8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  September 9, 2015

INVESTORS REAL ESTATE TRUST

 (Exact name of Registrant as specified in its charter)

North Dakota	001-35624	45-0311232
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

1400 31st Avenue SW, Suite 60

Post Office Box 1988

Minot, ND 58702-1988

 (Address of principal executive offices) (Zip code)

(701) 837-4738

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed from last report)

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

☐ Written communications pursuant to Rule 425 under the Securities Act

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

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

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

Item 2.02. Results of Operations and Financial Condition.

and

Item 7.01. Regulation FD Disclosure.

An earnings release issued by the Company on September 9, 2015, regarding financial and operational results for the three months ended July 31, 2015, is attached as Exhibit 99.1, and certain supplemental information regarding the Company’s capital analysis, portfolio, tenant analysis and growth and strategy not included in the earnings release is attached as Exhibit 99.2.

This information pursuant to Item 7.01 and Item 2.02 of Form 8-K, including Exhibits 99.1 and 99.2, is being furnished. This information is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any Securities Act registration statements.

ITEM 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description
99.1	Earnings Release issued September 9, 2015, regarding financial and operational results for the three months ended July 31, 2015
99.2	Supplemental information

SIGNATURE

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

	INVESTORS REAL ESTATE TRUST
Date:  September 9, 2015	By:	/s/ Timothy P. Mihalick
		Timothy P. Mihalick
		President & Chief Executive Officer

EX-99.1

Exhibit 99.1

Earnings Release

INVESTORS REAL ESTATE TRUST

ANNOUNCES

FINANCIAL AND OPERATING RESULTS

FOR THE QUARTER ENDED JULY 31, 2015

Minot, ND – September 9, 2015 – Investors Real Estate Trust (NYSE: IRET) reportedfinancial and operating results today for the quarter ended July 31, 2015.

For the three month period ended July 31, 2015, as compared to the same period of the prior fiscal year:

· Revenues increased to $51.0 million from $49.2 million, an increase of 3.5%.

· Total expenses decreased by approximately $1.2 million, or 3.2%, in the three months ended July 31, 2015 compared to the three months ended July 31, 2014, from $38.0 million to $36.8 million.

· FFO increased to $22.0 million on 139 million weighted average shares and units outstanding, from $18.9 million on 131 million weighted average shares and units outstanding ($.16 per share and unit compared to $.14 per share and unit).

· Net Income Available to Common Shareholders was $1.7 million compared to $(3.0) million of Net Loss Available to Common Shareholders in the prior fiscal year.

Significant Events and Transactions during the first quarter of fiscal year 2016:

· The placement into service of the following: the 72-unit Chateau II multi-family residential property in Minot, North Dakota; the 57,624 square foot Edina 6565 France SMC III healthcare expansion project in Edina, Minnesota; and the final 72 units of the 288-unit Renaissance Heights multi-family residential property in Williston, North Dakota, in which we have an approximately 70% interest.

· The disposition of an office property in Minneapolis, Minnesota, for a sale price of $7.0 million.

· On June 12, 2015, our Operating Partnership entered in an agreement to sell 33 office properties, one healthcare property and a parcel of unimproved land.

· On June 23, 2015, Jeff P. Caira was appointed as a Trustee of our Board of Trustees.

· On June 25, 2015, our Operating Partnership entered into an agreement to sell 17 retail properties and a parcel of unimproved land.

IRET’s President and Chief Executive Officer, Timothy Mihalick, commented, “As we celebrate IRET’s 45^th year in business, I am excited to report that we continue to transform the makeup of our real estate portfolio as previously announced.  On August 3, 2015 we completed the sale of substantially all of our office portfolio and expect to complete the sale of substantially all of our retail portfolio in the second quarter of fiscal year 2016.  As evidenced by our recent filings IRET is now reporting three property segments, which is down from the previously reported five segments and includes our multi-family and healthcare segments.  I believe this enhanced focus will allow us to concentrate on our core strengths of creating value through development, value enhancing property repositioning and improving operating efficiencies with a more concentrated portfolio, leading to increased NOI growth.  Our first quarter results met our expectations and we believe that as other development projects come on line during fiscal year 2016 we will see the full effect of those developments with year over year NOI growth in fiscal year 2017.  We remain confident about the future of IRET as we execute on all of the changes during this exciting time.

¹ The National Association of Real Estate Investment Trusts, Inc. (NAREIT) defines FFO as “net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property, plus real estate depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.”  In addition, 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. See table below for a reconciliation of Net Income to FFO.

i

Operating Results

Net Operating Income (NOI)² from all properties increased by $1.3 million, or 4.5%, during the three-month period ended July 31, 2015, compared to the same period one year ago. Non-same-store properties, primarily our new multi-family residential developments, provided for an increase of approximately $859,000, while same-store³ NOI provided for approximately $490,000.

Occupancy as of July 31, 2015 compared to July 31, 2014 decreased slightly in our multi-family residential and healthcare segments and remained stable in our industrial segment on a same-store basis. Occupancy represents the actual number of units or square footage leased divided by the total number of units or square footage at the end of the period.

Occupancy Levels on a Same-Store Property and All Property Basis:

	Same-Store Properties(a)						All Properties
	As of July 31,						As of July 31,
Segments	2015			2014			2015			2014
Multi-Family Residential		93.5	%		94.0	%		91.2	%		93.4	%
Healthcare		96.0	%		96.6	%		94.7	%		96.6	%
Industrial		100.0	%		100.0	%		84.3	%		100.0	%

(a)	Non-same-store properties consist of the following properties (re-development and in-service development properties are listed in bold type):
Held for Investment -	Multi-Family Residential -	Arcata, Golden Valley, MN; Chateau II, Minot, ND; Colonial Villa, Burnsville, MN; Commons at Southgate, Minot, ND; Cypress Court I and II, St. Cloud, MN;  Dakota Commons, Williston, ND; Homestead Garden, Rapid City, SD;  Legacy Heights, Bismarck, ND; Northridge, Bismarck, ND;  Red 20, Minneapolis, MN; Renaissance Heights, Williston, ND and Silver Springs, Rapid City, SD. Total number of units, 1,759.
	Healthcare -	Edina 6565 France SMC III, Edina, MN. Total rentable square footage, 57,624.
	Industrial -	Roseville 3075 Long Lake Road, Roseville, MN. Total rentable square footage, 220,557.
	Other -	Minot Southgate Wells Fargo Bank, Minot, ND. Total rentable square footage, 4,998.

Held for Sale -	Healthcare -	Nebraska Orthopaedic Hospital, Omaha, NE. Total rentable square footage, 61,758.
	Total NOI for held for sale properties for the three months ended July 31, 2015 and 2014, respectively, $478 and $471.

Sold -	Multi-Family Residential -	Lancaster, St. Cloud, MN.
	Healthcare -	Jamestown Medical Office Building, Jamestown, ND.
	Industrial -	Eagan 2785 & 2795 Hwy 55, Eagan, MN.
	Other -	2030 Cliff Road, Eagan, MN; Burnsville Bluffs II, Burnsville, MN; Dewey Hill Business Center, Edina, MN; Fargo Express Community, Fargo, ND; Kalispell Retail Center, Kalispell, MT; Northgate I, Maple Grove, MN; Northgate II, Maple Grove, MN; Plymouth I, Plymouth, MN; Plymouth II, Plymouth, MN; Plymouth III, Plymouth, MN; Plymouth IV-V, Plymouth, MN; Southeast Tech, Eagan, MN; Thresher Square, Minneapolis, MN; Weston Retail, Weston, WI; Whitewater Plaza, Minnetonka, MN and Wirth Corporate Center, Golden Valley, MN.
	Total NOI for sold properties for the three months ended July 31, 2015 and 2014, respectively, $8 and $1,242.

² We measure the performance of our segments based on NOI, which we define as total real estate revenues and gain on involuntary conversion less real estate expenses (which consist of utilities, maintenance, real estate taxes, insurance, property management expenses and other property expenses). We believe that NOI is an important supplemental measure of operating performance for a real estate investment trust’s operating real estate because it provides a measure of core operations that is unaffected by depreciation, amortization, financing and general and administrative expense. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders or cash flow from operating activities as a measure of financial performance. See tables below for a reconciliation of NOI to the condensed consolidated financial statements.

³ Same-store properties are properties owned or in service for the entirety of the periods being compared (except for properties for which significant redevelopment or expansion occurred during either of the periods being compared, and properties sold or classified as held for sale), and, in the case of development or re-development properties, which have achieved a target level of occupancy of 90% for multi-family residential properties and 85% for office, healthcare, industrial and retail properties.

ii

Developments Placed in Service and Disposition

During the first quarter of fiscal year 2016, we placed into service the 72-unit Chateau II multi-family residential property in Minot, North Dakota; the 57,624 square foot Edina 6565 France SMC III healthcare expansion project in Edina, Minnesota; and the final 72 units of the 288-unit Renaissance Heights multi-family residential property in Williston, North Dakota, in which we have an approximately 70% interest.

Also during the first quarter of fiscal year 2016, we sold an office property in Minneapolis, Minnesota, for a sale price of $7.0 million.

Strategic Dispositions

At July 31, 2015, we had 48 office properties, 17 retail properties and two healthcare properties classified as held for sale. In January 2015, we announced that we were exploring a calendar year 2015 disposition of substantially all of our office and retail properties, in an update to our current strategic plan, under which we have been directing new investments primarily toward multi-family residential and healthcare properties. We intend to use the proceeds from dispositions to continue portfolio deleveraging and for developing and acquiring high-quality assets in our multi-family, healthcare and industrial segments. During the first quarter of fiscal year 2016, we signed an agreement to sell 17 retail properties located in 3 states for a sale price of $80.6 million. This pending disposition is subject to various closing conditions and contingencies, and no assurances can be given that the transaction will be completed on the terms currently expected, or at all. Subsequent to the end of the first quarter of fiscal year 2016, we sold a portfolio of 33 office properties, one healthcare property and one parcel of unimproved land, for a sale price of $250.0 million at a gain of approximately $18.1 million with a related loss on debt extinguishment of approximately $4.8 million. Also subsequent to the end of the first quarter of fiscal year 2016, a joint venture entity in which we have an approximately 51% interest sold a portfolio of 5 office properties in Mendota Heights, Minnesota, for a sale price of $40.0 million.

Mortgages Payable

The Company’s mortgages payable include a non-recourse $122.6 million CMBS loan, for which nine of the Company’s office properties serve as collateral and under which a special-purpose subsidiary of the Company is the borrower. This loan matures in October 2016. Because the loan amount significantly exceeds the Company’s current estimate of the fair value of this nine-property portfolio, the Company contacted the master servicer to initiate discussions on various alternatives with regard to the loan. On April 14, 2015, the Company received a letter from the special servicer advising that the loan was in default due to a nonpayment on April 6, 2015. The Company is currently discussing a deed in lieu agreement with the lender, but the Company can give no assurance that such resolution will be entered into or that another mutually acceptable resolution will be reached.

Shareholder Equity, Distributions and Capital Structure

As of July 31, 2015, IRET had a total capitalization of $2.1 billion. Total capitalization is defined as the market value (closing price at end of period) of the Company’s outstanding common shares and the imputed market value of the outstanding limited partnership units of IRET Properties (which are convertible, at the expiration of a specified holding period, into cash or, at the Company’s sole discretion, into common shares of the Company on a one-to-one basis), plus the book value of the Company’s preferred shares and the outstanding principal balance of the consolidated debt of the Company.

On July 1, 2015, IRET paid a quarterly distribution of $0.1300 per share and unit on its common shares and limited partnership units of IRET Properties. This was IRET’s 177^th consecutive distribution. IRET also paid, on June 30, 2015, a quarterly distribution of $0.5156 per share on its Series A preferred shares and a quarterly distribution of $0.4968 per share on its Series B preferred shares.

Distribution Declared.  Subsequent to the end of the first quarter of fiscal year 2016, on September 2, 2015, the Company’s Board of Trustees declared a regular quarterly distribution of $0.1300 per share and unit on the Company’s common shares of beneficial interest and the limited partnership units of IRET Properties, payable October 1, 2015 to common shareholders and unitholders of record on September 15, 2015. Also on September 2, 2015, the Company’s Board of Trustees’ declared a distribution of $0.5156 per share on the Company’s Series A preferred shares of beneficial interest, payable September 30, 2015 to Series A preferred shareholders of record on September 15, 2015, and declared a distribution of $0.4968 per share on the Company’s Series B preferred shares of beneficial interest, payable September 30, 2015 to Series B preferred shareholders of record on September 15, 2015.

iii

Conference Call Information

The Conference Call for 1st Quarter Earnings is scheduled for Thursday, September 10, 2015 at 9:00 A.M. Central Time.  The call will be limited to one hour, including questions and answers.  Conference call access information is as follows:

USA Toll Free Number: 1-877-509-9785

International Toll Free Number: 1-412-902-4132

Canada Toll Free Number: 1-855-669-9657

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

About IRET

IRET is a self-administered, equity real estate investment trust investing in income-producing properties located primarily in the upper Midwest. IRET holds for investment a portfolio of 181 properties consisting of 100 multi-family residential properties, 64 healthcare properties (including senior housing), 7 industrial properties and 10 other commercial properties with a total of 4.4 million square feet of leasable space.  IRET common shares, Series A preferred shares and Series B preferred shares are publicly traded on the New York Stock Exchange (NYSE symbols: IRET, IRETPR and IRETPRB, respectively). IRET’s press releases and supplemental information are available on the Company website at www.iret.com or by contacting Investor Relations at 701-837-4738.

Certain statements in this earnings release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from projected results. Such risks, uncertainties and other factors include, but are not limited to: intentions and expectations regarding future distributions on our common shares and units, fluctuations in interest rates, the effect of government regulation, the availability of capital, changes in general and local economic and real estate market conditions, competition, our ability to attract and retain skilled personnel, and those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including our 2015 Form 10-K.  We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

iv

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

	(in thousands, except share data)
	July 31, 2015			April 30, 2015
ASSETS
Real estate investments
Property owned	$	1,618,948		$	1,546,367
Less accumulated depreciation		(325,536	)		(313,308	)
		1,293,412			1,233,059
Development in progress		133,794			153,994
Unimproved land		24,542			25,827
Total real estate investments		1,451,748			1,412,880
Assets held for sale		453,217			463,103
Cash and cash equivalents		44,770			48,970
Other investments		329			329
Receivable arising from straight-lining of rents, net of allowance of $689 and $718, respectively		15,612			15,617
Accounts receivable, net of allowance of $135 and $438, respectively		3,650			2,865
Real estate deposits		6,614			2,489
Prepaid and other assets		2,224			3,174
Intangible assets, net of accumulated amortization of $20,643 and $19,610, respectively		25,179			26,213
Tax, insurance, and other escrow		8,858			10,073
Property and equipment, net of accumulated depreciation of $1,482 and $1,464, respectively		1,464			1,542
Goodwill		1,718			1,718
Deferred charges and leasing costs, net of accumulated amortization of $8,301 and $8,077, respectively		9,290			8,864
TOTAL ASSETS	$	2,024,673		$	1,997,837
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
LIABILITIES
Liabilities held for sale	$	308,812		$	321,393
Accounts payable and accrued expenses		60,506			56,399
Revolving line of credit		83,500			60,500
Mortgages payable		669,734			668,112
Construction debt and other		165,873			144,111
TOTAL LIABILITIES		1,288,425			1,250,515
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES		6,361			6,368
EQUITY
Investors Real Estate Trust shareholders’ equity
Series A Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at July 31, 2015 and April 30, 2015, aggregate liquidation preference of $28,750,000)		27,317			27,317
Series B Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 4,600,000 shares issued and outstanding at July 31, 2015 and April 30, 2015, aggregate liquidation preference of $115,000,000)		111,357			111,357
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 125,519,557 shares issued and outstanding at July 31, 2015, and 124,455,624 shares issued and outstanding at April 30, 2015)		957,707			951,868
Accumulated distributions in excess of net income		(452,971	)		(438,432	)
Total Investors Real Estate Trust shareholders’ equity		643,410			652,110
Noncontrolling interests – Operating Partnership (13,921,386 units at July 31, 2015 and 13,999,725 units at April 30, 2015)		56,120			58,325
Noncontrolling interests – consolidated real estate entities		30,357			30,519
Total equity		729,887			740,954
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	$	2,024,673		$	1,997,837

v

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)

for the three months ended July 31, 2015 and 2014

	(in thousands, except per share data)
	Three Months Ended July 31
	2015			2014
REVENUE
Real estate rentals	$	45,522		$	43,564
Tenant reimbursement		4,396			4,857
TRS senior housing revenue		1,038			793
TOTAL REVENUE		50,956			49,214
EXPENSES
Depreciation/amortization related to real estate investments		13,272			12,214
Utilities		3,206			2,945
Maintenance		5,374			4,986
Real estate taxes		4,917			4,987
Insurance		1,100			1,462
Property management expenses		3,871			3,666
Other property expenses		(68	)		206
TRS senior housing expenses		769			693
Administrative expenses		2,454			3,664
Other expenses		424			612
Amortization related to non-real estate investments		171			221
Impairment of real estate investments		1,285			2,320
TOTAL EXPENSES		36,775			37,976
Operating income		14,181			11,238
Interest expense		(9,196	)		(9,747	)
Interest income		556			560
Other income		51			126
Income before loss on sale of real estate and other investments and  income  from discontinued operations		5,592			2,177
Loss on sale of real estate and other investments		(175	)		(2,993	)
Income (loss) from continuing operations		5,417			(816	)
(Loss) income from discontinued operations		(690	)		617
NET INCOME (LOSS)		4,727			(199	)
Net (income) loss attributable to noncontrolling interests – Operating Partnership		(186	)		402
Net income attributable to noncontrolling interests – consolidated real estate entities		(1	)		(354	)
Net income (loss) attributable to Investors Real Estate Trust		4,540			(151	)
Dividends to preferred shareholders		(2,879	)		(2,879	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	1,661		$	(3,030	)
Earnings (loss) per common share from continuing operations – Investors Real Estate Trust – basic and diluted	$	.02		$	(.03	)
Loss per common share from discontinued operations – Investors Real Estate Trust – basic and diluted		(.01	)		.00
NET INCOME (LOSS) PER COMMON SHARE – BASIC AND DILUTED	$	.01		$	(.03	)
DIVIDENDS PER COMMON SHARE	$	.1300		$	.1300

vi

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO

INVESTORS REAL ESTATE TRUST TO FUNDS FROM OPERATIONS

for the three months ended July 31, 2015 and 2014

	(in thousands, except per share amounts)
Three Months Ended July 31,	2015							2014
	Amount			Weighted Avg Shares and Units(2)		Per Share And Unit(3)		Amount			Weighted Avg Shares and Units(2)		Per Share And Unit(3)
Net income (loss) attributable to Investors Real Estate Trust	$	4,540						$	(151	)
Less dividends to preferred shareholders		(2,879	)						(2,879	)
Net income (loss) available to common shareholders		1,661			124,855	$	0.02		(3,030	)		111,039	$	(0.03	)
Adjustments:
Noncontrolling interest – Operating Partnership		186			13,951				(402	)		20,293
Depreciation and amortization(1)		18,259							17,037
Impairment of real estate investments		1,725							2,320
Loss on depreciable property sales		175							2,993
FFO applicable to common shares and Units	$	22,006			138,806	$	0.16	$	18,918			131,332	$	0.14

(1) Real estate depreciation and amortization consists of the sum of depreciation/amortization related to real estate investments and amortization related to non-real estate investments from the Condensed Consolidated Statements of Operations, totaling $13,443 and $12,435, and depreciation/amortization from Discontinued Operations of $4,863 and $4,621, less corporate-related depreciation and amortization on office equipment and other assets of $31 and $19, for the three months ended July 31, 2015 and 2014, respectively.

(2) UPREIT Units of the Operating Partnership are exchangeable for cash, or, at the Company’s discretion, for common shares of beneficial interest on a one-for-one basis.

(3) Net income attributable to Investors Real Estate Trust is calculated on a per share basis. FFO is calculated on a per share and unit basis.

vii

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILATION OF NET OPERATING INCOME TO THE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

for the three months ended July 31, 2015 and 2014

	(in thousands)
Three Months Ended July 31, 2015	Multi-Family Residential		Healthcare		Industrial		All Other(1)		Total
Real estate revenue	$	31,379	$	15,706	$	1,622	$	1,211	$	49,918
Real estate expenses		13,922		3,832		396		250		18,400
Net operating income	$	17,457	$	11,874	$	1,226	$	961		31,518
TRS senior housing revenue										1,038
TRS senior housing expenses										(769	)
Depreciation/amortization										(13,443	)
Administrative expenses										(2,454	)
Other expenses										(424	)
Impairment of real estate investments										(1,285	)
Interest expense										(9,196	)
Interest and other income										607
Income before loss on sale of real estate and other investments and loss from discontinued operations										5,592
Loss on sale of real estate and other investments										(175	)
Income from continuing operations										5,417
Loss from discontinued operations										(690	)
Net income									$	4,727

	(in thousands)
Three Months Ended July 31, 2014	Multi-Family Residential		Healthcare		Industrial		All Other(1)		Total
Real estate revenue	$	27,727	$	16,202	$	1,570	$	2,922	$	48,421
Real estate expenses		12,221		4,356		450		1,225		18,252
Net operating income	$	15,506	$	11,846	$	1,120	$	1,697		30,169
TRS senior housing revenue										793
TRS senior housing expenses										(693	)
Depreciation/amortization										(12,435	)
Administrative expenses										(3,664	)
Other expenses										(612	)
Impairment of real estate investments										(2,320	)
Interest expense										(9,747	)
Interest and other income										686
Income before loss on sale of real estate and other investments and income from discontinued operations										2,177
Loss on sale of real estate and other investments										(2,993	)
Loss from continuing operations										(816	)
Income from discontinued operations										617
Net loss									$	(199	)

(1) NOI from segments below the quantitative thresholds is attributable to the Company’s office and retail segments. Both of these segments met the quantitative threshold for determining reportable segments prior to the first quarter of fiscal year 2016, at which time the Company classified most of the properties in these segments as held for sale and discontinued operations.

viii

EX-99.2

Exhibit 99.2

First Quarter Fiscal 2016

Supplemental Operating and Financial Data

for the Quarter Ended July 31, 2015

CONTACT: Cindy Bradehoft Director of Investor Relations Direct Dial: 952-401-4835 E-Mail: cbradehoft@iret.com 1400 31^st 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

July 31, 2015

	Page
Company Background and Highlights	2
Property Cost by Segment and by State	5
Key Financial Data
Condensed Consolidated Balance Sheets	6
Condensed Consolidated Statements of Operations	7
Funds From Operations	8
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)	9
Capital Analysis
Long-Term Mortgage Debt Analysis	10
Long-Term Mortgage Debt Detail	11-12
Capital Analysis	13
Portfolio Analysis
Same-Store Properties Net Operating Income Summary	14
Net Operating Income Detail	15-16
Same-Store Properties and All Properties Occupancy Levels by Segment	17
Tenant Analysis
Multi-Family Residential Summary	18
Commercial Leasing Summary	19-20
10 Largest Commercial Tenants - Based on Annualized Base Rent	21
Commercial Lease Expirations	22
Growth and Strategy
Development Placed in Service Summary	23
Development in Progress Summary	24
Acquisitions and Development Liquidity Profile	25
Definitions	26

1

Company Background and Highlights

First Quarter Fiscal 2016

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.  Our portfolio consists of multi-family residential; healthcare, including senior housing, and industrial segments.

During the first quarter of fiscal year 2016, we placed into service the 72-unit Chateau II multi-family residential property in Minot, North Dakota; the 57,624 square foot Edina 6565 France SMC III healthcare expansion project in Edina, Minnesota; and the final 72 units of the 288-unit Renaissance Heights multi-family residential property in Williston, North Dakota, in which we have an approximately 70% interest.

Also during the first quarter of fiscal year 2016, we sold an office property in Minneapolis, Minnesota, for a sale price of $7.0 million.

We experienced generally stable trends across our apartment investments during the first quarter of fiscal year 2016. Same-store net operating income was flat and occupancy slipped 0.5% to 93.5% at quarter end on same store-assets when compared to the same period in the prior fiscal year.  According to AXIOMetrics Inc., the national apartment occupancy rate declined 0.11% to 95.2% during July 2015, which matches the level of three months ago.  However, our ability to maintain occupancy levels and raise rents remains dependent on continued healthy employment and wage growth. We have continued to observe considerable multi-family development activity in our markets, and as this new construction is completed and leased, we will experience increased competition for residents. However, based on information available to us, apartment developers in our markets are currently seeing increases in construction costs for potential new apartment developments, which may slow new developments in our markets.  The U.S. economic outlook through 2017 is forecasted to be good according to U.S. Bureau of Labor Statistics and Moody’s Analytics.  Businesses are adding jobs and for the first time in this phase of the economic cycle we are seeing meaningful wage growth.  There is an attitudinal shift also occurring toward renting by professional millennials and to lesser, although growing degree, by baby boomers.  These trends are beneficial to apartment owners.

Our healthcare segment consists of medical office properties and senior housing facilities. The medical office sector remains stable with high occupancy and modest rent increases.  Our senior housing assets continue to benefit from the strengthening recovery in the housing market, as occupancy trends are closely aligned with the ability of seniors to sell their homes in anticipation of moving to a senior care facility.

The industrial property market continues to improve.  Our industrial properties are located primarily in the Minneapolis market, and same-store occupancy remained at 100%. The demand for bulk warehouse and manufacturing space in our markets is healthy, with rents generally rising.

We are in process of selling substantially all of our office and retail properties.  In an update to our previously-announced strategic plan, we are narrowing our property focus.  Sale proceeds are intended to be used toward portfolio deleveraging and investments in multi-family residential and healthcare.

In the first quarter of fiscal year 2016, IRET paid its 177^th consecutive quarterly distribution. The $0.1300 per share/unit distribution was payable on July 1, 2015. Subsequent to the end of the first quarter of fiscal year 2016, on September 2, 2015, the Company’s Board of Trustees declared a regular quarterly distribution of $0.1300 per share and unit on the Company’s common shares of beneficial interest and the limited partnership units of IRET Properties, payable October 1, 2015 to common shareholders and unitholders of record on September 15, 2015. Also on September 2, 2015, the Company’s Board of Trustees’ declared a distribution of $0.5156 per share on the Company’s Series A preferred shares of beneficial interest, payable September 30, 2015 to Series A preferred shareholders of record on September 15, 2015, and declared a distribution of $0.4968 per share on the Company’s Series B preferred shares of beneficial interest, payable September 30, 2015 to Series B preferred shareholders of record on September 15, 2015.

As of July 31, 2015, IRET holds for investment a portfolio of 181 properties consisting of 100 multi-family residential properties, 64 healthcare properties (including senior housing), 7 industrial properties and 10 other commercial properties.  IRET’s common shares are publicly traded on the New York Stock Exchange (NYSE: IRET).

2

Company Snapshot

(as of July 31, 2015)

Company Headquarters	Minot, North Dakota
Fiscal Year-End	April 30
Reportable Segments	Multi-Family Residential, Healthcare, Industrial
Total Properties Held for Investment	181
Total Units Held for Investment (multi-family residential properties)	12,027
Total Square Feet Held for Investment (commercial properties)	4.4 million
Common Shares Outstanding (thousands)	125,520
Limited Partnership Units Outstanding (thousands)	13,921
Common Share Distribution - Quarter/Annualized	$0.13/$0.52
Dividend Yield	7.2%
Total Capitalization (see p.14 for detail)	$2.4 billion

Investor Information

(as of July 31, 2015)

Board of Trustees

Jeffrey L. Miller	Trustee and Chairman
John D. Stewart	Trustee, Vice Chairman, and Chair of Nominating and Governance Committee
Jeffrey K. Woodbury	Trustee, Chair of Audit Committee
Linda J. Hall	Trustee, Chair of Compensation Committee
Jeffrey P. Caira	Trustee
Terrance P. Maxwell	Trustee
Pamela J. Moret	Trustee
Stephen L. Stenehjem	Trustee
Timothy P. Mihalick	Trustee, President and Chief Executive Officer

Management

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

Corporate Headquarters:

1400 31^st Avenue SW, Suite 60

Post Office Box 1988

Minot, North Dakota 58702-1988

Trading Symbol:  IRET

Stock Exchange Listing:  NYSE

Investor Relations Contact:

Cindy Bradehoft

cbradehoft@iret.com

3

Common Share Data (NYSE: IRET)

	1st Quarter Fiscal Year 2016			4th Quarter Fiscal Year 2015			3rd Quarter Fiscal Year 2015			2nd Quarter Fiscal Year 2015			1st Quarter Fiscal Year 2015
High Closing Price	$	7.44		$	8.31		$	8.60		$	8.59		$	9.21
Low Closing Price	$	6.93		$	7.09		$	8.05		$	7.49		$	8.52
Average Closing Price	$	7.22		$	7.52		$	8.35		$	8.11		$	8.82
Closing Price at end of quarter	$	7.21		$	7.17		$	8.25		$	8.40		$	8.52
Common Share Distributions—annualized	$	0.520		$	0.520		$	0.520		$	0.520		$	0.520
Closing Dividend Yield - annualized		7.2	%		7.3	%		6.3	%		6.2	%		6.1	%
Closing common shares outstanding (thousands)		125,520			124,456			122,134			119,809			114,763
Closing limited partnership units outstanding (thousands)		13,921			14,000			14,398			14,731			17,975
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)	$	1,005,370		$	992,729		$	1,126,389		$	1,130,136		$	1,130,928

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 2015 Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

First Quarter Fiscal 2016 Development Placed in Service

Chateau II Minot, ND	Chateau II Minot, ND

4

First Quarter Fiscal 2016

Percentage of Total Property Cost by State for Properties Held for Investment

5

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

	7/31/2015			4/30/2015			1/31/2015(1)			10/31/2014(1)			7/31/2014(1)
ASSETS
Real estate investments
Property owned	$	1,618,948		$	1,546,367		$	2,093,148		$	2,013,770		$	2,025,327
Less accumulated depreciation		(325,536	)		(313,308	)		(439,153	)		(426,545	)		(435,317	)
		1,293,412			1,233,059			1,653,995			1,587,225			1,590,010
Development in progress		133,794			153,994			114,005			146,390			131,862
Unimproved land		24,542			25,827			27,675			24,947			24,772
Total real estate investments		1,451,748			1,412,880			1,795,675			1,758,562			1,746,644
Assets held for sale		453,217			463,103			44,259			41,183			6,508
Cash and cash equivalents		44,770			48,970			52,148			52,999			60,620
Other investments		329			329			329			329			329
Receivable arising from straight-lining of rents, net of allowance		15,612			15,617			27,169			27,425			27,286
Accounts receivable, net of allowance		3,650			2,865			5,574			3,719			7,013
Real estate deposits		6,614			2,489			7,494			4,924			3,741
Prepaid and other assets		2,224			3,174			5,580			2,263			3,428
Intangible assets, net of accumulated amortization		25,179			26,213			28,475			29,745			31,478
Tax, insurance, and other escrow		8,858			10,073			11,277			16,338			20,451
Property and equipment, net of accumulated depreciation		1,464			1,542			1,619			1,598			1,641
Goodwill		1,718			1,718			1,940			1,940			1,951
Deferred charges and leasing costs, net of accumulated amortization		9,290			8,864			19,803			20,445			20,677
TOTAL ASSETS	$	2,024,673		$	1,997,837		$	2,001,342		$	1,961,470		$	1,931,767
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
LIABILITIES
Liabilities held for sale	$	308,812		$	321,393		$	0		$	0		$	0
Accounts payable and accrued expenses		60,506			56,399			69,901			67,037			62,517
Revolving line of credit		83,500			60,500			50,500			40,500			35,500
Mortgages payable		669,734			668,112			1,006,179			1,013,161			1,017,574
Construction debt and other		165,873			144,111			132,210			107,731			83,666
TOTAL LIABILITIES		1,288,425			1,250,515			1,258,790			1,228,429			1,199,257
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES		6,361			6,368			6,340			6,373			6,313
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			111,357			111,357			111,357			111,357
Common Shares of Beneficial Interest		957,707			951,868			935,287			918,221			884,415
Accumulated distributions in excess of net income		(452,971	)		(438,432	)		(430,282	)		(420,036	)		(407,052	)
Total Investors Real Estate Trust shareholders’ equity		643,410			652,110			643,679			636,859			616,037
Noncontrolling interests – Operating Partnership		56,120			58,325			61,177			63,207			84,250
Noncontrolling interests – consolidated real estate entities		30,357			30,519			31,356			26,602			25,910
Total equity		729,887			740,954			736,212			726,668			726,197
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	$	2,024,673		$	1,997,837		$	2,001,342		$	1,961,470		$	1,931,767

(1) Period has not been revised to reflect assets and liabilities classified as held for sale at July 31, 2015.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

	Three Months Ended
OPERATING RESULTS	7/31/2015			4/30/2015			1/31/2015			10/31/2014			7/31/2014
Real estate revenue	$	49,918		$	50,252		$	51,976		$	50,346		$	48,421
Real estate expenses		18,400			18,699			19,118			17,764			18,252
Net operating income		31,518			31,553			32,858			32,582			30,169
TRS senior housing revenue		1,038			921			963			843			793
TRS senior housing expenses		(769	)		(754	)		(825	)		(725	)		(693	)
Depreciation/amortization		(13,443	)		(13,428	)		(12,837	)		(13,075	)		(12,435	)
Administrative expenses		(2,454	)		(2,516	)		(2,754	)		(2,890	)		(3,664	)
Other expenses		(424	)		(332	)		(488	)		(578	)		(612	)
Impairment of real estate investments		(1,285	)		0			(540	)		(1,803	)		(2,320	)
Interest expense		(9,196	)		(10,361	)		(10,009	)		(9,954	)		(9,747	)
Interest and other income		607			904			670			696			686
Income before (loss) gain on sale of real estate and other investments and (loss) income from discontinued operations		5,592			5,987			7,038			5,096			2,177
(Loss) gain on sale of real estate and other investments		(175	)		6,904			951			1,231			(2,993	)
Income (loss) income from continuing operations		5,417			12,891			7,989			6,327			(816	)
(Loss) income from discontinued operations		(690	)		971			1,162			(457	)		617
Net income (loss)	$	4,727		$	13,862		$	9,151		$	5,870		$	(199	)
Net (income) loss attributable to noncontrolling interest – Operating Partnership		(186	)		(908	)		(657	)		(363	)		402
Net income attributable to noncontrolling interests – consolidated real estate entities		(1	)		(2,201	)		(123	)		(393	)		(354	)
Net income (loss) attributable to Investors Real Estate Trust		4,540			10,753			8,371			5,114			(151	)
Dividends to preferred shareholders		(2,879	)		(2,878	)		(2,879	)		(2,878	)		(2,879	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	1,661		$	7,875		$	5,492		$	2,236		$	(3,030	)
Per Share Data
Earnings (loss) per common share from continuing operations – Investors Real Estate Trust – basic & diluted	$	.02		$	.06		$	.04		$	.02		$	(.03	)
(Loss) earnings per common share from discontinued operations – Investors Real Estate Trust – basic & diluted		(.01	)		.01			.01			.00			.00
Net income (loss) per common share – basic & diluted	$	.01		$	.07		$	.05		$	.02		$	(.03	)
Percentage of Revenues
Real estate expenses		36.9	%		37.2	%		36.8	%		35.3	%		37.7	%
Depreciation/amortization		26.9	%		26.7	%		24.7	%		26.0	%		25.7	%
General and administrative		4.9	%		5.0	%		5.3	%		5.7	%		7.6	%
Interest		18.4	%		20.6	%		19.3	%		19.8	%		20.1	%
Income from discontinued operations		(1.4	%)		1.9	%		2.2	%		(0.9	%)		1.3	%
Net (loss) income		9.5	%		27.6	%		17.6	%		11.7	%		(0.4	%)
Ratios
Adjusted EBITDA(1)/Interest expense		2.28	x		2.41	x		2.53	x		2.48	x		2.29	x
Adjusted EBITDA(1)/Interest expense plus preferred distributions		1.95	x		2.05	x		2.14	x		2.10	x		1.94	x

(1) See Definitions on page 26.  Adjusted EBITDA is a non-GAAP measure; see page 9 for a reconciliation of Adjusted EBITDA to net income.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FUNDS FROM OPERATIONS(unaudited)

(in thousands, except per share and unit data)

	Three Months Ended
	7/31/2015			4/30/2015			1/31/2015			10/31/2014			7/31/2014
Funds From Operations(1)
Net income (loss) attributable to Investors Real Estate Trust	$	4,540		$	10,753		$	8,371		$	5,114		$	(151	)
Less dividends to preferred shareholders		(2,879	)		(2,878	)		(2,879	)		(2,878	)		(2,879	)
Net income (loss) available to common shareholders		1,661			7,875			5,492			2,236			(3,030	)
Adjustments:
Noncontrolling interests – Operating Partnership		186			908			657			363			(402	)
Depreciation and amortization		18,259			18,083			17,706			17,624			17,037
Impairment of real estate investments		1,725			0			540			3,245			2,320
(Loss) gain on depreciable property sales		175			(4,890	)		(951	)		(1,231	)		2,993
FFO applicable to common shares and Units	$	22,006		$	21,976		$	23,444		$	22,237		$	18,918
FFO per share and unit - basic and diluted	$	0.16		$	0.16		$	0.17		$	0.17		$	0.14
Adjusted funds from operations(1)
FFO applicable to common shares and Units	$	22,006		$	21,976		$	23,444		$	22,237		$	18,918
Adjustments:
Tenant improvements at same-store properties		(191	)		(2,939	)		(1,984	)		(542	)		(2,169	)
Leasing costs at same-store properties		(336	)		(684	)		(358	)		(699	)		(578	)
Recurring capital expenditures(1)		(1,636	)		(1,342	)		(1,865	)		(1,567	)		(1,386	)
Straight-line rents		242			198			184			(103	)		(268	)
Non-real estate depreciation		101			100			94			96			99
Default interest		1,550			528			0			0			0
Share-based compensation expense(2)		66			280			260			601			1,073
AFFO applicable to common shares and Units	$	21,802		$	18,117		$	19,775		$	20,023		$	15,689
AFFO per share and unit - basic and diluted	$	0.16		$	0.13		$	0.15		$	0.15		$	0.12
Weighted average shares and units		138,806			137,412			135,315			133,295			131,332

(1) See Definitions on page 26.

(2) Three months ended 7/31/14 revised to include trustee share-based compensation expense.

8

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

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

(in thousands)

	Three Months Ended
	7/31/2015			4/30/2015			1/31/2015			10/31/2014			7/31/2014
Adjusted EBITDA(1)
Net income (loss) income attributable to Investors Real Estate Trust	$	4,540		$	10,753		$	8,371		$	5,114		$	(151	)
Adjustments:
Noncontrolling interests – Operating Partnership		186			908			657			363			(402	)
Income (loss) before noncontrolling interests – Operating Partnership		4,726			11,661			9,028			5,477			(553	)
Add:
Interest expense		14,961			15,162			14,595			14,599			14,664
Depreciation/amortization related to real estate investments		17,511			17,266			16,834			16,814			16,198
Amortization related to non-real estate investments		795			867			916			840			872
Amortization related to real estate revenues(2)		54			50			50			66			65
Impairment of real estate investments		1,725			0			540			3,245			2,320
Less:
Interest income		(556	)		(557	)		(561	)		(560	)		(560	)
Loss (gain) on sale of real estate and other investments		175			(4,890	)		(951	)		(1,231	)		2,993
Adjusted EBITDA	$	39,391			39,559			40,451			39,250			35,999

(1) See Definitions on page 26.

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

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT* ANALYSIS

(in thousands)

Debt Maturity Schedule

Annual Expirations

	Future Maturities of Mortgage Debt
Fiscal Year	Fixed Debt		Variable Debt		Total Debt		Weighted Average(1)			% of Total Debt
2016 (remainder)	$	50,789	$	0	$	50,789		3.38	%		7.6	%
2017		18,342		7,500		25,842		4.97	%		3.9	%
2018		18,042		13,000		31,042		4.32	%		4.6	%
2019		36,329		17,954		54,283		5.08	%		8.1	%
2020		111,949		12,114		124,063		5.50	%		18.5	%
2021		120,518		0		120,518		5.08	%		18.0	%
2022		110,726		0		110,726		5.59	%		16.5	%
2023		36,968		0		36,968		4.25	%		5.5	%
2024		65,797		0		65,797		4.28	%		9.8	%
2025		19,727		0		19,727		4.04	%		3.0	%
Thereafter		29,979		0		29,979		4.46	%		4.5	%
Total maturities	$	619,166	$	50,568	$	669,734		4.89	%		100.0	%

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

	7/31/2015			4/30/2015			1/31/2015(1)			10/31/2014(1)			7/31/2014(1)
Balances Outstanding
Mortgage
Fixed rate	$	619,166		$	629,770		$	927,724		$	949,002		$	972,142
Variable rate		50,568			38,342			78,455			64,159			45,432
Mortgage total	$	669,734		$	668,112		$	1,006,179		$	1,013,161		$	1,017,574
Weighted Average Interest Rates Secured		4.89	%		4.95	%		5.17	%		5.26	%		5.32	%

(1) Periods have not been restated to exclude mortgages held for sale.

10

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT* DETAIL AS OF JULY 31, 2015

(in thousands)

Property	Maturity Date	Fiscal 2016		Fiscal 2017		Fiscal 2018		Fiscal 2019		Thereafter		Total(1)
Multi-Family Residential
Landmark - Grand Forks, ND(2)	8/24/2015	$	1,556	$	0	$	0	$	0	$	0	$	1,556
Regency Park Estates - St Cloud, MN	1/1/2016		6,642		0		0		0		0		6,642
Pebble Springs – Bismarck, ND	7/1/2016		0		752		0		0		0		752
Southview – Minot, ND	7/1/2016		0		1,029		0		0		0		1,029
Homestead Gardens I – Rapid City, SD	7/11/2016		0		6,810		0		0		0		6,810
River Ridge – Bismarck, ND	6/30/2017		0		0		13,000		0		0		13,000
Evergreen II – Isanti, MN	11/1/2017		0		0		2,055		0		0		2,055
Ponds – Sartell, MN	11/1/2017		0		0		3,826		0		0		3,826
Homestead Gardens II - Rapid City, SD	6/1/2018		0		0		0		3,395		0		3,395
Plaza - Minot, ND	8/1/2018		0		0		0		5,315		0		5,315
Greenfield - Omaha, NE	2/1/2019		0		0		0		3,539		0		3,539
Grand Gateway - St. Cloud, MN	3/1/2019		0		0		0		5,314		0		5,314
Brooklyn Heights - Minot, ND	4/1/2019		0		0		0		680		0		680
Colton Heights - Minot, ND	4/1/2019		0		0		0		383		0		383
Pines - Minot, ND	4/1/2019		0		0		0		109		0		109
Summit Park - Minot, ND	4/1/2019		0		0		0		943		0		943
Terrace Heights - Minot, ND	4/1/2019		0		0		0		157		0		157
Summary of Debt due after Fiscal 2019			0		0		0		0		363,896		363,896
Sub-Total Multi-Family Residential		$	8,198	$	8,591	$	18,881	$	19,835	$	363,896	$	419,401
Healthcare
Edgewood Vista – Fargo, ND	2/25/2016		11,700		0		0		0		0		11,700
Edgewood Vista – Fremont, NE	2/25/2016		544		0		0		0		0		544
Edgewood Vista – Hastings, NE	2/25/2016		561		0		0		0		0		561
Edgewood Vista – Hermantown I, MN	2/25/2016		15,037		0		0		0		0		15,037
Edgewood Vista – Kalispell, MT	2/25/2016		562		0		0		0		0		562
Edgewood Vista – Missoula, MT	2/25/2016		799		0		0		0		0		799
Edgewood Vista – Omaha, NE	2/25/2016		356		0		0		0		0		356
Edgewood Vista – Virginia, MN	2/25/2016		12,791		0		0		0		0		12,791
Airport Medical – Bloomington, MN	6/1/2016		0		342		0		0		0		342
Park Dental – Brooklyn Center, MN	6/1/2016		0		196		0		0		0		196
Sartell 2000 23rd St S – Sartell, MN	12/1/2016		0		1,367		0		0		0		1,367
Billings 2300 Grant Road – Billings, MT	12/31/2016		0		1,167		0		0		0		1,167
Missoula 3050 Great Northern Ave – Missoula, MT	12/31/2016		0		1,202		0		0		0		1,202
High Pointe Health Campus – Lake Elmo, MN	4/1/2017		0		7,500		0		0		0		7,500
Edgewood Vista – Billings, MT	4/10/2017		0		1,769		0		0		0		1,769
Edgewood Vista – East Grand Forks, MN	4/10/2017		0		2,695		0		0		0		2,695
Edgewood Vista – Sioux Falls, SD	4/10/2017		0		1,013		0		0		0		1,013
St Michael Clinic – St. Michael, MN	4/1/2018		0		0		1,781		0		0		1,781
Garden View Medical – St. Paul, MN	6/30/2018		0		0		0		5,605		0		5,605
Ritchie Medical Plaza – St. Paul, MN	6/30/2018		0		0		0		7,035		0		7,035
Spring Creek - American Falls - American Falls, ID	9/1/2018		0		0		0		2,054		0		2,054
Spring Creek - Eagle - Eagle, ID	9/1/2018		0		0		0		1,890		0		1,890
Spring Creek - Meridian - Meridian, ID	9/1/2018		0		0		0		3,122		0		3,122
Spring Creek - Soda Springs - Soda Springs, ID	9/1/2018		0		0		0		739		0		739

11

 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT* DETAIL AS OF APRIL 30, 2015 (continued)

(in thousands)

Property	Maturity Date	Fiscal 2016		Fiscal 2017		Fiscal 2018		Fiscal 2019		Thereafter		Total(1)
Healthcare - continued
Health East St John & Woodwinds - Maplewood & Woodbury, MN	2/1/2019	$	0	$	0	$	0	$	6,950	$	0	$	6,950
Summary of Debt due after Fiscal 2019			0		0		0		0		137,770		137,770
Sub-Total Healthcare		$	42,350	$	17,251	$	1,781	$	27,395	$	137,770	$	226,547

Industrial
Stone Container - Fargo, ND	12/1/2015		108		0		0		0		0		108
Stone Container - Fargo, ND	12/1/2015		133		0		0		0		0		133
Urbandale 3900 106th Street – Urbandale, IA	7/5/2017		0		0		10,380		0		0		10,380
Summary of Debt due after Fiscal 2019			0		0		0		0		1,580		1,580
Sub-Total Industrial		$	241	$	0	$	10,380	$	0	$	1,580	$	12,201
All Other
Plaza 16 -  Minot, ND	8/1/2018		0		0		0		7,053		0		7,053
Summary of Debt due after Fiscal 2019			0		0		0		0		4,532		4,532
Sub-Total All Other		$	0	$	0	$	0	$	7,053	$	4,532	$	11,585
Total		$	50,789	$	25,842	$	31,042	$	54,283	$	507,778	$	669,734

* 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 September 1, 2017; as of July 31, 2015, the Company had borrowings of $83.5 million outstanding under this line. Construction loans and other debt totaled $165.9 million as of July 31, 2015.

(1) Totals are principal balances as of July 31, 2015.

(2) Loan was paid off subsequent to July 31, 2015.

12

 INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CAPITAL ANALYSIS

(in thousands, except per share and unit amounts)

	Three Months Ended
	7/31/2015			4/30/2015			1/31/2015			10/31/2014			7/31/2014
Equity Capitalization
Common shares outstanding			125,520			124,456			122,134			119,809			114,763
Operating partnership (OP) units outstanding			13,921			14,000			14,398			14,731			17,975
Total common shares and OP units outstanding			139,441			138,456			136,532			134,540			132,738
Market price per common share (closing price at end of period)		$	7.21		$	7.17		$	8.25		$	8.40		$	8.52
Equity capitalization-common shares and OP units		$	1,005,370		$	992,730		$	1,126,389		$	1,130,136		$	1,130,928
Recorded book value of preferred shares		$	138,674		$	138,674		$	138,674		$	138,674		$	138,674
Total equity capitalization		$	1,144,044		$	1,131,404		$	1,265,063		$	1,268,810		$	1,269,602
Debt Capitalization
Total debt		$	1,211,621		$	1,178,851		$	1,188,218		$	1,160,628		$	1,135,892
Total capitalization		$	2,355,665		$	2,310,255		$	2,453,281		$	2,429,438		$	2,405,494
Total debt to total capitalization		0.51:1			0.51:1			0.48:1			0.48:1			0.47:1

	Three Months Ended
	7/31/2015				4/30/2015				1/31/2015				10/31/2014				7/31/2014
Earnings to fixed charges(1)			1.18	x			1.57	x			1.41	x			1.30	x				(2)
Earnings to combined fixed charges and preferred distributions(1)			1.01	x			1.34	x			1.19	x			1.10	x				(2)
Debt service coverage ratio(1)			1.63	x			1.64	x			1.70	x			1.71	x			1.57	x
Distribution Data
Common shares and units outstanding at record date			138,576				137,596				135,490				133,527				130,795
Total common distribution paid		$	18,015			$	17,879			$	17,613			$	17,358			$	17,004
Common distribution per share and unit		$	.1300			$	.1300			$	.1300			$	.1300			$	.1300
Payout ratio (FFO per share and unit basis)(1)			81.3	%			81.3	%			76.5	%			76.5	%			92.9	%
Payout ratio (AFFO per share and unit basis)(1)			81.3	%			100.0	%			86.7	%			86.7	%			108.3	%

(1) See Definitions on page 26.

(2) Due to non-cash asset impairment and loss on sale charges of $5.3 million in the three months ended July 31, 2014, earnings were inadequate to cover fixed charges and combined fixed charges and preferred distributions by $2.2 million and $5.1 million, respectively. Excluding the asset impairment and loss on sale charges, the ratios of earnings to fixed charges and earnings to combined fixed charges and preferred distributions would have been 1.20 and 1.01, respectively, for the three months ended July 31, 2014.

13

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

SAME-STORE PROPERTIES NET OPERATING INCOME SUMMARY

(in thousands)

	Same-Store Properties(1)
	Three Months Ended July 31,
Segment	2015			2014			% Change
Multi-Family Residential		$	14,403		$	14,388		0.1	%
Healthcare			11,378			11,160		2.0	%
Industrial			1,259			1,152		9.3	%
All Other			896			746		20.1	%
		$	27,936		$	27,446		1.8	%

(1) See list of properties excluded from same-store properties on page ii.

14

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Three Months Ended July 31, 2015
	Reporting Segments
	Multi-Family Residential			Healthcare			Industrial			All Other			Corporate and Other			Total
Real estate rental revenue
Same-store(1)	$	26,129		$	15,107		$	1,572		$	1,123		$	0		$	43,931
Non-same-store		5,250			599			5			88			0			5,987
Total		31,379			15,706			1,622			1,211			0			49,918
Real estate expenses
Same-store(1)		11,726			3,729			313			227			0			15,995
Non-same-store		2,196			103			83			23			0			2,405
Total		13,922			3,832			396			250			0			18,400
Net operating income (NOI)
Same-store(1)		14,403			11,378			1,259			896			0			27,936
Non-same-store		3,054			496			(33	)		65			0			3,582
Net operating income	$	17,457		$	11,874		$	1,226		$	961		$	0		$	31,518
Reconciliation of NOI to net income (loss) available to common shareholders
TRS senior housing revenue	$	0		$	0		$	0		$	0		$	1,038		$	1,038
TRS senior housing expenses		0			0			0			0			(769	)		(769	)
Depreciation/amortization		(7,593	)		(4,829	)		(460	)		(461	)		(100	)		(13,443	)
Administrative expenses		0			0			0			0			(2,454	)		(2,454	)
Other expenses		0			0			0			0			(424	)		(424	)
Impairment of real estate investments		0			0			0			0			(1,285	)		(1,285	)
Interest expense		(5,923	)		(3,509	)		(233	)		(161	)		630			(9,196	)
Interest and other income		0			0			0			0			607			607
Income (loss) before loss on sale of real estate and other investments and loss from discontinued operations		3,941			3,536			533			339			(2,757	)		5,592
Loss on sale of real estate and other investments		0			0			0			(175	)		0			(175	)
Income (loss) from continuing operations		3,941			3,536			533			164			(2,757	)		5,417
Loss from discontinued operations		0			0			0			(690	)		0			(690	)
Net income (loss)		3,941			3,536			533			(526	)		(2,757	)		4,727
Net income attributable to noncontrolling interests – Operating Partnership		0			0			0			0			(186	)		(186	)
Net income attributable to noncontrolling interests – consolidated real estate entities		0			0			0			0			(1	)		(1	)
Net income (loss) attributable to Investors Real Estate Trust		3,941			3,536			533			(526	)		(2,944	)		4,540
Dividends to preferred shareholders		0			0			0			0			(2,879	)		(2,879	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	3,941		$	3,536		$	533		$	(526	)	$	(5,823	)	$	1,661

(1) See list of properties excluded from same-store properties on page ii.

15

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Three Months Ended July 31, 2014
	Reporting Segments
	Multi-Family Residential			Healthcare			Industrial			All Other			Corporate and Other			Total
Real estate rental revenue
Same-store(1)	$	25,824		$	15,374		$	1,497		$	1,145		$	0		$	43,840
Non-same-store		1,903			828			73			1,777			0			4,581
Total		27,727			16,202			1,570			2,922			0			48,421
Real estate expenses
Same-store(1)		11,436			4,214			345			399			0			16,394
Non-same-store		785			142			105			826			0			1,858
Total		12,221			4,356			450			1,225			0			18,252
Net operating income (NOI)
Same-store(1)		14,388			11,160			1,152			746			0			27,446
Non-same-store		1,118			686			(32	)		951			0			2,723
Net operating income	$	15,506		$	11,846		$	1,120		$	1,697		$	0		$	30,169
Reconciliation of NOI to net income (loss) available to common shareholders
TRS senior housing revenue	$	0		$	0		$	0		$	0		$	793		$	793
TRS senior housing expenses		0			0			0			0			(693	)		(693	)
Depreciation/amortization		(5,925	)		(5,010	)		(391	)		(1,025	)		(84	)		(12,435	)
Administrative expenses		0			0			0			0			(3,664	)		(3,664	)
Other expenses		0			0			0			0			(612	)		(612	)
Impairment of real estate investments		0			0			0			(1,566	)		(754	)		(2,320	)
Interest expense		(5,445	)		(3,668	)		(202	)		(534	)		102			(9,747	)
Interest and other income		0			0			0			0			686			686
Income (loss) before loss on sale of real estate and other investments and income from discontinued operations		4,136			3,168			527			(1,428	)		(4,226	)		2,177
Loss on sale of real estate and other investments		0			0			(1,793	)		(24	)		(1,176	)		(2,993	)
Income (loss) from continuing operations		4,136			3,168			(1,266	)		(1,452	)		(5,402	)		(816	)
Income from discontinued operations		0			0			0			617			0			617
Net income (loss)		4,136			3,168			(1,266	)		(835	)		(5,402	)		(199	)
Net loss attributable to noncontrolling interests – Operating Partnership		0			0			0			0			402			402
Net income attributable to noncontrolling interests – consolidated real estate entities		0			0			0			0			(354	)		(354	)
Net income (loss) attributable to Investors Real Estate Trust		4,136			3,168			(1,266	)		(835	)		(5,354	)		(151	)
Dividends to preferred shareholders		0			0			0			0			(2,879	)		(2,879	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	4,136		$	3,168		$	(1,266	)	$	(835	)	$	(8,233	)	$	(3,030	)

(1) See list of properties excluded from same-store properties on page ii.

16

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

SAME-STORE PROPERTIES AND ALL PROPERTIES OCCUPANCY LEVELS BY SEGMENT

July 31, 2015 vs. July 31, 2014

Segments	Same-Store Properties				All Properties
	July 31, 2015		July 31, 2014		July 31, 2015		July 31, 2014
Multi-Family Residential		93.5%		94.0%		91.2%		93.4%
Healthcare		96.0%		96.6%		94.7%		96.6%
Industrial		100.0%		100.0%		84.3%		100.0%

17

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

MULTI-FAMILY RESIDENTIAL SUMMARY⁽²⁾

	Three Months Ended
	07/31/15			04/30/15			01/31/15			10/31/14			07/31/14
Number of Units		12,027			11,844			11,765			11,292			11,080
Average Investment Per Unit
Same-Store	$	69,992		$	66,741		$	66,466		$	66,233		$	65,956
Non-Same-Store		149,281			146,337			143,999			133,763			125,239
All Properties	$	81,180		$	79,617		$	77,723		$	74,190		$	71,326
Average Scheduled Rent(1) per Unit
Same-Store	$	861		$	843		$	841		$	835		$	825
Non-Same-Store		1,445			1,452			1,390			1,320			1,220
All Properties	$	944		$	942		$	920		$	892		$	861
Total Receipts per Unit
Same-Store	$	848		$	838		$	835		$	844		$	820
Non-Same-Store		1,037			1,062			1,087			1,121			1,067
All Properties	$	875		$	874		$	871		$	877		$	842
Total Recurring Capital Expenditures per Unit(1)	$	159		$	136		$	119		$	158		$	139
Occupancy%
Same-Store		93.5	%		94.7	%		94.0	%		95.6	%		93.8	%
Non-Same-Store		77.7	%		78.6	%		77.1	%		87.6	%		89.5	%
All Properties		91.2	%		92.0	%		91.3	%		94.6	%		93.4	%
Operating Expenses as a % of Scheduled Rent
Same-Store		44.4	%		44.2	%		46.0	%		43.7	%		46.0	%
Non-Same-Store		31.9	%		30.0	%		27.0	%		28.8	%		29.5	%
All Properties		41.7	%		40.7	%		41.8	%		41.1	%		43.9	%

(1) See Definitions on page 32.

(2) Previously reported amounts are not revised for discontinued operations or changes in the composition of the same-store properties pool.

18

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING SUMMARY (Same-Store Properties)

Commercial Leasing Activity

During fiscal year 2016, we have executed new and renewal commercial leases for our same-store rental properties on 61,372 square feet for the three months ended July 31, 2015. Despite our leasing efforts, occupancy in our same-store healthcare and industrial portfolios decreased to 97.0% as of July 31, 2015, down from 97.4% as of July 31, 2014.

The total leasing activity for our same-store healthcare and industrial properties, expressed in square feet of leases signed during the period, and the resulting occupancy levels, are as follows:

Three Months Ended July 31, 2015 and 2014

	Square Feet of New Leases(1)				Square Feet of Leases Renewed(1)				Total Square Feet of Leases Executed(1)				Occupancy
Segments	2015		2014		2015		2014		2015		2014		2015			2014
Healthcare		1,624		8,947		46,422		39,016		48,046		47,963		96.0	%		96.6	%
Industrial		0		0		13,326		0		13,326		0		100.0	%		100.0	%
Total		1,624		8,947		59,748		39,016		61,372		47,963		97.0	%		97.4	%

(1) The leasing activity presented is based on leases signed or executed for our same-store rental properties during the period and is not intended to coincide with the commencement of rental revenue in accordance with GAAP.  Prior periods reflect amounts previously reported and exclude retroactive adjustments for properties reclassified to discontinued operations or non-same-store in the current period.

New Leases

The following table sets forth the average effective rents and the estimated costs of tenant improvements and leasing commissions, on a per square foot basis, that we are obligated to fulfill under the new leases signed for our same-store healthcare and industrial properties:

Three Months Ended July 31, 2015 and 2014

	Square Feet of New Leases(1)				Average Term in Years				Average Effective Rent(2)							Estimated Tenant Improvement Cost per Square Foot(1)								Leasing Commissions per Square Foot(1)
	2015		2014		2015		2014		2015			2014			2015			2014			2015			2014
Healthcare		1,624		8,947		16.5		8.6			23.64			21.10			35.00			29.69			10.00			9.10
Industrial		0		0		0		0			0			0			0			0			0			0
Total		1,624		8,947		16.5		8.6		$	23.64		$	21.10		$	35.00		$	29.69		$	10.00		$	9.10

(1) The leasing activity presented is based on leases signed or executed for our same-store rental properties during the period and is not intended to coincide with the commencement of rental revenue in accordance with GAAP.  Prior periods reflect amounts previously reported and exclude retroactive adjustments for properties reclassified to discontinued operations or non-same-store in the current period. Tenant improvements and leasing commissions presented are based on square feet leased during the period.

(2) Effective rents represent average annual base rental payments, on a straight-line basis for the term of each lease, excluding operating expense reimbursements. The underlying leases contain various expense structures including gross, modified gross, net and triple net.

19

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING SUMMARY (Same-Store Properties)

Lease Renewals

The following table summarizes our lease renewal activity within our same-store healthcare and industrial segments (square feet data in thousands):

Three Months Ended July 31, 2015 and 2014

	Square Feet of Leases Renewed(1)				Percent of Expiring Leases Renewed(2)						Average Term in Years				Weighted Average Growth (Decline) in Effective Rents(3)						Estimated Tenant Improvement Cost per Square Foot(1)						Leasing Commissions per Square Foot(1)
	2015		2014		2015			2014			2015		2014		2015			2014			2015			2014			2015			2014
Healthcare		46,422		39,016		86.5	%		90.7	%		8.4		5.6		15.3	%		4.5	%			15.23			5.03			6.30			2.01
Industrial		13,326		0		0	%		0	%		5.1		0		3.7	%		0	%			1.00			0			1.11			0
Total		59,748		39,016		86.5	%		90.7	%		7.9		5.6		14.4	%		4.5	%		$	12.06		$	5.03		$	5.14		$	2.01

(1) The leasing activity presented is based on leases signed or executed for our same-store rental properties during the period and is not intended to coincide with the commencement of rental revenue in accordance with GAAP.  Prior periods reflect amounts previously reported and exclude retroactive adjustments for properties reclassified to discontinued operations or non-same-store in the current period. Tenant improvements and leasing commissions are based on square feet leased during the period.

(2) Renewal percentage of expiring leases is based on square footage of renewed leases and not the number of leases renewed. The category of renewed leases does not include leases that have become month-to-month leases, as the month-to-month leases are considered lease amendments.

(3) Represents the percentage change in effective rent between the original leases and the renewal leases. Effective rents represent average annual base rental payments, on a straight-line basis for the term of each lease, excluding operating expense reimbursements. The underlying leases contain various expense structures including gross, modified gross, net and triple net.

Lease Expirations

Our ability to maintain and improve occupancy rates, and base rents, primarily depends upon our continuing ability to re-lease expiring space. The following table reflects the in-service portfolio lease expiration schedule of our consolidated healthcare and industrial properties, including square footage and annualized base rent for expiring leases, as of July 31, 2015.

Fiscal Year of Lease Expiration	# of Leases		Square Footage of Expiring Leases(2)		Percentage of Total Commercial Segments Leased Square  Footage			Annualized Base Rent of Expiring Leases at Expiration(3)		Percentage of Total Commercial Segments Annualized Base Rent
2016 (remainder)(1)		44		644,628		16.6	%	$	7,253,739		13.8	%
2017		28		194,940		5.0	%		2,967,374		5.6	%
2018		20		177,701		4.6	%		4,208,723		8.0	%
2019		21		350,052		9.0	%		4,802,740		9.1	%
2020		13		166,159		4.3	%		1,931,422		3.7	%
2021		17		98,512		2.5	%		1,931,600		3.7	%
2022		38		1,286,404		33.2	%		16,542,928		31.4	%
2023		12		480,309		12.4	%		2,295,072		4.4	%
2024		26		201,244		5.2	%		4,101,477		7.8	%
2025		5		76,691		2.0	%		1,634,465		3.1	%
Thereafter		14		200,747		5.2	%		4,953,209		9.4	%
Totals		238		3,877,387		100.0	%	$	52,622,749		100.0	%

(1) Includes month-to-month leases. As of July 31, 2015 month-to-month leases accounted for 308,027 square feet of which 286,854 square feet were located in five senior housing facilities in Wyoming.

(2) Assuming that none of the tenants exercise renewal or termination options, and including leases renewed prior to expiration. Also excludes 99,535 square feet of space occupied by IRET, of which 98,174 square feet is income producing real estate operated within a Taxable REIT Subsidiary.

(3) Annualized Base Rent is monthly scheduled rent as of July 1, 2015, multiplied by 12.

Because of the different property types in the Company’s commercial portfolio and the dispersed locations of a substantial portion of the portfolio’s properties in secondary and tertiary markets, information on current market rents is difficult to obtain, is highly subjective, and is often not directly comparable between properties. As a result, the Company believes that the increase or decrease in effective rent on its recent leases is the most objective and meaningful information available regarding rent trends and the relationship between rents on leases expiring in the near-term and current market rents across the Company’s markets. The Company believes that rents on its new and renewed leases generally approximate market rents.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

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

as of July 31, 2015

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		33		62		15.1	%(2)		1,521,147		39.4	%
Fairview Health Services		10		35		4.0	%		254,985		6.6%	%
St. Luke’s Hospital of Duluth, Inc.		6		28		3.7	%		198,775		5.2%	%
Applied Underwriters		3		19		2.6	%		141,724		3.7%	%
HealthEast Care System		1		43		1.8	%		114,316		3.0%	%
Microsoft (NASDAQ: MSFT)		1		41		1.5	%		122,040		3.2%	%
Arcadis Corporate Services, Inc.		1		12		1.4	%		71,430		1.9%	%
Nebraska Orthopaedic Hospital(3)		1		164		1.4	%		61,758		1.6%	%
State of Idaho Department of Health and Welfare		2		31		1.2	%		103,342		2.7	%
Affiliates of Siemens USA (NYSE: SI)		1		15		1.2	%		78,360		2.0	%
Total/Weighted Average				45		33.9	%		2,667,877		69.3	%

(1) See Definitions on page 32.

(2) If held for sale properties were excluded, Affiliates of Edgewood Vista percentage of total commercial segments’ minimum rents as of July 1, 2015 would be 31.6%.

(3) The tenant in the Company’s Nebraska Orthopaedic Hospital property has exercised its option to purchase the property. The Company and its tenant are currently engaged in an arbitration proceeding pursuant to the lease agreement to determine the purchase price.The Company currently can give no assurance that the sale of the property pursuant to the purchase option will be completed.

21

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASE EXPIRATIONS

 as of July 31, 2015

	(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
Healthcare
2016(remainder)(3)		43		449,553		15.8	%	$	6,202	$	13.80		13.1	%
2017		27		125,340		4.4	%		2,594		20.69		5.5	%
2018		19		167,999		5.9	%		4,150		24.70		8.7	%
2019		15		192,457		6.7	%		3,969		20.62		8.3	%
2020		12		64,592		2.3	%		1.334		20.66		2.8	%
2021 and thereafter		106		1,846,608		64.9	%		29,255		15.84		61.6	%
		222		2,846,549		100.0	%	$	47,504	$	16.69		100.0	%
Industrial
2016(remainder)(4)		1		195,075		18.9	%	$	1,052	$	5.39		20.5	%
2017		1		69,600		6.8	%		374		5.37		7.3	%
2018		1		9,702		0.9	%		58		6.02		1.1	%
2019		6		157,595		15.3	%		834		5.29		16.3	%
2020		1		101,567		9.9	%		597		5.88		11.7	%
2021 and thereafter		6		497,299		48.2	%		2,204		4.43		43.1	%
		16		1,030,838		100.0	%	$	5.119	$	4.97		100.0	%
Total
2016(remainder)(5)		44		644,628		16.6	%	$	7,254	$	11.25		13.8	%
2017		28		194,940		5.0	%		2,968		15.22		5.6	%
2018		20		177,701		4.6	%		4,208		23.68		8.0	%
2019		21		350,052		9.0	%		4,803		13.72		9.1	%
20120		13		166,159		4.3	%		1,931		11.62		3.7	%
2021 and thereafter		112		2,343,907		60.5	%		31,459		13.42		59.8	%
		238		3,877,387		100.0	%	$	52,623	$	13.57		100.0	%

(1) Excludes 99,535 square feet of space occupied by IRET, of which 98,174 square feet is income producing real estate operated within a Taxable REIT Subsidiary.

(2) Annualized Base Rent is monthly scheduled rent as of July 1, 2015 (cash basis), multiplied by 12.

(3) Includes month-to-month leases.  As of July 31, 2015 month-to-month leases accounted for 99,535 square feet.

(4) The industrial segment has no month-to-month leases in place as of July 31, 2015.

(5) Includes month-to-month leases.  As of July 31, 2015 month-to-month leases accounted for 99,535 square feet.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FISCAL 2016 DEVELOPMENT PLACED IN SERVICE SUMMARY

as of July 31, 2015

(dollars in thousands)

Property	Location	Segment Type	Date Placed in Service	Rentable Square Feet/Units		Occupancy At Date Placed in Service			July 31, 2015 Occupancy			Development Cost
Chateau II	Minot, ND	Multi-Family Residential	June 1, 2015		72		27.8	%		41.7	%	$	14,600
Edina 6565 France SMC III	Edina, MN	Healthcare	June 1, 2015		57,624		24.5	%		24.5	%		28,816
Renaissance Heights(1)	Williston, ND	Multi-Family Residential	July 27, 2015		288		42.4	%		42.4	%		62,339
			Total Square Feet		57,624							$	105,755
			Total Units		360

(1) The Company is currently an approximately 70.0% partner in the joint venture entity constructing this project; the anticipated total cost amount given is the total cost to the joint venture entity.

23

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FISCAL 2015 DEVELOPMENT IN PROGRESS SUMMARY

as of July 31, 2015

 (dollars in thousands)

								(in thousands)				(in fiscal years)
Project Name and Location	Planned Segment		Rentable Square Feet or Number of  Units		Percentage Leased or Committed			Anticipated Total Cost		Costs as of July 31, 2015		Anticipated Construction Completion
Minot Southgate Retail - Minot, ND	Other		7,963 sq ft			0	%	$	2,923	$	2,550	2Q 2016
PrairieCare Medical - Brooklyn Park, MN	Healthcare		70,756 sq ft			100	%		24,251		23,424	2Q 2016
Cardinal Point - Grand Forks, ND	Multi-Family Residential		251 units			10.4	%		40,042		33,704	3Q 2016
Deer Ridge – Jamestown, ND	Multi-Family Residential		163 units			11.7	%		24,519		20,627	3Q 2016
71 France Phases I, II & III- Edina, MN(1)	Multi-Family Residential		241 units			27.0	%		73,290		50,455	1Q 2017
Monticello Crossings Phase I – Monticello, MN(2)	Multi-Family Residential		136 units			0	%		19,097		1,978	2Q 2017
Other		n/a		n/a		n/a			n/a		2,790		n/a
								$	184,122	$	135,528

(1) The project will be constructed in three phases by a joint venture entity in which the Company has an approximately 52.6% interest. The anticipated total cost amount given is the total cost to the joint venture entity. The anticipated total cost includes approximately 21,772 square feet of retail space.

(2) This project will be constructed in two phases with approximately 202 units and an anticipated total cost of $31.5 million.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

ACQUISITIONS AND DEVELOPMENT LIQUIDITY PROFILE

as of July 31, 2015

(in millions)

Sources of Liquidity			Liquidity Needs
Liquidity Source	Amount		Liquidity Need	Amount
Cash on balance sheet as of 7/31/15(1)	$	45	Acquisitions(4)	$	72
Line of credit availability(2)	$	16	Development(5)	$	2
Disposition proceeds(3)	$	200
Estimated new debt on Acquisitions	$	4
Total Potential Liquidity	$	265	Total Liquidity Needs	$	74
Excess Liquidity / (Need)	$	191

Capital Sources
Three Months Ended 7/31/15			FY2015
Capital Source	Proceeds Generated		Capital Source	Proceeds Generated
Sale of common shares under dividend reinvestment and share purchase plan	$	1	Sale of common shares under dividend reinvestment and share purchase plan	$	49
Proceeds from sales of real estate and discontinued operations	$	7	Proceeds from sales of real estate and discontinued operations	$	74
Total Capital Generated	$	8	Total Capital Generated	$	123

(1) Includes compensating balances of $14 million

(2) Line of credit of $100 million less $84 million drawn as of 7/31/15

(3) Disposition proceeds consists of $373 million of estimated gross proceeds, less estimated outstanding debt and estimated closing costs of $173 million from closed and pending sales for the period from 7/31/15 through 9/9/15. No assurances can be given that pending transactions will be completed on terms currently proposed, or at all.

(4) Acquisitions amount consists of estimated gross costs for closed and pending acquisitions for the period from 7/31/15 through 9/9/15. No assurances can be given that pending transactions will be completed on terms currently proposed, or at all.

(5) Development in progress of $298 million less construction loans closed or committed of $146 million = IRET equity required of $152 million. IRET equity required of $152 million less $150 million invested as of 7/31/15 = amount remaining to be invested of $2 million.

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Definitions

July 31, 2015

Adjusted EBITDAis earnings before interest, taxes, depreciation, amortization, gain/loss on sale of real estate and other investments, impairment of real estate investments, gain/loss on extinguishment of debt and gain/loss from involuntary conversion. We consider Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, the cost of debt, or non-operating gains and losses. Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA as calculated by us is not comparable to Adjusted EBITDA reported by other REITs that do not define Adjusted EBITDA exactly as we do.

Adjusted funds from operations (AFFO) is calculated by subtracting from Funds from operations (FFO) (1) tenant improvements and leasing costs at same-store properties, 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 and (4) share-based compensation expense. We may also subtract from FFO certain unusual non-recurring items that do not produce cash available for distribution to shareholders. Our calculation subtracts from FFO leasing commissions and tenant improvements at same-store properties only, since we consider tenant improvement and leasing cost levels at non-same-store properties unrepresentative of expected levels at same-store properties. Previously-reported AFFO amounts are not revised for changes in the composition of the same-store properties pool. 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 Adjusted EBITDA by interest expense and principal amortization.

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 (NOI) is total real estate revenues and gain on involuntary conversion less real estate expenses (which consist of utilities, maintenance, real estate taxes, insurance and property management expenses).  We believe that NOI is an important supplemental measure of operating performance for a REIT’s operating real estate because it provides a measure of core operations that is unaffected by depreciation, amortization, financing and general and administrative expense. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders or cash flow from operating activities as a measure of financial performance.

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 and capital expenditures at properties sold during the period) 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 in subsequent periods until the property is classified as same-store (i.e., excluding capital expenditures on non-same-store 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.

Same-store properties are properties owned or in service for the entirety of the periods being compared (except for properties for which significant redevelopment or expansion occurred during either of the periods being compared, and properties sold or classified as held for sale), and, in the case of development or re-development properties, which have achieved a target level of occupancy of 90% for multi-family residential properties and 85% for office, healthcare, industrial and retail properties.

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