EX-99.1 2 iretexhibit991-06302008.htm PRESS RELEASE iretexhibit991-06302008.htm
 
 
 

Exhibit 99.1
 
Press Release
 
IRET
INVESTORS REAL ESTATE TRUST
 
 
 
FOR IMMEDIATE RELEASE
 
CONTACT INFO
 
Michelle R. Saari
Investors Real Estate Trust
PO Box 1988
12 Main Street S
Minot, North Dakota 58701
phone: 701.837.4738
fax: 701.838.7785
email: msaari@iret.com
 
Date:  June 30, 2008
 
INVESTORS REAL ESTATE TRUST
ANNOUNCES FINANCIAL AND OPERATING RESULTS
FOR THE YEAR AND QUARTER ENDED APRIL 30, 2008
 
Minot, ND – Investors Real Estate Trust (IRET) (ticker: IRET and IRETP; exchange: NASDAQ Global Select Market) reported financial and operating results today for the year and quarter ended April 30, 2008.
 
During the fourth quarter of fiscal year 2008, IRET’s revenues increased from the year-earlier period, due primarily to property acquisitions and a decrease in the level of tenant concessions offered.  Funds From Operations (FFO)1 increased on an absolute basis from the year-earlier period, but declined slightly on a per share and unit basis, primarily due to dilution following the Company’s October 2007 public offering of 6.9 million common shares.  Net income declined from the year-earlier period, primarily due to the effect of a gain on sale included within discontinued operations in the three and twelve months ended April 30, 2007.  For the three month period ended April 30, 2008, as compared to the same period of the prior fiscal year:
 
 
•
Revenues increased to $59.0 million from $53.7 million.
 
 
•
FFO increased to $17.1 million on approximately 78,195,000 weighted average shares and units outstanding, from $15.3 million on approximately 67,284,000 weighted average shares and units outstanding ($.22 per share and unit compared to $.23 per share and unit).
 
 
•
Net Income Available to Common Shareholders, as computed under generally accepted accounting principles, was $2.7 million, compared to $3.4 million.
 
For the twelve month period ended April 30, 2008, as compared to the same period of the prior fiscal year:
 
 
•
Revenues increased to $221.2 million from $197.5 million.
 
 
•
FFO increased to $64.2 million on approximately 73,477,000 weighted average shares and units outstanding, from $57.0 million on approximately 64,689,000 weighted average shares and units outstanding ($.87 per share and unit compared to $.88 per share and unit).
 
 
•
Net Income Available to Common Shareholders, as computed under generally accepted accounting principles, was $9.7 million, compared to $11.7 million.
 
______________________________
1 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/losses from sales of property plus real estate depreciation and amortization.  We consider FFO to be a standard supplemental measure for equity real estate investment trusts because it facilitates an understanding of the operating performance of properties without giving effect to real estate depreciation and amortization, which assume 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.
 

 
i
 

Operating Results
 
Net Operating Income (NOI)2 from stabilized properties3 increased 1.2%, or $329,000, during the three months ended April 30, 2008, compared to the same period one year ago.  NOI from stabilized properties increased in all of our segments except Commercial Office and Commercial Industrial. Multi-Family Residential increased 4.2%, Commercial Medical increased 4.3% and Commercial Retail increased 2.0%.  Commercial Office and Commercial Industrial decreased 0.8% and 17.0%, respectively.  NOI from stabilized properties increased 0.8%, or $876,000, for the twelve months ended April 30, 2008, compared to the twelve months ended April 30, 2007.
 
Economic occupancy4 levels on a stabilized property basis declined in all but one of our reportable segments during the three months ended April 30, 2008, compared to the three months ended April 30, 2007. Economic occupancy levels on an all-property basis declined in all reportable segments during the three months ended April 30, 2008, compared to the three months ended April 30, 2007.  Economic occupancy rates on a stabilized property and all-property basis for the three months ended April 30, 2008, as compared to the three months ended April 30, 2007, were as follows:
 
Economic Occupancy Levels on a Stabilized Property and All-Property Basis:
 
Segments
  
Stabilized Properties
    
All Properties
  
   
4th QTR
    
4th QTR
    
4th QTR
    
4th QTR
  
   
2008
    
2007
    
2008
    
2007
  
Multi-Family Residential
     92.8 %     92.4 %     92.1 %     92.5 %
Commercial Office
     89.6 %     90.5 %     90.8 %     92.4 %
Commercial Medical
     95.2 %     96.3 %     96.1 %     96.3 %
Commercial Industrial
     94.7 %     97.4 %     95.9 %     97.8 %
Commercial Retail
     87.9 %     89.3 %     88.2 %     89.6 %
 
For 4th Quarter 2008 and 4th Quarter 2007, stabilized properties excluded:
Multi-Family Residential –
17 South Main Apartments, Minot, ND; Arbors Apartments, S. Sioux City, NE; Indian Hills, Sioux City, IA; Quarry Ridge Apartments, Rochester, MN; Rum River Apartments, Isanti, MN; St. Cloud Student Housing, St. Cloud, MN; Cottonwood IV Apartments, Bismarck, ND and Greenfield Apartments, Omaha, NE.
Commercial Office -
17 South Main, Minot, ND; Corporate Center West, Omaha, NE; Farnam Executive Center, Omaha, NE; Flagship, Eden Prairie, MN; Gateway Corporate, Woodbury, MN; Highlands Ranch I, Highlands Ranch, CO; Miracle Hills One, Omaha, NE; Pacific Hills, Omaha, NE; Riverport, Maryland Heights, MO; Timberlands, Leawood, KS; Woodlands Plaza, Maryland Heights, MO; 610 Business Center, Brooklyn Park, MN; Intertech, Fenton, MO and Plymouth 5095, Plymouth, MN.
Commercial Medical -
2828 Chicago Avenue, Minneapolis, MN; Fox River Cottages, Grand Chute, WI; St. Michaels, St. Michael, MN; Barry Point, Kansas City, MO; Edgewood Vista Billings, Billings, MT; Edgewood Vista East Grand Forks, East Grand Forks, MN; Edgewood Vista Sioux Falls, Sioux Falls, SD; Edina 6405 France Medical, Edina, MN; Edina 6363 France Medical, Edina, MN; Minneapolis 701 25th Ave Medical (Riverside), Minneapolis, MN; Burnsville 303 Nicollet Medical (Ridgeview), Burnsville, MN; Burnsville 305 Nicollet Medical (Ridgeview South), Burnsville, MN; Eagan 1440 Duckwood Medical, Eagan, MN; Edgewood Vista Belgrade, Belgrade, MT; Edgewood Vista Columbus, Columbus, NE; Edgewood Vista Fargo, Fargo, ND; Edgewood Vista Grand Island, Grand Island, NE and Edgewood Vista Norfolk, Norfolk, NE.
Commercial Industrial -
Bloomington 2000, Bloomington, MN; Roseville 2929, Roseville, MN; Cedar Lake Business Center, St. Louis Park, MN; Urbandale, Urbandale, IA; Woodbury 1865, Woodbury, MN and Eagan 3785 & 2795 Highway 55, Eagan, MN.
Commercial Retail -
17 South Main, Minot, ND; Dakota West Plaza, Minot, ND and Weston Walgreens, Weston, WI.
 
Also excluded from stabilized properties in Q4 2008 and Q4 2007 are sold properties:
Multi-Family Residential -
Park East Apartments, Fargo, ND; Clearwater apartments, Boise, ID; 405 Grant Avenue Apartments, Harvey, ND and Sweetwater – Green Acres 1&2 Apartments, Devils Lake, ND.
Commercial Office -
Minnetonka Office Building, Minnetonka, MN.
Commercial Medical -
Wedgewood Sweetwater, Lithia Springs, GA.
Commercial Retail -
Glencoe C-Store, Glencoe, MN; Faribault Checker, Faribault, MN; Long Prairie C-Store, Long Prairie, MN; Paynesville C-Store, Paynesville, MN and Prior Lake I & III Strip Center, Prior Lake, MN.
Unimproved Land -
Long Prairie Unimproved Land, Long Prairie, MN.
______________________________
2 We measure the performance of our segments based on NOI, which we define as total revenues less property operating expenses and real estate taxes.  We believe that NOI is an important supplemental measure of operating performance for a real estate investment trust’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. See tables below for a reconciliation of NOI to the condensed consolidated financial statements.
3 Stabilized properties are those properties owned for the entirety of both periods being compared.  While results presented on a stabilized property basis are not determined in accordance with GAAP, management believes that measuring performance on a stabilized property basis is useful to investors and to management because it enables evaluation of how the Company’s properties are performing year over year.
4 Economic occupancy represents actual rental revenues recognized for the period indicated as a percentage of scheduled rental revenues for the period.  Percentage rents, tenant concessions, straightline adjustments and expense reimbursements are not considered in computing either actual revenues or scheduled rent revenues.

 
ii
 

Acquisition and Disposition Activity
 
During the fourth quarter of fiscal year 2008, IRET acquired eight senior housing facilities, six medical office properties and an office/warehouse facility for a total of approximately $103.1 million, excluding closing and other transaction costs.  The Company had no material dispositions in the first three quarters of fiscal year 2008; in the fourth quarter of fiscal year 2008, the Company sold its Sweetwater Apartments in Devils Lake, North Dakota, for a sales price of $940,000, and recognized a gain on sale of approximately $510,000.  The following table details the Company’s acquisitions during the three months ended April 30, 2008:
 
   
(in thousands)
  
Fourth Quarter Fiscal Year 2008 Acquisitions
  
Acquisition Cost
  
       
Commercial Property - Medical (including senior housing)
      
11,800 sq. ft./28 beds Edgewood Vista Billings - Billings, MT
   $ 4,250  
18,488 sq. ft./36 beds Edgewood Vista East Grand Forks - East Grand Forks, MN
     4,990  
11,800 sq. ft./28 beds Edgewood Vista Sioux Falls - Sioux Falls, SD
     3,350  
55,478 sq. ft. Edina 6405 France Medical - Edina, MN*
     13,615  
70,934 sq. ft. Edina 6363 France Medical - Edina, MN*
     13,360  
57,212 sq. ft. Minneapolis 701 25th Ave Medical (Riverside - Minneapolis, MN*
     8,000  
53,466 sq. ft. Burnsville 303 Nicollet Medical (Ridgeview) - Burnsville, MN
     8,800  
36,199 sq. ft. Burnsville 305 Nicollet Medical (Ridgeview South) - Burnsville, MN
     5,900  
17,640 sq. ft. Eagan 1440 Duckwood Medical - Eagan, MN
     2,325  
5,192 sq. ft./13 beds Edgewood Vista Belgrade - Belgrade, MT
     2,100  
5,194 sq. ft./13 beds Edgewood Vista Columbus - Columbus, NE
     1,450  
168,801 sq. ft./185 beds Edgewood Vista Fargo - Fargo, ND
     25,850  
5,185 sq. ft./13 beds Edgewood Vista Grand Island - Grand Island, NE
     1,400  
5,135 sq. ft./13 beds Edgewood Vista Norfolk - Norfolk, NE
     1,300  
         
Commercial Property - Industrial
        
198,600 sq. ft. Eagan 2785 & 2795 Highway 55 - Eagan, MN
     6,400  
         
Total Property Acquisitions
   $ 103,090  
 
 
* Acquisition of leasehold interests only (air rights lease and ground leases)
 
Development Activity
 
The Company has several ongoing development projects.  As of April 30, 2008, IRET is engaged in the following development activity:
 
Southdale Medical Building Expansion Project: In July 2007, the Company signed a lease with an anchor tenant committing the Company to construct an approximately 27,750 square foot addition to the Company’s existing Southdale Medical Building located in Edina, Minnesota.  The estimated cost of this expansion project is approximately $10.9 million, including relocation, tenant improvement and leasing costs expected to be incurred to relocate tenants in the existing facility.  Construction began in September 2007, and the expansion project is scheduled for completion in July 2008. As of April 30, 2008, the Company has incurred approximately $5.5 million in construction costs for this expansion project.
 
IRET Corporate Plaza: During fiscal year 2007, the Company purchased an unimproved parcel of land in Minot, North Dakota, for approximately $1.8 million.  The Company is constructing a mixed-use project on this site, to consist of approximately 67 apartments and 60,100 rentable square feet of office and retail space.  The Company plans to move its Minot, North Dakota offices to this location, occupying approximately one-third of the proposed office/retail space.   Current estimates are that the project will be completed in the second quarter of the Company’s fiscal year 2009, at a total cost of approximately $20.7 million.  As of April 30, 2008, the Company has incurred approximately $9.2 million of the estimated construction cost of this project.
 
2828 Chicago Avenue Medical Building: In fiscal year 2006, IRET purchased an approximately 55,000 square foot, five-story medical office building located in Minneapolis, Minnesota.  During fiscal year 2007, IRET committed to construct an approximately 56,000 square foot medical office building adjacent to the existing structure, and an adjoining parking ramp, with a planned project completion date of August 2008 and an estimated total project cost of $15.7 million. As of April 30, 2008, approximately 73% of this new medical office building was pre-leased to two tenants.  Construction on the project began in August 2007, and as of April 30, 2008, the Company has incurred approximately $8.2 million in construction costs.
 
Shareholder Equity, Distributions and Capital Structure
 
On April 1, 2008, IRET paid a quarterly distribution of $0.1680 per share and unit on its common shares and limited partnership units of IRET Properties.  This was IRET’s 148th consecutive distribution at equal or increasing rates.  IRET also paid, on March 31, 2008, a quarterly distribution of $0.5156 per share on its Series A preferred shares.
 

 
iii
 

As of April 30, 2008, IRET had a total capitalization of $1.9 billion.  Total capitalization is defined as the market value (closing price at end of period) of the Company’s outstanding common shares and the imputed market value of the outstanding limited partnership units of IRET Properties, plus the book value of the Company’s preferred shares and the outstanding principal balance of the consolidated debt of the Company.
 
Conference Call Information
 
The Conference Call for 4th Quarter Earnings is scheduled for Wednesday, July 2, 2008, at 9:00 A.M. Central Daylight Time.   In order to use the limited time available more efficiently, the Company requests that questions be submitted in advance, via e-mail to the attention of IRET’s Investor Relations Director at msaari@iret.com, by 5:00 p.m. Central Daylight Time on Tuesday, July 1, 2008.  During the question and answer period, priority will be given to addressing questions submitted in advance.  The call will be limited to one hour, including questions and answers.  Conference call access information is as follows:
 
USA Toll Free Number: 1-800-860-2442
 
International Toll Free Number: 1-412-858-4600
 
A replay of the call will be archived on the “Investor Relations/Upcoming Events and Presentations” page of IRET’s website, http://www.iret.com, through Friday, July 18, 2008.  Questions regarding the conference call should be directed to IRET Investor Relations at msaari@iret.com.
 
About IRET
 
IRET is a self-administered, equity real estate investment trust investing in income-producing properties located primarily in the upper Midwest.  IRET owns a diversified portfolio of properties consisting of 72 multi-family residential properties with 9,500 apartment units; and 65 office properties, 48 medical properties (including senior housing), 17 industrial properties and 33 retail properties with a total of approximately 11.5 million square feet of leasable space.  IRET’s distributions have increased every year for 37 consecutive years.  IRET common and preferred shares are publicly traded on the NASDAQ Global Select Market (symbols:  IRET and IRETP).  IRET’s press releases and supplemental information are available on the Company website at www.iret.com or by contacting Investor Relations at 701-837-4738.
 
Certain statements in this press release 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:  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 2007 Form 10-K.  We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
 

 
iv
 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
for the three months and twelve months ended April 30, 2008 and 2007
 

 
   
Three Months Ended
April 30
    
Twelve Months Ended
April 30
  
   
(in thousands, except per share data)
  
   
2008
    
2007
    
2008
    
2007
  
REVENUE
                        
Real estate rentals
   $ 46,674     $ 43,792     $ 179,965     $ 162,410  
Tenant reimbursement
     12,288       9,874       41,205       35,128  
TOTAL REVENUE
     58,962       53,666       221,170       197,538  
OPERATING EXPENSE
                                
Interest
     16,470       15,323       63,439       58,424  
Depreciation/amortization related to real estate investments
     13,537       11,802       50,042       44,419  
Utilities
     5,365       4,559       17,793       15,157  
Maintenance
     6,373       6,284       24,582       21,691  
Real estate taxes
     7,498       6,353       27,133       23,281  
Insurance
     700       619       2,624       2,377  
Property management expenses
     3,975       3,818       15,273       13,826  
Administrative expenses
     1,288       1,096       4,745       4,162  
Advisory and trustee services
     104       81       458       289  
Other operating expenses
     291       307       1,344       1,240  
Amortization related to non-real estate investments
     437       362       1,476       1,082  
TOTAL OPERATING EXPENSE
     56,038       50,604       208,909       185,948  
Operating income
     2,924       3,062       12,261       11,590  
Interest income
     449       541       2,095       1,944  
Other non-operating income
     222       154       665       721  
Income before minority interest and discontinued operations and
gain (loss) on sale of other investments
     3,595       3,757       15,021       14,255  
Gain (loss) on sale of other investments
     38       (1 )     42       (38 )
Minority interest portion of operating partnership income
     (833 )     (921 )     (3,524 )     (3,217 )
Minority interest portion of other partnerships’ loss
     111       39       136       26  
Income from continuing operations
     2,911       2,874       11,675       11,026  
Discontinued operations, net of minority interest
     377       1,161       413       3,084  
NET INCOME
     3,288       4,035       12,088       14,110  
Dividends to preferred shareholders
     (593 )     (593 )     (2,372 )     (2,372 )
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
   $ 2,695     $ 3,442     $ 9,716     $ 11,738  
Earnings per common share from continuing operations
   $ .04     $ .05     $ .17     $ .18  
Earnings per common share from discontinued operations
     .01       .02       .01       .06  
NET INCOME PER COMMON SHARE – BASIC AND DILUTED
   $ .05     $ .07     $ .18     $ .24  

 
v
 

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
for the three months and twelve months ended April 30, 2008 and 2007
 

 
 
(in thousands, except per share amounts)
  
Three Months Ended April 30,
2008
  
2007
  
 
Amount
    
Weighted
Avg Shares
and Units(2)
  
Per
Share and
Unit(3)
  
Amount
    
Weighted
Avg Shares
and Units(2)
  
Per
Share and
Unit(3)
  
 
 
 
Net income
   $ 3,288                 $ 4,035              
Less dividends to preferred shareholders
     (593 )                 (593 )            
Net income available to common shareholders
     2,695       57,382     $ .05       3,442       48,313     $ .07  
Adjustments:
                                                
Minority interest in earnings of unitholders
     973       20,813               1,390       18,971          
Depreciation and amortization(1)
     13,910                       12,119                  
Gain on depreciable property sales
     (510 )                     (1,616 )                
Funds from operations applicable to
common shares and units
   $ 17,068       78,195     $ .22     $ 15,335       67,284     $ .23  

 
 
(in thousands, except per share amounts)
  
Twelve Months Ended April 30,
2008
  
2007
  
 
Amount
    
Weighted
Avg Shares
and Units(2)
  
Per
Share and
Unit(3)
  
Amount
    
Weighted
Avg Shares
and Units(2)
  
Per
Share and
Unit(3)
  
 
 
 
Net income
   $ 12,088                 $ 14,110              
Less dividends to preferred shareholders
     (2,372 )                 (2,372 )            
Net income available to common shareholders
     9,716       53,060     $ .18       11,738       47,672     $ .25  
Adjustments:
                                                
Minority interest in earnings of unitholders
     3,677       20,417               4,299       17,017          
Depreciation and amortization(4)
     51,303                       45,559                  
Gain on depreciable property sales
     (514 )                     (4,602 )                
Funds from operations applicable to
common shares and units
   $ 64,182       73,477     $ .87     $ 56,994       64,689     $ .88  
 
(1)
Real estate depreciation and amortization consists of the sum of depreciation/amortization related to real estate investments and amortization related to non-real estate investments from the Condensed Consolidated Statements of Operations, totaling $13,974 and $12,164, and depreciation/amortization from Discontinued Operations of $5 and $21, less corporate-related depreciation and amortization on office equipment and other assets of $69 and $66, for the three months ended April 30, 2008 and 2007, respectively.
 
(2)
UPREIT Units of the Operating Partnership are exchangeable for common shares of beneficial interest on a one-for-one basis.
 
(3)
Net income is calculated on a per share basis. FFO is calculated on a per share and unit basis.
 
(4)
Real estate depreciation and amortization consists of the sum of depreciation/amortization related to real estate investments  and amortization related to non-real estate investments from the Condensed Consolidated Statements of Operations, totaling $51,518 and $45,501, and depreciation/amortization from Discontinued Operations of $47 and $299, less corporate-related depreciation and amortization on office equipment and other assets of $262 and $241, for the twelve months ended April 30, 2008 and 2007, respectively.
 

 
vi
 

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
RECONCILATION OF NET OPERATING INCOME TO THE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months and twelve months ended April 30, 2008 and 2007
 

 
(in thousands)
  
Three Months Ended April 30, 2008
Multi-Family
Residential
    
Commercial-
Office
    
Commercial-
Medical
    
Commercial-
Industrial
    
Commercial-
Retail
    
Total
  
                                     
Real estate revenue
   $ 18,469     $ 22,216     $ 11,648     $ 2,974     $ 3,655     $ 58,962  
Real estate expenses
     9,063       9,916       3,180       694       1,058       23,911  
Net operating income
   $ 9,406     $ 12,300     $ 8,468     $ 2,280     $ 2,597       35,051  
Interest
                                             (16,470 )
Depreciation/amortization
                                             (13,974 )
Administrative, advisory and trustee fees
                                       (1,392 )
Operating expenses
                                             (291 )
Non-operating income
                                             671  
Income before minority interest and discontinued operations and (loss) gain on sale of other investments
     $ 3,595  

 
 
(in thousands)
  
Three Months Ended April 30, 2007
Multi-Family
Residential
    
Commercial-
Office
    
Commercial-
Medical
    
Commercial-
Industrial
    
Commercial-
Retail
    
Total
  
                                     
Real estate revenue
   $ 17,330     $ 21,054     $ 8,966     $ 2,453     $ 3,863     $ 53,666  
Real estate expenses
     8,487       9,047       2,379       454       1,266       21,633  
Net operating income
   $ 8,843     $ 12,007     $ 6,587     $ 1,999     $ 2,597       32,033  
Interest
                                             (15,323 )
Depreciation/amortization
                                             (12,164 )
Administrative, advisory and trustee fees
                                       (1,177 )
Operating expenses
                                             (307 )
Non-operating income
                                             695  
Income before minority interest and discontinued operations and (loss) gain on sale of other investments
     $ 3,757  

 
 
(in thousands)
  
Twelve Months Ended April 30, 2008
Multi-Family
Residential
    
Commercial-
Office
    
Commercial-
Medical
    
Commercial-
Industrial
    
Commercial-
Retail
    
Total
  
                                     
Real estate revenue
   $ 72,827     $ 84,042     $ 38,412     $ 11,691     $ 14,198     $ 221,170  
Real estate expenses
     34,637       36,206       9,756       2,529       4,277       87,405  
Net operating income
   $ 38,190     $ 47,836     $ 28,656     $ 9,162     $ 9,921       133,765  
Interest
                                             (63,439 )
Depreciation/amortization
                                             (51,518 )
Administrative, advisory and trustee fees
                                       (5,203 )
Operating expenses
                                             (1,344 )
Non-operating income
                                             2,760  
Income before minority interest and discontinued operations and (loss) gain on sale of other investments
     $ 15,021  

 
 
(in thousands)
  
Twelve Months Ended April 30, 2007
Multi-Family
Residential
    
Commercial-
Office
    
Commercial-
Medical
    
Commercial-
Industrial
    
Commercial-
Retail
    
Total
  
                                     
Real estate revenue
   $ 66,972     $ 73,603     $ 34,783     $ 8,091     $ 14,089     $ 197,538  
Real estate expenses
     31,454       30,475       8,675       1,253       4,475       76,332  
Net operating income
   $ 35,518     $ 43,128     $ 26,108     $ 6,838     $ 9,614       121,206  
Interest
                                             (58,424 )
Depreciation/amortization
                                             (45,501 )
Administrative, advisory and trustee fees
                                       (4,451 )
Operating expenses
                                             (1,240 )
Non-operating income
                                             2,665  
Income before minority interest and discontinued operations and (loss) gain on sale of other investments
     $ 14,255  

 
vii
 

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
April 30, 2008 and 2007
 

 
   
(in thousands)
  
   
April 30, 2008
    
April 30, 2007
  
ASSETS
            
Real estate investments
            
Property owned
   $ 1,648,259     $ 1,489,287  
Less accumulated depreciation
     (219,379 )     (180,544 )
      1,428,880       1,308,743  
Development in progress
     22,856       3,498  
Unimproved land
     3,901       3,894  
Mortgage loans receivable, net of allowance
     541       399  
Total real estate investments
     1,456,178       1,316,534  
Other assets
                
Cash and cash equivalents
     53,481       44,516  
Marketable securities – available-for-sale
     420       2,048  
Receivable arising from straight-lining of rents, net of allowance
     14,113       12,558  
Accounts receivable, net of allowance
     4,163       3,171  
Real estate deposits
     1,379       735  
Prepaid and other assets
     349       568  
Intangible assets, net of accumulated amortization
     61,649       33,240  
Tax, insurance, and other escrow
     8,642       7,222  
Property and equipment, net
     1,467       1,458  
Goodwill
     1,392       1,397  
Deferred charges and leasing costs, net
     14,793       11,942  
TOTAL ASSETS
   $ 1,618,026     $ 1,435,389  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
LIABILITIES
                
Accounts payable and accrued expenses
   $ 33,757     $ 28,995  
Mortgages payable
     1,063,858       951,139  
Other
     978       896  
TOTAL LIABILITIES
     1,098,593       981,030  
                 
COMMITMENTS AND CONTINGENCIES
                
MINORITY INTEREST IN PARTNERSHIPS
     12,609       12,925  
MINORITY INTEREST OF UNITHOLDERS IN OPERATING PARTNERSHIP
     161,818       156,465  
(21,238,342 units at April 30, 2008 and 19,981,259 units at April 30, 2007)
                
SHAREHOLDERS’ EQUITY
                
Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at April 30, 2008 and April 30, 2007, aggregate liquidation preference of $28,750,000)
     27,317       27,317  
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 57,731,863 shares issued and outstanding at April 30, 2008, and 48,570,461 shares issued and outstanding at
April 30, 2007)
     440,187       354,495  
Accumulated distributions in excess of net income
     (122,498 )     (96,827 )
Accumulated other comprehensive loss
     0       (16 )
Total shareholders’ equity
     345,006       284,969  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 1,618,026     $ 1,435,389  

 
viii