12.0%
2015
135
1,228,609
11.6%
 
13,207
 
10.75
10.4%
2016
109
1,711,325
16.1%
 
18,043
 
10.54
14.3%
2017
95
1,379,938
13.0%
 
19,300
 
13.99
15.3%
2018 and thereafter
209
4,536,334
42.6%
 
57,431
 
12.66
45.4%
 
717
10,634,735
100.0%
$
126,498
$
11.89
100.0%
(1) Rentable square footage does not include month-to-month leases.  As of January 31, 2013 month-to-month leases accounted for 261,853 square feet.
(2) Annualized Base Rent is monthly scheduled rent as of January 1, 2013 (cash basis), multiplied by 12.




INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
FISCAL 2013 ACQUISITION SUMMARY
as of January 31, 2013
(dollars in thousands)

Property
 
Location
 
Segment Type
 
Acquisition
Date
Square
Feet/Units
Leased
Percentage
At
Acquisition
January 31,
2013 Leased
Percentage
Acquisition
Cost
 
 
 
 
 
 
 
 
 
 
 
 
Villa West
 
Topeka, KS
 
Multi-Family Residential
 
May 8, 2012
308
98.1%
86.4%
$
17,650
Colony
 
Lincoln, NE
 
Multi-Family Residential
 
June 4, 2012
232
98.3%
94.0%
 
17,500
Lakeside Village
 
Lincoln, NE
 
Multi-Family Residential
 
June 4, 2012
208
86.5%
83.2%
 
17,250
Quarry Ridge II(1)
 
Rochester, MN
 
Multi-Family Residential
 
June 29, 2012
159
33.3%
98.7%
 
4,591
Williston Garden Buildings 3 and 4(2)
 
Williston, ND
 
Multi-Family Residential
 
July 31, 2012
73
98.6%
98.6%
 
7,058
University Commons
 
Williston, ND
 
Unimproved Land
 
August 1, 2012
n/a
n/a
n/a
 
823
Cypress Court
 
St. Cloud, MN
 
Unimproved Land
 
August 10, 2012
n/a
n/a
n/a
 
447
Cypress Court Apartment Development
 
St. Cloud, MN
 
Unimproved Land
 
August 10, 2012
n/a
n/a
n/a
 
1,136
The Ponds at Heritage Place
 
Sartell, MN
 
Multi-Family Residential
 
October 10, 2012
58
91.4%
87.9%
 
5,020
Spring Wind Expansion(3)
 
Laramie, WY
 
Commercial Medical
 
November 16, 2012
26,662
100.0%
100.0%
 
1,675
Badger Hills
 
Rochester, MN
 
Unimproved Land
 
December 14, 2012
n/a
n/a
n/a
 
1,050
Minot IPS(4)
 
Minot, ND
 
Commercial Industrial
 
December 17, 2012
27,567
100.0%
100.0%
 
3,953
Grand Forks Unimproved
 
Grand Forks, ND
 
Unimproved Land
 
December 31, 2012
n/a
n/a
n/a
 
4,278
Jamestown Medical Office Building(5)
 
Jamestown, ND
 
Commercial Medical
 
January 1, 2013
45,222
91.7%
91.7%
 
4,901
Minot Unimproved (Southgate Lot 4)
 
Minot, ND
 
Unimproved Land
 
January 11, 2013
n/a
n/a
n/a
 
1,882
Commons at Southgate
 
Minot, ND
 
Unimproved Land
 
January 22, 2013
n/a
n/a
n/a
 
3,691
Landing at Southgate
 
Minot, ND
 
Unimproved Land
 
January 22, 2013
n/a
n/a
n/a
 
2,262
 
 
 
 
 
 
Total Square Feet
99,451
 
 
$
95,167
 
 
 
 
 
 
Total Units
1,038
 
 
 
 
(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 January 31, 2013 of $17.6 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 $12.0 million, for a total project cost at January 31, 2013 of $19.1 million.
(3)
Expansion project placed in service November 16, 2012. Additional costs paid in fiscal year 2012 totaled $1.8 million, for a total project cost at January 31, 2013 of $3.5 million.
(4)
Development property placed in service December 17, 2012. Additional costs paid in fiscal year 2012 totaled $1.8 million, for a total project cost at January 31, 2013 of $5.8 million.
(5)
Development property placed in service January 1, 2013. Additional costs paid in fiscal year 2012 totaled $1.0 million, for a total project cost at January 31, 2013 of $5.9 million.






INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
FISCAL 2013 DEVELOPMENT IN PROGESS SUMMARY
as of January 31, 2013
(dollars 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
Multi-Family Conversion - Minot, ND
Convert 15,000 sf. commercial office to 20 multi-family residential units
100%
 
3,000
 
2,556
4th Quarter Fiscal 2013
Branch Bank Building - Minot, ND
3,700 square foot commercial office building
100%
 
1,700
 
1,095
4th Quarter Fiscal 2013
River Ridge - Bismarck, ND
146 unit apartment building
0%
 
24,200
 
5,876
2nd Quarter Fiscal 2014
Cypress Court Apartment Development - St. Cloud, MN(1)
132 unit apartment building
0%
 
14,300
 
4,497
2nd Quarter Fiscal 2014
Landing at Southgate - Minot, ND(2)
three 36 unit apartment buildings
0%
 
15,400
 
2,262
2nd Quarter Fiscal 2014
Commons at Southgate - Minot, ND(2)
233 unit apartment building
0%
 
36,800
 
3,691
4th Quarter Fiscal 2014
Other
n/a
n/a
 
n/a
 
150
n/a
 
 
 
$
95,400
$
20,127
 
(1)
The Company is a 79% partner in the joint venture entity constructing this property; the anticipated total cost amount given is the total cost to the joint venture entity.
(2)
The Company is a 51% partner in the joint venture entity constructing these properties; the anticipated total cost amount given is the total cost to the joint venture entity



Definitions
January 31, 2013
Adjusted funds from operations (AFFO) is calculated by subtracting from Funds from operations (FFO) (1) tenant improvements and leasing commissions at stabilized properties, 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. We may also subtract from FFO certain unusual non-recurring items that do not produce cash available for distribution to shareholders. 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. Through the second quarter of fiscal year 2013, our calculation of AFFO excluded (that is, subtracted from FFO) tenant improvements and leasing commissions on an all-property basis. In the third quarter of the current fiscal year, we revised our calculation to subtract from FFO leasing commissions and tenant improvements at stabilized properties only, since we consider tenant improvement and leasing commission levels at non-stabilized properties unrepresentative of expected levels at stabilized properties. This change in definition had no effect on AFFO per share and unit as previously reported. We also updated the calculation to exclude the write-off of fully-amortized leasing commissions, which had previously been included in the calculation. This change resulted in a decrease in AFFO per share and unit in the second quarter of fiscal year 2013 from $0.13 to $0.12 and in the fourth quarter of fiscal year 2012 from $0.11 to $0.10.  The AFFO per share and unit payout ratio had a corresponding increase in the second quarter of fiscal year 2013 from 100.00% to 108.3% and in the fourth quarter of fiscal year 2012 from 118.2% to 130.0%.
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, in October 2011 NAREIT clarified its computation of FFO to exclude impairment charges for all periods presented. FFO is a non-GAAP measure.  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 (NOI) is total real estate revenues and gain on involuntary conversion less real estate expenses (which consist of utilities, maintenance, real estate taxes, insurance and property management expenses).  We believe that NOI is an important supplemental measure of operating performance for a REIT's operating real estate because it provides a measure of core operations that is unaffected by depreciation, amortization, financing and general and administrative expense. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders or cash flow from operating activities as a measure of financial performance.
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 properties owned and in operation for the entirety of the periods being compared (including properties that were redeveloped or expanded during the periods being compared, with properties purchased or sold during the periods being compared excluded from the stabilized property category), and, in the case of development or re-development properties, which have achieved a target level of occupancy.

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