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):  March 10, 2016

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 March 10, 2016, regarding financial and operational results for the three and nine months ended January 31, 2016, is attached as Exhibit 99.1, and certain supplemental information regarding the Company’s capital, portfolio and tenant analyses and development and acquisition activity 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 March 10, 2016, regarding financial and operational results for the three and nine months ended January 31, 2016
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:  March 10, 2016	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 AND YEAR-TO-DATE ENDED JANUARY 31, 2016

-Reports Funds From Operations of $0.40 and $0.61 per Share/Unit for Third Quarter and Year to Date 2016-

- Increases Total Revenue by 5.4% and 3.7% Year over Year for Third Quarter and Year to Date 2016-

(Minot, ND) – March 10, 2016 - Investors Real Estate Trust (NYSE: IRET) (NYSE: IRETPR) (NYSE: IRETPRB), a self-administered, equity real estate investment trust investing in income-producing properties located primarily in the upper Midwest, today reported its financial and operating results for the quarter and year to date ended January 31, 2016.

Third Quarter Highlights

· Reported Funds from Operations (“FFO”) of $54.5 million or $0.40 per share/unit

· Total revenue for the Company increased by $2.8 million, or 5.4%

· Net Operating Income (“NOI”) from all properties increased by $1.6 million, or 4.8%, and Same-Store NOI decreased by approximately $85,000, or 0.3%

· Executed new and renewal commercial leases for same-store rental properties on 57,206 square feet

· Disposed of three retail properties for sales prices totaling $3.5 million and nine office properties that secured a $122.6 million non-recourse mortgage loan

Year to Date Highlights

· Reported FFO of $84.7 million or $0.61 per share/unit

· Total revenues for the Company increased by $5.7 million, or 3.7%

· NOI from all properties increased by $1.6 million, or 1.7%, and Same-Store NOI decreased by $1.3 million, or 1.5%

· Executed new and renewal commercial leases for same-store rental properties on 376,605 square feet

· Placed into service five development projects totaling $137.8 million

President and Chief Executive Officer Tim Mihalick commented, “We are pleased with our quarterly and year to date results, which demonstrated strong topline growth with revenues increasing by 5.4% and 3.7% for the third quarter and year to date, as well as continued progress in our portfolio repositioning efforts. Within our Same-Store multifamily portfolio, our operating margins were impacted by current market conditions in western North Dakota as well as seasonally low leasing volumes in the winter months, but we expect that we will be able to drive revenues upward as we enter the busier spring and summer leasing seasons. Additionally during the third quarter, we disposed of three retail properties and nine office properties, and have now largely completed our previously announced office and retail disposition program.  As we have previously discussed, this process has resulted in meaningful disruptive FFO performance; however, we believe this capital recycling and portfolio repositioning program will result in a stronger operating platform with a more predictable net income stream.”

Mr. Mihalick continued, “Looking ahead, our efforts in the coming quarters will be centered on driving revenue growth and reducing expenses in our market leading segments, as well as enhancing our balance sheet, given our manageable near term debt maturities. We continue to believe in our unique focus in the upper Midwest, which allows us to utilize our local market relationships, development platform and access to institutional capital, providing a meaningful competitive advantage to drive outsized returns over the long term.”

Financial Results for the Three and Nine Months Ended January 31, 2016 Compared to the Prior Year Period

Net Income Attributable to Common Shareholders for the quarter ended January 31, 2016 was $36.9 million compared to $5.5 million for the same period of the prior fiscal year.  Net Income Attributable to Common Shareholders for the nine month period ending January 31, 2016 was $52.4 million compared to $4.7 million for the same period of the prior fiscal year. The increase in Net Income Attributable to Common Shareholders was primarily due to gain on extinguishment of debt of $36.5 million recognized in the three and nine months ended January 31, 2016.

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Funds from Operations (“FFO”) for the quarter ending January 31, 2016 was $54.5 million or $0.40 per share/unit.  FFO for the nine months ending January 31, 2016 was $84.7 million or $0.61 per share/unit. The increase in FFO was primarily due to gain on extinguishment of debt of $36.5 million recognized in the three and nine months ended January 31, 2016. Excluding gain or loss on extinguishment of debt and default interest, FFO would have been $0.14 and $0.44 for the three and nine months ended January 31, 2016, respectively.

The table below highlights the FFO and Adjusted Funds from Operations (“AFFO”) results by quarter for the first nine months of fiscal year 2016.

	Fiscal Year To Date, Nine months		Q3 ending January 31, 2016		Q2 ending October 31, 2015		Q1 ending July 31, 2015
FFO per share	$	.61	$	.40	$	.06	$	.16
AFFO per share	$	.40	$	.13	$	.11	$	.16

Operating Results for the Three Months Ended January 31, 2016 Compared to the Prior Year Period

Total revenue for the Company increased by $2.8 million, or 5.4%, in the three months ended January 31, 2016 compared to same period one year ago.

Total expenses for the Company increased by $2.8 million, or 7.6%, in the three months ended January 31, 2016 compared to same period one year ago. This increase is primarily due to an increase in depreciation expense at new acquisitions and developments placed in service.

Net Operating Income (NOI) from all properties increased by $1.6 million, or 4.8% for the quarter ending January 31, 2016 compared to the same period one year ago. Non-Same-Store properties, primarily the Company’s multifamily developments, provided for an increase in NOI of $1.7 million while Same-Store NOI decreased by approximately $85,000 for the quarter ending January 31, 2016 compared to the same period one year ago. The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North Dakota and shifting costs across the balance of the Company’s portfolio, which had been impacted by the execution of its strategic plan to sell the commercial office and retail segments.

Operating Results for the Nine Months Ended January 31, 2016 Compared to the Prior Year Period

Total revenues for the Company increased by $5.7 million, or 3.7%, in the nine months ended January 31, 2016 compared to same period one year ago.

Total expenses for the Company increased by $6.2 million, or 5.6%, in the nine months ended January 31, 2016 compared to same period one year ago. This increase is primarily due to an increase in depreciation expense and property management expense at new acquisitions and developments placed in service.

NOI from all properties increased by $1.6 million, or 1.7% for the nine month period ending January 31, 2016 compared to the same period one year ago.  Non-Same-Store properties, primarily the Company’s multifamily developments, provided for an increase in NOI of $2.9 million while Same-Store NOI decreased by $1.3 million.  The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North Dakota and shifting costs across the balance of the Company’s portfolio, which had been impacted by the execution of its strategic plan to sell the commercial office and retail segments.

Multifamily Results for the Three Months Ended January 31, 2016 Compared to the Prior Year Period

Multifamily (including non-same-store) NOI increased by approximately $898,000 or 5.3% for the quarter ending January 31, 2016 compared to the same period one year ago. Continued completion and lease up of our development projects is having a positive effect on total operations.

Multifamily Results for the Nine Months Ended January 31, 2016 Compared to the Prior Year Period

Multifamily (including non-same store) NOI increased by approximately $2.3 million or 4.6% for nine month period ending January 31, 2016 compared to the same period one year ago. Continued completion and lease up of our development projects and accretive acquisitions in the period are having a positive effect on total operations.

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Same-Store Multifamily Results for the Three Months Ended January 31, 2016 Compared to the Prior Year Period

Same-Store Multifamily NOI decreased by approximately $725,000 for the quarter ending January 31, 2016 compared to the same period one year ago. The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North Dakota and shifting costs across the balance of the Company’s portfolio, which had been impacted by the execution of its strategic plan to sell the commercial office and retail segments.

The Company’s operating margins of Same-Store Multifamily NOI to Gross Revenues improved by 60 basis points quarter over quarter to 53.3% for the third quarter of fiscal year 2016, as compared to the second quarter of fiscal year 2016.

The table below represents Same-Store Multifamily performance for the third quarter ending January 31, 2016 compared to the same period one year ago. Excluding the highly impacted energy markets of Minot and Williston, North Dakota, the balance of the same-store portfolio showed improving NOI results year over year.

														3rd Quarter Increase (Decrease) From Prior Year’s 3rd Quarter
Regions	Rentable Units		Occupancy 1/31/2016			FY16Q3 Weighted Average Occupancy(1)			FY16Q3 % of Actual NOI			FY16Q3 Average Rental Rate(2)		Revenues			Expenses			Net Operating Income			Average Rental Rate			Weighted Average Occupancy
Billings, MT		770		91.9	%		91.7	%		7.6	%	$	887		(3.7	%)		11.6	%		(13.5	%)		2.0	%		(5.6	%)
Bismarck, ND		909		92.1	%		92.1	%		12.0	%	$	1,061		0.9	%		8.9	%		(3.6	%)		4.8	%		(3.9	%)
Grand Forks, ND		1,230		93.3	%		93.2	%		13.5	%	$	915		(2.7	%)		(15.3	%)		8.8	%		0.4	%		(3.1	%)
Minneapolis, MN		319		99.7	%		99.0	%		3.2	%	$	882		8.9	%		1.8	%		16.5	%		3.3	%		5.6	%
Omaha, NE		1,370		97.4	%		96.2	%		11.6	%	$	858		6.1	%		22.4	%		(8.0	%)		0.7	%		5.5	%
Rapid City, SD		270		97.8	%		96.7	%		2.6	%	$	830		3.2	%		(13.8	%)		24.0	%		2.5	%		0.6	%
Rochester, MN		1,104		96.3	%		96.7	%		15.3	%	$	1,065		5.6	%		(1.1	%)		10.3	%		4.4	%		1.2	%
Sioux Falls, SD		969		99.2	%		97.9	%		7.6	%	$	804		5.5	%		12.3	%		(1.6	%)		3.7	%		1.8	%
St. Cloud, MN		1,015		96.3	%		95.6	%		7.9	%	$	846		4.4	%		3.5	%		5.5	%		2.9	%		1.4	%
Topeka, KS		1,042		97.8	%		96.8	%		9.9	%	$	762		7.2	%		(5.8	%)		18.9	%		3.3	%		3.9	%
Same Store Subtotals		8,998		95.9	%		95.2	%		91.2	%	$	896		3.2	%		3.3	%		3.1	%		2.7	%		0.5	%
Minot, ND(3)		734		86.8	%		88.7	%		7.0	%	$	1,008		(17.4	%)		3.4	%		(31.9	%)		(10.6	%)		(6.8	%)
Williston, ND(3)		145		75.2	%		69.4	%		1.8	%	$	1,706		(54.9	%)		7.3	%		(73.0	%)		(39.1	%)		(15.9	%)
Same Store Property Totals		9,877		94.9	%		94.0	%		100.0	%	$	916		(1.3	%)		3.4	%		(5.1	%)		(0.4	%)		(0.9	%)

(1) Weighted average occupancy is defined as gross potential rent less vacancy losses divided by gross potential rent for the period.

(2) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period.

(3) Denotes markets with high exposure to energy-related industries.

Same-Store Multifamily Results for the Nine Months Ended January 31, 2016 Compared to the Prior Year Period

Same-Store Multifamily NOI decreased by $2.4 million for the nine months ending January 31, 2016 compared to the same period one year ago. The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North Dakota and shifting costs across the balance of the Company’s portfolio, which had been impacted by the execution of its strategic plan to sell the commercial office and retail segments.

The Company’s operating margins of Same-Store Multifamily NOI to Gross Revenues decreased by 290 basis points year over year to 53.9% for the nine months ended January 31, 2016.

The table below represents Same-Store Multifamily performance for the nine months ending January 31, 2016 compared to the same period one year ago. Excluding the highly impacted energy markets of Minot and Williston, North Dakota, the balance of the same-store portfolio showed improving NOI results year over year.

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														YTD Increase (Decrease) From Prior Year’s YTD
Regions	Rentable Units		Occupancy 1/31/2016			FY16Q3 Weighted Average Occupancy(1)			FY16Q3 % of Actual NOI			FY16Q3 Average Rental Rate(2)		Revenues			Expenses			Net Operating Income			Average Rental Rate			Weighted Average Occupancy
Billings, MT		770		91.9	%		93.1	%		7.8	%	$	893		(2.0	%)		7.4	%		(8.2	%)		2.0	%		(4.1	%)
Bismarck, ND		909		92.1	%		93.3	%		11.8	%	$	1,063		(0.5	%)		12.7	%		(7.4	%)		4.0	%		(4.5	%)
Grand Forks, ND		1,230		93.3	%		94.5	%		13.1	%	$	919		(2.0	%)		1.1	%		(4.2	%)		1.4	%		(3.3	%)
Minneapolis, MN		319		99.7	%		98.0	%		3.1	%	$	876		6.2	%		3.2	%		9.1	%		3.6	%		2.6	%
Omaha, NE		1,370		97.4	%		96.3	%		12.6	%	$	864		6.9	%		10.9	%		3.4	%		1.8	%		5.1	%
Rapid City, SD		270		97.8	%		97.2	%		2.4	%	$	823		1.3	%		0.6	%		2.0	%		1.6	%		(0.3	%)
Rochester, MN		1,104		96.3	%		96.3	%		14.6	%	$	1,056		6.2	%		1.1	%		9.9	%		3.9	%		2.3	%
Sioux Falls, SD		969		99.2	%		97.4	%		7.4	%	$	800		4.5	%		8.5	%		0.1	%		3.6	%		0.9	%
St. Cloud, MN		1,015		96.3	%		94.3	%		7.0	%	$	834		2.9	%		8.6	%		(4.4	%)		2.7	%		0.3	%
Topeka, KS		1,042		97.8	%		95.8	%		8.7	%	$	753		4.7	%		0.1	%		9.1	%		2.0	%		2.8	%
Same Store Subtotals		8,998		95.9	%		95.3	%		88.5	%	$	892		2.8	%		5.9	%		0.3	%		2.6	%		0.1	%
Minot, ND(3)		734		86.8	%		90.9	%		8.5	%	$	1,070		(11.1	%)		12.4	%		(23.8	%)		(4.9	%)		(6.2	%)
Williston, ND(3)		145		75.2	%		74.0	%		3.0	%	$	2,181		(38.7	%)		8.2	%		(52.7	%)		(22.7	%)		(16.0	%)
Same Store Property Totals		9,877		94.9	%		94.3	%		100.0	%	$	923		(0.3	%)		6.4	%		(5.5	%)		0.8	%		(1.2	%)

(1) Weighted average occupancy is defined as gross potential rent less vacancy losses divided by gross potential rent for the period.

(2) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period.

(3) Denotes markets with high exposure to energy-related industries.

In addition to our initiatives to grow our multifamily portfolio through acquisitions and development, we have launched a value add program whereby we will be committing an estimated $3.5 million per quarter to rehab 4,000 units.  Apartments will be remodeled as the leases expire and upgrades will include a variety of new appliances, flooring, lighting, kitchen cabinets, and bathroom upgrades. Management expects these upgrades to range from $10,000 to $13,000 per unit and result in a return on investment of approximately 8% to 10% per year per unit.

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

Segments	Same-Store as of January 31, 2016			Same-Store as of January 31, 2015			All Properties as of January 31, 2016			All Properties as of January 31, 2015
Multifamily		94.9	%		94.5	%		91.1	%		91.3	%
Healthcare		95.8	%		95.8	%		94.7	%		95.9	%
Industrial		100.0	%		100.0	%		85.3	%		100.0	%

Development Projects in Progress

As of January 31, 2016, the following projects are being developed:

· Deer Ridge, a 163 unit, $24.9 million Multifamily development in Jamestown, ND

· Cardinal Point, a 251 unit $48.2 million Multifamily development in Grand Forks, ND

· 71 France, a 241 unit, $73.3 million Multifamily development in Edina, MN

· Monticello Crossings, a 202 unit, $31.8 million Multifamily development in Monticello, MN

Development Projects Placed in Service

During the three months ended January 31, 2016 no development projects were placed in service. During the nine months ended January 31, 2016, development projects totaling $136.8 million were placed in service.

The following table reflects the projects placed into service during the nine months ending January 31, 2016:

Project Name and Location	Segment	Rentable Sq Ft or Number of Units	Percentage Leased or Committed			Development Cost Incurred		Anticipated Same Store Date
Chateau II-Minot, ND	Multifamily	72 units		79.2	%	$	14,641	1Q 2019
Edina 6565 France SMC III-Edina, MN	Healthcare	57,624 sq ft		24.5	%	$	32,725	1Q 2019
Renaissance Heights-Williston, ND	Multifamily	288 units		46.2	%	$	62,451	1Q 2019
Minot Southgate Retail-Minot, ND	Other	7,963 sq ft		0	%	$	2,623	1Q 2019
PrairieCare Medical-Brooklyn Park, MN	Healthcare	70,756 sq ft		100.0	%	$	24,358	1Q 2018
						$	136,798

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Disposition Activity

During the three months ended January 31, 2016, the Company disposed of the following properties:

· Three retail properties for sales prices totaling $3.5 million, which sales are part of the implementation of the Company’s strategic plan to sell its commercial office and retail properties.

· Nine office properties that secured a $122.6 million non-recourse mortgage loan. Ownership in these properties was transferred to the mortgage lender and the Company removed the debt obligation and accrued interest from its balance sheet.

Liquidity

At January 31, 2016, the Company had $47.1 million cash on hand and $82.5 million available on its line of credit, which matures September 1, 2017.

Shareholder Equity and Capital Structure

Under the Company’s share repurchase program, during the three months ended January 31, 2016, the Company repurchased 1.8 million shares at an average price of $7.30 per share.

As of January 31, 2016, the Company’s total capitalization was $2.0 billion. Total capitalization is defined as the market value (closing price at end of period) of IRET’s outstanding common shares and the imputed market value of the outstanding limited partnership units of its operating partnership IRET Properties (which may be exchanged, at the expiration of a specified holding period, for either cash or its common shares, in the Company’s sole discretion, on a one-for-one basis), plus the book value of preferred shares and the outstanding principal balance of the Company’s consolidated debt.

Quarterly Distribution

On January 15, 2016, the Company paid a quarterly distribution of $0.1300 per common share and unit of IRET Properties. This was the Company’s 179^th consecutive distribution. The Company also paid, on December 31, 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.

Subsequent to the end of the third quarter of fiscal year 2016, on March 8, 2016, the Board of Trustees declared a regular quarterly distribution of $0.1300 per common share and unit, payable April 1, 2016 to common shareholders and unitholders of record on March 21, 2016.

Also on March 8, 2016, the Board declared a distribution of $0.5156 per share on the Company’s Series A preferred shares, payable March 31, 2016 to Series A preferred shareholders of record on March 21, 2016, and declared a distribution of $0.4968 per share on the Company’s Series B preferred shares, payable March 31, 2016 to Series B preferred shareholders of record on March 21, 2016.

Conference Call Information

The Conference Call for 3rd Quarter Earnings is scheduled for Friday, March 11, 2016 at 10:00 A.M. Eastern Time. 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 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 IR@iret.com.

About IRET

We are a self-administered, equity real estate investment trust investing in income-producing properties located primarily in the upper Midwest. We hold for investment a portfolio of 177 properties consisting of 94 multifamily properties, 66 healthcare properties (including senior housing), 7 industrial properties and 10 other commercial properties with a total of 4.5 million square feet of leasable space.  Our 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). Our press releases and supplemental information are available on our website at www.iret.com or by contacting Investor Relations at 203-682-8377.

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Supplemental Information

The Company produced the Supplemental Operating and Financial Data for the Quarter Ended January 31, 2016 (“Supplemental Information”) that provides detailed information regarding operating, capital, portfolio and tenant analyses and development and acquisition activity. This Supplemental Information is considered part of this earnings release.

Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined under the section titled “Definitions” in the Supplemental Information.

Forward-Looking Statements

This earnings release, including the Supplemental Information, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, which may be identified by the use of words such as “expects,” “plans,” “estimates,” “anticipates,” “projects,” “intends,” “believes,” “outlook” and similar expressions that do not relate to historical matters, specifically including the Company’s future plans, anticipated operating results, anticipated timing of development projects being placed into service, anticipated implementation and results of its value add program, and anticipated timing of properties becoming same-store properties, are based on the Company’s expectations, forecasts and assumptions at the time of this earnings release. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in such forward-looking statements.

Such risks, uncertainties and other factors that might cause such differences include, but are not limited to: intentions and expectations regarding future distributions on common shares and units; fluctuations in interest rates; adverse capital and credit market conditions that might affect the Company’s access to various sources of capital and cost of capital; adequate insurance coverage; the effect of government regulation; delays or inability to obtain necessary governmental permits and authorizations; changes in general and local economic and real estate market conditions; changes in demand for Company properties that may result in lower than expected occupancy and/or rental rates; ability to acquire quality properties in the Company’s targeted markets; ability to successfully dispose of certain assets; competition for tenants from similar competing properties; the Company’s ability to attract and retain skilled personnel; cyber-intrusion; abandonment of development or redevelopment opportunities for which the Company has already incurred costs; delays in completing development, redevelopment and/or lease up of properties and increased costs; and those risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including the Company’s Form 10-K for the fiscal year ended April 30, 2015 and subsequent quarterly reports on Form 10-Q.

The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

	(in thousands, except share data)
	January 31, 2016			April 30, 2015
ASSETS
Real estate investments
Property owned	$	1,801,019		$	1,546,367
Less accumulated depreciation		(346,895	)		(313,308	)
		1,454,124			1,233,059
Development in progress		78,341			153,994
Unimproved land		22,304			25,827
Total real estate investments		1,554,769			1,412,880
Assets held for sale		22,064			463,103
Cash and cash equivalents		47,117			48,970
Other investments		50			329
Receivable arising from straight-lining of rents, net of allowance of $766 and $718, respectively		16,778			15,617
Accounts receivable, net of allowance of $163 and $438, respectively		5,118			2,865
Real estate deposits		1,250			2,489
Prepaid and other assets		3,943			3,174
Intangible assets, net of accumulated amortization of $21,214 and $19,610, respectively		23,913			26,213
Tax, insurance, and other escrow		7,834			10,073
Property and equipment, net of accumulated depreciation of $1,116 and $1,464, respectively		1,442			1,542
Goodwill		1,715			1,718
Deferred charges and leasing costs, net of accumulated amortization of $9,078 and $8,077, respectively		9,816			8,864
TOTAL ASSETS	$	1,695,809		$	1,997,837
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
LIABILITIES
Liabilities held for sale	$	11,449		$	321,393
Accounts payable and accrued expenses		48,778			56,399
Revolving line of credit		17,500			60,500
Mortgages payable		761,645			668,112
Construction debt and other		140,264			144,111
TOTAL LIABILITIES		979,636			1,250,515
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES		7,244			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 January 31, 2016 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 January 31, 2016 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, 121,033,647 shares issued and outstanding at January 31, 2016, and 124,455,624 shares issued and outstanding at April 30, 2015)		924,658			951,868
Accumulated distributions in excess of net income		(434,388	)		(438,432	)
Total Investors Real Estate Trust shareholders’ equity		628,944			652,110
Noncontrolling interests – Operating Partnership (13,863,575 units at January 31, 2016 and 13,999,725 units at April 30, 2015)		58,254			58,325
Noncontrolling interests – consolidated real estate entities		21,731			30,519
Total equity		708,929			740,954
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	$	1,695,809		$	1,997,837

vii

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)

for the three and nine months ended January 31, 2016 and 2015

	(in thousands, except per share data)
	Three Months Ended January 31						Nine Months Ended January 31
	2016			2015			2016			2015
REVENUE
Real estate rentals	$	50,277		$	46,753		$	142,526		$	135,621
Tenant reimbursement		4,492			5,223			13,466			15,122
TRS senior housing revenue		1,003			963			3,006			2,599
TOTAL REVENUE		55,772			52,939			158,998			153,342
EXPENSES
Depreciation/amortization related to real estate investments		14,789			12,627			42,522			37,700
Utilities		3,427			3,564			9,757			9,533
Maintenance		5,821			5,033			16,979			15,081
Real estate taxes		5,029			5,284			14,948			15,052
Insurance		1,214			1,215			3,558			3,745
Property management expenses		4,676			3,825			13,182			10,970
Other property expenses		169			197			344			753
TRS senior housing expenses		912			825			2,493			2,243
Administrative expenses		2,929			2,754			8,316			9,308
Other expenses		86			488			1,714			1,678
Amortization related to non-real estate investments		130			210			470			647
Impairment of real estate investments		162			540			3,320			4,663
TOTAL EXPENSES		39,344			36,562			117,603			111,373
Operating income		16,428			16,377			41,395			41,969
Interest expense		(10,540	)		(10,009	)		(29,867	)		(29,710	)
Loss on extinguishment of debt		0			0			(106	)		0
Interest income		566			561			1,687			1,681
Other income		135			109			286			371
Income before gain (loss) on sale of real estate and other investments and income from discontinued operations		6,589			7,038			13,395			14,311
Gain (loss) on sale of real estate and other investments		1,446			951			1,271			(811	)
Income from continuing operations		8,035			7,989			14,666			13,500
Income from discontinued operations		35,408			1,162			50,181			1,322
NET INCOME		43,443			9,151			64,847			14,822
Net income attributable to noncontrolling interests – Operating Partnership		(4,227	)		(657	)		(5,940	)		(618	)
Net loss (income) attributable to noncontrolling interests – consolidated real estate entities		581			(123	)		2,096			(870	)
Net income attributable to Investors Real Estate Trust		39,797			8,371			61,003			13,334
Dividends to preferred shareholders		(2,879	)		(2,879	)		(8,636	)		(8,636	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	36,918		$	5,492		$	52,367		$	4,698
Earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted	$	.04		$	.04		$	.06		$	.03
Earnings per common share from discontinued operations – Investors Real Estate Trust – basic and diluted		.26			.01			.36			.01
NET INCOME PER COMMON SHARE – BASIC AND DILUTED	$	.30		$	.05		$	.42		$	.04
DIVIDENDS PER COMMON SHARE	$	.13		$	.13		$	.39		$	.39

viii

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO

INVESTORS REAL ESTATE TRUST TO FUNDS FROM OPERATIONS

for the three and nine months ended January 31, 2016 and 2015

	(in thousands, except per share amounts)
Three Months Ended January 31,	2016							2015
	Amount			Weighted Avg Shares and Units(1)		Per Share And Unit(2)		Amount			Weighted Avg Shares and Units(1)		Per Share And Unit(2)
Net income attributable to Investors Real Estate Trust	$	39,797						$	8,371
Less dividends to preferred shareholders		(2,879	)						(2,879	)
Net income available to common shareholders		36,918			121,864	$	0.30		5,492			120,855	$	0.05
Adjustments:
Noncontrolling interest – Operating Partnership		4,227			13,877				657			14,461
Depreciation and amortization of real property		14,975							17,706
Impairment of real estate investments		162							540
Gain on depreciable property sales		(1,777	)						(951	)
FFO applicable to Common Shares and Units(1)(3)	$	54,505			135,741	$	0.40	$	23,444			135,316	$	0.17

	(in thousands, except per share amounts)
Nine Months Ended January 31,	2016							2015
	Amount			Weighted Avg Shares and Units(1)		Per Share And Unit(2)		Amount			Weighted Avg Shares and Units(1)		Per Share And Unit(2)
Net income attributable to Investors Real Estate Trust	$	61,003						$	13,334
Less dividends to preferred shareholders		(8,636	)						(8,636	)
Net income available to common shareholders		52,367			123,793	$	0.42		4,698			116,303	$	0.04
Adjustments:
Noncontrolling interest – Operating Partnership		5,940			13,913				618			17,334
Depreciation and amortization of real property		48,095							52,367
Impairment of real estate investments		3,760							6,105
(Gain) loss on depreciable property sales		(25,512	)						811
FFO applicable to Common Shares and Units(1)(3)	$	84,650			137,706	$	0.61	$	64,599			133,637	$	0.48

(1) Units of the Operating Partnership are exchangeable for cash, or, at our discretion, for Common Shares on a one-for-one basis.

(2) Net income attributable to Investors Real Estate Trust is calculated on a per Common Share basis. FFO is calculated on a per Common Share and Unit basis.

(3) Excluding gain or loss on extinguishment of debt and default interest, FFO would have been $19.6 million and $0.14 per Common Share and Unit for the three months ended January 31, 2016 and $60.1 million and $0.44 per Common Share and Unit for the nine months ended January 31, 2016.

ix

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILATION OF NET OPERATING INCOME TO THE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

for the three months ended January 31, 2016 and 2015

	(in thousands)
Three Months Ended January 31, 2016	Multifamily		Healthcare		Industrial		All Other		Total
Real estate revenue	$	33,296	$	18,350	$	1,650	$	1,473	$	54,769
Real estate expenses		15,460		4,208		453		215		20,336
Net operating income	$	17,836	$	14,142	$	1,197	$	1,258		34,433
TRS senior housing revenue, net of expenses										91
Depreciation/amortization										(14,919	)
Administrative expenses										(2,929	)
Other expenses										(86	)
Impairment of real estate investments										(162	)
Interest expense										(10,540	)
Interest and other income										701
Income before gain on sale of real estate and other investments and income from discontinued operations										6,589
Gain on sale of real estate and other investments										1,446
Income from continuing operations										8,035
Income from discontinued operations										35,408
Net income									$	43,443

	(in thousands)
Three Months Ended January 31, 2015	Multifamily		Healthcare		Industrial		All Other		Total
Real estate revenue	$	30,256	$	17,491	$	1,741	$	2,488	$	51,976
Real estate expenses		13,318		4,260		501		1,039		19,118
Net operating income	$	16,938	$	13,231	$	1,240	$	1,449		32,858
TRS senior housing revenue, net of expenses										138
Depreciation/amortization										(12,837	)
Administrative expenses										(2,754	)
Other expenses										(488	)
Impairment of real estate investments										(540	)
Interest expense										(10,009	)
Interest and other income										670
Income before gain on sale of real estate and other investments and income from discontinued operations										7,038
Gain on sale of real estate and other investments										951
Income from continuing operations										7,989
Income from discontinued operations										1,162
Net income									$	9,151

x

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILATION OF NET OPERATING INCOME TO THE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

for the nine months ended January 31, 2016 and 2015

	(in thousands)
Nine Months Ended January 31, 2016	Multifamily		Healthcare		Industrial		All Other		Total
Real estate revenue	$	96,782	$	50,435	$	4,913	$	3,862	$	155,992
Real estate expenses		44,602		12,202		1,138		826		58,768
Net operating income	$	52,180	$	38,233	$	3,775	$	3,036		97,224
TRS senior housing revenue, net of expenses										513
Depreciation/amortization										(42,992	)
Administrative expenses										(8,316	)
Other expenses										(1,714	)
Impairment of real estate investments										(3,320	)
Interest expense										(29,867	)
Loss on extinguishment of debt										(106	)
Interest and other income										1,973
Income before gain on sale of real estate and other investments and income from discontinued operations										13,395
Gain on sale of real estate and other investments										1,271
Income from continuing operations										14,666
Income from discontinued operations										50,181
Net income									$	64,847

	(in thousands)
Nine Months Ended January 31, 2015	Multifamily		Healthcare		Industrial		All Other		Total
Real estate revenue	$	87,576	$	50,024	$	4,904	$	8,239	$	150,743
Real estate expenses		37,700		12,726		1,223		3,485		55,134
Net operating income	$	49,876	$	37,298	$	3,681	$	4,754		95,609
TRS senior housing revenue, net of expenses										356
Depreciation/amortization										(38,347	)
Administrative expenses										(9,308	)
Other expenses										(1,678	)
Impairment of real estate investments										(4,663	)
Interest expense										(29,710	)
Interest and other income										2,052
Income before loss on sale of real estate and other investments and income from discontinued operations										14,311
Loss on sale of real estate and other investments										(811	)
Income from continuing operations										13,500
Income from discontinued operations										1,322
Net income									$	14,822

xi

EX-99.2

Exhibit 99.2

Supplemental Financial and Operating Data

Table of Contents

January 31, 2016

	Page
Company Background	2
Property Cost by Segment and by State	4
Key Financial Data
Condensed Consolidated Balance Sheets	5
Condensed Consolidated Statements of Operations	6
Funds From Operations	7
Adjusted EBITDA	8
Capital Analysis
Long-Term Mortgage Debt Analysis	9
Long-Term Mortgage Debt Detail	10-11
Capital Analysis	12
Portfolio Analysis
Same-Store Properties Net Operating Income Summary	13
Net Operating Income Detail	14-17
Same-Store Properties and All Properties Occupancy Levels by Segment	18
Tenant Analysis
Multifamily Summary	19
Commercial Leasing Summary	20-22
10 Largest Commercial Tenants - Based on Annualized Base Rent	23
Commercial Lease Expirations	24
Growth Analysis
Acquisitions and Development Summary	25
Acquisitions and Development Liquidity Profile	26
Definitions	27

1

Company Background

Third Quarter Fiscal 2016

We are 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 multifamily; healthcare, including senior housing; and industrial segments.

As of January 31, 2016, we held for investment a portfolio of 177 properties consisting of 94 multifamily properties, 66 healthcare properties (including senior housing), 7 industrial properties and 10 other commercial properties.   Our 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).

Company Snapshot

(as of January 31, 2016)

Company Headquarters	Minot, North Dakota
Fiscal Year-End	April 30
Reportable Segments	Multifamily, Healthcare, Industrial
Total Properties Held for Investment	177
Total Units Held for Investment (multifamily properties)	12,401
Total Square Feet Held for Investment (commercial properties)	4.5 million
Common Shares Outstanding (thousands)	121,034
Limited Partnership Units Outstanding (thousands)	13,864
Common Share Distribution - Quarter/Annualized	$0.13/$0.52
Dividend Yield	8.0%
Total Capitalization (see p.12 for detail)	$2.0 billion

Investor Information

(as of January 31, 2016)

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
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 W. Reiling	Executive Vice President and Chief Investment Officer
Andrew Martin	Senior Vice President, Residential Property Management
Charles A. Greenberg	Senior Vice President, Commercial and Senior Housing Asset Management

Corporate Headquarters:

1400 31^st Avenue SW, Suite 60

Post Office Box 1988

Minot, North Dakota 58702-1988

Trading Symbol for Common Shares:  IRET

Stock Exchange Listing:  NYSE

Investor Relations Contact:

Stephen Swett

203-682-8377

IR@iret.com

2

Common Share Data (NYSE: IRET)

	3rd Quarter Fiscal Year 2016			2nd Quarter Fiscal Year 2016			1st Quarter Fiscal Year 2016			4th Quarter Fiscal Year 2015			3rd Quarter Fiscal Year 2015
High Closing Price	$	8.39		$	8.16		$	7.44		$	8.31		$	8.60
Low Closing Price	$	6.24		$	6.51		$	6.93		$	7.09		$	8.05
Average Closing Price	$	7.35		$	7.39		$	7.22		$	7.52		$	8.35
Closing Price at end of quarter	$	6.52		$	8.12		$	7.21		$	7.17		$	8.25
Common Share Distributions—annualized	$	0.52		$	0.52		$	0.52		$	0.52		$	0.52
Closing Dividend Yield - annualized		8.0	%		6.4	%		7.2	%		7.3	%		6.3	%
Closing common shares outstanding (thousands)		121,034			122,798			125,520			124,456			122,134
Closing limited partnership units outstanding (thousands)		13,864			13,890			13,921			14,000			14,398
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)	$	879,535		$	1,109,907		$	1,005,370		$	992,729		$	1,126,389

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

3

Third Quarter Fiscal 2016

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

4

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

	1/31/2016			10/31/2015			7/31/2015			4/30/2015			1/31/2015
ASSETS
Real estate investments
Property owned	$	1,801,019		$	1,763,150		$	1,618,948		$	1,546,367		$	2,093,148
Less accumulated depreciation		(346,895	)		(333,570	)		(325,536	)		(313,308	)		(439,153	)
		1,454,124			1,429,580			1,293,412			1,233,059			1,653,995
Development in progress		78,341			89,843			133,794			153,994			114,005
Unimproved land		22,304			22,485			24,542			25,827			27,675
Total real estate investments		1,554,769			1,541,908			1,451,748			1,412,880			1,795,675
Assets held for sale		22,064			115,428			453,217			463,103			44,259
Cash and cash equivalents		47,117			55,133			44,770			48,970			52,148
Other investments		50			329			329			329			329
Receivable arising from straight-lining of rents, net of allowance		16,778			16,097			15,612			15,617			27,169
Accounts receivable, net of allowance		5,118			4,023			3,650			2,865			5,574
Real estate deposits		1,250			444			6,614			2,489			7,494
Prepaid and other assets		3,943			3,289			2,224			3,174			5,580
Intangible assets, net of accumulated amortization		23,913			25,288			25,179			26,213			28,475
Tax, insurance, and other escrow		7,834			7,440			8,858			10,073			11,277
Property and equipment, net of accumulated depreciation		1,442			1,408			1,464			1,542			1,619
Goodwill		1,715			1,715			1,718			1,718			1,940
Deferred charges and leasing costs, net of accumulated amortization		9,816			9,451			9,290			8,864			19,803
TOTAL ASSETS	$	1,695,809		$	1,781,953		$	2,024,673		$	1,997,837		$	2,001,342
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
LIABILITIES
Liabilities held for sale	$	11,449		$	145,565		$	308,812		$	321,393		$	0
Accounts payable and accrued expenses		48,778			55,460			60,506			56,399			69,901
Revolving line of credit		17,500			17,500			83,500			60,500			50,500
Mortgages payable		761,645			728,973			669,734			668,112			1,006,179
Construction debt and other		140,264			128,477			165,873			144,111			132,210
TOTAL LIABILITIES		979,636			1,075,975			1,288,425			1,250,515			1,258,790
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES		7,244			7,105			6,361			6,368			6,340
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		924,658			936,893			957,707			951,868			935,287
Accumulated distributions in excess of net income		(434,388	)		(455,508	)		(452,971	)		(438,432	)		(430,282	)
Total Investors Real Estate Trust shareholders’ equity		628,944			620,059			643,410			652,110			643,679
Noncontrolling interests – Operating Partnership		58,254			55,957			56,120			58,325			61,177
Noncontrolling interests – consolidated real estate entities		21,731			22,857			30,357			30,519			31,356
Total equity		708,929			698,873			729,887			740,954			736,212
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	$	1,695,809		$	1,781,953		$	2,024,673		$	1,997,837		$	2,001,342

5

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

	Nine Months Ended						Three Months Ended
OPERATING RESULTS	1/31/2016			1/31/2015			1/31/2016			10/31/2015			7/31/2015			4/30/2015			1/31/2015
Real estate revenue	$	155,992		$	150,743		$	54,769		$	51,305		$	49,918		$	50,252		$	51,976
Real estate expenses		58,768			55,134			20,336			20,032			18,400			18,699			19,118
Net operating income		97,224			95,609			34,433			31,273			31,518			31,553			32,858
TRS senior housing revenue, net of expenses		513			356			91			153			269			167			138
Depreciation/amortization		(42,992	)		(38,347	)		(14,919	)		(14,630	)		(13,443	)		(13,428	)		(12,837	)
Administrative expenses		(8,316	)		(9,308	)		(2,929	)		(2,933	)		(2,454	)		(2,516	)		(2,754	)
Other expenses		(1,714	)		(1,678	)		(86	)		(1,204	)		(424	)		(332	)		(488	)
Impairment of real estate investments		(3,320	)		(4,663	)		(162	)		(1,873	)		(1,285	)		0			(540	)
Interest expense		(29,867	)		(29,710	)		(10,540	)		(10,131	)		(9,196	)		(10,361	)		(10,009	)
Loss on extinguishment of debt		(106	)		0			0			(106	)
Interest and other income		1,973			2,052			701			665			607			904			670
Income before income (loss) on sale of real estate and other investments and income (loss) from discontinued operations		13,395			14,311			6,589			1,214			5,592			5,987			7,038
Income (loss) on sale of real estate and other investments		1,271			(811	)		1,446			0			(175	)		6,904			951
Income from continuing operations		14,666			13,500			8,035			1,214			5,417			12,891			7,989
Income (loss) from discontinued operations		50,181			1,322			35,408			15,463			(690	)		971			1,162
Net income	$	64,847		$	14,822		$	43,443		$	16,677		$	4,727		$	13,862		$	9,151
Net income attributable to noncontrolling interest – Operating Partnership		(5,940	)		(618	)		(4,227	)		(1,527	)		(186	)		(908	)		(657	)
Net loss (income) attributable to noncontrolling interests – consolidated real estate entities		2,096			(870	)		581			1,516			(1	)		(2,201	)		(123	)
Net income attributable to Investors Real Estate Trust		61,003			13,334			39,797			16,666			4,540			10,753			8,371
Dividends to preferred shareholders		(8,636	)		(8,636	)		(2,879	)		(2,878	)		(2,879	)		(2,878	)		(2,879	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	52,367		$	4,698		$	36,918		$	13,788		$	1,661		$	7,875		$	5,492
Per Share Data
Earnings per common share from continuing operations – Investors Real Estate Trust – basic & diluted	$	.06		$	.03		$	.04		$	.00		$	.02		$	.06		$	.04
Earnings (loss) per common share from discontinued operations – Investors Real Estate Trust – basic & diluted		.36			.01			.26			.11			(.01	)		.01			.01
Net income per common share – basic & diluted	$	.42		$	.04		$	.30		$	.11		$	.01		$	.07		$	.05
Percentage of Revenues
Real estate expenses		37.7	%		36.6	%		37.1	%		39.0	%		36.9	%		37.2	%		36.8	%
Depreciation/amortization		27.6	%		25.4	%		27.2	%		28.5	%		26.9	%		26.7	%		24.7	%
Administrative expenses		5.3	%		6.2	%		5.3	%		5.7	%		4.9	%		5.0	%		5.3	%
Interest		19.1	%		19.7	%		19.2	%		19.7	%		18.4	%		20.6	%		19.3	%
Income (loss) from discontinued operations		32.2	%		0.9	%		64.6	%		30.1	%		(1.4	%)		1.9	%		2.2	%
Net income		41.6	%		9.8	%		79.3	%		32.5	%		9.5	%		27.6	%		17.6	%
Ratios
Adjusted EBITDA(1)/Interest expense		2.22	x		2.44	x		2.29	x		2.08	x		2.28	x		2.41	x		2.53	x
Adjusted EBITDA(1)/Interest expense plus preferred distributions		1.88	x		2.06	x		1.92	x		1.74	x		1.95	x		2.05	x		2.14	x

(1) See Definitions on page 27.  Adjusted EBITDA is a non-GAAP measure; see page 8 for a reconciliation of Adjusted EBITDA to net income.

6

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FUNDS FROM OPERATIONS(unaudited)

(in thousands, except per share and unit data)

	Nine Months Ended						Three Months Ended
	1/31/2016			1/31/2015			1/31/2016			10/31/2015			7/31/2015			4/30/2015			1/31/2015
Funds From Operations(1)
Net income attributable to Investors Real Estate Trust	$	61,003		$	13,334		$	39,797		$	16,666		$	4,540		$	10,753		$	8,371
Less dividends to preferred shareholders		(8,636	)		(8,636	)		(2,879	)		(2,878	)		(2,879	)		(2,878	)		(2,879	)
Net income available to common shareholders		52,367			4,698			36,918			13,788			1,661			7,875			5,492
Adjustments:
Noncontrolling interests – Operating Partnership		5,940			618			4,227			1,527			186			908			657
Depreciation and amortization of real properyty		48,095			52,367			14,975			14,860			18,259			18,083			17,706
Impairment of real estate investments		3,760			6,105			162			1,873			1,725			0			540
(Gain) loss on depreciable property sales	$	(25,512	)	$	811			(1,778	)		(23,909	)		175			(4,890	)		(951	)
FFO applicable to common shares and Units(2)		84,650			64,599		$	54,504		$	8,139		$	22,006		$	21,976		$	23,444
FFO per share and unit - basic and diluted	$	0.61		$	0.48		$	0.40		$	0.06		$	0.16		$	0.16		$	0.17
Adjusted funds from operations(1)
FFO applicable to common shares and Units	$	84,650		$	64,599		$	54,504		$	8,139		$	22,006		$	21,976		$	23,444
Adjustments:
Tenant improvements at same-store(3) properties		(731	)		(4,649	)		(383	)		(157	)		(191	)		(2,939	)		(1,984	)
Leasing costs at same-store properties(3)		(498	)		(1,606	)		(102	)		(59	)		(336	)		(684	)		(358	)
Recurring capital expenditures(1)(3)		(4,736	)		(4,793	)		(1,406	)		(1,713	)		(1,636	)		(1,342	)		(1,865	)
Straight-line rents		(620	)		(187	)		(554	)		(309	)		242			198			184
Non-real estate depreciation		261			288			80			80			101			100			94
Acquisition costs(4)		162			104			9			153			0			112			0
Default interest		4,683			0			1,566			1,567			1,550			528			0
(Gain) loss on extinguishment of debt		(29,231	)		0			(36,456	)		7,226			0			0			0
Share-based compensation expense		1,391			1,935			787			539			66			280			260
AFFO applicable to common shares and Units	$	55,331		$	55,691		$	18,045		$	15,466		$	21,802		$	18,229		$	19,775
AFFO per share and unit - basic and diluted	$	0.40		$	0.42		$	0.13		$	0.11		$	0.16		$	0.13		$	0.15
Weighted average shares and units		137,706			133,637			135,741			138,565			138,806			137,412			135,315

(1) See Definitions on page 27.

(2) Excluding gain or loss on extinguishment of debt and default interest, FFO would have been $19.6 million and $0.14 per share and unit for the three months ended January 31, 2016 and $60.1 million and $0.44 per share and unit for the nine months ended January 31, 2016.

(3) Quarterly information is for properties in the same-store pool at that point in time; consequently, quarterly numbers may not total to year-to-date numbers.

(4) Nine months ended 1/31/15 and three months ended 7/31/15, 4/30/15 and 1/31/15 revised to include acquisition costs.

7

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

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

(unaudited)

(in thousands)

	Nine Months Ended						Three Months Ended
	1/31/2016			1/31/2015			1/31/2016			10/31/2015			7/31/2015			4/30/2015			1/31/2015
Adjusted EBITDA(1)
Net income attributable to Investors Real Estate Trust	$	61,003		$	13,334		$	39,797		$	16,666		$	4,540		$	10,753		$	8,371
Adjustments:
Noncontrolling interests – Operating Partnership		5,940			618			4,227			1,527			186			908			657
Income before noncontrolling interests – Operating Partnership		66,943			13,952			44,024			18,193			4,726			11,661			9,028
Add:
Interest expense		42,699			43,858			13,976			13,762			14,961			15,162			14,595
(Gain) loss on extinguishment of debt		(29,230	)		0			(36,456	)		7,226			0			0			0
Depreciation/amortization related to real estate investments		46,761			49,846			14,789			14,461			17,511			17,266			16,834
Amortization related to non-real estate investments		1,472			2,628			235			442			795			867			916
Amortization related to real estate revenues(2)		123			181			31			38			54			50			50
Impairment of real estate investments		3,760			6,105			162			1,873			1,725			0			540
Less:
Interest income		(1,687	)		(1,681	)		(566	)		(565	)		(556	)		(557	)		(561	)
(Gain) loss on sale of real estate and other investments		(26,282	)		811			(1,777	)		(24,680	)		175			(4,890	)		(951	)
Adjusted EBITDA	$	104,559		$	115,700			34,418			30,750			39,391			39,559			40,451

(1) See Definitions on page 27.

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

8

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT* ANALYSIS

(in thousands)

Debt Maturity Schedule

Annual Expirations

Total Mortgage Debt*

	Future Maturities of Mortgage Debt(1)
Fiscal Year	Fixed Debt		Variable Debt		Total Debt		Weighted Average(2)			% of Total Debt
2016 (remainder)	$	41,403	$	0	$	41,403		2.97	%		5.3	%
2017		17,043		7,500		24,543		4.87	%		3.2	%
2018		17,864		13,000		30,864		4.34	%		4.0	%
2019		45,538		15,210		60,748		5.34	%		7.9	%
2020		110,219		54,284		164,503		5.44	%		21.3	%
2021		119,309		0		119,309		5.08	%		15.4	%
2022		109,462		0		109,462		5.59	%		14.2	%
2023		40,896		0		40,896		4.25	%		5.3	%
2024		64,661		0		64,661		4.28	%		8.4	%
2025		19,487		0		19,487		4.04	%		2.5	%
Thereafter		96,430		0		96,430		3.97	%		12.5	%
Total maturities	$	682,312	$	89,994	$	772,306		4.83	%		100.0	%

(1) Includes mortgages on properties held for sale.

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

	1/31/2016			10/31/2015			7/31/2015			4/30/2015			1/31/2015
Balances Outstanding(1)
Mortgage
Fixed rate	$	682,312		$	920,234		$	1,106,257		$	1,054,455		$	927,724
Variable rate		89,994			89,826			82,664			69,967			78,455
Mortgage total	$	772,306		$	1,010,060		$	1,188,921		$	1,124,422		$	1,006,179
Weighted Average Interest Rates
Secured		4.83	%		5.04	%		5.12	%		5.16	%		5.17	%

(1) Includes mortgages on properties held for sale.

9

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT* DETAIL AS OF JANUARY 31, 2016

(in thousands)

Property	Maturity Date	Fiscal 2016		Fiscal 2017		Fiscal 2018		Fiscal 2019		Thereafter		Total(1)
Multifamily
Pebble Springs – Bismarck, ND	7/1/2016	$	0	$	743	$	0	$	0	$	0	$	743
Southview – Minot, ND	7/1/2016		0		1,016		0		0		0		1,016
Homestead Gardens I – Rapid City, SD	7/11/2016		0		6,640		0		0		0		6,640
River Ridge – Bismarck, ND	6/30/2017		0		0		13,000		0		0		13,000
Evergreen II – Isanti, MN	11/1/2017		0		0		2,032		0		0		2,032
Ponds – Sartell, MN	11/1/2017		0		0		3,774		0		0		3,774
Homestead Gardens II - Rapid City, SD	6/1/2018		0		0		0		3,319		0		3,319
Plaza - Minot, ND	8/1/2018		0		0		0		5,249		0		5,249
Greenfield - Omaha, NE	2/1/2019		0		0		0		3,516		0		3,516
Brooklyn Heights - Minot, ND	4/1/2019		0		0		0		651		0		651
Colton Heights - Minot, ND	4/1/2019		0		0		0		366		0		366
Pines - Minot, ND	4/1/2019		0		0		0		104		0		104
Summit Park - Minot, ND	4/1/2019		0		0		0		903		0		903
Terrace Heights - Minot, ND	4/1/2019		0		0		0		150		0		150
Summary of Debt due after Fiscal 2019			0		0		0		0		469,687		469,687
Sub-Total Multifamily		$	0	$	8,399	$	18,806	$	14,258	$	469,687	$	511,150
Healthcare
Edgewood Vista – Fargo, ND(2)	2/25/2016		11,407		0		0		0		0		11,407
Edgewood Vista – Fremont, NE(2)	2/25/2016		533		0		0		0		0		533
Edgewood Vista – Hastings, NE(2)	2/25/2016		549		0		0		0		0		549
Edgewood Vista – Hermantown I, MN(2)	2/25/2016		14,716		0		0		0		0		14,716
Edgewood Vista – Kalispell, MT(2)	2/25/2016		550		0		0		0		0		550
Edgewood Vista – Missoula, MT(2)	2/25/2016		782		0		0		0		0		782
Edgewood Vista – Omaha, NE(2)	2/25/2016		348		0		0		0		0		348
Edgewood Vista – Virginia, MN(2)	2/25/2016		12,518		0		0		0		0		12,518
Airport Medical – Bloomington, MN	6/1/2016		0		158		0		0		0		158
Park Dental – Brooklyn Center, MN	6/1/2016		0		91		0		0		0		91
Sartell 2000 23rd St S – Sartell, MN	12/1/2016		0		901		0		0		0		901
Billings 2300 Grant Road – Billings, MT	12/31/2016		0		1,044		0		0		0		1,044
Missoula 3050 Great Northern Ave – Missoula, MT	12/31/2016		0		1,068		0		0		0		1,068
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		1,738		0		0		0		1,738
Edgewood Vista – East Grand Forks, MN	4/10/2017		0		2,648		0		0		0		2,648
Edgewood Vista – Sioux Falls, SD	4/10/2017		0		996		0		0		0		996
St Michael Clinic – St. Michael, MN	4/1/2018		0		0		1,752		0		0		1,752
Garden View Medical – St. Paul, MN	6/30/2018		0		0		0		6,890		0		6,890
Ritchie Medical Plaza – St. Paul, MN	6/30/2018		0		0		0		8,320		0		8,320
Spring Creek - American Falls - American Falls, ID	9/1/2018		0		0		0		1,989		0		1,989
Spring Creek - Eagle - Eagle, ID	9/1/2018		0		0		0		1,830		0		1,830
Spring Creek - Meridian - Meridian, ID	9/1/2018		0		0		0		3,023		0		3,023
Spring Creek - Soda Springs - Soda Springs, ID	9/1/2018		0		0		0		716		0		716
Health East St John & Woodwinds - Maplewood & Woodbury, MN	2/1/2019		0		0		0		6,095		0		6,095
Nebraska Orthopedic Hospital – Omaha, NE(3)	4/1/2019		0		0		0		10,661		0		10,661
Summary of Debt due after Fiscal 2019			0		0		0		0		139,852		139,852
Sub-Total Healthcare		$	41,403	$	16,144	$	1,752	$	39,524	$	139,852	$	238,675

10

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT* DETAIL AS OF JANUARY 31, 2016 (continued)

(in thousands)

Property	Maturity Date	Fiscal 2016		Fiscal 2017		Fiscal 2018		Fiscal 2019		Thereafter		Total(1)
Industrial
Urbandale 3900 106th Street – Urbandale, IA	7/5/2017		0		0		10,306		0		0		10,306
Summary of Debt due after Fiscal 2019			0		0		0		0		1,530		1,530
Sub-Total Industrial		$	0	$	0	$	10,306	$	0	$	1,530	$	11,836

All Other
Plaza 16 – Minot, ND	8/1/2018		0		0		0		6,966		0		6,966
Summary of Debt due after Fiscal 2019			0		0		0		0		3,679		3,679
Sub-Total All Other		$	0	$	0	$	0	$	6,966	$	3,679	$	10,645
Total		$	41,403	$	24,543	$	30,864	$	60,748	$	614,748	$	772,306

* Mortgage debt does not include our multi-bank line of credit or construction loans. The line of credit has a maturity date of September 1, 2017. As of January 31, 2016, we had borrowings of $17.5 million outstanding under this line. Construction loans and other debt totaled $140.3 million as of January 31, 2016.

(1) Totals are principal balances as of January 31, 2016.

(2) Mortgage was refinanced subsequent to January 31, 2016.

(3) Property is classified as held for sale at January 31, 2016.

11

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CAPITAL ANALYSIS

(in thousands, except per share and unit amounts)

	Three Months Ended
	1/31/2016		10/31/2015		7/31/2015		4/30/2015		1/31/2015
Equity Capitalization
Common shares outstanding		121,034		122,798		125,520		124,456		122,134
Operating partnership (OP) units outstanding		13,864		13,890		13,921		14,000		14,398
Total common shares and OP units outstanding		134,898		136,688		139,441		138,456		136,532
Market price per common share (closing price at end of period)	$	6.52	$	8.12	$	7.21	$	7.17	$	8.25
Equity capitalization-common shares and OP units	$	879,535	$	1,109,907	$	1,005,370	$	992,730	$	1,126,389
Recorded book value of preferred shares	$	138,674	$	138,674	$	138,674	$	138,674	$	138,674
Total equity capitalization	$	1,018,209	$	1,248,581	$	1,144,044	$	1,131,404	$	1,265,063
Debt Capitalization
Total debt	$	940,294	$	1,007,825	$	1,211,621	$	1,178,851	$	1,188,218
Total capitalization	$	1,958,503	$	2,256,406	$	2,355,665	$	2,310,255	$	2,453,281
Total debt to total capitalization	0.48:1		0.45:1		0.51:1		0.51:1		0.48:1

	Nine Months Ended						Three Months Ended
	1/31/2016			1/31/2015			1/31/2016			10/31/2015			7/31/2015			4/30/2015			1/31/2015
Earnings to fixed charges(1)		1.27	x		1.19	x		1.51	x		1.12	x		1.18	x		1.57	x		1.41	x
Earnings to combined fixed charges and preferred distributions(1)		1.07	x		1.01	x		1.27	x		(2	)		1.01	x		1.34	x		1.19	x
Debt service coverage ratio(1)		1.59	x		1.66	x		1.65	x		1.49	x		1.63	x		1.64	x		1.70	x
Distribution Data
Common shares and units outstanding at record date		135,408			135,490			135,408			139,540			138,576			137,596			135,490
Total common distribution paid	$	53,754		$	51,975		$	17,603		$	18,136		$	18,015		$	17,879		$	17,613
Common distribution per share and unit	$	.3900		$	.3900		$	.1300		$	.1300		$	.1300		$	.1300		$	.1300
Payout ratio (FFO per share and unit basis)(1)		63.9	%		81.3	%		32.5	%		216.7	%		81.3	%		81.3	%		76.5	%
Payout ratio (AFFO per share and unit basis)(1)		97.5	%		92.9	%		100.0	%		118.2	%		81.3	%		100.0	%		86.7	%

(1) See Definitions on page 27.

(2) Due to non-cash asset impairment and loss on sale charges of $1.9 million in the three months ended October 31, 2015, earnings were inadequate to cover combined fixed charges and preferred distributions by $1.1 million. Excluding the asset impairment and loss on sale charges, the ratio of earnings to combined fixed charges and preferred distributions would have been 1.04x for the three months ended October 31, 2015.

12

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

SAME-STORE PROPERTIES NET OPERATING INCOME SUMMARY

(in thousands)

	Same-Store Properties									Same-Store Properties
	Three Months Ended January 31									Nine Months Ended January 31
Segment	2016			2015			% Change			2016			2015			% Change
Multi-Family Residential		$	13,603		$	14,328		(5.1	)%		$	41,694		$	44,103		(5.5	)%
Healthcare			12,582			12,493		0.7	%			35,383			35,191		0.5	%
Industrial			1,255			1,247		0.6	%			3,807			3,653		4.2	%
All Other			1,160			617		88.0	%			2,734			1,944		40.6	%
		$	28,600		$	28,685		(0.3	)%		$	83,618		$	84,891		(1.5	)%

13

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Three Months Ended January 31, 2016
	Reporting Segments
	Multifamily			Healthcare			Industrial			All Other			Corporate and Other			Total
Real estate rental revenue
Same-store	$	25,513		$	16,490		$	1,574		$	1,351		$	0		$	44,928
Non-same-store		7,783			1,860			76			122			0			9,841
Total		33,296			18,350			1,650			1,473			0			54,769
Real estate expenses
Same-store		11,910			3,908			319			191			0			16,328
Non-same-store		3,550			300			134			24			0			4,008
Total		15,460			4,208			453			215			0			20,336
Net operating income (NOI)
Same-store		13,603			12,582			1,255			1,160			0			28,600
Non-same-store		4,233			1,560			(58	)		98			0			5,833
Net operating income	$	17,836		$	14,142		$	1,197		$	1,258		$	0		$	34,433
Reconciliation of NOI to net income (loss) available to common shareholders
TRS senior housing revenue, net of expenses	$	0		$	0		$	0		$	0		$	91		$	91
Depreciation/amortization		(8,817	)		(5,115	)		(445	)		(462	)		(80	)		(14,919	)
Administrative expenses		0			0			0			0			(2,929	)		(2,929	)
Other expenses		0			0			0			0			(86	)		(86	)
Impairment of real estate investments		0			0			0			0			(162	)		(162	)
Interest expense		(6,860	)		(3,605	)		(271	)		(155	)		351			(10,540	)
Interest and other income		0			0			0			0			701			701
Income before gain (loss) on sale of real estate and other investments and income  from discontinued operations		2,159			5,422			481			641			(2,114	)		6,589
Gain (loss) on sale of real estate and other investments		0			0			0			1,461			(15	)		1,446
Income (loss) from continuing operations		2,159			5,422			481			2,102			(2,129	)		8,035
Income from discontinued operations		0			0			0			35,408			0			35,408
Net income (loss)		2,159			5,422			481			37,510			(2,129	)		43,443
Net income attributable to noncontrolling interests – Operating Partnership		0			0			0			0			(4,227	)		(4,227	)
Net loss attributable to noncontrolling interests – consolidated real estate entities		0			0			0			0			581			581
Net income (loss) attributable to Investors Real Estate Trust		2,159			5,422			481			37,510			(5,775	)		39,797
Dividends to preferred shareholders		0			0			0			0			(2,879	)		(2,879	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	2,159		$	5,422		$	481		$	37,510		$	(8,654	)	$	36,918

14

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Three Months Ended January 31, 2015
	Reporting Segments
	Multifamily			Healthcare			Industrial			All Other			Corporate and Other			Total
Real estate rental revenue
Same-store	$	25,849		$	16,593		$	1,705		$	985		$	0		$	45,132
Non-same-store		4,407			898			36			1,503			0			6,844
Total		30,256			17,491			1,741			2,488			0			51,976
Real estate expenses
Same-store		11,521			4,100			458			368			0			16,447
Non-same-store		1,797			160			43			671			0			2,671
Total		13,318			4,260			501			1,039			0			19,118
Net operating income (NOI)
Same-store		14,328			12,493			1,247			617			0			28,685
Non-same-store		2,610			738			(7	)		832			0			4,173
Net operating income	$	16,938		$	13,231		$	1,240		$	1,449		$	0		$	32,858
Reconciliation of NOI to net income (loss) available to common shareholders
TRS senior housing revenue, net of expenses	$	0		$	0		$	0		$	0		$	138		$	138
Depreciation/amortization		(6,900	)		(4,925	)		(390	)		(528	)		(94	)		(12,837	)
Administrative expenses		0			0			0			0			(2,754	)		(2,754	)
Other expenses		0			0			0			0			(488	)		(488	)
Impairment of real estate investments		0			0			0			0			(540	)		(540	)
Interest expense		(5,794	)		(3,780	)		(201	)		(384	)		150			(10,009	)
Interest and other income		0			0			0			0			670			670
Income (loss) before gain on sale of real estate and other investments and (loss) income from discontinued operations		4,244			4,526			649			537			(2,918	)		7,038
Gain on sale of real estate and other investments		0			0			0			951			0			951
Income (loss) from continuing operations		4,244			4,526			649			1,488			(2,918	)		7,989
(Loss) income from discontinued operations		0			(16	)		0			1,178			0			1,162
Net income (loss)		4,244			4,510			649			2,666			(2,918	)		9,151
Net income attributable to noncontrolling interests – Operating Partnership		0			0			0			0			(657	)		(657	)
Net income attributable to noncontrolling interests – consolidated real estate entities		0			0			0			0			(123	)		(123	)
Net income (loss) attributable to Investors Real Estate Trust		4,244			4,510			649			2,666			(3,698	)		8,371
Dividends to preferred shareholders		0			0			0			0			(2,879	)		(2,879	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	4,244		$	4,510		$	649		$	2,666		$	(6,577	)	$	5,492

15

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Nine Months Ended January 31, 2016
	Reporting Segments
	Multifamily			Healthcare			Industrial			All Other			Corporate and Other			Total
Real estate rental revenue
Same-store	$	77,402		$	46,920		$	4,726		$	3,486		$	0		$	132,534
Non-same-store		19,380			3,515			187			376			0			23,458
Total		96,782			50,435			4,913			3,862			0			155,992
Real estate expenses
Same-store		35,708			11,537			919			752			0			48,916
Non-same-store		8,894			665			219			74			0			9,852
Total		44,602			12,202			1,138			826			0			58,768
Net operating income (NOI)
Same-store		41,694			35,383			3,807			2,734			0			83,618
Non-same-store		10,486			2,850			(32	)		302			0			13,606
Net operating income	$	52,180		$	38,233		$	3,775		$	3,036		$	0		$	97,224
Reconciliation of NOI to net income (loss) available to common shareholders
TRS senior housing revenue, net of expenses	$	0		$	0		$	0		$	0		$	513		$	513
Depreciation/amortization		(24,978	)		(15,018	)		(1,352	)		(1,383	)		(261	)		(42,992	)
Administrative expenses		0			0			0			0			(8,316	)		(8,316	)
Other expenses		0			0			0			0			(1,714	)		(1,714	)
Impairment of real estate investments		(1,873	)		0			0			0			(1,447	)		(3,320	)
Interest expense		(19,377	)		(10,654	)		(737	)		(479	)		1,380			(29,867	)
Loss on extinguishment of debt		(93	)		0			0			(13	)		0			(106	)
Interest and other income		0			0			0			0			1,973			1,973
Income (loss) before gain (loss) on sale of real estate and other investments and (loss) income from discontinued operations		5,859			12,561			1,686			1,161			(7,872	)		13,395
Gain (loss) on sale of real estate and other investments		0			0			0			1,286			(15	)		1,271
Income (loss) from continuing operations		5,859			12,561			1,686			2,447			(7,887	)		14,666
(Loss) income from discontinued operations		0			(1,072	)		0			51,253			0			50,181
Net income (loss)		5,859			11,489			1,686			53,700			(7,887	)		64,847
Net income attributable to noncontrolling interests – Operating Partnership		0			0			0			0			(5,940	)		(5,940	)
Net loss attributable to noncontrolling interests – consolidated real estate entities		0			0			0			0			2,096			2,096
Net income (loss) attributable to Investors Real Estate Trust		5,859			11,489			1,686			53,700			(11,731	)		61,003
Dividends to preferred shareholders		0			0			0			0			(8,636	)		(8,636	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	5,859		$	11,489		$	1,686		$	53,700		$	(20,367	)	$	52,367

16

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)

	Nine Months Ended January 31, 2015
	Reporting Segments
	Multifamily			Healthcare			Industrial			All Other			Corporate and Other			Total
Real estate rental revenue
Same-store	$	77,660		$	47,473		$	4,758		$	3,109		$	0		$	133,000
Non-same-store		9,916			2,551			146			5,130			0			17,743
Total		87,576			50,024			4,904			8,239			0			150,743
Real estate expenses
Same-store		33,557			12,282			1,105			1,165			0			48,109
Non-same-store		4,143			444			118			2,320			0			7,025
Total		37,700			12,726			1,223			3,485			0			55,134
Net operating income (NOI)
Same-store		44,103			35,191			3,653			1,944			0			84,891
Non-same-store		5,773			2,107			28			2,810			0			10,718
Net operating income	$	49,876		$	37,298		$	3,681		$	4,754		$	0		$	95,609
Reconciliation of NOI to net income (loss) available to common shareholders
TRS senior housing revenue, net of expenses	$	0		$	0		$	0		$	0		$	356		$	356
Depreciation/amortization		(19,119	)		(14,903	)		(1,171	)		(2,866	)		(288	)		(38,347	)
Administrative expenses		0			0			0			0			(9,308	)		(9,308	)
Other expenses		0			0			0			0			(1,678	)		(1,678	)
Impairment of real estate investments		0			0			0			(3,369	)		(1,294	)		(4,663	)
Interest expense		(16,861	)		(11,139	)		(605	)		(1,439	)		334			(29,710	)
Interest and other income		0			0			0			0			2,052			2,052
Income (loss) before gain (loss) on sale of real estate and other investments and (loss) income from discontinued operations		13,896			11,256			1,905			(2,920	)		(9,826	)		14,311
Gain (loss) on sale of real estate and other investments		1,418			0			(1,793	)		759			(1,195	)		(811	)
Income (loss) from continuing operations		15,314			11,256			112			(2,161	)		(11,021	)		13,500
(Loss) income from discontinued operations		0			(44	)		0			1,366			0			1,322
Net income (loss)		15,314			11,212			112			(795	)		(11,021	)		14,822
Net income attributable to noncontrolling interests – Operating Partnership		0			0			0			0			(618	)		(618	)
Net income attributable to noncontrolling interests – consolidated real estate entities		0			0			0			0			(870	)		(870	)
Net income (loss) attributable to Investors Real Estate Trust		15,314			11,212			112			(795	)		(12,509	)		13,334
Dividends to preferred shareholders		0			0			0			0			(8,636	)		(8,636	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	15,314		$	11,212		$	112		$	(795	)	$	(21,145	)	$	4,698

17

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

SAME-STORE PROPERTIES AND ALL PROPERTIES OCCUPANCY LEVELS BY SEGMENT

January 31, 2016 vs. January 31, 2015

Segments	Same-Store Properties						All Properties
	January 31, 2016			January 31, 2015			January 31, 2016			January 31, 2015
Multifamily		94.9	%		94.5	%		91.1	%		91.3	%
Healthcare		95.8	%		95.8	%		94.7	%		95.9	%
Industrial		100.0	%		100.0	%		85.3	%		100.0	%

18

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

MULTIFAMILY SUMMARY⁽¹⁾

	Three Months Ended
	01/31/16			10/31/15			07/31/15			04/30/15			01/31/15
Number of Units
Same-Store		9,877			9,877			10,268			9,895			9,895
Non-Same-Store		2,915			2,783			1,759			1,949			1,870
All Properties		12,792			12,660			12,027			11,844			11,765
Average Investment Per Unit
Same-Store	$	72,696		$	72,308		$	69,992		$	66,741		$	66,466
Non-Same-Store		142,111			134,136			149,281			146,337			143,999
All Properties	$	88,228		$	84,701		$	81,180		$	79,617		$	77,723
Average Scheduled Rent(2) per Unit
Same-Store	$	877		$	885		$	861		$	843		$	841
Non-Same-Store		1,229			1,218			1,445			1,452			1,390
All Properties	$	956		$	952		$	944		$	942		$	920
Total Receipts per Unit(3)
Same-Store	$	861		$	877		$	848		$	838		$	835
Non-Same-Store		911			826			1,037			1,062			1,087
All Properties	$	872		$	866		$	875		$	874		$	871
Total Recurring Capital Expenditures(2) per Unit	$	142		$	173		$	159		$	136		$	119
Occupancy
Same-Store		94.9	%		95.4	%		93.5	%		94.7	%		94.0	%
Non-Same-Store		78.1	%		79.5	%		77.7	%		78.6	%		77.1	%
All Properties		91.1	%		91.9	%		91.2	%		92.0	%		91.3	%
Operating Expenses as a % of Scheduled Rent
Same-Store		45.9	%		47.1	%		44.4	%		44.2	%		46.0	%
Non-Same-Store		34.0	%		39.9	%		31.9	%		30.0	%		27.0	%
All Properties		42.4	%		45.2	%		41.7	%		40.7	%		41.8	%

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

(2) See Definitions on page 27.

(3) Includes vacant units.

19

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 57,206 square feet for the three months ended January 31, 2016 and 376,605 square feet for the nine months ended January 31, 2016.  Due to our leasing efforts, occupancy in our same-store healthcare and industrial portfolios has remained strong at 96.9% as of January 31, 2016, compared to 97.0% as of January 31, 2015.

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 January 31, 2016 and 2015

	Square Feet of New Leases(1)				Square Feet of Leases Renewed(1)				Total Square Feet of Leases Executed(1)				Occupancy
Segments	2016		2015		2016		2015		2016		2015		2016			2015
Healthcare		40,630		6,400		16,576		7,703		57,206		14,103		95.8	%		95.8	%
Industrial		0		0		0		29,995		0		29,995		100.0	%		100.0	%
Total		40,630		6,400		16,576		37,698		57,206		44,098		96.9	%		97.0	%

(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 US 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.

Nine Months Ended January 31, 2016 and 2015

	Square Feet of New Leases(1)				Square Feet of Leases Renewed(1)				Total Square Feet of Leases Executed(1)				Occupancy
Segments	2016		2015		2016		2015		2016		2015		2016			2015
Healthcare		45,085		17,979		123,119		108,391		168,204		126,370		95.8	%		95.8	%
Industrial		0		0		208,401		29,995		208,401		29,995		100.0	%		100.0	%
Total		45,085		17,979		331,520		138,386		376,605		156,365		96.9	%		97.0	%

(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 US 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 January 31, 2016 and 2015

	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)
	2016	2015	2016	2015		2016		2015		2016		2015		2016		2015
Healthcare	40,630	6,400	7.1	7.5	$	19.86	$	18.51	$	11.45	$	59.06	$	3.09	$	6.50
Industrial	0	0	0	0		0		0		0		0		0		0
Total	40,630	6,400	7.1	7.5	$	19.86	$	18.51	$	11.45	$	59.06	$	3.09	$	6.50

(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 US 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.

20

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING SUMMARY (Same-Store Properties)

Nine Months Ended January 31, 2016 and 2015

	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)
	2016		2015		2016		2015		2016		2015		2016		2015		2016		2015
Healthcare		45,085		17,979		7.1		6.1	$	19.97	$	20.00	$	13.10	$	37.16	$	3.27	$	6.84
Industrial		0		0		0		0		0		0		0		0		0		0
Total		45,085		17,979		7.1		6.1	$	19.97	$	20.00	$	13.10	$	37.16	$	3.27	$	6.84

(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 US 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.

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 January 31, 2016 and 2015

	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)
	2016		2015		2016			2015			2016		2015		2016			2015			2016		2015		2016		2015
Healthcare		16,576		7,703		93.8	%		84.5	%		0.4		16.8		4.3	%		1.3	%	$	0	$	35.00	$	0	$	7.80
Industrial		0		29,995		100.0	%		0	%		0		3.0		0			(4.5	%)		0		0		0		1.21
Total		16,576		37,698		98.2	%		84.5	%		0.4		9.9		4.3	%		(2.3	%)	$	0	$	7.15	$	0	$	2.56

(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 US 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.

Nine Months Ended January 31, 2016 and 2015

	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)
	2016		2015		2016			2015			2016		2015		2016			2015			2016		2015		2016		2015
Healthcare		123,119		108,391		91.5	%		73.2	%		4.9		6.3		5.8	%		(3.5	%)	$	9.19	$	10.99	$	2.84	$	1.54
Industrial		208,401		29,995		100.0	%		0	%		5.0		3.0		18.1	%		(4.5	%)		0.59		0		0.07		1.21
Total		331,520		138,386		97.2	%		73.2	%		4.9		6.1		9.7	%		(3.6	%)	$	3.78	$	8.61	$	1.10	$	1.47

(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 US 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.

Our ability to maintain or increase occupancy rates is a principal driver of maintaining and increasing the average effective rents in our commercial segments.  The increase in the average growth in effective rents for the industrial segment for the nine months ended January 31, 2016 when compared to the same periods in the prior fiscal year is due to a 195,075 square foot lease renewal executed at our Stone Container property in Fargo, North Dakota.  This lease was renewed at a 19.2% increase in effective rent primarily due to improved market conditions in the property location.

21

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING SUMMARY (Same-Store Properties)

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 January 31, 2016.

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)		29		359,418		9.1	%	$	4,498,347		8.1	%
2017		28		195,819		4.9	%		2,975,306		5.4	%
2018		21		190,145		4.8	%		4,432,353		8.0	%
2019		23		363,803		9.2	%		5,012,211		9.0	%
2020		14		170,080		4.3	%		2,024,020		3.6	%
2021		21		305,801		7.7	%		3,361,298		6.0	%
2022		39		1,296,621		32.7	%		17,019,770		30.6	%
2023		12		480,309		12.1	%		2,314,783		4.2	%
2024		26		206,209		5.2	%		4,053,182		7.3	%
2025		11		136,393		3.4	%		2,738,609		4.9	%
Thereafter		13		260,954		6.6	%		7,160,363		12.9	%
Totals		237		3,965,552		100.0	%	$	55,590,242		100.0	%

(1) Includes month-to-month leases. As of January 31, 2016, month-to-month leases accounted for 307,706 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 us.

(3) Annualized Base Rent is monthly scheduled rent as of January 1, 2016, multiplied by 12.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

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

as of January 31, 2016

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		56		30.2	%		1,521,147		38.4	%
Fairview Health Services		8		51		7.7	%		240,243		6.1	%
St. Luke’s Hospital of Duluth, Inc.		6		46		7.1	%		198,775		5.0	%
PrairieCare Medical LLC		2		234		4.6	%		100,292		2.5	%
HealthEast Care System		1		37		3.6	%		114,316		2.9	%
Nebraska Orthopaedic Hospital(3)		1		158		2.8	%		61,758		1.6	%
Quality Manufacturing Corp		1		84		2.1	%		427,798		10.8	%
Westrock CP LLC		1		59		1.9	%		195,075		4.9	%
Allina Health		4		36		1.7	%		56,306		1.4	%
Children’s Hospitals & Clinics		3		62		1.7	%		51,088		1.3	%
Total/Weighted Average				59		63.4	%		2,966,798		74.9	%

(1) See Definitions on page 27.

(2) The tenant in the Nebraska Orthopaedic Hospital property has exercised its option to purchase the property. However, we can give no assurance if or when the sale of the property will be completed.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASE EXPIRATIONS

 as of January 31, 2016

	(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)		29		359,418		12.3	%	$	4,498	$	12.51		8.9	%
2017		27		126,219		4.3	%		2,601		20.61		5.2	%
2018		20		180,443		6.2	%		4,377		24.26		8.7	%
2019		17		206,208		7.1	%		4,220		20.46		8.4	%
2020		13		68,513		2.3	%		1,427		20.83		2.8	%
2021 and thereafter		114		1,981,913		67.8	%		33,176		16.74		66.0	%
		220		2,922,714		100.0	%	$	50,299	$	17.21		100.0	%
Industrial
2016(remainder)(4)		0		0		0.0	%	$	0	$	0.00		0.0	%
2017		1		69,600		6.7	%		374		5.37		7.1	%
2018		1		9,702		0.9	%		56		5.77		1.0	%
2019		6		157,595		15.1	%		792		5.03		15.0	%
2020		1		101,567		9.7	%		597		5.88		11.3	%
2021 and thereafter		8		704,374		67.6	%		3,472		4.93		65.6	%
		17		1,042,838		100.0	%	$	5,291	$	5.07		100.0	%
Total
2016(remainder)(5)		29		359,418		9.1	%	$	4,498	$	12.51		8.1	%
2017		28		195,819		4.9	%		2,975		15.19		5.4	%
2018		21		190,145		4.8	%		4,433		23.31		8.0	%
2019		23		363,803		9.2	%		5,012		13.78		9.0	%
20120		14		170,080		4.3	%		2,024		11.90		3.6	%
2021 and thereafter		122		2,686,287		67.7	%		36,648		13.64		65.9	%
		237		3,965,552		100.0	%	$	55,590	$	14.02		100.0	%

(1) Excludes 99,535 square feet of space occupied by us, 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 January 1, 2016 (cash basis), multiplied by 12.

(3) Includes month-to-month leases.  As of January 31, 2016 month-to-month leases accounted for 307,706 square feet.

(4) The industrial segment has no month-to-month leases in place as of January 31, 2016.

(5) Includes month-to-month leases.  As of January 31, 2016 month-to-month leases accounted for 307,706 square feet.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FISCAL 2016 ACQUISITIONS AND DEVELOPMENT SUMMARY

as of January 31, 2016

(dollars in thousands)

Acquisitions

Property	Location	Segment	Acquisition Date	Square Feet/Units		Occupancy At Acquisition			January 31, 2016 Occupancy			Acquisition Cost
Lakeside Medical Plaza	Omaha, NE	Healthcare	August 20, 2015		27,819		100	%		100	%	$	6,500
Gardens	Grand Forks, ND	Multifamily	September 10, 2015		74		36.5	%		85.1	%		9,250
GrandeVille at Cascade Lake	Rochester, MN	Multifamily	October 29, 2015		276		94.6	%		84.8	%		56,000
			Total Square Feet		27,819							$	71,750
			Total Units		350

Developments Placed in Service

Property(1)	Location	Segment	Date Placed in Service	Rentable Square Feet/Units		Occupancy At Date Placed in Service			January 31, 2016 Occupancy			Development Cost
Chateau II	Minot, ND	Multifamily	June 1, 2015		72		27.8	%		79.2	%	$	14,641
Edina 6565 France SMC III(2)	Edina, MN	Healthcare	June 1, 2015		57,624		24.5	%		24.5	%		32,725
Renaissance Heights(3)	Williston, ND	Multifamily	July 27, 2015		288		42.4	%		46.2	%		62,451
PrairieCare Medical	Brooklyn Park, MN	Healthcare	September 8, 2015		70,756		100	%		100	%		24,358
Minot Southgate Retail	Minot, ND	Other	October 1, 2015		7,963		0	%		0	%		2,623
			Total Square Feet		136,343							$	136,798
			Total Units		360

(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 Development In Progress Summary for additional information on the Deer Ridge, 71 France and Cardinal Point projects, which were partially placed in service during the nine months ended January 31, 2016.

(2) Anticipated total cost includes estimated tenant improvement costs that have not been incurred as of January 31, 2016.

(3) We are 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.

Developments in Progress

(in thousands)

(in fiscal years)

Project Name and Location

Location

Planned Segment

Rentable Square Feet or Number of Units

Percentage Leased or Committed

Anticipated Total Cost(1)

Costs as of January 31, 2016

Anticipated Construction Completion

Deer Ridge

Jamestown, ND

Multifamily

163 units

35.0

%

$

24,874

$

24,874

4Q 2016

Cardinal Point(2)

Grand Forks, ND

Multifamily

251 units

35.5

%

48,242

48,242

4Q 2016

71 France(3)

Edina, MN

Multifamily

241 units

34.9

%

73,290

69,105

1Q 2017

Monticello Crossings

Monticello, MN

Multifamily

202 units

0

%

31,784

11,210

2Q 2017

Other

n/a

n/a

n/a

n/a

3,524

n/a

$

178,190

$

156,955

(1) Includes costs related to development projects that are placed in service in phases (Deer Ridge - $14.3 million, 71 France - $41.3 million, Cardinal Point - $23.0 million).

(2) Anticipated total cost as of January 31, 2016 includes incremental cost increase due to the replacement of the project’s original general contractor. There may be additional costs for this project as it nears completion in the fourth quarter of fiscal year 2016.

(3) The project will be constructed in three phases by a joint venture entity in which we currently have 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.

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

ACQUISITIONS AND DEVELOPMENT LIQUIDITY PROFILE

as of January 31, 2016

(in millions)

Sources of Liquidity			Liquidity Needs
Liquidity Source	Amount		Liquidity Need	Amount
Cash on balance sheet as of 1/31/16(1)	$	47	Development	$	34
Line of credit availability(2)	$	82	Acquisitions(4)	$	48
Disposition proceeds(3)	$	5
Construction loan proceeds	$	62
Total Potential Liquidity	$	196	Total Liquidity Needs	$	82
Excess Liquidity / (Need)	$	114

Capital Sources
Nine Months Ended 01/31/16			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	$	39
Proceeds from sales of real estate and discontinued operations	$	375	Proceeds from sales of real estate and discontinued operations	$	27
Total Capital Generated	$	376	Total Capital Generated	$	66

(1) Includes compensating balances of $14 million.

(2) Line of credit of $100 million less $18 million drawn as of 1/31/16.

(3) Disposition proceeds consists of $5 million of estimated gross proceeds, less estimated outstanding debt and estimated closing costs of $0  from closed and pending sales for the period from 1/31/16 through 3/10/16. 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, net of UPREIT contributions, for closed and pending acquisitions for the period from 01/31/16 through 03/10/16.  No assurances can be given that pending transactions will be completed on terms currently proposed, or at all.

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Definitions

January 31, 2016

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 adjust FFO for certain unusual non-recurring items that do not produce cash available for distribution to shareholders or are otherwise not representative of our ongoing operating performance. 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 multifamily properties and 85% for office, healthcare, industrial and retail properties.

US GAAP – Accounting principles generally accepted in the United States of America.

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