EX-99.2 3 iretexhibit992-09102012.htm EXHIBIT 99.2 SUPPLEMENTAL OPERATING AND FINANCIAL DATA

Exhibit 99.2



Second Quarter Fiscal 2013
Supplemental Operating and Financial Data
for the Quarter Ended October 31, 2012

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





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

 
Page
 
 
Company Background and Highlights                                                                                                                                                                                                          
2
 
 
Property Cost by Segment                                                                                                                                                                                                          
5
 
 
Key Financial Data
 
Condensed Consolidated Balance Sheets                                                                                                                                                                                                  
6
Condensed Consolidated Statements of Operations                                                                                                                                                                                                  
7
Funds From Operations                                                                                                                                                                                                  
8
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)                                                                                                                                                                                                  
9
 
 
Capital Analysis
 
Long-Term Mortgage Debt Analysis                                                                                                                                                                                                  
10
Long-Term Mortgage Debt Detail                                                                                                                                                                                                  
11-13
Capital Analysis                                                                                                                                                                                                  
14
 
 
Portfolio Analysis
 
Stabilized Properties Net Operating Income Summary                                                                                                                                                                                                  
15
Net Operating Income Detail                                                                                                                                                                                                  
16-19
Stabilized Properties and Overall Physical Occupancy Levels by Segment                                                                                                                                                                                                  
20
 
 
Tenant Analysis
 
Commercial Leasing Summary                                                                                                                                                                                                  
21-22
Multi-Family Residential Summary                                                                                                                                                                                                  
23
10 Largest Commercial Tenants - Based on Annualized Base Rent                                                                                                                                                                                                  
24
Lease Expirations                                                                                                                                                                                                  
25
 
 
Growth and Strategy
 
Acquisition Summary                                                                                                                                                                                                  
26
Development Summary                                                                                                                                                                                                  
27
 
 
Definitions                                                                                                                                                                                                        
28




Company Background and Highlights
Second Quarter Fiscal 2013
Investors Real Estate Trust is a self-administered, equity real estate investment trust (REIT) investing in a portfolio of income-producing properties located primarily in the upper Midwest.  IRET's portfolio is diversified among multi-family residential, commercial office, commercial medical (including senior housing), commercial industrial and commercial retail segments.
During the second quarter of fiscal year 2013, the Company closed on its acquisitions of:
·
a 58-unit multi-family residential property in Sartell, Minnesota (The Ponds at Heritage Place), on approximately 6.5 acres of land, for a purchase price of approximately $5.0 million, of which $3.3 million was paid in cash and the remainder in limited partnership units of the Operating Partnership valued at $1.7 million;
·
an approximately 2.6 acre parcel of vacant land in Williston, North Dakota, acquired for possible future development, for a purchase price of approximately $822,500, paid in cash; and
·
an approximately 3.8 acre parcel of vacant land in St. Cloud, Minnesota, acquired for possible future development for a purchase price of approximately $447,000, paid in cash.
During the second quarter of fiscal year 2013, the Company sold two condominium units and two-multi-family residential properties, for a total sales price of approximately $7.3 million.
The Company's revenues in the second quarter of fiscal year 2013 continued to be affected by low occupancy levels in its commercial office segment. Despite the ongoing economic recovery and renewed commercial leasing interest, the Company believes the continued elevated vacancy in its commercial office segment reflects continuing challenging economic conditions in certain of the Company's markets. IRET's multi-family residential portfolio continued its strong performance, with real estate revenue increasing compared to the year-earlier periods, although occupancy levels decreased slightly.
In the second quarter of fiscal year 2013, IRET paid its 166th consecutive quarterly distribution. The $0.1300 per share/unit distribution was payable on October 1, 2012. Subsequent to the end of the second quarter of fiscal year 2013, the Company declared a quarterly distribution of $0.1300 per share and unit payable on January 15, 2013 to shareholder and unitholders of record on January 2, 2013. The Board of Trustees also declared a quarterly distribution of $0.5156 per share on the Company's Series A preferred shares, payable December 31, 2012 to Series A preferred shareholders of record on December 17, 2012, and declared a distribution of $0.4968 per share on the Company's Series B preferred shares of beneficial interest, payable December 31, 2012 to Series B preferred shareholders of record on December 17, 2012.
As of October 31, 2012, IRET owns a diversified portfolio of 267 properties consisting of 85 multi-family residential properties, 68 commercial office properties, 65 commercial medical properties (including senior housing), 19 commercial industrial properties and 30 commercial retail properties.  IRET's common shares are publicly traded on the NASDAQ Global Select Market (NASDAQ:  IRET).





Company Snapshot
(as of October 31, 2012)
Company Headquarters                                                                                              
  
Minot, North Dakota
  
Fiscal Year-End                                                                                              
  
April 30
  
Reportable Segments                                                                                              
  
Multi-Family Residential, Commercial Office, Commercial Medical, Commercial Industrial, Commercial Retail
  
Total Properties                                                                                              
    267  
Total Square Feet
        
(commercial properties)                                                                                          
  
12.3 million
  
Total Units
        
(multi-family residential properties)                                                                                          
    9,934
 
  
Common Shares Outstanding (thousands)                                                                                              
    93,161
 
  
Limited Partnership Units Outstanding (thousands)
    21,336
 
  
Common Share Distribution - Quarter/Annualized
  
$0.13/$0.52
 
  
Dividend Yield                                                                                              
    6.2%
 
 
Total Capitalization (see p.14 for detail)                                                                                              
  
$2.2 billion
  


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


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


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





Common Share Data (NASDAQ: IRET)
 
  
2nd Quarter
Fiscal Year 2013
    
1st Quarter
Fiscal Year 2013
    
4th Quarter
Fiscal Year 2012
    
3rd Quarter
Fiscal Year 2012
    
2nd Quarter
Fiscal Year 2012
  
High Closing Price
  
$
8.49
    
$
8.31
    
$
7.97
    
$
7.64
    
$
8.12
  
Low Closing Price
  
$
7.92
    
$
7.05
    
$
7.22
    
$
6.89
    
$
6.92
  
Average Closing Price
  
$
8.25
    
$
7.57
    
$
7.56
    
$
7.27
    
$
7.46
  
Closing Price at end of quarter
  
$
8.42
    
$
8.16
    
$
7.22
    
$
7.42
    
$
7.41
  
Common Share Distributions—annualized
  
$
0.520
    
$
0.520
    
$
0.520
    
$
0.520
    
$
0.520
  
Closing Dividend Yield - annualized
    
6.2
%
    
6.4
%
    
7.2
%
    
7.0
%
    
7.0
%
Closing common shares outstanding (thousands)
    
93,161
      
91,812
      
89,474
      
85,744
      
83,682
  
Closing limited partnership units outstanding (thousands)
    
21,336
      
21,171
      
20,332
      
19,596
      
19,534
  
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)
  
$
964,065
    
$
921,941
    
$
792,799
    
$
781,623
    
$
764,831
  

Certain statements in these supplemental disclosures are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from projected results. Such risks, uncertainties and other factors include, but are not limited to: intentions and expectations regarding future distributions on our common shares and units, fluctuations in interest rates, the effect of government regulation, the availability of capital, changes in general and local economic and real estate market conditions, competition, our ability to attract and retain skilled personnel, and those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including our 2012 Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Second Quarter Fiscal 2013 Acquisition
 
The Ponds at Heritage Place
1210 & 1211 7th Ave S
 Sartell, MN 56377
 
 
 
 
 
 
 
 
 
 






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







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

 
  
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
  
ASSETS
  
   
   
   
   
 
Real estate investments
  
   
   
   
   
 
Property owned
  
$
1,983,978
    
$
1,979,099
    
$
1,892,009
    
$
1,861,321
    
$
1,844,654
  
Less accumulated depreciation
    
(394,256
)
    
(387,286
)
    
(373,490
)
    
(364,190
)
    
(351,174
)
 
    
1,589,722
      
1,591,813
      
1,518,519
      
1,497,131
      
1,493,480
  
Development in progress
    
23,218
      
10,498
      
27,599
      
22,281
      
14,124
  
Unimproved land
    
11,670
      
10,990
      
10,990
      
6,390
      
6,558
  
Mortgage loans receivable, net of allowance
    
0
      
0
      
0
      
0
      
155
  
Total real estate investments
    
1,624,610
      
1,613,301
      
1,557,108
      
1,525,802
      
1,514,317
  
Real estate held for sale
    
1,844
      
1,131
      
2,067
      
0
      
0
  
Cash and cash equivalents
    
84,258
      
37,002
      
39,989
      
35,502
      
32,697
  
Other investments
    
637
      
635
      
634
      
633
      
628
  
Receivable arising from straight-lining of rents, net of allowance
    
24,895
      
24,127
      
23,273
      
21,965
      
20,905
  
Accounts receivable, net of allowance
    
2,854
      
6,448
      
7,052
      
3,977
      
8,243
  
Real estate deposits
    
55
      
4
      
263
      
578
      
451
  
Prepaid and other assets
    
2,101
      
3,070
      
3,703
      
4,107
      
1,718
  
Intangible assets, net of accumulated amortization
    
42,281
      
43,796
      
44,588
      
49,055
      
50,322
  
Tax, insurance, and other escrow
    
12,177
      
13,161
      
11,669
      
11,427
      
11,315
  
Property and equipment, net of accumulated depreciation
    
1,351
      
1,332
      
1,454
      
1,464
      
1,986
  
Goodwill
    
1,110
      
1,120
      
1,120
      
1,120
      
1,127
  
Deferred charges and leasing costs, net of accumulated amortization
    
21,164
      
21,932
      
21,447
      
22,014
      
21,255
  
TOTAL ASSETS
  
$
1,819,337
    
$
1,767,059
    
$
1,714,367
    
$
1,677,644
    
$
1,664,964
  
 
                                        
LIABILITIES AND EQUITY
                                        
LIABILITIES
                                        
Accounts payable and accrued expenses
  
$
38,762
    
$
41,084
    
$
47,403
    
$
43,439
    
$
39,002
  
Revolving line of credit
    
10,000
      
44,500
      
39,000
      
49,000
      
47,000
  
Mortgages payable
    
1,045,197
      
1,080,655
      
1,048,689
      
1,038,717
      
1,039,625
  
Other
    
32,889
      
25,094
      
14,012
      
6,326
      
1,164
  
TOTAL LIABILITIES
    
1,126,848
      
1,191,333
      
1,149,104
      
1,137,482
      
1,126,791
  
 
                                        
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES
    
0
      
0
      
0
      
0
      
1,005
  
EQUITY
                                        
Investors Real Estate Trust shareholders' equity
                                        
Series A Preferred Shares of Beneficial Interest
    
27,317
      
27,317
      
27,317
      
27,317
      
27,317
  
Series B Preferred Shares of Beneficial Interest
    
111,357
      
0
      
0
      
0
      
0
  
Common Shares of Beneficial Interest
    
711,880
      
701,431
      
684,049
      
657,304
      
643,022
  
Accumulated distributions in excess of net income
    
(295,396
)
    
(289,025
)
    
(278,377
)
    
(269,942
)
    
(260,535
)
Total Investors Real Estate Trust shareholders' equity
    
555,158
      
439,723
      
432,989
      
414,679
      
409,804
  
Noncontrolling interests – Operating Partnership
    
122,357
      
122,373
      
118,710
      
114,852
      
116,550
  
Noncontrolling interests – consolidated real estate entities
    
14,974
      
13,630
      
13,564
      
10,631
      
10,814
  
Total equity
    
692,489
      
575,726
      
565,263
      
540,162
      
537,168
  
TOTAL LIABILITIES AND EQUITY
  
$
1,819,337
    
$
1,767,059
    
$
1,714,367
    
$
1,677,644
    
$
1,664,964
  






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
  
10/31/2012
    
10/31/2011
    
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
  
Real estate revenue
  
$
126,929
    
$
119,364
    
$
64,943
    
$
61,986
    
$
60,188
    
$
60,546
    
$
60,200
  
Real estate expenses
    
49,645
      
50,169
      
24,804
      
24,841
      
22,634
      
24,590
      
25,527
  
Gain on involuntary conversion
    
2,263
      
0
      
2,263
      
0
      
274
      
0
      
0
  
Net operating income
    
79,547
      
69,195
      
42,402
      
37,145
      
37,828
      
35,956
      
34,673
  
Depreciation/amortization
    
(32,728
)
    
(29,682
)
    
(16,506
)
    
(16,222
)
    
(15,146
)
    
(15,183
)
    
(14,874
)
Administrative expenses, advisory and trustee services
    
(4,157
)
    
(4,285
)
    
(2,061
)
    
(2,096
)
    
(1,437
)
    
(1,659
)
    
(2,104
)
Other expenses
    
(1,032
)
    
(1,150
)
    
(513
)
    
(519
)
    
(389
)
    
(359
)
    
(835
)
Interest expense
    
(32,723
)
    
(31,978
)
    
(16,300
)
    
(16,423
)
    
(16,333
)
    
(16,411
)
    
(16,193
)
Interest and other income
    
345
      
366
      
203
      
142
      
141
      
279
      
213
  
Income from continuing operations
    
9,252
      
2,466
      
7,225
      
2,027
      
4,664
      
2,623
      
880
  
Income (loss) from discontinued operations
    
2,754
      
598
      
2,785
      
(31
)
    
(543
)
    
(102
)
    
611
  
Net income
  
$
12,006
    
$
3,064
    
$
10,010
    
$
1,996
    
$
4,121
    
$
2,521
    
$
1,491
  
 
                                                        
Net income attributable to noncontrolling interest – Operating Partnership
    
(1,541
)
    
(372
)
    
(1,290
)
    
(251
)
    
(636
)
    
(351
)
    
(194
)
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities
    
(274
)
    
14
      
(208
)
    
(66
)
    
(106
)
    
(43
)
    
(12
)
Net income attributable to Investors Real Estate Trust
    
10,191
      
2,706
      
8,512
      
1,679
      
3,379
      
2,127
      
1,285
  
Dividends to preferred shareholders
    
(3,471
)
    
(1,186
)
    
(2,878
)
    
(593
)
    
(593
)
    
(593
)
    
(593
)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
  
$
6,720
    
$
1,520
    
$
5,634
    
$
1,086
    
$
2,786
    
$
1,534
    
$
692
  
 
                                                        
Per Share Data
                                                        
Earnings per common share from continuing operations – Investors Real Estate Trust – basic & diluted
  
$
.05
    
$
.01
    
$
.04
    
$
.01
    
$
.04
    
$
.02
    
$
.00
  
Earnings (loss) per common share from discontinued operations – Investors Real Estate Trust – basic & diluted
    
.02
      
.01
      
.02
      
.00
      
(.01
)
    
.00
      
.01
  
Net income per common share – basic & diluted
  
$
.07
    
$
.02
    
$
.06
    
$
.01
    
$
.03
    
$
.02
    
$
.01
  
 
                                                        
Percentage of Revenues
                                                        
Real estate expenses
    
39.1
%
    
42.0
%
    
38.2
%
    
40.1
%
    
37.6
%
    
40.6
%
    
42.4
%
Depreciation/amortization
    
25.8
%
    
24.9
%
    
25.4
%
    
26.2
%
    
25.2
%
    
25.1
%
    
24.7
%
General and administrative
    
3.3
%
    
3.6
%
    
3.2
%
    
3.4
%
    
2.4
%
    
2.7
%
    
3.5
%
Interest
    
25.8
%
    
26.8
%
    
25.1
%
    
26.5
%
    
27.1
%
    
27.1
%
    
26.9
%
Income (loss) from discontinued operations
    
2.2
%
    
0.5
%
    
4.3
%
    
(0.1
)%
    
(0.9
)%
    
(0.2
)%
    
1.0
%
Net income
    
9.5
%
    
2.6
%
    
15.4
%
    
3.2
%
    
6.8
%
    
4.2
%
    
2.5
%
 
                                                        
Ratios
                                                        
EBITDA(1)/Interest expense
    
2.19
x
    
2.00
x
    
2.28
x
    
2.09
x
    
2.17
x
    
2.07
x
    
1.97
x
EBITDA(1)/Interest expense plus preferred distributions
    
1.98
x
    
1.93
x
    
1.95
x
    
2.02
x
    
2.09
x
    
2.00
x
    
1.90
x
(1) See Definitions on page 28.  EBITDA is a non-GAAP measure; see page 9 for a reconciliation of EBITDA to net income.





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

 
  
Six Months Ended
    
Three Months Ended
  
 
  
10/31/2012
    
10/31/2011
    
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
  
Funds From Operations(1)
  
   
   
   
   
   
   
 
Net income attributable to Investors Real Estate Trust
  
$
10,191
    
$
2,706
    
$
8,512
    
$
1,679
    
$
3,379
    
$
2,127
    
$
1,285
  
Less dividends to preferred shareholders
    
(3,471
)
    
(1,186
)
    
(2,878
)
    
(593
)
    
(593
)
    
(593
)
    
(593
)
Net income available to common shareholders
    
6,720
      
1,520
      
5,634
      
1,086
      
2,786
      
1,534
      
692
  
Adjustments:
                                                        
Noncontrolling interests – Operating Partnership
    
1,541
      
372
      
1,290
      
251
      
636
      
351
      
194
  
Depreciation and amortization
    
32,707
      
29,713
      
16,520
      
16,187
      
15,165
      
15,179
      
14,890
  
Real estate impairment
    
0
      
0
      
0
      
0
      
293
      
135
      
0
  
(Gain) loss on depreciable property sales
  
$
(2,680
)
  
$
(589
)
    
(2,753
)
    
73
      
240
      
0
      
(589
)
Funds from operations applicable to common shares and Units
    
38,288
      
31,016
    
$
20,691
    
$
17,597
    
$
19,120
    
$
17,199
    
$
15,187
  
 
                                                        
FFO per share and unit - basic and diluted
  
$
0.34
    
$
0.31
    
$
0.18
    
$
0.16
    
$
0.18
    
$
0.16
    
$
0.15
  
 
                                                        
Adjusted funds from operations(1)
                                                        
Funds from operations applicable to common shares and Units
  
$
38,288
    
$
31,016
    
$
20,691
    
$
17,597
    
$
19,120
    
$
17,199
    
$
15,187
  
Adjustments:
                                                        
Tenant improvements
    
(3,591
)
    
(3,456
)
    
(1,385
)
    
(2,206
)
    
(4,846
)
    
(2,007
)
    
(2,021
)
Leasing commissions
    
(768
)
    
(1,885
)
    
567
      
(1,335
)
    
701
      
(1,589
)
    
(1,182
)
Recurring capital expenditures(1)
    
(4,097
)
    
(3,841
)
    
(2,110
)
    
(1,987
)
    
(1,451
)
    
(1,411
)
    
(1,872
)
Straight-line rents
    
(1,632
)
    
(1,995
)
    
(768
)
    
(864
)
    
(1,330
)
    
(1,059
)
    
(1,597
)
Non-real estate depreciation
    
219
      
217
      
83
      
136
      
78
      
114
      
90
  
Gain on involuntary conversion
    
(2,263
)
    
0
      
(2,263
)
    
0
      
(274
)
    
0
      
0
  
Adjusted funds from operations applicable to common shares and Units
  
$
26,156
    
$
20,056
    
$
14,815
    
$
11,341
    
$
11,998
    
$
11,247
    
$
8,605
  
 
                                                        
AFFO per share and unit - basic and diluted
    
0.23
      
0.20
      
0.13
      
0.10
      
0.11
      
0.11
      
0.09
  
 
                                                        
Weighted average shares and units
    
112,458
      
101,286
      
113,690
      
111,292
      
107,316
      
103,935
      
101,669
  
(1) See Definitions on page 28.






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

 
  
Six Months Ended
    
Three Months Ended
  
 
  
10/31/2012
    
10/31/2011
    
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
  
EBITDA(1)
  
   
   
   
   
   
   
 
Net income attributable to Investors Real Estate Trust
  
$
10,191
    
$
2,706
    
$
8,512
    
$
1,679
    
$
3,379
    
$
2,127
    
$
1,285
  
Adjustments:
                                                        
Noncontrolling interests – Operating Partnership
    
1,541
      
372
      
1,290
      
251
      
636
      
351
      
194
  
Income before noncontrolling interests – Operating Partnership
    
11,732
      
3,078
      
9,802
      
1,930
      
4,015
      
2,478
      
1,479
  
Add:
                                                        
Interest
    
32,886
      
32,243
      
16,369
      
16,517
      
16,454
      
16,533
      
16,318
  
Depreciation/amortization related to real estate investments
    
31,210
      
28,359
      
15,757
      
15,453
      
14,390
      
14,359
      
14,193
  
Amortization related to non-real estate investments
    
1,632
      
1,492
      
799
      
833
      
821
      
903
      
758
  
Amortization related to real estate revenues(2)
    
83
      
80
      
46
      
37
      
30
      
31
      
29
  
Less:
                                                        
Interest income
    
(106
)
    
(90
)
    
(88
)
    
(18
)
    
(33
)
    
(25
)
    
(37
)
Gain on sale of real estate, land and other investments
    
(2,680
)
    
(589
)
    
(2,753
)
    
73
      
240
      
0
      
(589
)
Gain on involuntary conversion
    
(2,263
)
    
0
      
(2,263
)
    
0
      
(274
)
    
0
      
0
  
EBITDA
  
$
72,494
    
$
64,573
    
$
37,669
    
$
34,825
    
$
35,643
    
$
34,279
    
$
32,151
  
(1) Definitions on page 28.
(2) See Included in real estate revenue in the Statement of Operations.






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

 
  
5.61%
Future Maturities of Mortgage Debt
  
Fiscal Year
  
Fixed Debt
    
Variable Debt
    
Total Debt
    
Weighted
Average(1)
    
% of
Total Debt
  
2013
  
$
12,154
    
$
0
    
$
12,154
      
5.50
%
    
1.1
%
2014
    
37,791
      
647
      
38,438
      
5.61
%
    
3.7
%
2015
    
74,326
      
17,250
      
91,576
      
5.47
%
    
8.8
%
2016
    
77,379
      
0
      
77,379
      
5.56
%
    
7.4
%
2017
    
188,031
      
0
      
188,031
      
6.14
%
    
18.0
%
2018
    
67,859
      
0
      
67,859
      
5.61
%
    
6.4
%
2019
    
97,579
      
5,639
      
103,218
      
5.91
%
    
9.9
%
2020
    
124,070
      
0
      
124,070
      
5.90
%
    
11.9
%
2021
    
126,042
      
0
      
126,042
      
5.35
%
    
12.0
%
2022
    
136,754
      
0
      
136,754
      
5.62
%
    
13.1
%
Thereafter
    
79,676
      
0
      
79,676
      
4.76
%
    
7.7
%
Total maturities
  
$
1,021,661
    
$
23,536
    
$
1,045,197
      
5.66
%
    
100.0
%
(1)
Weighted average interest rate of debt that matures in fiscal year.
 
  
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
  
Balances Outstanding
  
   
   
   
   
 
Mortgage
  
   
   
   
   
 
Fixed rate
  
$
1,021,661
    
$
1,064,564
    
$
1,032,543
    
$
1,028,198
    
$
1,033,550
  
Variable rate
    
23,536
      
16,091
      
16,146
      
10,519
      
6,075
  
Mortgage total
  
$
1,045,197
    
$
1,080,655
    
$
1,048,689
    
$
1,038,717
    
$
1,039,625
  
 
                                        
Weighted Average Interest Rates
                                        
Secured
    
5.66
%
    
5.72
%
    
5.78
%
    
5.84
%
    
5.86
%





INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LONG-TERM MORTGAGE DEBT* DETAIL AS OF OCTOBER 31, 2012
(in thousands)
Property
Maturity Date
  
Fiscal 2013
    
Fiscal 2014
    
Fiscal 2015
    
Fiscal 2016
    
Thereafter
    
Total(1)
  
 
 
  
   
   
   
   
   
 
Multi-Family Residential
 
  
   
   
   
   
   
 
 Monticello Village - Monticello, MN
3/1/2013
  
$
2,924
    
$
0
    
$
0
    
$
0
    
$
0
    
$
2,924
  
 Quarry Ridge - Rochester, MN
10/1/2013
    
0
      
11,740
      
0
      
0
      
0
      
11,740
  
 East Park - Sioux Falls, SD
12/1/2013
    
0
      
1,479
      
0
      
0
      
0
      
1,479
  
 Sycamore Village - Sioux Falls, SD
12/1/2013
    
0
      
832
      
0
      
0
      
0
      
832
  
 Candlelight - Fargo, ND(2)
3/1/2014
    
0
      
1,252
      
0
      
0
      
0
      
1,252
  
 Evergreen II - Isanti, MN
11/1/2014
    
0
      
0
      
2,166
      
0
      
0
      
2,166
  
 Campus Center - St Cloud, MN
6/1/2015
    
0
      
0
      
0
      
1,316
      
0
      
1,316
  
 Campus Knoll - St Cloud, MN
6/1/2015
    
0
      
0
      
0
      
877
      
0
      
877
  
 Landmark - Grand Forks, ND
8/24/2015
    
0
      
0
      
0
      
1,730
      
0
      
1,730
  
 Regency Park Estates - St Cloud, MN
1/1/2016
    
0
      
0
      
0
      
7,033
      
0
      
7,033
  
 Summary of Debt due after Fiscal 2016
 
    
0
      
0
      
0
      
0
      
316,365
      
316,365
  
Sub-Total Multi-Family Residential
 
  
$
2,924
    
$
15,303
    
$
2,166
    
$
10,956
    
$
316,365
    
$
347,714
  
 
 
                                                
Commercial Office
 
                                                
 Whitewater Plaza - Minnetonka, MN
3/1/2014
    
0
      
2,546
      
0
      
0
      
0
      
2,546
  
 Whitewater Plaza - Minnetonka, MN
3/1/2014
    
0
      
1,320
      
0
      
0
      
0
      
1,320
  
 Viromed - Eden Prairie, MN
4/1/2014
    
0
      
478
      
0
      
0
      
0
      
478
  
 Wirth Corporate Center - Golden Valley, MN
4/1/2014
    
0
      
3,538
      
0
      
0
      
0
      
3,538
  
 TCA Building - Eagan, MN
5/1/2014
    
0
      
0
      
7,311
      
0
      
0
      
7,311
  
 Brenwood - Hennepin County, MN
7/15/2014
    
0
      
0
      
5,250
      
0
      
0
      
5,250
  
 Burnsville Bluffs II - Burnsville, MN
8/8/2014
    
0
      
0
      
1,738
      
0
      
0
      
1,738
  
 Plymouth IV - Plymouth, MN
8/8/2014
    
0
      
0
      
3,206
      
0
      
0
      
3,206
  
 Plymouth V - Plymouth, MN
8/8/2014
    
0
      
0
      
3,747
      
0
      
0
      
3,747
  
 Plaza VII - Boise, ID
9/1/2014
    
0
      
0
      
1,023
      
0
      
0
      
1,023
  
 Crosstown Centre - Eden Prairie, MN
12/1/2014
    
0
      
0
      
3,363
      
0
      
0
      
3,363
  
 Crosstown Centre - Eden Prairie, MN
12/1/2014
    
0
      
0
      
10,089
      
0
      
0
      
10,089
  
 Northgate I - Maple Grove, MN
12/10/2014
    
0
      
0
      
5,252
      
0
      
0
      
5,252
  
 Plymouth I - Plymouth, MN
12/10/2014
    
0
      
0
      
1,177
      
0
      
0
      
1,177
  
 Plymouth II - Plymouth, MN
12/10/2014
    
0
      
0
      
1,177
      
0
      
0
      
1,177
  
 Plymouth III - Plymouth, MN
12/10/2014
    
0
      
0
      
1,449
      
0
      
0
      
1,449
  
 Benton Business Park - Sauk Rapids, MN
1/1/2015
    
0
      
0
      
593
      
0
      
0
      
593
  
 West River Business Park - Waite Park, MN
1/1/2015
    
0
      
0
      
593
      
0
      
0
      
593
  
 Highlands Ranch I - Highlands Ranch, CO
3/1/2015
    
0
      
0
      
8,330
      
0
      
0
      
8,330
  
 Highlands Ranch II - Highlands Ranch, CO
3/1/2015
    
0
      
0
      
8,041
      
0
      
0
      
8,041
  
 US Bank Financial Center - Bloomington, MN
7/1/2015
    
0
      
0
      
0
      
13,579
      
0
      
13,579
  
 Rapid City 900 Concourse Drive - Rapid City, SD
8/1/2015
    
0
      
0
      
0
      
1,394
      
0
      
1,394
  
 Westgate I - Boise, ID
8/1/2015
    
0
      
0
      
0
      
1,215
      
0
      
1,215
  
 Westgate II - Boise, ID
8/1/2015
    
0
      
0
      
0
      
2,975
      
0
      
2,975
  
 Brook Valley I - LaVista, NE
1/1/2016
    
0
      
0
      
0
      
1,323
      
0
      
1,323
  
 Spring Valley IV - Omaha, NE
1/1/2016
    
0
      
0
      
0
      
788
      
0
      
788
  
 Spring Valley V - Omaha, NE
1/1/2016
    
0
      
0
      
0
      
866
      
0
      
866
  
 Spring Valley X - Omaha, NE
1/1/2016
    
0
      
0
      
0
      
803
      
0
      
803
  
 Spring Valley XI - Omaha, NE
1/1/2016
    
0
      
0
      
0
      
788
      
0
      
788
  
 Summary of Debt due after Fiscal 2016
 
    
0
      
0
      
0
      
0
      
253,147
      
253,147
  
Sub-Total Commercial Office
 
  
$
0
    
$
7,882
    
$
62,339
    
$
23,731
    
$
253,147
    
$
347,099
  







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

Property
Maturity Date
  
Fiscal 2013
    
Fiscal 2014
    
Fiscal 2015
    
Fiscal 2016
    
Thereafter
    
Total(1)
  
 
 
  
   
   
   
   
   
 
Commercial Medical
 
  
   
   
   
   
   
 
 High Pointe Health Campus - Lake Elmo, MN
4/1/2014
  
$
0
    
$
5,400
    
$
0
    
$
0
    
$
0
    
$
5,400
  
 Edgewood Vista - Billings, MT
12/10/2014
    
0
      
0
      
1,937
      
0
      
0
      
1,937
  
 Edgewood Vista - East Grand Forks, MN
12/10/2014
    
0
      
0
      
2,950
      
0
      
0
      
2,950
  
 Edgewood Vista - Sioux Falls, SD
12/10/2014
    
0
      
0
      
1,110
      
0
      
0
      
1,110
  
 Garden View Medical - St Paul, MN
8/1/2015
    
0
      
0
      
0
      
1,572
      
0
      
1,572
  
 Edina 6363 France Medical - St Paul, MN
8/6/2015
    
0
      
0
      
0
      
10,000
      
0
      
10,000
  
 2800 Medical Building - Minneapolis, MN
9/1/2015
    
0
      
0
      
0
      
5,494
      
0
      
5,494
  
 2828 Medical Building - Minneapolis, MN
9/1/2015
    
0
      
0
      
0
      
8,455
      
0
      
8,455
  
 Edina 6405 France Medical - Edina, MN
9/1/2015
    
0
      
0
      
0
      
8,930
      
0
      
8,930
  
 Ritchie Medical Plaza - St Paul, MN
9/1/2015
    
0
      
0
      
0
      
6,576
      
0
      
6,576
  
 Summary of Debt due after Fiscal 2016
 
    
0
      
0
      
0
      
0
      
211,365
      
211,365
  
Sub-Total Commercial Medical
 
  
$
0
    
$
5,400
    
$
5,997
    
$
41,027
    
$
211,365
    
$
263,789
  
 
 
                                                
Commercial Industrial
 
                                                
 Bloomington 2000 West 94th Street - Bloomington, MN(3)
3/1/2013
    
3,736
      
0
      
0
      
0
      
0
      
3,736
  
 Roseville 2929 Long Lake Road - Roseville, MN(3)
3/1/2013
    
5,494
      
0
      
0
      
0
      
0
      
5,494
  
 Bodycote Industrial Building - Eden Prairie, MN
9/1/2013
    
0
      
1,082
      
0
      
0
      
0
      
1,082
  
 Cedar Lake Business Center - St. Louis Park, MN
11/1/2013
    
0
      
2,306
      
0
      
0
      
0
      
2,306
  
 Woodbury 1865 Woodlane - Woodbury, MN
11/1/2013
    
0
      
2,713
      
0
      
0
      
0
      
2,713
  
 Stone Container - Roseville, MN
7/14/2014
    
0
      
0
      
4,500
      
0
      
0
      
4,500
  
 Brooklyn Park 7401 Boone Avenue - Brooklyn Park, MN
9/28/2014
                    
7,500
                      
7,500
  
 Clive 2075 NW 94th St - Clive, IA
9/30/2014
    
0
      
0
      
2,195
      
0
      
0
      
2,195
  
 Metal Improvement Company - New Brighton, MN
9/30/2014
    
0
      
0
      
1,461
      
0
      
0
      
1,461
  
 Winsted Industrial Building
9/30/2014
    
0
      
0
      
386
      
0
      
0
      
386
  
 Stone Container - Fargo, ND
12/1/2015
    
0
      
0
      
0
      
737
      
0
      
737
  
 Stone Container - Fargo, ND
12/1/2015
    
0
      
0
      
0
      
928
      
0
      
928
  
 Summary of Debt due after Fiscal 2016
 
    
0
      
0
      
0
      
0
      
17,311
      
17,311
  
Sub-Total Commercial Industrial
 
  
$
9,230
    
$
6,101
    
$
16,042
    
$
1,665
    
$
17,311
    
$
50,349
  






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

Property
Maturity Date
  
Fiscal 2013
    
Fiscal 2014
    
Fiscal 2015
    
Fiscal 2016
    
Thereafter
    
Total(1)
  
 
 
  
   
   
   
   
   
 
Commercial Retail
 
  
   
   
   
   
   
 
 Burnsville I Strip Center - Burnsville, MN
6/30/2013
  
$
0
    
$
363
    
$
0
    
$
0
    
$
0
    
$
363
  
 Burnsville II Strip Center - Burnsville, MN
6/30/2013
    
0
      
285
      
0
      
0
      
0
      
285
  
 St Cloud Westgate - St Cloud, MN
10/10/2013
    
0
      
3,104
      
0
      
0
      
0
      
3,104
  
 Omaha Barnes & Noble - Omaha, NE
6/1/2014
    
0
      
0
      
2,490
      
0
      
0
      
2,490
  
 Jamestown Buffalo Mall - Jamestown, ND
9/1/2014
    
0
      
0
      
618
      
0
      
0
      
618
  
 Fargo Express Center - Fargo, ND
10/1/2014
    
0
      
0
      
965
      
0
      
0
      
965
  
 Lakeville Strip Center - Lakeville, MN
10/1/2014
    
0
      
0
      
959
      
0
      
0
      
959
  
 Summary of Debt due after Fiscal 2016
 
    
0
      
0
      
0
      
0
      
27,462
      
27,462
  
Sub-Total Commercial Retail
 
  
$
0
    
$
3,752
    
$
5,032
    
$
0
    
$
27,462
    
$
36,246
  
 
 
                                                
Total
 
  
$
12,154
    
$
38,438
    
$
91,576
    
$
77,379
    
$
825,650
    
$
1,045,197
  
* Mortgage debt does not include the Company's multi-bank line of credit or construction loans.  The line of credit has a maturity date of August 12, 2014; as of October 31, 2012, the Company had borrowings of $10.0 million outstanding under this line. Construction loans and other debt totaled $32.8 million as of October 31, 2012.
(1) Totals are principal balances as of October 31, 2012.
(2) This loan was assumed by the buyer subsequent to the end of the second quarter of fiscal year 2013 as a result of the sale of the asset.
(3) These loans were paid off December 3, 2012, subsequent to the end of the second quarter of fiscal year 2013.








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

 
  
Three Months Ended
  
 
  
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
  
Equity Capitalization
  
   
   
   
   
 
Common shares outstanding
    
93,161
      
91,812
      
89,474
      
85,744
      
83,682
  
Operating partnership (OP) units outstanding
    
21,336
      
21,171
      
20,332
      
19,596
      
19,534
  
Total common shares and OP units outstanding
    
114,497
      
112,983
      
109,806
      
105,340
      
103,216
  
Market price per common share (closing price at end of period)
  
$
8.42
    
$
8.16
    
$
7.22
    
$
7.42
    
$
7.41
  
Equity capitalization-common shares and OP units
  
$
964,065
    
$
921,941
    
$
792,799
    
$
781,623
    
$
764,831
  
Recorded book value of preferred shares
  
$
138,674
    
$
27,317
    
$
27,317
    
$
27,317
    
$
27,317
  
Total equity capitalization
  
$
1,102,739
    
$
949,258
    
$
820,116
    
$
808,940
    
$
792,148
  
 
                                        
Debt Capitalization
                                        
Total debt
  
$
1,087,972
    
$
1,150,123
    
$
1,101,564
    
$
1,095,416
    
$
1,087,625
  
Total capitalization
  
$
2,190,711
    
$
2,099,381
    
$
1,621,680
    
$
1,604,356
    
$
1,879,773
  
 
                                        
Total debt to total capitalization
  
0.50:1
    
0.55:1
    
0.57:1
    
0.58:1
    
0.58:1
  
 
                                        


 
  
Six Months Ended
    
Three Months Ended
  
 
  
10/31/2012
    
10/31/2011
    
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
  
Earnings to fixed charges(1)
    
1.26
x
    
1.07
x
    
1.42
x
    
1.11
x
    
1.25
x
    
1.15
x
    
1.05
x
Earnings to combined fixed charges and preferred distributions(1)
    
1.14
x
    
1.04
x
    
1.21
x
    
1.07
x
    
1.21
x
    
1.11
x
    
1.01
x
Debt service coverage ratio(1)
    
1.52
x
    
1.39
x
    
1.60
x
    
1.45
x
    
1.49
x
    
1.43
x
    
1.37
x
 
                                                        
Distribution Data
                                                        
Common shares and units outstanding at record date
    
113,516
      
101,439
      
113,516
      
111,525
      
106,642
      
103,761
      
101,439
  
Total common distribution paid
  
$
29,170
    
$
30,461
    
$
14,757
    
$
14,413
    
$
13,809
    
$
13,486
    
$
13,186
  
Common distribution per share and unit
  
$
.2600
    
$
.3430
    
$
.1300
    
$
.1300
    
$
.1300
    
$
.1300
    
$
.1300
  
Payout ratio (FFO per share and unit basis)(1)
    
76.5
%
    
97.3
%
    
72.2
%
    
81.3
%
    
72.2
%
    
81.3
%
    
86.7
%
Payout ratio (AFFO per share and unit basis)(1)
    
113.0
%
    
150.8
%
    
100.0
%
    
130.0
%
    
118.2
%
    
118.2
%
    
144.4
%
(1) See Definitions on page 28.





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

 
  
Stabilized Properties(1)
    
Stabilized Properties(1)
  
 
  
Three Months Ended
October 31,
    
Six Months Ended
October 31,
  
Segment
  
2012
    
2011
    
%
Change
    
2012
    
2011
    
%
Change
  
Multi-Family Residential
  
$
10,806
    
$
9,238
      
17.0
%
  
$
20,647
    
$
18,133
      
13.9
%
Commercial Office
    
9,736
      
9,554
      
1.9
%
    
19,085
      
19,426
      
(1.8
)%
Commercial Medical
    
10,434
      
10,676
      
(2.3
)%
    
20,806
      
21,775
      
(4.5
)%
Commercial Industrial
    
2,642
      
2,431
      
8.7
%
    
5,082
      
4,900
      
3.7
%
Commercial Retail
    
2,330
      
2,155
      
8.1
%
    
4,526
      
4,299
      
5.3
%
 
  
$
35,948
    
$
34,054
      
5.6
%
  
$
70,146
    
$
68,533
      
2.4
%
(1) See list of properties excluded from stabilized properties on page ii.




INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
NET OPERATING INCOME DETAIL
(in thousands)
 
  
Three Months Ended October 31, 2012
  
 
  
Reporting Segments
    
   
 
 
  
Multi-Family
Residential
    
Commercial
Office
    
Commercial
Medical
    
Commercial
Industrial
    
Commercial
Retail
    
Corporate and
Other
    
Total
  
Real estate rental revenue
  
   
   
   
   
   
   
 
Stabilized(1)
  
$
18,319
    
$
19,128
    
$
14,490
    
$
3,577
    
$
3,616
    
$
0
    
$
59,130
  
Non-Stabilized
    
4,786
      
0
      
1,027
      
0
      
0
      
0
      
5,813
  
Total
    
23,105
      
19,128
      
15,517
      
3,577
      
3,616
      
0
      
64,943
  
 
                                                        
Real estate expenses
                                                        
Stabilized(1)
    
7,513
      
9,392
      
4,056
      
935
      
1,286
      
0
      
23,182
  
Non-Stabilized
    
1,495
      
0
      
127
      
0
      
0
      
0
      
1,622
  
Total
    
9,008
      
9,392
      
4,183
      
935
      
1,286
      
0
      
24,804
  
 
                                                        
Gain on involuntary conversion
                                                        
Non-stabilized
    
2,263
      
0
      
0
      
0
      
0
      
0
      
2,263
  
Total
    
2,263
      
0
      
0
      
0
      
0
      
0
      
2,263
  
 
                                                        
Stabilized(1)
    
10,806
      
9,736
      
10,434
      
2,642
      
2,330
      
0
      
35,948
  
Non-Stabilized
    
5,554
      
0
      
900
      
0
      
0
      
0
      
6,454
  
Net operating income
  
$
16,360
    
$
9,736
    
$
11,334
    
$
2,642
    
$
2,330
    
$
0
    
$
42,402
  
 
                                                        
Reconciliation of NOI to net income (loss) available to common shareholders
                                                        
Depreciation/amortization
  
$
(4,832
)
  
$
(5,210
)
  
$
(4,500
)
  
$
(909
)
  
$
(972
)
  
$
(83
)
  
$
(16,506
)
Administrative, advisory and trustee fees
    
0
      
0
      
0
      
0
      
0
      
(2,061
)
    
(2,061
)
Other expenses
    
0
      
0
      
0
      
0
      
0
      
(513
)
    
(513
)
Interest expense
    
(5,230
)
    
(5,305
)
    
(4,159
)
    
(853
)
    
(632
)
    
(121
)
    
(16,300
)
Interest and other income
    
0
      
0
      
0
      
0
      
0
      
203
      
203
  
Income (loss) from continuing operations
    
6,298
      
(779
)
    
2,675
      
880
      
726
      
(2,575
)
    
7,225
  
Income from discontinued operations
    
2,785
      
0
      
0
      
0
      
0
      
0
      
2,785
  
Net income (loss)
    
9,083
      
(779
)
    
2,675
      
880
      
726
      
(2,575
)
    
10,010
  
Net income attributable to noncontrolling interests – Operating Partnership
    
0
      
0
      
0
      
0
      
0
      
(1,290
)
    
(1,290
)
Net income attributable to noncontrolling interests – consolidated real estate entities
    
0
      
0
      
0
      
0
      
0
      
(208
)
    
(208
)
Net income (loss) attributable to Investors Real Estate Trust
    
9,083
      
(779
)
    
2,675
      
880
      
726
      
(4,073
)
    
8,512
  
Dividends to preferred shareholders
    
0
      
0
      
0
      
0
      
0
      
(2,878
)
    
(2,878
)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
  
$
9,083
      
(779
)
    
2,675
      
880
      
726
    
$
(6,951
)
  
$
5,634
  
(1)
See list of properties excluded from stabilized properties on page ii.






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

 
  
Three Months Ended 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)
  
$
17,533
    
$
18,367
    
$
16,558
    
$
3,566
    
$
3,242
    
$
0
    
$
59,266
  
Non-Stabilized
    
419
      
0
      
515
      
0
      
0
      
0
      
934
  
Total
    
17,952
      
18,367
      
17,073
      
3,566
      
3,242
      
0
      
60,200
  
 
                                                        
Real estate expenses
                                                        
Stabilized(1)
    
8,295
      
8,813
      
5,882
      
1,135
      
1,087
      
0
      
25,212
  
Non-Stabilized
    
226
      
0
      
89
      
0
      
0
      
0
      
315
  
Total
    
8,521
      
8,813
      
5,971
      
1,135
      
1,087
      
0
      
25,527
  
 
                                                        
Net Operating Income (NOI)
                                                        
Stabilized(1)
    
9,238
      
9,554
      
10,676
      
2,431
      
2,155
      
0
      
34,054
  
Non-Stabilized
    
193
      
0
      
426
      
0
      
0
      
0
      
619
  
Net operating income
  
$
9,431
    
$
9,554
    
$
11,102
    
$
2,431
    
$
2,155
    
$
0
    
$
34,673
  
 
                                                        
Reconciliation of NOI to net income (loss) available to common shareholders
                                                        
Depreciation/amortization
  
$
(3,514
)
  
$
(5,151
)
  
$
(4,321
)
  
$
(925
)
  
$
(863
)
  
$
(100
)
  
$
(14,874
)
Administrative, advisory and trustee services
    
0
      
0
      
0
      
0
      
0
      
(2,104
)
    
(2,104
)
Other expenses
    
0
      
0
      
0
      
0
      
0
      
(835
)
    
(835
)
Interest expense
    
(4,391
)
    
(5,400
)
    
(4,091
)
    
(908
)
    
(802
)
    
(601
)
    
(16,193
)
Interest and other income
    
0
      
0
      
0
      
0
      
0
      
213
      
213
  
Income (loss) from continuing operations
    
1,526
      
(997
)
    
2,690
      
598
      
490
      
(3,427
)
    
880
  
Income from discontinued operations
    
21
      
0
      
0
      
0
      
590
      
0
      
611
  
Net income (loss)
    
1,547
      
(997
)
    
2,690
      
598
      
1,080
      
(3,427
)
    
1,491
  
Net income attributable to noncontrolling interests – Operating Partnership
    
0
      
0
      
0
      
0
      
0
      
(194
)
    
(194
)
Net income attributable to noncontrolling interests – consolidated real estate entities
    
0
      
0
      
0
      
0
      
0
      
(12
)
    
(12
)
Net income (loss) attributable to Investors Real Estate Trust
    
1,547
      
(997
)
    
2,690
      
598
      
1,080
      
(3,633
)
    
1,285
  
Dividends to preferred shareholders
    
0
      
0
      
0
      
0
      
0
      
(593
)
    
(593
)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
  
$
1,547
    
$
(997
)
  
$
2,690
    
$
598
    
$
1,080
    
$
(4,226
)
  
$
692
  
(1)
See list of properties excluded from stabilized properties on page ii.




INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
NET OPERATING INCOME DETAIL
(in thousands)
 
  
Six Months Ended October 31, 2012
  
 
  
Reporting Segments
    
   
 
 
  
Multi-Family
Residential
    
Commercial
Office
    
Commercial
Medical
    
Commercial
Industrial
    
Commercial
Retail
    
Corporate and
Other
    
Total
  
Real estate rental revenue
  
   
   
   
   
   
   
 
Stabilized(1)
  
$
36,226
    
$
37,767
    
$
28,821
    
$
7,037
    
$
6,967
    
$
0
    
$
116,818
  
Non-Stabilized
    
8,088
      
0
      
2,023
      
0
      
0
      
0
      
10,111
  
Total
    
44,314
      
37,767
      
30,844
      
7,037
      
6,967
      
0
      
126,929
  
 
                                                        
Real estate expenses
                                                        
Stabilized(1)
    
15,579
      
18,682
      
8,015
      
1,955
      
2,441
      
0
      
46,672
  
Non-Stabilized
    
2,722
      
0
      
251
      
0
      
0
      
0
      
2,973
  
Total
    
18,301
      
18,682
      
8,266
      
1,955
      
2,441
      
0
      
49,645
  
 
                                                        
Gain on involuntary conversion
                                                        
Non-stabilized
    
2,263
      
0
      
0
      
0
      
0
      
0
      
2,263
  
Total
    
2,263
      
0
      
0
      
0
      
0
      
0
      
2,263
  
 
                                                        
Stabilized(1)
    
20,647
      
19,085
      
20,806
      
5,082
      
4,526
      
0
      
70,146
  
Non-Stabilized
    
7,629
      
0
      
1,772
      
0
      
0
      
0
      
9,401
  
Net operating income
  
$
28,276
    
$
19,085
    
$
22,578
    
$
5,082
    
$
4,526
    
$
0
    
$
79,547
  
 
                                                        
Reconciliation of NOI to net income (loss) available to common shareholders
                                                        
Depreciation/amortization
  
$
(9,357
)
  
$
(10,421
)
  
$
(8,977
)
  
$
(1,848
)
  
$
(1,906
)
  
$
(219
)
  
$
(32,728
)
Administrative, advisory and trustee fees
    
0
      
0
      
0
      
0
      
0
      
(4,157
)
    
(4,157
)
Other expenses
    
0
      
0
      
0
      
0
      
0
      
(1,032
)
    
(1,032
)
Interest expense
    
(10,044
)
    
(10,576
)
    
(8,258
)
    
(1,727
)
    
(1,339
)
    
(779
)
    
(32,723
)
Interest and other income
    
0
      
0
      
0
      
0
      
0
      
345
      
345
  
Income (loss) from continuing operations
    
8,875
      
(1,912
)
    
5,343
      
1,507
      
1,281
      
(5,842
)
    
9,252
  
Income from discontinued operations
    
2,754
      
0
      
0
      
0
      
0
      
0
      
2,754
  
Net income (loss)
    
11,629
      
(1,912
)
    
5,343
      
1,507
      
1,281
      
(5,842
)
    
12,006
  
Net income attributable to noncontrolling interests – Operating Partnership
    
0
      
0
      
0
      
0
      
0
      
(1,541
)
    
(1,541
)
Net income attributable to noncontrolling interests – consolidated real estate entities
    
0
      
0
      
0
      
0
      
0
      
(274
)
    
(274
)
Net income (loss) attributable to Investors Real Estate Trust
    
11,629
      
(1,912
)
    
5,343
      
1,507
      
1,281
      
(7,657
)
    
10,191
  
Dividends to preferred shareholders
    
0
      
0
      
0
      
0
      
0
      
(3,471
)
    
(3,471
)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
  
$
11,629
    
$
(1,912
)
  
$
5,343
    
$
1,507
    
$
1,281
    
$
(11,128
)
  
$
6,720
  
(1)
See list of properties excluded from stabilized properties on page ii.




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)
  
$
34,527
    
$
37,182
    
$
33,175
    
$
7,001
    
$
6,450
    
$
0
    
$
118,335
  
Non-Stabilized
    
514
      
0
      
515
      
0
      
0
      
0
      
1,029
  
Total
    
35,041
      
37,182
      
33,690
      
7,001
      
6,450
      
0
      
119,364
  
 
                                                        
Real estate expenses
                                                        
Stabilized(1)
    
16,394
      
17,756
      
11,400
      
2,101
      
2,151
      
0
      
49,802
  
Non-Stabilized
    
278
      
0
      
89
      
0
      
0
      
0
      
367
  
Total
    
16,672
      
17,756
      
11,489
      
2,101
      
2,151
      
0
      
50,169
  
 
                                                        
Stabilized(1)
    
18,133
      
19,426
      
21,775
      
4,900
      
4,299
      
0
      
68,533
  
Non-Stabilized
    
236
      
0
      
426
      
0
      
0
      
0
      
662
  
Net operating income
  
$
18,369
    
$
19,426
    
$
22,201
    
$
4,900
    
$
4,299
    
$
0
    
$
69,195
  
 
                                                        
Reconciliation of NOI to net income (loss) available to common shareholders
                                                        
Depreciation/amortization
  
$
(6,968
)
  
$
(10,511
)
  
$
(8,514
)
  
$
(1,806
)
  
$
(1,684
)
  
$
(199
)
  
$
(29,682
)
Administrative, advisory and trustee fees
    
0
      
0
      
0
      
0
      
0
      
(4,285
)
    
(4,285
)
Other expenses
    
0
      
0
      
0
      
0
      
0
      
(1,150
)
    
(1,150
)
Interest expense
    
(8,816
)
    
(10,598
)
    
(8,030
)
    
(1,844
)
    
(1,570
)
    
(1,120
)
    
(31,978
)
Interest and other income
    
0
      
0
      
0
      
0
      
0
      
366
      
366
  
Income (loss) from continuing operations
    
2,585
      
(1,683
)
    
5,657
      
1,250
      
1,045
      
(6,388
)
    
2,466
  
(Loss) income from discontinued operations
    
(18
)
    
0
      
0
      
0
      
616
      
0
      
598
  
Net income (loss)
    
2,567
      
(1,683
)
    
5,657
      
1,250
      
1,661
      
(6,388
)
    
3,064
  
Net income attributable to noncontrolling interests – Operating Partnership
    
0
      
0
      
0
      
0
      
0
      
(372
)
    
(372
)
Net loss attributable to noncontrolling interests – consolidated real estate entities
    
0
      
0
      
0
      
0
      
0
      
14
      
14
  
Net income (loss) attributable to Investors Real Estate Trust
    
2,567
      
(1,683
)
    
5,657
      
1,250
      
1,661
      
(6,746
)
    
2,706
  
Dividends to preferred shareholders
    
0
      
0
      
0
      
0
      
0
      
(1,186
)
    
(1,186
)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
  
$
2,567
    
$
(1,683
)
  
$
5,657
    
$
1,250
    
$
1,661
    
$
(7,932
)
  
$
1,520
  
(1)
See list of properties excluded from stabilized properties on page ii.





 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
STABILIZED PROPERTIES AND ALL PROPERTIES PHYSICAL OCCUPANCY LEVELS BY SEGMENT
2nd Quarter Fiscal 2013 vs. 2nd Quarter Fiscal 2012

Segments
Stabilized Properties
All Properties
 
2nd Quarter
2nd Quarter
2nd Quarter
2nd Quarter
 
Fiscal 2013
Fiscal 2012
Fiscal 2013
Fiscal 2012
Multi-Family Residential
94.8%
95.2%
94.6%
94.7%
Commercial Office
78.4%
78.0%
78.4%
78.0%
Commercial Medical
94.9%
96.0%
95.2%
96.2%
Commercial Industrial
90.7%
92.3%
90.7%
92.3%
Commercial Retail
88.3%
87.0%
88.3%
87.0%

 

 





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

 
  
Three Months Ended October 31, 2012
  
 
  
New(1)
    
Renew(2)
    
Total
    
Expiring(3)
    
Net Change
    
Percentage
Change
  
Gross Square Footage
  
   
   
   
   
   
 
Commercial Office
    
75,225
      
30,798
      
106,023
      
50,543
      
55,480
    
 
Commercial Medical
    
3,725
      
9,988
      
13,713
      
9,568
      
4,145
    
 
Commercial Industrial
    
0
      
0
      
0
      
0
      
0
    
 
Commercial Retail
    
30,207
      
37,110
      
67,317
      
12,481
      
54,836
    
 
Total All Segments
    
109,157
      
77,896
      
187,053
      
72,592
      
114,461
    
 
 
                                          
 
Weighted Average Rental Rates(3)
                                          
 
Commercial Office
  
$
12.12
    
$
17.71
    
$
13.75
    
$
13.33
    
$
0.42
      
3.1
%
Commercial Medical
    
21.65
      
21.92
      
21.85
      
19.38
      
2.47
      
12.7
%
Commercial Industrial
    
0.00
      
0.00
      
0.00
      
0.00
      
0.00
      
0.00
%
Commercial Retail
    
5.43
      
3.19
      
4.20
      
13.80
      
(9.60
)
    
(69.6
)%
Total All Segments
  
$
10.60
    
$
11.33
    
$
10.90
    
$
14.21
    
$
(3.31
)
    
(23.3
)%
 
                                                

 
  
Six Months Ended October 31, 2012
  
 
  
New(1)
    
Renew(2)
    
Total
    
Expiring(3)
    
Net Change
    
Percentage
Change
  
Gross Square Footage
  
   
   
   
   
   
 
Commercial Office
    
109,865
      
94,977
      
204,842
      
294,045
      
(89,203
)
  
 
Commercial Medical
    
10,612
      
11,456
      
22,068
      
19,371
      
2,697
    
 
Commercial Industrial
    
0
      
9,702
      
9,702
      
32,717
      
(23,015
)
  
 
Commercial Retail
    
39,277
      
39,530
      
78,807
      
35,773
      
43,034
    
 
Total All Segments
    
159,754
      
155,665
      
315,419
      
381,906
      
(66,487
)
  
 
 
                                          
 
Weighted Average Rental Rates(3)
                                          
 
Commercial Office
  
$
13.25
    
$
16.62
    
$
14.81
    
$
13.48
    
$
1.33
      
9.9
%
Commercial Medical
    
22.14
      
22.08
      
22.11
      
20.62
      
1.49
      
7.2
%
Commercial Industrial
    
0.00
      
5.84
      
5.84
      
3.88
      
1.96
      
50.5
%
Commercial Retail
    
7.04
      
4.02
      
5.52
      
10.92
      
(5.40
)
    
(49.5
)%
Total All Segments
  
$
12.32
    
$
13.15
    
$
12.73
    
$
12.78
    
$
(0.05
)
    
(0.4
)%
 
                                                


 
Three Months Ended October 31, 2012
Six Months Ended October 31, 2012
 
New(1)
Renew(2)
Total
New(1)
Renew(2)
Total
Weighted Average Term of New/Renewed Leased(4)
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Office
 
4.9
 
5.3
 
5.1
 
4.4
 
3.9
 
4.1
Commercial Medical
 
6.2
 
5.3
 
6.0
 
6.2
 
5.3
 
5.7
Commercial Industrial
 
0.0
 
0.0
 
0.0
 
0.0
 
3.3
 
3.3
Commercial Retail
 
2.5
 
3.0
 
2.7
 
3.1
 
3.4
 
3.2
Total All Segments
 
4.8
 
4.9
 
4.9
 
4.5
 
4.1
 
4.3
(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.






INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
COMMERCIAL LEASING COMMITMENTS
for the three and six months ended October 31, 2012

 
  
2nd Quarter Fiscal 2013 Total
    
Year-To-Date Total
  
 
  
New
    
Renew
    
Total Dollars
    
New
    
Renew
    
Total Dollars
  
Tenant Improvements
  
   
   
   
   
   
 
Commercial Office
  
$
437
    
$
471
    
$
908
    
$
926
    
$
592
    
$
1,518
  
Commercial Medical
    
66
      
99
      
165
      
439
      
135
      
574
  
Commercial Industrial
    
0
      
0
      
0
      
0
      
5
      
5
  
Commercial Retail
    
42
      
0
      
42
      
46
      
0
      
46
  
Subtotal
  
$
545
    
$
570
    
$
1,115
    
$
1,411
    
$
732
    
$
2,143
  
 
                                                
Tenant Improvements per square foot
                                                
Commercial Office
  
$
5.82
    
$
15.28
    
$
8.56
    
$
8.43
    
$
6.23
    
$
7.41
  
Commercial Medical
    
17.60
      
9.92
      
12.00
      
41.32
      
11.85
      
26.02
  
Commercial Industrial
    
0.00
      
0.00
      
0.00
      
0.00
      
0.52
      
0.52
  
Commercial Retail
    
1.41
      
0.00
      
0.63
      
1.16
      
0.00
      
0.58
  
All Segments
  
$
5.00
    
$
7.31
    
$
5.96
    
$
8.83
    
$
4.71
    
$
6.79
  
 
                                                
Leasing Costs
                                                
Commercial Office
  
$
306
    
$
392
    
$
698
    
$
570
    
$
500
    
$
1,070
  
Commercial Medical
    
54
      
41
      
95
      
102
      
45
      
147
  
Commercial Industrial
    
0
      
0
      
0
      
0
      
19
      
19
  
Commercial Retail
    
9
      
2
      
11
      
15
      
5
      
20
  
Subtotal
  
$
369
    
$
435
    
$
804
    
$
687
    
$
569
    
$
1,256
  
 
                                                
Leasing Costs per square foot
                                                
Commercial Office
  
$
4.06
    
$
12.74
    
$
6.58
    
$
5.18
    
$
5.26
    
$
5.22
  
Commercial Medical
    
14.49
      
4.07
      
6.90
      
9.66
      
3.91
      
6.68
  
Commercial Industrial
    
0.00
      
0.00
      
0.00
      
0.00
      
1.98
      
1.98
  
Commercial Retail
    
0.31
      
0.05
      
0.17
      
0.38
      
0.12
      
0.25
  
All Segments
  
$
3.38
    
$
5.58
    
$
4.30
    
$
4.30
    
$
3.65
    
$
3.98
  
 
                                                
Tenant Improvements and Leasing Costs
                                                
Commercial Office
  
$
743
    
$
863
    
$
1,606
    
$
1,496
    
$
1,092
    
$
2,588
  
Commercial Medical
    
119
      
140
      
259
      
541
      
180
      
721
  
Commercial Industrial
    
0
      
0
      
0
      
0
      
24
      
24
  
Commercial Retail
    
52
      
2
      
54
      
61
      
5
      
66
  
Total
  
$
914
    
$
1,005
    
$
1,919
    
$
2,098
    
$
1,301
    
$
3,399
  
 
                                                
Tenant Improvements and Leasing Costs per square foot
                                                
Commercial Office
  
$
9.88
    
$
28.02
    
$
15.15
    
$
13.62
    
$
11.49
    
$
12.63
  
Commercial Medical
    
32.10
      
13.98
      
18.90
      
50.98
      
15.76
      
32.70
  
Commercial Industrial
    
0.00
      
0.00
      
0.00
      
0.00
      
2.50
      
2.50
  
Commercial Retail
    
1.72
      
0.05
      
0.80
      
1.54
      
0.12
      
0.83
  
All Segments
  
$
8.38
    
$
12.90
    
$
10.26
    
$
13.13
    
$
8.36
    
$
10.78
  






 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
MULTI-FAMILY RESIDENTIAL SUMMARY

 
  
Three Months Ended
  
 
  
10/31/2012
    
07/31/2012
    
04/30/2012
    
01/31/2012
    
10/31/2011
  
Number of Units
    
9,934
      
9,876
      
8,894
      
8,654
      
8,618
  
Average Investment Per Unit
                                        
Stabilized
  
$
58,308
    
$
58,012
    
$
57,776
    
$
57,738
    
$
57,393
  
Non-Stabilized
    
85,580
      
83,113
      
83,758
      
78,203
      
66,638
  
 
  
$
62,614
    
$
61,472
    
$
59,268
    
$
58,497
    
$
57,648
  
 
                                        
Average Scheduled Rent(1) per Unit
                                        
Stabilized
  
$
734
    
$
726
    
$
718
    
$
716
    
$
710
  
Non-Stabilized
    
967
      
889
      
908
      
866
      
1,014
  
 
  
$
771
    
$
749
    
$
729
    
$
721
    
$
719
  
 
                                        
Total Receipts per Unit
                                        
Stabilized
  
$
733
    
$
716
    
$
709
    
$
705
    
$
701
  
Non-Stabilized
    
996
      
831
      
845
      
851
      
837
  
 
  
$
774
    
$
732
    
$
717
    
$
710
    
$
705
  
 
                                        
Total Recurring Capital Expenditures per Unit(1)
                                        
Stabilized
  
$
193
    
$
209
    
$
157
    
$
155
    
$
215
  
Non-Stabilized
    
135
      
123
      
122
      
181
      
117
  
 
  
$
184
    
$
196
    
$
155
    
$
156
    
$
211
  
 
                                        
Physical Occupancy%
                                        
Stabilized
    
94.8
%
    
93.7
%
    
94.2
%
    
93.9
%
    
95.2
%
Non-Stabilized
    
93.4
%
    
88.7
%
    
85.4
%
    
74.5
%
    
79.3
%
 
    
94.6
%
    
93.0
%
    
93.7
%
    
93.2
%
    
94.7
%
 
                                        
Operating Expenses as a % of Scheduled Rent
                                        
Stabilized
    
41.3
%
    
44.8
%
    
46.4
%
    
45.8
%
    
47.0
%
Non-Stabilized
    
36.9
%
    
34.8
%
    
37.3
%
    
38.6
%
    
32.5
%
Total
    
40.4
%
    
43.1
%
    
45.8
%
    
45.5
%
    
46.5
%
(1) See Definitions on page 28.




INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
10 LARGEST COMMERCIAL TENANTS – BASED ON ANNUALIZED BASE RENT(1)
as of October 31, 2012

Tenant
Number of
Properties
Average
Remaining
Lease Term
in Months
% of Total
Commercial
Segments'
Minimum
Rents
Aggregate
Rentable
Square Feet
% of Aggregate
Occupied
Square
Feet
Affiliates of Edgewood Vista
32
91
13.2%
1,450,585
13.6%
St. Luke's Hospital of Duluth, Inc.
6
39
3.5%
198,775
1.9%
Fairview Health Services
9
50
3.4%
238,703
2.2%
Applied Underwriters
3
52
2.2%
141,724
1.3%
HealthEast Care System
1
76
1.6%
114,316
1.1%
Nebraska Orthopedic Hospital
1
197
1.3%
61,758
0.6%
Affiliates of Siemens USA (NYSE: SI)
2
53
1.3%
112,848
1.1%
Arcadis Corporate Services, Inc.
1
45
1.2%
71,430
0.7%
Microsoft (NASDAQ: MSFT)
1
74
1.2%
122,040
1.1%
State of Idaho Department of Health and Welfare
2
64
1.1%
103,342
1.0%
Total/Weighted Average
 
68
30.0%
2,615,521
24.6%
(1) See Definitions on page 28.





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

 
  
(dollars in thousands except average rental rates)
  
Fiscal Year
  
Number of
Leases
    
Rentable
Square Feet(1)
    
% of Rentable
Square Feet
    
Annualized
Rent(2)
    
Average
Rental
Rate
    
% of
Annualized
Base Rent
  
Commercial Office
  
   
   
   
   
   
 
2013
    
35
      
247,413
      
6.3
%
  
$
3,257
    
$
13.16
      
5.7
%
2014
    
55
      
467,656
      
11.9
%
    
5,842
      
12.49
      
10.1
%
2015
    
74
      
515,135
      
13.1
%
    
7,535
      
14.63
      
13.1
%
2016
    
45
      
639,228
      
16.3
%
    
9,879
      
15.46
      
17.2
%
2017
    
44
      
827,259
      
21.0
%
    
14,008
      
16.93
      
24.3
%
2018 and thereafter
    
59
      
1,236,176
      
31.4
%
    
17,036
      
13.78
      
29.6
%
 
    
312
      
3,932,867
      
100.0
%
  
$
57,557
    
$
14.63
      
100.0
%
 
                                                
Commercial Medical
                                                
2013
    
22
      
112,621
      
4.0
%
  
$
2,162
    
$
19.19
      
4.5
%
2014
    
24
      
395,597
      
14.2
%
    
6,841
      
17.29
      
14.3
%
2015
    
16
      
60,120
      
2.2
%
    
1,544
      
25.68
      
3.2
%
2016
    
24
      
175,113
      
6.3
%
    
3,596
      
20.54
      
7.5
%
2017
    
20
      
133,237
      
4.8
%
    
2,812
      
21.11
      
5.9
%
2018 and thereafter
    
91
      
1,907,925
      
68.5
%
    
30,878
      
16.18
      
64.6
%
 
    
197
      
2,784,613
      
100.0
%
  
$
47,833
    
$
17.18
      
100.0
%
 
                                                
Commercial Industrial
                                                
2013
    
6
      
223,340
      
8.6
%
  
$
661
    
$
2.96
      
6.3
%
2014
    
10
      
321,629
      
12.3
%
    
1,179
      
3.67
      
11.3
%
2015
    
6
      
344,493
      
13.2
%
    
1,398
      
4.06
      
13.3
%
2016
    
9
      
689,564
      
26.5
%
    
2,986
      
4.33
      
28.5
%
2017
    
5
      
311,141
      
11.9
%
    
1,180
      
3.79
      
11.3
%
2018 and thereafter
    
7
      
716,095
      
27.5
%
    
3,071
      
4.29
      
29.3
%
 
    
43
      
2,606,262
      
100.0
%
  
$
10,475
    
$
4.02
      
100.0
%
 
                                                
Commercial Retail
                                                
2013
    
22
      
146,930
      
12.4
%
  
$
871
    
$
5.93
      
8.7
%
2014
    
41
      
207,584
      
17.5
%
    
1,310
      
6.31
      
13.1
%
2015
    
38
      
291,463
      
24.5
%
    
2,241
      
7.69
      
22.3
%
2016
    
23
      
96,993
      
8.2
%
    
1,176
      
12.13
      
11.7
%
2017
    
23
      
103,114
      
8.7
%
    
1,105
      
10.72
      
11.0
%
2018 and thereafter
    
27
      
340,466
      
28.7
%
    
3,326
      
9.77
      
33.2
%
 
    
174
      
1,186,550
      
100.0
%
  
$
10,029
    
$
8.45
      
100.0
%
 
                                                
Commercial Total
                                                
2013
    
85
      
730,304
      
6.9
%
  
$
6,951
    
$
9.52
      
5.5
%
2014
    
130
      
1,392,466
      
13.3
%
    
15,172
      
10.90
      
12.1
%
2015
    
134
      
1,211,211
      
11.5
%
    
12,718
      
10.50
      
10.1
%
2016
    
101
      
1,600,898
      
15.2
%
    
17,637
      
11.02
      
14.0
%
2017
    
92
      
1,374,751
      
13.1
%
    
19,105
      
13.90
      
15.2
%
2018 and thereafter
    
184
      
4,200,662
      
40.0
%
    
54,311
      
12.93
      
43.1
%
 
    
726
      
10,510,292
      
100.0
%
  
$
125,894
    
$
11.98
      
100.0
%
(1) Rentable square footage does not include month-to-month leases.  As of October 31,2012 month-to-month leases accounted for 147,737 square feet.
(2) Annualized Base Rent is monthly scheduled rent as of October 1, 2012 (cash basis), multiplied by 12.




INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
FISCAL 2013 ACQUISITION SUMMARY
as of October 31, 2012
(dollars in thousands)

Property
Location
Segment Type
Acquisition
Date
  
Square
Feet/Units
    
Leased
Percentage
At
Acquisition
    
October 31,
2012 Leased
Percentage
    
Acquisition
Cost
  
 
 
 
 
  
   
   
   
 
Villa West
Topeka, KS
Multi-Family Residential
May 8, 2012
    
308
      
98.1
%
    
91.9
%
  
$
17,650
  
Colony
Lincoln, NE
Multi-Family Residential
June 4, 2012
    
232
      
98.3
%
    
97.4
%
    
17,500
  
Lakeside Village
Lincoln, NE
Multi-Family Residential
June 4, 2012
    
208
      
86.5
%
    
85.6
%
    
17,250
  
Quarry Ridge II(1)
Rochester, MN
Multi-Family Residential
June 29, 2012
    
159
      
33.3
%
    
98.7
%
    
4,591
  
Williston Garden Buildings 3 and 4(2)
Williston, ND
Multi-Family Residential
July 31, 2012
    
73
      
98.6
%
    
97.9
%
    
6.886
  
University Commons
Williston, ND
Unimproved Land
August 1, 2012
    
n/
a
    
n/
a
    
n/
a
    
823
  
Cypress Court
St. Cloud, MN
Unimproved Land
August 10, 2012
    
n/
a
    
n/
a
    
n/
a
    
447
  
The Ponds at Heritage Place
Sartell, MN
Multi-Family Residential
October 10, 2012
    
58
      
91.4
%
    
91.4
%
    
5,020
  
 
Total Square Feet
  
0
                    
$
70,167
  
 
Total Units
  
1,038
                          
(1)
Development property placed in service June 29, 2012. Additional costs paid in fiscal years 2012 and 2011, and land acquired in fiscal year 2007, totaled $13.0 million, for a total project cost at October 31, 2012 of $17.6 million.
(2)
Development property placed in service July 31, 2012. Buildings 1 and 2 were placed in service in fiscal year 2012. Additional costs paid in fiscal year 2012 totaled $12.0 million, for a total project cost at October 31, 2012 of $18.9 million.





INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
FISCAL 2013 DEVELOPMENT IN PROGESS SUMMARY
as of October 31, 2012
(dollars in thousands)

Property and Location
Total Rentable
Square Feet
or # of Units
  
Percentage
Leased
or Committed
    
Anticipated
Total
Cost
    
Cost to
Date
  
Anticipated
Construction
Completion
Spring Wind - Laramie, WY
29 assisted living units and 16 memory care units
    
100
%
    
3,800
      
3,445
  
3rd Quarter Fiscal 2013
Industrial-Office Build-to-Suit - Minot, ND
28,000 sf. commercial industrial building
    
100
%
    
6,033
      
5,484
  
3rd Quarter Fiscal 2013
Jamestown Medical Office Building -Jamestown, ND(1)
45,000 square foot medical office building
    
99.5
%
    
9,200
      
5,418
  
3rd Quarter Fiscal 2013
Multi-Family Conversion - Minot, ND
Convert 15,000 sf. commercial office to 20 multi-family residential units
    
0
%
    
3,000
      
1,658
  
4th Quarter Fiscal 2013
Branch Bank Building - Minot, ND
3,700 square foot commercial office building
    
100
%
    
1,700
      
601
  
4th Quarter Fiscal 2013
River Ridge - Bismarck, ND
146 unit apartment building
    
0
%
    
24,200
      
3,387
  
2rd Quarter Fiscal 2014
Cypress Court - St. Cloud, MN(2)
132 unit apartment building
    
0
%
    
14,300
      
3,225
  
4th Quarter Fiscal 2014
 
 
          
$
62,233
    
$
23,218
  
 
(1)
The Company is a 51% partner in the joint venture entity constructing this property; the anticipated total cost amount given is the total cost to the joint venture entity.
(2)
The Company is a 79% partner in the joint venture entity constructing this property; the anticipated total cost amount given is the total cost to the joint venture entity


 
Definitions
October 31, 2012
Adjusted funds from operations (AFFO) is calculated by subtracting from Funds from operations (FFO) (1) tenant improvements and leasing commissions and recurring capital expenditures that are capitalized and amortized and are necessary to maintain our properties and revenue stream and (2) straight line rents, then adding (3) non-real estate depreciation and amortization. We may also subtract from FFO certain unusual non-recurring items that do not produce cash available for distribution to shareholders. AFFO is included herein because we consider it to be a measure of a REIT's ability to incur and service debt and to pay distributions to its shareholders. AFFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.
Annualized base rent (ABR) is calculated as monthly base rent (cash basis) per the lease, as of the reporting period, multiplied by 12.
Debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet plus the market value of shares outstanding at the end of the period.
Debt service coverage ratio is computed by dividing earnings before interest income and expense, depreciation, amortization and gain on sale of real estate by interest expense and principal amortization.
EBITDA is earnings before interest, taxes, depreciation and amortization. We consider EBITDA to be an appropriate supplemental performance measure because it eliminates depreciation, interest and the gain/loss from property dispositions, which permits investors to view income from operations without the effect of non-cash depreciation or the cost of debt; however, EBIDTA as we calculate it has not been adjusted for the effect of nonrecurring events such as asset impairment and gain/loss on involuntary conversion.  EBITDA is a non-GAAP measure. EBITDA as calculated by us is not comparable to EBITDA reported by other REITs that do not define EBITDA exactly as we do.
Funds from operations (FFO) - The National Association of Real Estate Investment Trusts, Inc. (NAREIT) defines FFO as "net income (computed in accordance with generally accepted accounting principles, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis." In addition, in October 2011 NAREIT clarified its computation of FFO to exclude impairment charges for all periods presented. FFO is a non-GAAP measure.  We consider FFO, which is a standard supplemental measure for equity real estate investment trusts, helpful to investors because it facilitates an understanding of the operating performance of properties without giving effect to impairment write-downs and to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time.  Since real estate values instead historically rise or fall with market conditions, we believe that FFO provides investors and management with a more accurate indication of our financial and operating results.
Net Operating Income is total real estate revenues less real estate expenses (which consist of utilities, maintenance, real estate taxes, insurance and property management expenses).
Payout ratio (FFO per share and unit basis) - The ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual FFO per share and unit.
Ratio of earnings to fixed charges - The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests - consolidated real estate entities, capitalized interest and preferred distributions. Fixed charges consist of mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest.
Ratio of earnings to combined fixed charges and preferred distributions - The ratio of earnings to combined fixed charges and preferred distributions is computed by dividing earnings by combined fixed charges and preferred distributions. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests - consolidated real estate entities, capitalized interest and preferred distributions. Combined fixed charges and preferred distributions consist of fixed charges (mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest) and preferred distributions.
Recurring capital expenditures are expenditures (excluding capital expenditures recoverable from tenants) made on a regular or recurring basis to maintain a property's competitive position within its market, generally with a depreciable life of 5 to 12 years, but excluding (a) capital expenditures made in the year of acquisition and the following two years (i.e., excluding capital expenditures on non-stabilized properties), (b) improvements associated with the expansion or re-development of a building, (c) renovations to a building which change the underlying classification of the building (for example, from industrial to office or Class C office to Class A office) or (d) capital improvements that represent the addition of something new to a property, rather than the replacement of an existing item.
Scheduled rent revenue is the total possible revenue from all leasable units and square footage, with occupied space valued at contract rates pursuant to leases and vacant units or square footage at market rates.
Stabilized properties are properties owned and in operation for the entirety of the periods being compared (including properties that were redeveloped or expanded during the periods being compared, with properties purchased or sold during the periods being compared excluded from the stabilized property category), and, in the case of development or re-development properties, which have achieved a target level of occupancy.

28