NOTE 10 • ACQUISITIONS, DEVELOPMENT PROJECTS PLACED IN SERVICE AND DISPOSITIONS

PROPERTY ACQUISITIONS

IRET Properties added approximately $43.6 million of real estate properties to its portfolio through property acquisitions during fiscal year 2014, compared to $108.2 million in fiscal year 2013. The Company expensed approximately $176,000 and $434,000 of transaction costs related to the acquisitions in fiscal years 2014 and 2013, respectively. The fiscal year 2014 and 2013 acquisitions are detailed below.

Fiscal 2014 (May 1, 2013 to April 30, 2014)

		(in thousands)
		Total Acquisition Cost		Form of Consideration						Investment Allocation
Acquisitions	Date Acquired	Total Acquisition Cost		Cash		Units⁽¹⁾		Other⁽²⁾		Land		Building		Intangible Assets

Multi-Family Residential
71 unit - Alps Park - Rapid City, SD	2013-05-01	$	6,200	$	2,920	$	3,280	$	0	$	287	$	5,551	$	362
96 unit - Southpoint - Grand Forks, ND	2013-09-05		10,600		10,400		200		0		576		9,893		131
24 unit - Pinecone Villas - Sartell, MN	2013-10-31		2,800		2,800		0		0		584		2,191		25
			19,600		16,120		3,480		0		1,447		17,635		518

Commercial Healthcare
98,174 sq ft Legends at Heritage Place - Sartell, MN	2013-10-31		11,863		11,863		0		0		970		10,511		382
39,500 sq ft Spring Creek Fruitland - Fruitland, ID	2014-02-05		7,050		7,050		0		0		550		6,500		0
			18,913		18,913		0		0		1,520		17,011		382

Unimproved Land
Chateau II - Minot, ND	2013-05-21		179		179		0		0		179		0		0
Jamestown Unimproved - Jamestown, ND	2013-08-09		700		700		0		0		700		0		0
Red 20 - Minneapolis, MN⁽³⁾	2013-08-20		1,900		0		0		1,900		1,900		0		0
Legends at Heritage Place - Sartell, MN	2013-10-31		537		537		0		0		537		0		0
Spring Creek Fruitland - Fruitland, ID	2014-01-21		335		335		0		0		335		0		0
Isanti Unimproved - Isanti, MN	2014-02-04		50		50		0		0		50		0		0
Rapid City Unimproved - Rapid City, SD	2014-03-25		1,366		1,366		0		0		1,366		0		0
			5,067		3,167		0		1,900		5,067		0		0

Total Property Acquisitions		$	43,580	$	38,200	$	3,480	$	1,900	$	8,034	$	34,646	$	900

(1)	Value of limited partnership units of the Operating Partnership at the acquisition date.

(2)	Consists of value of land contributed by the joint venture partner.

(3)	Land is owned by a joint venture in which the Company has an approximately 58.6% interest. The joint venture is consolidated in IRET's financial statements.

NOTE 10 • continued

Fiscal 2013 (May 1, 2012 to April 30, 2013)

		(in thousands)
		Total Acquisition Cost		Form of Consideration						Investment Allocation
Acquisitions	Date Acquired	Total Acquisition Cost		Cash		Units⁽¹⁾		Other⁽²⁾		Land		Building		Intangible Assets

Multi-Family Residential
308 unit - Villa West - Topeka, KS	2012-05-08	$	17,650	$	5,150	$	0	$	12,500	$	1,590	$	15,760	$	300
232 unit - Colony - Lincoln, NE	2012-06-04		17,500		14,368		3,132		0		1,515		15,731		254
208 unit - Lakeside Village - Lincoln, NE	2012-06-04		17,250		13,954		3,296		0		1,215		15,837		198
58 unit - Ponds at Heritage Place - Sartell, MN	2012-10-10		5,020		3,332		1,688		0		395		4,564		61
336 unit - Whispering Ridge - Omaha, NE	2013-04-24		28,314		25,798		2,516		0		2,139		25,424		751
			85,734		62,602		10,632		12,500		6,854		77,316		1,564

Unimproved Land
University Commons - Williston, ND	2012-08-01		823		823		0		0		823		0		0
Cypress Court - St. Cloud, MN⁽³⁾	2012-08-10		447		447		0		0		447		0		0
Cypress Court Apartment Development - St. Cloud, MN⁽³⁾	2012-08-10		1,136		0		0		1,136		1,136		0		0
Badger Hills - Rochester, MN⁽⁴⁾	2012-12-14		1,050		1,050		0		0		1,050		0		0
Grand Forks - Grand Forks, ND	2012-12-31		4,278		2,278		2,000		0		4,278		0		0
Minot (Southgate Lot 4) - Minot, ND	2013-01-11		1,882		1,882		0		0		1,882		0		0
Commons at Southgate - Minot, ND⁽⁵⁾	2013-01-22		3,691		0		0		3,691		3,691		0		0
Landing at Southgate - Minot, ND⁽⁵⁾	2013-01-22		2,262		0		0		2,262		2,262		0		0
Grand Forks 2150 - Grand Forks, ND	2013-03-25		1,600		1,600		0		0		1,600		0		0
Bismarck 4916 - Bismarck, ND	2013-04-12		3,250		3,250		0		0		3,250		0		0
Arcata - Golden Valley, MN	2013-04-30		2,088		2,088		0		0		2,088		0		0
			22,507		13,418		2,000		7,089		22,507		0		0

Total Property Acquisitions		$	108,241	$	76,020	$	12,632	$	19,589	$	29,361	$	77,316	$	1,564

(1)	Value of limited partnership units of the Operating Partnership at the acquisition date.

(2)	Consists of assumed debt (Villa West - $12.5 million) and value of land contributed by the joint venture partner (Cypress Court - $1.1 million, Commons at Southgate - $3.7 million, Landing at Southgate - $2.3 million).

(3)	Land is owned by a joint venture in which the Company has an approximately 86.1% interest. The joint venture is consolidated in IRET's financial statements.

(4)	Acquisition of unimproved land consisted of two parcels acquired separately on December 14 and December 20, 2012, respectively.

(5)	Land is owned by a joint venture entity in which the Company has an approximately 51% interest. The joint venture is consolidated in IRET's financial statements.

NOTE 10 • continued

Acquisitions in fiscal years 2014 and 2013 are immaterial to our real estate portfolio both individually and in the aggregate, and consequently no proforma information is presented. The results of operations from acquired properties are included in the Consolidated Statements of Operations as of their acquisition date. The revenue and net income of our fiscal year 2014 and 2013 acquisitions (excluding development projects placed in service) are detailed below.

	(in thousands)
	April 30, 2014		April 30, 2013
Total revenue	$	1,897	$	6,497
Net income	$	(82)	$	(66)

DEVELOPMENT PROJECTS PLACED IN SERVICE

IRET Properties placed approximately $53.5 million of development projects in service during fiscal year 2014, compared to $47.9 million in fiscal year 2013. The fiscal year 2014 and 2013 development projects placed in service are detailed below.

Fiscal 2014 (May 1, 2013 to April 30, 2014)

		(in thousands)
Development Projects Placed in Service⁽¹⁾	Date Placed in Service	Land		Building		Development Cost

Multi-Family Residential
108 unit - Landing at Southgate - Minot, ND⁽²⁾	2013-09-04	$	2,262	$	12,864	$	15,126
132 unit - Cypress Court - St. Cloud, MN⁽³⁾	2013-11-01		1,136		12,428		13,564
146 unit - River Ridge - Bismarck, ND⁽⁴⁾	2013-12-02		589		24,268		24,857

Total Development Projects Placed in Service		$	3,987	$	49,560	$	53,547

(1)

Development projects that are placed in service in phases are excluded from this table until the entire project has been placed in service. See Note 15 for additional information on the Renaissance Heights I project, which was partially placed in service during the three months ended April 30, 2014.

(2)

Development property placed in service September 4, 2013. Costs paid in fiscal year 2013 totaled $6.3 million. Additional costs paid in fiscal year 2014 totaled $8.8 million, for a total project cost at April 20, 2014 of $15.1 million. The project is owned by a joint venture entity in which the Company has an approximately 51% interest.

(3)

Development property placed in service November 1, 2013. Costs paid in fiscal year 2013 totaled $5.8 million. Additional costs paid in fiscal year 2014 totaled $7.8 million, for a total project cost at April 30, 2014 of $13.6 million. The project is owned by a joint venture entity in which the Company has an approximately 86.1% interest.

(4)	Development property placed in service December 2, 2013. Costs paid in fiscal year 2013 totaled $10.1 million, including the land acquired in fiscal year 2009. Additional costs paid in fiscal year 2014 totaled $14.8 million, for a total project cost at April 30, 2014 of $24.9 million.

NOTE 10 • continued

Fiscal 2013 (May 1, 2012 to April 30, 2013)

		(in thousands)
Development Projects Placed in Service	Date Placed in Service	Land		Building		Development Cost

Multi-Family Residential
159 unit - Quarry Ridge II - Rochester, MN⁽¹⁾	2012-06-29	$	942	$	16,636	$	17,578
73 unit - Williston Garden Buildings 3 and 4 - Williston, ND⁽²⁾	2012-07-31		700		8,734		9,434
20 unit - First Avenue - Minot, ND⁽³⁾	2013-04-15		0		2,677		2,677
			1,642		28,047		29,689
Commercial Healthcare
26,662 sq ft Spring Wind Expansion - Laramie, WY⁽⁴⁾	2012-11-16		0		3,485		3,485
45,222 sq ft Jamestown Medical Office Building - Jamestown, ND⁽⁵⁾	2013-01-01		0		7,605		7,605
			0		11,090		11,090

Commercial Industrial
27,698 sq ft Minot IPS - Minot, ND⁽⁶⁾	2012-12-17		416		5,484		5,900

Commercial Retail
3,702 sq ft Arrowhead First International Bank - Minot, ND⁽⁷⁾	2013-03-19		75		1,165		1,240

Total Development Projects Placed in Service		$	2,133	$	45,786	$	47,919

(1)	Development property placed in service June 29, 2012. Costs paid in fiscal years 2011 and 2012 totaled $13.0 million, including land acquired in fiscal year 2007. Additional costs paid in fiscal year 2013 totaled $4.6 million, for a total project cost at April 30, 2013 of $17.6 million.

(2)

Development property placed in service July 31, 2012. Buildings 1 and 2 were placed in service in fiscal year 2012. Costs paid in fiscal year 2012 for Buildings 3 and 4 totaled $2.4 million. Additional costs paid in fiscal year 2013 totaled $7.0 million, for a total project cost at April 30, 2013 of $9.4 million. The project is owned by a joint venture entity in which the Company has an approximately 60% interest.

(3)	Redevelopment property placed in service April 15, 2013. Costs paid in fiscal years 2011 and 2012 totaled approximately $321,000. Additional costs paid in fiscal year 2013 totaled $2.4 million, for a total project cost at April 30, 2013 of $2.7 million.

(4)	Expansion project placed in service November 16, 2012. Costs paid in fiscal year 2012 totaled $1.8 million. Additional costs paid in fiscal year 2013 totaled $1.7 million, for a total project cost at April 30, 2013 of $3.5 million.

(5)

Development property placed in service January 1, 2013. Costs paid in fiscal year 2012 totaled $1.0 million. Additional costs paid in fiscal year 2013 totaled $6.6 million, for a total project cost at April 30, 2013 of $7.6 million. The project is owned by a joint venture entity in which the Company has an approximately 51% interest.

(6)	Development property placed in service December 17, 2012. Costs paid in fiscal year 2012 totaled $1.8 million. Additional costs paid in fiscal year 2013 totaled $4.1 million, for a total project cost at April 30, 2013 of $5.9 million.

(7)	Development property placed in service March 19, 2013. Costs paid in fiscal year 2012 totaled approximately 75,000. Additional costs paid in fiscal year 2013 totaled $1.2 million, for a total project cost at April 30, 2013 of $1.2 million.

NOTE 10 • continued

PROPERTY DISPOSITIONS

During fiscal year 2014, the Company disposed of two multi-family residential properties, three commercial office properties, twelve commercial industrial properties, and three commercial retail properties for an aggregate sales price of $80.9 million, compared to dispositions totaling $26.3 million in fiscal year 2013. The fiscal year 2014 and 2013 dispositions are detailed below.

Fiscal 2014 (May 1, 2013 to April 30, 2014)

		(in thousands)
Dispositions	Date Disposed	Sales Price		Book Value and Sales Cost		Gain/(Loss)

Multi-Family Residential
84 unit - East Park - Sioux Falls, SD	2013-12-18	$	2,214	$	2,358	$	(144)
48 unit - Sycamore Village - Sioux Falls, SD	2013-12-18		1,296		1,380		(84)
			3,510		3,738		(228)

Commercial Office
121,669 sq ft Bloomington Business Plaza - Bloomington, MN	2013-09-12		4,500		7,339		(2,839)
118,125 sq ft Nicollet VII - Burnsville, MN	2013-09-12		7,290		6,001		1,289
42,929 sq ft Pillsbury Business Center - Bloomington, MN	2013-09-12		1,160		1,164		(4)
			12,950		14,504		(1,554)

Commercial Industrial
41,880 sq ft Bodycote Industrial Building- Eden Prairie, MN	2013-05-13		3,150		1,375		1,775
42,244 sq ft Fargo 1320 45^th Street N - Fargo, ND	2013-05-13		4,700		4,100		600
49,620 sq ft Metal Improvement Company - New Brighton, MN	2013-05-13		2,350		1,949		401
172,057 sq ft Roseville 2929 Long Lake Road - Roseville, MN	2013-05-13		9,275		9,998		(723)
322,751 sq ft Brooklyn Park 7401 Boone Ave - Brooklyn Park, MN	2013-09-12		12,800		12,181		619
50,400 sq ft Cedar Lake Business Center - St. Louis Park, MN	2013-09-12		2,550		2,607		(57)
35,000 sq ft API Building - Duluth, MN	2013-09-24		2,553		1,488		1,065
59,292 sq ft Lighthouse - Duluth, MN	2013-10-08		1,825		1,547		278
606,006 sq ft Dixon Avenue Industrial Park - Des Moines, IA	2013-10-31		14,675		10,328		4,347
41,685 sq ft Winsted Industrial Building - Winsted, MN	2014-01-17		725		747		(22)
69,984 sq ft Minnetonka 13600 County Road 62 - Minnetonka, MN	2014-01-30		3,800		3,084		716
42,510 sq ft Clive 2075NW 94^th Street - Clive, IA	2014-01-30		2,735		2,675		60
			61,138		52,079		9,059

Commercial Retail
23,187 sq ft Eagan Community - Eagan, MN	2013-05-14		2,310		2,420		(110)
10,625 sq ft Anoka Strip Center- Anoka, MN	2013-12-23		325		347		(22)
8,400 sq ft Burnsville 2 Strip Center - Burnsville, MN	2014-01-08		650		796		(146)
			3,285		3,563		(278)

Total Property Dispositions		$	80,883	$	73,884	$	6,999

NOTE 10 • continued

Fiscal 2013 (May 1, 2012 to April 30, 2013)

		(in thousands)
Dispositions	Date Disposed	Sales Price		Book Value and Sales Cost		Gain/(Loss)

Multi-Family Residential
116 unit - Terrace on the Green - Fargo, ND	2012-09-27	$	3,450	$	1,248	$	2,202
85 unit - Prairiewood Meadows - Fargo, ND	2012-09-27		3,450		2,846		604
66 unit - Candlelight - Fargo, ND	2012-11-27		1,950		1,178		772
			8,850		5,272		3,578

Commercial Retail
16,080 sq ft Kentwood Thomasville - Kentwood, MI	2012-06-20		625		692		(67)

Commercial Healthcare
47,950 sq ft Steven's Pointe -Steven's Point, WI	2013-04-25		16,100		12,667		3,433

Other
Georgetown Square Condominiums 5 and 6	2012-06-21		330		336		(6)
Georgetown Square Condominiums 3 and 4	2012-08-02		368		421		(53)
			698		757		(59)

Total Property Dispositions		$	26,273	$	19,388	$	6,885