8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):

September 9, 2008

INVESTORS REAL ESTATE TRUST

(Exact name of registrant as specified in its charter)

North Dakota	0-14851	45-0311232
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

12 Main Street South

Minot, ND 58701

(Address of principal executive offices, including zip code)

(701) 837-4738

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

□ Written communications pursuant to Rule 425 under the Securities Act

□ Soliciting material pursuant to Rule 14a-12 under the Exchange Act

□ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

□ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

ITEM 2.02.                      Results of Operations and Financial Condition

and

ITEM 7.01.                      Regulation FD Disclosure

A press release issued by the Registrant on September 9, 2008, regarding earnings for the three months ended July 31, 2008, is attached as Exhibit 99.1.  Also, certain supplemental information not included in the press release is attached as Exhibit 99.2.  This information is being furnished pursuant to Item 7.01 and Item 2.02 of Form 8-K.  This information is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any Securities Act registration statements.

ITEM 9.01                      Financial Statements and Exhibits

(c)   Exhibits

Exhibit
Number	Description
99.1	Press Release issued September 9, 2008, regarding earnings for the three months ended July 31, 2008
99.2	Certain supplemental information not included in the press release

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

INVESTORS REAL ESTATE TRUST

By:       /s/ Timothy P. Mihalick

Timothy P. Mihalick

Senior Vice President & Chief Operating Officer

Date: September 9, 2008

EX-99.1

Exhibit 99.1

Press Release

      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:  September 9, 2008

INVESTORS REAL ESTATE TRUST

ANNOUNCES FIRST QUARTER FISCAL 2009

FINANCIAL AND OPERATING RESULTS

Minot, ND – Investors Real Estate Trust (IRET) (NASDAQ:IRET) (NASDAQ:IRETP) reportedfinancial and operating results today for the quarter ended July 31, 2008.  These results are summarized below; for the full report, please access the IRET website at www.iret.com to view the quarterly report on Form 10-Q filed with the Securities and Exchange Commission for the quarter ended July 31, 2008 (click on “Investor Relations” and then on “SEC Filings”).

During the first quarter of fiscal year 2009, 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 a decrease in lease termination fees and an increase in amortization expense related to in-place leases in the three months ended July 31, 2008 compared to the three months ended July 31, 2007.  Additionally, an increase in vacancy rates in our portfolio and associated operating costs for the vacant space impacted net income in the first quarter of fiscal year 2009.  For the three month period ended July 31, 2008, as compared to the same period of the prior fiscal year:

• Revenues increased to $58.8 million from $53.6 million.

• FFO increased to $16.1 million on approximately 79,214,000 weighted average shares and units outstanding, from $15.9 million on approximately 68,947,000 weighted average shares and units outstanding ($.20 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 $1.8 million, compared to $2.4 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 decreased approximately 3.6 %, or $1.2 million, during the three months ended July 31, 2008, compared to the same period one year ago.  NOI from stabilized properties decreased in all of our segments except multi-family residential and commercial medical: multi-family residential increased 2.3% and commercial medical increased 1.1%.

Economic occupancy4 levels on a stabilized property basis declined in all but one of our five reportable segments during the three months ended July 31, 2008, compared to the three months ended July 31, 2007.  Economic occupancy levels on an all-property basis declined in three of our five reportable segments during the three months ended July 31, 2008, compared to the three months ended July 31, 2007.  Economic occupancy rates on a stabilized property and all-property basis for the three months ended July 31, 2008, as compared to the three months ended July 31, 2007, were as follows:

Economic Occupancy Levels ona StabilizedProperty and All Property Basis:

Segments	Stabilized Properties(a)						All Properties
	1st Quarter			1st Quarter			1st Quarter			1st Quarter
	Fiscal 2009			Fiscal 2008			Fiscal 2009			Fiscal 2008
Multi-Family Residential		92.8	%		92.2	%		92.3	%		91.8	%
Commercial Office		88.9	%		93.3	%		89.1	%		93.3	%
Commercial Medical		95.7	%		96.0	%		96.5	%		96.1	%
Commercial Industrial		95.9	%		98.6	%		96.8	%		98.1	%
Commercial Retail		86.6	%		87.0	%		86.6	%		87.0	%

a)   For 1st Quarter Fiscal 2009 and 1st Quarter Fiscal 2008, stabilized properties excluded:

Multi-Family Residential - Indian Hills, Sioux City, IA; Cottonwood IV Apartments, Bismarck, ND; Greenfield Apartments, Omaha, NE; Minot 4th Street Apartments, Minot, ND; Minot 11th Street Apartments, Minot, ND; Minot Fairmont Apartments, Minot, ND; Minot Westridge Apartments, Minot, ND and Thomasbrook Apartments, Lincoln, NE.

Commercial Office - 610 Business Center, Brooklyn Park, MN; Intertech, Fenton, MO and Plymouth 5095, Plymouth, MN.

Commercial Medical - 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 - Cedar Lake Business Center, St. Louis Park, MN; Urbandale, Urbandale, IA; Woodbury 1865, Woodbury, MN and Eagan 2785 & 2795 Highway 55, Eagan, MN.

Discontinued operations from fiscal 2008 include:

Multi-Family Residential - 405 Grant Avenue Apartments, Harvey, ND and Sweetwater – Green Acres 1&2 Apartments, Devils Lake, ND.

Commercial Office - Minnetonka Office Building, Minnetonka, 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 first quarter of fiscal year 2009, IRET acquired a parcel of unimproved land in Bismarck, North Dakota for approximately $576,000, and four small apartment buildings with a total of 52 units in Minot, North Dakota, for a total purchase price (excluding closing costs) of approximately $2.5 million, including the issuance of limited partnership units of IRET Properties, the Company’s operating partnership, valued at approximately $2.0 million.  The Company had no dispositions in the first quarter of fiscal year 2009.  The following table details the Company’s acquisitions during the three months ended July 31, 2008:

	(in thousands)
Acquisitions	Land		Building		Acquisition Cost
Multi-Family Residential
33-unit Minot Westridge Apartments – Minot, ND	$	67	$	1,887	$	1,954
12-unit Minot Fairmont Apartments – Minot, ND		28		337		365
4-unit Minot 4th Street Apartments – Minot, ND		15		74		89
3-unit Minot 11th Street Apartments – Minot, ND		11		53		64
		121		2,351		2,472
Unimproved Land
Bismarck 2130 S. 12th Street – Bismarck, ND		576		0		576
		576		0		576
Total Property Acquisitions	$	697	$	2,351	$	3,048

Development Activity

The Company has several ongoing development projects.  As of July 31, 2008, IRET is engaged in the following development activity:

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 56,239 square foot medical office building adjacent to the existing structure, and an adjoining parking ramp, with planned project completion in the second quarter of IRET’s fiscal year 2009 and an estimated total project cost of $15.7 million. As of July 31, 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 July 31, 2008, the Company has incurred approximately $14.2 million in construction costs.

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 $11.0 million, including relocation, tenant improvement and leasing costs expected to be incurred to relocate tenants in the existing facility.  Construction began in September 2007. The exterior shell of the expansion project was completed in July 2008.  Certain interior work and tenant improvements are ongoing and are scheduled for completion in the second quarter of fiscal year 2009. As of July 31, 2008, the Company has incurred approximately $7.5 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 71 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 an expected total cost of approximately $20.7 million, including estimated future tenant build-outs and out-lot development.  As of July 31, 2008, the Company has incurred approximately $13.2 million of the estimated construction cost of this project.

Shareholder Equity, Distributions and Capital Structure

On July 1, 2008, IRET paid a quarterly distribution of $0.1685 per share and unit on its common shares and limited partnership units of IRET Properties.  This was IRET’s 149th consecutive distribution at equal or increasing rates.  IRET also paid, on June 30, 2008, a quarterly distribution of $0.5156 per share on its Series A preferred shares.

As of July 31, 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 (which are convertible, at the expiration of a specified holding period, into cash or, at the Company’s sole discretion, into common shares of the Company on a one-to-one basis), plus the book value of the Company’s preferred shares and the outstanding principal balance of the consolidated debt of the Company.

iii

Conference Call Information

The Conference Call for 1st Quarter Earnings is scheduled for Thursday, September 11, 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 Wednesday, September 10, 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, September 26, 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 76 multi-family residential properties with 9,528 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 38 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 2008 Form 10-K.  We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

iv

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

	(in thousands)
	July 31, 2008			April 30, 2008
ASSETS
Real estate investments
Property owned	$	1,655,778		$	1,648,259
Less accumulated depreciation		(229,691	)		(219,379	)
		1,426,087			1,428,880
Development in progress		35,231			22,856
Unimproved land		4,567			3,901
Mortgage loans receivable, net of allowance		534			541
Total real estate investments		1,466,419			1,456,178
Other assets
Cash and cash equivalents		42,351			53,481
Marketable securities – available-for-sale		420			420
Receivable arising from straight-lining of rents, net of allowance		14,383			14,113
Accounts receivable, net of allowance		4,395			4,163
Real estate deposits		1,048			1,379
Prepaid and other assets		2,324			349
Intangible assets, net of accumulated amortization		58,936			61,649
Tax, insurance, and other escrow		7,888			8,642
Property and equipment, net		1,450			1,467
Goodwill		1,392			1,392
Deferred charges and leasing costs, net		15,155			14,793
TOTAL ASSETS	$	1,616,161		$	1,618,026
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Accounts payable and accrued expenses	$	32,917		$	33,757
Mortgages payable		1,068,267			1,063,858
Other		830			978
TOTAL LIABILITIES		1,102,014			1,098,593
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST IN PARTNERSHIPS		13,186			12,609
MINORITY INTEREST OF UNITHOLDERS IN OPERATING PARTNERSHIP		159,984			161,818
(21,292,531 units at July 31, 2008 and 21,238,342 units at April 30, 2008)
SHAREHOLDERS’ EQUITY
Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at July 31, 2008 and April 30, 2008, aggregate liquidation preference of $28,750,000)		27,317			27,317
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 58,202,448 shares issued and outstanding at July 31, 2008, and 57,731,863 shares issued and outstanding at April 30, 2008)		444,134			440,187
Accumulated distributions in excess of net income		(130,474	)		(122,498	)
Total shareholders’ equity		340,977			345,006
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,616,161		$	1,618,026

v

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)

for the three months ended July 31, 2008 and 2007

	Three Months Ended July 31
	(in thousands, except per share data)
	2008			2007
REVENUE
Real estate rentals	$	47,657		$	44,093
Tenant reimbursement		11,189			9,480
TOTAL REVENUE		58,846			53,573
EXPENSES
Interest		16,888			15,442
Depreciation/amortization related to real estate investments		13,318			12,189
Utilities		4,434			3,948
Maintenance		6,999			6,006
Real estate taxes		7,370			6,429
Insurance		750			650
Property management expenses		4,251			3,841
Administrative expenses		1,231			1,122
Advisory and trustee services		100			74
Other expenses		362			253
Amortization related to non-real estate investments		449			343
TOTAL EXPENSES		56,152			50,297
Interest income		223			354
Other income		25			281
Income before minority interest and discontinued operations and loss on sale of other investments		2,942			3,911
Loss on sale of other investments		0			(1	)
Minority interest portion of operating partnership income		(647	)		(981	)
Minority interest portion of other partnerships’ loss		63			36
Income from continuing operations		2,358			2,965
Discontinued operations, net of minority interest		0			16
NET INCOME		2,358			2,981
Dividends to preferred shareholders		(593	)		(593	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	1,765		$	2,388
Earnings per common share from continuing operations	$	.03		$	.05
Earnings per common share from discontinued operations		.00			.00
NET INCOME PER COMMON SHARE – BASIC AND DILUTED	$	.03		$	.05

vi

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS

	(in thousands, except per share amounts)
Three Months Ended July 31,	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		$	2,358								$	2,981
Less dividends to preferred shareholders			(593	)								(593	)
Net income available to common shareholders			1,765			57,916		$	0.03			2,388			48,663		$	0.05
Adjustments:
Minority interest in earnings of Unitholders			647			21,298						987			20,284
Depreciation and amortization(1)			13,641									12,485
(Gain)/loss on depreciable property sales			0									1
Funds from operations applicable to common shares and Units		$	16,053			79,214		$	0.20		$	15,861			68,947		$	0.23

(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 $13,767 and $12,532, and depreciation/amortization from Discontinued Operations of $0 and $16, less corporate-related depreciation and amortization on office equipment and other assets of $126 and $63, for the three months ended July 31, 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.

vii

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILATION OF NET OPERATING INCOME TO THE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	(in thousands)
Three Months Ended July 31, 2008	Multi-Family Residential			Commercial- Office		Commercial- Medical		Commercial- Industrial		Commercial- Retail		Total
Real estate revenue		$	18,601	$	20,806	$	12,866	$	3,096	$	3,477	$	58,846
Real estate expenses			8,724		9,444		3,762		734		1,140		23,804
Net operating income		$	9,877	$	11,362	$	9,104	$	2,362	$	2,337		35,042
Interest													(16,888	)
Depreciation/amortization													(13,767	)
Administrative, advisory and trustee fees													(1,331	)
Other expenses													(362	)
Other income													248
Income before minority interest and discontinued operations and (loss) gain on sale of other investments												$	2,942

	(in thousands)
Three Months Ended July 31, 2007	Multi-Family Residential			Commercial-Office		Commercial-Medical		Commercial-Industrial		Commercial-Retail		Total
Real estate revenue		$	17,719	$	20,594	$	8,966	$	2,662	$	3,632	$	53,573
Real estate expenses			8,284		8,716		2,273		499		1,102		20,874
Net operating income		$	9,435	$	11,878	$	6,693	$	2,163	$	2,530		32,699
Interest													(15,442	)
Depreciation/amortization													(12,532	)
Administrative, advisory and trustee fees													(1,196	)
Other expenses													(253	)
Other income													635
Income before minority interest and discontinued operations and (loss) gain on sale of other investments												$	3,911

viii

EX-99.2

Exhibit 99.2

First Quarter Fiscal 2009

Supplemental Operating and Financial Data

for the Quarter Ended July 31, 2008

CONTACT: Michelle Saari VP - Investors Relations Direct Dial: 701-837-4738 E-Mail: msaari@iret.com 12 Main Street South Minot, ND 58701 Tel: 701-837-4738 Fax: 701-837-7117 www.iret.com

Supplemental Financial and Operating Data

Table of Contents

July 31, 2008 

	Page
Company Background and Highlights	2
Investment Cost by Segment	3
Key Financial Data
Condensed Consolidated Balance Sheets	4
Condensed Consolidated Statements of Operations	5
Funds From Operations	6
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)	7
Capital Analysis
Long-Term Mortgage Debt Analysis	8
Capital Analysis	9
Portfolio Analysis
Stabilized Properties Net Operating Income Summary	10
Net Operating Income Detail	11-12
Stabilized Properties and Overall Economic Occupancy Levels by Segment	13
Tenant Analysis
Commercial Leasing Summary	14-15
Multi-Family Residential Summary	16
10 Largest Commercial Tenants - Based on Annualized Base Rent	17
Lease Expirations as of July 31, 2008	18
Growth and Strategy
Fiscal 2009 Acquisition Summary	19
Fiscal 2009 Development Summary	20

1

Company Background and Highlights

First Quarter Fiscal 2009

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, medical (including senior housing), industrial and retail segments.

During the first quarter of fiscal year 2009, IRET acquired a parcel of unimproved land in Bismarck, North Dakota for approximately $576,000, and four small apartment buildings with a total of 52 units in Minot, North Dakota for a purchase price (excluding closing costs) of approximately $2.5 million, including the issuance of limited partnership units of IRET Properties, the Company’s operating partnership, valued at approximately $2.0 million.  The Company had no dispositions in the first quarter of fiscal year 2009. 

During the first quarter of fiscal year 2009, IRET completed construction of the exterior shell of an approximately 27,750 square foot addition to the Company’s Southdale Medical Building in Edina, Minnesota.  Certain interior work and tenant improvements are ongoing and are scheduled for completion in the second quarter of fiscal year 2009.  The estimated cost of this expansion project is approximately $11.0 million, including relocation, tenant improvement and leasing costs expected to be incurred to relocate tenants in the existing facility.  The addition is currently approximately 75% leased.

Also during the first quarter of fiscal year 2009, the Company completed construction of the parking ramp adjoining the approximately 56,239 square foot medical office building the Company is constructing next to its existing five-story medical office building located at 2828 Chicago Avenue in Minneapolis, Minnesota.  The new medical office building was approximately 85% complete as of July 31, 2008, with interior work and tenant improvements currently ongoing and scheduled for completion in the second quarter of fiscal year 2009.  The medical office building and adjoining parking ramp have an estimated total project cost of $15.7 million.  As of July 31, 2008, approximately 73% of this new medical office building was pre-leased to two tenants.

The Company changed the ticker symbol for its common shares of beneficial interest listed on the NASDAQ Global Select Market to “IRET” from “IRETS”, with effect on July 1, 2008.

In the first quarter of fiscal year 2009, IRET paid its 149th consecutive quarterly distribution per common share/unit at equal or increasing rates. 

As of July 31, 2008, IRET owns a diversified portfolio of 239 properties consisting of 76 multi-family residential properties, 65 office properties, 48 medical properties (including senior housing), 17 industrial properties and 33 retail properties.  IRET’s distributions have increased every year for 38 consecutive years.  IRET’s shares are publicly traded on the NASDAQ Global Select Market (NASDAQ:  IRET).

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:  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 2008 Form 10-K.  We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

2

Fiscal 2009 Development Projects

Southdale Medical Center Expansion Project	2828 Chicago Avenue Medical Building
Edina, MN	Minneapolis, MN
	(architects’ rendering)
IRET Corporate Plaza
Minot, ND
(architects’ rendering)

Investment Cost by Segment - First Quarter Fiscal 2009

With investments in the multi-family residential and commercial office, medical, industrial and retail segments, IRET’s diversified portfolio helps to provide stability during market fluctuations in returns from specific property types.

3

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS(unaudited)

(in thousands)

	07/31/2008			04/30/2008			01/31/2008			10/31/2007			07/31/2007
ASSETS
Real estate investments
Property owned	$	1,655,778		$	1,648,259		$	1,558,560		$	1,529,063		$	1,520,975
Less accumulated depreciation		(229,691	)		(219,379	)		(209,400	)		(199,682	)		(190,127	)
		1,426,087			1,428,880			1,349,160			1,329,381			1,330,848
Development in progress		35,231			22,856			14,734			10,553			4,853
Unimproved land		4,567			3,901			3,901			3,901			4,165
Mortgage loans receivable, net of allowance		534			541			548			391			393
Total real estate investments		1,466,419			1,456,178			1,368,343			1,344,226			1,340,259
Other assets
Cash and cash equivalents		42,351			53,481			76,392			89,302			24,647
Marketable securities – available-for-sale		420			420			2,160			2,090			2,046
Receivable arising from straight-lining of rents, net of allowance		14,383			14,113			13,753			13,430			13,097
Accounts receivable, net of allowance		4,395			4,163			3,842			2,279			2,980
Real estate deposits		1,048			1,379			1,103			1,601			272
Prepaid and other assets		2,324			349			821			1,445			1,917
Intangible assets, net of accumulated amortization		58,936			61,649			29,025			30,457			32,999
Tax, insurance, and other escrow		7,888			8,642			8,060			6,539			7,529
Property and equipment, net		1,450			1,467			1,487			1,486			1,476
Goodwill		1,392			1,392			1,396			1,397			1,397
Deferred charges and leasing costs, net		15,155			14,793			13,528			12,624			12,447
TOTAL ASSETS	$	1,616,161		$	1,618,026		$	1,519,910		$	1,506,876		$	1,441,066
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Accounts payable and accrued expenses	$	32,917		$	33,757		$	29,573		$	22,974		$	25,205
Mortgages payable		1,068,267			1,063,858			975,785			967,612			960,086
Other		830			978			1,019			1,161			1,103
TOTAL LIABILITIES		1,102,014			1,098,593			1,006,377			991,747			986,394
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST IN PARTNERSHIPS		13,186			12,609			12,768			12,781			12,818
MINORITY INTEREST OF UNITHOLDERS IN OPERATING PARTNERSHIP		159,984			161,818			155,301			154,274			159,477
SHAREHOLDERS’ EQUITY
Preferred Shares of Beneficial Interest		27,317			27,317			27,317			27,317			27,317
Common Shares of Beneficial Interest		444,134			440,187			433,645			429,236			357,614
Accumulated distributions in excess of net income		(130,474	)		(122,498	)		(115,546	)		(108,474	)		(102,526	)
Accumulated other comprehensive income (loss)		0			0			48			(5	)		(28	)
Total shareholders’ equity		340,977			345,006			345,464			348,074			282,377
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,616,161		$	1,618,026		$	1,519,910		$	1,506,876		$	1,441,066

4

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

	Three Months Ended
OPERATING RESULTS	07/31/2008			04/30/2008			01/31/2008			10/31/2007			07/31/2007
Real estate revenue	$	58,846		$	58,962		$	54,424		$	54,211		$	53,573
Real estate expenses		23,804			23,911			21,567			21,053			20,874
Net operating income		35,042			35,051			32,857			33,158			32,699
Interest		(16,888	)		(16,470	)		(15,840	)		(15,687	)		(15,442	)
Depreciation/amortization		(13,767	)		(13,974	)		(12,508	)		(12,504	)		(12,532	)
Administrative, advisory and trustee fees		(1,331	)		(1,392	)		(1,348	)		(1,267	)		(1,196	)
Other expenses		(362	)		(291	)		(343	)		(457	)		(253	)
Other income		248			671			1,023			431			635
Income before minority interest and discontinued operations and (loss) gain on sale of other investments	$	2,942		$	3,595		$	3,841		$	3,674		$	3,911
Gain (loss) on sale of other investments		0			38			2			3			(1	)
Minority interest portion of operating partnership income		(647	)		(833	)		(855	)		(855	)		(981	)
Minority interest portion of other partnerships’ (income) loss		63			111			(11	)		0			36
Income from continuing operations		2,358			2,911			2,977			2,822			2,965
Discontinued operations, net of minority interest		0			377			6			14			16
NET INCOME		2,358			3,288			2,983			2,836			2,981
Dividends to preferred shareholders		(593	)		(593	)		(593	)		(593	)		(593	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	1,765		$	2,695		$	2,390		$	2,243		$	2,388
Per Share Data
Earnings per common share from continuing operations	$	.03		$	.04		$	.04		$	.04		$	.05
Earnings per common share from discontinued operations		.00			.01			.00			.00			.00
Net income per common share – basic & diluted	$	.03		$	.05		$	.04		$	.04		$	.05
Percentage of Revenues
Real estate expenses		40.5	%		40.6	%		39.6	%		38.8	%		39.0	%
General and administrative		2.3	%		2.4	%		2.5	%		2.3	%		2.2	%
Ratios
EBITDA/Interest expense		1.98	x		2.04	x		1.97	x		2.01	x		2.04	x
EBITDA/Interest expense plus preferred distributions		1.91	x		1.97	x		1.90	x		1.93	x		1.97	x

5

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FUNDS FROM OPERATIONS(unaudited)

(in thousands, except per share and unit data)

	Three Months Ended
	07/31/2008			04/30/2008			01/31/2008			10/31/2007			07/31/2007
Funds From Operations(1)
Net income	$	2,358		$	3,288		$	2,983		$	2,836		$	2,981
Less dividends to preferred shareholders		(593	)		(593	)		(593	)		(593	)		(593	)
Net income available to common shareholders		1,765			2,695			2,390			2,243			2,388
Adjustments:
Minority interest in earnings of Unitholders		647			973			858			859			987
Depreciation and amortization		13,641			13,910			12,456			12,452			12,485
(Gain)/loss on depreciable property sales		0			(510	)		(2	)		(3	)		1
Funds from operations applicable to common shares and Units	$	16,053		$	17,068		$	15,702		$	15,551		$	15,861
FFO per share and unit - basic and diluted	$	0.20		$	0.22		$	0.21		$	0.21		$	0.23
Weighted average shares and units		79,214			78,195			75,755			70,158			68,947

(1) 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/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.

6

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) (unaudited)

(in thousands)

	Three Months Ended
		07/312008		04/30/2008			01/31/2008			10/31/2007			07/31/2007
EBITDA(1)
Net income	$	2,358		$	3,288		$	2,983		$	2,836		$	2,981
Adjustments:
Minority interest portion of operating partnership income		647			973			858			859			987
Income before minority interest		3,005			4,261			3,841			3,695			3,968
Add:
Interest		16,888			16,470			15,840			15,687			15,442
Depreciation/amortization related to real estate investments		13,318			13,542			12,165			12,177			12,205
Amortization related to non-real estate investments		449			437			356			340			343
Amortization related to real estate revenues(2)		(57	)		(65	)		(79	)		(99	)		(40	)
Less:
Interest income		(223	)		(449	)		(953	)		(339	)		(354	)
(Gain) loss on sale of real estate, land and other investments		0			(552	)		(2	)		(3	)		1
EBITDA	$	33,380		$	33,644		$	31,168		$	31,458		$	31,565

(1)   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. 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.

(2)   Included in real estate revenue in the Statement of Operations.

7

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT ANALYSIS

(in thousands)

Debt Maturity Schedule

Annual Expirations

	Future Maturities of Debt
Fiscal Year	Fixed Debt		Variable Debt		Total Debt
2009	$	15,061	$	1,142	$	16,203
2010		129,768		2,500		132,268
2011		82,680		0		82,680
2012		93,168		0		93,168
2013		26,230		4,954		31,184
2014		49,490		0		49,490
2015		72,720		0		72,720
2016		67,024		397		67,421
2017		162,667		0		162,667
2018		94,718		0		94,718
Thereafter		263,483		2,265		265,748
Total maturities	$	1,057,009	$	11,258	$	1,068,267

	07/31/2008			04/30/2008			01/31/2008			10/31/2007			07/31/2007
Balances Outstanding
Mortgage
Fixed rate	$	1,057,009		$	1,052,162		$	951,112		$	943,632		$	938,677
Variable rate		11,258			11,696			24,673			23,980			21,409
Mortgage total		1,068,267			1,063,858			975,785			967,612			960,086
Weighted Average Interest Rates
Secured		6.36	%		6.37	%		6.44	%		6.36	%		6.37	%

8

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CAPITAL ANALYSIS

(in thousands, except per share and unit amounts)

	07/31/2008			04/30/2008			01/31/2008			10/31/2007			07/31/2007
Equity Capitalization
Common shares outstanding		58,202			57,732			56,977			56,419			48,893
Operating partnership (OP) units outstanding		21,293			21,238			20,395			20,114			20,494
Total common shares and OP units outstanding		79,495			78,970			77,372			76.533			69,387
Market price per common share (closing price at end of period)	$	10.50		$	10.20		$	9.80		$	10.85		$	9.62
Equity capitalization-common shares and OP units	$	834,698		$	805,494		$	758,246		$	830,383		$	667,503
Recorded book value of preferred shares	$	27,317		$	27,317		$	27,317		$	27,317		$	27,317
Total equity capitalization	$	862,015		$	832,811		$	785,563		$	857,700		$	694,820
Debt Capitalization
Total mortgage debt	$	1,068,267		$	1,063,858		$	975,785		$	967,612		$	960,086
Total capitalization	$	1,930,282		$	1,896,669		$	1,761,348		$	1,825,312		$	1,654,906
Total debt to total capitalization	0.55:1			0.56:1			0.55:1			0.53:1			0.58:1
Earnings to fixed charges(1)		1.15	x		1.20	x		1.23	x		1.23	x		1.25	x
Earnings to combined fixed charges and preferred distributions(2)		1.12	x		1.16	x		1.19	x		1.19	x		1.21	x
Debt service coverage ratio(3)		1.40	x		1.46	x		1.42	x		1.45	x		1.48	x
Distribution Data
Common shares and units outstanding at record date		79,116			77,675			76,698			69,363			68,523
Total common distribution paid	$	13,332		$	13,050		$	12,847		$	11,584		$	11,409
Common distribution per share and unit	$	0.1685		$	0.1680		$	0.1675		$	0.1670		$	0.1665
Payout ratio (FFO per share and unit basis)(4)		84.3	%		76.4	%		79.8	%		79.5	%		72.4	%

(1)   The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations before adjustments for minority interest in consolidated subsidiaries, plus fixed charges and preferred distributions, less 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.

(2)   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 before adjustments for minority interest in consolidated subsidiaries, plus fixed charges and preferred distributions, less 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.

(3)   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.

(4)   The ratio of the current quarterly distribution rate per common share and unit divided by quarterly FFO per share and unit.

9

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

STABILIZED PROPERTIES NET OPERATING INCOME SUMMARY

(in thousands)

	Stabilized Properties(1)
	Three Months Ended July 31,
Segment	2008		2007		% Change
Multi-Family Residential	$	9,471	$	9,258		2.3	%
Commercial Office		10,932		11,872		(7.9	%)
Commercial Medical		6,699		6,626		1.1	%
Commercial Industrial		1,663		1,976		(15.8	%)
Commercial Retail		2,337		2,530		(7.6	%)
	$	31,102	$	32,262		(3.6	%)

1. For 1st Quarter Fiscal 2009 and 1st Quarter Fiscal 2008, stabilized properties excluded:

Multi-Family Residential - Indian Hills, Sioux City, IA; Cottonwood IV Apartments, Bismarck, ND; Greenfield Apartments, Omaha, NE; Minot 4th Street Apartments, Minot, ND; Minot 11th Street Apartments, Minot, ND; Minot Fairmont Apartments, Minot, ND; Minot Westridge Apartments, Minot, ND and Thomasbrook Apartments, Lincoln, NE.

Commercial Office - 610 Business Center, Brooklyn Park, MN; Intertech, Fenton, MO and Plymouth 5095, Plymouth, MN.

Commercial Medical - 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 - Cedar Lake Business Center, St. Louis Park, MN; Urbandale, Urbandale, IA; Woodbury 1865, Woodbury, MN and Eagan 2785 & 2795 Highway 55, Eagan, MN.

Discontinued operations from fiscal 2008 include:

Multi-Family Residential - 405 Grant Avenue Apartments, Harvey, ND and Sweetwater – Green Acres 1&2 Apartments, Devils Lake, ND.

Commercial Office - Minnetonka Office Building, Minnetonka, MN.

10

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Three Months Ended July 31, 2008
	Multi-Family Residential			Commercial Office			Commercial Medical			Commercial Industrial			Commercial Retail			Corporate and  Other			Total
Real estate rental revenue
Stabilized(1)	$	17,649		$	20,187		$	9,303		$	2,202		$	3,477		$	0		$	52,818
Non-Stabilized		952			619			3,563			894			0			0			6,028
Total		18,601			20,806			12,866			3,096			3,477			0			58,846
Real estate expenses
Stabilized(1)		8,178			9,255			2,604			539			1,140			0			21,716
Non-Stabilized		546			189			1,158			195			0			0			2,088
Total		8,724			9,444			3,762			734			1,140			0			23,804
Net Operating Income (NOI)
Stabilized(1)		9,471			10,932			6,699			1,663			2,337			0			31,102
Non-Stabilized		406			430			2,405			699			0			0			3,940
Net operating income	$	9,877		$	11,362		$	9,104		$	2,362		$	2,337		$	0		$	35,042
Reconciliation of NOI to net income available to common shareholders
Interest (expense) income	$	(4,945	)	$	(5,979	)	$	(4,304	)	$	(960	)	$	(1,038	)	$	338		$	(16,888	)
Depreciation/amortization		(3,473	)		(5,492	)		(3,140	)		(859	)		(742	)		(61	)		(13,767	)
Administrative, advisory and trustee fees		0			0			0			0			0			(1,331	)		(1,331	)
Other expenses		0			0			0			0			0			(362	)		(362	)
Other income		0			0			0			0			0			248			248
Income before minority interest and discontinued operations and (loss) gain on sale of other investments		1,459			(109	)		1,660			543			557			(1,168	)		2,942
Minority interest portion of operating partnership income		0			0			0			0			0			(647	)		(647	)
Minority interest portion of other partnerships’ loss		0			0			0			0			0			63			63
Income from continuing operations		1,459			(109	)		1,660			543			557			(1,752	)		2,358
NET INCOME		1,459			(109	)		1,660			543			557			(1,752	)		2,358
Dividends to preferred shareholders		0			0			0			0			0			(593	)		(593	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	1,459		$	(109	)	$	1,660		$	543		$	557		$	(2,345	)	$	1,765

1. For 1st Quarter Fiscal 2009 and 1st Quarter Fiscal 2008, stabilized properties excluded:

Multi-Family Residential - Indian Hills, Sioux City, IA; Cottonwood IV Apartments, Bismarck, ND; Greenfield Apartments, Omaha, NE; Minot 4th Street Apartments, Minot, ND; Minot 11th Street Apartments, Minot, ND; Minot Fairmont Apartments, Minot, ND; Minot Westridge Apartments, Minot, ND and Thomasbrook Apartments, Lincoln, NE.

Commercial Office - 610 Business Center, Brooklyn Park, MN; Intertech, Fenton, MO and Plymouth 5095, Plymouth, MN.

Commercial Medical - 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 - Cedar Lake Business Center, St. Louis Park, MN; Urbandale, Urbandale, IA; Woodbury 1865, Woodbury, MN and Eagan 2785 & 2795 Highway 55, Eagan, MN.

11

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Three Months Ended July 31, 2007
	Multi-Family Residential			Commercial Office			Commercial Medical			Commercial Industrial			Commercial Retail			Corporate and  Other			Total
Real estate rental revenue
Stabilized(1)	$	17,143		$	20,587		$	8,855		$	2,419		$	3,632		$	0		$	52,636
Non-Stabilized		576			7			111			243			0			0			937
Total		17,719			20,594			8,966			2,662			3,632			0			53,573
Real estate expenses
Stabilized(1)		7,885			8,715			2,229			443			1,102			0			20,374
Non-Stabilized		399			1			44			56			0			0			500
Total		8,284			8,716			2,273			499			1,102			0			20,874
Net Operating Income (NOI)
Stabilized(1)		9,258			11,872			6,626			1,976			2,530			0			32,262
Non-Stabilized		177			6			67			187			0			0			437
Net operating income	$	9,435		$	11,878		$	6,693		$	2,163		$	2,530		$	0		$	32,699
Reconciliation of NOI to net income available to common shareholders
Interest (expense) income	$	(4,953	)	$	(5,802	)	$	(2,876	)	$	(782	)	$	(1,031	)	$	2		$	(15,442	)
Depreciation/amortization		(3,228	)		(5,686	)		(2,161	)		(718	)		(684	)		(55	)		(12,532	)
Administrative, advisory and trustee fees		0			0			0			0			0			(1,196	)		(1,196	)
Other expenses		0			0			0			0			0			(253	)		(253	)
Other income		0			0			0			0			0			635			635
Income before minority interest and discontinued operations and (loss) gain on sale of other investments		1,254			390			1,656			663			815			(867	)		3,911
Loss on sale of other investments		0			0			0			0			0			(1	)		(1	)
Minority interest portion of operating partnership income		0			0			0			0			0			(981	)		(981	)
Minority interest portion of other partnerships’ loss		0			0			0			0			0			36			36
Income from continuing operations		1,254			390			1,656			663			815			(1,813	)		2,965
Discontinued operations, net of minority interest(2)		18			(2	)		0			0			0			0			16
NET INCOME		1,272			388			1,656			663			815			(1,813	)		2,981
Dividends to preferred shareholders		0			0			0			0			0			(593	)		(593	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	1,272		$	388		$	1,656		$	663		$	815		$	(2,406	)	$	2,388

1. For 1st Quarter Fiscal 2009 and 1st Quarter Fiscal 2008, stabilized properties excluded:

Multi-Family Residential - Indian Hills, Sioux City, IA; Cottonwood IV Apartments, Bismarck, ND; Greenfield Apartments, Omaha, NE; Minot 4th Street Apartments, Minot, ND; Minot 11th Street Apartments, Minot, ND; Minot Fairmont Apartments, Minot, ND; Minot Westridge Apartments, Minot, ND and Thomasbrook Apartments, Lincoln, NE.

Commercial Office - 610 Business Center, Brooklyn Park, MN; Intertech, Fenton, MO and Plymouth 5095, Plymouth, MN.

Commercial Medical - 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 - Cedar Lake Business Center, St. Louis Park, MN; Urbandale, Urbandale, IA; Woodbury 1865, Woodbury, MN and Eagan 2785 & 2795 Highway 55, Eagan, MN.

Discontinued operations from fiscal 2008 include:

Multi-Family Residential - 405 Grant Avenue Apartments, Harvey, ND and Sweetwater – Green Acres 1&2 Apartments, Devils Lake, ND.

Commercial Office - Minnetonka Office Building, Minnetonka, MN.

12

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

STABILIZED PROPERTIES AND OVERALL ECONOMIC OCCUPANCY LEVELS BY SEGMENT

1st Quarter Fiscal 2009 vs. 1st Quarter Fiscal 2008

Segments	Stabilized Properties						All Properties
	1st Quarter			1st Quarter			1st Quarter			1st Quarter
	Fiscal 2009			Fiscal 2008			Fiscal 2009			Fiscal 2008
Multi-Family Residential		92.8	%		92.2	%		92.3	%		91.8	%
Commercial Office		88.9	%		93.3	%		89.1	%		93.3	%
Commercial Medical		95.7	%		96.0	%		96.5	%		96.1	%
Commercial Industrial		95.9	%		98.6	%		96.8	%		98.1	%
Commercial Retail		86.6	%		87.0	%		86.6	%		87.0	%

13

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING SUMMARY

for the three months ended July 31, 2008

	New(1)		Renew(2)		1st Quarter Fiscal 2009 Total
Gross Leasing Square Footage
Commercial Office		48,371		114,138		162,509
Commercial Medical		7,573		7,247		14,820
Commercial Industrial		12,500		0		12,500
Commercial Retail		7,606		38,586		46,192
Total		76,050		159,971		236,021
Weighted Average Term (yrs)
Commercial Office		4.8		3.6		4.3
Commercial Medical		7.5		3.7		5.2
Commercial Industrial		0.1		0.0		0.1
Commercial Retail		4.1		3.2		3.7
Total		4.6		3.4		4.0
Weighted Average Rental Rate Increases(3)
Rate on Expiring Leases
Commercial Office					$	10.90
Commercial Medical						18.15
Commercial Industrial						0.00
Commercial Retail						8.64
Total					$	10.92
Weighted Average Rate on New and Renewal Leases(3)
Commercial Office	$	7.24	$	9.83	$	9.06
Commercial Medical		22.65		16.49		19.64
Commercial Industrial		5.50		0.00		5.50
Commercial Retail		8.56		7.95		8.05
Total	$	8.62	$	9.68	$	9.34
Percentage Increase (Decrease)
Commercial Office						(16.9	%)
Commercial Medical						8.2	%
Commercial Industrial						0.0	%
Commercial Retail						(6.8	%)
Total						(14.5	%)

(1) Excluding leases in place on date of acquisition.

(2) Renewing leases are not necessarily leases expiring in that period. Expansion footage for renewing tenants is included in this column.

(3) Net of estimated operating expenses, other than tenant improvements.

14

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING SUMMARY

for the three months ended July 31, 2008

	1st Quarter Fiscal 2009 Total
	New		Renew		Total Dollars
Tenant Improvements
Commercial Office	$	482,779	$	494,961	$	977,740
Commercial Medical		265,055		4,225		269,280
Commercial Industrial		0		0		0
Commercial Retail		14,548		0		14,548
Subtotal	$	762,382	$	499,186	$	1,261,568
Tenant Improvements per square foot
Commercial Office	$	9.98	$	4.34	$	6.02
Commercial Medical		35.00		0.58		0.58
Commercial Industrial		0.00		0.00		0.00
Commercial Retail		1.91		0.00		0.31
Subtotal	$	10.02	$	3.12	$	5.35
Leasing Costs
Commercial Office	$	258,509	$	412,452	$	670,961
Commercial Medical		50,093		13,921		64,014
Commercial Industrial		343		0		343
Commercial Retail		12,932		2,947		15,879
Subtotal	$	321,877	$	429,320	$	751,197
Leasing Costs per square foot
Commercial Office	$	5.34	$	3.61	$	4.13
Commercial Medical		6.61		1.92		4.32
Commercial Industrial		0.03		0.00		0.03
Commercial Retail		1.70		0.08		0.34
Subtotal	$	4.23	$	2.68	$	3.18
Tenant Improvements and Leasing Costs
Commercial Office	$	741,288	$	907,413	$	1,648,701
Commercial Medical		315,148		18,146		333,294
Commercial Industrial		343		0		343
Commercial Retail		27,480		2,947		30,427
Total	$	1,084,259	$	928,506	$	2,012,765
Tenant Improvements and Leasing Costs per square foot
Commercial Office	$	15.33	$	7.95	$	10.15
Commercial Medical		41.61		2.50		22.49
Commercial Industrial		0.03		0.00		0.03
Commercial Retail		3.61		0.08		0.66
Total	$	14.26	$	5.80	$	8.53

15

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

MULTI-FAMILY RESIDENTIAL SUMMARY

	Three Months Ended
	07/31/2008			04/30/2008			01/31/2008			10/31/2007			07/31/2007
Number of Units		9,528			9,500			9,500			9,337			9,337
Average Investment Per Unit	$	53,919		$	53,677		$	53,313		$	52,898		$	52,524
Average Scheduled Rent per Unit
Stabilized	$	700.43		$	695.01		$	690.31		$	686.99		$	684.23
Non-Stabilized		647.89			657.55			611.55			590.24			595.63
	$	697.18		$	692.85		$	686.38		$	683.01		$	680.59
Total Receipts per Unit
Stabilized	$	657.09		$	658.05		$	659.05		$	659.02		$	638.27
Non-Stabilized		536.68			484.14			474.53			491.86			500.23
	$	649.63		$	648.03		$	649.84		$	652.15		$	632.59
Occupancy %
Stabilized		92.8	%		93.2	%		93.9	%		94.2	%		92.2	%
Non-Stabilized		84.1	%		72.4	%		76.1	%		81.6	%		81.5	%
		92.3	%		92.1	%		93.1	%		93.8	%		91.8	%
Operating Expenses as a % of Scheduled Rent
Stabilized		43.5	%		45.9	%		44.3	%		44.6	%		42.9	%
Non-Stabilized		47.5	%		46.7	%		47.2	%		65.4	%		58.1	%
Total		43.7	%		45.9	%		44.4	%		45.4	%		43.5	%

16

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

10 LARGEST COMMERCIAL TENANTS – BASED ON ANNUALIZED BASE RENT

as of July 31, 2008

Tenant	Number of Properties		Weighted  Average  Remaining  Lease Term  in Months		% of Total Commercial Segments’ Minimum  Rents			Aggregate  Rentable  Square Feet		Percentage of Aggregate  Occupied  Square  Feet
Affiliates of Edgewood Vista/Sunwest Management, Inc.		21		245		10.8	%		983,877		9.4	%
St. Lukes Hospital of Duluth, Inc.		6		84		3.5	%		198,775		1.9	%
Fairview Health		8		49		2.3	%		167,086		1.6	%
Applied Underwriters		3		103		2.2	%		141,724		1.3	%
Best Buy Co., Inc. (NYSE: BBY)		2		28		2.0	%		224,650		2.1	%
UGS Corp.		1		37		1.7	%		122,567		1.2	%
HealthEast Care System		1		127		1.6	%		114,316		1.1	%
Microsoft (NASDAQ: MSFT)		1		61		1.5	%		122,040		1.2	%
Smurfit - Stone Container (NASDAQ: SSCC)		2		89		1.5	%		424,147		4.0	%
Arcadis Corporate Services (NASDAQ: ARCAF)		2		36		1.4	%		82,725		0.8	%
Total/Weighted Average				105		28.5	%		2,581,907		24.6	%

17

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LEASE EXPIRATIONS

as of July 31, 2008

Fiscal Year	Number of  Leases		Rentable  Square Feet		Percent of  Rentable  Square Feet			Annualized  Rent *		Average  Rental  Rate		Percent of  Annualized  Rent
Commercial Office
2009		39		314,089		7.6	%	$	3,165,891	$	10.08		6.0	%
2010		75		721,436		17.3	%		8,162,688		11.31		15.4	%
2011		64		609,070		14.6	%		7,921,067		13.01		15.0	%
2012		46		763,435		18.4	%		10,624,841		13.92		20.1	%
2013		34		574,474		13.8	%		7,262,507		12.64		13.8	%
2014 and thereafter		56		1,177,239		28.3	%		15,672,806		13.31		29.7	%
		314		4,159,743		100.0	%	$	52,809,800	$	12.70		100.0	%
Commercial Medical
2009		19		64,744		3.0	%	$	1,164,769	$	17.99		3.2	%
2010		24		66,599		3.1	%		1,237,797		18.59		3.4	%
2011		16		60,868		2.8	%		1,112,167		18.22		3.0	%
2012		29		108,148		5.0	%		2,235,263		20.67		6.1	%
2013		16		66,383		3.1	%		1,200,507		18.08		3.3	%
2014 and thereafter		94		1,786,348		83.0	%		29,613,757		16.58		81.0	%
		198		2,153,090		100.0	%	$	36,564,260	$	16.98		100.0	%
Commercial Industrial
2009		4		107,788		4.1	%	$	497,923	$	4.62		4.9	%
2010		6		256,657		9.7	%		775,783		3.02		7.6	%
2011		14		843,507		31.8	%		2,626,621		3.11		25.7	%
2012		2		237,066		8.9	%		640,078		2.70		6.3	%
2013		4		263,834		10.0	%		1,288,193		4.88		12.6	%
2014 and thereafter		9		940,284		35.5	%		4,382,489		4.66		42.9	%
		39		2,649,136		100.0	%	$	10,211,087	$	3.85		100.0	%
Commercial Retail
2009		26		147,413		12.3	%	$	1,130,399	$	7.67		11.5	%
2010		51		216,883		18.2	%		1,492,320		6.88		15.2	%
2011		43		259,098		21.7	%		2,551,501		9.85		26.0	%
2012		21		213,795		17.9	%		1,137,116		5.32		11.6	%
2013		13		67,485		5.7	%		427,440		6.33		4.4	%
2014 and thereafter		26		288,623		24.2	%		3,065,588		10.62		31.3	%
		180		1,193,297		100.0	%	$	9,804,364	$	8.22		100.0	%
Commercial Total
2009		88		634,034		6.2	%	$	5,958,982	$	9.40		5.4	%
2010		156		1,261,575		12.4	%		11,668,588		9.25		10.7	%
2011		137		1,772,543		17.5	%		14,211,356		8.02		13.0	%
2012		98		1,322,444		13.0	%		14,637,298		11.07		13.4	%
2013		67		972,176		9.6	%		10,178,647		10.47		9.3	%
2014 and thereafter		185		4,192,494		41.3	%		52,734,640		12.58		48.2	%
		731		10,155,266		100.0	%	$	109,389,511	$	10.77		100.0	%

* Annualized Rent is monthly scheduled rent as of July 31, 2008 (cash basis), multiplied by 12.

18

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FISCAL 2009 ACQUISITION SUMMARY

as of July 31, 2008

($’s in thousands)

Property	Location	Segment Type	Acquisition Date	Square Feet/Units		Leased Percentage at Acquisition			July 31, 2008 Leased Percentage			Investment
33-unit Minot Westridge Apartments	Minot, ND	Multi-Family Residential	May 1, 2008		33		100.0	%		100.0	%	$	1,954
12-unit Minot Fairmont Apartments	Minot, ND	Multi-Family Residential	May 1, 2008		12		100.0	%		100.0	%		365
4-unit Minot 4th Street Apartments	Minot, ND	Multi-Family Residential	May 1, 2008		4		100.0	%		100.0	%		89
3-unit Minot 11th Street Apartments	Minot, ND	Multi-Family Residential	May 1, 2008		3		100.0	%		100.0	%		64
Bismarck 2130 S. 12th Street	Bismarck, ND	Unimproved Land	May 23, 2008		N/A		N/A			N/A			576
			Total Square Feet		0							$	3,048
			Total Units		52

19

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FISCAL 2009 DEVELOPMENT SUMMARY

as of July 31, 2008

($’s in thousands)

Property and Location	Total Rentable Square Feet or # of Units	Percentage  Leased or Committed			Anticipated  Total Cost		Cost to  Date		Anticipated  Construction Completion
2828 Chicago Avenue Medical Building, Minneapolis, MN	56,239 s.f.		73	%		15,700		14,177	2nd Quarter Fiscal 2009
Southdale Medical Building Expansion, Edina, MN	27,750 s.f.		75	%		10,988		7,533	2nd Quarter Fiscal 2009
IRET Corporate Plaza, Minot, ND	approximately 71 units & 60,100 s.f.		33	%*		20,739		13,200	2nd Quarter Fiscal 2009
401 South Main, Minot, ND	10 Units		0	%	$	793	$	321	2nd Quarter Fiscal 2009
		Total			$	42,332	$	35,231

*      IRET - - occupied portion.

20