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):

December 12, 2011

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.)

1400 31st Avenue SW, Suite 60

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

An earnings release issued by the Registrant on December 12, 2011, regarding financial and operational results for the three and six months ended October 31, 2011, is attached as Exhibit 99.1. Also, certain supplemental information not included in the earnings 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

(d)   Exhibits

Exhibit
Number	Description
99.1	Earnings Release issued December 12, 2011, regarding financial and operational results for the three and six months ended October 31, 2011
99.2	Certain supplemental information not included in the earnings 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

President & Chief Executive Officer

Date: December 12, 2011

EX-99.1

Exhibit 99.1

Earnings Release

INVESTORS REAL ESTATE TRUST

ANNOUNCES

FINANCIAL AND OPERATING RESULTS

FOR THE QUARTER AND YEAR-TO-DATE ENDED OCTOBER 31, 2011

Minot, ND – December 12, 2011 – Investors Real Estate Trust (tickers: IRET and IRETP; exchange: NASDAQ Global Select Market) reportedfinancial and operating results today for the quarter and year-to-date ended October 31, 2011.

During the three month period ended October 31, 2011, IRET’s revenues increased from the year-earlier period. Funds From Operations (FFO)1 overall and on a per share and unit basis decreased for the three month period ended October 31, 2011 compared to the same period of the prior fiscal year.  Net income decreased from the year-earlier period, primarily due to the decrease in gain on sale of discontinued operations in the three month period ended October 31, 2011, compared to the three month period ended October 31, 2010.

For the three month period ended October 31, 2011, as compared to the same period of the prior fiscal year:

• Revenues increased to $60.7 million from $58.8 million.

• FFO decreased to $15.2 million on approximately 101,669,000 weighted average shares and units outstanding, from $16.0 million on approximately 98,737,000 weighted average shares and units outstanding ($.15 per share and unit compared to $.17 per share and unit).

• Net Income Available to Common Shareholders, as computed under generally accepted accounting principles, was approximately $692,000 compared to $5.2 million in the same period of the prior fiscal year.

• Total expenses increased by $2.9 million, or 7.1%, in the three months ended October 31, 2011 compared to the three months ended October 31, 2010, from $41.0 million to $43.9 million.

During the six month period ended October 31, 2011, IRET’s revenues increased from the year-earlier period. Funds From Operations (FFO)1 overall and on a per share and unit basis decreased for the six month period ended October 31, 2011 compared to the same period of the prior fiscal year.  Net income decreased from the year-earlier period, primarily due to the decrease in gain on sale of discontinued operations in the six month period ended October 31, 2011, compared to the six month period ended October 31, 2010.

For the six month period ended October 31, 2011, as compared to the same period of the prior fiscal year:

• Revenues increased to $120.3 million from $118.0 million.

• FFO decreased to $31.0 million on approximately 101,286,000 weighted average shares and units outstanding, from $32.9 million on approximately 97,775,000 weighted average shares and units outstanding ($.31 per share and unit compared to $.34 per share and unit).

• Net Income Available to Common Shareholders, as computed under generally accepted accounting principles, was approximately $1.5 million compared to $6.6 million in the same period of the prior fiscal year.

• Total expenses increased by $3.9 million, or 4.7%, in the six months ended October 31, 2011 compared to the six months ended October 31, 2010, from $82.2 million to $86.1 million.

IRET’s President and Chief Executive Officer, Timothy Mihalick, commented: “IRET continues to reduce vacancy in its multi-family residential, industrial, medical and retail segments, but vacancy levels in our commercial office segment remain elevated and continue to reflect the challenging and uncertain economic conditions in our markets.  A sluggish and weak economy continues to depress tenant demand for office space and pressure rental rates.  While we made significant progress in the second quarter of fiscal year 2012, and subsequent to quarter end, in leasing certain vacant space in our commercial portfolio, as indicated by our November 2011 announcement of the execution of leases covering 137,488 square feet at three of our commercial properties, the pace of recovery in our commercial office segment has been slower than we expected, which has affected our revenues in this quarter.  However, we continue to see numerous acquisition and development opportunities, particularly in our home market of North Dakota, where oil activity remains strong.  Additionally, and as before, we remain focused on improving our core operational efficiencies, which we expect to assist in providing favorable results to our bottom line.”

______________________________

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 (or losses) from sales of property, plus real estate depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.”  In addition, NAREIT recently clarified its computation of FFO to exclude impairment charges for all periods presented. FFO is a non-GAAP measure. We consider FFO, which is a standard supplemental measure for equity real estate investment trusts, helpful to investors because it facilitates an understanding of the operating performance of properties without giving effect to impairment write-downs and to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time.  Since real estate values instead historically rise or fall with market conditions, we believe that FFO provides investors and management with a more accurate indication of our financial and operating results. See table below for a reconciliation of Net Income to FFO.

i

Operating Results

Net Operating Income (NOI)2 from stabilized properties3 decreased approximately $1.1 million or 3.2% during the three month period ended October 31, 2011, compared to the same period one year ago. NOI from stabilized properties decreased in three of our five segments, with NOI increasing in our multi-family residential and commercial industrial segments, which increased 12.7% and 11.0%, respectively, due to increased occupancy.  NOI from all properties increased by $351,000 during the three month period ended October 31, 2011, compared to the same period one year ago. NOI from all properties increased in three of our five segments. NOI in our commercial office segment, however, decreased 12.9% due to increased vacancy, and in our commercial retail segment, decreased 2.2 % due to increased real estate expenses, compared to the three month period ended October 31, 2010.

Net Operating Income (NOI)2 from stabilized properties3 decreased approximately $2.2 million or 3.1% during the six month period ended October 31, 2011, compared to the same period one year ago. NOI from stabilized properties decreased in three of our five segments, with NOI increasing only in our multi-family residential and commercial industrial segments, which increased 12.1% and 4.5%, respectively, due to increased occupancy.  NOI from all properties decreased by $222,000 during the six month period ended October 31, 2011, compared to the same period one year ago. NOI from all properties increased in three of our five segments. NOI in our commercial office segment, however, decreased 11.4% due to increased vacancy, and in our commercial retail segment, decreased 5.4 % due to increased real estate expenses, compared to the six month period ended October 31, 2010.

As of October 31, 2011, compared to October 31, 2010, physical occupancy levels on a stabilized property basis and on an all property basis increased in four of our five reportable segments.

Physical Occupancy Levels on a Stabilized Property and All Property Basis:

	Stabilized Properties(a)		All Properties
	As of October 31,		As of  October 31,
Segments	Fiscal 2012	Fiscal 2011	Fiscal 2012	Fiscal 2011
Multi-Family Residential	94.8%	90.6%	94.6%	90.6%
Commercial Office	77.7%	80.5%	78.0%	80.5%
Commercial Medical	95.8%	95.7%	96.2%	95.8%
Commercial Industrial	92.2%	80.0%	92.3%	80.3%
Commercial Retail	85.3%	83.6%	85.8%	83.6%

a. As of October 31, 2011, stabilized properties excluded:

Multi-Family Residential - North Pointe II, Bismarck, ND and Sierra Vista, Sioux Falls, SD, Cottage West Twin Homes, Sioux Falls, SD, Gables Townhomes, Sioux Falls, SD, and Regency Park Estates, St Cloud, MN

Total number of units, 289 Occupancy % for October 31, 2011 is 89.6%.

Commercial Office - 1st Avenue Building, Minot, ND and Omaha 10802 Farnum Drive, Omaha, NE.

Total square footage 63,001. Occupancy % for October 31, 2011 is 98.7%.

Commercial Medical - Billings 2300 Grant Road, Billings, MT; Missoula 3050 Great Northern Avenue, Missoula, MT; Edgewood Vista-Minot, Minot, ND; Edina 6525 Drew Avenue, Edina, MN; Spring Creek American Falls, American Falls, ID; Spring Creek Soda Springs, Soda Springs, ID; Spring Creek Eagle, Eagle, ID; Spring Creek Meridian, Meridian, ID; Spring Creek Overland, Boise, ID; Spring Creek Boise, Boise, ID; Spring Creek Ustick, Meridian, ID and Trinity at Plaza 16, Minot, ND.

Total square footage, 315,567. Occupancy % for October 31, 2011 is 99.7%.

Commercial Industrial - Fargo 1320 45th Street North, Fargo, ND.

Total square footage, 42,244. Occupancy % for October 31, 2011 is 100.0%.

Commercial Retail - Minot 1400 31st Ave, Minot, ND.

Total square footage, 48,960 Occupancy % for October 31, 2011 is 100.0%.

As of October 31, 2010, stabilized properties excluded:

Commercial Office - 1st Avenue Building, Minot, ND.

Total square footage, 4,427. Occupancy % for October 31, 2010 is 100.0%.

Commercial Medical - Billings 2300 Grant Road, Billings, MT; Missoula 3050 Great Northern Avenue, Missoula, MT and Fox River Cottages, Grand Chute, WI.

Total square footage, 55,681. Occupancy % for October 31, 2010 is 100.0%.

Commercial Industrial - Fargo 1320 45th Street North, Fargo, ND.

Total square footage, 42,244. Occupancy % for October 31, 2010 is 100.0%.

______________________________

2 We measure the performance of our segments based on NOI, which we define as total real estate revenues less real estate expenses (which consist of utilities, maintenance, real estate taxes, insurance and property management expenses). We believe that NOI is an important supplemental measure of operating performance for a 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, and which, in the case of development or re-development properties, have achieved a target level of occupancy.

ii

Acquisitions and Dispositions

During the second quarter of fiscal year 2012, the Company closed on or placed in-service the following acquisitions and development projects: an approximately 3,431 square foot medical office property located in Edina, Minnesota, for a purchase price of $505,000, of which $31,000 was paid in cash and the remainder in limited partnership units of the Operating Partnership valued at $474,000 (this property adjoins an existing medical office property owned by the Company);  two multi-family residential properties in Sioux Falls, South Dakota, with 50 units and 24 units, respectively, for purchase prices of $4.7 million and $2.3 million, respectively, paid in cash; an approximately 24,795 square foot, one-story medical clinic was completed for Trinity Health, a non-profit healthcare organization based in Minot, North Dakota, on land owned by the Company adjacent to the Company’s former headquarters building in Minot, for total project costs (excluding the value of the land) of approximately $8.9 million (construction of this build-to-suit facility began in the second quarter of fiscal year 2011, with the project’s certificate of occupancy issued on September 23, 2011); an approximately 9.6 acre parcel of vacant land located in Minot, North Dakota, zoned for commercial development, for a purchase price of  approximately $416,000, paid in cash; seven senior housing projects located in Boise, Idaho and towns surrounding Boise, with a total of approximately 261 beds, for a total purchase price of approximately $33.8 million; a small parcel of vacant land adjoining the Company’s Meadow Wind assisted living facility in Casper, Wyoming, for which the Company paid $50,000; and the 147-unit Regency Park Estates multi-family residential property in St. Cloud, Minnesota, for a purchase price totaling $10.9 million, of which approximately $7.2 million consisted of the assumption of existing debt, with the remaining approximately $3.7 million paid in cash (approximately $2.2 million) and in limited partnership units of the Operating Partnership valued at approximately $1.5 million.

During the second quarter of fiscal year 2012, the Company sold a small retail property in Livingston, Montana, for a sale price of approximately $2.2 million, with approximately $1.2 million of the sale proceeds applied to pay off the outstanding mortgage loan balance on the property.

Shareholder Equity, Distributions and Capital Structure

As of October 31, 2011, IRET had a total capitalization of $1.8 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.

On October 3, 2011, IRET paid a quarterly distribution of $0.1300 per share and unit on its common shares and limited partnership units of IRET Properties. This was IRET’s 162nd consecutive distribution.  IRET also paid, on September 30, 2011, a quarterly distribution of $0.5156 per share on its Series A preferred shares.

Distribution Declared.  Subsequent to the end of the second quarter of fiscal year 2012, on December 7, 2011, the Company’s Board of Trustees declared a regular quarterly distribution of 13.00 cents per share and unit on the Company’s common shares of beneficial interest and the limited partnership units of IRET Properties, payable January 16, 2012 to common shareholders and unitholders of record on January 3, 2012.  Also on December 7, 2011, the Company’s Board of Trustees declared a distribution of 51.56 cents per share on the Company’s preferred shares of beneficial interest, payable January 3, 2012 to preferred shareholders of record on December 20, 2011.

Conference Call Information

The Conference Call for2nd Quarter Earnings is scheduled for Tuesday, December 13, 2011 at 9:00 A.M. Central Standard Time.  The call will be limited to one hour, including questions and answers.  Conference call access information is as follows:

USA Toll Free Number: 1-877-317-6789

International Toll Free Number: 1-412-317-6789

Canada Toll Free Number: 1-866-605-3852

A webcast and transcript of the call will be archived on the “Investors Presentations & Events” page of IRET’s website, http://www.iret.com, for one year.  Questions regarding the conference call should be directed to IRET Investor Relations at landerson@iret.com.

iii

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 81 multi-family residential properties with 8,885 apartment units; and 68 commercial office properties, 65 commercial medical properties (including senior housing), 19 commercial industrial properties and 32 commercial retail properties with a total of approximately 12.3 million square feet of leasable space.  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 earnings 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: intentions and expectations regarding future distributions on our common shares and units, fluctuations in interest rates, the effect of government regulation, the availability of capital, changes in general and local economic and real estate market conditions, competition, our ability to attract and retain skilled personnel, and those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including our 2011 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, except share data)
	October 31, 2011			April 30, 2011
ASSETS
Real estate investments
Property owned	$	1,844,654		$	1,770,798
Less accumulated depreciation		(351,174	)		(328,952	)
		1,493,480			1,441,846
Development in progress		14,124			9,693
Unimproved land		6,558			6,550
Mortgage loans receivable, net of allowance of $3 and $3, respectively		155			156
Total real estate investments		1,514,317			1,458,245
Other assets
Cash and cash equivalents		32,697			41,191
Other investments		628			625
Receivable arising from straight-lining of rents, net of allowance of $1,097 and $996, respectively		20,905			18,933
Accounts receivable, net of allowance of $311 and $317, respectively		8,243			5,646
Real estate deposits		451			329
Prepaid and other assets		1,718			2,351
Intangible assets, net of accumulated amortization of $45,407 and $42,154, respectively		50,322			49,832
Tax, insurance, and other escrow		11,315			15,268
Property and equipment, net of accumulated depreciation of $1,448 and $1,231, respectively		1,986			1,704
Goodwill		1,127			1,127
Deferred charges and leasing costs, net of accumulated amortization of $15,558 and $13,675, respectively		21,255			20,112
TOTAL ASSETS	$	1,664,964		$	1,615,363
LIABILITIES AND EQUITY
LIABILITIES
Accounts payable and accrued expenses	$	39,002		$	37,879
Revolving line of credit		47,000			30,000
Mortgages payable		1,039,625			993,803
Other		1,164			8,404
TOTAL LIABILITIES		1,126,791			1,070,086
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES		1,005			987
EQUITY
Investors Real Estate Trust shareholders’ equity
Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at October 31, 2011 and April 30, 2011, aggregate liquidation preference of $28,750,000)		27,317			27,317
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 83,681,912 shares issued and outstanding at October 31, 2011, and 80,523,265 shares issued and outstanding at April 30, 2011)		643,022			621,936
Accumulated distributions in excess of net income		(260,535	)		(237,563	)
Total Investors Real Estate Trust shareholders’ equity		409,804			411,690
Noncontrolling interests – Operating Partnership (19,534,288 units at October 31, 2011 and 20,067,350 units at April 30, 2011)		116,550			123,627
Noncontrolling interests – consolidated real estate entities		10,814			8,973
Total equity		537,168			544,290
TOTAL LIABILITIES AND EQUITY	$	1,664,964		$	1,615,363

v

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)

for the three and six months ended October 31, 2011 and 2010

	(in thousands, except per share data)
	Three Months Ended October 31						Six Months Ended October 31
	2011			2010			2011			2010
REVENUE
Real estate rentals	$	49,820		$	47,733		$	98,663		$	95,541
Tenant reimbursement		10,868			11,114			21,596			22,431
TOTAL REVENUE		60,688			58,847			120,259			117,972
EXPENSES
Depreciation/amortization related to real estate investments		14,195			13,777			28,351			27,681
Utilities		4,900			4,355			8,898			8,409
Maintenance		6,962			6,749			13,790			13,643
Real estate taxes		7,676			7,464			15,479			15,288
Insurance		785			769			1,662			1,220
Property management expenses		5,468			4,964			10,847			10,051
Administrative expenses		1,911			1,582			3,863			3,339
Advisory and trustee services		193			136			422			348
Other expenses		835			563			1,150			916
Amortization related to non-real estate investments		758			637			1,492			1,289
TOTAL EXPENSES		43,683			40,996			85,954			82,184
Interest expense		(16,317	)		(16,416	)		(32,223	)		(32,467	)
Interest income		37			65			90			119
Other income		176			102			276			185
Income from continuing operations before income taxes		901			1,602			2,448			3,625
Income tax benefit		0			19			0			0
Income from continuing operations		901			1,621			2,448			3,625
Income from discontinued operations		590			5,500			616			5,828
NET INCOME		1,491			7,121			3,064			9,453
Net income attributable to noncontrolling interests – Operating Partnership		(194	)		(1,322	)		(372	)		(1,692	)
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities		(12	)		20			14			44
Net income attributable to Investors Real Estate Trust		1,285			5,819			2,706			7,805
Dividends to preferred shareholders		(593	)		(593	)		(1,186	)		(1,186	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	692		$	5,226		$	1,520		$	6,619
Earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted		.00			.01			.01			.03
Earnings per common share from discontinued operations – Investors Real Estate Trust – basic and diluted		.01			.06			.01			.06
NET INCOME PER COMMON SHARE – BASIC AND DILUTED	$	.01		$	.07		$	.02		$	.09
DIVIDENDS PER COMMON SHARE	$	.1300		$	.1715		$	.3015		$	.3430

vi

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO

INVESTORS REAL ESTATE TRUST TO FUNDS FROM OPERATIONS

for the three and six months ended October 31, 2011 and 2010

	(in thousands, except per share amounts)
Three Months Ended October 31,	2011									2010
	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 attributable to Investors Real Estate Trust		$	1,285								$	5,819
Less dividends to preferred shareholders			(593	)								(593	)
Net income available to common shareholders			692			82,078		$	0.01			5,226			78,647		$	0.07
Adjustments:
Noncontrolling interest – Operating Partnership			194			19,591						1,322			20,090
Depreciation and amortization(1)			14,890									14,888
Gain on depreciable property sales			(589	)								(5,404	)
Funds from operations applicable to common shares and Units		$	15,187			101,669		$	0.15			16,032			98,737		$	0.17

	(in thousands, except per share amounts)
Six Months Ended October 31,	2011									2010
	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 attributable to Investors Real Estate Trust		$	2,706								$	7,805
Less dividends to preferred shareholders			(1,186	)								(1,186	)
Net income available to common shareholders			1,520			81,467		$	0.02			6,619			77,512		$	0.09
Adjustments:
Noncontrolling interest – Operating Partnership			372			19,819						1,692			20,263
Depreciation and amortization(4)			29,713									29,948
Gain on depreciable property sales			(589	)								(5,404	)
Funds from operations applicable to common shares and Units		$	31,016			101,286		$	0.31			32,855			97,775		$	0.34

(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 $14,953 and $14,414, and depreciation/amortization from Discontinued Operations of $(2) and $545, less corporate-related depreciation and amortization on office equipment and other assets of $61 and $71, for the three months ended October 31, 2011 and 2010, 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 attributable to Investors Real Estate Trust 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 $29,843 and $28,970, and depreciation/amortization from Discontinued Operations of $8 and $1,125, less corporate-related depreciation and amortization on office equipment and other assets of $138 and $147, for the six months ended October 31, 2011 and 2010, respectively.

vii

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILATION OF NET OPERATING INCOME TO THE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

for the three and six months ended October 31, 2011 and 2010

	(in thousands)
Three Months Ended October 31, 2011	Multi-Family Residential			Commercial- Office			Commercial- Medical			Commercial- Industrial			Commercial- Retail			Total
Real estate revenue		$	18,381		$	18,367		$	17,073		$	3,566		$	3,301	$	60,688
Real estate expenses			8,757			8,812			5,971			1,134			1,117		25,791
Net operating income		$	9,624		$	9,555		$	11,102		$	2,432		$	2,184		34,897
Depreciation/amortization																	(14,953	)
Administrative, advisory and trustee services																	(2,104	)
Other expenses																	(835	)
Interest expense																	(16,317	)
Interest and other income																	213
Income from continuing operations																	901
Income from discontinued operations																	590
Net income																$	1,491

	(in thousands)
Three Months Ended October 31, 2010	Multi-Family Residential			Commercial- Office		Commercial- Medical		Commercial- Industrial		Commercial- Retail		Total
Real estate revenue		$	16,544	$	19,603	$	16,245	$	3,152	$	3,303	$	58,847
Real estate expenses			8,283		8,631		5,363		955		1,069		24,301
Net operating income		$	8,261	$	10,972	$	10,882	$	2,197	$	2,234		34,546
Depreciation/amortization													(14,414	)
Administrative, advisory and trustee services													(1,718	)
Other expenses													(563	)
Interest expense													(16,416	)
Interest and other income													167
Income tax benefit													19
Income from continuing operations													1,621
Income from discontinued operations													5,500
Net income												$	7,121

	(in thousands)
Six Months Ended October 31, 2011	Multi-Family Residential			Commercial- Office			Commercial- Medical			Commercial- Industrial			Commercial- Retail			Total
Real estate revenue		$	35,863		$	37,182		$	33,690		$	7,001		$	6,523	$	120,259
Real estate expenses			17,123			17,756			11,489			2,100			2,208		50,676
Net operating income		$	18,740		$	19,426		$	22,201		$	4,901		$	4,315		69,583
Depreciation/amortization																	(29,843	)
Administrative, advisory and trustee services																	(4,285	)
Other expenses																	(1,150	)
Interest expense																	(32,223	)
Interest and other income																	366
Income from continuing operations																	2,448
Income from discontinued operations																	616
Net income																$	3,064

	(in thousands)
Six Months Ended October 31, 2010	Multi-Family Residential			Commercial- Office		Commercial- Medical		Commercial- Industrial		Commercial- Retail		Total
Real estate revenue		$	32,711	$	39,496	$	32,555	$	6,541	$	6,669	$	117,972
Real estate expenses			16,341		17,574		10,671		1,919		2,106		48,611
Net operating income		$	16,370	$	21,922	$	21,884	$	4,622	$	4,563		69,361
Depreciation/amortization													(28,970	)
Administrative, advisory and trustee services													(3,687	)
Other expenses													(916	)
Interest expense													(32,467	)
Interest and other income													304
Income from continuing operations													3,625
Income from discontinued operations													5,828
Net income												$	9,453

viii

EX-99.2

Exhibit 99.2

Second Quarter Fiscal 2012

Supplemental Operating and Financial Data

for the Quarter Ended October 31, 2011

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

Supplemental Financial and Operating Data

Table of Contents

October 31, 2011

	Page
Company Background and Highlights	2
Investment Cost by Segment	5
Key Financial Data
Condensed Consolidated Balance Sheets	6
Condensed Consolidated Statements of Operations	7
Funds From Operations	8
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)	9
Capital Analysis
Long-Term Mortgage Debt Analysis	10
Long-Term Mortgage Debt Detail	11-12
Capital Analysis	13
Portfolio Analysis
Stabilized Properties Net Operating Income Summary	14
Net Operating Income Detail	15-18
Stabilized Properties and Overall Physical Occupancy Levels by Segment	19
Tenant Analysis
Commercial Leasing Summary	20-21
Multi-Family Residential Summary	22
10 Largest Commercial Tenants - Based on Annualized Base Rent	23
Lease Expirations as of October 31, 2011	24
Growth and Strategy
Fiscal 2012 Acquisition Summary	25
Fiscal 2012 Development Summary	26
Definitions	27

Company Background and Highlights

Second Quarter Fiscal 2012

Investors Real Estate Trust is a self-administered, equity real estate investment trust (REIT) investing in a portfolio of income-producing properties located primarily in the upper Midwest.  IRET’s portfolio is diversified among multi-family residential, commercial office, commercial medical (including senior housing), commercial industrial and commercial retail segments.

During the second quarter of fiscal year 2012, the Company closed on or placed in-service the following acquisitions and development projects: an approximately 3,431 square foot medical office property located in Edina, Minnesota, for a purchase price of $505,000, of which $31,000 was paid in cash and the remainder in limited partnership units of the Operating Partnership valued at $474,000 (this property adjoins an existing medical office property owned by the Company);  two multi-family residential properties in Sioux Falls, South Dakota, with 50 units and 24 units, respectively, for purchase prices of $4.7 million and $2.3 million, respectively, paid in cash; an approximately 24,795 square foot, one-story medical clinic was completed for Trinity Health, a non-profit healthcare organization based in Minot, North Dakota, on land owned by the Company adjacent to the Company’s former headquarters building in Minot, for total project costs (excluding the value of the land) of approximately $8.9 million (construction of this build-to-suit facility began in the second quarter of fiscal year 2011, with the project’s certificate of occupancy issued on September 23, 2011); an approximately 9.6 acre parcel of vacant land located in Minot, North Dakota, zoned for commercial development, for a purchase price of  $416,000, paid in cash; seven senior housing projects located in Boise, Idaho and towns surrounding Boise, with a total of approximately 261 beds, for a total purchase price of approximately $33.8 million; a small parcel of vacant land adjoining the Company’s Meadow Wind assisted living facility in Casper, Wyoming, for which the Company paid $50,000; and the 147-unit Regency Park Estates multi-family residential property in St. Cloud, Minnesota, for a purchase price totaling $10.9 million, of which approximately $7.2 million consisted of the assumption of existing debt, with the remaining approximately $3.7 million paid in cash (approximately $2.2 million) and in limited partnership units of the Operating Partnership valued at approximately $1.5 million.

During the second quarter of fiscal year 2012, the Company sold a small retail property in Livingston, Montana, for a sale price of approximately $2.2 million, with approximately $1.2 million of the sale proceeds applied to pay off the outstanding mortgage loan balance on the property.

During the second quarter of fiscal year 2012, the Company signed agreements for the acquisition of two multi-family residential projects in Billings, Montana, with a total of 36 units, for a purchase price totaling approximately $2.1 million, currently expected to be paid in cash; and for the construction of an  approximately 23,000 square foot industrial building to be located in Minot, North Dakota on an approximately 9-acre parcel of vacant land, for a total construction cost currently estimated at $4.8 million, subject to tenant-requested changes, with construction expected to be completed in the summer of 2012.  These pending projects are subject to various closing conditions and contingencies, and no assurances can be given that any of these transactions will be completed.

The Company continued to experience a challenging market environment during the second quarter of fiscal year 2012, in our commercial office segment in particular. Physical occupancy as of October 31, 2011 compared to October 31, 2010 increased in all of our reportable segments except for commercial office, on a stabilized and all-property basis.  Our overall level of tenant concessions increased in the quarter, compared to the same quarter of the prior fiscal year.  We believe the continued decrease in occupancy levels in our commercial office segment reflect the economic conditions in our markets, as economic growth continues to be sluggish and uncertain.

As we have previously reported, Minot, North Dakota, where our corporate headquarters are located, experienced significant flooding in June 2011, resulting in extensive damage to our Arrowhead Shopping Center and Chateau Apartments.  Both of these properties are currently undergoing restoration.   Chateau Apartments is expected to be available for leasing in the third quarter of the current fiscal year.  Arrowhead Shopping Center is currently in various stages of re-leasing.  Costs related to clean-up, redevelopment and loss of rents are being reimbursed to the Company by its insurance carrier, less the Company’s deductible of $200,000 under the policy.  As of October 31, 2011, the Company had received and recognized $4.3 million of insurance proceeds for clean-up costs and redevelopment; reimbursement for business interruption (loss of rents) in an amount totaling $474,000 is expected to be added back as income to the extent that insurance proceeds are received and gain contingencies are resolved, in accordance with GAAP.  The  Company currently estimates that a gain on involuntary conversion of approximately $2.6 million will be reported in a future quarter, once all flood-related costs have been reimbursed; however, this number is an estimate only and is subject to revision as reimbursements are received and recognized.

In the second quarter of fiscal year 2012, IRET paid its 162nd consecutive quarterly distribution.  The $0.1300 per share/unit distribution was paid on October 3, 2011.  Subsequent to the end of the second quarter of fiscal year 2012, the Company declared a quarterly distribution of $0.1300 per share and unit payable on January 16, 2012 to shareholders of record on January 3, 2012.  The Board of Trustees also declared a quarterly distribution of $0.5156 per share on the Company’s Series A preferred shares, payable January 3, 2012 to preferred shareholders of record on December 20, 2011.

As of October 31, 2011, IRET owns a diversified portfolio of 265 properties consisting of 81multi-family residential properties, 68 commercial office properties, 65 commercial medical properties (including senior housing), 19 commercial industrial properties and 32 commercial retail properties.  IRET’s shares are publicly traded on the NASDAQ Global Select Market (NASDAQ:  IRET).

2

Company Snapshot

(as of October 31, 2011)

Company Headquarters	Minot, North Dakota
Fiscal Year-End	April 30
Reportable Segments	Multi-Family Residential, Commercial Office, Commercial Medical, Commercial Industrial, Commercial Retail
Total Properties	265
Total Square Feet
(commercial properties)	12.3 million
Total Units
(multi-family residential properties)	8,885
Common Shares Outstanding (thousands)	83,682
Limited Partnership Units Outstanding (thousands)	19,534
Common Share Distribution - Quarter/Annualized	$0.13/$0.52
Dividend Yield	7.0%
Total Capitalization (see p. 13 for detail)	$1.8 billion

Investor Information

Board of Trustees

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

Management

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

Corporate Headquarters:

1400 31st Avenue SW, Suite 60

Minot, North Dakota 58701

Trading Symbol:  IRET

Stock Exchange Listing:  NASDAQ

Investor Relations:

Lindsey Anderson

landerson@iret.com

3

Common Share Data (NASDAQ: IRET)

	2nd Quarter Fiscal Year 2012			1st Quarter Fiscal Year 2012			4th Quarter Fiscal Year 2011			3rd Quarter Fiscal Year 2011			2nd Quarter Fiscal Year 2011
High Closing Price	$	8.12		$	9.69		$	9.54		$	9.26		$	8.90
Low Closing Price	$	6.92		$	8.07		$	8.92		$	8.74		$	7.97
Average Closing Price	$	7.46		$	8.87		$	9.24		$	8.99		$	8.43
Closing Price at end of quarter	$	7.41		$	8.13		$	9.41		$	8.94		$	8.80
Common Share Distributions—annualized	$	0.520		$	0.686		$	0.686		$	0.686		$	0.686
Closing Dividend Yield - annualized		7.0	%		8.4	%		7.3	%		7.7	%		7.8	%
Closing common shares outstanding (thousands)		83,682			81,259			80,523			79,846			79,092
Closing limited partnership units outstanding (thousands)		19,534			19,958			20,068			20,047			19,994
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)	$	764,831		$	822,894		$	946,561		$	893,043		$	871,957

Certain statements in these supplemental disclosures are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from projected results. Such risks, uncertainties and other factors include, but are not limited to: intentions and expectations regarding future distributions on our common shares and units, fluctuations in interest rates, the effect of government regulation, the availability of capital, changes in general and local economic and real estate market conditions, competition, our ability to attract and retain skilled personnel, and those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including our 2011Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Second Quarter Fiscal 2012 Acquisitions

Regency Park Estates 1615 15th Ave SE St. Cloud, MN 56304	Cottage West Twin Homes 4604 W. Cottage Trail Sioux Falls, SD 57106
Edgewood Spring Creek American Falls 605 Hillcrest American Falls, ID 83211	Edgewood Spring Creek Overland 10139 W. Overland Road Boise, ID 83709

4

Investment Cost by Segment – Second Quarter Fiscal 2012

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

5

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

	10/31/2011			07/31/2011			04/30/2011			01/31/2011			10/31/2010
ASSETS
Real estate investments
Property owned	$	1,844,654		$	1,777,485		$	1,770,798		$	1,763,585		$	1,773,924
Less accumulated depreciation		(351,174	)		(339,293	)		(328,952	)		(319,235	)		(322,379	)
		1,493,480			1,438,192			1,441,846			1,444,350			1,451,545
Development in progress		14,124			12,697			9,693			4,231			2,755
Unimproved land		6,558			6,550			6,550			7,470			7,876
Mortgage loans receivable, net of allowance		155			156			156			157			157
Total real estate investments		1,514,317			1,457,595			1,458,245			1,456,208			1,462,333
Other assets
Cash and cash equivalents		32,697			37,307			41,191			30,907			43,701
Marketable securities – available-for-sale		628			627			625			325			420
Receivable arising from straight-lining of rents, net of allowance		20,905			19,331			18,933			18,656			18,125
Accounts receivable, net of allowance		8,243			7,935			5,646			8,864			5,179
Real estate deposits		451			458			329			254			2,089
Prepaid and other assets		1,718			1,997			2,351			2,852			3,375
Intangible assets, net of accumulated amortization		50,322			48,108			49,832			51,543			48,140
Tax, insurance, and other escrow		11,315			15,198			15,268			18,467			10,504
Property and equipment, net of accumulated depreciation		1,986			1,687			1,704			1,332			1,370
Goodwill		1,127			1,127			1,127			1,127			1,260
Deferred charges and leasing costs, net of accumulated amortization		21,255			20,304			20,112			19,737			18,606
TOTAL ASSETS	$	1,664,964		$	1,611,674		$	1,615,363		$	1,610,272		$	1,615,102
LIABILITIES AND EQUITY
LIABILITIES
Accounts payable and accrued expenses	$	39,002		$	34,547		$	37,879		$	35,633		$	26,616
Revolving lines of credit		47,000			34,000			30,000			10,000			29,100
Mortgages payable		1,039,625			1,002,962			993,803			998,929			1,004,532
Other		1,164			6,369			8,404			8,423			1,227
TOTAL LIABILITIES		1,126,791			1,077,878			1,070,086			1,052,985			1,061,475
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES		1,005			1,263			987			1,237			1,357
EQUITY
Investors Real Estate Trust shareholders’ equity
Preferred Shares of Beneficial Interest		27,317			27,317			27,317			27,317			27,317
Common Shares of Beneficial Interest		643,022			627,722			621,936			616,701			610,580
Accumulated distributions in excess of net income		(260,535	)		(250,585	)		(237,563	)		(223,684	)		(221,304	)
Total Investors Real Estate Trust shareholders’ equity		409,804			404,454			411,690			420,334			416,593
Noncontrolling interests – Operating Partnership		116,550			119,382			123,627			126,335			126,113
Noncontrolling interests – consolidated real estate entities		10,814			8,697			8,973			9,381			9,564
Total equity		537,168			532,533			544,290			556,050			552,270
TOTAL LIABILITIES AND EQUITY	$	1,664,964		$	1,611,674		$	1,615,363		$	1,610,272		$	1,615,102

6

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

	Six Months Ended						Three Months Ended
OPERATING RESULTS	10/31/2011			10/31/2010			10/31/2011			07/31/2011			04/30/2011			01/31/2011			10/31/2010
Real estate revenue	$	120,259		$	117,972		$	60,688		$	59,571		$	59,067		$	60,146		$	58,847
Real estate expenses		50,676			48,611			25,791			24,885			26,266			27,033			24,301
Net operating income		69,583			69,361			34,897			34,686			32,801			33,113			34,546
Depreciation/amortization		(29,843	)		(28,970	)		(14,953	)		(14,890	)		(14,937	)		(14,581	)		(14,414	)
Administrative expenses, advisory and trustee services		(4,285	)		(3,687	)		(2,104	)		(2,181	)		(1,685	)		(1,850	)		(1,718	)
Other expenses		(1,150	)		(916	)		(835	)		(315	)		(417	)		(441	)		(563	)
Interest		(32,223	)		(32,467	)		(16,317	)		(15,906	)		(15,606	)		(15,868	)		(16,416	)
Interest and other income		366			304			213			153			130			107			167
Income tax benefit (expense)		0			0			0			0			0			0			19
Income from continuing operations		2,448			3,625			901			1,547			286			480			1,621
Income (loss) from discontinued operations		616			5,828			590			26			24			14,108			5,500
Net income	$	3,064		$	9,453		$	1,491		$	1,573		$	310		$	14,588		$	7,121
Net (income) loss attributable to noncontrolling interest – Operating Partnership		(372	)		(1,692	)		(194	)		(178	)		36			(2,793	)		(1,322	)
Net loss (income) attributable to noncontrolling interests – consolidated real estate entities		14			44			(12	)		26			98			38			20
Net income attributable to Investors Real Estate Trust		2,706			7,805			1,285			1,421			444			11,833			5,819
Dividends to preferred shareholders		(1,186	)		(1,186	)		(593	)		(593	)		(593	)		(593	)		(593	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	1,520		$	6,619		$	692		$	828		$	(149	)	$	11,240		$	5,226
Per Share Data
Earnings (loss) per common share from continuing operations – Investors Real Estate Trust – basic & diluted	$	.01		$	.03		$	.00		$	.01		$	(.01	)	$	.00		$	.01
Earnings (loss) per common share from discontinued operations – Investors Real Estate Trust – basic & diluted		.01			.06			.01			.00			.00			.14			.06
Net income (loss) per common share – basic & diluted	$	.02		$	.09		$	.01		$	.01		$	(.01	)	$	.14		$	.07
Percentage of Revenues
Real estate expenses		42.1	%		41.2	%		42.5	%		41.8	%		44.5	%		44.9	%		41.3	%
Depreciation/amortization		24.8	%		24.6	%		24.6	%		25.0	%		25.3	%		24.2	%		24.5	%
General and administrative		3.6	%		3.1	%		3.5	%		3.7	%		2.9	%		3.1	%		2.9	%
Interest		26.8	%		27.5	%		26.9	%		26.7	%		26.4	%		26.4	%		27.9	%
Net income		2.5	%		8.0	%		2.5	%		2.6	%		0.5	%		24.3	%		12.1	%
Ratios
EBITDA(1)/Interest expense		2.00	x		2.00	x		1.97	x		2.03	x		1.98	x		1.97	x		1.96	x
EBITDA/Interest expense plus preferred distributions		1.93	x		1.93	x		1.90	x		1.96	x		1.91	x		1.90	x		1.89	x

(1) See Definitions on page 27.  EBITDA is a non-GAAP measure; see page 9 for a reconciliation of EBITDA to net income (loss).

7

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FUNDS FROM OPERATIONS(unaudited)

(in thousands, except per share and unit data)

	Six Months Ended						Three Months Ended
	10/31/2011			10/31/2010			10/31/2011			07/31/2011			04/30/2011			01/31/2011			10/31/2010
Funds From Operations(1)
Net income attributable to Investors Real Estate Trust	$	2,706		$	7,805		$	1,285		$	1,421		$	444		$	11,833		$	5,819
Less dividends to preferred shareholders		(1,186	)		(1,186	)		(593	)		(593	)		(593	)		(593	)		(593	)
Net income (loss) available to common shareholders		1,520			6,619			692			828			(149	)		11,240			5,226
Adjustments:
Noncontrolling interests – Operating Partnership		372			1,692			194			178			(36	)		2,793			1,322
Depreciation and amortization		29,713			29,948			14,890			14,823			14,877			14,577			14,888
Gain on depreciable property sales		(589	)		(5,404	)		(589	)		0			0			(13,961	)		(5,404	)
Funds from operations applicable to common shares and Units	$	31,016		$	32,855		$	15,187		$	15,829		$	14,692		$	14,649		$	16,032
FFO per share and unit - basic and diluted	$	0.31		$	0.34		$	0.15		$	0.16		$	0.15		$	0.14		$	0.17
Weighted average shares and units		101,286			97,775			101,669			100,844			100,239			99,355			98,737

(1) See Definitions on page 27.

8

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

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

(in thousands)

	Six Months Ended						Three Months Ended
	10/31/2011			10/31/2010			10/31/2011			07/31/2011			04/30/2011			01/31/2011			10/31/2010
EBITDA(1)
Net income attributable to Investors Real Estate Trust	$	2,706		$	7,805		$	1,285		$	1,421		$	444		$	11,833		$	5,819
Adjustments:
Noncontrolling interests – Operating Partnership		372			1,692			194			178			(36	)		2,793			1,322
Income before noncontrolling interests – Operating Partnership		3,078			9,497			1,479			1,599			408			14,626			7,141
Add:
Interest		32,243			34,108			16,318			15,925			15,626			15,719			17,346
Depreciation/amortization related to real estate investments		28,359			28,802			14,193			14,166			14,246			13,943			14,320
Amortization related to non-real estate investments		1,492			1,293			758			734			701			689			639
Amortization related to real estate revenues(2)		80			53			29			51			56			44			28
Less:
Interest income		(90	)		(124	)		(37	)		(53	)		(65	)		(75	)		(66	)
Gain on sale of real estate, land and other investments		(589	)		(5,404	)		(589	)		0			0			(13,961	)		(5,404	)
EBITDA	$	64,573		$	68,225		$	32,151		$	32,422		$	30,972		$	30,985		$	34,004

(1)   See Definitions on page 27.

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

9

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT ANALYSIS

(in thousands)

Debt Maturity Schedule

Annual Expirations

Total Mortgage Debt

	Future Maturities of Debt
Fiscal Year	Fixed Debt		Variable Debt		Total Debt		Weighted Average(1)			% of Total Debt
2012	$	13,087	$	0	$	13,087		6.50	%		1.3	%
2013		21,840		0		21,840		5.76	%		2.1	%
2014		42,299		772		43,071		6.13	%		4.1	%
2015		75,056		5,250		80,306		5.66	%		7.7	%
2016		73,506		53		73,559		5.92	%		7.1	%
2017		187,270		0		187,270		6.16	%		18.0	%
2018		83,743		0		83,743		5.79	%		8.0	%
2019		101,507		0		101,507		6.08	%		9.8	%
2020		118,070		0		118,070		5.86	%		11.4	%
2021		126,475		0		126,475		5.44	%		12.2	%
Thereafter		190,697		0		190,697		5.72	%		18.3	%
Total maturities	$	1,033,550	$	6,075	$	1,039,625		5.86	%		100.0	%

(1)   Weighted average interest rate of debt that matures in fiscal year.

	10/31/2011			07/31/2011			04/30/2011			01/31/2011			10/31/2010
Balances Outstanding
Mortgage
Fixed rate	$	1,033,550		$	996,256		$	992,276		$	997,332		$	1,002,867
Variable rate		6,075			6,706			1,527			1,597			1,665
Mortgage total		1,039,625			1,002,962			993,803			998,929			1,004,532
Weighted Average Interest Rates
Secured		5.86	%		5.90	%		5.92	%		6.05	%		6.14	%

10

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT* DETAIL AS OF OCTOBER 31, 2011

(in thousands)

Property	Maturity Date	Fiscal 2012		Fiscal 2013		Fiscal 2014		Fiscal 2015		Thereafter		Total(1)
Multi-Family Residential
Meadows III - Jamestown, ND 2	11/1/2011	$	928	$	0	$	0	$	0	$	0	$	928
Crown - Rochester, MN 3	1/1/2012		2,496		0		0		0		0		2,496
Monticello Village - Monticello, MN	3/1/2013		0		2,991		0		0		0		2,991
Quarry Ridge - Rochester, MN	10/1/2013		0		0		12,008		0		0		12,008
East Park - Sioux Falls, SD	12/1/2013		0		0		1,513		0		0		1,513
Sycamore Village - Sioux Falls, SD	12/1/2013		0		0		851		0		0		851
Candlelight - Fargo, ND	3/1/2014		0		0		1,295		0		0		1,295
Summary of Debt due after Fiscal 2015			0		0		0		0		275,899		275,899
Sub-Total Multi-Family Residential		$	3,424	$	2,991	$	15,667	$	0	$	275,899	$	297,981
Commercial Office
Wirth Corporate Center - Golden Valley, MN	2/1/2012	$	3,649	$	0	$	0	$	0	$	0	$	3,649
Great Plains - Fargo, ND	10/1/2013		0		0		2,554		0		0		2,554
Whitewater Plaza - Minnetonka, MN	3/1/2014		0		0		2,590		0		0		2,590
Whitewater Plaza - Minnetonka, MN	3/1/2014		0		0		1,343		0		0		1,343
Viromed - Eden Prairie, MN	4/1/2014		0		0		769		0		0		769
TCA Building - Eagan, MN	5/1/2014		0		0		0		7,755		0		7,755
Brenwood - Hennepin County, MN	7/15/2014		0		0		0		5,250		0		5,250
Burnsville Bluffs II - Burnsville, MN	8/8/2014		0		0		0		1,774		0		1,774
Plymouth IV - Plymouth, MN	8/8/2014		0		0		0		3,273		0		3,273
Plymouth V - Plymouth, MN	8/8/2014		0		0		0		3,825		0		3,825
Plaza VII - Boise, ID	9/1/2014		0		0		0		1,080		0		1,080
Crosstown Centre - Eden Prairie, MN	12/1/2014		0		0		0		3,479		0		3,479
Crosstown Centre - Eden Prairie, MN	12/1/2014		0		0		0		10,437		0		10,437
Northgate I - Maple Grove, MN	12/10/2014		0		0		0		5,423		0		5,423
Plymouth I - Plymouth, MN	12/10/2014		0		0		0		1,215		0		1,215
Plymouth II - Plymouth, MN	12/10/2014		0		0		0		1,215		0		1,215
Plymouth III - Plymouth, MN	12/10/2014		0		0		0		1,496		0		1,496
Benton Business Park - Sauk Rapids, MN	1/1/2015		0		0		0		657		0		657
West River Business Park - Waite Park, MN	1/1/2015		0		0		0		657		0		657
Highlands Ranch I - Highlands Ranch, CO	3/1/2015		0		0		0		8,540		0		8,540
Highlands Ranch II - Highlands Ranch, CO	3/1/2015		0		0		0		8,315		0		8,315
Summary of Debt due after Fiscal 2015			0		0		0		0		279,965		279,965
Sub-Total Commercial Office		$	3,649	$	0	$	7,256	$	64,391	$	279,965	$	355,261
Commercial Medical
Georgetown Square - Grand Chute, WI	5/1/2012	$	0	$	2,198	$	0	$	0	$	0	$	2,198
High Pointe Health Campus - Lake Elmo, MN	12/1/2013		0		0		1,869		0		0		1,869
Edgewood Vista - Billings, MT	12/10/2014		0		0		0		1,998		0		1,998
Edgewood Vista - East Grand Forks, MN	12/10/2014		0		0		0		3,043		0		3,043
Edgewood Vista - Sioux Falls, SD	12/10/2014		0		0		0		1,144		0		1,144
Summary of Debt due after Fiscal 2015			0		0		0		0		270,156		270,156
Sub-Total Commercial Medical		$	0	$	2,198	$	1,869	$	6,185	$	270,156	$	280,408

11

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT* DETAIL AS OF JULY 31, 2011 (continued)

(in thousands)

Property	Maturity Date	Fiscal 2012		Fiscal 2013		Fiscal 2014		Fiscal 2015		Thereafter		Total(1)
Commercial Industrial
Stone Container - Roseville, MN 3	2/1/2012	$	3,625	$	0	$	0	$	0	$	0	$	3,625
Minnetonka 13600 County Road 62 - Minnetonka, MN	2/27/2012		2,389		0		0		0		0		2,389
Dixon Avenue Industrial Park - Des Moines, IA	1/1/2013		0		7,164		0		0		0		7,164
Bloomington 2000 West 94th Street - Bloomington, MN	3/1/2013		0		3,840		0		0		0		3,840
Roseville 2929 Long Lake Road - Roseville, MN	3/1/2013		0		5,647		0		0		0		5,647
Bodycote Industrial Building - Eden Prairie, MN	9/1/2013		0		0		1,153		0		0		1,153
Cedar Lake Business Center - St. Louis Park, MN	11/1/2013		0		0		2,362		0		0		2,362
Woodbury 1865 Woodlane - Woodbury, MN	11/1/2013		0		0		2,779		0		0		2,779
Clive 2075 NW 94th St - Clive, IA	9/30/2014		0		0		0		2,232		0		2,232
Metal Improvement Company - New Brighton, MN	9/30/2014		0		0		0		1,526		0		1,526
Winsted Industrial Building	9/30/2014		0		0		0		402		0		402
Summary of Debt due after Fiscal 2015			0		0		0		0		23,565		23,565
Sub-Total Commercial Industrial		$	6,014	$	16,651	$	6,294	$	4,160	$	23,565	$	56,684
Commercial Retail
Burnsville I Strip Center - Burnsville, MN	6/30/2013	$	0	$	0	$	430	$	0	$	0	$	430
Burnsville II Strip Center - Burnsville, MN	6/30/2013		0		0		342		0		0		342
St Cloud Westgate - St Cloud, MN	10/10/2013		0		0		3,286		0		0		3,286
Eagan I Retail Center - Eagan, MN	12/22/2013		0		0		1,371		0		0		1,371
Forest Lake Westlake Center - Forest Lake, MN	12/22/2013		0		0		4,383		0		0		4,383
Pine City C-Store  - Pine City, MN	4/20/2014		0		0		304		0		0		304
Pine City Evergreen Square - Pine City, MN	4/20/2014		0		0		1,869		0		0		1,869
Omaha Barnes & Noble - Omaha, NE	6/1/2014		0		0		0		2,627		0		2,627
Jamestown Buffalo Mall - Jamestown, ND	9/1/2014		0		0		0		915		0		915
Fargo Express Center - Fargo, ND	10/1/2014		0		0		0		1,017		0		1,017
Lakeville Strip Center - Lakeville, MN	10/1/2014		0		0		0		1,011		0		1,011
Summary of Debt due after Fiscal 2015			0		0		0		0		31,736		31,736
Sub-Total Commercial Retail		$	0	$	0	$	11,985	$	5,570	$	31,736	$	49,291
Total		$	13,087	$	21,840	$	43,071	$	80,306	$	881,321	$	1,039,625

* Mortgage debt does not include the Company’s multi-bank line of credit.  The line of credit has a maturity date of August 11, 2013; as of October 31, 2011, the Company had borrowings of $47,000,000 outstanding under this line with a subsequent advance on November 1, 2011 of $2,000,000 to bring total borrowings to $49,000,000 outstanding to date.

(1) Totals are principal balances as of October 31, 2011.

(2) Loan was subsequently paid off November 1, 2011.

(3) Commitment has been issued to refinance this maturing loan on or before its maturity.

12

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CAPITAL ANALYSIS

(in thousands, except per share and unit amounts)

	Three Months Ended
	10/31/2011		07/31/2011		04/30/2011		01/31/2011		10/31/2010
Equity Capitalization
Common shares outstanding		83,682		81,259		80,523		79,846		79,092
Operating partnership (OP) units outstanding		19,534		19,958		20,068		20,047		19,994
Total common shares and OP units outstanding		103,216		101,217		100,591		99,893		99,086
Market price per common share (closing price at end of period)	$	7.41	$	8.13	$	9.41	$	8.94	$	8.80
Equity capitalization-common shares and OP units	$	764,831	$	822,894	$	946,561	$	893,043	$	871,957
Recorded book value of preferred shares	$	27,317	$	27,317	$	27,317	$	27,317	$	27,317
Total equity capitalization	$	792,148	$	850,211	$	973,878	$	920,360	$	899,274
Debt Capitalization
Total mortgage debt	$	1,039,625	$	1,002,962	$	993,803	$	998,929	$	1,004,532
Total capitalization	$	1,831,773	$	1,853,173	$	1,967,681	$	1,919,289	$	1,903,806
Total debt to total capitalization	0.57:1		0.54:1		0.51:1		0.52:1		0.53:1

	Six Months Ended						Three Months Ended
	10/31/2011			10/31/2010			10/31/2011			07/31/2011			04/30/2011			01/31/2011			10/31/2010
Earnings to fixed charges(1)		1.08	x		1.11	x		1.05	x		1.10	x		1.02	x		1.03	x		1.09	x
Earnings to combined fixed charges and preferred distributions(1)		1.04	x		1.07	x		1.02	x		1.06	x		0.99	x		0.99	x		1.06	x
Debt service coverage ratio(1)		1.39	x		1.42	x		1.37	x		1.41	x		1.37	x		1.37	x		1.40	x
Distribution Data
Common shares and units outstanding at record date		101,439			98,726			101,439			100,725			100,101			99,213			98,726
Total common distribution paid	$	30,461		$	33,482		$	13,186		$	17,275		$	17,167		$	17,015		$	16,931
Common distribution per share and unit	$	.3015		$	.3430		$	.1300		$	.1715		$	.1715		$	.1715		$	.1715
Payout ratio (FFO per share and unit basis)(1)		97.3	%		100.9	%		86.7	%		107.2	%		114.3	%		122.5	%		100.9	%

(1)   See Definitions on page 27.

13

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

STABILIZED PROPERTIES NET OPERATING INCOME SUMMARY

(in thousands)

	Stabilized Properties(1)							Stabilized Properties(1)
	Three Months Ended October 31,							Six Months Ended October 31,
Segment	2011		2010		% Change			2011		2010		% Change
Multi-Family Residential	$	9,310	$	8,261		12.7	%	$	18,355	$	16,370		12.1	%
Commercial Office		9,337		10,976		(14.9	%)		19,003		21,930		(13.3	%)
Commercial Medical		10,197		10,737		(5.0	%)		20,797		21,736		(4.3	%)
Commercial Industrial		2,323		2,092		11.0	%		4,684		4,482		4.5	%
Commercial Retail		2,021		2,234		(9.5	%)		4,078		4,563		(10.6	%)
	$	33,188	$	34,300		(3.2	%)	$	66,917	$	69,081		(3.1	%)

(1) As of October 31, 2011, stabilized properties excluded:

Multi-Family Residential - North Pointe II, Bismarck, ND and Sierra Vista, Sioux Falls, SD, Cottage West Twin Homes, Sioux Falls, SD, Gables Townhomes, Sioux Falls, SD, and Regency Park Estates, St Cloud, MN

Total number of units, 289 Occupancy % for October 31, 2011 is 89.6%.

Commercial Office - 1st Avenue Building, Minot, ND and Omaha 10802 Farnum Drive, Omaha, NE.

Total square footage 63,001. Occupancy % for October 31, 2011 is 98.7%.

Commercial Medical - Billings 2300 Grant Road, Billings, MT; Missoula 3050 Great Northern Avenue, Missoula, MT; Edgewood Vista-Minot, Minot, ND; Edina 6525 Drew Avenue, Edina, MN; Spring Creek American Falls, American Falls, ID; Spring Creek Soda Springs, Soda Springs, ID; Spring Creek Eagle, Eagle, ID; Spring Creek Meridian, Meridian, ID; Spring Creek Overland, Boise, ID; Spring Creek Boise, Boise, ID; Spring Creek Ustick, Meridian, ID and Trinity at Plaza 16, Minot, ND.

Total square footage, 315,567. Occupancy % for October 31, 2011 is 99.7%.

Commercial Industrial - Fargo 1320 45th Street North, Fargo, ND.

Total square footage, 42,244. Occupancy % for October 31, 2011 is 100.0%.

Commercial Retail - Minot 1400 31st Ave, Minot, ND.

Total square footage, 48,960 Occupancy % for October 31, 2011 is 100.0%.

(1)   As of October 31, 2010, stabilized properties excluded:

Commercial Office - 1st Avenue Building, Minot, ND.

Total square footage, 4,427. Occupancy % for October 31, 2010 is 100.0%.

Commercial Medical - Billings 2300 Grant Road, Billings, MT; Missoula 3050 Great Northern Avenue, Missoula, MT and Fox River Cottages, Grand Chute, WI.

Total square footage, 55,681. Occupancy % for October 31, 2010 is 100.0%.

Commercial Industrial - Fargo 1320 45th Street North, Fargo, ND.

Total square footage, 42,244. Occupancy % for October 31, 2010 is 100.0%.

14

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Three Months Ended October 31, 2011
	Reporting Segments
	Multi-Family Residential			Commercial Office			Commercial Medical			Commercial Industrial			Commercial Retail			Corporate and  Other			Total
Real estate rental revenue
Stabilized(1)	$	17,813		$	18,002		$	16,075		$	3,455		$	3,102		$	0		$	58,447
Non-Stabilized		568			365			998			111			199			0			2,241
Total		18,381			18,367			17,073			3,566			3,301			0			60,688
Real estate expenses
Stabilized(1)		8,503			8,665			5,878			1,132			1,081			0			25,259
Non-Stabilized		254			147			93			2			36			0			532
Total		8,757			8,812			5,971			1,134			1,117			0			25,791
Stabilized(1)		9,310			9,337			10,197			2,323			2,021			0			33,188
Non-Stabilized		314			218			905			109			163			0			1,709
Net operating income	$	9,624		$	9,555		$	11,102		$	2,432		$	2,184		$	0		$	34,897
Reconciliation of NOI to net income (loss) available to common shareholders
Depreciation/amortization	$	(3,576	)	$	(5,150	)	$	(4,321	)	$	(925	)	$	(880	)	$	(101	)	$	(14,953	)
Administrative, advisory and trustee fees		0			0			0			0			0			(2,104	)		(2,104	)
Other expenses		0			0			0			0			0			(835	)		(835	)
Interest expense		(4,489	)		(5,400	)		(4,115	)		(908	)		(804	)		(601	)		(16,317	)
Interest and other income		0			0			0			0			0			213			213
Income from continuing operations		1,559			(995	)		2,666			599			500			(3,428	)		901
Income from discontinued operations		0			0			0			0			590			0			590
Net income (loss)		1,559			(995	)		2,666			599			1,090			(3,428	)		1,491
Net loss attributable to noncontrolling interests – Operating Partnership		0			0			0			0			0			(194	)		(194	)
Net loss attributable to noncontrolling interests – consolidated real estate entities		0			0			0			0			0			(12	)		(12	)
Net income (loss) attributable to Investors Real Estate Trust		1,559			(995	)		2,666			599			1,090			(3,634	)		1,285
Dividends to preferred shareholders		0			0			0			0			0			(593	)		(593	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	1,559		$	(995	)	$	2,666		$	599		$	1,090		$	(4,227	)	$	692

(1) As of October 31, 2011, stabilized properties excluded:

Multi-Family Residential - North Pointe II, Bismarck, ND and Sierra Vista, Sioux Falls, SD, Cottage West Twin Homes, Sioux Falls, SD, Gables Townhomes, Sioux Falls, SD, and Regency Park Estates, St Cloud, MN

Total number of units, 289 Occupancy % for October 31, 2011 is 89.6%.

Commercial Office - 1st Avenue Building, Minot, ND and Omaha 10802 Farnum Drive, Omaha, NE.

Total square footage 63,001. Occupancy % for October 31, 2011 is 98.7%.

Commercial Medical - Billings 2300 Grant Road, Billings, MT; Missoula 3050 Great Northern Avenue, Missoula, MT; Edgewood Vista-Minot, Minot, ND; Edina 6525 Drew Avenue, Edina, MN; Spring Creek American Falls, American Falls, ID; Spring Creek Soda Springs, Soda Springs, ID; Spring Creek Eagle, Eagle, ID; Spring Creek Meridian, Meridian, ID; Spring Creek Overland, Boise, ID; Spring Creek Boise, Boise, ID; Spring Creek Ustick, Meridian, ID and Trinity at Plaza 16, Minot, ND.

Total square footage, 315,567. Occupancy % for October 31, 2011 is 99.7%.

Commercial Industrial - Fargo 1320 45th Street North, Fargo, ND.

Total square footage, 42,244. Occupancy % for October 31, 2011 is 100.0%.

Commercial Retail - Minot 1400 31st Ave, Minot, ND.

Total square footage, 48,960 Occupancy % for October 31, 2011 is 100.0%.

15

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Three Months Ended October 31, 2010
	Reporting Segments
	Multi-Family Residential			Commercial Office			Commercial Medical			Commercial Industrial			Commercial Retail			Corporate and  Other			Total
Real estate rental revenue
Stabilized(1)	$	16,544		$	19,601		$	16,081		$	3,041		$	3,303		$	0		$	58,570
Non-Stabilized		0			2			164			111			0			0			277
Total		16,544			19,603			16,245			3,152			3,303			0			58,847
Real estate expenses
Stabilized(1)		8,283			8,625			5,344			949			1,069			0			24,270
Non-Stabilized		0			6			19			6			0			0			31
Total		8,283			8,631			5,363			955			1,069			0			24,301
Net Operating Income (NOI)
Stabilized(1)		8,261			10,976			10,737			2,092			2,234			0			34,300
Non-Stabilized		0			(4	)		145			105			0			0			246
Net operating income	$	8,261		$	10,972		$	10,882		$	2,197		$	2,234		$	0		$	34,546
Reconciliation of NOI to net income (loss) available to common shareholders
Depreciation/amortization	$	(3,364	)	$	(5,423	)	$	(3,934	)	$	(869	)	$	(732	)	$	(92	)	$	(14,414	)
Administrative, advisory and trustee services		0			0			0			0			0			(1,718	)		(1,718	)
Other expenses		0			0			0			0			0			(563	)		(563	)
Interest expense		(4,265	)		(5,561	)		(4,506	)		(1,001	)		(802	)		(281	)		(16,416	)
Interest and other income		0			0			0			0			0			167			167
Income (loss) from continuing operations before income taxes		632			(12	)		2,442			327			700			(2,487	)		1,602
Income tax expense		0			0			0			0			0			19			19
Income (loss) from continuing operations		632			(12	)		2,442			327			700			(2,468	)		1,621
Income (loss) from discontinued operations		5,528			0			(12	)		(3	)		(13	)		0			5,500
Net income (loss)		6,160			(12	)		2,430			324			687			(2,468	)		7,121
Net income attributable to noncontrolling interests – Operating Partnership		0			0			0			0			0			(1,322	)		(1,322	)
Net income attributable to noncontrolling interests – consolidated real estate entities		0			0			0			0			0			20			20
Net income (loss) attributable to Investors Real Estate Trust		6,160			(12	)		2,430			324			687			(3,770	)		5,819
Dividends to preferred shareholders		0			0			0			0			0			(593	)		(593	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	6,160		$	(12	)	$	2,430		$	324		$	687		$	(4,363	)	$	5,226

(1)       As of October 31, 2010, stabilized properties excluded:

Commercial Office - 1st Avenue Building, Minot, ND.

Total square footage, 4,427. Occupancy % for October 31, 2010 is 100.0%.

Commercial Medical - Billings 2300 Grant Road, Billings, MT; Missoula 3050 Great Northern Avenue, Missoula, MT and Fox River Cottages, Grand Chute, WI.

Total square footage, 55,681. Occupancy % for October 31, 2010 is 100.0%.

Commercial Industrial - Fargo 1320 45th Street North, Fargo, ND.

Total square footage, 42,244. Occupancy % for October 31, 2010 is 100.0%.

16

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Six Months Ended October 31, 2011
	Reporting Segments
	Multi-Family Residential			Commercial Office			Commercial Medical			Commercial Industrial			Commercial Retail			Corporate and  Other			Total
Real estate rental revenue
Stabilized(1)	$	35,147		$	36,494		$	32,189		$	6,780		$	6,217		$	0		$	116,827
Non-Stabilized		716			688			1,501			221			306			0			3,432
Total		35,863			37,182			33,690			7,001			6,523			0			120,259
Real estate expenses
Stabilized(1)		16,792			17,491			11,392			2,096			2,139			0			49,910
Non-Stabilized		331			265			97			4			69			0			766
Total		17,123			17,756			11,489			2,100			2,208			0			50,676
Net Operating Income (NOI)
Stabilized(1)		18,355			19,003			20,797			4,684			4,078			0			66,917
Non-Stabilized		385			423			1,404			217			237			0			2,666
Net operating income	$	18,740		$	19,426		$	22,201		$	4,901		$	4,315		$	0		$	69,583
Reconciliation of NOI to net income (loss) available to common shareholders
Depreciation/amortization	$	(7,095	)	$	(10,511	)	$	(8,514	)	$	(1,806	)	$	(1,718	)	$	(199	)	$	(29,843	)
Administrative, advisory and trustee services		0			0			0			0			0			(4,285	)		(4,285	)
Other expenses		0			0			0			0			0			(1,150	)		(1,150	)
Interest expense		(9,010	)		(10,598	)		(8,078	)		(1,844	)		(1,573	)		(1,120	)		(32,223	)
Interest and other income		0			0			0			0			0			366			366
Income (loss) from continuing operations		2,635			(1,683	)		5,609			1,251			1,024			(6,388	)		2,448
Income (loss) from discontinued operations		0			0			0			0			616			0			616
Net income (loss)		2,635			(1,683	)		5,609			1,251			1,640			(6,388	)		3,064
Net income attributable to noncontrolling interests – Operating Partnership		0			0			0			0			0			(372	)		(372	)
Net income attributable to noncontrolling interests – consolidated real estate entities		0			0			0			0			0			14			14
Net income (loss) attributable to Investors Real Estate Trust		2,635			(1,683	)		5,609			1,251			1,640			(6,746	)		2,706
Dividends to preferred shareholders		0			0			0			0			0			(1,186	)		(1,186	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	2,635		$	(1,683	)	$	5,609		$	1,251		$	1,640		$	(7,932	)	$	1,520

(1) As of October 31, 2011, stabilized properties excluded:

Multi-Family Residential - North Pointe II, Bismarck, ND and Sierra Vista, Sioux Falls, SD, Cottage West Twin Homes, Sioux Falls, SD, Gables Townhomes, Sioux Falls, SD, and Regency Park Estates, St Cloud, MN

Total number of units, 289 Occupancy % for October 31, 2011 is 89.6%.

Commercial Office - 1st Avenue Building, Minot, ND and Omaha 10802 Farnum Drive, Omaha, NE.

Total square footage 63,001. Occupancy % for October 31, 2011 is 98.7%.

Commercial Medical - Billings 2300 Grant Road, Billings, MT; Missoula 3050 Great Northern Avenue, Missoula, MT; Edgewood Vista-Minot, Minot, ND; Edina 6525 Drew Avenue, Edina, MN; Spring Creek American Falls, American Falls, ID; Spring Creek Soda Springs, Soda Springs, ID; Spring Creek Eagle, Eagle, ID; Spring Creek Meridian, Meridian, ID; Spring Creek Overland, Boise, ID; Spring Creek Boise, Boise, ID; Spring Creek Ustick, Meridian, ID and Trinity at Plaza 16, Minot, ND.

Total square footage, 315,567. Occupancy % for October 31, 2011 is 99.7%.

Commercial Industrial - Fargo 1320 45th Street North, Fargo, ND.

Total square footage, 42,244. Occupancy % for October 31, 2011 is 100.0%.

Commercial Retail - Minot 1400 31st Ave, Minot, ND.

Total square footage, 48,960 Occupancy % for October 31, 2011 is 100.0%.

17

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Six Months Ended October 31, 2010
	Reporting Segments
	Multi-Family Residential			Commercial Office			Commercial Medical			Commercial Industrial			Commercial Retail			Corporate and  Other			Total
Real estate rental revenue
Stabilized(1)	$	32,711		$	39,492		$	32,365		$	6,394		$	6,669		$	0		$	117,631
Non-Stabilized		0			4			190			147			0			0			341
Total		32,711			39,496			32,555			6,541			6,669			0			117,972
Real estate expenses
Stabilized(1)		16,341			17,562			10,629			1,912			2,106			0			48,550
Non-Stabilized		0			12			42			7			0			0			61
Total		16,341			17,574			10,671			1,919			2,106			0			48,611
Net Operating Income (NOI)
Stabilized(1)		16,370			21,930			21,736			4,482			4,563			0			69,081
Non-Stabilized		0			(8	)		148			140			0			0			280
Net operating income	$	16,370		$	21,922		$	21,884		$	4,622		$	4,563		$	0		$	69,361
Reconciliation of NOI to net income (loss) available to common shareholders
Depreciation/amortization	$	(6,726	)	$	(10,995	)	$	(7,832	)	$	(1,766	)	$	(1,462	)	$	(189	)	$	(28,970	)
Administrative, advisory and trustee services		0			0			0			0			0			(3,687	)		(3,687	)
Other expenses		0			0			0			0			0			(916	)		(916	)
Interest expense		(8,559	)		(11,132	)		(8,820	)		(2,001	)		(1,598	)		(357	)		(32,467	)
Interest and other income		0			0			0			0			0			304			304
Income (loss) from continuing operations		1,085			(205	)		5,232			855			1,503			(4,845	)		3,625
Income (loss) from discontinued operations		5,876			0			(8	)		(11	)		(29	)		0			5,828
Net income (loss)		6,961			(205	)		5,224			844			1,474			(4,845	)		9,453
Net income attributable to noncontrolling interests – Operating Partnership		0			0			0			0			0			(1,692	)		(1,692	)
Net income attributable to noncontrolling interests – consolidated real estate entities		0			0			0			0			0			44			44
Net income (loss) attributable to Investors Real Estate Trust		6,961			(205	)		5,224			844			1,474			(6,493	)		7,805
Dividends to preferred shareholders		0			0			0			0			0			(1,186	)		(1,186	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	6,961		$	(205	)	$	5,224		$	844		$	1,474		$	(7,679	)	$	6,619

(1)      As of October 31, 2010, stabilized properties excluded:

Commercial Office - 1st Avenue Building, Minot, ND.

Total square footage, 4,427. Occupancy % for October 31, 2010 is 100.0%.

Commercial Medical - Billings 2300 Grant Road, Billings, MT; Missoula 3050 Great Northern Avenue, Missoula, MT and Fox River Cottages, Grand Chute, WI.

Total square footage, 55,681. Occupancy % for October 31, 2010 is 100.0%.

Commercial Industrial - Fargo 1320 45th Street North, Fargo, ND.

Total square footage, 42,244. Occupancy % for October 31, 2010 is 100.0%.

18

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

STABILIZED PROPERTIES AND ALL PROPERTIES PHYSICAL OCCUPANCY LEVELS BY SEGMENT

2nd Quarter Fiscal 2012 vs. 2nd Quarter Fiscal 2011

Segments	Stabilized Properties		All Properties
	2nd Quarter	2nd Quarter	2nd Quarter	2nd Quarter
	Fiscal 2012	Fiscal 2011	Fiscal 2012	Fiscal 2011
Multi-Family Residential	94.8%	90.6%	94.6%	90.6%
Commercial Office	77.7%	80.5%	78.0%	80.5%
Commercial Medical	95.8%	95.7%	96.2%	95.8%
Commercial Industrial	92.2%	80.0%	92.3%	80.3%
Commercial Retail	85.3%	83.6%	85.8%	83.6%

19

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING SUMMARY

for the three and six months ended October 31, 2011

	Three Months Ended October 31, 2011
	New(1)		Renew(2)		Total		Expiring(3)		Net Change			Percentage Change
Gross Square Footage
Commercial Office		117,826		120,093		237,919		293,951		(56,032	)
Commercial Medical		197,278		2,039		199,317		6,043		193,274
Commercial Industrial		0		199,662		199,662		0		199,662
Commercial Retail		13,823		5,492		19,315		30,215		(10,900	)
Total All Segments		328,927		327,286		656,213		330,209		326,004
Weighted Average Rental Rates(3)
Commercial Office	$	10.60	$	21.58	$	16.14	$	13.89	$	2.25			16.2	%
Commercial Medical		19.70		22.50		19.73		18.58		1.15			6.2	%
Commercial Industrial		0.00		6.01		6.01		0.00		6.01		na
Commercial Retail		18.12		24.51		19.94		10.53		9.41			89.4	%
Total All Segments	$	16.38	$	12.13	$	14.26	$	13.67	$	0.59			4.3	%

	Six Months Ended October 31, 2011
	New(1)		Renew(2)		Total		Expiring(3)		Net Change			Percentage Change
Gross Square Footage
Commercial Office		148,358		278,163		426,521		482,055		(55,534	)
Commercial Medical		204,918		21,496		226,414		39,791		186,623
Commercial Industrial		0		393,770		393,770		13,870		379,900
Commercial Retail		35,110		44,131		79,241		167,304		(88,063	)
Total All Segments		388,386		737,560		1,125,946		703,020		422,926
Weighted Average Rental Rates(3)
Commercial Office	$	10.44	$	14.99	$	13.41	$	12.60	$	0.81			6.4	%
Commercial Medical		19.56		17.01		19.32		18.76		0.56			3.0	%
Commercial Industrial		0.00		3.77		3.77		2.70		1.07			39.6	%
Commercial Retail		9.4		14.07		12.00		5.45		6.55			120.2	%
Total All Segments	$	15.16	$	9.01	$	11.13	$	11.05	$	0.08			0.7	%

	Three Months Ended October 31, 2011						Six Months Ended October 31, 2011
	New(1)		Renew(2)		Total		New(1)		Renew(2)		Total
Weighted Average Term of New/Renewed Leased
Commercial Office		5.0		3.2		4.0		4.5		3.5		3.9
Commercial Medical		8.6		3.0		8.3		8.1		4.7		6.9
Commercial Industrial		0.0		6.1		6.1		0.0		5.3		5.3
Commercial Retail		5.4		4.8		5.1		6.0		5.2		5.5
Total All Segments		6.5		3.8		5.4		6.1		4.2		5.0

(1)   Does not include leases in place on acquired properties.

(2)   Renewals may include leases that have renewed prior to expiration date.  Square footage or rental rate changes on renewals are included in calculation.

(3)   Expired leases include leases with tenants who have vacated or renewed. Excluded from expired leases are leases that have been amended to extend the term, including leases on a month-to-month basis.

(4) Term in years.

20

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING COMMITTMENTS

for the three and six months ended October 31, 2011

	2nd Quarter Fiscal 2012 Total						Year-To-Date Total
	New		Renew		Total Dollars		New		Renew		Total Dollars
Tenant Improvements
Commercial Office	$	1,603,223	$	713,681	$	2,316,904	$	1,974,208	$	1,185,458	$	3,159,666
Commercial Medical		758,390		10,195		768,585		758,390		182,645		941,035
Commercial Industrial		0		279,071		279,071		0		349,071		349,071
Commercial Retail		266,713		0		266,713		289,213		18,846		308,059
Subtotal	$	2,628,326	$	1,002,947	$	3,631,273	$	3,021,811	$	1,736,020	$	4,757,831
Tenant Improvements per square foot
Commercial Office	$	13.61	$	5.94	$	9.74	$	13.31	$	4.26	$	7.41
Commercial Medical		3.84		5.00		3.86		3.70		8.50		4.16
Commercial Industrial		0.00		1.40		1.40		0.00		0.89		0.89
Commercial Retail		19.29		0.00		13.81		8.24		0.43		3.89
All Segments	$	7.99	$	3.06	$	5.53	$	7.78	$	2.35	$	4.23
Leasing Costs
Commercial Office	$	1,425,055	$	1,144,857	$	2,569,912	$	1,611,826	$	1,481,999	$	3,093,825
Commercial Medical		274,090		19,371		293,461		277,681		103,183		380,864
Commercial Industrial		0		373,205		373,205		0		415,105		415,105
Commercial Retail		78,839		24,868		103,707		78,839		32,864		111,703
Subtotal	$	1,777,984	$	1,562,301	$	3,340,285	$	1,968,346	$	2,033,151	$	4,001,497
Leasing Costs per square foot
Commercial Office	$	12.09	$	9.53	$	10.80	$	10.86	$	5.33	$	7.25
Commercial Medical		1.39		9.50		1.47		1.36		4.80		1.68
Commercial Industrial		0.00		1.87		1.87		0.00		1.05		1.05
Commercial Retail		5.70		4.53		5.37		2.25		0.74		1.41
All Segments	$	5.41	$	4.77	$	5.09	$	5.07	$	2.76	$	3.55
Tenant Improvements and Leasing Costs
Commercial Office	$	3,028,278	$	1,858,538	$	4,886,816	$	3,586,034	$	2,667,457	$	6,253,491
Commercial Medical		1,032,480		29,566		1,062,046		1,036,071		285,828		1,321,899
Commercial Industrial		0		652,276		652,276		0		764,176		764,176
Commercial Retail		345,552		24,868		370,420		368,052		51,710		419,762
Total	$	4,406,310	$	2,565,248	$	6,971,558	$	4,990,157	$	3,769,171	$	8,759,328
Tenant Improvements and Leasing Costs per square foot
Commercial Office	$	25.70	$	15.48	$	20.54	$	24.17	$	9.59	$	14.66
Commercial Medical		5.23		14.50		5.33		5.06		13.30		5.84
Commercial Industrial		0.00		3.27		3.27		0.00		1.94		1.94
Commercial Retail		25.00		4.53		19.18		10.48		1.17		5.30
All Segments	$	13.40	$	7.84	$	10.62	$	12.85	$	5.11	$	7.78

21

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

MULTI-FAMILY RESIDENTIAL SUMMARY

	Three Months Ended
	10/31/2011			07/31/2011			04/30/2011			01/31/2011			10/31/2010
Number of Units		8,885			8,664			8,661			8,593			8,590
Average Investment Per Unit
Stabilized	$	56,479		$	56,093		$	55,922		$	55,866		$	55,561
Non-Stabilized		72,974			62,078			61,947			0			0
	$	56,926		$	56,140		$	55,969		$	55,866		$	55,561
Average Scheduled Rent(1) per Unit
Stabilized	$	707		$	701		$	698		$	697		$	699
Non-Stabilized		962			715			567			0			0
	$	714		$	701		$	697		$	697		$	699
Total Receipts per Unit
Stabilized	$	697		$	675		$	665		$	655		$	642
Non-Stabilized		790			726			538			0			0
	$	696		$	675		$	664		$	655		$	642
Total Recurring Capital Expenditures per Unit(1)
Stabilized	$	212		$	230		$	144		$	146		$	165
Non-Stabilized		123			113			105			0			0
	$	209		$	229		$	144		$	146		$	165
Physical Occupancy%
Stabilized		94.8	%		91.5	%		92.8	%		91.1	%		90.6	%
Non-Stabilized		89.6	%		94.1	%		89.7	%		0.0	%		0.0	%
		94.6	%		91.5	%		92.8	%		91.1	%		90.6	%
Operating Expenses as a % of Scheduled Rent
Stabilized		47.0	%		46.3	%		49.4	%		49.7	%		46.1	%
Non-Stabilized		36.7	%		52.4	%		47.4	%		0.0	%		0.0	%
Total		46.6	%		46.3	%		49.4	%		49.7	%		46.1	%

(1) See Definitions on page 27.

22

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

10 LARGEST COMMERCIAL TENANTS – BASED ON ANNUALIZED BASE RENT(1)

as of October 31, 2011

Tenant	Number of Properties	Average Remaining Lease Term in Months	% of Total Commercial Segments’ Minimum Rents	Aggregate Rentable Square Feet	% of Aggregate Occupied Square Feet
Affiliates of Edgewood Vista	27	117	10.2%	1,190,393	11.1%
St. Lukes Hospital of Duluth, Inc.	6	51	3.5%	198,775	1.9%
Fairview Health Services	9	72	3.5%	261,814	2.5%
Applied Underwriters	3	64	2.3%	141,724	1.3%
Affiliates of Siemens USA	2	35	1.7%	142,017	1.3%
HealthEast Care System	1	88	1.6%	114,316	1.1%
Affiliates of Hewlett Packard (NASDAQ: HPQ)	2	8	1.5%	376,480	3.5%
Microsoft (NASDAQ: MSFT)	1	22	1.4%	122,040	1.1%
Smurfit - Stone Container (NASDAQ: SSCC)	2	49	1.3%	406,397	3.8%
Nebraska Orthopedic Hospital	1	209	1.3%	61,758	0.6%
Total/Weighted Average		83	28.3%	3,015,714	28.2%

(1) See Definitions on page 27.

23

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LEASE EXPIRATIONS

as of October 31, 2011

Fiscal Year	Number of Leases		Rentable Square Feet		% of Rentable Square Feet			Annualized Rent*		Average Rental Rate		% of Annualized  Base Rent
Commercial Office
2012		27		197,155		5.1	%	$	3,092,158	$	15.68		5.5	%
2013		48		560,392		14.5	%		7,823,991		13.96		14.0	%
2014		52		611,995		15.8	%		8,110,783		13.25		14.5	%
2015		63		458,532		11.8	%		6,536,120		14.25		11.7	%
2016		37		556,350		14.4	%		8,757,569		15.74		15.7	%
2017 and thereafter		60		1,486,898		38.4	%		21,606,979		14.53		38.6	%
		287		3,871,322		100.0	%	$	55,927,600	$	14.45		100.0	%
Commercial Medical
2012		19		64,307		2.3	%	$	1,386,502	$	21.56		3.0	%
2013		21		115,219		4.2	%		2,546,709		22.10		5.5	%
2014		25		378,305		13.7	%		6,908,486		18.26		14.8	%
2015		15		58,499		2.1	%		1,402,318		23.97		3.0	%
2016		25		176,413		6.4	%		3,575,300		20.27		7.7	%
2017 and thereafter		88		1,963,556		71.3	%		30,779,499		15.68		66.0	%
		193		2,756,299		100.0	%	$	46,598,814	$	16.91		100.0	%
Commercial Industrial
2012		5		483,192		18.1	%	$	1,154,770	$	2.39		11.3	%
2013		3		36,072		1.4	%		134,028		3.72		1.3	%
2014		8		234,078		8.8	%		957,588		4.09		9.3	%
2015		6		344,493		12.9	%		1,389,772		4.03		13.6	%
2016		8		784,327		29.5	%		3,155,660		4.02		30.7	%
2017 and thereafter		11		780,498		29.3	%		3,471,845		4.45		33.8	%
		41		2,662,660		100.0	%	$	10,263,663	$	3.85		100.0	%
Commercial Retail
2012		23		138,618		11.9	%	$	763,502	$	5.51		8.1	%
2013		35		106,311		9.1	%		865,603		8.14		9.2	%
2014		38		205,102		17.6	%		1,285,356		6.27		13.6	%
2015		28		279,538		23.9	%		2,082,394		7.45		22.1	%
2016		20		90,751		7.8	%		1,088,161		11.99		11.5	%
2017 and thereafter		31		347,036		29.7	%		3,353,591		9.66		35.5	%
		175		1,167,356		100.0	%	$	9,438,607	$	8.09		100.0	%
Commercial Total
2012		74		883,272		8.4	%	$	6,396,932	$	7.24		5.2	%
2013		107		817,994		7.8	%		11,370,331		13.90		9.3	%
2014		123		1,429,480		13.7	%		17,262,213		12.08		14.1	%
2015		112		1,141,062		10.9	%		11,410,604		10.00		9.3	%
2016		90		1,607,841		15.4	%		16,576,690		10.31		13.6	%
2017 and thereafter		190		4,577,988		43.8	%		59,211,914		12.93		48.5	%
		696		10,457,637		100.0	%	$	122,228,684	$	11.69		100.0	%

* Annualized Base Rent is monthly scheduled rent as of October 31, 2011 (cash basis), multiplied by 12.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FISCAL 2012 ACQUISITION SUMMARY

as of October 31, 2011

($’s in thousands)

Property	Location	Segment Type	Acquisition Date	Square Feet/Units		Leased Percentage At Acquisition			October 31, 2011 Leased Percentage			Acquisition Cost
Buffalo Mall Theaters1	Jamestown, ND	Commercial Retail	June 15, 2011		19,037		100.0	%		100.0	%	$	781
Regency Park Estates	Sioux Falls, SD	Multi-Family Residential	August 1, 2011		50		85.0	%		85.0	%		10,900
Spring Creek American Falls	American Falls, ID	Commercial Medical	September 1, 2011		17,273		100.0	%		100.0	%		4,070
Spring Creek Soda Springs	Soda Springs, ID	Commercial Medical	September 1, 2011		15,571		100.0	%		100.0	%		2,230
Spring Creek Eagle	Eagle, ID	Commercial Medical	September 1, 2011		15,559		100.0	%		100.0	%		4,100
Spring Creek Meridian	Meridian, ID	Commercial Medical	September 1, 2011		31,820		100.0	%		100.0	%		7,250
Spring Creek Overland	Boise, ID	Commercial Medical	September 1, 2011		26,605		100.0	%		100.0	%		6,725
Spring Creek Boise	Boise, ID	Commercial Medical	September 1, 2011		16,311		100.0	%		100.0	%		5,075
Spring Creek Ustick	Meridian, ID	Commercial Medical	September 1, 2011		26,605		100.0	%		100.0	%		4,300
Meadow Wind Land	Casper, WY	Unimproved Land	September 1, 2011	na		na			na				50
Minot IPS	Minot, ND	Unimproved Land	September 7, 2011		-	na			na				416
Trinity at Plaza 162	Minot, ND	Commercial Medical	September 23, 2011		24,795		100.0	%		100.0	%		4,879
Cottage West Twin Homes	Sioux Falls, SD	Multi-Family Residential	October 12, 2011		50		98.0	%		98.0	%		4,730
Gables Townhomes	Sioux Falls, SD	Multi-Family Residential	October 12, 2011		24		87.5	%		87.5	%		2,270
Edina 6525 Drew Avenue S	Edina, MN	Commercial Medical	October 13, 2011		2,900		76.4	%		76.4	%		505
			Total Square Feet		196,476							$	58,281
			Total Units		124

(1)    Conversion project placed in service June 15, 2011. Additional costs incurred in fiscal year 2011 totaled $1.4 million, for a total project cost at July 31, 2011 of $2.2 million.

(2)   Development property placed in service September 23, 2011.  Additional costs paid in fiscal year 2011 totaled $3.3 million, for a total project cost at October 31, 2011 of $8.2 million.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FISCAL 2012 DEVELOPMENT SUMMARY

as of October 31, 2011

($’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
Multi-Family Conversion - Minot, ND	Convert 15,000 sf. commercial office to 20 multi-family residential units		0	%		2,900		417	1st Quarter Fiscal 2013
Spring Wind, Laramie, WY	29 assisted living units and 16 memory care units		0	%		3,800		275	1st Quarter Fiscal 2013
Meadow Wind, Casper, WY	28 assisted living units and 16 memory care units		0	%		4,700		3,071	3rd Quarter Fiscal 2012
Industrial-Office Build-to-Suit, Minot, ND	23,000 sf. commercial industrial building		100	%		5,800		482	2nd Quarter Fiscal 2013
Quarry Ridge II Apartments, Rochester, MN	159 unit apartment building		0	%		19,400		4,251	2nd Quarter Fiscal 2013
Georgetown Square Condos - Grand Chute, WI	8 condo units		0	%	na			1,750		na
Williston Garden Apartments(1)	145 unit apartment building		0	%		19,500		3,878	2nd Quarter Fiscal 2013
		Total			$	56,100	$	14,124

(1)    The Company is a 60% partner in the joint venture entity constructing this property; the anticipated total cost amount given is the total cost to the joint venture entity.

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Definitions

October 31, 2011

Annualized base rent (ABR) is calculated as monthly base rent (cash basis) per the lease, as of the reporting period, multiplied by 12.

Debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet plus the market value of shares outstanding at the end of the period.

Debt service coverage ratio is computed by dividing earnings before interest income and expense, depreciation, amortization and gain on sale of real estate by interest expense and principal amortization.

EBITDAis earnings before interest, taxes, depreciation and amortization. We consider EBITDA to be an appropriate supplemental performance measure because it eliminates depreciation, interest and the gain/loss from property dispositions, which permits investors to view income from operations without the effect of non-cash depreciation or the cost of debt; however, EBIDTA as we calculate it has not been adjusted for the effect of nonrecurring events such as asset impairment and gain/loss on involuntary conversion.  EBITDA is a non-GAAP measure. EBITDA as calculated by us is not comparable to EBITDA reported by other REITs that do not define EBITDA exactly as we do.

Funds from operations (FFO) - The National Association of Real Estate Investment Trusts, Inc. (NAREIT) defines FFO as “net income (computed in accordance with generally accepted accounting principles, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.” In addition, NAREIT recently clarified its computation of FFO to exclude impairment charges for all periods presented. FFO is a non-GAAP measure.  We consider FFO, which is a standard supplemental measure for equity real estate investment trusts, helpful to investors because it facilitates an understanding of the operating performance of properties without giving effect to impairment write-downs and to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time.  Since real estate values instead historically rise or fall with market conditions, we believe that FFO provides investors and management with a more accurate indication of our financial and operating results.

Net Operating Income is total real estate revenues less real estate expenses (which consist of utilities, maintenance, real estate taxes, insurance and property management expenses).

Payout ratio (FFO per share and unit basis) - The ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual FFO per share and unit.

Ratio of earnings to fixed charges - The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests - consolidated real estate entities, capitalized interest and preferred distributions. Fixed charges consist of mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest.

Ratio of earnings to combined fixed charges and preferred distributions - The ratio of earnings to combined fixed charges and preferred distributions is computed by dividing earnings by combined fixed charges and preferred distributions. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests - consolidated real estate entities, capitalized interest and preferred distributions. Combined fixed charges and preferred distributions consist of fixed charges (mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest) and preferred distributions.

Recurring capital expenditures are costs that increase the value and extend the useful life of a property.  Ordinary repair and maintenance costs that do not extend the useful life of the asset are expensed as incurred.  Costs incurred on a lease turnover due to normal wear and tear by the resident are expensed on the turn.  Recurring capital expenditures typically include appliances, carpeting and flooring, and kitchen/bath cabinets.

Scheduled rent revenue is the total possible revenue from all leasable units and square footage, with occupied space valued at contract rates pursuant to leases and vacant units or square footage at market rates.

Stabilized properties are those properties owned for the entirety of both periods being compared, and, in the case of development or re-development properties, which have achieved a target level of occupancy.

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