UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 8, 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 September 8, 2016, regarding financial and operational results for the three months ended July 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 9.01Financial Statements and Exhibits
(d) |
Exhibits |
Exhibit |
|
Number |
Description |
|
|
99.1 |
Earnings Release issued September 8, 2016, regarding financial and operational results for the three months ended July 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 |
|
|
|
|
|
By |
/s/ Timothy P. Mihalick |
|
|
Timothy P. Mihalick |
Date: September 8, 2016 |
|
Chief Executive Officer |
Exhibit 99.1
Earnings Release
INVESTORS REAL ESTATE TRUST ANNOUNCES FINANCIAL AND OPERATING RESULTS
FOR THE QUARTER ENDED JULY 31, 2016
- Increases Total Revenue by 10.1% Year over Year for First Quarter of Fiscal Year 2017 -
- Reports Funds From Operations of $0.12 per Share/Unit for First Quarter of Fiscal Year 2017 -
(Minot, ND) – September 8, 2016 - Investors Real Estate Trust (NYSE: IRET) (NYSE: IRETPR) (NYSE: IRETPRB), a real estate investment trust focused on the acquisition, development, redevelopment and management of multifamily communities located primarily in select growth markets throughout the Midwest, today reported its financial and operating results for the quarter ended July 31, 2016.
First Quarter Highlights
· |
Total revenue for the Company was $49.6 million, up 10.1% from the first quarter of fiscal year 2016 |
· |
Net (loss) income available to common shareholders was $(24.5) million compared to $1.7 million for the first quarter of fiscal year 2016. The decrease in net income available to common shareholders was primarily due to non-cash impairment expense of $54.2 million, net of gain on sale of real estate of $9.0 million recognized in the three months ended July 31, 2016 |
· |
Reported Funds from Operations (“FFO”) of $15.9 million or $0.12 per share/unit |
· |
Placed into service one multifamily development project containing 241 units and representing aggregate investment of $72.2 million |
· |
Disposed of one non-core industrial property and one parcel of unimproved land for sales prices totaling $13.7 million |
· |
Same store multifamily Net Operating Income (“NOI”) growth year over year was up 1.1%, excluding energy impacted markets |
· |
Subsequent to quarter end, the Company announced the execution of sales agreements to dispose of 26 senior housing assets for $236.0 million. These sales are in addition to the previously announced exercise of purchase options by the tenant in 8 senior housing assets the Company owns in Idaho for a total of approximately $43.5 million. If all these transactions close, the Company will have completely disposed of its senior housing portfolio for a total of approximately $279.5 million. |
Chief Executive Officer Tim Mihalick commented, “Overall we are pleased with the quarter’s operating results. Though we are witnessing a near term supply demand imbalance in certain of our multifamily markets, we drove strong revenue growth in many of our target markets, and our newer, non-same store multifamily assets are accelerating the earnings power of the Company as a whole. Reflective of this, we made continued progress with our development pipeline with the delivery of 71 France in Edina, Minnesota and we expect that the completion of our development program will provide a strong runway for future earnings growth.”
Mr. Mihalick continued, “With the recently announced pending sale of $236 million of senior housing assets, which represents our exit from that business, we continue to refine our portfolio and execute on our strategy to transition to a pure-play multifamily REIT. Additionally, within our multifamily segment, we intend to identify smaller, less relevant assets and begin disposing of outliers. As an organization, we are focused on maximizing value by enhancing our operations, prudently allocating our capital and strengthening our balance sheet. By doing so, we will provide our
i
shareholders with a higher quality earnings stream with better margins and most importantly, a differentiated opportunity to invest in a growing, best in class multifamily operator in the Midwest. Given all the Company’s activities in the last quarter we are very pleased with our progress.”
Financial Results for the Three Months Ended July 31, 2016 Compared to the Prior Year Period
Net (loss) income available to common shareholders for the quarter ended July 31, 2016 was $(24.5) million compared to $1.7 million for the same period of the prior fiscal year. The decrease in net income available to common shareholders was primarily due to non-cash impairment expense of $54.2 million, net of gain on sale of real estate of $9.0 million recognized in the three months ended July 31, 2016.
Funds from Operations (“FFO”) for the quarter ending July 31, 2016 was $15.9 million or $0.12 per share/unit.
The table below highlights FFO and Adjusted Funds from Operations (“AFFO”) results for the most recent five quarters.
|
|
Q1 ended |
|
|
Q4 ended |
|
Q3 ended |
|
Q2 ended |
|
Q1 ended |
|
||||
|
|
|
July 31, 2016 |
|
|
April 30, 2016 |
|
January 31, 2016 |
|
October 31, 2015 |
|
July 31, 2015 |
|
|||
FFO per share |
|
$ |
.12 |
|
$ |
.14 |
|
$ |
.40 |
|
$ |
.06 |
|
$ |
.16 |
|
AFFO per share |
|
$ |
.10 |
|
$ |
.11 |
|
$ |
.13 |
|
$ |
.11 |
|
$ |
.16 |
|
Operating Results for the Three Months Ended July 31, 2016 Compared to the Prior Year Period
Total revenue for the Company increased by $4.6 million, or 10.1%, in the three months ended July 31, 2016 compared to same period one year ago.
Net Operating Income (NOI) from all properties increased by $1.2 million, or 4.6%, for the quarter ending July 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 $3.7 million while Same-Store NOI decreased by approximately $2.5 million for the quarter ending July 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.
Multifamily Results for the Three Months Ended July 31, 2016 Compared to the Prior Year Period
Multifamily (including non-same-store) NOI increased by approximately $2.2 million or 12.0% for the quarter ending July 31, 2016 compared to the same period one year ago.
Same-Store Multifamily Results for the Three Months Ended July 30, 2016 Compared to the Prior Year Period
Same-Store multifamily NOI decreased by approximately $853,000 for the quarter ending July 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.
The Company’s operating margins of Same-Store multifamily NOI to gross revenues decreased by 106 basis points year over year to 57.01% for the first quarter of fiscal year 2017, as compared to the same period in the prior fiscal year.
ii
The table below represents Same-Store multifamily performance by region for the first quarter ending July 31, 2016 compared to the same period one year ago. Excluding the energy impacted markets of Minot and Williston, North Dakota, the same-store portfolio showed improving NOI results year over year, although some select markets did see downward pressure on rents due to increased supply. Expense increases in select markets in the table below were primarily due to increased maintenance expenses.
|
|
|
|
|
|
FY17Q1 |
|
FY17Q1 |
|
FY17Q1 |
|
1st Quarter Increase (Decrease) From Prior Year’s 1st Quarter |
|
|||||||||
|
|
|
|
|
|
Weighted |
|
% of |
|
Average |
|
|
|
|
|
Net |
|
Average |
|
Weighted |
|
|
|
|
Rentable |
|
Occupancy |
|
Average |
|
Actual |
|
Rental |
|
|
|
|
|
Operating |
|
Rental |
|
Average |
|
|
Regions |
|
Units |
|
7/31/2016 |
|
Occupancy(1) |
|
NOI |
|
Rate(2) |
|
Revenues |
|
Expenses(4) |
|
Income |
|
Rate |
|
Occupancy |
|
|
Minneapolis, MN |
|
559 |
|
93.7 |
% |
93.2 |
% |
4.7 |
% |
$ |
935 |
|
6.0 |
% |
13.1 |
% |
0.1 |
% |
8.7 |
% |
(2.7) |
% |
Rochester, MN |
|
1,106 |
|
92.2 |
% |
93.3 |
% |
13.7 |
% |
$ |
1,105 |
|
3.5 |
% |
1.1 |
% |
4.8 |
% |
5.8 |
% |
(2.3) |
% |
St. Cloud, MN |
|
1,187 |
|
92.1 |
% |
92.8 |
% |
9.4 |
% |
$ |
884 |
|
5.9 |
% |
(10.3) |
% |
27.7 |
% |
6.2 |
% |
(0.3) |
% |
Bismarck, ND |
|
977 |
|
89.3 |
% |
87.9 |
% |
10.1 |
% |
$ |
1,020 |
|
(9.4) |
% |
1.4 |
% |
(15.2) |
% |
(3.2) |
% |
(6.2) |
% |
Grand Forks, ND |
|
1,230 |
|
90.9 |
% |
92.3 |
% |
11.1 |
% |
$ |
914 |
|
(3.5) |
% |
0.9 |
% |
(6.6) |
% |
(0.8) |
% |
(2.7) |
% |
Omaha, NE |
|
1,370 |
|
96.4 |
% |
96.1 |
% |
11.8 |
% |
$ |
873 |
|
0.5 |
% |
3.0 |
% |
(1.4) |
% |
0.6 |
% |
(0.1) |
% |
Rapid City, SD |
|
474 |
|
97.3 |
% |
97.2 |
% |
4.5 |
% |
$ |
906 |
|
3.5 |
% |
(0.4) |
% |
6.7 |
% |
3.4 |
% |
0.2 |
% |
Sioux Falls, SD |
|
969 |
|
97.5 |
% |
96.5 |
% |
7.5 |
% |
$ |
836 |
|
4.0 |
% |
6.5 |
% |
1.8 |
% |
5.3 |
% |
(1.3) |
% |
Topeka, KS |
|
1,042 |
|
93.6 |
% |
94.2 |
% |
8.3 |
% |
$ |
781 |
|
5.0 |
% |
(3.6) |
% |
12.4 |
% |
5.4 |
% |
(0.4) |
% |
Billings, MT |
|
770 |
|
93.1 |
% |
90.8 |
% |
7.1 |
% |
$ |
936 |
|
1.8 |
% |
10.6 |
% |
(3.8) |
% |
5.0 |
% |
(3.2) |
% |
Same Store Subtotals |
|
9,684 |
|
93.4 |
% |
93.2 |
% |
88.2 |
% |
$ |
918 |
|
1.1 |
% |
1.1 |
% |
1.1 |
% |
3.1 |
% |
(2.0) |
% |
Minot, ND(3) |
|
967 |
|
92.3 |
% |
93.8 |
% |
9.6 |
% |
$ |
945 |
|
(21.1) |
% |
(9.7) |
% |
(27.3) |
% |
(25.1) |
% |
4.0 |
% |
Williston, ND(3) |
|
189 |
|
77.8 |
% |
75.0 |
% |
2.2 |
% |
$ |
1,397 |
|
(47.6) |
% |
(31.0) |
% |
(54.9) |
% |
(52.8) |
% |
5.2 |
% |
Same Store Property Totals |
|
10,840 |
|
93.0 |
% |
92.8 |
% |
100.0 |
% |
$ |
928 |
|
(3.3) |
% |
(0.9) |
% |
(5.1) |
% |
(2.3) |
% |
(1.0) |
% |
(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. |
(4) |
Same-store results by region do not include offsite costs associated with property management or casualty-related amounts, which increased by $475,000 and $505,000, respectively, for FY17 Q1 as compared to FY16 Q1. |
In addition to these initiatives to grow the multifamily portfolio through acquisitions and development, the Company has launched a value add program whereby the Company is committing an estimated $3.5 million per quarter to rehab approximately 1,500 units in fiscal year 2017. 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 $7,000 to $13,000 per unit and result in a return on investment of approximately 8% to 10% per year per unit. During fiscal year 2016 and year to date in fiscal year 2017, under the value add program, the Company completed remodeling of 814 units at an average cost of $9,439 with an average return on investment for leased units of 13.4%.
Development Project in Progress
As of July 31, 2016, the following project is being developed:
· |
Monticello Crossings, a 202 unit, $31.8 million multifamily development in Monticello, MN |
Development Projects Placed in Service
During the three months ended July 31, 2016, one development project was placed in service, as detailed in the following table:
|
|
|
|
|
|
Occupancy |
|
Development Cost |
|
|
|
|
|
|
|
|
Rentable Sq Ft or |
|
as of |
|
as of |
|
Anticipated |
|
|
Project Name and Location |
|
Segment |
|
Number of Units |
|
July 31, 2016 |
|
July 31, 2016 |
|
Same Store Date |
|
|
71 France - Edina, MN |
|
Multifamily |
|
241 |
|
72.8 |
% |
|
72,230 |
|
1Q 2019 |
|
iii
Disposition Activity
During the three months ended July 31, 2016, the Company disposed of the following properties:
· |
One industrial property in Fargo, ND, for a sales price of $13.4 million. |
· |
One parcel of unimproved land in Grand Chute, WI, for a sales price of approximately $250,000. |
Liquidity
At July 31, 2016, the Company had $54.4 million cash on hand and $82.5 million available on its line of credit, which matures September 1, 2017.
Quarterly Distribution
On July 1, 2016, the Company paid a quarterly distribution of $0.13 per common share and unit of IRET Properties. This was the Company’s 181st consecutive distribution. The Company also paid, on June 30, 2016, 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 first quarter of fiscal year 2017, on September 1, 2016, the Board of Trustees declared a regular quarterly distribution of $0.13 per common share and unit, payable October 3, 2016 to common shareholders and unitholders of record on September 15, 2016.
Additionally on September 1, 2016, the Board declared a distribution of $0.5156 per share on the Company’s Series A preferred shares, payable September 30, 2016 to Series A preferred shareholders of record on September 15, 2016, and declared a distribution of $0.4968 per share on the Company’s Series B preferred shares, payable September 30, 2016 to Series B preferred shareholders of record on September 15, 2016.
Guidance
For the fiscal year ending April 30, 2017, management continues to expect to report FFO in the range of $0.48 to $0.54 per share/unit. This guidance reflects management’s view of current market conditions, as well as the earnings impact of certain events referenced in this release and discussed during the scheduled first quarter fiscal year 2017 conference call. This guidance does not include the operational or capital impact of any future acquisition, development, disposition, or capital markets activity, including potential transactions discussed as part of the Company’s strategic initiatives. This guidance is also based on management’s assumption of same-store multifamily NOI growth of 2% to 4%. A number of factors could impact the Company’s ability to meet its guidance and assumption, and there can be no assurance that the Company can achieve such results. This guidance and assumption are subject to change.
Conference Call Information
The conference call for First Quarter Earnings is scheduled for Friday, September 9, 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
iv
About IRET
The Company focuses on the acquisition, development, redevelopment and management of multifamily communities located primarily in select growth markets throughout the Midwest. As of July 31, 2016, the Company owned interests in 147 properties that were held for investment, consisting of: (1) 100 multifamily properties consisting of 13,012 units, and (2) 47 commercial properties, including 31 healthcare properties, containing a total of approximately 2.8 million square feet of leasable space. The Company’s 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). The Company's press releases and supplemental information are available on its website at www.iret.com or by contacting Investor Relations at 701-837-7104.
Supplemental Information
The Company produced the Supplemental Operating and Financial Data for the Quarter Ended July 31, 2016 (“Supplemental Information”), which is available on the Company’s website at www.iret.com.
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; changes in operating costs; 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, 2016 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.
v
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
(in thousands, except share data) |
|
||||
|
|
July 31, 2016 |
|
April 30, 2016 |
|
||
ASSETS |
|
|
|
|
|
|
|
Real estate investments |
|
|
|
|
|
|
|
Property owned |
|
$ |
1,667,442 |
|
$ |
1,681,471 |
|
Less accumulated depreciation |
|
|
(319,087) |
|
|
(312,889) |
|
|
|
|
1,348,355 |
|
|
1,368,582 |
|
Development in progress |
|
|
27,454 |
|
|
51,681 |
|
Unimproved land |
|
|
18,933 |
|
|
20,939 |
|
Total real estate investments |
|
|
1,394,742 |
|
|
1,441,202 |
|
Assets held for sale and assets of discontinued operations |
|
|
215,817 |
|
|
220,537 |
|
Cash and cash equivalents |
|
|
54,438 |
|
|
66,698 |
|
Other investments |
|
|
— |
|
|
50 |
|
Receivable arising from straight-lining of rents, net of allowance of $285 and $333, respectively |
|
|
7,683 |
|
|
7,179 |
|
Accounts receivable, net of allowance of $144 and $97, respectively |
|
|
3,018 |
|
|
1,524 |
|
Prepaid and other assets |
|
|
2,265 |
|
|
2,937 |
|
Intangible assets, net of accumulated amortization of $6,916 and $6,230, respectively |
|
|
1,172 |
|
|
1,858 |
|
Tax, insurance, and other escrow |
|
|
4,752 |
|
|
5,450 |
|
Property and equipment, net of accumulated depreciation of $1,129 and $1,058, respectively |
|
|
977 |
|
|
1,011 |
|
Goodwill |
|
|
1,680 |
|
|
1,680 |
|
Deferred charges and leasing costs, net of accumulated amortization of $3,919 and $3,719, respectively |
|
|
4,999 |
|
|
4,896 |
|
TOTAL ASSETS |
|
$ |
1,691,543 |
|
$ |
1,755,022 |
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Liabilities held for sale and liabilities of discontinued operations |
|
$ |
76,195 |
|
$ |
77,488 |
|
Accounts payable and accrued expenses |
|
|
41,797 |
|
|
39,727 |
|
Revolving line of credit |
|
|
17,500 |
|
|
17,500 |
|
Mortgages payable, net of loan costs of $4,544 and $4,930, respectively |
|
|
812,082 |
|
|
812,393 |
|
Construction debt and other |
|
|
78,481 |
|
|
82,130 |
|
TOTAL LIABILITIES |
|
|
1,026,055 |
|
|
1,029,238 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES |
|
|
7,468 |
|
|
7,522 |
|
EQUITY |
|
|
|
|
|
|
|
Investors Real Estate Trust shareholders’ equity |
|
|
|
|
|
|
|
Series A Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at July 31, 2016 and April 30, 2016, aggregate liquidation preference of $28,750,000) |
|
|
27,317 |
|
|
27,317 |
|
Series B Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 4,600,000 shares issued and outstanding at July 31, 2016 and April 30, 2016, aggregate liquidation preference of $115,000,000) |
|
|
111,357 |
|
|
111,357 |
|
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 121,527,837 shares issued and outstanding at July 31, 2016, and 121,091,249 shares issued and outstanding at April 30, 2016) |
|
|
922,698 |
|
|
922,084 |
|
Accumulated distributions in excess of net income |
|
|
(482,264) |
|
|
(442,000) |
|
Total Investors Real Estate Trust shareholders’ equity |
|
|
579,108 |
|
|
618,758 |
|
Noncontrolling interests – Operating Partnership (16,285,239 units at July 31, 2016 and 16,285,239 units at April 30, 2016) |
|
|
73,071 |
|
|
78,484 |
|
Noncontrolling interests – consolidated real estate entities |
|
|
5,841 |
|
|
21,020 |
|
Total equity |
|
|
658,020 |
|
|
718,262 |
|
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
|
$ |
1,691,543 |
|
$ |
1,755,022 |
|
vi
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
|
(in thousands, except per share data) |
|
|||||
|
|
Three Months Ended |
|
||||
|
|
July 31 |
|
||||
|
|
2016 |
|
2015 |
|
||
REVENUE |
|
|
|
|
|
|
|
Real estate rentals |
|
$ |
44,985 |
|
$ |
40,750 |
|
Tenant reimbursement |
|
|
4,626 |
|
|
4,295 |
|
TOTAL REVENUE |
|
|
49,611 |
|
|
45,045 |
|
EXPENSES |
|
|
|
|
|
|
|
Property operating expenses, excluding real estate taxes |
|
|
16,057 |
|
|
13,488 |
|
Real estate taxes |
|
|
5,577 |
|
|
4,816 |
|
Depreciation and amortization |
|
|
14,267 |
|
|
11,217 |
|
Impairment of real estate investments |
|
|
54,153 |
|
|
1,285 |
|
General and administrative expenses |
|
|
2,606 |
|
|
2,454 |
|
Acquisition and investment related costs |
|
|
43 |
|
|
7 |
|
Other expenses |
|
|
852 |
|
|
417 |
|
TOTAL EXPENSES |
|
|
93,555 |
|
|
33,684 |
|
Operating income |
|
|
(43,944) |
|
|
11,361 |
|
Interest expense |
|
|
(10,364) |
|
|
(7,814) |
|
Interest income |
|
|
572 |
|
|
556 |
|
Other income |
|
|
473 |
|
|
51 |
|
(Loss) income before gain (loss) on sale of real estate and other investments and income from discontinued operations |
|
|
(53,263) |
|
|
4,154 |
|
Gain (loss) on sale of real estate and other investments |
|
|
8,958 |
|
|
(175) |
|
(Loss) income from continuing operations |
|
|
(44,305) |
|
|
3,979 |
|
Income from discontinued operations |
|
|
3,711 |
|
|
748 |
|
NET (LOSS) INCOME |
|
|
(40,594) |
|
|
4,727 |
|
Net loss (income) attributable to noncontrolling interests – Operating Partnership |
|
|
3,296 |
|
|
(186) |
|
Net loss (income) attributable to noncontrolling interests – consolidated real estate entities |
|
|
15,655 |
|
|
(1) |
|
Net (loss) income attributable to Investors Real Estate Trust |
|
|
(21,643) |
|
|
4,540 |
|
Dividends to preferred shareholders |
|
|
(2,879) |
|
|
(2,879) |
|
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS |
|
$ |
(24,522) |
|
$ |
1,661 |
|
(Loss) earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted |
|
$ |
(.23) |
|
$ |
.01 |
|
Earnings per common share from discontinued operations – Investors Real Estate Trust – basic and diluted |
|
|
.03 |
|
|
— |
|
NET (LOSS) INCOME PER COMMON SHARE – BASIC & DILUTED |
|
$ |
(.20) |
|
$ |
.01 |
|
DIVIDENDS PER COMMON SHARE |
|
$ |
.13 |
|
$ |
.13 |
|
vii
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO
INVESTORS REAL ESTATE TRUST TO FUNDS FROM OPERATIONS
z
|
|
|
(in thousands, except per share amounts) |
|
|||||||||||||
Three Months Ended July 31, |
|
2016 |
|
2015 |
|
||||||||||||
|
|
|
|
|
|
|
Per |
|
|
|
|
|
Per |
|
|||
|
|
|
|
|
Weighted |
|
Share |
|
|
|
Weighted |
|
Share |
|
|||
|
|
|
|
|
Avg Shares |
|
And |
|
|
|
Avg Shares |
|
And |
|
|||
|
|
Amount |
|
and Units(1) |
|
Unit(2) |
|
Amount |
|
and Units(1) |
|
Unit(2) |
|
||||
Net (loss) income attributable to Investors Real Estate Trust |
|
$ |
(21,643) |
|
|
|
|
|
|
$ |
4,540 |
|
|
|
|
|
|
Less dividends to preferred shareholders |
|
|
(2,879) |
|
|
|
|
|
|
|
(2,879) |
|
|
|
|
|
|
Net (loss) income available to common shareholders |
|
|
(24,522) |
|
121,117 |
|
$ |
(0.20) |
|
|
1,661 |
|
124,855 |
|
$ |
0.01 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest – Operating Partnership |
|
|
(3,296) |
|
16,285 |
|
|
|
|
|
186 |
|
13,951 |
|
|
|
|
Depreciation and amortization of real property |
|
|
13,437 |
|
|
|
|
|
|
|
18,259 |
|
|
|
|
|
|
Impairment of real estate investments attributable to Investors Real Estate Trust |
|
|
39,189 |
|
|
|
|
|
|
|
1,725 |
|
|
|
|
|
|
(Gain) loss on depreciable property sales |
|
|
(8,958) |
|
|
|
|
|
|
|
175 |
|
|
|
|
|
|
FFO applicable to Common Shares and Units(1) |
|
$ |
15,850 |
|
137,402 |
|
$ |
0.12 |
|
$ |
22,006 |
|
138,806 |
|
$ |
0.16 |
|
(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.
viii
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
RECONCILATION OF NET OPERATING INCOME TO THE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(in thousands) |
|
|||||||||||||
Three Months Ended July 31, 2016 |
|
Multifamily |
|
Healthcare |
|
All Other |
|
Amounts Not Allocated To Segments(1) |
|
Total |
|
|||||
Real estate revenue |
|
$ |
35,040 |
|
$ |
11,541 |
|
$ |
3,030 |
|
$ |
— |
|
$ |
49,611 |
|
Real estate expenses |
|
|
14,879 |
|
|
4,192 |
|
|
725 |
|
|
1,838 |
|
|
21,634 |
|
Net operating income (loss) |
|
$ |
20,161 |
|
$ |
7,349 |
|
$ |
2,305 |
|
$ |
(1,838) |
|
|
27,977 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14,267) |
|
Impairment of real estate investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(54,153) |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,606) |
|
Acquisition and investment related costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(43) |
|
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(852) |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,364) |
|
Interest and other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,045 |
|
Loss before gain on sale of real estate and other investments and income from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(53,263) |
|
Gain on sale of real estate and other investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,958 |
|
Loss from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(44,305) |
|
Income from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,711 |
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(40,594) |
|
|
|
(in thousands) |
|
|||||||||||||
Three Months Ended July 31, 2015 |
|
Multifamily |
|
Healthcare |
|
All Other |
|
Amounts Not Allocated To Segments(1) |
|
Total |
|
|||||
Real estate revenue |
|
$ |
31,433 |
|
$ |
10,779 |
|
$ |
2,833 |
|
$ |
— |
|
$ |
45,045 |
|
Real estate expenses |
|
|
13,438 |
|
|
3,482 |
|
|
610 |
|
|
774 |
|
|
18,304 |
|
Net operating income (loss) |
|
$ |
17,995 |
|
$ |
7,297 |
|
$ |
2,223 |
|
$ |
(774) |
|
|
26,741 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,217) |
|
Impairment of real estate investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,285) |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,454) |
|
Acquisition and investment related costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(417) |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,814) |
|
Interest and other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
607 |
|
Income before loss on sale of real estate and other investments and income from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,154 |
|
Loss on sale of real estate and other investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(175) |
|
Income from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,979 |
|
Income from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
748 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,727 |
|
(1) |
Consists of offsite costs associated with property management and casualty-related amounts. |
ix
Supplemental Financial and Operating Data
July 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 |
Capital Analysis |
|
12 |
|
|
|
Portfolio Analysis |
|
|
Net Operating Income Detail |
|
13-14 |
|
|
|
Tenant Analysis |
|
|
Multifamily Summary |
|
15 |
Healthcare Leasing Summary |
|
16-17 |
10 Largest Commercial Tenants - Based on Annualized Base Rent |
|
18 |
|
|
|
Growth Analysis |
|
|
Acquisitions and Development Summary |
|
19 |
|
|
|
Definitions |
|
20 |
1
Company Background
First Quarter Fiscal 2017
We are a self-administered, equity real estate investment trust (REIT) focused on the acquisition, development, redevelopment and management of multifamily communities located primarily in select growth markets throughout the Midwest. Our portfolio consists of multifamily and healthcare segments.
As of July 31, 2016, we held for investment a portfolio of 147 properties consisting of 100 multifamily properties, 31 healthcare properties, and 16 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 July 31, 2016)
Company Headquarters |
Minot, North Dakota |
Fiscal Year-End |
April 30 |
Reportable Segments |
Multifamily and Healthcare |
Total Properties Held for Investment |
147 |
Total Units Held for Investment |
|
(multifamily properties) |
13,012 |
Total Square Feet Held for Investment |
|
(healthcare and other commercial properties) |
2.8 million |
Common Shares Outstanding (thousands) |
121,528 |
Limited Partnership Units Outstanding (thousands) |
16,285 |
Common Share Distribution - Quarter/Annualized |
$0.13/$0.52 |
Dividend Yield |
7.9% |
Total Capitalization (see p.12 for detail) |
$2.0 billion |
Investor Information
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 |
Michael T. Dance |
Trustee |
Terrance P. Maxwell |
Trustee |
John A. Schissel |
Trustee |
Stephen L. Stenehjem |
Trustee |
Timothy P. Mihalick |
Trustee, Chief Executive Officer |
Management
Timothy P. Mihalick |
Chief Executive Officer; Trustee |
Mark O. Decker, Jr. |
President and Chief Investment Officer |
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 |
Andrew Martin |
Senior Vice President, Residential Property Management |
Corporate Headquarters:
1400 31st Avenue SW, Suite 60
Post Office Box 1988
Minot, North Dakota 58702-1988
Trading Symbol for Common Shares: IRET
Stock Exchange Listing: NYSE
Investor Relations Contact:
Stephen Swett
701-837-7104
IR@iret.com
2
Common Share Data (NYSE: IRET)
|
|
1st Quarter |
|
4th Quarter |
|
3rd Quarter |
|
2nd Quarter |
|
1st Quarter |
|
|||||
|
|
Fiscal Year 2017 |
|
Fiscal Year 2016 |
|
Fiscal Year 2016 |
|
Fiscal Year 2016 |
|
Fiscal Year 2016 |
|
|||||
High Closing Price |
|
$ |
6.63 |
|
$ |
7.48 |
|
$ |
8.39 |
|
$ |
8.16 |
|
$ |
7.44 |
|
Low Closing Price |
|
$ |
6.01 |
|
$ |
5.97 |
|
$ |
6.24 |
|
$ |
6.51 |
|
$ |
6.93 |
|
Average Closing Price |
|
$ |
6.35 |
|
$ |
6.71 |
|
$ |
7.35 |
|
$ |
7.39 |
|
$ |
7.22 |
|
Closing Price at end of quarter |
|
$ |
6.62 |
|
$ |
6.02 |
|
$ |
6.52 |
|
$ |
8.12 |
|
$ |
7.21 |
|
Common Share Distributions—annualized |
|
$ |
0.52 |
|
$ |
0.52 |
|
$ |
0.52 |
|
$ |
0.52 |
|
$ |
0.52 |
|
Closing Dividend Yield - annualized |
|
|
7.9 |
% |
|
8.6 |
% |
|
8.0 |
% |
|
6.4 |
% |
|
7.2 |
% |
Closing common shares outstanding (thousands) |
|
|
121,528 |
|
|
121,091 |
|
|
121,034 |
|
|
122,798 |
|
|
125,520 |
|
Closing limited partnership units outstanding (thousands) |
|
|
16,285 |
|
|
16,285 |
|
|
13,864 |
|
|
13,890 |
|
|
13,921 |
|
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands) |
|
$ |
912,322 |
|
$ |
827,004 |
|
$ |
879,535 |
|
$ |
1,109,907 |
|
$ |
1,005,370 |
|
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, changes in operating costs, 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 2016. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
3
First Quarter Fiscal 2017
Property Cost by Segment for Properties Held for Investment
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)
|
|
7/31/2016 |
|
4/30/2016 |
|
1/31/2016 |
|
10/31/2015 |
|
7/31/2015 |
|
|||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property owned |
|
$ |
1,667,442 |
|
$ |
1,681,471 |
|
$ |
1,589,921 |
|
$ |
1,552,448 |
|
$ |
1,408,251 |
|
Less accumulated depreciation |
|
|
(319,087) |
|
|
(312,889) |
|
|
(308,876) |
|
|
(296,927) |
|
|
(290,269) |
|
|
|
|
1,348,355 |
|
|
1,368,582 |
|
|
1,281,045 |
|
|
1,255,521 |
|
|
1,117,982 |
|
Development in progress |
|
|
27,454 |
|
|
51,681 |
|
|
78,341 |
|
|
89,843 |
|
|
133,794 |
|
Unimproved land |
|
|
18,933 |
|
|
20,939 |
|
|
22,304 |
|
|
22,485 |
|
|
24,542 |
|
Total real estate investments |
|
|
1,394,742 |
|
|
1,441,202 |
|
|
1,381,690 |
|
|
1,367,849 |
|
|
1,276,318 |
|
Assets held for sale and assets of discontinued operations |
|
|
215,817 |
|
|
220,537 |
|
|
231,212 |
|
|
324,278 |
|
|
663,051 |
|
Cash and cash equivalents |
|
|
54,438 |
|
|
66,698 |
|
|
47,117 |
|
|
55,133 |
|
|
44,770 |
|
Other investments |
|
|
— |
|
|
50 |
|
|
50 |
|
|
329 |
|
|
329 |
|
Receivable arising from straight-lining of rents, net of allowance |
|
|
7,683 |
|
|
7,179 |
|
|
7,168 |
|
|
6,681 |
|
|
6,390 |
|
Accounts receivable, net of allowance |
|
|
3,018 |
|
|
1,524 |
|
|
2,180 |
|
|
3,015 |
|
|
2,715 |
|
Real estate deposits |
|
|
— |
|
|
— |
|
|
1,250 |
|
|
444 |
|
|
6,614 |
|
Prepaid and other assets |
|
|
2,265 |
|
|
2,937 |
|
|
3,868 |
|
|
3,243 |
|
|
2,195 |
|
Intangible assets, net of accumulated amortization |
|
|
1,172 |
|
|
1,858 |
|
|
1,590 |
|
|
2,132 |
|
|
1,188 |
|
Tax, insurance, and other escrow |
|
|
4,752 |
|
|
5,450 |
|
|
7,221 |
|
|
6,752 |
|
|
8,227 |
|
Property and equipment, net of accumulated depreciation |
|
|
977 |
|
|
1,011 |
|
|
948 |
|
|
897 |
|
|
945 |
|
Goodwill |
|
|
1,680 |
|
|
1,680 |
|
|
1,697 |
|
|
1,697 |
|
|
1,718 |
|
Deferred charges and leasing costs, net of accumulated amortization |
|
|
4,999 |
|
|
4,896 |
|
|
4,815 |
|
|
4,615 |
|
|
4,431 |
|
TOTAL ASSETS |
|
$ |
1,691,543 |
|
$ |
1,755,022 |
|
$ |
1,690,806 |
|
$ |
1,777,065 |
|
$ |
2,018,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities held for sale and liabilities of discontinued operations |
|
$ |
76,195 |
|
$ |
77,488 |
|
$ |
89,110 |
|
$ |
223,597 |
|
$ |
386,580 |
|
Accounts payable and accrued expenses |
|
|
41,797 |
|
|
39,727 |
|
|
47,636 |
|
|
54,631 |
|
|
59,802 |
|
Revolving line of credit |
|
|
17,500 |
|
|
17,500 |
|
|
17,500 |
|
|
17,500 |
|
|
83,500 |
|
Mortgages payable, net of loan costs |
|
|
812,082 |
|
|
812,393 |
|
|
688,023 |
|
|
654,781 |
|
|
594,788 |
|
Construction debt and other |
|
|
78,481 |
|
|
82,130 |
|
|
132,364 |
|
|
120,578 |
|
|
157,973 |
|
TOTAL LIABILITIES |
|
|
1,026,055 |
|
|
1,029,238 |
|
|
974,633 |
|
|
1,071,087 |
|
|
1,282,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES |
|
|
7,468 |
|
|
7,522 |
|
|
7,244 |
|
|
7,105 |
|
|
6,361 |
|
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 |
|
|
922,698 |
|
|
922,084 |
|
|
924,658 |
|
|
936,893 |
|
|
957,707 |
|
Accumulated distributions in excess of net income |
|
|
(482,264) |
|
|
(442,000) |
|
|
(434,388) |
|
|
(455,508) |
|
|
(452,971) |
|
Total Investors Real Estate Trust shareholders’ equity |
|
|
579,108 |
|
|
618,758 |
|
|
628,944 |
|
|
620,059 |
|
|
643,410 |
|
Noncontrolling interests – Operating Partnership |
|
|
73,071 |
|
|
78,484 |
|
|
58,254 |
|
|
55,957 |
|
|
56,120 |
|
Noncontrolling interests – consolidated real estate entities |
|
|
5,841 |
|
|
21,020 |
|
|
21,731 |
|
|
22,857 |
|
|
30,357 |
|
Total equity |
|
|
658,020 |
|
|
718,262 |
|
|
708,929 |
|
|
698,873 |
|
|
729,887 |
|
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
|
$ |
1,691,543 |
|
$ |
1,755,022 |
|
$ |
1,690,806 |
|
$ |
1,777,065 |
|
$ |
2,018,891 |
|
5
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
|
|
Three Months Ended |
|
|||||||||||||
OPERATING RESULTS |
|
7/31/2016 |
|
4/30/2016 |
|
1/31/2016 |
|
10/31/2015 |
|
7/31/2015 |
|
|||||
Real estate revenue |
|
$ |
49,611 |
|
$ |
48,523 |
|
$ |
48,406 |
|
$ |
46,346 |
|
$ |
45,045 |
|
Real estate expenses |
|
|
21,634 |
|
|
20,524 |
|
|
20,321 |
|
|
19,951 |
|
|
18,304 |
|
Net operating income |
|
|
27,977 |
|
|
27,999 |
|
|
28,085 |
|
|
26,395 |
|
|
26,741 |
|
Depreciation/amortization |
|
|
(14,267) |
|
|
(13,517) |
|
|
(12,693) |
|
|
(12,405) |
|
|
(11,217) |
|
Impairment of real estate investments |
|
|
(54,153) |
|
|
(2,223) |
|
|
(162) |
|
|
(1,873) |
|
|
(1,285) |
|
General and administrative expenses |
|
|
(2,606) |
|
|
(2,951) |
|
|
(2,929) |
|
|
(2,933) |
|
|
(2,454) |
|
Acquisition and investment related costs |
|
|
(43) |
|
|
(397) |
|
|
(35) |
|
|
(391) |
|
|
(7) |
|
Other expenses |
|
|
(852) |
|
|
(950) |
|
|
(51) |
|
|
(813) |
|
|
(417) |
|
Interest expense |
|
|
(10,364) |
|
|
(10,062) |
|
|
(9,151) |
|
|
(8,741) |
|
|
(7,814) |
|
Loss on extinguishment of debt |
|
|
— |
|
|
— |
|
|
— |
|
|
(106) |
|
|
— |
|
Interest and other income |
|
|
1,045 |
|
|
600 |
|
|
701 |
|
|
665 |
|
|
607 |
|
(Loss) income before income (loss) on sale of real estate and other investments and income (loss) from discontinued operations |
|
|
(53,263) |
|
|
(1,501) |
|
|
3,765 |
|
|
(202) |
|
|
4,154 |
|
Income (loss) on sale of real estate and other investments |
|
|
8,958 |
|
|
8,369 |
|
|
1,446 |
|
|
— |
|
|
(175) |
|
Gain on bargain purchase |
|
|
— |
|
|
3,424 |
|
|
— |
|
|
— |
|
|
— |
|
(Loss) income from continuing operations |
|
|
(44,305) |
|
|
10,292 |
|
|
5,211 |
|
|
(202) |
|
|
3,979 |
|
Income (loss) from discontinued operations |
|
|
3,711 |
|
|
1,463 |
|
|
38,232 |
|
|
16,879 |
|
|
748 |
|
Net (loss) income |
|
$ |
(40,594) |
|
$ |
11,755 |
|
$ |
43,443 |
|
$ |
16,677 |
|
$ |
4,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss (income) attributable to noncontrolling interest – Operating Partnership |
|
|
3,296 |
|
|
(1,092) |
|
|
(4,227) |
|
|
(1,527) |
|
|
(186) |
|
Net loss (income) attributable to noncontrolling interests – consolidated real estate entities |
|
|
15,655 |
|
|
340 |
|
|
581 |
|
|
1,516 |
|
|
(1) |
|
Net (loss) income attributable to Investors Real Estate Trust |
|
|
(21,643) |
|
|
11,003 |
|
|
39,797 |
|
|
16,666 |
|
|
4,540 |
|
Dividends to preferred shareholders |
|
|
(2,879) |
|
|
(2,878) |
|
|
(2,879) |
|
|
(2,878) |
|
|
(2,879) |
|
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS |
|
$ |
(24,522) |
|
$ |
8,125 |
|
$ |
36,918 |
|
$ |
13,788 |
|
$ |
1,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per common share from continuing operations – Investors Real Estate Trust – basic & diluted |
|
$ |
(0.23) |
|
$ |
0.06 |
|
$ |
0.02 |
|
$ |
(0.01) |
|
$ |
0.01 |
|
Earnings per common share from discontinued operations – Investors Real Estate Trust – basic & diluted |
|
|
0.03 |
|
|
0.01 |
|
|
0.28 |
|
|
0.12 |
|
|
— |
|
Net (loss) income per common share – basic & diluted |
|
$ |
(0.20) |
|
$ |
0.07 |
|
$ |
0.30 |
|
$ |
0.11 |
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate expenses |
|
|
43.6 |
% |
|
42.3 |
% |
|
42.0 |
% |
|
43.0 |
% |
|
40.6 |
% |
Depreciation/amortization |
|
|
28.8 |
% |
|
27.9 |
% |
|
26.2 |
% |
|
26.8 |
% |
|
24.9 |
% |
General and administrative expenses |
|
|
5.3 |
% |
|
6.8 |
% |
|
6.1 |
% |
|
6.3 |
% |
|
5.4 |
% |
Interest |
|
|
20.9 |
% |
|
20.7 |
% |
|
18.9 |
% |
|
18.9 |
% |
|
17.3 |
% |
Income from discontinued operations |
|
|
7.5 |
% |
|
3.0 |
% |
|
79.0 |
% |
|
36.4 |
% |
|
1.7 |
% |
Net income |
|
|
(81.8) |
% |
|
24.2 |
% |
|
89.7 |
% |
|
36.0 |
% |
|
10.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1)/Interest expense |
|
|
2.52 |
x |
|
2.76 |
x |
|
2.29 |
x |
|
2.08 |
x |
|
2.28 |
x |
Adjusted EBITDA(1)/Interest expense plus preferred distributions |
|
|
2.03 |
x |
|
2.23 |
x |
|
1.92 |
x |
|
1.74 |
x |
|
1.95 |
x |
(1) |
See Definitions on page 20. 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)
|
|
Three Months Ended |
|
|||||||||||||
|
|
7/31/2016 |
|
4/30/2016 |
|
1/31/2016 |
|
10/31/2015 |
|
7/31/2015 |
|
|||||
Funds From Operations(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to Investors Real Estate Trust |
|
$ |
(21,643) |
|
$ |
11,003 |
|
$ |
39,797 |
|
$ |
16,666 |
|
$ |
4,540 |
|
Less dividends to preferred shareholders |
|
|
(2,879) |
|
|
(2,878) |
|
|
(2,879) |
|
|
(2,878) |
|
|
(2,879) |
|
Net (loss) income available to common shareholders |
|
|
(24,522) |
|
|
8,125 |
|
|
36,918 |
|
|
13,788 |
|
|
1,661 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests – Operating Partnership |
|
|
(3,296) |
|
|
1,092 |
|
|
4,227 |
|
|
1,527 |
|
|
186 |
|
Depreciation and amortization of real property |
|
|
13,437 |
|
|
15,694 |
|
|
14,975 |
|
|
14,860 |
|
|
18,259 |
|
Impairment of real estate investments attributable to Investors Real Estate Trust |
|
|
39,189 |
|
|
2,223 |
|
|
162 |
|
|
1,873 |
|
|
1,725 |
|
(Gain) loss on depreciable property sales |
|
|
(8,958) |
|
|
(7,910) |
|
|
(1,778) |
|
|
(23,909) |
|
|
175 |
|
FFO applicable to common shares and Units |
|
$ |
15,850 |
|
$ |
19,224 |
|
$ |
54,504 |
|
$ |
8,139 |
|
$ |
22,006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share and unit - basic and diluted(2) |
|
$ |
0.12 |
|
$ |
0.14 |
|
$ |
0.40 |
|
$ |
0.06 |
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted funds from operations(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO applicable to common shares and Units |
|
$ |
15,850 |
|
$ |
19,224 |
|
$ |
54,504 |
|
$ |
8,139 |
|
$ |
22,006 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tenant improvements at same-store(3) properties |
|
|
(500) |
|
|
(778) |
|
|
(383) |
|
|
(157) |
|
|
(191) |
|
Leasing costs at same-store properties(3) |
|
|
(170) |
|
|
(89) |
|
|
(102) |
|
|
(59) |
|
|
(336) |
|
Recurring capital expenditures(1)(3) |
|
|
(1,141) |
|
|
(825) |
|
|
(1,406) |
|
|
(1,713) |
|
|
(1,636) |
|
Straight-line rents |
|
|
(697) |
|
|
(238) |
|
|
(554) |
|
|
(309) |
|
|
242 |
|
Non-real estate depreciation |
|
|
88 |
|
|
93 |
|
|
80 |
|
|
80 |
|
|
101 |
|
Acquisition costs(4) |
|
|
— |
|
|
91 |
|
|
9 |
|
|
153 |
|
|
— |
|
Default interest |
|
|
— |
|
|
— |
|
|
1,566 |
|
|
1,567 |
|
|
1,550 |
|
(Gain) loss on extinguishment of debt |
|
|
— |
|
|
— |
|
|
(36,456) |
|
|
7,226 |
|
|
— |
|
Gain on bargain purchase |
|
|
— |
|
|
(3,424) |
|
|
— |
|
|
— |
|
|
— |
|
Share-based compensation expense |
|
|
262 |
|
|
864 |
|
|
787 |
|
|
539 |
|
|
66 |
|
AFFO applicable to common shares and Units |
|
$ |
13,692 |
|
$ |
14,918 |
|
$ |
18,045 |
|
$ |
15,466 |
|
$ |
21,802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per share and unit - basic and diluted |
|
$ |
0.10 |
|
$ |
0.11 |
|
$ |
0.13 |
|
$ |
0.11 |
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares and units |
|
|
137,402 |
|
|
136,438 |
|
|
135,741 |
|
|
138,565 |
|
|
138,806 |
|
(1) |
See Definitions on page 20. |
(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 $16.9 million and $0.12 per share and unit for the three months ended October 31, 2015. |
(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) |
Three months ended July 31, 2015 was 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)
|
|
Three Months Ended |
|
|||||||||||||
|
|
7/31/2016 |
|
4/30/2016 |
|
1/31/2016 |
|
10/31/2015 |
|
7/31/2015 |
|
|||||
Adjusted EBITDA(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to Investors Real Estate Trust |
|
$ |
(21,643) |
|
$ |
11,003 |
|
$ |
39,797 |
|
$ |
16,666 |
|
$ |
4,540 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests – Operating Partnership |
|
|
(3,296) |
|
|
1,092 |
|
|
4,227 |
|
|
1,527 |
|
|
186 |
|
Income before noncontrolling interests – Operating Partnership |
|
|
(24,939) |
|
|
12,095 |
|
|
44,024 |
|
|
18,193 |
|
|
4,726 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
11,738 |
|
|
11,475 |
|
|
13,976 |
|
|
13,762 |
|
|
14,961 |
|
(Gain) loss on extinguishment of debt |
|
|
— |
|
|
— |
|
|
(36,456) |
|
|
7,226 |
|
|
— |
|
Depreciation/amortization related to real estate investments |
|
|
13,497 |
|
|
15,765 |
|
|
15,024 |
|
|
14,903 |
|
|
18,306 |
|
Amortization related to real estate revenues(2) |
|
|
27 |
|
|
23 |
|
|
31 |
|
|
38 |
|
|
54 |
|
Impairment of real estate investments attributable to Investors Real Estate Trust |
|
|
39,189 |
|
|
2,223 |
|
|
162 |
|
|
1,873 |
|
|
1,725 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
(572) |
|
|
(570) |
|
|
(566) |
|
|
(565) |
|
|
(556) |
|
(Gain) loss on sale of real estate and other investments |
|
|
(8,958) |
|
|
(7,911) |
|
|
(1,777) |
|
|
(24,680) |
|
|
175 |
|
Adjusted EBITDA |
|
|
29,982 |
|
|
33,100 |
|
|
34,418 |
|
|
30,750 |
|
|
39,391 |
|
(1) |
See Definitions on page 20. |
(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) |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
% of |
|
Fiscal Year |
|
Fixed Debt |
|
Variable Debt |
|
Total Debt |
|
Average(2) |
|
Total Debt |
|
|||
2017 (remainder) |
|
$ |
15,013 |
|
$ |
105,268 |
|
$ |
120,281 |
|
3.30 |
% |
13.6 |
% |
2018 |
|
|
17,677 |
|
|
25,649 |
|
|
43,326 |
|
3.97 |
% |
4.9 |
% |
2019 |
|
|
33,357 |
|
|
64,991 |
|
|
98,348 |
|
3.90 |
% |
11.1 |
% |
2020 |
|
|
100,941 |
|
|
51,526 |
|
|
152,467 |
|
5.46 |
% |
17.3 |
% |
2021 |
|
|
129,611 |
|
|
— |
|
|
129,611 |
|
5.03 |
% |
14.7 |
% |
2022 |
|
|
108,138 |
|
|
1,735 |
|
|
109,873 |
|
5.57 |
% |
12.4 |
% |
2023 |
|
|
40,440 |
|
|
— |
|
|
40,440 |
|
4.25 |
% |
4.5 |
% |
2024 |
|
|
63,491 |
|
|
— |
|
|
63,491 |
|
4.27 |
% |
7.2 |
% |
2025 |
|
|
19,242 |
|
|
— |
|
|
19,242 |
|
4.04 |
% |
2.2 |
% |
2026 |
|
|
55,780 |
|
|
— |
|
|
55,780 |
|
3.74 |
% |
6.3 |
% |
Thereafter |
|
|
51,561 |
|
|
— |
|
|
51,561 |
|
4.10 |
% |
5.8 |
% |
Total maturities |
|
$ |
635,251 |
|
$ |
249,169 |
|
$ |
884,420 |
|
4.54 |
% |
100.0 |
% |
(1) |
Includes mortgages on properties held for sale. |
(2) |
Weighted average interest rate of debt that matures in fiscal year. |
|
|
7/31/2016 |
|
4/30/2016 |
|
1/31/2016 |
|
10/31/2015 |
|
7/31/2015 |
|
|||||
Balances Outstanding(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate |
|
$ |
635,251 |
|
$ |
689,346 |
|
$ |
682,312 |
|
$ |
920,234 |
|
$ |
1,106,257 |
|
Variable rate |
|
|
249,169 |
|
|
196,801 |
|
|
89,994 |
|
|
89,826 |
|
|
82,664 |
|
Mortgage total |
|
$ |
884,420 |
|
$ |
886,147 |
|
$ |
772,306 |
|
$ |
1,010,060 |
|
$ |
1,188,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Interest Rates Secured |
|
|
4.54 |
% |
|
4.54 |
% |
|
4.83 |
% |
|
5.04 |
% |
|
5.12 |
% |
(1) |
Includes mortgages on properties held for sale. |
9
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LONG-TERM MORTGAGE DEBT* DETAIL AS OF JULY 31, 2016
(in thousands)
Property |
|
Maturity Date |
|
Fiscal 2017 |
|
Fiscal 2018 |
|
Fiscal 2019 |
|
Fiscal 2020 |
|
Thereafter |
|
Total(1) |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multifamily |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commons at Southgate-Minot, ND(2) |
|
9/1/2016 |
|
|
21,556 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
21,556 |
|
Landing at Southgate-Minot, ND(2) |
|
9/1/2016 |
|
|
10,144 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
10,144 |
|
Arcata Apartments-Golden Valley, MN |
|
2/15/2017 |
|
|
23,196 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
23,196 |
|
Williston Garden - Williston, ND |
|
4/30/2017 |
|
|
7,475 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
7,475 |
|
Williston Garden - Williston, ND |
|
4/30/2017 |
|
|
2,395 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,395 |
|
Evergreen II – Isanti, MN |
|
11/1/2017 |
|
|
— |
|
|
2,009 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,009 |
|
Ponds – Sartell, MN |
|
11/1/2017 |
|
|
— |
|
|
3,722 |
|
|
— |
|
|
— |
|
|
— |
|
|
3,722 |
|
Homestead Gardens II - Rapid City, SD |
|
6/1/2018 |
|
|
— |
|
|
— |
|
|
3,244 |
|
|
— |
|
|
— |
|
|
3,244 |
|
River Ridge – Bismarck, ND |
|
6/30/2018 |
|
|
— |
|
|
— |
|
|
13,000 |
|
|
— |
|
|
— |
|
|
13,000 |
|
Plaza - Minot, ND |
|
8/1/2018 |
|
|
— |
|
|
— |
|
|
5,176 |
|
|
— |
|
|
— |
|
|
5,176 |
|
Greenfield - Omaha, NE |
|
2/1/2019 |
|
|
— |
|
|
— |
|
|
3,490 |
|
|
— |
|
|
— |
|
|
3,490 |
|
Brooklyn Heights - Minot, ND |
|
4/1/2019 |
|
|
— |
|
|
— |
|
|
621 |
|
|
— |
|
|
— |
|
|
621 |
|
Colton Heights - Minot, ND |
|
4/1/2019 |
|
|
— |
|
|
— |
|
|
349 |
|
|
— |
|
|
— |
|
|
349 |
|
Pines - Minot, ND |
|
4/1/2019 |
|
|
— |
|
|
— |
|
|
99 |
|
|
— |
|
|
— |
|
|
99 |
|
Summit Park - Minot, ND |
|
4/1/2019 |
|
|
— |
|
|
— |
|
|
861 |
|
|
— |
|
|
— |
|
|
861 |
|
Terrace Heights - Minot, ND |
|
4/1/2019 |
|
|
— |
|
|
— |
|
|
143 |
|
|
— |
|
|
— |
|
|
143 |
|
Avalon Cove-Rochester, MN |
|
4/5/2019 |
|
|
— |
|
|
— |
|
|
25,747 |
|
|
— |
|
|
— |
|
|
25,747 |
|
Crystal Bay-Rochester, MN |
|
4/5/2019 |
|
|
— |
|
|
— |
|
|
7,952 |
|
|
— |
|
|
— |
|
|
7,952 |
|
French Creek-Rochester, MN |
|
4/5/2019 |
|
|
— |
|
|
— |
|
|
3,081 |
|
|
— |
|
|
— |
|
|
3,081 |
|
Monticello Village - Monticello, MN |
|
5/28/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,888 |
|
|
— |
|
|
2,888 |
|
Rimrock West - Billings, MT |
|
9/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
3,207 |
|
|
— |
|
|
3,207 |
|
Rocky Meadows - Billings, MT |
|
9/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
4,973 |
|
|
— |
|
|
4,973 |
|
Cimarron Hills - Omaha, NE |
|
10/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
4,627 |
|
|
— |
|
|
4,627 |
|
Cottonwood - Bismarck, ND |
|
10/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
15,297 |
|
|
— |
|
|
15,297 |
|
Forest Park - Grand Forks, ND |
|
10/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
7,386 |
|
|
— |
|
|
7,386 |
|
Renaissance Heights I - Williston, ND |
|
10/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
42,533 |
|
|
— |
|
|
42,533 |
|
Evergreen - Isanti, MN |
|
11/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,942 |
|
|
— |
|
|
1,942 |
|
Pinehurst - Billings, MT |
|
11/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
153 |
|
|
— |
|
|
153 |
|
Northridge - Bismarck, ND |
|
12/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
6,105 |
|
|
— |
|
|
6,105 |
|
Castlerock - Billings, MT |
|
1/1/2020 |
|
|
— |
|
|
— |
|
|
— |
|
|
6,436 |
|
|
— |
|
|
6,436 |
|
Thomasbrook - Lincoln, NE |
|
1/1/2020 |
|
|
— |
|
|
— |
|
|
— |
|
|
5,767 |
|
|
— |
|
|
5,767 |
|
Westwood Park - Bismarck, ND |
|
1/1/2020 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,907 |
|
|
— |
|
|
1,907 |
|
Kirkwood Manor - Bismarck, ND |
|
2/1/2020 |
|
|
— |
|
|
— |
|
|
— |
|
|
3,190 |
|
|
— |
|
|
3,190 |
|
Brookfield Village - Topeka, KS |
|
3/1/2020 |
|
|
— |
|
|
— |
|
|
— |
|
|
5,099 |
|
|
— |
|
|
5,099 |
|
Crown Colony - Topeka, KS |
|
4/1/2020 |
|
|
— |
|
|
— |
|
|
— |
|
|
7,897 |
|
|
— |
|
|
7,897 |
|
Mariposa - Topeka, KS |
|
4/1/2020 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,858 |
|
|
— |
|
|
2,858 |
|
Sherwood - Topeka, KS |
|
4/1/2020 |
|
|
— |
|
|
— |
|
|
— |
|
|
11,860 |
|
|
— |
|
|
11,860 |
|
Summary of Debt due after Fiscal 2020 |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
345,830 |
|
|
345,830 |
|
Sub-Total Multifamily |
|
|
|
$ |
64,766 |
|
$ |
5,731 |
|
$ |
63,763 |
|
$ |
134,125 |
|
$ |
345,830 |
|
$ |
614,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sartell 2000 23rd St S – Sartell, MN(3) |
|
12/1/2016 |
|
|
417 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
417 |
|
Billings 2300 Grant Road – Billings, MT |
|
12/31/2016 |
|
|
913 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
913 |
|
Missoula 3050 Great Northern Ave – Missoula, MT |
|
12/31/2016 |
|
|
924 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
924 |
|
Edgewood Vista – Fargo, ND(3) |
|
2/25/2017 |
|
|
11,149 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
11,149 |
|
Edgewood Vista – Fremont, NE(3) |
|
2/25/2017 |
|
|
522 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
522 |
|
Edgewood Vista – Hastings, NE(3) |
|
2/25/2017 |
|
|
538 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
538 |
|
Edgewood Vista – Hermantown I, MN(3) |
|
2/25/2017 |
|
|
14,416 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
14,416 |
|
10
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
LONG-TERM MORTGAGE DEBT* DETAIL AS OF JULY 31, 2016
(in thousands)
Property |
|
Maturity Date |
|
Fiscal 2017 |
|
Fiscal 2018 |
|
Fiscal 2019 |
|
Fiscal 2020 |
|
Thereafter |
|
Total (1) |
|
||||||
Edgewood Vista – Kalispell, MT(3) |
|
2/25/2017 |
|
|
539 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
539 |
|
Edgewood Vista – Missoula, MT(3) |
|
2/25/2017 |
|
|
766 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
766 |
|
Edgewood Vista – Omaha, NE(3) |
|
2/25/2017 |
|
|
341 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
341 |
|
Edgewood Vista – Virginia, MN(3) |
|
2/25/2017 |
|
|
12,262 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
12,262 |
|
High Pointe Health Campus – Lake Elmo, MN |
|
4/1/2017 |
|
|
7,445 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
7,445 |
|
Edgewood Vista – Billings, MT(3) |
|
4/10/2017 |
|
|
1,707 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,707 |
|
Edgewood Vista – East Grand Forks, MN(3) |
|
4/10/2017 |
|
|
2,599 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,599 |
|
Edgewood Vista – Sioux Falls, SD(3) |
|
4/10/2017 |
|
|
977 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
977 |
|
St Michael Clinic – St. Michael, MN |
|
4/1/2018 |
|
|
— |
|
|
1,722 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,722 |
|
PrairieCare Medical - Brooklyn Park, MN |
|
4/10/2018 |
|
|
— |
|
|
14,850 |
|
|
— |
|
|
— |
|
|
— |
|
|
14,850 |
|
Garden View Medical – St. Paul, MN |
|
6/30/2018 |
|
|
— |
|
|
— |
|
|
6,890 |
|
|
— |
|
|
— |
|
|
6,890 |
|
Ritchie Medical Plaza – St. Paul, MN |
|
6/30/2018 |
|
|
— |
|
|
— |
|
|
8,320 |
|
|
— |
|
|
— |
|
|
8,320 |
|
Spring Creek - American Falls - American Falls, ID(3) |
|
9/1/2018 |
|
|
— |
|
|
— |
|
|
1,921 |
|
|
— |
|
|
— |
|
|
1,921 |
|
Spring Creek - Eagle - Eagle, ID(3) |
|
9/1/2018 |
|
|
— |
|
|
— |
|
|
1,767 |
|
|
— |
|
|
— |
|
|
1,767 |
|
Spring Creek - Meridian - Meridian, ID(3) |
|
9/1/2018 |
|
|
— |
|
|
— |
|
|
2,920 |
|
|
— |
|
|
— |
|
|
2,920 |
|
Spring Creek - Soda Springs - Soda Springs, ID(3) |
|
9/1/2018 |
|
|
— |
|
|
— |
|
|
692 |
|
|
— |
|
|
— |
|
|
692 |
|
Health East St John & Woodwinds - Maplewood & Woodbury, MN |
|
2/1/2019 |
|
|
— |
|
|
— |
|
|
5,205 |
|
|
— |
|
|
— |
|
|
5,205 |
|
Denfeld Clinic - Duluth, MN |
|
8/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,277 |
|
|
— |
|
|
1,277 |
|
Gateway Clinic - Sandstone, MN |
|
8/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
739 |
|
|
— |
|
|
739 |
|
Mariner Clinic - Superior, WI |
|
8/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,617 |
|
|
— |
|
|
1,617 |
|
Pavilion I - Duluth, MN |
|
8/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
4,261 |
|
|
— |
|
|
4,261 |
|
Pavilion II - Duluth, MN |
|
8/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
7,841 |
|
|
— |
|
|
7,841 |
|
Wells Clinic - Hibbing, MN |
|
8/1/2019 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,128 |
|
|
— |
|
|
1,128 |
|
Summary of Debt due after Fiscal 2020 |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
120,594 |
|
|
120,594 |
|
Sub-Total Healthcare |
|
|
|
$ |
55,515 |
|
$ |
16,572 |
|
$ |
27,715 |
|
$ |
16,863 |
|
$ |
120,594 |
|
$ |
237,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roseville 3075 Loan Lake Road - Roseville, MN |
|
5/1/2017 |
|
|
— |
|
|
10,798 |
|
|
— |
|
|
— |
|
|
— |
|
|
10,798 |
|
Urbandale 3900 106th Street – Urbandale, IA |
|
7/5/2017 |
|
|
— |
|
|
10,225 |
|
|
— |
|
|
— |
|
|
— |
|
|
10,225 |
|
Plaza 16 – Minot, ND |
|
8/1/2018 |
|
|
— |
|
|
— |
|
|
6,870 |
|
|
— |
|
|
— |
|
|
6,870 |
|
Lexington Commerce Center - Eagan, MN |
|
2/1/2020 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,479 |
|
|
— |
|
|
1,479 |
|
Summary of Debt due after Fiscal 2020 |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,574 |
|
|
3,574 |
|
Sub-Total All Other |
|
|
|
$ |
— |
|
$ |
21,023 |
|
$ |
6,870 |
|
$ |
1,479 |
|
$ |
3,574 |
|
$ |
32,946 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
$ |
120,281 |
|
$ |
43,326 |
|
$ |
98,348 |
|
$ |
152,467 |
|
$ |
469,998 |
|
$ |
884,420 |
|
* 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 July 31, 2016, we had borrowings of $17.5 million outstanding under this line. Construction loans and other debt totaled $78.4 million as of July 31, 2016.
(1)Totals are principal balances as of July 31, 2016.
(2)Subsequent to July 31, 2016, the term of these loans was extended to November 1, 2016.
(3)Property is classified as held for sale at July 31, 2016
11
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CAPITAL ANALYSIS
(in thousands, except per share and unit amounts)
|
|
Three Months Ended |
|
|||||||||||||
|
|
7/31/2016 |
|
4/30/2016 |
|
1/31/2016 |
|
10/31/2015 |
|
7/31/2015 |
|
|||||
Equity Capitalization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
|
121,528 |
|
|
121,091 |
|
|
121,034 |
|
|
122,798 |
|
|
125,520 |
|
Operating partnership (OP) units outstanding |
|
|
16,285 |
|
|
16,285 |
|
|
13,864 |
|
|
13,890 |
|
|
13,921 |
|
Total common shares and OP units outstanding |
|
|
137,813 |
|
|
137,376 |
|
|
134,898 |
|
|
136,688 |
|
|
139,441 |
|
Market price per common share (closing price at end of period) |
|
$ |
6.62 |
|
$ |
6.02 |
|
$ |
6.52 |
|
$ |
8.12 |
|
$ |
7.21 |
|
Equity capitalization-common shares and OP units |
|
$ |
912,322 |
|
$ |
827,004 |
|
$ |
879,535 |
|
$ |
1,109,907 |
|
$ |
1,005,370 |
|
Recorded book value of preferred shares |
|
$ |
138,674 |
|
$ |
138,674 |
|
$ |
138,674 |
|
$ |
138,674 |
|
$ |
138,674 |
|
Total equity capitalization |
|
$ |
1,050,996 |
|
$ |
965,678 |
|
$ |
1,018,209 |
|
$ |
1,248,581 |
|
$ |
1,144,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Capitalization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt |
|
$ |
988,031 |
|
$ |
993,323 |
|
$ |
940,294 |
|
$ |
1,007,825 |
|
$ |
1,211,621 |
|
Total capitalization |
|
$ |
2,039,027 |
|
$ |
1,959,001 |
|
$ |
1,958,503 |
|
$ |
2,256,406 |
|
$ |
2,355,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt to total capitalization |
|
|
0.48:1 |
|
|
0.51:1 |
|
|
0.48:1 |
|
|
0.45:1 |
|
|
0.51:1 |
|
|
|
Three Months Ended |
|
|||||||||||||
|
|
7/31/2016 |
|
4/30/2016 |
|
1/31/2016 |
|
10/31/2015 |
|
7/31/2015 |
|
|||||
Earnings to fixed charges(1) |
|
|
(2) |
|
|
1.85 |
x |
|
1.32 |
x |
|
1.02 |
x |
|
1.10 |
x |
Earnings to combined fixed charges and preferred distributions(1) |
|
|
(2) |
|
|
1.49 |
x |
|
1.11 |
x |
|
(3) |
|
|
(4) |
|
Debt service coverage ratio(1) |
|
|
1.62 |
x |
|
1.86 |
x |
|
1.65 |
x |
|
1.49 |
x |
|
1.63 |
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares and units outstanding at record date |
|
|
137,376 |
|
|
134,897 |
|
|
135,408 |
|
|
139,540 |
|
|
138,576 |
|
Total common distribution paid |
|
$ |
17,859 |
|
$ |
17,536 |
|
$ |
17,603 |
|
$ |
18,136 |
|
$ |
18,015 |
|
Common distribution per share and unit |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.13 |
|
Payout ratio (FFO per share and unit basis)(1) |
|
|
108.3 |
% |
|
92.9 |
% |
|
32.5 |
% |
|
216.7 |
% |
|
81.3 |
% |
Payout ratio (AFFO per share and unit basis)(1) |
|
|
130.0 |
% |
|
118.2 |
% |
|
100 |
% |
|
118.2 |
% |
|
81.3 |
% |
(1) |
See Definitions on page 20. |
(2) |
Earnings were inadequate to cover fixed charges and combined fixed charges and preferred distributions by $28.7 million and $31.6 million, respectively. Excluding non-cash asset impairment and gain on sale charges of $45.2 million in the three months ended July 31, 2016, the ratio of earnings to fixed charges and of earnings to combined fixed charges and preferred distributions would have been 2.38 and 1.92x, respectively, for the three months ended July 31, 2016. |
(3) |
Earnings were inadequate to cover combined fixed charges and preferred distributions by $2.6 million. Excluding non-cash asset impairment and loss on sale charges of $1.9 million in the three months ended October 31, 2015, the ratio of earnings to combined fixed charges and preferred distributions would have been .96x for the three months ended October 31, 2015. |
(4) |
Earnings were inadequate to cover combined fixed charges and preferred distributions by $1.2 million. Excluding non-cash asset impairment and loss on sale charges of $1.5 million in the three months ended July 31, 2015, the ratio of earnings to combined fixed charges and preferred distributions would have been 1.01x for the three months ended July 31, 2015. |
12
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
NET OPERATING INCOME DETAIL
(in thousands)
|
|
Three Months Ended July 31, 2016 |
|
|||||||||||||
|
|
Reporting Segments |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Corporate and |
|
|
|
|
|
|
|
Multifamily |
|
Healthcare |
|
All Other |
|
Other |
|
Total |
|
|||||
Real estate rental revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store |
|
$ |
28,018 |
|
$ |
10,131 |
|
$ |
2,399 |
|
$ |
— |
|
$ |
40,548 |
|
Non-same-store |
|
|
7,022 |
|
|
1,410 |
|
|
631 |
|
|
— |
|
|
9,063 |
|
Total |
|
|
35,040 |
|
|
11,541 |
|
|
3,030 |
|
|
— |
|
|
49,611 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate expenses(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store |
|
|
12,045 |
|
|
3,788 |
|
|
596 |
|
|
1,663 |
|
|
18,092 |
|
Non-same-store |
|
|
2,834 |
|
|
404 |
|
|
129 |
|
|
175 |
|
|
3,542 |
|
Total |
|
|
14,879 |
|
|
4,192 |
|
|
725 |
|
|
1,838 |
|
|
21,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income (NOI) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store |
|
|
15,973 |
|
|
6,343 |
|
|
1,803 |
|
|
(1,663) |
|
|
22,456 |
|
Non-same-store |
|
|
4,188 |
|
|
1,006 |
|
|
502 |
|
|
(175) |
|
|
5,521 |
|
Net operating income (loss) |
|
$ |
20,161 |
|
$ |
7,349 |
|
$ |
2,305 |
|
$ |
(1,838) |
|
$ |
27,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of NOI to net income (loss) available to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation/amortization |
|
$ |
(10,445) |
|
$ |
(2,828) |
|
$ |
(922) |
|
$ |
(72) |
|
$ |
(14,267) |
|
Impairment of real estate investments |
|
|
(51,401) |
|
|
— |
|
|
— |
|
|
(2,752) |
|
|
(54,153) |
|
General and administrative expenses |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,606) |
|
|
(2,606) |
|
Acquisition and investment related costs |
|
|
— |
|
|
— |
|
|
— |
|
|
(43) |
|
|
(43) |
|
Other expenses |
|
|
— |
|
|
— |
|
|
— |
|
|
(852) |
|
|
(852) |
|
Interest expense |
|
|
(7,642) |
|
|
(2,019) |
|
|
(376) |
|
|
(327) |
|
|
(10,364) |
|
Interest and other income |
|
|
— |
|
|
— |
|
|
— |
|
|
1,045 |
|
|
1,045 |
|
Income before gain (loss) on sale of real estate and other investments, gain on bargain purchase and income from discontinued operations |
|
|
(49,327) |
|
|
2,502 |
|
|
1,007 |
|
|
(7,445) |
|
|
(53,263) |
|
Gain (loss) on sale of real estate and other investments |
|
|
— |
|
|
— |
|
|
8,982 |
|
|
(24) |
|
|
8,958 |
|
Gain on bargain purchase |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Income (loss) from continuing operations |
|
|
(49,327) |
|
|
2,502 |
|
|
9,989 |
|
|
(7,469) |
|
|
(44,305) |
|
Income from discontinued operations |
|
|
— |
|
|
3,711 |
|
|
— |
|
|
— |
|
|
3,711 |
|
Net income (loss) |
|
|
(49,327) |
|
|
6,213 |
|
|
9,989 |
|
|
(7,469) |
|
|
(40,594) |
|
Net income attributable to noncontrolling interests – Operating Partnership |
|
|
— |
|
|
— |
|
|
— |
|
|
3,296 |
|
|
3,296 |
|
Net loss attributable to noncontrolling interests – consolidated real estate entities |
|
|
— |
|
|
— |
|
|
— |
|
|
15,655 |
|
|
15,655 |
|
Net income (loss) attributable to Investors Real Estate Trust |
|
|
(49,327) |
|
|
6,213 |
|
|
9,989 |
|
|
11,482 |
|
|
(21,643) |
|
Dividends to preferred shareholders |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,879) |
|
|
(2,879) |
|
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |
|
$ |
(49,327) |
|
$ |
6,213 |
|
$ |
9,989 |
|
$ |
8,603 |
|
$ |
(24,522) |
|
(1) |
Offsite costs associated with property management and casualty-related amounts are included in the Corporate and Other column. |
13
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
NET OPERATING INCOME DETAIL
(in thousands)
|
|
Three Months Ended July 31, 2015 |
|
|||||||||||||
|
|
Reporting Segments |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Corporate and |
|
|
|
|
|
|
|
Multifamily |
|
Healthcare |
|
All Other |
|
Other |
|
Total |
|
|||||
Real estate rental revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store |
|
$ |
28,976 |
|
$ |
10,180 |
|
$ |
2,417 |
|
$ |
— |
|
$ |
41,573 |
|
Non-same-store |
|
|
2,457 |
|
|
599 |
|
|
416 |
|
|
— |
|
|
3,472 |
|
Total |
|
|
31,433 |
|
|
10,779 |
|
|
2,833 |
|
|
— |
|
|
45,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate expenses(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store |
|
|
12,150 |
|
|
3,253 |
|
|
501 |
|
|
757 |
|
|
16,661 |
|
Non-same-store |
|
|
1,288 |
|
|
229 |
|
|
109 |
|
|
17 |
|
|
1,643 |
|
Total |
|
|
13,438 |
|
|
3,482 |
|
|
610 |
|
|
774 |
|
|
18,304 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income (NOI) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store |
|
|
16,826 |
|
|
6,927 |
|
|
1,916 |
|
|
(757) |
|
|
24,912 |
|
Non-same-store |
|
|
1,169 |
|
|
370 |
|
|
307 |
|
|
(17) |
|
|
1,829 |
|
Net operating income (loss) |
|
$ |
17,995 |
|
$ |
7,297 |
|
$ |
2,223 |
|
$ |
(774) |
|
$ |
26,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of NOI to net income (loss) available to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation/amortization |
|
$ |
(7,593) |
|
$ |
(2,618) |
|
$ |
(921) |
|
$ |
(85) |
|
$ |
(11,217) |
|
Impairment of real estate investments |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,285) |
|
|
(1,285) |
|
General and administrative expenses |
|
|
— |
|
$ |
— |
|
$ |
— |
|
|
(2,454) |
|
|
(2,454) |
|
Acquisition and investment related costs |
|
|
— |
|
|
— |
|
|
— |
|
|
(7) |
|
|
(7) |
|
Other expenses |
|
|
— |
|
|
— |
|
|
— |
|
|
(417) |
|
|
(417) |
|
Interest expense |
|
|
(5,923) |
|
|
(2,127) |
|
|
(394) |
|
|
630 |
|
|
(7,814) |
|
Interest and other income |
|
|
— |
|
|
— |
|
|
— |
|
|
607 |
|
|
607 |
|
Income (loss) before gain on sale of real estate and other investments and (loss) income from discontinued operations |
|
|
4,479 |
|
|
2,552 |
|
|
908 |
|
|
(3,785) |
|
|
4,154 |
|
Loss on sale of real estate and other investments |
|
|
— |
|
|
— |
|
|
(175) |
|
|
— |
|
|
(175) |
|
Income (loss) from continuing operations |
|
|
4,479 |
|
|
2,552 |
|
|
733 |
|
|
(3,785) |
|
|
3,979 |
|
Income (loss) from discontinued operations |
|
|
— |
|
|
1,426 |
|
|
(678) |
|
|
— |
|
|
748 |
|
Net income (loss) |
|
|
4,479 |
|
|
3,978 |
|
|
55 |
|
|
(3,785) |
|
|
4,727 |
|
Net income attributable to noncontrolling interests – Operating Partnership |
|
|
— |
|
|
— |
|
|
— |
|
|
(186) |
|
|
(186) |
|
Net income attributable to noncontrolling interests – consolidated real estate entities |
|
|
— |
|
|
— |
|
|
— |
|
|
(1) |
|
|
(1) |
|
Net income (loss) attributable to Investors Real Estate Trust |
|
|
4,479 |
|
|
3,978 |
|
|
55 |
|
|
(3,972) |
|
|
4,540 |
|
Dividends to preferred shareholders |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,879) |
|
|
(2,879) |
|
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |
|
$ |
4,479 |
|
|
3,978 |
|
|
55 |
|
|
(6,851) |
|
|
1,661 |
|
(1) |
Offsite costs associated with property management and casualty-related amounts are included in the Corporate and Other column. |
14
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
MULTIFAMILY SUMMARY(1)
|
|
Three Months Ended |
|
|||||||||||||
|
|
07/31/16 |
|
|
04/30/16 |
|
|
01/31/16 |
|
|
10/31/15 |
|
|
07/31/15 |
|
|
Number of Units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store |
|
|
10,840 |
|
|
9,853 |
|
|
9,877 |
|
|
9,877 |
|
|
10,268 |
|
Non-Same-Store |
|
|
2,196 |
|
|
3,121 |
|
|
2,915 |
|
|
2,783 |
|
|
1,759 |
|
All Properties |
|
|
13,036 |
|
|
12,974 |
|
|
12,792 |
|
|
12,660 |
|
|
12,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Investment Per Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store |
|
$ |
77,371 |
|
$ |
72,986 |
|
$ |
72,696 |
|
$ |
72,308 |
|
$ |
69,992 |
|
Non-Same-Store |
|
|
196,164 |
|
|
161,851 |
|
|
142,111 |
|
|
134,136 |
|
|
149,281 |
|
All Properties |
|
$ |
97,382 |
|
$ |
94,092 |
|
$ |
88,228 |
|
$ |
84,701 |
|
$ |
81,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Scheduled Rent(2) per Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store |
|
$ |
888 |
|
$ |
871 |
|
$ |
877 |
|
$ |
885 |
|
$ |
861 |
|
Non-Same-Store |
|
|
1,458 |
|
|
1,244 |
|
|
1,229 |
|
|
1,218 |
|
|
1,445 |
|
All Properties |
|
$ |
984 |
|
$ |
960 |
|
$ |
956 |
|
$ |
952 |
|
$ |
944 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Rental Rate per Unit(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store |
|
$ |
928 |
|
$ |
912 |
|
$ |
916 |
|
$ |
927 |
|
$ |
886 |
|
Non-Same-Store |
|
|
1,462 |
|
|
1,276 |
|
|
1,255 |
|
|
1,240 |
|
|
1,473 |
|
All Properties |
|
$ |
1,020 |
|
$ |
1,000 |
|
$ |
993 |
|
$ |
992 |
|
$ |
985 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store |
|
|
93.0 |
% |
|
94.8 |
% |
|
94.9 |
% |
|
95.4 |
% |
|
93.5 |
% |
Non-Same-Store |
|
|
77.5 |
% |
|
78.4 |
% |
|
78.1 |
% |
|
79.5 |
% |
|
77.7 |
% |
All Properties |
|
|
90.4 |
% |
|
90.8 |
% |
|
91.1 |
% |
|
91.9 |
% |
|
91.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses as a % of Scheduled Rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store |
|
|
47.0 |
% |
|
44.4 |
% |
|
45.9 |
% |
|
47.1 |
% |
|
44.4 |
% |
Non-Same-Store |
|
|
31.2 |
% |
|
36.6 |
% |
|
34.0 |
% |
|
39.9 |
% |
|
31.9 |
% |
All Properties |
|
|
43.0 |
% |
|
42.0 |
% |
|
42.4 |
% |
|
45.2 |
% |
|
41.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Recurring Capital Expenditures(2) per Unit |
|
$ |
105 |
|
$ |
84 |
|
$ |
142 |
|
$ |
173 |
|
$ |
159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Recurring Capital Expenditures per Unit - Same-Store |
|
$ |
200 |
|
$ |
85 |
|
$ |
77 |
|
$ |
291 |
|
$ |
274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value-Add Expenditures per Unit(4) |
|
$ |
8,102 |
|
$ |
7,632 |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
(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 20. |
(3) |
Average rental rate is defined as total revenues divided by the weighted average occupied units for the period. |
(4) |
Cost per unit represents the average amount spent on completed and in-progress units during the period. |
15
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
HEALTHCARE LEASING SUMMARY (Same-Store Properties)
Healthcare Leasing Activity
During fiscal year 2017, we have executed new and renewal healthcare leases for our same-store properties on 32,224 square feet for the three months ended July 31, 2016. Due to our leasing efforts, occupancy in our same-store healthcare portfolio has remained strong at 92.7% as of July 31, 2016.
The total leasing activity for our same-store healthcare properties, expressed in square feet of leases signed during the period, and the resulting occupancy levels, are as follows:
Three Months Ended July 31, 2016 and 2015
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
||
|
|
Square Feet of |
|
Square Feet of |
|
Square Feet of |
|
|
|
|
|
||||||
|
|
New Leases(1) |
|
Leases Renewed(1) |
|
Leases Executed(1 |
|
Occupancy |
|
||||||||
Segments |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
Healthcare |
|
12,140 |
|
1,624 |
|
20,084 |
|
46,422 |
|
32,224 |
|
48,046 |
|
92.7 |
% |
95.8 |
% |
(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. |
Healthcare 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 properties:
Three Months Ended July 31, 2016 and 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Tenant |
|
Leasing |
|
||||||||
|
|
Square Feet of |
|
Average Term |
|
Average |
|
Improvement Cost per |
|
Commissions per |
|
||||||||||||||||
|
|
New Leases(1 |
|
in Years |
|
Effective Rent(2 |
|
Square Foot(1) |
|
Square Foot(1 |
|
||||||||||||||||
Segments |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Healthcare |
|
12,140 |
|
1,624 |
|
15.0 |
|
16.5 |
|
$ |
20.30 |
|
$ |
23.64 |
|
$ |
55.15 |
|
$ |
35.00 |
|
$ |
8.75 |
|
|
10.00 |
|
(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. |
16
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
HEALTHCARE LEASING SUMMARY (Same-Store Properties)
Healthcare Lease Renewals
The following table summarizes our lease renewal activity within our same-store healthcare segment (square feet data in thousands):
Three Months Ended July 31, 2016 and 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average |
|
Tenant Improvement |
|
Leasing |
|
||||||||||
|
|
Square Feet of Leases |
|
Percent of Expiring |
|
Average Term |
|
Growth (Decline) |
|
Cost per Square |
|
Commissions per |
|
||||||||||||||||
|
|
Renewed(1) |
|
Leases Renewed(2) |
|
in Years(3) |
|
in Effective Rents(4) |
|
Foot(1) |
|
Square Foot(1) |
|
||||||||||||||||
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
||||
Healthcare |
|
20,084 |
|
46,422 |
|
100.0 |
% |
86.5 |
% |
3.3 |
|
8.4 |
|
4.7 |
% |
15.3 |
% |
$ |
4.11 |
|
$ |
15.23 |
|
$ |
2.51 |
|
$ |
6.30 |
|
(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) |
Lease renewals during the three months ended July 31, 2016 ranged from six-month to ten-year terms, with a weighted average term of 3.3 years. The six-month renewal was for a 4,800 square foot lease that was designed to be co-terminus with another lease with the same tenant. Both leases are expected to renew for seven years at that time. |
(4) |
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. |
Healthcare 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 healthcare properties, including square footage and annualized base rent for expiring leases, as of July 31, 2016.
|
|
|
|
|
|
Percentage of Total |
|
Annualized Base |
|
|
|
|
Percentage of Total |
|
|
|
|
|
|
Square Footage of |
|
Healthcare |
|
Rent of Expiring |
|
|
Average |
|
Healthcare |
|
|
Fiscal Year of Lease Expiration |
|
# of Leases |
|
Expiring Leases(2) |
|
Leased Square Footage |
|
Leases at Expiration(3) |
|
|
Rental Rate |
|
Annualized Base Rent |
|
|
2017(1) |
|
42 |
|
162,823 |
|
12.2 |
% |
$ |
3,302,203 |
|
$ |
20.28 |
|
11.2 |
% |
2018 |
|
18 |
|
172,258 |
|
12.9 |
% |
|
4,275,288 |
|
|
24.82 |
|
14.5 |
% |
2019 |
|
14 |
|
178,998 |
|
13.4 |
% |
|
3,712,483 |
|
|
20.74 |
|
12.6 |
% |
2020 |
|
13 |
|
75,006 |
|
5.6 |
% |
|
1,555,258 |
|
|
20.74 |
|
5.3 |
% |
2021 |
|
20 |
|
95,575 |
|
7.2 |
% |
|
2,028,150 |
|
|
21.22 |
|
6.9 |
% |
2022 |
|
11 |
|
62,328 |
|
4.7 |
% |
|
1,152,353 |
|
|
18.49 |
|
3.9 |
% |
2023 |
|
11 |
|
52,511 |
|
3.9 |
% |
|
985,379 |
|
|
18.77 |
|
3.4 |
% |
2024 |
|
25 |
|
154,575 |
|
11.6 |
% |
|
3,572,636 |
|
|
23.11 |
|
12.1 |
% |
2025 |
|
5 |
|
76,691 |
|
5.8 |
% |
|
1,661,344 |
|
|
21.66 |
|
5.6 |
% |
2026 |
|
9 |
|
103,178 |
|
7.7 |
% |
|
1,777,081 |
|
|
17.22 |
|
6.0 |
% |
Thereafter |
|
15 |
|
200,308 |
|
15.0 |
% |
|
5,451,265 |
|
|
27.21 |
|
18.5 |
% |
Totals |
|
183 |
|
1,334,251 |
|
100.0 |
% |
$ |
29,473,440 |
|
$ |
22.09 |
|
100.0 |
% |
(1) |
Includes month-to-month leases. As of July 31, 2016, month-to-month leases accounted for 24,014 square feet. |
(2) |
Assuming that none of the tenants exercise renewal or termination options, and including leases renewed prior to expiration. Also excludes 1,361 square feet of space occupied by us. |
(3) |
Annualized Base Rent is monthly scheduled rent as of July 1, 2016, multiplied by 12. |
17
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
10 LARGEST COMMERCIAL TENANTS – BASED ON ANNUALIZED BASE RENT(1)
as of July 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
% of Total |
|
|
|
% of Aggregate |
|
|
|
|
|
Remaining |
|
Commercial |
|
Aggregate |
|
Occupied |
|
|
|
Number of |
|
Lease Term |
|
Minimum |
|
Rentable |
|
Square |
|
Tenant |
|
Properties |
|
in Months |
|
Rents |
|
Square Feet |
|
Feet |
|
Affiliates of Edgewood Vista |
|
33 |
|
50 |
|
31.3 |
% |
1,521,147 |
|
37.0 |
% |
Fairview Health Services |
|
8 |
|
49 |
|
8.0 |
% |
240,243 |
|
5.9 |
% |
St. Luke’s Hospital of Duluth, Inc. |
|
5 |
|
93 |
|
6.9 |
% |
186,331 |
|
4.5 |
% |
PrairieCare Medical LLC |
|
2 |
|
147 |
|
4.8 |
% |
100,292 |
|
2.4 |
% |
HealthEast Care System |
|
1 |
|
31 |
|
3.7 |
% |
114,316 |
|
2.8 |
% |
Quality Manufacturing Corp |
|
1 |
|
78 |
|
2.2 |
% |
427,798 |
|
10.4 |
% |
Allina Health |
|
4 |
|
35 |
|
1.8 |
% |
53,132 |
|
1.3 |
% |
Children’s Hospitals & Clinics |
|
3 |
|
38 |
|
1.7 |
% |
50,438 |
|
1.2 |
% |
Noran Neurological Clinic |
|
1 |
|
85 |
|
1.6 |
% |
38,506 |
|
1.0 |
% |
Amerada Hess |
|
1 |
|
120 |
|
1.5 |
% |
50,610 |
|
1.2 |
% |
Total/Weighted Average |
|
|
|
55 |
|
63.5 |
% |
2,782,813 |
|
67.7 |
% |
(1)See Definitions on page 20.
18
INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
FISCAL 2017 ACQUISITIONS AND DEVELOPMENT SUMMARY
as of July 31, 2016
(dollars in thousands)
Development Placed in Service
|
|
|
|
|
|
|
|
|
|
Occupancy at |
|
Occupancy |
|
Development |
|
|
|
|
|
|
|
|
Date Placed in |
|
|
|
Date Placed in |
|
as of |
|
Cost as of |
|
|
Property |
|
Location |
|
Segment |
|
Service |
|
Number of Units |
|
Service |
|
July 31, 2016 |
|
July 31, 2016 |
|
|
71 France(1) |
|
Edina, MN |
|
Multifamily |
|
5/1/16 |
|
241 |
|
45.1 |
% |
72.8 |
% |
$ |
72,230 |
|
(1) |
We are currently an approximately 52.6% partner in the joint venture entity constructing this project. The anticipated total cost amount given is the total cost to the joint venture entity. |
Development in Progress
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in fiscal years) |
|
|
|
|
|
|
|
|
|
Percentage |
|
(in thousands) |
|
Anticipated |
|
||||
|
|
|
|
|
|
|
|
Leased |
|
Anticipated |
|
Costs as of |
|
Construction |
|
||
Project Name and Location |
|
Location |
|
Planned Segment |
|
Number of Units |
|
or Committed |
|
Total Cost |
|
July 31, 2016 |
|
Completion |
|
||
Monticello Crossings |
|
Monticello, MN |
|
Multifamily |
|
202 units |
|
36.7 |
% |
|
31,784 |
|
|
24,248 |
|
3Q 2017 |
|
Other |
|
|
|
n/a |
|
n/a |
|
n/a |
|
|
n/a |
|
|
3,155 |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
$ |
31,784 |
|
$ |
27,403 |
|
|
|
19
Definitions
July 31, 2016
Adjusted EBITDA is 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
20
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.
21
28R.,A7JP<8QN]=.C6BW/S'CSBS+)Y
M54P>'JJI.=DN5W2LTVVUIT];GS[1117ZZO;6Q^^U%?$OPO_P"#@3]G/X@0Q_VEK'B+P?<./FCU
M?2)'"G_?M_-7'N2*^RO"7BK3_'7A73=;TFZ2]TO6+6*]L[A 0L\,B!T< @'!
M4@\@'FOR_$X'$8=VKP5']#8#-L%C4WA*L9VWLTVO5;KYGE'[>G[&FA?MS_
M +.FK^"M6$5O?,/M6C:B4W-IEZH/ER#OM.2K@=49AUP1_-O\6/A;KGP1^).M
M>$O$MC)INN^'[M[.\MW_ ('4]0?XE(PRL.&4@C@U_5?7YL_\%^?^"='_ N3
MX>-\9?"-CO\ %'A.VV:]!"GSZEIZ?\ML#K) .2>ICSS\BBOIN%,Y^KU?JM5^
MY+;R?^3_ #^9\#XC\*_7L-_:&&7[VFM;?:C_ )QW7E==C\5:***_4#^>2UHN
MM7GAS6+74-/NKBQO[&9+BVN()#'+!(A#*ZL.58$ @CD$5^]W_!(/_@JG8?MO
M> (_"OBJZM[/XI:#;C[3&<1KKL"@#[5$.F__ )Z(.A^8?*<+^ ]:_@+Q[K7P
MN\9Z;XB\.ZE>:/K>CSK%R=N[9G&3C/4UX1_P5$_X)Y7/_!17X7>&_#MMXJ@\)MH.JG4
MC/+IYO!,#"\>S:)$Q][.7NG6+65K.=[%2D+22%,+M!R
MYR03QG WZ\ZI*\F]/DK+Y+3\CW:$5&G%*^W5W?S;;N_F_4\=^-_P:^*GC7QA
M-J7A/XSS^!]'6W54TN+PK9:@ Z@[G,LWS$L>W ]R?'/V'=)^.G[0GP0\ ?
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M?#O]HC_@G1X);3_!*-,L5);R(91F*X$:Y"AAO8
M!5' 'H
E>UP_FCP.*M4TA+27EY_+\KGR_&.0K-?7C\
MJSD_P#7-O\ T-JZ>OBL1_%EZO\ ,^HH_P ./H@KX+B&*^]*^#(Q
MD5QUNAM$E' J6)