North Dakota | 45-0311232 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
1400 31st Avenue SW, Suite 60 | |
Post Office Box 1988 | |
Minot, ND 58702-1988 | |
(Address of principal executive offices) (Zip code) |
þ Large accelerated filer | ¨ Accelerated filer | ¨ Emerging growth company | ||
¨ Non-accelerated filer | ¨ Smaller reporting company |
PAGE | ||
PART I | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
PART III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
PART IV | ||
Item 15. | ||
• | economic conditions in the markets where we own apartment communities or markets in which we may invest in the future; |
• | rental conditions in our markets, including occupancy levels and rental rates, our potential inability to renew residents or obtain new residents upon expiration of existing leases, changes in tax and housing laws, or other factors; |
• | adverse changes in real estate markets, including future demand for apartment homes in our significant markets, barriers of entry into new markets, limitations on our ability to increase rental rates, our ability to identify and consummate acquisitions and dispositions on favorable terms, our ability to reinvest sales proceeds successfully, and our ability to accommodate any significant decline in the market value of real estate serving as collateral for our mortgage obligations; |
• | inability to succeed in any new markets we may enter; |
• | failure of new acquisitions to achieve anticipated results or be efficiently integrated; |
• | inability to complete lease-up of our projects on schedule and on budget; |
• | inability to sell certain properties on terms that are acceptable; |
• | failure to reinvest proceeds from sales of properties into tax-deferred exchanges, which could necessitate special dividend and tax protection payments; |
• | inability to fund capital expenditures out of cash flow; |
• | inability to pay, or need to reduce, dividends on our common shares; |
• | financing risks, including our potential inability to obtain debt or equity financing on favorable terms, or at all; |
• | level and volatility of interest or capitalization rates or capital market conditions; |
• | changes in operating costs, including real estate taxes, utilities, and insurance costs; |
• | the availability and cost of casualty insurance for losses; |
• | inability to continue to satisfy complex rules in order to maintain our status as a REIT for federal income tax purposes, inability of the Operating Partnership to satisfy the rules to maintain its status as a partnership for federal income tax purposes, and the risk of changes in laws affecting REITs; |
• | inability to attract and retain qualified personnel; |
• | cyber liability or potential liability for breaches of our privacy or information security systems; |
• | inability to comply with environmental laws and regulations; and |
• | other risks identified in this Report, in other SEC reports, or in other documents that we publicly disseminate. |
• | Providing excellent customer service to enhance resident satisfaction and retention; |
• | Employing new technologies that make our communities more efficient and more accessible to residents; |
• | Optimizing revenues; |
• | Controlling operating costs; and |
• | Unlocking value within the portfolio through redevelopment and enhancement of existing assets. |
• | Investing in income-producing apartment communities that grow distributable cash flow and are located in key geographic markets with populations ranking in the top 25 U.S. metropolitan statistical areas, including expansion in the Minneapolis and Denver markets; |
• | Selecting markets with favorable market characteristics, including occupancy rates, supply pipeline, rent growth, income growth, and employment forecasts; |
• | Leveraging our Midwest-centered portfolio to take advantage of our heightened market knowledge and regional experience; |
• | Building a strong market presence in new markets but limiting over-exposure to any given market; and |
• | Deemphasizing our exposure to tertiary markets. |
(in thousands) | |||||||||||||||
Transition Period Ended | Years Ended | ||||||||||||||
December 31, 2018 | April 30, 2018 | April 30, 2017 | April 30, 2016 | ||||||||||||
Limited partnership units issued | — | — | — | 2,559 | |||||||||||
Value at issuance, net of issue costs | $ | — | $ | — | $ | — | $ | 18,226 |
• | downturns in national, regional, and local economic conditions (particularly increases in unemployment); |
• | competition from other apartment communities; |
• | local real estate market conditions, including an oversupply of apartments or other housing, or a reduction in demand for apartment communities; |
• | the attractiveness of our apartment communities to residents as well as residents' perceptions of the safety, convenience, and attractiveness of our apartment communities and the areas in which they are located; |
• | changes in interest rates and availability of attractive financing that might make other housing options, like home ownership, more attractive; |
• | our ability to collect rents from our residents; |
• | vacancies, changes in rental rates, and the periodic need to repair, renovate, and redevelop our apartment communities; |
• | increases in operating costs, including real estate taxes, state and local taxes, insurance expenses, utilities, and security costs, many of which are not reduced significantly when circumstances cause a reduction in revenues from a property; |
• | increases in compensation costs due to the tight labor market in many of the markets in which we operate; |
• | our ability to provide adequate maintenance and insurance on our apartment communities; and |
• | changes in tax laws and other government regulations that could affect the value of REITs generally or our business in particular. |
• | acquisition agreements are subject to customary closing conditions, including completion of due diligence investigations, and we may be unable to complete an acquisition after making a non-refundable deposit and incurring other acquisition-related costs; |
• | expected occupancy, rental rates, and operating expenses of acquired apartment communities may differ from the actual results, or from those of our existing apartment communities; |
• | we may be unable to obtain financing for acquisitions on favorable terms, or at all; |
• | competition for these properties could cause us to pay higher prices for new properties or prevent us from purchasing a desired property at all; |
• | we may be subject to unknown liabilities from acquired properties, with either no recourse or limited recourse against prior owners or other third parties with respect to these unknown liabilities; and |
• | we may be unable to quickly and efficiently integrate new acquisitions into our existing operations. |
• | we may not be successful in identifying suitable properties or other assets that meet our acquisition or development criteria or in consummating acquisitions or developments on satisfactory terms, or at all; |
• | we may be unable to maintain consistent standards, controls, policies, and procedures, or realize the anticipated benefits of the acquisitions within the anticipated time frame, or at all; |
• | acquisitions and divestitures could divert our attention from our existing properties and could cause us to lose key employees or be unable to attract highly qualified new employees; |
• | unfamiliarity with the dynamics and prevailing market conditions or local government or permitting procedures of any new geographic markets could adversely affect our ability to successfully expand into or operate within those markets or cause us to become more dependent on third parties in new markets due to our inability to directly and efficiently manage and otherwise monitor new properties in new markets; |
• | we may make assumptions regarding the expected future performance of acquired properties, including expected occupancy, rental rates, and cash flows, that prove to be inaccurate; and |
• | we may improperly estimate the costs of repositioning or redeveloping an acquired property. |
• | the need to expand our management team and staff; |
• | the need to enhance internal operating systems and controls; and |
• | the ability to consistently achieve targeted returns on individual properties. |
• | our partner might become insolvent, refuse to make capital contributions when due, or otherwise fail to meet its obligations, which may result in certain liabilities to us for guarantees and other commitments; |
• | our partner might at any time have economic or other business interests or goals that are or become inconsistent with our interests or goals; |
• | we could become engaged in a dispute with our partner, which could require us to expend additional resources to resolve such disputes; or |
• | our partner may be in a position to take action or withhold consent contrary to our instructions or requests, which could restrict our ability to transfer our interest in a joint venture to a third party. |
• | our cash flow will be insufficient to meet required payments of principal and interest; |
• | we will not be able to renew, refinance, or repay our indebtedness when due; and |
• | the terms of any renewal or refinancing will be less favorable than the terms of our current indebtedness. |
• | regional, national, and global economic and business conditions; |
• | actual or anticipated changes in our quarterly operating results or dividends; |
• | changes in our funds from operations or earnings estimates; |
• | investor interest in our property portfolio; |
• | the market perception and performance of REITs in general; |
• | the market perception or trading volume of REITs relative to other investment opportunities; |
• | the market perception of our financial condition, performance, distributions, and growth potential; |
• | general stock and bond market conditions, including potential increases in interest rates that could lead investors to seek high annual yield from dividends; |
• | shifts in our investor base to a higher concentration of passive investors, including exchange-traded funds and index funds, that could have an adverse effect on our ability to communicate with our shareholders; |
• | our ability to access capital markets, which could impact our cost of capital; |
• | a change in our credit rating or analyst ratings; |
• | changes in minimum dividend requirements; |
• | terrorism or other factors that adversely impact the markets in which our stock trades; and |
• | changes in tax laws or government regulations that could affect the attractiveness of our stock. |
• | operating and financial results cannot support the current distribution payment; |
• | unanticipated costs, capital requirements, or cash requirements; |
• | annual distribution requirements under the REIT provisions of the Code; |
• | a conclusion that the payment of distributions would cause us to breach the terms of certain agreements or contracts, such as financial ratio covenants in our debt financing documents; or |
• | other factors the Board of Trustees may consider relevant. |
• | less than 100 people owning our shares; |
• | our being “closely held” within the meaning of Section 856(h) of the Code; or |
• | 50% or more of the fair market value of our shares being held by persons other than “United States persons.” |
(in thousands) | ||||||||
Investment | Physical | |||||||
Number of | (initial cost plus | Occupancy | ||||||
Apartment | improvements less | as of | ||||||
Community Name and Location | Homes | impairment) | December 31, 2018 | |||||
MULTIFAMILY | ||||||||
71 France - Edina, MN (1) (2) (4) (5) | 241 | $ | 66,585 | 95.0 | % | |||
Alps Park - Rapid City, SD (1) | 71 | 6,208 | 100.0 | % | ||||
Arbors - South Sioux City, NE (1) | 192 | 9,505 | 94.8 | % | ||||
Arcata - Golden Valley, MN (4) (5) | 165 | 33,244 | 95.2 | % | ||||
Ashland - Grand Forks, ND (1) | 84 | 8,603 | 96.4 | % | ||||
Avalon Cove - Rochester, MN (5) | 187 | 36,127 | 97.3 | % | ||||
Boulder Court - Eagan, MN | 115 | 9,818 | 100.0 | % | ||||
Brookfield Village - Topeka, KS (1) | 160 | 9,215 | 97.5 | % | ||||
Canyon Lake - Rapid City, SD (1) | 109 | 6,674 | 97.2 | % | ||||
Cardinal Point - Grand Forks, ND (4) (5) | 251 | 35,052 | 94.4 | % | ||||
Cascade Shores - Rochester, MN (1) (5) | 90 | 18,383 | 95.6 | % | ||||
Castlerock - Billings, MT (1) | 166 | 8,059 | 95.2 | % | ||||
Chateau - Minot, ND (4) (5) | 104 | 21,299 | 93.3 | % | ||||
Cimarron Hills - Omaha, NE (1) | 234 | 15,185 | 96.2 | % | ||||
Colonial Villa - Burnsville, MN | 239 | 23,334 | 93.7 | % | ||||
Colony - Lincoln, NE (1) | 232 | 18,901 | 96.6 | % | ||||
Commons and Landing at Southgate - Minot, ND (1) (2) | 341 | 54,917 | 98.2 | % | ||||
Cottage West Twin Homes - Sioux Falls, SD (1) | 50 | 5,348 | 96.0 | % | ||||
Cottonwood - Bismarck, ND (1) | 268 | 24,011 | 96.3 | % | ||||
Country Meadows - Billings, MT (1) | 133 | 10,089 | 94.0 | % | ||||
Crestview - Bismarck, ND (1) | 152 | 6,826 | 98.0 | % | ||||
Crown Colony - Topeka, KS (1) | 220 | 14,525 | 96.8 | % | ||||
Crystal Bay - Rochester, MN (5) | 76 | 12,130 | 92.1 | % | ||||
Cypress Court - St. Cloud, MN (1) (2) | 196 | 20,714 | 96.9 | % | ||||
Deer Ridge - Jamestown, ND (1) (4) (5) | 163 | 25,041 | 94.5 | % | ||||
Dylan - Denver, CO (3)(4) | 274 | 89,942 | 91.2 | % | ||||
Evergreen - Isanti, MN (1) | 72 | 7,083 | 97.2 | % | ||||
Forest Park - Grand Forks, ND (1) | 268 | 14,836 | 91.4 | % | ||||
French Creek - Rochester, MN (5) | 40 | 5,153 | 100.0 | % | ||||
Gables Townhomes - Sioux Falls, SD (1) | 24 | 2,527 | 87.5 | % | ||||
Gardens - Grand Forks, ND (5) | 74 | 9,333 | 94.6 | % | ||||
Grand Gateway - St. Cloud, MN | 116 | 9,788 | 96.6 | % |
(in thousands) | ||||||||
Investment | Physical | |||||||
Number of | (initial cost plus | Occupancy | ||||||
Apartment | improvements less | as of | ||||||
Community Name and Location | Homes | impairment) | December 31, 2018 | |||||
GrandeVille at Cascade Lake - Rochester, MN (1) (5) | 276 | $ | 57,017 | 96.0 | % | |||
Greenfield - Omaha, NE | 96 | 6,044 | 99.0 | % | ||||
Heritage Manor - Rochester, MN (1) | 182 | 10,688 | 95.6 | % | ||||
Homestead Garden - Rapid City, SD (1) | 152 | 15,459 | 98.0 | % | ||||
Indian Hills - Sioux City, IA | 120 | 7,704 | 96.7 | % | ||||
Kirkwood Manor - Bismarck, ND (1) | 108 | 5,124 | 93.5 | % | ||||
Lakeside Village - Lincoln, NE (1) | 208 | 18,254 | 94.2 | % | ||||
Landmark - Grand Forks, ND | 90 | 2,913 | 93.3 | % | ||||
Legacy - Grand Forks, ND (1) | 360 | 33,568 | 91.1 | % | ||||
Legacy Heights - Bismarck, ND (4) (5) | 119 | 15,368 | 97.5 | % | ||||
Mariposa - Topeka, KS (1) | 54 | 6,550 | 98.1 | % | ||||
Meadows - Jamestown, ND | 81 | 7,064 | 95.1 | % | ||||
Monticello Crossings - Monticello, MN (4) (5) | 202 | 31,898 | 98.0 | % | ||||
Monticello Village - Monticello, MN | 60 | 5,354 | 98.3 | % | ||||
North Pointe - Bismarck, ND (1) | 73 | 5,619 | 91.8 | % | ||||
Northridge - Bismarck, ND | 68 | 8,590 | 95.6 | % | ||||
Oakmont Estates - Sioux Falls, SD | 79 | 6,664 | 98.7 | % | ||||
Oakwood Estates - Sioux Falls, SD | 160 | 8,155 | 95.6 | % | ||||
Olympic Village - Billings, MT (1) | 274 | 15,638 | 98.2 | % | ||||
Olympik Village - Rochester, MN (1) | 140 | 9,861 | 97.1 | % | ||||
Oxbo - St Paul, MN (3)(4) | 191 | 57,562 | 95.3 | % | ||||
Oxbow Park - Sioux Falls, SD | 120 | 7,294 | 94.2 | % | ||||
Park Meadows - Waite Park, MN (1) | 360 | 20,241 | 97.8 | % | ||||
Park Place - Plymouth, MN (3)(4) | 500 | 94,861 | 93.4 | % | ||||
Pebble Springs - Bismarck, ND | 16 | 991 | 100.0 | % | ||||
Pinehurst - Billings, MT | 21 | 1,282 | 85.7 | % | ||||
Plaza - Minot, ND (1) | 71 | 16,697 | 94.4 | % | ||||
Pointe West - Rapid City, SD (1) | 90 | 5,873 | 91.1 | % | ||||
Ponds at Heritage Place - Sartell, MN | 58 | 5,405 | 91.4 | % | ||||
Prairie Winds - Sioux Falls, SD (1) | 48 | 2,699 | 97.9 | % | ||||
Quarry Ridge - Rochester, MN (1) | 313 | 34,370 | 95.2 | % | ||||
Red 20 - Minneapolis, MN (1)(5) | 130 | 26,201 | 92.3 | % | ||||
Regency Park Estates - St. Cloud, MN (1) | 147 | 13,355 | 94.6 | % | ||||
Ridge Oaks - Sioux City, IA (1) | 132 | 7,258 | 92.4 | % | ||||
Rimrock West - Billings, MT (1) | 78 | 5,881 | 97.4 | % | ||||
River Ridge - Bismarck, ND | 146 | 26,145 | 99.3 | % | ||||
Rocky Meadows - Billings, MT (1) | 98 | 7,999 | 96.9 | % | ||||
Rum River - Isanti, MN (1) | 72 | 6,129 | 94.4 | % | ||||
Sherwood - Topeka, KS (1) | 300 | 21,153 | 99.0 | % | ||||
Sierra Vista - Sioux Falls, SD | 44 | 2,934 | 100.0 | % | ||||
Silver Springs - Rapid City, SD (1) | 52 | 3,946 | 98.1 | % | ||||
South Pointe - Minot, ND (1) | 196 | 15,736 | 98.5 | % | ||||
Southpoint - Grand Forks, ND | 96 | 10,638 | 93.8 | % | ||||
Southwind - Grand Forks, ND (1) | 164 | 9,457 | 88.4 | % | ||||
Sunset Trail - Rochester, MN (1) | 146 | 16,433 | 95.9 | % | ||||
Thomasbrook - Lincoln, NE (1) | 264 | 16,235 | 97.0 | % | ||||
Valley Park - Grand Forks, ND (1) | 167 | 8,480 | 91.0 | % | ||||
Villa West - Topeka, KS (1) | 308 | 19,232 | 94.8 | % | ||||
Village Green - Rochester, MN | 36 | 3,598 | 100.0 | % | ||||
Westend - Denver, CO (3)(4) | 390 | 127,879 | 96.7 | % | ||||
West Stonehill - Waite Park, MN (1) | 313 | 18,942 | 98.4 | % | ||||
Westwood Park - Bismarck, ND (1) | 65 | 4,088 | 96.9 | % |
(in thousands) | ||||||||
Investment | Physical | |||||||
Number of | (initial cost plus | Occupancy | ||||||
Apartment | improvements less | as of | ||||||
Community Name and Location | Homes | impairment) | December 31, 2018 | |||||
Whispering Ridge - Omaha, NE (1) | 336 | $ | 29,256 | 97.3 | % | |||
Winchester - Rochester, MN | 115 | 8,924 | 96.5 | % | ||||
Woodridge - Rochester, MN (1) | 110 | 9,756 | 97.3 | % | ||||
TOTAL MULTIFAMILY | 13,702 | $ | 1,582,917 | 95.7 | % |
(in thousands) | ||||||||
Investment | Physical | |||||||
Net Rentable | (initial cost plus | Occupancy | ||||||
Square | improvements less | as of | ||||||
Property Name and Location | Footage | impairment) | December 31, 2018 | |||||
OTHER - MIXED USE | ||||||||
71 France - Edina, MN (1) | 20,955 | $ | 6,654 | 100.0 | % | |||
Oxbo - St Paul, MN | 11,477 | 3,526 | 100.0 | % | ||||
Plaza - Minot, ND (1) | 50,610 | 9,597 | 100.0 | % | ||||
Red 20 - Minneapolis, MN (1) | 10,508 | 2,944 | 100.0 | % | ||||
TOTAL OTHER - MIXED USE | 93,550 | $ | 22,721 | |||||
OTHER - COMMERCIAL | ||||||||
Dakota West Plaza - Minot, ND | 16,921 | 624 | 52.3 | % | ||||
Minot 1400 31st Ave - Minot, ND | 48,960 | 11,606 | 76.3 | % | ||||
Minot IPS - Minot, ND | 27,698 | 6,368 | 100.0 | % | ||||
Woodbury 1865 Woodlane - Woodbury, MN | 69,600 | 3,400 | 100.0 | % | ||||
TOTAL OTHER - COMMERCIAL | 163,179 | $ | 21,998 | |||||
UNIMPROVED LAND | ||||||||
Creekside Crossing - Bismarck, ND | 3,049 | |||||||
Minot 1525 24th Ave SW - Minot, ND | 506 | |||||||
Rapid City - Rapid City, SD | 1,376 | |||||||
Weston - Weston, WI | 370 | |||||||
TOTAL UNIMPROVED LAND | $ | 5,301 | ||||||
TOTAL APARTMENT HOMES | 13,702 | |||||||
TOTAL SQUARE FOOTAGE - OTHER | 256,729 | |||||||
TOTAL GROSS REAL ESTATE INVESTMENTS, EXCLUDING MORTGAGE NOTES RECEIVABLE | $ | 1,632,937 |
(1) | Encumbered by mortgage debt. |
(2) | Owned by a joint venture entity and consolidated in our financial statements. We have an approximately 52.6% ownership in 71 France, 65.5% ownership in Commons & Landing at Southgate, and 86.1% ownership in Cypress Court. |
(3) | Non-same-store for the comparison of the eight months ended December 31, 2018 to the eight months ended December 31, 2017. Refer to Item 7 for definition of non-same-store. |
(4) | Non-same-store for the comparison of fiscal years 2018 and 2017. |
(5) | Non-same-store for the comparison of fiscal years 2017 and 2016. |
(in thousands) | ||||||||||||
State | Multifamily | Other | Total | % of Total | ||||||||
Minnesota | $ | 550,874 | $ | 15,297 | $ | 566,171 | 44.4 | % | ||||
North Dakota | 269,878 | 15,632 | 285,510 | 22.4 | % | |||||||
Colorado | 212,056 | — | 212,056 | 16.7 | % | |||||||
Nebraska | 81,890 | — | 81,890 | 6.4 | % | |||||||
South Dakota | 47,834 | — | 47,834 | 3.8 | % | |||||||
Kansas | 45,223 | — | 45,223 | 3.6 | % | |||||||
Montana | 25,730 | — | 25,730 | 2.0 | % | |||||||
Iowa | 9,351 | — | 9,351 | 0.7 | % | |||||||
Total | $ | 1,242,836 | $ | 30,929 | $ | 1,273,765 | 100.0 | % |
Distributions Declared | ||||
(per share and unit) | ||||
Two months ended December 31, 2018 | $ | 0.70 | ||
Three months ended October 31, 2018 | 0.70 | |||
Three months ended July 31, 2018 | 0.70 |
Distributions Declared | |||||||
(per share and unit) | |||||||
Quarter Ended | Fiscal Year 2018 | Fiscal Year 2017 | |||||
April 30 | $ | 0.70 | $ | 0.70 | |||
January 31 | 0.70 | 1.30 | |||||
October 31 | 0.70 | 1.30 | |||||
July 31 | 0.70 | 1.30 |
Maximum Dollar | |||||||||||
Total Number of Shares | Amount of Shares That | ||||||||||
Total Number of | Average Price | Purchased as Part of | May Yet Be Purchased | ||||||||
Shares and Units | Paid per | Publicly Announced | Under the Plans or | ||||||||
Period | Purchased(1) | Share and Unit | Plans or Programs | Programs(2) | |||||||
May 1 - 31, 2018 | 11,921 | $ | 51.77 | 11,829 | $ | 34,949,007 | |||||
June 1 - 30, 2018 | 8,944 | 53.07 | — | 34,949,007 | |||||||
July 1 - 31, 2018 | — | — | — | 34,949,007 | |||||||
August 1 - 31, 2018 | — | — | — | 34,949,007 | |||||||
September 1 - 30, 2018 | 60 | 54.70 | — | 34,949,007 | |||||||
October 1 - 31, 2018 | — | — | — | 34,949,007 | |||||||
November 1 - 30, 2018 | 1,717 | 52.57 | 1,717 | 34,858,396 | |||||||
December 1 - 31, 2018 | 28,865 | 51.16 | 28,575 | 33,391,744 | |||||||
Total | 51,507 | $ | 51.68 | 42,121 |
(1) | Includes 235 shares surrendered to us by employees in satisfaction of tax withholding obligations associated with the vesting of restricted shares. |
(2) | Represents amounts outstanding under our $50,000,000 share repurchase program, which was authorized by our Board of Trustees on December 7, 2016 reauthorized on December 5, 2017 for a one year period, and reauthorized for another one year period on December 5, 2018. |
Period Ending | ||||||||||||
Index | 12/31/2013 | 12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | 12/31/2018 | ||||||
Investors Real Estate Trust | 100.00 | 101.17 | 92.66 | 101.42 | 85.91 | 79.27 | ||||||
S&P 500 Index | 100.00 | 113.69 | 115.26 | 129.05 | 157.22 | 150.33 | ||||||
FTSE Nareit Equity REITs | 100.00 | 130.43 | 134.40 | 144.55 | 150.20 | 144.38 |
(in thousands, except per share data) | |||||||||||||||||||
Eight Months Ended | Fiscal Years Ended April 30, | ||||||||||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||
Consolidated Statement of Operations Data | |||||||||||||||||||
Revenue | $ | 121,871 | $ | 169,745 | $ | 160,104 | $ | 145,500 | $ | 141,294 | $ | 127,124 | |||||||
Impairment of real estate investments in continuing and discontinued operations | 1,221 | 18,065 | 57,028 | 5,983 | 6,105 | 44,426 | |||||||||||||
Gain (loss) on debt extinguishment in continuing and discontinued operations | (556 | ) | (7,448 | ) | (4,889 | ) | 29,230 | — | — | ||||||||||
Gain (loss) on sale of discontinued operations and real estate and other investments | 10,277 | 183,687 | 74,847 | 33,422 | 6,093 | 6,948 | |||||||||||||
Income (loss) from continuing operations | (5,890 | ) | (37,194 | ) | (46,228 | ) | 9,182 | 10,237 | (2,003 | ) | |||||||||
Income (loss) from discontinued operations | 570 | 164,823 | 76,753 | 67,420 | 18,447 | (14,937 | ) | ||||||||||||
Net income (loss) | (5,320 | ) | 127,629 | 30,525 | 76,602 | 28,684 | (16,940 | ) | |||||||||||
Net (income) loss attributable to noncontrolling interests – Operating Partnership | 1,032 | (12,702 | ) | (4,059 | ) | (7,032 | ) | (1,526 | ) | 4,676 | |||||||||
Net income (loss) attributable to controlling interests | (4,398 | ) | 116,788 | 43,347 | 72,006 | 24,087 | (13,174 | ) | |||||||||||
Consolidated Balance Sheet Data | |||||||||||||||||||
Total real estate investments | 1,289,476 | 1,380,245 | 1,121,385 | 1,204,654 | 1,057,356 | 910,077 | |||||||||||||
Total assets | 1,335,997 | 1,426,658 | 1,474,514 | 1,755,022 | 1,992,092 | 1,862,990 | |||||||||||||
Mortgages payable | 444,197 | 509,919 | 565,978 | 648,173 | 453,928 | 462,380 | |||||||||||||
Revolving lines of credit | 57,500 | 124,000 | 57,050 | 17,500 | 60,500 | 22,500 | |||||||||||||
Term loans | 143,991 | 69,514 | — | — | — | — | |||||||||||||
Total Investors Real Estate Trust shareholders’ equity | 568,786 | 605,663 | 553,721 | 618,758 | 652,110 | 592,184 | |||||||||||||
Consolidated Per Common Share Data (basic and diluted) | |||||||||||||||||||
Earnings (loss) from continuing operations – basic & diluted | $ | (0.79 | ) | $ | (3.54 | ) | $ | (3.01 | ) | — | $ | (0.32 | ) | $ | (1.11 | ) | |||
Earnings (loss) from discontinued operations – basic & diluted | $ | 0.04 | $ | 12.25 | $ | 5.59 | $ | 4.91 | $ | 1.37 | $ | (1.20 | ) | ||||||
Net income (loss) per common share - basic & diluted | $ | (0.75 | ) | $ | 8.71 | $ | 2.58 | $ | 4.91 | $ | 1.05 | $ | (2.31 | ) | |||||
Distributions | $ | 2.10 | $ | 2.80 | $ | 4.60 | $ | 5.20 | $ | 5.20 | $ | 5.20 |
CALENDAR YEAR | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||
Tax status of distributions | |||||||||||||
Capital gain | 100.00 | % | 48.87 | % | 87.57 | % | 11.99 | % | 23.09 | % | 3.09 | % | |
Ordinary income | — | 14.59 | % | 12.43 | % | 36.28 | % | 25.74 | % | 28.41 | % | ||
Return of capital | — | 36.54 | % | — | 51.73 | % | 51.17 | % | 68.50 | % |
• | Continued the refinement of our portfolio, resulting in the disposition of three apartment communities, five commercial properties, and three parcels of unimproved land for an aggregate sale price of $63.4 million; |
• | Stabilized two class A core assets - Oxbo Apartments located in St. Paul, Minnesota, and Dylan Apartments located in Denver, Colorado; |
• | Amended our line of credit to increase the overall unsecured facility and to make certain other changes to our credit facility described under "Credit Agreement" below; |
• | Changed our fiscal year-end to December 31, effective January 1, 2019, thereby improving comparability of IRET results with our peers; and |
• | Completed a 1-for-10 reverse stock split of our common stock, effective as of the close of trading on December 27, 2018, with trading commencing on a split-adjusted basis on December 28, 2018. |
• | increase the overall unsecured facility from $370.0 million to $395.0 million, reallocating the commitment for our revolving line of credit to $250.0 million and the remaining $145.0 million between two term loans; |
• | extend the maturity of the revolving line of credit to August 2022; |
• | extend the existing $70.0 million unsecured term loan maturity to January 2024; and |
• | add a new $75.0 million, 7-year unsecured term loan maturing in August 2025 that bears interest at a spread over LIBOR based on IRET's overall leverage. |
(in thousands) | ||||||||||||
Eight Months Ended December 31, | ||||||||||||
2018 | 2017 | $ Change | % Change | |||||||||
Revenue | ||||||||||||
Same-store | $ | 98,753 | $ | 95,539 | $ | 3,214 | 3.4 | % | ||||
Non-same-store | 17,385 | 4,044 | 13,341 | 329.9 | % | |||||||
Other properties and dispositions | 5,733 | 11,666 | (5,933 | ) | (50.9 | )% | ||||||
Total | 121,871 | 111,249 | 10,622 | 9.5 | % | |||||||
Property operating expenses, including real estate taxes | ||||||||||||
Same-store | 42,359 | 42,064 | 295 | 0.7 | % | |||||||
Non-same-store | 6,537 | 1,714 | 4,823 | 281.4 | % | |||||||
Other properties and dispositions | 1,823 | 4,037 | (2,214 | ) | (54.8 | )% | ||||||
Total | 50,719 | 47,815 | 2,904 | 6.1 | % | |||||||
Net operating income | ||||||||||||
Same-store | 56,394 | 53,475 | 2,919 | 5.5 | % | |||||||
Non-same-store | 10,848 | 2,330 | 8,518 | 365.6 | % | |||||||
Other properties and dispositions | 3,910 | 7,629 | (3,719 | ) | (48.7 | )% | ||||||
Total | $ | 71,152 | $ | 63,434 | $ | 7,718 | 12.2 | % | ||||
Property management expense | (3,663 | ) | (3,652 | ) | 11 | 0.3 | % | |||||
Casualty gain (loss) | (915 | ) | (600 | ) | 315 | 52.5 | % | |||||
Depreciation and amortization | (50,456 | ) | (54,902 | ) | (4,446 | ) | (8.1 | )% | ||||
Impairment of real estate investments | (1,221 | ) | (256 | ) | 965 | 377.0 | % | |||||
General and administrative expenses | (9,812 | ) | (9,041 | ) | 771 | 8.5 | % | |||||
Interest expense | (21,359 | ) | (22,804 | ) | (1,445 | ) | (6.3 | )% | ||||
Loss on extinguishment of debt | (556 | ) | (818 | ) | (262 | ) | (32.0 | )% | ||||
Interest and other income | 1,233 | 714 | 519 | 72.7 | % | |||||||
Income (loss) before gain (loss) on sale of real estate and other investments and income (loss) from discontinued operations | (15,597 | ) | (27,925 | ) | 12,328 | 44.1 | % | |||||
Gain (loss) on sale of real estate and other investments | 9,707 | 17,816 | (8,109 | ) | (45.5 | )% | ||||||
Income (loss) from continuing operations | (5,890 | ) | (10,109 | ) | 4,219 | (41.7 | )% | |||||
Income (loss) from discontinued operations | 570 | 150,703 | (150,133 | ) | (99.6 | )% | ||||||
NET INCOME (LOSS) | $ | (5,320 | ) | $ | 140,594 | $ | (145,914 | ) | (103.8 | )% | ||
Net (income) loss attributable to noncontrolling interests – Operating Partnership | 1,032 | (14,222 | ) | 15,254 | (107.3 | )% | ||||||
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities | (110 | ) | 1,042 | (1,152 | ) | (110.6 | )% | |||||
Net income (loss) attributable to controlling interests | (4,398 | ) | 127,414 | (131,812 | ) | (103.5 | )% | |||||
Dividends to preferred shareholders | (4,547 | ) | (6,296 | ) | 1,749 | (27.8 | )% | |||||
Redemption of preferred shares | — | (3,657 | ) | 3,657 | (100.0 | )% | ||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | (8,945 | ) | $ | 117,461 | $ | (126,406 | ) | (107.6 | )% |
(in thousands) | |||||||||||||||||||||||
Fiscal Years Ended April 30, | |||||||||||||||||||||||
2018 vs. 2017 | 2017 vs 2016 | ||||||||||||||||||||||
2018 | 2017 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | ||||||||||||||||
Revenue | |||||||||||||||||||||||
Same-store | $ | 126,415 | $ | 121,252 | $ | 5,163 | 4.3 | % | $ | 108,347 | $ | 110,078 | $ | (1,731 | ) | (1.6 | )% | ||||||
Non-same-store | 33,568 | 20,962 | 12,606 | 60.1 | % | 33,867 | 18,971 | 14,896 | 78.5 | % | |||||||||||||
Other properties and dispositions | 9,762 | 17,890 | (8,128 | ) | (45.4 | )% | 17,890 | 16,451 | 1,439 | 8.7 | % | ||||||||||||
Total | 169,745 | 160,104 | 9,641 | 6.0 | % | 160,104 | 145,500 | 14,604 | 10.0 | % | |||||||||||||
Property operating expenses, including real estate taxes | |||||||||||||||||||||||
Same-store | 56,773 | 51,862 | 4,911 | 9.5 | % | 46,988 | 46,099 | 889 | 1.9 | % | |||||||||||||
Non-same-store | 13,687 | 9,033 | 4,654 | 51.5 | % | 13,907 | 8,663 | 5,244 | 60.5 | % | |||||||||||||
Other properties and dispositions | 2,574 | 3,431 | (857 | ) | (25.0 | )% | 3,431 | 3,386 | 45 | 1.3 | % | ||||||||||||
Total | 73,034 | 64,326 | 8,708 | 13.5 | % | 64,326 | 58,148 | 6,178 | 10.6 | % | |||||||||||||
Net operating income | |||||||||||||||||||||||
Same-store | 69,642 | 69,390 | 252 | 0.4 | % | 61,359 | 63,979 | (2,620 | ) | (4.1 | )% | ||||||||||||
Non-same-store | 19,881 | 11,929 | 7,952 | 66.7 | % | 19,960 | 10,308 | 9,652 | 93.6 | % | |||||||||||||
Other properties and dispositions | 7,188 | 14,459 | (7,271 | ) | (50.3 | )% | 14,459 | 13,065 | 1,394 | 10.7 | % | ||||||||||||
Total | $ | 96,711 | $ | 95,778 | $ | 933 | 1.0 | % | $ | 95,778 | $ | 87,352 | $ | 8,426 | 9.6 | % | |||||||
Property management expense | (5,526 | ) | (5,046 | ) | 480 | 9.5 | % | (5,046 | ) | (3,714 | ) | 1,332 | 35.9 | % | |||||||||
Casualty gain (loss) | (500 | ) | (414 | ) | 86 | 20.8 | % | (414 | ) | (238 | ) | 176 | 73.9 | % | |||||||||
Depreciation and amortization | (82,070 | ) | (44,253 | ) | 37,817 | 85.5 | % | (44,253 | ) | (39,273 | ) | 4,980 | 12.7 | % | |||||||||
Impairment of real estate investments | (18,065 | ) | (57,028 | ) | (38,963 | ) | (68.3 | )% | (57,028 | ) | (5,543 | ) | 51,485 | 928.8 | % | ||||||||
General and administrative expenses | (14,203 | ) | (15,871 | ) | (1,668 | ) | (10.5 | )% | (15,871 | ) | (13,498 | ) | 2,373 | 17.6 | % | ||||||||
Acquisition and investment related costs | (51 | ) | (3,276 | ) | (3,225 | ) | (98.4 | )% | (3,276 | ) | (830 | ) | 2,446 | 294.7 | % | ||||||||
Interest expense | (34,178 | ) | (34,314 | ) | (136 | ) | (0.4 | )% | (34,314 | ) | (28,417 | ) | 5,897 | 20.8 | % | ||||||||
Loss on extinguishment of debt | (940 | ) | (1,651 | ) | (711 | ) | (43.1 | )% | (1,651 | ) | (106 | ) | 1,545 | 1,457.5 | % | ||||||||
Interest and other income | 1,508 | 1,146 | 362 | 31.6 | % | 1,146 | 385 | 761 | 197.7 | % | |||||||||||||
Income (loss) before gain (loss) on sale of real estate and other investments and income (loss) from discontinued operations | (57,314 | ) | (64,929 | ) | 7,615 | 11.7 | % | (64,929 | ) | (3,882 | ) | (61,047 | ) | (1,572.6 | )% | ||||||||
Gain (loss) on sale of real estate and other investments | 20,120 | 18,701 | 1,419 | 7.6 | % | 18,701 | 9,640 | 9,061 | 94.0 | % | |||||||||||||
Gain on bargain purchase | — | — | — | — | — | 3,424 | (3,424 | ) | (100.0 | )% | |||||||||||||
Income (loss) from continuing operations | (37,194 | ) | (46,228 | ) | 9,034 | (19.5 | )% | (46,228 | ) | 9,182 | (55,410 | ) | (603.5 | )% | |||||||||
Income (loss) from discontinued operations | 164,823 | 76,753 | 88,070 | 114.7 | % | 76,753 | 67,420 | 9,333 | 13.8 | % | |||||||||||||
NET INCOME (LOSS) | $ | 127,629 | $ | 30,525 | $ | 97,104 | 318.1 | % | $ | 30,525 | $ | 76,602 | $ | (46,077 | ) | (60.2 | )% | ||||||
Net (income) loss attributable to noncontrolling interests – Operating Partnership | (12,702 | ) | (4,059 | ) | (8,643 | ) | 212.9 | % | (4,059 | ) | (7,032 | ) | 2,973 | (42.3 | )% | ||||||||
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities | 1,861 | 16,881 | (15,020 | ) | (89.0 | )% | 16,881 | 2,436 | 14,445 | 593.0 | % | ||||||||||||
Net income (loss) attributable to controlling interests | 116,788 | 43,347 | 73,441 | 169.4 | % | 43,347 | 72,006 | (28,659 | ) | (39.8 | )% | ||||||||||||
Dividends to preferred shareholders | (8,569 | ) | (10,546 | ) | 1,977 | (18.7 | )% | (10,546 | ) | (11,514 | ) | 968 | (8.4 | )% | |||||||||
Redemption of preferred shares | (3,657 | ) | (1,435 | ) | (2,222 | ) | 154.8 | % | (1,435 | ) | — | (1,435 | ) | 100.0 | % | ||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | 104,562 | $ | 31,366 | $ | 73,196 | 233.4 | % | $ | 31,366 | $ | 60,492 | $ | (29,126 | ) | (48.1 | )% |
December 31, | April 30, | ||||||||||||||||
Physical Occupancy (1) | 2018 | 2017 | 2018 | 2017 | 2017 | 2016 | |||||||||||
Same-store | 95.8 | % | 95.2 | % | 96.5 | % | 93.8 | % | 94.2 | % | 94.9 | % | |||||
Non-same-store | 94.2 | % | 84.9 | % | 92.1 | % | 88.5 | % | 88.8 | % | 73.7 | % | |||||
Total | 95.7 | % | 94.5 | % | 95.6 | % | 93.1 | % | 93.1 | % | 90.8 | % | |||||
Number of Apartment Homes | 2018 | 2017 | 2018 | 2017 | 2017 | 2016 | |||||||||||
Same-store | 12,347 | 12,344 | 11,320 | 11,320 | 10,511 | 10,511 | |||||||||||
Non-same-store | 1,355 | 965 | 2,856 | 1,892 | 2,701 | 2,463 | |||||||||||
Total | 13,702 | 13,309 | 14,176 | 13,212 | 13,212 | 12,974 |
(1) | Physical occupancy represents the actual number of apartment homes leased divided by the total number of apartment homes at the end of the period. |
• | depreciation and amortization related to real estate; |
• | gains and losses from the sale of certain real estate assets; |
• | gains and losses from change in control; and |
• | impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. |
(in thousands, except per share and unit amounts) | ||||||||||||||||||||||
Eight Months Ended December 31, | 2018 | 2017 | ||||||||||||||||||||
Per | Per | |||||||||||||||||||||
Weighted Avg | Share | Weighted Avg | Share | |||||||||||||||||||
Shares and | and | Shares and | and | |||||||||||||||||||
Amount | Units(1) | Unit(2) | Amount | Units(1) | Unit(2) | |||||||||||||||||
Net income (loss) available to common shareholders | $ | (8,945 | ) | 11,937 | $ | (0.75 | ) | $ | 117,461 | 12,015 | $ | 9.78 | ||||||||||
Adjustments: | ||||||||||||||||||||||
Noncontrolling interests – Operating Partnership | (1,032 | ) | 1,387 | 14,222 | 1,483 | |||||||||||||||||
Depreciation and amortization | 48,425 | 61,200 | ||||||||||||||||||||
Impairment of real estate | 1,221 | 256 | ||||||||||||||||||||
Gain on sale of real estate | (9,110 | ) | (167,553 | ) | ||||||||||||||||||
Funds from operations applicable to common shares and Units | $ | 30,559 | 13,324 | $ | 2.29 | $ | 25,586 | 13,498 | $ | 1.90 |
(1) | Pursuant to Exchange Rights, limited partnership units of the Operating Partnership are redeemable for cash, or, at our discretion, may be exchangeable for common shares on a one-for-one basis. |
(2) | Net income (loss) available to common shareholders is calculated on a per common share basis. FFO is calculated on a per common share and limited partnership unit basis. |
(in thousands, except per share and unit amounts) | |||||||||||||||||||||||||||||||||
Fiscal Years Ended April 30, | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||
Per | Per | Per | |||||||||||||||||||||||||||||||
Weighted Avg | Share | Weighted Avg | Share | Weighted Avg | Share | ||||||||||||||||||||||||||||
Shares and | and | Shares and | and | Shares and | and | ||||||||||||||||||||||||||||
Amount | Units(1) | Unit(2) | Amount | Units(1) | Unit(2) | Amount | Units(1) | Unit(2) | |||||||||||||||||||||||||
Net income (loss) available to common shareholders | $ | 104,562 | 11,998 | $ | 8.71 | $ | 31,366 | 12,117 | $ | 2.59 | $ | 60,492 | 12,309 | $ | 4.91 | ||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||
Noncontrolling interests – Operating Partnership | 12,702 | 1,461 | 4,059 | 1,613 | 7,032 | 1,428 | |||||||||||||||||||||||||||
Depreciation and amortization | 87,299 | 52,564 | 63,789 | ||||||||||||||||||||||||||||||
Impairment of real estate | 18,065 | 42,065 | 5,983 | ||||||||||||||||||||||||||||||
Gain on sale of real estate | (183,687 | ) | (74,847 | ) | (33,422 | ) | |||||||||||||||||||||||||||
Funds from operations applicable to common shares and Units | $ | 38,941 | 13,459 | $ | 2.89 | $ | 55,207 | 13,730 | $ | 4.02 | $ | 103,874 | 13,737 | $ | 7.56 |
(1) | Pursuant to Exchange Rights, limited partnership units of the Operating Partnership are redeemable for cash, or, at our discretion, may be exchangeable for common shares on a one-for-one basis. |
(2) | Net income (loss) available to common shareholders is calculated on a per common share basis. FFO is calculated on a per common share and limited partnership unit basis. |
• | extending and sequencing our debt maturity dates; |
• | managing interest rate exposure through the appropriate use of a mix of fixed and floating debt and utilizing our line of credit and term loan as appropriate; |
• | maintaining adequate coverage ratios on our debt obligations; |
• | where appropriate, accessing the equity markets through our shelf registration statement. |
• | The disposition of three apartment communities, five commercial properties, and three land parcels for a total sales price of $63.4 million. The net proceeds of these transactions was $32.5 million after pay down of debt and distribution of $1.9 million in net proceeds to our joint venture partners in those transactions; and |
• | Proceeds from a $75.0 million term loan that expires in 2025. |
• | Repaying approximately $66.2 million of mortgage principal; and |
• | Funding capital expenditures for apartment communities of approximately $12.5 million. |
(in thousands) | ||||||||||||||||||||
Less than | More than | |||||||||||||||||||
Total | 1 Year | 1-3 Years | 3-5 Years | 5 Years | ||||||||||||||||
Long-term debt (principal and interest) | $ | 521,495 | $ | 48,756 | $ | 221,218 | $ | 103,499 | $ | 148,022 | ||||||||||
Line of credit (principal and interest)(1) | $ | 65,633 | $ | 2,168 | $ | 4,343 | $ | 59,122 | — | |||||||||||
Term loans (principal and interest) | $ | 182,247 | $ | 6,156 | $ | 12,328 | $ | 12,311 | $ | 151,452 | ||||||||||
Total | $ | 769,375 | $ | 57,080 | $ | 237,889 | $ | 174,932 | $ | 299,474 |
(1) | The future interest payments on the line of credit were estimated using the outstanding principal balance and interest rate in effect as of December 31, 2018. |
Future Principal Payments (in thousands, except percentages) | |||||||||||||||||||||||||
Fair | |||||||||||||||||||||||||
Debt | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total | Value | |||||||||||||||||
Fixed Rate | $ | 28,587 | $ | 87,592 | $ | 104,553 | $ | 40,917 | $ | 48,546 | $ | 135,779 | $ | 445,974 | $ | 444,241 | |||||||||
Average Interest Rate(1) | 5.18 | % | 5.03 | % | 4.93 | % | 4.30 | % | 4.05 | % | |||||||||||||||
Variable Rate(2) | — | — | — | $ | 57,500 | — | $ | 145,000 | $ | 202,500 | $ | 202,500 | |||||||||||||
Average Interest Rate(1) | — | — | — | 3.72 | % | — |
(1) | Interest rate is annualized, |
(2) | Includes $57.5 million under our line of credit and $145.0 million on our term loans. |
• | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions, acquisitions and dispositions of assets; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and the trustees; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. |
EXHIBIT NO. | DESCRIPTION | |
3.1. | ||
3.2 | ||
3.3 | ||
10.1** | ||
10.2** | ||
10.3 | ||
10.4** | ||
10.5** | ||
10.6** | ||
10.7** | ||
10.8** | ||
10.9** | ||
10.10** | ||
10.11** | ||
10.12** | ||
10.13** |
EXHIBIT NO. | DESCRIPTION | |
10.14 | ||
10.15 | ||
10.16 | ||
10.17 | ||
10.18 | ||
10.19 | ||
10.20 | ||
10.21 | ||
10.22 | ||
10.23 | ||
10.24 | ||
EXHIBIT NO. | DESCRIPTION | |
10.25 | ||
10.26 | ||
10.27** | ||
10.28** | ||
10.29** | ||
10.30† | ||
10.31 | ||
10.32† | ||
21.1† | ||
23.1† | ||
24.1† | ||
31.1† | ||
31.2† | ||
32.1† | ||
32.2† | ||
101† | The following materials from our Transition Report on Form 10-KT for the eight-months ended December 31, 2018 formatted in eXtensible Business Reporting Language ("XBRL"): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Statements of Cash Flows, and (v) notes to these consolidated financial statements. |
Date: February 27, 2019 | Investors Real Estate Trust | |
By: | /s/ Mark O. Decker, Jr. | |
Mark O. Decker, Jr. | ||
President & Chief Executive Officer |
Signature | Title | Date | ||
/s/ Jeffrey P. Caira | ||||
Jeffrey P. Caira | Trustee & Chairman | February 27, 2019 | ||
/s/ Mark O. Decker, Jr. | ||||
Mark O. Decker, Jr. | President & Chief Executive Officer (Principal Executive Officer); Trustee | February 27, 2019 | ||
/s/ John A. Kirchmann | ||||
John A. Kirchmann | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | February 27, 2019 | ||
/s/ Michael T. Dance | ||||
Michael T. Dance | Trustee | February 27, 2019 | ||
/s/ Emily Nagle Green | ||||
Emily Nagle Green | Trustee | February 27, 2019 | ||
/s/ Linda J. Hall | ||||
Linda J. Hall | Trustee | February 27, 2019 | ||
/s/ Terrance P. Maxwell | ||||
Terrance P. Maxwell | Trustee | February 27, 2019 | ||
/s/ John A. Schissel | ||||
John A. Schissel | Trustee | February 27, 2019 | ||
/s/ Mary J. Twinem | ||||
Mary J. Twinem | Trustee | February 27, 2019 | ||
PAGE | ||
CONSOLIDATED FINANCIAL STATEMENTS | ||
ADDITIONAL INFORMATION | ||
(in thousands) | ||||||||||
December 31, 2018 | April 30, 2018 | April 30, 2017 | ||||||||
ASSETS | ||||||||||
Real estate investments | ||||||||||
Property owned | $ | 1,627,636 | $ | 1,669,764 | $ | 1,358,529 | ||||
Less accumulated depreciation | (353,871 | ) | (311,324 | ) | (255,599 | ) | ||||
1,273,765 | 1,358,440 | 1,102,930 | ||||||||
Unimproved land | 5,301 | 11,476 | 18,455 | |||||||
Mortgage loans receivable | 10,410 | 10,329 | — | |||||||
Total real estate investments | 1,289,476 | 1,380,245 | 1,121,385 | |||||||
Assets held for sale and assets of discontinued operations | — | — | 283,023 | |||||||
Cash and cash equivalents | 13,792 | 11,891 | 28,819 | |||||||
Restricted cash | 5,464 | 4,225 | 27,981 | |||||||
Other assets | 27,265 | 30,297 | 13,306 | |||||||
TOTAL ASSETS | $ | 1,335,997 | $ | 1,426,658 | $ | 1,474,514 | ||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | ||||||||||
LIABILITIES | ||||||||||
Liabilities held for sale and liabilities of discontinued operations | $ | — | $ | — | $ | 130,904 | ||||
Accounts payable and accrued expenses | 40,892 | 29,018 | 35,566 | |||||||
Revolving line of credit | 57,500 | 124,000 | 57,050 | |||||||
Term loans, net of unamortized loan costs of $1,009, $486 and $0, respectively | 143,991 | 69,514 | — | |||||||
Mortgages payable, net of unamortized loan costs of $1,777, $2,221 and $3,054, respectively | 444,197 | 509,919 | 565,978 | |||||||
Construction debt | — | — | 41,741 | |||||||
TOTAL LIABILITIES | 686,580 | 732,451 | 831,239 | |||||||
COMMITMENTS AND CONTINGENCIES (NOTE 13) | ||||||||||
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES | 5,968 | 6,644 | 7,117 | |||||||
EQUITY | ||||||||||
Series B Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, no shares issued and outstanding at December 31, 2018 and April 30, 2018 and 4,600,000 shares issued and outstanding at April 30, 2017, aggregate liquidation preference of $115,000,000) | — | — | 111,357 | |||||||
Series C Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 4,118,460 shares issued and outstanding at December 31, 2018 and April 30, 2018 and no shares issued and outstanding at April 30, 2017, aggregate liquidation preference of $102,971,475) | 99,456 | 99,456 | — | |||||||
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 11,942,372 shares issued and outstanding at December 31, 2018, 11,952,598 shares issued and outstanding at April 30, 2018 and 12,119,930 shares issued and outstanding at April 30, 2017) | 899,234 | 900,097 | 908,905 | |||||||
Accumulated distributions in excess of net income | (429,048 | ) | (395,669 | ) | (466,541 | ) | ||||
Accumulated other comprehensive income | (856 | ) | 1,779 | — | ||||||
Total Investors Real Estate Trust shareholders’ equity | 568,786 | 605,663 | 553,721 | |||||||
Noncontrolling interests – Operating Partnership (1,367,502 units at December 31, 2018, 1,409,943 units at April 30, 2018 and 1,561,722 units at April 30, 2017) | 67,916 | 73,012 | 73,233 | |||||||
Noncontrolling interests – consolidated real estate entities | 6,747 | 8,888 | 9,204 | |||||||
Total equity | 643,449 | 687,563 | 636,158 | |||||||
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | $ | 1,335,997 | $ | 1,426,658 | $ | 1,474,514 |
(in thousands, except per share data) | |||||||||||||||||
Eight Months Ended December 31, | Fiscal Years Ended April 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2016 | |||||||||||||
(Unaudited) | |||||||||||||||||
REVENUE | $ | 121,871 | $ | 111,249 | $ | 169,745 | $ | 160,104 | $ | 145,500 | |||||||
EXPENSES | |||||||||||||||||
Property operating expenses, excluding real estate taxes | 37,198 | 35,581 | 54,292 | 47,587 | 43,741 | ||||||||||||
Real estate taxes | 13,521 | 12,234 | 18,742 | 16,739 | 14,407 | ||||||||||||
Property management expense | 3,663 | 3,652 | 5,526 | 5,046 | 3,714 | ||||||||||||
Casualty (gain) loss | 915 | 600 | 500 | 414 | 238 | ||||||||||||
Depreciation and amortization | 50,456 | 54,902 | 82,070 | 44,253 | 39,273 | ||||||||||||
Impairment of real estate investments | 1,221 | 256 | 18,065 | 57,028 | 5,543 | ||||||||||||
General and administrative expenses | 9,812 | 9,041 | 14,203 | 15,871 | 13,498 | ||||||||||||
Acquisition and investment related costs | — | — | 51 | 3,276 | 830 | ||||||||||||
TOTAL EXPENSES | 116,786 | 116,266 | 193,449 | 190,214 | 121,244 | ||||||||||||
Operating income (loss) | 5,085 | (5,017 | ) | (23,704 | ) | (30,110 | ) | 24,256 | |||||||||
Interest expense | (21,359 | ) | (22,804 | ) | (34,178 | ) | (34,314 | ) | (28,417 | ) | |||||||
Loss on extinguishment of debt | (556 | ) | (818 | ) | (940 | ) | (1,651 | ) | (106 | ) | |||||||
Interest income | 1,168 | 432 | 1,197 | 366 | 78 | ||||||||||||
Other income | 65 | 282 | 311 | 780 | 307 | ||||||||||||
Income (loss) before gain (loss) on sale of real estate and other investments, gain on bargain purchase and income (loss) from discontinued operations | (15,597 | ) | (27,925 | ) | (57,314 | ) | (64,929 | ) | (3,882 | ) | |||||||
Gain (loss) on sale of real estate and other investments | 9,707 | 17,816 | 20,120 | 18,701 | 9,640 | ||||||||||||
Gain on bargain purchase | — | — | — | — | 3,424 | ||||||||||||
Income (loss) from continuing operations | (5,890 | ) | (10,109 | ) | (37,194 | ) | (46,228 | ) | 9,182 | ||||||||
Income (loss) from discontinued operations | 570 | 150,703 | 164,823 | 76,753 | 67,420 | ||||||||||||
NET INCOME (LOSS) | (5,320 | ) | 140,594 | 127,629 | 30,525 | 76,602 | |||||||||||
Net (income) loss attributable to noncontrolling interests – Operating Partnership | 1,032 | (14,222 | ) | (12,702 | ) | (4,059 | ) | (7,032 | ) | ||||||||
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities | (110 | ) | 1,042 | 1,861 | 16,881 | 2,436 | |||||||||||
Net income (loss) attributable to controlling interests | (4,398 | ) | 127,414 | 116,788 | 43,347 | 72,006 | |||||||||||
Dividends to preferred shareholders | (4,547 | ) | (6,296 | ) | (8,569 | ) | (10,546 | ) | (11,514 | ) | |||||||
Redemption of preferred shares | — | (3,657 | ) | (3,657 | ) | (1,435 | ) | — | |||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | (8,945 | ) | $ | 117,461 | $ | 104,562 | $ | 31,366 | $ | 60,492 | ||||||
Earnings (loss) per common share from continuing operations – basic and diluted | $ | (0.79 | ) | $ | (1.41 | ) | $ | (3.54 | ) | $ | (3.01 | ) | $ | — | |||
Earnings (loss) per common share from discontinued operations – basic and diluted | 0.04 | 11.19 | 12.25 | 5.59 | 4.91 | ||||||||||||
NET EARNINGS (LOSS) PER COMMON SHARE – BASIC & DILUTED | $ | (0.75 | ) | $ | 9.78 | $ | 8.71 | $ | 2.58 | $ | 4.91 |
(in thousands) | |||||||||||||||
Eight Months Ended | Fiscal Years Ended April 30, | ||||||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | ||||||||||||
Net income (loss) | $ | (5,320 | ) | $ | 127,629 | $ | 30,525 | $ | 76,602 | ||||||
Other comprehensive income: | |||||||||||||||
Unrealized gain (loss) from derivative instrument | (2,794 | ) | 1,627 | — | — | ||||||||||
(Gain) loss on derivative instrument reclassified into earnings | 159 | 152 | — | — | |||||||||||
Total comprehensive income (loss) | $ | (7,955 | ) | $ | 129,408 | $ | 30,525 | $ | 76,602 | ||||||
Comprehensive (income) loss attributable to noncontrolling interests – Operating Partnership | 1,032 | (12,888 | ) | (4,059 | ) | (7,032 | ) | ||||||||
Net comprehensive (income) loss attributable to noncontrolling interests – consolidated real estate entities | (110 | ) | 1,861 | 16,881 | 2,436 | ||||||||||
Comprehensive income (loss) attributable to controlling interests | $ | (7,033 | ) | $ | 118,381 | $ | 43,347 | $ | 72,006 |
(in thousands) | ||||||||||||||||||||
NUMBER | ACCUMULATED | ACCUMULATED | ||||||||||||||||||
OF | DISTRIBUTIONS | OTHER | NONREDEEMABLE | |||||||||||||||||
PREFERRED | COMMON | COMMON | IN EXCESS OF | COMPREHENSIVE | NONCONTROLLING | TOTAL | ||||||||||||||
SHARES | SHARES | SHARES | NET INCOME | INCOME | INTERESTS | EQUITY | ||||||||||||||
Balance at April 30, 2015 | $ | 138,674 | 12,446 | $ | 951,868 | $ | (438,432 | ) | — | $ | 88,844 | $ | 740,954 | |||||||
Net income (loss) attributable to controlling interest and noncontrolling interests | 72,006 | 4,562 | 76,568 | |||||||||||||||||
Distributions – common shares and Units | (64,060 | ) | (7,230 | ) | (71,290 | ) | ||||||||||||||
Distributions – Series A preferred shares | (2,372 | ) | (2,372 | ) | ||||||||||||||||
Distributions – Series B preferred shares | (9,142 | ) | (9,142 | ) | ||||||||||||||||
Distribution reinvestment and share purchase plan | 82 | 5,619 | 5,619 | |||||||||||||||||
Shares issued and share-based compensation | 19 | 1,728 | 1,728 | |||||||||||||||||
Partnership units issued | 18,226 | 18,226 | ||||||||||||||||||
Redemption of Units for common shares | 27 | 1,477 | (1,477 | ) | — | |||||||||||||||
Shares repurchased | (464 | ) | (35,000 | ) | (35,000 | ) | ||||||||||||||
Distributions to nonredeemable noncontrolling interests – consolidated real estate entities | (7,029 | ) | (7,029 | ) | ||||||||||||||||
Adjustments to prior year redemption of Units for common shares | (3,608 | ) | 3,608 | — | ||||||||||||||||
Balance at April 30, 2016 | $ | 138,674 | 12,110 | $ | 922,084 | $ | (442,000 | ) | — | $ | 99,504 | $ | 718,262 | |||||||
Net income (loss) attributable to controlling interests and nonredeemable noncontrolling interests | 43,347 | (12,400 | ) | 30,947 | ||||||||||||||||
Distributions – common shares and Units | (55,907 | ) | (7,453 | ) | (63,360 | ) | ||||||||||||||
Distributions – Series A preferred shares | (1,403 | ) | (1,403 | ) | ||||||||||||||||
Distributions – Series B preferred shares | (9,143 | ) | (9,143 | ) | ||||||||||||||||
Shares issued and share-based compensation | 39 | 358 | 358 | |||||||||||||||||
Redemption of Units for common shares | 50 | 875 | (875 | ) | — | |||||||||||||||
Redemption of Units for cash | (966 | ) | (966 | ) | ||||||||||||||||
Shares repurchased | (27,317 | ) | (79 | ) | (4,501 | ) | (1,435 | ) | (33,253 | ) | ||||||||||
Contributions from nonredeemable noncontrolling interests – consolidated real estate entities | 7,188 | 7,188 | ||||||||||||||||||
Conversion to equity of notes receivable from nonredeemable noncontrolling interests – consolidated real estate entities | (7,366 | ) | (7,366 | ) | ||||||||||||||||
Acquisition of nonredeemable noncontrolling interests – consolidated real estate entities | (9,893 | ) | 5,019 | (4,874 | ) | |||||||||||||||
Other | — | (18 | ) | (214 | ) | (232 | ) | |||||||||||||
Balance at April 30, 2017 | $ | 111,357 | 12,120 | $ | 908,905 | $ | (466,541 | ) | — | $ | 82,437 | $ | 636,158 |
NUMBER | ACCUMULATED | ACCUMULATED | |||||||||||||||||||
OF | DISTRIBUTIONS | OTHER | NONREDEEMABLE | ||||||||||||||||||
PREFERRED | COMMON | COMMON | IN EXCESS OF | COMPREHENSIVE | NONCONTROLLING | TOTAL | |||||||||||||||
SHARES | SHARES | SHARES | NET INCOME | INCOME | INTERESTS | EQUITY | |||||||||||||||
Balance at April 30, 2017 | $ | 111,357 | 12,120 | $ | 908,905 | $ | (466,541 | ) | $ | — | $ | 82,437 | $ | 636,158 | |||||||
Net income (loss) attributable to controlling interests and nonredeemable noncontrolling interests | 116,788 | 11,582 | 128,370 | ||||||||||||||||||
Other comprehensive income - derivative instrument | 1,779 | 1,779 | |||||||||||||||||||
Distributions – common shares and Units | (33,689 | ) | (4,096 | ) | (37,785 | ) | |||||||||||||||
Distributions – Series B preferred shares | (4,571 | ) | (4,571 | ) | |||||||||||||||||
Distributions – Series C preferred shares | (3,999 | ) | (3,999 | ) | |||||||||||||||||
Share-based compensation, net of forfeitures | 10 | 1,663 | 1,663 | ||||||||||||||||||
Issuance of Series C preferred shares | 99,456 | 99,456 | |||||||||||||||||||
Redemption of Units for common shares | 3 | 34 | (34 | ) | — | ||||||||||||||||
Redemption of Units for cash | (8,775 | ) | (8,775 | ) | |||||||||||||||||
Shares repurchased | (111,357 | ) | (178 | ) | (9,935 | ) | (3,657 | ) | (124,949 | ) | |||||||||||
Contributions from nonredeemable noncontrolling interests – consolidated real estate entities | 619 | 619 | |||||||||||||||||||
Conversion to equity of notes receivable from nonredeemable noncontrolling interests – consolidated real estate entities | (246 | ) | (246 | ) | |||||||||||||||||
Other | (2 | ) | (570 | ) | 413 | (157 | ) | ||||||||||||||
Balance at April 30, 2018 | $ | 99,456 | 11,953 | $ | 900,097 | $ | (395,669 | ) | $ | 1,779 | $ | 81,900 | $ | 687,563 | |||||||
Cumulative adjustment upon adoption of ASC 606 and ASC 610-20 | 627 | 627 | |||||||||||||||||||
Balance on May 1, 2018 | 99,456 | 11,953 | 900,097 | (395,042 | ) | 1,779 | 81,900 | 688,190 | |||||||||||||
Net income (loss) attributable to controlling interests and nonredeemable noncontrolling interests | (4,398 | ) | (480 | ) | (4,878 | ) | |||||||||||||||
Other comprehensive income - derivative instrument | (2,635 | ) | (2,635 | ) | |||||||||||||||||
Distributions – common shares and Units | (25,060 | ) | (2,917 | ) | (27,977 | ) | |||||||||||||||
Distributions – Series C preferred shares | (4,548 | ) | (4,548 | ) | |||||||||||||||||
Share-based compensation, net of forfeitures | 3 | 1,042 | 1,042 | ||||||||||||||||||
Redemption of Units for common shares | 33 | 649 | (649 | ) | — | ||||||||||||||||
Redemption of Units for cash | (498 | ) | (498 | ) | |||||||||||||||||
Shares repurchased | (42 | ) | (2,172 | ) | (2,172 | ) | |||||||||||||||
Distributions to nonredeemable noncontrolling interests – consolidated real estate entities | (2,432 | ) | (2,432 | ) | |||||||||||||||||
Conversion to equity of notes receivable from nonredeemable noncontrolling interests – consolidated real estate entities | (392 | ) | (392 | ) | |||||||||||||||||
Acquisition of nonredeemable noncontrolling interests – consolidated real estate entities | (175 | ) | 131 | (44 | ) | ||||||||||||||||
Other | (5 | ) | (207 | ) | (207 | ) | |||||||||||||||
Balance at December 31, 2018 | $ | 99,456 | 11,942 | $ | 899,234 | $ | (429,048 | ) | $ | (856 | ) | $ | 74,663 | $ | 643,449 |
(in thousands) | ||||||||||||||
Eight Months Ended | Fiscal Year Ended April 30, | |||||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||
Net income (loss) | $ | (5,320 | ) | $ | 127,629 | $ | 30,525 | $ | 76,602 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 51,394 | 83,276 | 46,135 | 41,098 | ||||||||||
Depreciation and amortization from discontinued operations | — | 8,526 | 10,477 | 24,357 | ||||||||||
(Gain) loss on sale of real estate, land, other investments and discontinued operations | (10,277 | ) | (183,687 | ) | (74,847 | ) | (33,423 | ) | ||||||
(Gain) loss on extinguishment of debt and discontinued operations | 482 | 6,839 | 3,848 | (30,135 | ) | |||||||||
Gain on bargain purchase | — | — | — | (3,424 | ) | |||||||||
Share-based compensation expense | 845 | 1,587 | 6 | 2,256 | ||||||||||
Impairment of real estate investments | 1,221 | 18,065 | 57,028 | 5,983 | ||||||||||
Other, net | 629 | 1,457 | 499 | 651 | ||||||||||
Write off of development pursuit costs | — | — | 3,161 | — | ||||||||||
Changes in other assets and liabilities: | ||||||||||||||
Other assets | (1,145 | ) | (646 | ) | (214 | ) | 2,588 | |||||||
Accounts payable and accrued expenses | 2,205 | (7,851 | ) | 2,434 | (14,292 | ) | ||||||||
Net cash provided (used) by operating activities | 40,034 | 55,195 | 79,052 | 72,261 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||
Principal proceeds on mortgage loan receivable | 545 | — | — | — | ||||||||||
Increase in loans receivable | (918 | ) | (15,480 | ) | — | — | ||||||||
Decrease in other investments | — | — | 50 | 279 | ||||||||||
Proceeds from sale of discontinued operations | — | 426,131 | 237,135 | 365,845 | ||||||||||
Proceeds from sale of real estate and other investments | 62,695 | 64,639 | 47,354 | 40,306 | ||||||||||
Insurance proceeds received | 1,344 | 584 | 88 | 1,320 | ||||||||||
Payments for acquisitions of real estate assets | (977 | ) | (374,081 | ) | — | (121,821 | ) | |||||||
Payments for development of real estate assets | — | (2,655 | ) | (18,274 | ) | (122,801 | ) | |||||||
Payments for improvements of real estate assets | (11,518 | ) | (17,980 | ) | (41,083 | ) | (26,904 | ) | ||||||
Payments for improvements of real estate assets from discontinued operations | — | (1,046 | ) | (1,110 | ) | (7,672 | ) | |||||||
Net cash provided (used) by investing activities | 51,171 | 80,112 | 224,160 | 128,552 | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||
Proceeds from mortgages payable | — | — | 84,150 | 143,574 | ||||||||||
Principal payments on mortgages payable | (67,016 | ) | (205,159 | ) | (298,984 | ) | (241,206 | ) | ||||||
Proceeds from revolving lines of credit | 53,017 | 370,350 | 246,000 | 82,000 | ||||||||||
Principal payments on revolving lines of credit | (119,517 | ) | (303,400 | ) | (206,450 | ) | (125,000 | ) | ||||||
Proceeds from notes payable and other debt | — | 3,252 | 19,341 | 94,142 | ||||||||||
Principal payments on notes payable and other debt | — | (21,689 | ) | (49,080 | ) | (24,754 | ) | |||||||
Payoff of financing liability | — | (7,900 | ) | — | — | |||||||||
Proceeds from term loan | 74,352 | 69,462 | — | — | ||||||||||
Proceeds from sale of common shares under distribution reinvestment and share purchase program | — | — | — | 1,493 | ||||||||||
Additions to notes receivable from noncontrolling partner – consolidated real estate entities | — | — | (9,211 | ) | — | |||||||||
Proceeds from noncontrolling partner – consolidated real estate entities | — | — | 9,749 | 1,120 | ||||||||||
Payments for acquisition of noncontrolling interests – consolidated real estate entities | — | — | (4,938 | ) | — | |||||||||
Proceeds from sale of preferred shares | — | 99,467 | — | — | ||||||||||
Repurchase of common shares | (2,172 | ) | (9,935 | ) | (4,501 | ) | (35,000 | ) | ||||||
Repurchase of preferred shares | — | (115,017 | ) | (28,752 | ) | — | ||||||||
Repurchase of partnership units | (498 | ) | (8,775 | ) | (966 | ) | — | |||||||
Distributions paid to common shareholders | (16,724 | ) | (33,689 | ) | (55,907 | ) | (60,063 | ) | ||||||
Distributions paid to preferred shareholders | (5,116 | ) | (8,763 | ) | (10,744 | ) | (11,514 | ) | ||||||
Distributions paid to noncontrolling interests – Unitholders of the Operating Partnership | (1,959 | ) | (4,096 | ) | (7,453 | ) | (7,101 | ) | ||||||
Distributions paid to noncontrolling interests – consolidated real estate entities | (2,432 | ) | (99 | ) | (174 | ) | (7,029 | ) | ||||||
Net cash provided (used) by financing activities | (88,065 | ) | (175,991 | ) | (317,920 | ) | (189,338 | ) | ||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 3,140 | (40,684 | ) | (14,708 | ) | 11,475 | ||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF YEAR | 16,116 | 56,800 | 71,508 | 60,033 | ||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF YEAR | $ | 19,256 | $ | 16,116 | $ | 56,800 | $ | 71,508 |
(in thousands) | ||||||||||||||
Eight Months Ended | Fiscal Year Ended April 30, | |||||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | |||||||||||
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||||||||
Distribution reinvestment plan – shares issued | — | — | — | 3,997 | ||||||||||
Operating partnership distribution reinvestment plan – shares issued | — | — | — | 130 | ||||||||||
Operating partnership units converted to shares | 649 | 34 | 875 | 1,477 | ||||||||||
Real estate assets acquired through the issuance of operating partnership units | — | — | — | 18,226 | ||||||||||
(Decrease) increase to accounts payable included within real estate investments | (329 | ) | (3,415 | ) | (1,851 | ) | (10,420 | ) | ||||||
Conversion to equity of notes receivable from noncontrolling interests – consolidated real estate entities | 670 | — | 9,846 | — | ||||||||||
Construction debt reclassified to mortgages payable | — | 23,300 | 10,549 | 123,553 | ||||||||||
Increase in mortgage notes receivable | — | 10,329 | — | — | ||||||||||
Decrease in real estate assets in connection with transfer of real estate assets in settlement of debt | — | — | — | 87,213 | ||||||||||
Decrease in debt in connection with transfer of real estate assets in settlement of debt | — | — | — | 122,610 | ||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||||||||
Cash paid for interest, net of amounts capitalized of $0, $0, $431 and $4,396, respectively | 24,135 | 35,758 | 34,432 | 39,668 |
(in thousands) | ||||||||||
As previously reported at April 30, 2017 | Adjustment | As revised at April 30, 2017 | ||||||||
Common shares of beneficial interest | $ | 916,121 | $ | (7,216 | ) | $ | 908,905 | |||
Noncontrolling interests - consolidated real estate entities | 1,924 | 7,280 | 9,204 | |||||||
Redeemable noncontrolling interests - consolidated real estate entities | 7,181 | (64 | ) | 7,117 |
(in thousands) | ||||||||||
As previously reported at April 30, 2018 | Adjustment | As revised at April 30, 2018 | ||||||||
Common shares of beneficial interest | $ | 907,843 | $ | (7,746 | ) | $ | 900,097 | |||
Noncontrolling interests - consolidated real estate entities | 1,078 | 7,810 | 8,888 | |||||||
Redeemable noncontrolling interests - consolidated real estate entities | 6,708 | (64 | ) | 6,644 |
(in thousands) | ||||||||||
As previously reported at April 30, 2017 | Adjustment | As revised at April 30, 2017 | ||||||||
Common shares of beneficial interest | $ | 916,121 | $ | (7,216 | ) | $ | 908,905 | |||
Nonredeemable noncontrolling interests | 75,157 | 7,280 | 82,437 |
(in thousands) | ||||||||||
As previously reported at April 30, 2018 | Adjustment | As revised at April 30, 2018 | ||||||||
Common shares of beneficial interest | $ | 907,843 | $ | (7,746 | ) | $ | 900,097 | |||
Nonredeemable noncontrolling interests | 74,090 | 7,810 | 81,900 |
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters |
ASU 2014-09, Revenue from Contracts with Customers | This ASU will eliminate the transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principle based approach for determining revenue recognition. The standard outlines a five-step model whereby revenue is recognized as performance obligations within a contract are satisfied. | This ASU is effective for annual reporting periods beginning after December 15, 2017, as a result of a deferral of the effective date arising from the issuance of ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date. Early adoption is permitted. We adopted the new standard effective May 1, 2018 using the modified retrospective approach. | The majority of our revenue is derived from rental income, which is scoped out from this standard and will be accounted for under ASC 840, Leases. Our other revenue streams, which were evaluated under this ASU, include but are not limited to other income from residents determined not to be within the scope of ASC 840 and gains and losses from real estate dispositions. Refer to the Revenues section below for information regarding the impact of adopting the standard on our consolidated financial statements. |
ASU 2016-02, Leases | This ASU amends existing accounting standards for lease accounting, including by requiring lessees to recognize most leases on the balance sheet and making certain changes to lessor accounting. | This ASU is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. | Our residential leases, where we are the lessor, will continue to be accounted for as operating leases under the new standard. As a result, there is not a significant change in the accounting for lease revenue. For leases where we are the lessee, we will recognize a right of use asset and related lease liability on our consolidated balance sheets upon adoption. The adoption of this standard will not have a material impact on our consolidated financial statements. |
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments | This ASU addresses eight specific cash flow issues with the objective of reducing diversity in practice. The cash flow issues include debt prepayment or debt extinguishment costs and proceeds from the settlement of insurance claims. | This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted the new standard effective May 1, 2018. | The standard requires we present combined inflows and outflows of cash, cash equivalents, and restricted cash in the consolidated statement of cash flows. See additional disclosures regarding the required change below. |
ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash | This ASU requires the statement of cash flows to explain the change in total cash, cash equivalents, and amounts generally described as restricted cash. It also requires that restricted cash be included when reconciling the beginning and end of period amounts on the statement of cash flows. | This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted the new standard effective May 1, 2018. | The standard requires we present combined inflows and outflows of cash, cash equivalents, and restricted cash in the consolidated statement of cash flows. See additional disclosures regarding the required change below. |
ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets | This ASU clarifies the definition of an in-substance nonfinancial asset and changes the accounting for partial sales of nonfinancial assets to be more consistent with the accounting for a sale of a business pursuant to ASU 2017-01. This ASU allows for either a retrospective or modified retrospective approach. | This ASU is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. We adopted the new standard effective May 1, 2018 using the modified retrospective approach. | Refer to the Revenues section below for information regarding the impact of adopting the standard on our condensed consolidated financial statements. |
ASU 2018-10, Codification Improvements to Topic 842, Leases | This ASU was issued to increase shareholders' awareness of narrow aspects of the guidance issued in the amendments and to expedite the improvements under ASU 2016-02. | This ASU is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. | The adoption of this standard will not have a material impact on our consolidated financial statements. |
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters |
ASU 2018-11, Leases: Targeted Improvements | This ASU allows lessors to account for lease and non-lease components, by class of underlying assets, as a single lease component if certain criteria are met. The new standard also indicates that companies are permitted to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption in lieu of the modified retrospective approach and provides other practical expedients. | This ASU is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. | The adoption of this standard will not have a material impact on our consolidated financial statements. |
ASU 2018-13, Fair Value Measurements (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirement for Fair Value Measurements | This ASU eliminates certain disclosure requirements affecting all levels of measurement, and modifies and adds new disclosure requirements for Level 3 measurements. | This ASU is effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. | We are currently evaluating the impact the new standard may have on our disclosures. |
ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract | This ASU reduces the complexity for the accounting for costs of implementing a cloud computing service arrangement. The standard aligns various requirements for capitalizing implementation costs. | This ASU is effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. | We are currently evaluating the impact the new standard may have on our consolidated financial statements. |
ASU 2018-20, Leases (Topic 842) - Narrow-Scope Improvements for Lessors | This ASU reduces a lessor's implementation and ongoing costs associated with applying the new leases standard. The ASU also clarifies a specific lessor accounting requirements. | This ASU is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. | The adoption of this standard will not have a material impact on our consolidated financial statements. |
(in thousands) | |||||||||||
As previously reported | Impact of ASUs | As adjusted and currently reported | |||||||||
April 30, 2018 | 2016-15 and 2016-18 | April 30, 2018 | |||||||||
Net cash provided by operating activities | $ | 48,035 | $ | 7,160 | $ | 55,195 | |||||
Net cash provided by (used by) investing activities | 104,189 | (24,077 | ) | 80,112 | |||||||
Net cash provided by (used by) financing activities | (169,152 | ) | (6,839 | ) | (175,991 | ) | |||||
Net increase (decrease) in cash, cash equivalents | (16,928 | ) | 16,928 | — | |||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | — | (40,684 | ) | (40,684 | ) | ||||||
Cash and cash equivalents at beginning of period | 28,819 | (28,819 | ) | — | |||||||
Cash, cash equivalents, and restricted cash at beginning of period | — | 56,800 | 56,800 | ||||||||
Cash and cash equivalents at end of period | $ | 11,891 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 4,225 | $ | 16,116 |
(in thousands) | |||||||||||
As previously reported | Impact of ASUs | As adjusted and currently reported | |||||||||
April 30, 2017 | 2016-15 and 2016-18 | April 30, 2017 | |||||||||
Net cash provided by operating activities | $ | 73,930 | $ | 5,122 | $ | 79,052 | |||||
Net cash provided by (used by) investing activities | 202,263 | 21,897 | 224,160 | ||||||||
Net cash provided by (used by) financing activities | (314,072 | ) | (3,848 | ) | (317,920 | ) | |||||
Net increase (decrease) in cash, cash equivalents | (37,879 | ) | 37,879 | — | |||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | — | (14,708 | ) | (14,708 | ) | ||||||
Cash and cash equivalents at beginning of period | 66,698 | (66,698 | ) | — | |||||||
Cash, cash equivalents, and restricted cash at beginning of period | — | 71,508 | 71,508 | ||||||||
Cash and cash equivalents at end of period | $ | 28,819 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 27,981 | $ | 56,800 |
(in thousands) | |||||||||||
As previously reported | Impact of ASUs | As adjusted and currently reported | |||||||||
April 30, 2016 | 2016-15 and 2016-18 | April 30, 2016 | |||||||||
Net cash provided by operating activities | $ | 66,493 | $ | 5,768 | $ | 72,261 | |||||
Net cash provided by (used by) investing activities | 134,252 | (5,700 | ) | 128,552 | |||||||
Net cash provided by (used by) financing activities | (183,017 | ) | (6,321 | ) | (189,338 | ) | |||||
Net increase (decrease) in cash, cash equivalents | 17,728 | (17,728 | ) | — | |||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | — | 11,475 | 11,475 | ||||||||
Cash and cash equivalents at beginning of period | 48,970 | (48,970 | ) | — | |||||||
Cash, cash equivalents, and restricted cash at beginning of period | — | 60,033 | 60,033 | ||||||||
Cash and cash equivalents at end of period | $ | 66,698 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 4,810 | $ | 71,508 |
(in thousands) | |||||||||||
Balance sheet description | December 31, 2018 | April 30, 2018 | April 30, 2017 | ||||||||
Cash and cash equivalents | $ | 13,792 | $ | 11,891 | $ | 28,819 | |||||
Restricted cash | 5,464 | 4,225 | 27,981 | ||||||||
Total cash, cash equivalents and restricted cash | $ | 19,256 | $ | 16,116 | $ | 56,800 |
• | Other property revenues: We recognize revenue for rental related income not included as a component of a lease, such as other transactional fees, when the services are transferred to our customers for an amount which reflects the consideration we expect to receive in exchange for those services. These fees are charged to residents monthly and recognized as the performance obligation is satisfied. |
• | Gains or losses on sales of real estate: Subsequent to the adoption of the new standard, a gain or loss is recognized when the criteria for derecognition of an asset are met, including when (1) a contract exists and (2) the buyer obtained control of the nonfinancial asset that was sold. As a result, we may recognize a gain on real estate disposition transactions that previously did not qualify as a sale or for full profit recognition under the previous accounting standard. |
(in thousands, except percentages) | |||||||
Eight Months Ended December 31, 2018 | |||||||
Revenue Stream | Applicable Standard | Amount of Revenue | Percent of Revenue | ||||
Rental revenue | Leases | $ | 117,575 | 96.5 | % | ||
Other property revenue | Revenue Recognition | 4,296 | 3.5 | % | |||
$ | 121,871 | 100.0 | % |
in thousands | |||||||||
December 31, 2018 | April 30, 2018 | April 30, 2017 | |||||||
Receivable arising from straight line rents | $ | 1,145 | $ | 1,458 | $ | 2,145 | |||
Accounts receivable, net of allowance | 71 | 81 | 476 | ||||||
Fair value of interest rate swaps | 818 | 1,779 | — | ||||||
Loans receivable | 16,399 | 15,480 | — | ||||||
Prepaid and other assets | 3,802 | 5,334 | 4,891 | ||||||
Intangible assets | 498 | 1,469 | 202 | ||||||
Property and equipment, net of accumulated depreciation | 686 | 820 | 901 | ||||||
Goodwill | 1,546 | 1,553 | 1,572 | ||||||
Deferred charges and leasing costs | 2,300 | 2,323 | 3,119 | ||||||
Total Other Assets | $ | 27,265 | $ | 30,297 | $ | 13,306 |
(in thousands) | ||||||||||
December 31, 2018 | April 30, 2018 | April 30, 2017 | ||||||||
IRET - 71 France, LLC | $ | 5,918 | $ | 6,606 | $ | 7,427 | ||||
IRET - Cypress Court Apartments, LLC | 829 | 890 | 979 | |||||||
IRET - Williston Garden Apartments, LLC | — | 1,635 | 1,057 | |||||||
IRET - WRH 1, LLC | — | (467 | ) | (619 | ) | |||||
WRH Holding, LLC | — | 224 | 360 | |||||||
Noncontrolling interests – consolidated real estate entities | $ | 6,747 | $ | 8,888 | $ | 9,204 |
(in thousands) | ||||||||||||||
Transition period ended | Years ended April 30, | |||||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | |||||||||||
Balance at beginning of fiscal year | $ | 6,644 | $ | 7,117 | $ | 7,522 | $ | 6,368 | ||||||
Contributions | — | 268 | 17 | 1,120 | ||||||||||
Net (loss) income | (676 | ) | (741 | ) | (422 | ) | 34 | |||||||
Balance at close of fiscal year | $ | 5,968 | $ | 6,644 | $ | 7,117 | $ | 7,522 |
(in thousands) | ||||
2019 | $ | 28,587 | ||
2020 | 87,592 | |||
2021 | 104,553 | |||
2022 | 40,917 | |||
2023 | 48,546 | |||
Thereafter | 280,779 | |||
Total payments | $ | 590,974 |
(in thousands) | |||||||||||
December 31, 2018 | April 30, 2018 | April 30, 2017 | Weighted Average Maturity in Years | ||||||||
Unsecured line of credit | $ | 57,500 | $ | 124,000 | $ | 57,050 | 3.67 | ||||
Term loans | 145,000 | 70,000 | — | 5.86 | |||||||
Unsecured debt | 202,500 | 194,000 | 57,050 | ||||||||
Mortgages payable - fixed (1) | 445,974 | 489,401 | 629,535 | 3.61 | |||||||
Mortgages payable - variable(1) | — | 22,739 | 57,708 | ||||||||
Construction debt - variable | — | — | 41,737 | ||||||||
Total debt | $ | 648,474 | $ | 706,140 | $ | 786,030 | |||||
Weighted average interest rate on unsecured line of credit | 3.72 | % | 3.35 | % | 2.67 | % | |||||
Weighted average interest rate on term loans (rate with swaps) | 4.01 | % | 3.86 | % | — | ||||||
Weighted average interest rate on mortgages payable(1) | 4.58 | % | 4.69 | % | 4.71 | % | |||||
Weighted average interest rate on construction debt | — | — | 3.27 | % |
(1) | Includes mortgages payable related to assets held for sale and assets of discontinued operations at April 30, 2017. |
(in thousands) | (in thousands) | |||||||||||||||||||||||
December 31, 2018 | April 30, 2018 | April 30, 2017 | December 31, 2018 | April 30, 2018 | April 30, 2017 | |||||||||||||||||||
Balance Sheet Location | Fair Value | Fair Value | Fair Value | Balance Sheet Location | Fair Value | Fair Value | Fair Value | |||||||||||||||||
Derivative instruments - interest rate swaps | Other Assets | $ | 818 | $ | 1,779 | — | Accounts Payable and Accrued Expenses | $ | 1,675 | — | — | |||||||||||||
Total derivatives designated as hedging instruments | $ | 818 | $ | 1,779 | — | $ | 1,675 | — | — |
(in thousands) | |||||||||||||||||||||||
Gain (Loss) Recognized in OCI | Location of Gain (Loss) Reclassified from Accumulated OCI into Income | Gain (Loss) Reclassified from Accumulated OCI into Income | |||||||||||||||||||||
Transition Period Ended December 31, | Year Ended April 30, | Transition Period Ended December 31, | Year Ended April 30, | ||||||||||||||||||||
2018 | 2018 | 2017 | 2018 | 2018 | 2017 | ||||||||||||||||||
Interest rate contracts | $ | (2,794 | ) | $ | 1,627 | — | Interest expense | $ | (159 | ) | $ | (152 | ) | — | |||||||||
Total derivatives in cash flow hedging relationships | $ | (2,794 | ) | $ | 1,627 | — | $ | (159 | ) | $ | (152 | ) | — |
(in thousands) | |||||||||||||||||
Total | Form of Consideration | Investment Allocation | |||||||||||||||
Date | Acquisition | Intangible | |||||||||||||||
Acquisitions | Acquired | Cost | Cash | Land | Building | Assets | |||||||||||
Multifamily | |||||||||||||||||
191 homes - Oxbo - St. Paul, MN (1) | May 26, 2017 | $ | 61,500 | $ | 61,500 | $ | 5,809 | $ | 54,910 | $ | 781 | ||||||
500 homes - Park Place - Plymouth, MN | September 13, 2017 | 92,250 | 92,250 | 10,609 | 80,711 | 930 | |||||||||||
274 homes - Dylan - Denver, CO | November 28, 2017 | 90,600 | 90,600 | 12,155 | 77,249 | 1,196 | |||||||||||
390 homes - Westend - Denver, CO | March 28, 2018 | 128,700 | 128,700 | 25,525 | 102,101 | 1,074 | |||||||||||
Total Acquisitions | $ | 373,050 | $ | 373,050 | $ | 54,098 | $ | 314,971 | $ | 3,981 |
(1) | Property includes 11,477 square feet of retail space. |
(in thousands) | |||||||||||
Date Placed | Development | ||||||||||
Development Projects Placed in Service | in Service | Land | Building | Cost | |||||||
Multifamily | |||||||||||
241 homes - 71 France - Edina, MN(1) | May 1, 2016 | $ | 4,721 | $ | 67,641 | $ | 72,362 | ||||
202 homes - Monticello Crossings - Monticello, MN(2) | March 1, 2017 | 1,734 | 28,782 | 30,516 | |||||||
Total Development Projects Placed in Service | $ | 6,455 | $ | 96,423 | $ | 102,878 |
(1) | Costs paid in prior fiscal years totaled $70.9 million. Additional costs incurred in fiscal year 2017 totaled $1.5 million, for a total project cost at April 30, 2017 of $72.4 million. The project is owned by a joint venture entity in which we currently have an approximately 52.6% interest. The joint venture is consolidated in our financial statements. |
(2) | Costs paid in prior fiscal years totaled $15.5 million. Additional costs incurred in fiscal year 2017 totaled $15.0 million, for a total project cost at April 30, 2017 of $30.5 million. |
(in thousands) | |||||||||||
Date | Book Value | ||||||||||
Dispositions | Disposed | Sales Price | and Sale Cost | Gain/(Loss) | |||||||
Multifamily | |||||||||||
44 unit - Dakota Commons - Williston, ND | July 26, 2018 | $ | 4,420 | $ | 3,878 | $ | 542 | ||||
145 unit - Williston Garden - Williston, ND(1) | July 26, 2018 | 12,310 | 11,313 | 997 | |||||||
288 unit - Renaissance Heights - Williston, ND(2) | July 26, 2018 | 24,770 | 17,856 | 6,914 | |||||||
41,500 | 33,047 | 8,453 | |||||||||
Other | |||||||||||
7,849 sq ft Minot Southgate Retail - Minot, ND | July 12, 2018 | 1,925 | 2,056 | (131 | ) | ||||||
9,052 sq ft Fresenius - Duluth, MN | July 27, 2018 | 1,900 | 1,078 | 822 | |||||||
15,000 sq ft Minot 2505 16th St SW - Minot, ND | October 12, 2018 | 1,710 | 1,814 | (104 | ) | ||||||
81,594 sq ft Minot Arrowhead - Minot, ND | November 30, 2018 | 6,622 | 5,907 | 715 | |||||||
100,850 sq ft Bloomington 2000 W 94th Street - Bloomington, MN | December 19, 2018 | 4,550 | 4,550 | — | |||||||
16,707 | 15,405 | 1,302 | |||||||||
Unimproved Land | |||||||||||
Grand Forks - Grand Forks, ND | July 16, 2018 | 3,000 | 2,986 | 14 | |||||||
Renaissance Heights - Williston, ND(3) | July 26, 2018 | 750 | 684 | 66 | |||||||
Badger Hills Unimproved - Rochester, MN | August 29, 2018 | 1,400 | 1,528 | (128 | ) | ||||||
5,150 | 5,198 | (48 | ) | ||||||||
Total Property Dispositions | $ | 63,357 | $ | 53,650 | $ | 9,707 |
(1) | This apartment community was owned by a joint venture entity in which we had an interest of approximately 74.11%. |
(2) | This apartment community was owned by a joint venture entity in which we had an interest of approximately 87.14%. |
(3) | This parcel of land was owned by a joint venture entity in which we had an interest of approximately 70.00% |
(in thousands) | |||||||||||
Date | Book Value | ||||||||||
Dispositions | Disposed | Sales Price | and Sales Cost | Gain/(Loss) | |||||||
Multifamily | |||||||||||
327 homes - 13 apartment communities - Minot, ND (1)(2) | August 22, 2017 | $ | 12,263 | $ | 11,562 | $ | 701 | ||||
48 homes - Crown - Rochester, MN | December 1, 2017 | 5,700 | 3,318 | 2,382 | |||||||
16 homes - Northern Valley - Rochester, MN | December 1, 2017 | 950 | 690 | 260 | |||||||
18,913 | 15,570 | 3,343 | |||||||||
Other | |||||||||||
4,998 sq ft Minot Southgate Wells Fargo Bank - Minot, ND | May 15, 2017 | 3,440 | 3,332 | 108 | |||||||
90,260 sq ft Lexington Commerce Center - Eagan, MN | August 22, 2017 | 9,000 | 3,963 | 5,037 | |||||||
17,640 sq ft Duckwood Medical - Eagan, MN | August 24, 2017 | 2,100 | 1,886 | 214 | |||||||
279,834 sq ft Edgewood Vista Hermantown I & II - Hermantown, MN | October 19, 2017 | 36,884 | 24,697 | 12,187 | |||||||
518,161 sq ft Urbandale - Urbandale, IA | November 22, 2017 | 16,700 | 12,857 | 3,843 | |||||||
36,053 sq ft 3075 Long Lake Road - Roseville, MN | November 28, 2017 | 18,650 | 12,766 | 5,884 | |||||||
1,205,432 sq ft 25 Healthcare properties | December 29, 2017 | 370,268 | 232,778 | 137,490 | |||||||
43,404 sq ft Garden View - St. Paul, MN | January 19, 2018 | 14,000 | 6,191 | 7,809 | |||||||
52,116 sq ft Ritchie Medical - St. Paul, MN | January 19, 2018 | 16,500 | 10,419 | 6,081 | |||||||
22,187 sq ft Bismarck 715 East Broadway and Unimproved Land - Bismarck, ND | March 7, 2018 | 5,500 | 3,215 | 2,285 | |||||||
493,042 | 312,104 | 180,938 | |||||||||
Unimproved Land | |||||||||||
Bismarck 4916 Unimproved Land - Bismarck, ND | August 8, 2017 | 3,175 | 3,188 | (13 | ) | ||||||
Total Dispositions | $ | 515,130 | $ | 330,862 | $ | 184,268 |
(1) | These communities include: 4th Street 4 Plex, 11th Street 3 Plex, Apartments on Main, Brooklyn Heights, Colton Heights, Fairmont, First Avenue (Apartments and Office), Pines, Southview, Summit Park, Temple (includes 17 South Main Retail), Terrace Heights, and Westridge. |
(2) | The properties included: 2800 Medical, 2828 Chicago Avenue, Airport Medical, Billings 2300 Grand Road, Burnsville 303 Nicollet Medical, Burnsville 305 Nicollet Medical, Duluth Denfeld Clinic, Edina 6363 France Medical, Edina 6405 France Medical, Edina 6517 Drew Avenue, Edina 6225 France SMC II, Edina 6545 France SMC I, Gateway Clinic, High Pointe Health Campus, Lakeside Medical Plaza, Mariner Clinic, Minneapolis 701 25th Avenue Medical, Missoula 3050 Great Northern, Park Dental, Pavilion I, Pavilion II, PrairieCare Medical, St. Michael Clinic, Trinity at Plaza 16 and Wells Clinic. |
(in thousands) | |||||||||||
Date | Book Value | ||||||||||
Dispositions | Disposed | Sales Price | and Sales Cost | Gain/(Loss) | |||||||
Multifamily | |||||||||||
24 homes Pinecone Villas - Sartell, MN | April 20, 2017 | $ | 3,540 | $ | 2,732 | $ | 808 | ||||
Healthcare | |||||||||||
189,244 sq ft 9 Idaho Spring Creek Senior Housing Properties(1) | October 31, 2016 | 43,900 | 37,397 | 6,503 | |||||||
426,652 sq ft 5 Edgewood Vista Senior Housing Properties(2) | January 18, 2017 | 69,928 | 50,393 | 19,535 | |||||||
286,854 sq ft 5 Wyoming Senior Housing Properties(3) | February 1, 2017 | 49,600 | 45,469 | 4,131 | |||||||
169,001 sq ft 9 Edgewood Vista Senior Housing Properties(4) | February 15, 2017 | 30,700 | 24,081 | 6,619 | |||||||
169,562 sq ft 4 Edgewood Vista Senior Housing Properties(5) | March 1, 2017 | 35,348 | 14,511 | 20,837 | |||||||
114,316 sq ft Healtheast St. John & Woodwinds - Maplewood & Woodbury MN | March 6, 2017 | 20,700 | 13,777 | 6,923 | |||||||
59,760 sq ft Sartell 2000 23rd Street South - Sartell, MN | March 31, 2017 | 5,600 | 5,923 | (323 | ) | ||||||
98,174 sq ft Legends at Heritage Place - Sartell, MN | April 20, 2017 | 9,960 | 11,439 | (1,479 | ) | ||||||
265,736 | 202,990 | 62,746 | |||||||||
Other | |||||||||||
195,075 sq ft Stone Container - Fargo, ND | July 25, 2016 | 13,400 | 4,418 | 8,982 | |||||||
28,528 sq ft Grand Forks Carmike - Grand Forks, ND | December 29, 2016 | 4,000 | 1,563 | 2,437 | |||||||
17,400 | 5,981 | 11,419 | |||||||||
Unimproved Land | |||||||||||
Georgetown Square Unimproved Land - Grand Chute, WI | May 6, 2016 | 250 | 274 | (24 | ) | ||||||
Total Property Dispositions | $ | 286,926 | $ | 211,977 | $ | 74,949 |
(1) | The properties included in this portfolio disposition are: Spring Creek American Falls, Spring Creek Boise, Spring Creek Eagle, Spring Creek Fruitland, Spring Creek Fruitland Unimproved, Spring Creek Meridian, Spring Creek Overland, Spring Creek Soda Springs and Spring Creek Ustick. |
(2) | The properties included in this portfolio disposition are: Edgewood Vista Bismarck, Edgewood Vista Brainerd, Edgewood Vista East Grand Forks, Edgewood Vista Fargo, and Edgewood Vista Spearfish. |
(3) | The properties included in this portfolio disposition are: Casper 1930 E 12th Street (Park Place), Casper 3955 E 12th Street (Meadow Wind), Cheyenne 4010 N College Drive (Aspen Wind), Cheyenne 4606 N College Drive (Sierra Hills) and Laramie 1072 N 22nd Street (Spring Wind). |
(4) | The properties included in this portfolio disposition are: Edgewood Vista Belgrade, Edgewood Vista Billings, Edgewood Vista Columbus, Edgewood Vista Fremont, Edgewood Vista Grand Island, Edgewood Vista Minot, Edgewood Vista Missoula, Edgewood Vista Norfolk and Edgewood Vista Sioux Falls. |
(5) | The properties included in this portfolio are: Edgewood Vista Hastings, Edgewood Vista Kalispell, Edgewood Vista Omaha and Edgewood Vista Virginia. |
(in thousands) | ||||||||||
Transition period ended December 31, 2018 | Multifamily | All Other | Total | |||||||
Revenue | $ | 116,138 | $ | 5,733 | $ | 121,871 | ||||
Property operating expenses, including real estate taxes | 48,896 | 1,823 | 50,719 | |||||||
Net operating income | $ | 67,242 | $ | 3,910 | $ | 71,152 | ||||
Property management expenses | (3,663 | ) | ||||||||
Casualty loss | (915 | ) | ||||||||
Depreciation and amortization | (50,456 | ) | ||||||||
Impairment of real estate investments | (1,221 | ) | ||||||||
General and administrative expenses | (9,812 | ) | ||||||||
Interest expense | (21,359 | ) | ||||||||
Loss on debt extinguishment | (556 | ) | ||||||||
Interest and other income | 1,233 | |||||||||
Income (loss) before gain on sale of real estate and other investments and income (loss) from discontinued operations | (15,597 | ) | ||||||||
Gain (loss) on sale of real estate and other investments | 9,707 | |||||||||
Gain (loss) from continuing operations | (5,890 | ) | ||||||||
Income (loss) from discontinued operations | 570 | |||||||||
Net income (loss) | $ | (5,320 | ) |
(in thousands) | ||||||||||
Year ended April 30, 2018 | Multifamily | All Other | Total | |||||||
Revenue | $ | 159,983 | $ | 9,762 | $ | 169,745 | ||||
Property operating expenses, including real estate taxes | 70,460 | 2,574 | 73,034 | |||||||
Net operating income | $ | 89,523 | $ | 7,188 | $ | 96,711 | ||||
Property management expenses | (5,526 | ) | ||||||||
Casualty loss | (500 | ) | ||||||||
Depreciation and amortization | (82,070 | ) | ||||||||
Impairment of real estate investments | (18,065 | ) | ||||||||
General and administrative expenses | (14,203 | ) | ||||||||
Acquisition and investment related costs | (51 | ) | ||||||||
Interest expense | (34,178 | ) | ||||||||
Loss on debt extinguishment | (940 | ) | ||||||||
Interest and other income | 1,508 | |||||||||
Income (loss) before gain on sale of real estate and other investments and income (loss) from discontinued operations | (57,314 | ) | ||||||||
Gain (loss) on sale of real estate and other investments | 20,120 | |||||||||
Gain (loss) from continuing operations | (37,194 | ) | ||||||||
Income (loss) from discontinued operations | 164,823 | |||||||||
Net income (loss) | $ | 127,629 |
(in thousands) | ||||||||||
Year ended April 30, 2017 | Multifamily | All Other | Total | |||||||
Revenue | $ | 142,214 | $ | 17,890 | $ | 160,104 | ||||
Property operating expenses, including real estate taxes | 60,895 | 3,431 | 64,326 | |||||||
Net operating income | $ | 81,319 | $ | 14,459 | $ | 95,778 | ||||
Property management expenses | (5,046 | ) | ||||||||
Casualty loss | (414 | ) | ||||||||
Depreciation and amortization | (44,253 | ) | ||||||||
Impairment of real estate investments | (57,028 | ) | ||||||||
General and administrative expenses | (15,871 | ) | ||||||||
Acquisition and investment related costs | (3,276 | ) | ||||||||
Interest expense | (34,314 | ) | ||||||||
Loss on debt extinguishment | (1,651 | ) | ||||||||
Interest and other income | 1,146 | |||||||||
Income (loss) before gain on sale of real estate and other investments | (64,929 | ) | ||||||||
Gain (loss) on sale of real estate and other investments | 18,701 | |||||||||
Income (loss) from continuing operations | (46,228 | ) | ||||||||
Income (loss) from discontinued operations | 76,753 | |||||||||
Net income (loss) | $ | 30,525 |
(in thousands) | ||||||||||
Year ended April 30, 2016 | Multifamily | All Other | Total | |||||||
Revenue | $ | 129,049 | $ | 16,451 | $ | 145,500 | ||||
Property operating expenses, including real estate taxes | 54,762 | 3,386 | 58,148 | |||||||
Net operating income | $ | 74,287 | $ | 13,065 | $ | 87,352 | ||||
Property management expenses | (3,714 | ) | ||||||||
Casualty loss | (238 | ) | ||||||||
Depreciation and amortization | (39,273 | ) | ||||||||
Impairment of real estate investments | (5,543 | ) | ||||||||
General and administrative expenses | (13,498 | ) | ||||||||
Acquisition and investment related costs | (830 | ) | ||||||||
Interest expense | (28,417 | ) | ||||||||
Loss on debt extinguishment | (106 | ) | ||||||||
Interest and other income | 385 | |||||||||
Income (loss) before loss on sale of real estate and other investments and income (loss) from discontinued operations | (3,882 | ) | ||||||||
Gain (loss) on sale of real estate and other investments | 9,640 | |||||||||
Gain (loss) on bargain purchase | 3,424 | |||||||||
Income (loss) from continuing operations | 9,182 | |||||||||
Income (loss) from discontinued operations | 67,420 | |||||||||
Net income (loss) | $ | 76,602 |
(in thousands) | ||||||||||
As at December 31, 2018 | Multifamily | All Other | Total | |||||||
Segment assets | ||||||||||
Property owned | $ | 1,582,917 | $ | 44,719 | $ | 1,627,636 | ||||
Less accumulated depreciation | (340,081 | ) | (13,790 | ) | (353,871 | ) | ||||
Total property owned | $ | 1,242,836 | $ | 30,929 | $ | 1,273,765 | ||||
Cash and cash equivalents | 13,792 | |||||||||
Restricted cash | 5,464 | |||||||||
Other assets | 27,265 | |||||||||
Unimproved land | 5,301 | |||||||||
Mortgage loans receivable | 10,410 | |||||||||
Total Assets | $ | 1,335,997 |
(in thousands) | ||||||||||
As at April 30, 2018 | Multifamily | All Other | Total | |||||||
Segment assets | ||||||||||
Property owned | $ | 1,606,421 | $ | 63,343 | $ | 1,669,764 | ||||
Less accumulated depreciation | (294,477 | ) | (16,847 | ) | (311,324 | ) | ||||
Total property owned | $ | 1,311,944 | $ | 46,496 | $ | 1,358,440 | ||||
Cash and cash equivalents | 11,891 | |||||||||
Restricted cash | 4,225 | |||||||||
Other assets | 30,297 | |||||||||
Unimproved land | 11,476 | |||||||||
Mortgage loans receivable | 10,329 | |||||||||
Total Assets | $ | 1,426,658 |
(in thousands) | ||||||||||
As at April 30, 2017 | Multifamily | All Other | Total | |||||||
Segment assets | ||||||||||
Property owned | $ | 1,260,541 | $ | 97,988 | $ | 1,358,529 | ||||
Less accumulated depreciation | (232,592 | ) | (23,007 | ) | (255,599 | ) | ||||
Total property owned | $ | 1,027,949 | $ | 74,981 | $ | 1,102,930 | ||||
Assets held for sale and assets from discontinued operations | 283,023 | |||||||||
Cash and cash equivalents | 28,819 | |||||||||
Restricted cash | 27,981 | |||||||||
Other assets | 13,306 | |||||||||
Unimproved land | 18,455 | |||||||||
Total Assets | $ | 1,474,514 |
(in thousands) | |||||||||||||
Period Ended | Year Ended | ||||||||||||
December 31, 2018 | April 30, 2018 | April 30, 2017 | April 30, 2016 | ||||||||||
REVENUE | |||||||||||||
Real estate rentals | $ | — | $ | 19,744 | $ | 43,984 | $ | 69,623 | |||||
Tenant reimbursement | — | 11,650 | 16,110 | 23,434 | |||||||||
TRS senior housing revenue | — | — | 3,218 | 3,955 | |||||||||
TOTAL REVENUE | — | 31,394 | 63,312 | 97,012 | |||||||||
EXPENSES | |||||||||||||
Property operating expenses, excluding real estate taxes | — | 6,350 | 9,051 | 17,470 | |||||||||
Real estate taxes | — | 5,191 | 6,848 | 11,611 | |||||||||
Property management expense | — | 206 | 574 | 1,957 | |||||||||
Depreciation and amortization | — | 8,445 | 10,772 | 24,725 | |||||||||
Impairment of real estate investments | — | — | — | 440 | |||||||||
TRS senior housing expenses | — | — | 3,113 | 3,366 | |||||||||
TOTAL EXPENSES | — | 20,192 | 30,358 | 59,569 | |||||||||
Operating income (loss) | — | 11,202 | 32,954 | 37,443 | |||||||||
Interest expense(1) | — | (4,172 | ) | (11,628 | ) | (25,757 | ) | ||||||
Gain (loss) on extinguishment of debt(1) | — | (6,508 | ) | (3,238 | ) | 29,336 | |||||||
Interest income | — | 661 | 2,179 | 2,179 | |||||||||
Other income | — | 73 | 340 | 437 | |||||||||
Income (loss) from discontinued operations before gain on sale | — | 1,256 | 20,607 | 43,638 | |||||||||
Gain (loss) on sale of discontinued operations | 570 | 163,567 | 56,146 | 23,782 | |||||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS | $ | 570 | $ | 164,823 | $ | 76,753 | $ | 67,420 | |||||
Segment Data | |||||||||||||
All other | $ | 570 | $ | 164,823 | $ | 76,753 | $ | 67,420 | |||||
Total | $ | 570 | $ | 164,823 | $ | 76,753 | $ | 67,420 |
(1) | Interest expense includes $4.7 million for the fiscal year ended April 30, 2016, of default interest related to a $122.6 million non-recourse loan. Gain on extinguishment of debt in the fiscal year ended April 30, 2016 includes $36.5 million of gain on extinguishment of debt recognized in connection with our transfer of ownership to the mortgage lender of the nine properties serving as collateral for the $122.6 million non-recourse loan and the removal of the debt obligation and accrued interest from our balance sheet. |
(in thousands) | ||||||||||||
Period Ended | Year Ended | |||||||||||
12/31/2018 | April 30, 2018 | April 30, 2017 | April 30, 2016 | |||||||||
Property Sale Data | ||||||||||||
Sales price | — | $ | 437,652 | $ | 239,436 | $ | 373,460 | |||||
Net book value and sales costs | — | (274,085 | ) | (183,290 | ) | (349,678 | ) | |||||
Gain on sale of discontinued operations | — | $ | 163,567 | $ | 56,146 | $ | 23,782 |
April 30, 2017 | ||||
Carrying amounts of major classes of assets included as part of discontinued operations | ||||
Property owned and intangible assets, net of accumulated depreciation and amortization | $ | 255,466 | ||
Restricted cash | 728 | |||
Other Assets | 12,750 | |||
Total major classes of assets of the discontinued operations | 268,944 | |||
Other assets included in the disposal group classified as held for sale | 14,079 | |||
Total assets of the disposal group classified as held for sale on the balance sheet | $ | 283,023 | ||
Carrying amounts of major classes of liabilities included as part of discontinued operations | ||||
Accounts payable and accrued expenses | $ | 4,835 | ||
Mortgages payable | 112,208 | |||
Other | 7,977 | |||
Total major classes of liabilities of the discontinued operations | 125,020 | |||
Other liabilities included in the disposal group classified as held for sale | 5,884 | |||
Total liabilities of the disposal group classified as held for sale on the balance sheet | $ | 130,904 |
(in thousands, except per share data) | ||||||||||||||
For Period Ended | For Year Ended April 30, | |||||||||||||
December 31, 2018 | April 30, 2018 | April 30, 2017 | April 30, 2016 | |||||||||||
NUMERATOR | ||||||||||||||
Income (loss) from continuing operations – controlling interests | $ | (4,908 | ) | $ | (30,266 | ) | $ | (24,473 | ) | $ | 11,553 | |||
Income (loss) from discontinued operations – controlling interests | 510 | 147,054 | 67,820 | 60,453 | ||||||||||
Net income (loss) attributable to controlling interests | (4,398 | ) | 116,788 | 43,347 | 72,006 | |||||||||
Dividends to preferred shareholders | (4,547 | ) | (8,569 | ) | (10,546 | ) | (11,514 | ) | ||||||
Redemption of preferred shares | — | (3,657 | ) | (1,435 | ) | — | ||||||||
Numerator for basic earnings per share – net income available to common shareholders | (8,945 | ) | 104,562 | 31,366 | 60,492 | |||||||||
Noncontrolling interests – Operating Partnership | (1,032 | ) | 12,702 | 4,059 | 7,032 | |||||||||
Numerator for diluted earnings per share | $ | (9,977 | ) | $ | 117,264 | $ | 35,425 | $ | 67,524 | |||||
DENOMINATOR | ||||||||||||||
Denominator for basic earnings per share weighted average shares | 11,937 | 119,977 | 121,169 | 123,094 | ||||||||||
Effect of redeemable operating partnership units | 1,387 | 14,617 | 16,130 | 14,278 | ||||||||||
Denominator for diluted earnings per share | 13,324 | 134,594 | 137,299 | 137,372 | ||||||||||
Earnings (loss) per common share from continuing operations – basic and diluted | $ | (0.79 | ) | $ | (3.54 | ) | $ | (3.01 | ) | $ | — | |||
Earnings (loss) per common share from discontinued operations – basic and diluted | 0.04 | 12.25 | 5.59 | 4.91 | ||||||||||
NET EARNINGS (LOSS) PER COMMON SHARE – BASIC & DILUTED | $ | (0.75 | ) | $ | 8.71 | $ | 2.58 | $ | 4.91 |
(in thousands) | |||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||
December 31, 2018 | |||||||||||
Real estate investments valued at fair value | $ | 3,049 | — | — | $ | 3,049 | |||||
April 30, 2018 | |||||||||||
Real estate investments valued at fair value | $ | 52,145 | — | — | $ | 52,145 | |||||
April 30, 2017 | |||||||||||
Real estate investments valued at fair value | $ | 506 | — | — | $ | 506 | |||||
Real estate held for sale (1) | 10,891 | — | — | 10,891 |
(1) | Represents only the portion of real estate held for sale at April 30, 2017 that was written down to estimated fair value. |
(in thousands) | |||||||||||||||||||
12/31/2018 | 4/30/2018 | 4/30/2017 | |||||||||||||||||
Amount | Fair Value | Amount | Fair Value | Amount | Fair Value | ||||||||||||||
FINANCIAL ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 13,792 | $ | 13,792 | $ | 11,891 | $ | 11,891 | $ | 28,819 | $ | 28,819 | |||||||
Mortgage and note receivables | 26,809 | 26,809 | 25,809 | 25,809 | — | — | |||||||||||||
FINANCIAL LIABILITIES | |||||||||||||||||||
Other debt, including other debt related to assets held for sale | — | — | — | — | 49,637 | 49,637 | |||||||||||||
Revolving line of credit | 57,500 | 57,500 | 124,000 | 124,000 | 57,050 | 57,050 | |||||||||||||
Term loan A (1) | 70,000 | 70,000 | 70,000 | 70,000 | — | — | |||||||||||||
Term loan B (1) | 75,000 | 75,000 | — | — | — | — | |||||||||||||
Mortgages payable (2) | 445,974 | 444,241 | 509,919 | 510,803 | 665,440 | 680,941 | |||||||||||||
Mortgages payable related to assets held for sale | — | — | — | — | 21,803 | 21,861 |
(1) | Excluding the effect of the interest rate swap agreement. |
(2) | Includes mortgages payable related to assets held for sale and assets of discontinued operations at April 30, 2017. |
(in thousands, except per Unit amounts) | |||||||||
Number of | Aggregate | Average Price | |||||||
Units | Cost | Per Unit | |||||||
Transition Period Ended December 31, 2018 | 9 | $ | 499 | $ | 53.12 | ||||
Fiscal Year Ended April 30, 2018 | 149 | 8,775 | 58.90 | ||||||
Fiscal Year Ended April 30, 2017 | 17 | 966 | 58.40 |
(in thousands) | ||||||
Number of | Total Book | |||||
Units | Value | |||||
Transition Period Ended December 31, 2018 | 33 | $ | 649 | |||
Fiscal Year Ended April 30, 2018 | 3 | 34 | ||||
Fiscal Year Ended April 30, 2017 | 50 | 875 |
(in thousands, except per share data) | |||||||||||
QUARTER ENDED | July 31, 2018 | October 31, 2018 | Two Months Ended December 31, 2018 | ||||||||
Revenues | $ | 45,946 | $ | 45,638 | $ | 30,287 | |||||
Net income (loss) attributable to controlling interest | $ | 2,916 | $ | (4,558 | ) | $ | (2,756 | ) | |||
Net income (loss) available to common shareholders | $ | 1,211 | $ | (6,264 | ) | $ | (3,892 | ) | |||
Net income (loss) per common share - basic & diluted | $ | 0.10 | $ | (0.52 | ) | $ | (0.33 | ) |
(in thousands, except per share data) | |||||||||||||
QUARTER ENDED | July 31, 2017 | October 31, 2017 | January 31, 2018 | April 30, 2018 | |||||||||
Revenues | $ | 40,978 | $ | 41,866 | $ | 42,716 | $ | 44,185 | |||||
Net income (loss) attributable to controlling interests | $ | (11,264 | ) | $ | 12,821 | $ | 136,105 | $ | (20,874 | ) | |||
Net income (loss) available to common shareholders | $ | (13,550 | ) | $ | 6,360 | $ | 134,331 | $ | (22,579 | ) | |||
Net income (loss) per common share - basic & diluted | $ | (1.12 | ) | $ | 0.53 | $ | 11.22 | $ | (1.89 | ) |
(in thousands, except per share data) | |||||||||||||
QUARTER ENDED | July 31, 2016 | October 31, 2016 | January 31, 2017 | April 30, 2017 | |||||||||
Revenues | $ | 38,301 | $ | 39,195 | $ | 39,797 | $ | 42,811 | |||||
Net income (loss) attributable to controlling interests | $ | (21,643 | ) | $ | 11,600 | $ | 23,110 | $ | 30,280 | ||||
Net income (loss) available to common shareholders | $ | (24,522 | ) | $ | 8,722 | $ | 19,172 | $ | 27,994 | ||||
Net income (loss) per common share - basic & diluted | $ | (2.02 | ) | $ | 0.72 | $ | 1.58 | $ | 2.33 |
Transition Period Ended | Fiscal Year Ended April 30, | ||||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | ||||||||||
Share based compensation expense | $ | 845 | $ | 1,587 | $ | 6 | $ | 2,256 |
Awards with Service Conditions | ||||||
Wtd Avg Grant- | ||||||
Shares | Date Fair Value | |||||
Unvested at April 30, 2015 | 10,754 | $ | 71.70 | |||
Granted | — | — | ||||
Vested | (10,754 | ) | 71.70 | |||
Unvested at April 30, 2016 | — | |||||
Granted | 25,326 | 61.59 | ||||
Vested | (2,132 | ) | 59.50 | |||
Forfeited | (3,683 | ) | 62.40 | |||
Unvested at April 30, 2017 | 19,511 | |||||
Granted | 9,136 | 57.55 | ||||
Vested | (18,545 | ) | 59.89 | |||
Forfeited | (202 | ) | 62.40 | |||
Unvested at April 30, 2018 | 9,900 | |||||
Granted | — | — | ||||
Vested | (2,709 | ) | 63.21 | |||
Forfeited | — | — | ||||
Unvested at December 31, 2018 | 7,191 | $ | 60.49 |
RSUs with Service Conditions | RSUs with Market Conditions | |||||||||||
Wtd Avg Grant- | Wtd Avg Grant- | |||||||||||
Shares | Date Fair Value | Shares | Date Fair Value | |||||||||
Unvested at April 30, 2017 | — | — | ||||||||||
Granted | 6,994 | $ | 60.54 | 11,538 | $ | 70.90 | ||||||
Vested | (207 | ) | 50.30 | — | ||||||||
Forfeited | — | — | ||||||||||
Unvested at April 30, 2018 | 6,787 | 60.85 | 11,538 | 70.90 | ||||||||
Granted | 14,878 | 53.60 | 15,461 | 57.70 | ||||||||
Vested | (2,943 | ) | 60.83 | — | — | |||||||
Forfeited | (462 | ) | 53.60 | (1,680 | ) | 70.90 | ||||||
Unvested at December 31, 2018 | 18,260 | $ | 55.13 | 25,319 | $ | 62.84 |
Gross amount at which carried at | Life on which | ||||||||||||||||||||||||||
Initial Cost to Company | close of period | depreciation in | |||||||||||||||||||||||||
Costs capitalized | Date of | latest income | |||||||||||||||||||||||||
Buildings & | subsequent to | Buildings & | Accumulated | Construction | statement is | ||||||||||||||||||||||
Description | Encumbrances(1) | Land | Improvements | acquisition | Land | Improvements | Total | Depreciation | or Acquisition | computed | |||||||||||||||||
Multifamily | |||||||||||||||||||||||||||
71 France - Edina, MN | $ | 55,554 | $ | 4,721 | $ | 61,762 | $ | 102 | $ | 4,721 | $ | 61,864 | $ | 66,585 | $ | (7,861 | ) | 2016 | 30-37 | years | |||||||
Alps Park - Rapid City, SD | 3,543 | 287 | 5,551 | 370 | 333 | 5,875 | 6,208 | (1,084 | ) | 2013 | 30-37 | years | |||||||||||||||
Arbors - South Sioux City, NE | 3,494 | 350 | 6,625 | 2,530 | 1,055 | 8,450 | 9,505 | (3,328 | ) | 2006 | 30-37 | years | |||||||||||||||
Arcata - Golden Valley, MN | — | 2,088 | 31,036 | 120 | 2,090 | 31,154 | 33,244 | (5,281 | ) | 2015 | 30-37 | years | |||||||||||||||
Ashland - Grand Forks, ND | 5,115 | 741 | 7,569 | 293 | 803 | 7,800 | 8,603 | (1,704 | ) | 2012 | 30-37 | years | |||||||||||||||
Avalon Cove - Rochester, MN | — | 1,616 | 34,074 | 437 | 1,726 | 34,401 | 36,127 | (3,237 | ) | 2016 | 30-37 | years | |||||||||||||||
Boulder Court - Eagan, MN | — | 1,067 | 5,498 | 3,253 | 1,561 | 8,257 | 9,818 | (3,613 | ) | 2003 | 30-37 | years | |||||||||||||||
Brookfield Village - Topeka, KS | 4,847 | 509 | 6,698 | 2,008 | 926 | 8,289 | 9,215 | (3,418 | ) | 2003 | 30-37 | years | |||||||||||||||
Canyon Lake - Rapid City, SD | 2,636 | 305 | 3,958 | 2,411 | 398 | 6,276 | 6,674 | (2,794 | ) | 2001 | 30-37 | years | |||||||||||||||
Cardinal Point - Grand Forks, ND | — | 1,600 | 33,400 | 52 | 1,615 | 33,437 | 35,052 | (700 | ) | 2013 | 30-37 | years | |||||||||||||||
Cascade Shores - Rochester, MN | 11,400 | 1,585 | 16,710 | 88 | 1,586 | 16,797 | 18,383 | (1,636 | ) | 2016 | 30-37 | years | |||||||||||||||
Castlerock - Billings, MT | 6,134 | 736 | 4,864 | 2,459 | 1,022 | 7,037 | 8,059 | (3,879 | ) | 1998 | 30-37 | years | |||||||||||||||
Chateau - Minot, ND | — | 301 | 20,058 | 940 | 326 | 20,973 | 21,299 | (4,017 | ) | 2013 | 30-37 | years | |||||||||||||||
Cimarron Hills - Omaha, NE | 4,406 | 706 | 9,588 | 4,891 | 1,588 | 13,597 | 15,185 | (6,732 | ) | 2001 | 30-37 | years | |||||||||||||||
Colonial Villa - Burnsville, MN | — | 2,401 | 11,515 | 9,418 | 2,946 | 20,388 | 23,334 | (9,557 | ) | 2003 | 30-37 | years | |||||||||||||||
Colony - Lincoln, NE | 12,251 | 1,515 | 15,730 | 1,656 | 1,771 | 17,130 | 18,901 | (3,826 | ) | 2012 | 30-37 | years | |||||||||||||||
Commons and Landing at Southgate - Minot, ND | 25,655 | 5,945 | 47,512 | 1,460 | 6,333 | 48,584 | 54,917 | (8,764 | ) | 2015 | 30-37 | years | |||||||||||||||
Cottage West Twin Homes - Sioux Falls, SD | 3,338 | 968 | 3,762 | 618 | 1,076 | 4,272 | 5,348 | (943 | ) | 2011 | 30-37 | years | |||||||||||||||
Cottonwood - Bismarck, ND | — | 1,056 | 17,372 | 5,583 | 1,625 | 22,386 | 24,011 | (10,152 | ) | 1997 | 30-37 | years | |||||||||||||||
Country Meadows - Billings, MT | 6,062 | 491 | 7,809 | 1,789 | 575 | 9,514 | 10,089 | (5,134 | ) | 1995 | 30-37 | years | |||||||||||||||
Crestview - Bismarck, ND | 3,511 | 235 | 4,290 | 2,301 | 607 | 6,219 | 6,826 | (4,002 | ) | 1994 | 30-37 | years | |||||||||||||||
Crown Colony - Topeka, KS | 7,499 | 620 | 9,956 | 3,949 | 1,207 | 13,318 | 14,525 | (6,541 | ) | 1999 | 30-37 | years | |||||||||||||||
Crystal Bay - Rochester, MN | — | 433 | 11,425 | 272 | 436 | 11,694 | 12,130 | (1,078 | ) | 2016 | 30-37 | years | |||||||||||||||
Cypress Court - St. Cloud, MN | 12,217 | 1,583 | 18,879 | 252 | 1,612 | 19,102 | 20,714 | (3,508 | ) | 2012 | 30-37 | years | |||||||||||||||
Deer Ridge - Jamestown, ND | 11,001 | 711 | 24,129 | 201 | 738 | 24,303 | 25,041 | (3,534 | ) | 2013 | 30-37 | years | |||||||||||||||
Dylan - Denver, CO | — | 12,155 | 77,215 | 572 | 12,155 | 77,787 | 89,942 | (2,917 | ) | 2013 | 30-37 | years | |||||||||||||||
Evergreen - Isanti, MN | — | 1,129 | 5,524 | 430 | 1,141 | 5,942 | 7,083 | (1,528 | ) | 2008 | 30-37 | years | |||||||||||||||
Forest Park - Grand Forks, ND | 7,011 | 810 | 5,579 | 8,447 | 1,473 | 13,363 | 14,836 | (7,928 | ) | 1993 | 30-37 | years | |||||||||||||||
French Creek - Rochester, MN | — | 201 | 4,735 | 217 | 207 | 4,946 | 5,153 | (434 | ) | 2016 | 30-37 | years | |||||||||||||||
Gables Townhomes - Sioux Falls, SD | 1,351 | 349 | 1,921 | 257 | 400 | 2,127 | 2,527 | (458 | ) | 2011 | 30-37 | years | |||||||||||||||
Gardens - Grand Forks, ND | — | 518 | 8,702 | 113 | 528 | 8,805 | 9,333 | (1,017 | ) | 2015 | 30-37 | years | |||||||||||||||
Grand Gateway - St. Cloud, MN | — | 814 | 7,086 | 1,888 | 961 | 8,827 | 9,788 | (2,406 | ) | 2012 | 30-37 | years | |||||||||||||||
GrandeVille at Cascade Lake - Rochester, MN | 36,000 | 5,003 | 50,363 | 1,651 | 5,065 | 51,952 | 57,017 | (5,814 | ) | 2015 | 30-37 | years | |||||||||||||||
Greenfield - Omaha, NE | — | 578 | 4,122 | 1,344 | 872 | 5,172 | 6,044 | (1,799 | ) | 2007 | 30-37 | years | |||||||||||||||
Heritage Manor - Rochester, MN | 3,248 | 403 | 6,968 | 3,317 | 682 | 10,006 | 10,688 | (5,251 | ) | 1998 | 30-37 | years | |||||||||||||||
Homestead Garden - Rapid City, SD | — | 655 | 14,139 | 665 | 718 | 14,741 | 15,459 | (2,195 | ) | 2015 | 30-37 | years | |||||||||||||||
Indian Hills - Sioux City, IA | — | 294 | 2,921 | 4,489 | 470 | 7,234 | 7,704 | (2,361 | ) | 2007 | 30-37 | years | |||||||||||||||
Kirkwood Manor - Bismarck, ND | 3,039 | 449 | 2,725 | 1,950 | 625 | 4,499 | 5,124 | (2,498 | ) | 1997 | 30-37 | years | |||||||||||||||
Lakeside Village - Lincoln, NE | 12,111 | 1,215 | 15,837 | 1,202 | 1,348 | 16,906 | 18,254 | (3,659 | ) | 2012 | 30-37 | years |
Gross amount at which carried at | Life on which | ||||||||||||||||||||||||||
Initial Cost to Company | close of period | depreciation in | |||||||||||||||||||||||||
Costs capitalized | Date of | latest income | |||||||||||||||||||||||||
Buildings & | subsequent to | Buildings & | Accumulated | Construction | statement is | ||||||||||||||||||||||
Description | Encumbrances(1) | Land | Improvements | acquisition | Land | Improvements | Total | Depreciation | or Acquisition | computed | |||||||||||||||||
Landmark - Grand Forks, ND | — | $ | 184 | $ | 1,514 | $ | 1,215 | $ | 366 | $ | 2,547 | $ | 2,913 | $ | (1,492 | ) | 1997 | 30-37 | years | ||||||||
Legacy - Grand Forks, ND | $ | 14,031 | 1,362 | 21,727 | 10,479 | 2,263 | 31,305 | 33,568 | (15,220 | ) | 1995-2005 | 30-37 | years | ||||||||||||||
Legacy Heights - Bismarck, ND | — | 1,207 | 13,742 | 419 | 1,307 | 14,061 | 15,368 | (1,578 | ) | 2015 | 30-37 | years | |||||||||||||||
Mariposa - Topeka, KS | 2,715 | 399 | 5,110 | 1,041 | 455 | 6,095 | 6,550 | (2,228 | ) | 2004 | 30-37 | years | |||||||||||||||
Meadows - Jamestown, ND | — | 590 | 4,519 | 1,955 | 710 | 6,354 | 7,064 | (3,091 | ) | 1998 | 30-37 | years | |||||||||||||||
Monticello Crossings - Monticello, MN | — | 1,734 | 30,136 | 28 | 1,734 | 30,164 | 31,898 | (2,648 | ) | 2017 | 30-37 | years | |||||||||||||||
Monticello Village - Monticello, MN | — | 490 | 3,756 | 1,108 | 638 | 4,716 | 5,354 | (1,922 | ) | 2004 | 30-37 | years | |||||||||||||||
North Pointe - Bismarck, ND | 3,175 | 303 | 3,957 | 1,359 | 384 | 5,235 | 5,619 | (2,331 | ) | 1995-2011 | 30-37 | years | |||||||||||||||
Northridge - Bismarck, ND | — | 884 | 7,515 | 191 | 974 | 7,616 | 8,590 | (1,041 | ) | 2015 | 30-37 | years | |||||||||||||||
Oakmont Estates - Sioux Falls, SD | — | 422 | 4,838 | 1,404 | 711 | 5,953 | 6,664 | (2,664 | ) | 2002 | 30-37 | years | |||||||||||||||
Oakwood Estates - Sioux Falls, SD | — | 543 | 2,784 | 4,828 | 868 | 7,287 | 8,155 | (5,235 | ) | 1993 | 30-37 | years | |||||||||||||||
Olympic Village - Billings, MT | 9,777 | 1,164 | 10,441 | 4,033 | 1,829 | 13,809 | 15,638 | (6,978 | ) | 2000 | 30-37 | years | |||||||||||||||
Olympik Village - Rochester, MN | 3,895 | 1,034 | 6,109 | 2,718 | 1,368 | 8,493 | 9,861 | (3,336 | ) | 2005 | 30-37 | years | |||||||||||||||
Oxbo - St Paul, MN | — | 5,809 | 51,586 | 167 | 5,879 | 51,683 | 57,562 | (3,093 | ) | 2015 | 30-37 | years | |||||||||||||||
Oxbow Park - Sioux Falls, SD | — | 404 | 3,152 | 3,738 | 993 | 6,301 | 7,294 | (4,496 | ) | 1994 | 30-37 | years | |||||||||||||||
Park Meadows - Waite Park, MN | 7,934 | 1,143 | 9,099 | 9,999 | 2,121 | 18,120 | 20,241 | (9,812 | ) | 1997 | 30-37 | years | |||||||||||||||
Park Place - Plymouth, MN | — | 10,609 | 80,781 | 3,471 | 10,623 | 84,238 | 94,861 | (3,892 | ) | 1997 | 30-37 | years | |||||||||||||||
Pebble Springs - Bismarck, ND | — | 7 | 748 | 236 | 65 | 926 | 991 | (497 | ) | 1999 | 30-37 | years | |||||||||||||||
Pinehurst - Billings, MT | — | 72 | 687 | 523 | 168 | 1,114 | 1,282 | (493 | ) | 2002 | 30-37 | years | |||||||||||||||
Plaza - Minot, ND | — | 867 | 12,784 | 3,046 | 998 | 15,699 | 16,697 | (4,410 | ) | 2009 | 30-37 | years | |||||||||||||||
Pointe West - Rapid City, SD | 2,393 | 240 | 3,538 | 2,095 | 431 | 5,442 | 5,873 | (3,253 | ) | 1994 | 30-37 | years | |||||||||||||||
Ponds at Heritage Place - Sartell, MN | — | 395 | 4,564 | 446 | 413 | 4,992 | 5,405 | (1,098 | ) | 2012 | 30-37 | years | |||||||||||||||
Prairie Winds - Sioux Falls, SD | 1,292 | 144 | 1,816 | 739 | 309 | 2,390 | 2,699 | (1,589 | ) | 1993 | 30-37 | years | |||||||||||||||
Quarry Ridge - Rochester, MN | 25,277 | 2,254 | 30,024 | 2,092 | 2,406 | 31,964 | 34,370 | (8,553 | ) | 2006 | 30-37 | years | |||||||||||||||
Red 20 - Minneapolis, MN | 22,219 | 1,900 | 24,116 | 185 | 1,908 | 24,293 | 26,201 | (4,221 | ) | 2015 | 30-37 | years | |||||||||||||||
Regency Park Estates - St. Cloud, MN | 7,838 | 702 | 10,198 | 2,455 | 1,060 | 12,295 | 13,355 | (3,121 | ) | 2011 | 30-37 | years | |||||||||||||||
Ridge Oaks - Sioux City, IA | 3,131 | 178 | 4,073 | 3,007 | 318 | 6,940 | 7,258 | (3,250 | ) | 2001 | 30-37 | years | |||||||||||||||
Rimrock West - Billings, MT | 3,046 | 330 | 3,489 | 2,062 | 516 | 5,365 | 5,881 | (2,647 | ) | 1999 | 30-37 | years | |||||||||||||||
River Ridge - Bismarck, ND | — | 576 | 24,670 | 899 | 793 | 25,352 | 26,145 | (5,598 | ) | 2008 | 30-37 | years | |||||||||||||||
Rocky Meadows - Billings, MT | 4,722 | 656 | 5,726 | 1,617 | 815 | 7,184 | 7,999 | (4,087 | ) | 1995 | 30-37 | years | |||||||||||||||
Rum River - Isanti, MN | 3,235 | 843 | 4,823 | 463 | 864 | 5,265 | 6,129 | (1,700 | ) | 2007 | 30-37 | years | |||||||||||||||
Sherwood - Topeka, KS | 11,268 | 1,142 | 14,684 | 5,327 | 2,159 | 18,994 | 21,153 | (9,478 | ) | 1999 | 30-37 | years | |||||||||||||||
Sierra Vista - Sioux Falls, SD | — | 241 | 2,097 | 596 | 291 | 2,643 | 2,934 | (662 | ) | 2011 | 30-37 | years | |||||||||||||||
Silver Springs - Rapid City, SD | 2,088 | 215 | 3,007 | 724 | 257 | 3,689 | 3,946 | (574 | ) | 2015 | 30-37 | years | |||||||||||||||
South Pointe - Minot, ND | 7,871 | 550 | 9,548 | 5,638 | 1,373 | 14,363 | 15,736 | (8,222 | ) | 1995 | 30-37 | years | |||||||||||||||
Southpoint - Grand Forks, ND | — | 576 | 9,893 | 169 | 633 | 10,005 | 10,638 | (1,548 | ) | 2013 | 30-37 | years | |||||||||||||||
Southwind - Grand Forks, ND | 5,031 | 400 | 4,938 | 4,119 | 827 | 8,630 | 9,457 | (4,988 | ) | 1995 | 30-37 | years | |||||||||||||||
Sunset Trail - Rochester, MN | 7,476 | 336 | 12,814 | 3,283 | 720 | 15,713 | 16,433 | (7,608 | ) | 1999 | 30-37 | years | |||||||||||||||
Thomasbrook - Lincoln, NE | 5,496 | 600 | 10,306 | 5,329 | 1,646 | 14,589 | 16,235 | (6,829 | ) | 1999 | 30-37 | years | |||||||||||||||
Valley Park - Grand Forks, ND | 3,555 | 294 | 4,137 | 4,049 | 1,223 | 7,257 | 8,480 | (4,072 | ) | 1999 | 30-37 | years | |||||||||||||||
Villa West - Topeka, KS | 11,381 | 1,590 | 15,760 | 1,882 | 2,338 | 16,894 | 19,232 | (3,787 | ) | 2012 | 30-37 | years | |||||||||||||||
Village Green - Rochester, MN | — | 234 | 2,296 | 1,068 | 359 | 3,239 | 3,598 | (1,394 | ) | 2003 | 30-37 | years | |||||||||||||||
Westend - Denver, CO | — | 25,525 | 102,180 | 174 | 25,525 | 102,354 | 127,879 | (2,848 | ) | 1995 | 30-37 | years |
Gross amount at which carried at | Life on which | ||||||||||||||||||||||||||
Initial Cost to Company | close of period | depreciation in | |||||||||||||||||||||||||
Costs capitalized | Date of | latest income | |||||||||||||||||||||||||
Buildings & | subsequent to | Buildings & | Accumulated | Construction | statement is | ||||||||||||||||||||||
Description | Encumbrances(1) | Land | Improvements | acquisition | Land | Improvements | Total | Depreciation | or Acquisition | computed | |||||||||||||||||
West Stonehill - Waite Park, MN | $ | 7,720 | $ | 939 | $ | 10,167 | $ | 7,836 | $ | 1,914 | $ | 17,028 | $ | 18,942 | $ | (9,874 | ) | 1995 | 30-37 | years | |||||||
Westwood Park - Bismarck, ND | 1,814 | 116 | 1,909 | 2,063 | 293 | 3,795 | 4,088 | (2,114 | ) | 1998 | 30-37 | years | |||||||||||||||
Whispering Ridge - Omaha, NE | 20,561 | 2,139 | 25,424 | 1,693 | 2,438 | 26,818 | 29,256 | (5,317 | ) | 2012 | 30-37 | years | |||||||||||||||
Winchester - Rochester, MN | — | 748 | 5,622 | 2,554 | 1,044 | 7,880 | 8,924 | (3,536 | ) | 2003 | 30-37 | years | |||||||||||||||
Woodridge - Rochester, MN | 5,610 | 370 | 6,028 | 3,358 | 750 | 9,006 | 9,756 | (5,068 | ) | 1997 | 30-37 | years | |||||||||||||||
Total Multifamily | $ | 445,974 | $ | 130,603 | $ | 1,260,439 | $ | 191,875 | $ | 153,398 | $ | 1,429,519 | $ | 1,582,917 | $ | (340,081 | ) |
Gross amount at which carried at | Life on which | |||||||||||||||||||||||||||
Initial Cost to Company | close of period | depreciation in | ||||||||||||||||||||||||||
Costs capitalized | Date of | latest income | ||||||||||||||||||||||||||
Buildings & | subsequent to | Buildings & | Accumulated | Construction | statement is | |||||||||||||||||||||||
Description | Encumbrances(1) | Land | Improvements | acquisition | Land | Improvements | Total | Depreciation | or Acquisition | computed | ||||||||||||||||||
Other - Mixed Use | ||||||||||||||||||||||||||||
71 France - Edina, MN | — | $ | — | $ | 5,879 | $ | 775 | $ | — | $ | 6,654 | $ | 6,654 | $ | (585 | ) | 2016 | 30-37 | years | |||||||||
Oxbo - St Paul, MN | — | — | 3,472 | 54 | — | 3,526 | 3,526 | (194 | ) | 2015 | 30-37 | years | ||||||||||||||||
Plaza - Minot, ND | — | 389 | 5,444 | 3,764 | 598 | 8,999 | 9,597 | (3,494 | ) | 2009 | 30-37 | years | ||||||||||||||||
Red 20 - Minneapolis, MN | — | — | 2,525 | 419 | — | 2,944 | 2,944 | (401 | ) | 2015 | 30-37 | years | ||||||||||||||||
Total Other - Mixed Use | — | $ | 389 | $ | 17,320 | $ | 5,012 | $ | 598 | $ | 22,123 | $ | 22,721 | $ | (4,674 | ) | ||||||||||||
Other - Commercial | ||||||||||||||||||||||||||||
Dakota West Plaza - Minot , ND | — | 92 | 493 | 39 | 106 | 518 | 624 | (185 | ) | 2006 | 30-37 | years | ||||||||||||||||
Minot 1400 31st Ave - Minot, ND | — | 1,026 | 6,143 | 4,437 | 1,038 | 10,568 | 11,606 | (5,485 | ) | 2010 | 30-37 | years | ||||||||||||||||
Minot IPS - Minot, ND | — | 416 | 5,952 | — | 416 | 5,952 | 6,368 | (3,399 | ) | 2012 | 30-37 | years | ||||||||||||||||
Woodbury 1865 Woodlane - Woodbury, MN | — | 1,108 | 2,292 | — | 1,108 | 2,292 | 3,400 | (47 | ) | 2007 | 30-37 | years | ||||||||||||||||
Total Other - Commercial | — | $ | 2,642 | $ | 14,880 | $ | 4,476 | $ | 2,668 | $ | 19,330 | $ | 21,998 | $ | (9,116 | ) | ||||||||||||
Subtotal | $ | 445,974 | $ | 133,634 | $ | 1,292,639 | $ | 201,363 | $ | 156,664 | $ | 1,470,972 | $ | 1,627,636 | $ | (353,871 | ) |
Gross amount at which carried at | ||||||||||||||||||||||||||
Initial Cost to Company | close of period | |||||||||||||||||||||||||
Costs capitalized | Date of | |||||||||||||||||||||||||
Buildings & | subsequent to | Buildings & | Accumulated | Construction | ||||||||||||||||||||||
Description | Encumbrances (1) | Land | Improvements | acquisition | Land | Improvements | Total | Depreciation | or Acquisition | |||||||||||||||||
Unimproved Land | ||||||||||||||||||||||||||
Creekside Crossing - Bismarck, ND | — | $ | 2,357 | — | $ | 692 | $ | 3,049 | — | $ | 3,049 | — | 2015 | |||||||||||||
Minot 1525 24th Ave SW - Minot, ND | — | 506 | — | — | 506 | — | 506 | — | 2015 | |||||||||||||||||
Rapid City - Rapid City, SD | — | 1,376 | — | — | 1,376 | — | 1,376 | — | 2014 | |||||||||||||||||
Weston - Weston, WI | — | 370 | — | — | 370 | — | 370 | — | 2006 | |||||||||||||||||
Total Unimproved Land | — | $ | 4,609 | — | $ | 692 | $ | 5,301 | — | $ | 5,301 | — | ||||||||||||||
Total | $ | 445,974 | $ | 138,243 | $ | 1,292,639 | $ | 202,055 | $ | 161,965 | $ | 1,470,972 | $ | 1,632,937 | $ | (353,871 | ) |
(1) | Amounts in this column are the mortgages payable balance as of December 31, 2018. These amounts do not include amounts owing under the Company's multi-bank line of credit or term loans. |
(in thousands) | |||||||||||||
Transition Period Ended | Year Ended April 30, | ||||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | ||||||||||
Balance at beginning of year | $ | 1,669,764 | $ | 1,358,529 | $ | 1,369,893 | $ | 1,090,362 | |||||
Additions during year | |||||||||||||
Multifamily and Other | — | 369,332 | 61,565 | 285,080 | |||||||||
Improvements and Other | 11,620 | 15,065 | 34,761 | 31,007 | |||||||||
1,681,384 | 1,742,926 | 1,466,219 | 1,406,449 | ||||||||||
Deductions during year | |||||||||||||
Cost of real estate sold | (53,653 | ) | (46,001 | ) | (21,601 | ) | (1,305 | ) | |||||
Impairment charge | — | (15,192 | ) | (51,401 | ) | — | |||||||
Write down of asset and accumulated depreciation on impaired assets | — | (8,597 | ) | (7,144 | ) | — | |||||||
Properties classified as held for sale during the year | — | — | (24,156 | ) | (26,373 | ) | |||||||
Other (1) | (95 | ) | (3,372 | ) | (3,388 | ) | (8,878 | ) | |||||
Balance at close of year | $ | 1,627,636 | $ | 1,669,764 | $ | 1,358,529 | $ | 1,369,893 |
(in thousands) | |||||||||||||
Transition Period Ended | Year Ended April 30, | ||||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | ||||||||||
Balance at beginning of year | $ | 311,324 | $ | 255,599 | $ | 237,859 | $ | 212,826 | |||||
Additions during year | |||||||||||||
Provisions for depreciation | 49,208 | 78,785 | 42,960 | 37,846 | |||||||||
Deductions during year | |||||||||||||
Accumulated depreciation on real estate sold or classified as held for sale | (6,609 | ) | (11,033 | ) | (14,687 | ) | (9,957 | ) | |||||
Write down of asset and accumulated depreciation on impaired assets | — | (8,597 | ) | (7,144 | ) | — | |||||||
Other (1) | (52 | ) | (3,430 | ) | (3,389 | ) | (2,856 | ) | |||||
Balance at close of year | $ | 353,871 | $ | 311,324 | $ | 255,599 | $ | 237,859 |
(in thousands) | |||||||||||
Transition Period Ended | Year Ended April 30, | ||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | ||||||||
Balance at beginning of year | — | — | $ | 51,681 | $ | 153,994 | |||||
Additions during year | |||||||||||
Unimproved land moved to development in progress | — | — | — | 1,734 | |||||||
Improvements and other | — | — | 7,762 | 48,109 | |||||||
Deductions during year | |||||||||||
Development placed in service (2) | — | — | (59,443 | ) | (152,156 | ) | |||||
Balance at close of year | — | — | — | $ | 51,681 |
(in thousands) | |||||||||||||
Transition Period Ended | Year Ended April 30, | ||||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | ||||||||||
Balance at beginning of year | $ | 11,476 | $ | 18,455 | $ | 20,939 | $ | 25,827 | |||||
Additions during year | |||||||||||||
Improvements and other | — | — | 1,024 | 205 | |||||||||
Deductions during year | |||||||||||||
Cost of real estate sold | (4,954 | ) | (1,000 | ) | — | (442 | ) | ||||||
Impairment charge | (1,221 | ) | (2,617 | ) | (3,508 | ) | (1,285 | ) | |||||
Properties classified as held for sale during the year | — | (3,288 | ) | — | (1,632 | ) | |||||||
Unimproved land moved to development in progress | — | — | — | (1,734 | ) | ||||||||
Other (1) | — | (74 | ) | — | — | ||||||||
Balance at close of year | 5,301 | 11,476 | 18,455 | 20,939 | |||||||||
Total real estate investments, excluding mortgage notes receivable (3) | $ | 1,279,066 | $ | 1,369,916 | $ | 1,121,385 | $ | 1,204,654 |
(1) | Consists of miscellaneous disposed assets. |
(2) | Includes development projects that are placed in service in phases. |
(3) | The net basis, including held for sale properties, for Federal Income Tax purposes was $1.2 billion, $1.5 billion, $1.4 billion and $1.6 billion at December 31, 2018, April 30, 2018, 2017 and 2016, respectively. |
(a) | Subject to the preferential rights of holders of any class or series of Preferred Units of the Partnership expressly designated as ranking senior to the Series D Preferred Units as to distributions, the holders of Series D Preferred Units shall be entitled to receive, out of funds of the Partnership legally available for payment of distributions, cumulative cash distributions at the rate of 3.862% per annum of the $100.00 per Series D Preferred Unit issue price (equivalent to a fixed annual amount of $3.862 per unit) (the “Series D Preferred Return”). The Series D Preferred Return shall be paid only when, as and if authorized by the General Partner and declared by the Partnership, but if the Series D Preferred Return is not paid quarterly, it shall continue to accrue and be cumulative as provided below. Distributions on the Series D Preferred Units shall accrue and be cumulative from (but excluding) the date of original issue of any Series D Preferred Units and shall be payable quarterly, in equal amounts, in arrears, on or about the last day of each March, June, September and December of each year (each a “Series D Distribution Payment Date’’) for the period ending on such Series D Distribution Payment Date, commencing on March 31, 2019. If any date on which distributions are to be made on the Series D Preferred Units is not a Business Day, then payment of the distribution to be made on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The amount of any distribution payable on the Series D Preferred Units for any partial distribution period will be prorated and computed on the basis of twelve 30-day months |
(b) | No distributions on the Series D Preferred Units shall be authorized by the General Partner or declared, paid or set apart for payment by the Partnership at such time as the terms and provisions of any agreement of the General Partner, the Trust or the Partnership, including any agreement relating to the indebtedness of any of them, prohibits such authorization, declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law. |
(c) | Notwithstanding anything to the contrary contained herein, distributions on the Series D Preferred Units will accrue whether or not the restrictions referred to in Section 5(b) above exist, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized or declared |
(d) | Except as provided in Section 5(e) below, no distributions shall be declared and paid or set apart for payment, and no other distribution of cash or other property may be declared and made, directly or indirectly, on or with respect to, any Partnership Units, Series D Parity Preferred Units or Series D Junior Preferred Units of the Partnership (other than a distribution paid in units of, or options, warrants or rights to subscribed for or purchase units of, Partnership Units or Series D Junior Preferred Units) for any period, nor shall units of any class or series of Partnership Units, Series D Parity Preferred Units or Series D Junior Preferred Units be redeemed, purchased or otherwise acquired for any consideration, nor shall any funds be paid or made available for a sinking fund for the redemption of any such units by the Partnership, directly or indirectly (except by conversion into or exchange for units of, or options, warrants or rights to purchase of subscribed for units of, Partnership Units or Series D Junior Preferred Units, and except for purchases or exchanges pursuant to a purchase or exchange offer made on the same terms to all holders of Series D Preferred Units and all holders of Series D Parity Preferred Units), unless full cumulative distributions on the Series D Preferred Units for all past distribution periods shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for such payment. The foregoing sentence will not prohibit (i) distributions payable solely in Partnership Units or Series D Junior Preferred Units, or (ii) the conversion of Series D Junior Preferred Units or Series D Parity Preferred Units into Partnership Units or Series D Junior Preferred Units. |
(e) | When distributions are not paid in full (or a sum sufficient for such full payment is not so set apart) on the Series D Preferred Units and any Series D Parity Preferred Units, all distributions declared on the Series D Preferred Units and any Series D Parity Preferred Units shall be declared pro rata so that the amount of distributions declared per Series D Preferred Unit and such Series D Parity Preferred Units shall in all cases bear to each other the same ratio that accrued distributions per |
(f) | Holders of Series D Preferred Units shall not be entitled to any distribution, whether payable in cash, property or units of the Partnership, in excess of full cumulative distributions on the Series D Preferred Units as provided above. Any distribution made on the Series D Preferred Units shall first be credited against the earliest accrued but unpaid distributions due with respect to such units which remains payable. Accrued but unpaid distributions on Series D Preferred Units will accumulate as of the Series D Distribution Payment Date on which they first become payable or on the date of redemption, as the case may be. |
(g) | For the avoidance of doubt, in determining whether a distribution (other than upon voluntary or involuntary liquidation) by distribution, redemption or other acquisition of Partnership Units or Preferred Units is permitted under North Dakota law, no effect shall be given to the amounts that would be needed, if the Partnership were to be dissolved at the time of the distribution, to satisfy the preferential rights upon distribution of holders of Partnership Interests whose preferential rights are superior to those receiving the distribution. |
(a) | Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Partnership, before any distribution or payment shall be made to the holders of any Partnership Units or Series D Junior Preferred Units, the holders of the Series D Preferred Units then outstanding shall be entitled to be paid, or have the Partnership declare and set apart for payment, out of the assets of the Partnership legally available for distribution to its Partners after payment or provision for payment of all debts and other liabilities of the Partnership, a liquidation preference in cash or property at fair market value, as determined by the General Partner, of $100.00 per Series D Preferred Unit plus an amount equal to any accrued and unpaid distributions to, and including, the date of payment or the date the liquidation preference is set apart for payment (the “Series D Liquidating Distributions”). |
(b) | If upon any such voluntary or involuntary liquidation, dissolution or winding up of the Partnership, the available assets of the Partnership are insufficient to pay the full amount of the Series D Liquidating Distributions on all outstanding Series D Preferred Units and the corresponding amounts payable on all outstanding Series D Parity Preferred Units, then the holders of Series D Preferred Units and Series D Parity Preferred Units shall share ratably in any such distribution of assets in proportion to the full Series D Liquidating Distributions to which they would otherwise be respectively entitled. |
(c) | Upon any voluntary or involuntary liquidation, dissolution or winding up of the Partnership, after payment shall have been made in full to the holders of the Series D Preferred Units and any Series D Parity Preferred Units, any other series or class or classes of Series D Junior Preferred Units shall be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series D Preferred Units and any Series D Parity Preferred Units shall not be entitled to share therein. |
(d) | After payment of the full amount of the Liquidating Distributions to which they are entitled, holders of Series D Preferred Units will have no right or claim to any of the remaining assets of the Partnership. |
(e) | For the avoidance of doubt, the consolidation or merger of the Partnership with or into another entity, the merger of another entity with or into the Partnership, a statutory unit exchange by the Partnership or the sale, lease, transfer or conveyance of all or substantially all of the assets or business of the Partnership shall not be considered a liquidation, dissolution or winding up of the affairs of the Partnership. |
(a) | Exchange. The holders of Series D Preferred Units shall be entitled to exchange Series D Preferred Units for Partnership Units, at their option, on the following terms and subject to the following conditions: |
(i) | At any time after the date hereof, each holder of Series D Preferred Units at its option may exchange each of its Series D Preferred Units for 1.37931 Partnership Units; provided, however, that no Series D Preferred Units may be exchanged on any proposed Series D Exchange Date pursuant to this Section 7 unless at least 1,000 Series D Preferred Units, in the aggregate, are exchanged by one or more holders thereof on such Series D Exchange Date pursuant to Series D Exchange Notices. Each holder of Series D Preferred Units that has delivered a Series D Exchange Notice to the General Partner may rescind such Series D Exchange Notice by delivering written notice of such rescission to the General Partner prior to the Series D Exchange Date specified in the applicable Series D Exchange Notice. |
(ii) | The exchange rate shall be proportionately adjusted upon subdivisions, stock splits, stock dividends, combinations and reclassification of Partnership Units and the common stock of the General Partner in order to preserve the relative economic values of the Partnership Units and the Series D Preferred Units. |
(iii) | In case the Partnership shall be a party to any transaction (including, without limitation, a merger, consolidation, statutory share exchange, tender offer for all or substantially all of the Partnership’s equity interests or sale of all or substantially all of the Partnership’s assets), in each case as a result of which Partnership Units will be converted into the right to receive shares of capital stock, other securities or other property (including cash or any combination thereof), each Series D Preferred Unit will thereafter be convertible or exchangeable into the kind and amount of shares of capital stock and other securities and property receivable (including cash or any combination thereof) upon the consummation of such transaction by a holder of that number of Partnership Units or fraction thereof into which one Series D Preferred Unit was convertible or exchangeable immediately prior to such transaction. |
(iv) | Notwithstanding anything to the contrary in this Section 7(a): |
1. | A holder of Series D Preferred Units will not have the right to exchange Series D Preferred Units for Partnership Units if (1) in the opinion of counsel for the General Partner, the General Partner would no longer qualify or its status would |
2. | No fractional units will be issued in connection with the exchange of Series D Preferred Units into Partnership Units. In lieu of fractional Partnership Units, the holder of the Series D Preferred Units to be exchanged shall be entitled to receive a cash payment in respect of any fractional unit in an amount equal to the fractional interest multiplied by the closing price of a common share of beneficial interest of the Trust on the date the Series D Preferred Units are surrendered for conversion by a holder thereof. |
(b) | Procedure for Exchange. Any exchange described in Section 7(a) above shall be exercised pursuant to a delivery of a Series D Exchange Notice to the General Partner by the holder who is exercising such exchange right, by (A) email and (B) by certified mail postage prepaid. The Series D Exchange Notice and certificates, if any, representing such Series D Preferred Unit to be exchanged shall be delivered to the office of the Partnership maintained for such purpose. Currently, such office is: |
(c) | Payment of Series D Preferred Return. On the Series D Distribution Payment Date next following each the Series D Exchange Date, the holders of Series D Preferred Units that exchanged on such date shall be entitled to Series D Preferred Return in an amount equal to (i) a prorated portion of the Series D Preferred Return based on the number of days elapsed from the prior Series D Distribution Payment Date through, but not including, the Series D Exchange Date, less (ii) the amount of the distribution or dividend, if any, paid on the Partnership Units into which the Series D Preferred Units were exchanged for the quarterly period in which the Series D Exchange Date occurred. |
(a) | Subject to the limitations in this Section 8, at any time after the date of this Amendment, each holder of Series D Preferred Units at its option may require redemption of, and the Partnership shall redeem, all or a portion of such holder’s Series D Preferred Units. Each such redemption shall be on not fewer than 30 nor more than 60 days’ written notice from the holder of Series D Preferred Units to the Partnership. Notwithstanding any term of the Partnership Agreement to the |
(b) | The Partnership will pay the Series D Redemption Price for any redeemed Series D Preferred Units to the holder of Series D Preferred Units upon surrender of the Series D Preferred Units by such holder of Series D Preferred Units at the place designated by the Partnership. Unless the Partnership and such holder of Series D Preferred Units agree otherwise, the Partnership will pay the Redemption Price in the same manner that the most recent distribution of Series D Preferred Return was delivered to such holder of Series D Preferred Units. On and after the Series D Redemption Date, distributions will cease to accumulate on such holder’s Series D Preferred Units, unless the Partnership defaults in the payment of the Series D Redemption Price |
(c) | If any date fixed for redemption of such holder’s Series D Preferred Units is not a Business Day, then payment of the Series D Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Series D Redemption Price is improperly withheld or refused and not paid by the Partnership, distributions on such holder’s Series D Preferred Units will continue to accumulate from the original redemption date to the date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Series D Redemption Price. |
(d) | Each redemption notice shall (i) state the number of Series D Preferred Units to be redeemed; (ii) be delivered by the holder of the Series D Preferred Units to the Partnership not fewer than 30 nor more than 60 days prior to the Series D Redemption Date in the same manner provided above for delivery of Series D Exchange Notices above; and (iii) be irrevocable. |
(e) | If the funds necessary for a redemption have been set apart by the Partnership for the benefit of the holders of any Series D Preferred Units to be redeemed, then from and after the Series D Redemption Date distributions will cease to accrue on such Series D Preferred Units, such Series D Preferred Units shall no longer be deemed outstanding and all rights of the holders of such Series D Preferred Units will terminate, except the right to receive the Series D Redemption Price. |
(f) | All Series D Preferred Units redeemed or otherwise acquired by the Partnership in any manner whatsoever shall be retired and reclassified as authorized but unissued Preferred Units, without designation as to class or series, and may thereafter be reissued as any class or series of Preferred Units in accordance with the applicable provisions of the Partnership Agreement. |
NAME, OFFICE AND REGISTERED AGENT | ||
PARTNERS | ||
TERM AND DISSOLUTION | ||
FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP | ||
CERTIFICATES DESCRIBING PARTNERSHIP UNITS | ||
CAPITAL CONTRIBUTIONS | ||
ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL | ||
ADDITIONAL FUNDING | ||
CAPITAL ACCOUNTS | ||
PERCENTAGE INTERESTS | ||
NO INTEREST ON CONTRIBUTIONS | ||
RETURN OF CAPITAL CONTRIBUTIONS | ||
NO THIRD PARTY BENEFICIARY | ||
ALLOCATION OF PROFIT AND LOSS | ||
DISTRIBUTION OF CASH | ||
IRET DISTRIBUTION REQUIREMENTS | ||
NO RIGHT TO DISTRIBUTIONS IN KIND | ||
LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS | ||
DISTRIBUTIONS UPON LIQUIDATION | ||
SUBSTANTIAL ECONOMIC EFFECT | ||
MANAGEMENT OF THE PARTNERSHIP | ||
DELEGATION OF AUTHORITY | ||
INDEMNIFICATION AND EXCULPATION OF INDEMNITEES | ||
LIABILITY OF THE GENERAL PARTNER | ||
REIMBURSEMENT | ||
OUTSIDE ACTIVITIES | ||
CONFLICTS OF INTEREST AND INVESTMENT RESTRICTIONS |
GENERAL PARTNER PARTICIPATION | ||
TITLE TO PARTNERSHIP ASSETS | ||
MISCELLANEOUS | ||
TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST | ||
ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER | ||
EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A GENERAL PARTNER | ||
REMOVAL OF A GENERAL PARTNER | ||
MANAGEMENT OF THE PARTNERSHIP | ||
POWER OF ATTORNEY | ||
LIMITATION ON LIABILITY OF LIMITED PARTNERS | ||
OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR AFFILIATE | ||
EXCHANGE RIGHT | ||
REGISTRATION | ||
PURCHASE FOR INVESTMENT | ||
RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS | ||
ADMISSION OF SUBSTITUTE LIMITED PARTNER | ||
RIGHTS OF ASSIGNEES OF PARTNERSHIP INTEREST | ||
EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A LIMITED PARTNER | ||
JOINT OWNERSHIP OF INTERESTS | ||
BOOKS AND RECORDS | ||
CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS | ||
FISCAL AND TAXABLE YEAR | ||
ANNUAL TAX INFORMATION AND REPORT | ||
PARTNER REPRESENTATIVE; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS | ||
REPORTS TO LIMITED PARTNERS | ||
NOTICES | ||
SURVIVAL OF RIGHTS | ||
ADDITIONAL DOCUMENTS | ||
SEVERABILITY | ||
ENTIRE AGREEMENT | ||
PRONOUNS AND PLURALS | ||
HEADINGS | ||
COUNTERPARTS | ||
GOVERNING LAW | ||
a) | The General Partner of the Partnership is IRET, Inc., a North Dakota corporation. Its principal place of business shall be the same as that of the Partnership. |
b) | The Limited Partners shall be those Persons identified as Limited Partners in a schedule maintained by the Partnership, as the same may be amended from time to time. |
a) | The term of the Partnership shall continue in full force and effect until April 30, 2050, except that the Partnership shall be dissolved upon the first to occur of any of the following events: |
(i) | dissolution, death, removal or withdrawal of a General Partner unless the business of the Partnership is continued pursuant to Section 7.03(b) hereof; provided that if a General Partner is on the date of such occurrence a partnership, the dissolution of such General Partner as a result of the dissolution, death, withdrawal, removal or Event of Bankruptcy of a partner in such partnership shall not be an event of dissolution of the Partnership if the business of such General Partner is continued by the remaining partner or partners, either alone or with additional partners, and such General Partner an such partners comply with any other applicable requirements of this Agreement; |
(ii) | The passage of 90 days after the sale or other disposition of all or substantially all of the assets of the Partnership (provided that if the Partnership receives an installment obligation as consideration for such sale or other disposition, the Partnership shall continue, unless sooner dissolved under the provisions of this Agreement, until such time as such note or notes are paid in full); |
(iii) | The exchange of all Limited Partnership Interests; or |
(iv) | The election by the General Partner that the Partnership should be dissolved. |
(b) | Upon dissolution of the Partnership (unless the business of the Partnership is continued pursuant to Section 7.03(b) hereof), the General Partner (or its trustee, receiver, successor or legal representative) shall amend or cancel the Certificate and liquidate the Partnership's assets and apply and distribute the proceeds thereof in accordance with Section 5.06 hereof. Notwithstanding the foregoing, the liquidating General Partner may either (i) defer liquidation of, or withhold from distribution for a reasonable time, any assets of the Partnership (including those necessary to satisfy the Partnership's debts and obligations), or (ii) distribute the assets to the Partners in kind. |
General. The General Partner is hereby authorized to cause the Partnership to issue such additional Partnership Interests in the form of Partnership Units for any Partnership purpose at any time or from time to time, to the Partners (including the General Partner and IRET) or to other Persons for such consideration and on such terms and conditions as shall be established by the General Partner in its sole and absolute discretion, all without the approval of any Limited Partners. Any additional Partnership Interests issued thereby may be issued in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to Limited Partnership Interests, all as shall be determined by the General Partner in its sole and absolute discretion and without the approval of any Limited Partner, subject to North Dakota law, including, without limitation, (i) the allocations of items of Partnership income, gain, loss, deduction and credit to each such class or series of Partnership Interests; (ii) the right of each such class or series of Partnership Interests to share in Partnership distributions; and (iii) the rights of each such class or series of Partnership Interests upon dissolution and liquidation of the Partnership; provided, however, that no additional Partnership Interests shall be issued to the General Partner or IRET unless either: |
i) | the additional Partnership Interests are issued in connection with an issuance of IRET Shares of or other interests in IRET, which shares or interests have designations, preferences and other rights, all such that the economic interests are substantially similar to the designations, preferences and other rights of the additional Partnership Interests issued to the General Partner or IRET by the Partnership in accordance with this Section 4.02 and the General Partner or IRET shall make a Capital Contribution to the Partnership in an amount equal to the proceeds raised in connection with the issuance of such shares of stock of or other interests in IRET, or |
ii) | the additional Partnership Interests are issued to all Partners in proportion to their respective Percentage Interests. Without limiting the |
(b) | In connection with any and all issuances of IRET Shares, IRET and the General Partner, as IRET determines, shall make Capital Contributions to the Partnership of the proceeds therefrom, provided that if the proceeds actually received and contributed by IRET, directly or through the General Partner, are less than the gross proceeds of such issuance as a result of any underwriter's discount or other expenses paid or incurred in connection with such issuance, then the General Partner and IRET shall be deemed to have made Capital Contributions to the Partnership in the aggregate amount of the gross proceeds of such issuance and the Partnership shall be deemed simultaneously to have paid such offering expenses in accordance with Section 6.05 hereof and in connection with the required issuance of additional Partnership Units to the General Partner and IRET for such Capital Contributions pursuant to Section 4.02(a) hereof. |
(a) | Profit. After giving effect to the special allocations set forth in Section 5.01(c), (d), and (e) hereof, and subject to Section 5.01(f), Profit of the Partnership for each fiscal year of the Partnership shall be allocated to the Partners in accordance with their respective Percentage Interests. |
(b) | Loss. After giving effect to the special allocations set forth in Section 5.01(c), (d), and (e) hereof, and subject to Section 5.01(f), Loss of the Partnership for |
(c) | Minimum Gain Chargeback. Notwithstanding any provision to the contrary, (i) any expense of the Partnership that is a “nonrecourse deduction” within the meaning of Regulations Section 1.704-2(b)(1) shall be allocated in accordance with the Partners’ respective Percentage Interests, (ii) any expense of the Partnership that is a “partner nonrecourse deduction” within the meaning of Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that bears the “economic risk of loss” of such deduction in accordance with Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1) for any Partnership taxable year, then, subject to the exceptions set forth in Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income shall be allocated among the Partners in accordance with Regulations Section 1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j), and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership taxable year, then, subject to the exceptions set forth in Regulations Section 1.704(2)(g), items of gain and income shall be allocated among the Partners in accordance with Regulations Section 1.704-2(i)(4) and the ordering rules contained in Regulations Section 1.704-2(j). The manner in which it is reasonably expected that the deductions attributable to nonrecourse liabilities will be allocated for purposes of determining a Partner’s share of the nonrecourse liabilities of the Partnership within the meaning of Regulations Section 1.752-3(a)(3) shall be in accordance with a Partner’s Percentage Interest. |
(d) | Qualified Income Offset. If a Limited Partner receives in any taxable year an adjustment, allocation or distribution described in subparagraphs (4), (5) or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance in such Partner’s Capital Account that exceeds the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i), such Partner shall be allocated specially for such taxable year (and, if necessary, later taxable years) items of income and gain in an amount and manner sufficient to eliminate such deficit Capital Account balance as quickly as possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to a Partner in accordance with this Section 5.01(d), to the extent permitted by Regulations Section 1.704-1(b), items of expense or loss shall be allocated to such Partner in an amount necessary to offset the income or gain previously allocated to such Partner under this Section 5.01(d). |
(e) | Capital Account Deficits. Loss shall not be allocated to a Limited Partner to the extent that such allocation would cause a deficit in such Partner’s Capital Account (after reduction to reflect the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain. Any Loss in excess of that limitation shall be allocated to the General Partner. After the occurrence of an allocation of Loss to the General Partner in accordance with this Section 5.01(e), to the extent permitted by Regulations Section 1.704-1(b), Profit shall be allocated to such Partner in an amount necessary to offset the Loss previously allocated to each Partner under this Section 5.01(e). |
(f) | Priority Allocations with Respect to Preferred Units. After giving effect to the allocations set forth in Sections 5.01(c), (d), and (e) hereof, but before giving effect to the allocations set forth in Sections 5.01(a) and 5.01(b), Net Operating Income shall be allocated to IRET in respect of the Preferred Units until the aggregate amount of Net Operating Income allocated to the Trust under this Section 5.01(f) for the current and all prior years equals the aggregate amount of the Preferred Return of each outstanding series of Preferred Units paid to the Trust for the current and all prior years. For purposes of this Section 5.01(f), “Net Operating Income” means the excess, if any, of the Partnership’s gross income over its expenses (but not taking into account depreciation, amortization, or any other noncash expenses of the Partnership), calculated in accordance with the principles of Section 5.01(g) hereof. |
(g) | Definition of Profit and Loss. “Profit” and “Loss” and any items of income, gain, expense or loss referred to in this Agreement shall be determined in accordance with federal income tax accounting principles, as modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss shall not include items of income, gain and expense that are specially allocated pursuant to Sections 5.01(c), 5.01(d), 5.01(e), or 5.01(f) hereof. All allocations of income, Profit, gain, Loss and expense (and all items contained therein) for federal income tax purposes shall be identical to all allocations of such items set forth in this Section 5.01, except as otherwise required by Section 704(c) of the Code and Regulations Section 1.704-1(b)(4). With respect to properties acquired by the Partnership, the General Partner shall have the authority to elect the method to be used by the Partnership for allocating items of income, gain and expense as required by Section 704(c) of the Code with respect to such properties, and such election shall be binding on all Partners. |
(h) | Allocations Between Transferor and Transferee. If a Partner transfers any part or all of its Partnership Interest, the distributive shares of the various items of Profit and Loss allocable among the Partners during such fiscal year of the Partnership shall be allocated between the transferor and the |
(a) | The Partnership shall distribute cash on a quarterly (or, at the election of the General Partner, more frequent) basis, in an amount determined by the General Partner in its sole discretion, to the Partners who are Partners on the Partnership Record Date with respect to such quarter (or other distribution period) in accordance with their respective Percentage Interests on the Partnership Record Date; provided, however, that if a new or existing Partner acquires an additional Partnership Interest in exchange for a Capital Contribution on any date other than a Partnership Record Date, the cash distribution attributable to such additional Partnership Interest relating to the Partnership Record Date next following the issuance of such additional Partnership Interest shall be reduced in the proportion that the number of days that such additional Partnership Interest is held by such Partner bears to the number of days between such Partnership Record Date and the immediately preceding Partnership Record Date. |
(b) | Notwithstanding any other provision of this AGREEMENT, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law including, without limitation, pursuant to Sections 1441, 1442, 1445, 1446, 1471, 1472, 1473 or 1474 of the Code. To the extent that the Partnership is required to withhold and pay over to any taxing authority any amount resulting from the allocation or distribution of income to the Partner or assignee (including by reason of Section 1446 of the Code), the amount withheld shall be treated as a distribution of cash in the amount of such withholding to such Partner. |
(c) | In no event may a Partner receive a distribution of cash with respect to a Partnership Unit if such Partner is entitled to receive a cash dividend as the holder of record of an IRET Share for which all or part of such Partnership Unit has been or will be exchanged. |
(a) | Upon liquidation of the Partnership, after payment of, or adequate provision for, debts and obligations of the Partnership, including any Partner loans, any remaining assets of the Partnership shall he distributed to all Partners with positive Capital Accounts in accordance with their respective positive Capital Account balances. For purposes of the preceding sentence, the Capital Account of each Partner shall be determined after all adjustments made in accordance with Sections 5.01 and 5.02 resulting from Partnership operations and from all sales and dispositions of all or any part of the Partnership's assets. To the extent deemed advisable by the General Partner, appropriate arrangements (including the use of a liquidating trust) may be made to assure that adequate funds are available to pay any contingent debts or obligations. |
(b) | If the General Partner has a negative balance in its Capital Account following a liquidation of the Partnership, as determined after taking into account all Capital Account adjustments in accordance with Sections 5.01 and 5.02 resulting from Partnership operations and from all sales and dispositions of all or any part of the Partnership's assets, the General Partner shall contribute to the Partnership an amount of cash equal to the negative balance in its Capital Account and such cash shall be paid or distributed by the Partnership to creditors, if any, and then to the Limited Partners in accordance with Section 5.06(a). Such contribution by the General Partner shall be made by the end of the Partnership's taxable year in which the liquidation occurs (or, if later, within 90 days after the date of the liquidation). |
(a) | Except as otherwise expressly provided in this Agreement, the General Partner shall have full, complete and exclusive discretion to manage and control the business of the Partnership for the purposes herein stated, and shall make all decisions affecting the business and assets of the Partnership. Subject to the restrictions specifically contained in this Agreement, the powers of the General Partner shall include, without limitation, the authority to take the following actions on behalf of the Partnership: |
(i) | to acquire, purchase, own, operate, lease and dispose of any real property and any other property or assets that the General Partner determines are necessary or appropriate or in the best interests of the business of the Partnership; |
(ii) | to construct buildings and make other improvements on the properties owned or leased by the Partnership; |
(iii) | to authorize, issue, sell, redeem or otherwise purchase any Partnership Interests or any securities (including secured and unsecured debt obligations of the Partnership, debt obligations of the Partnership convertible into any class or series of Partnership Interests, or options, rights, warrants or appreciation rights relating to any Partnership Interests) of the Partnership; |
(iv) | to borrow or lend money for the Partnership, issue or receive evidences of indebtedness in connection therewith, refinance, increase the amount of, modify, amend or change the terms of, or extend the time for the payment of, any such indebtedness, and secure such indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership's assets; |
(v) | to guarantee or become a comaker of indebtedness of IRET or any Subsidiary thereof, refinance, increase the amount, modify or change the terms of, or extend the time for the payment of, any such guarantee or indebtedness, and secure such guarantee or indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership's assets; |
(vi) | to use assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with this Agreement, including, without limitation, payment, either directly or by reimbursement, of all operating costs and general administrative expenses of IRET, the General Partner, the Partnership or any Subsidiary of either, to third parties or to the General Partner as set forth in this Agreement; |
(vii) | to lease all or any portion of any of the Partnership's assets, whether or not the terms of such leases extend beyond the termination date of the Partnership and whether or not any portion of the Partnership's assets so leased are to be occupied by the lessee, or, in turn, subleased in |
(viii) | to prosecute, defend, arbitrate, or compromise any and all claims or liabilities in favor of or against the Partnership, on such terms and in such manner as the General Partner may reasonably determine, and similarly to prosecute, settle or defend litigation with respect to the Partners, the Partnership, or the Partnership's assets; provided, however, that the General Partner may not, without the consent of all of the Partners, confess a judgment against the Partnership; |
(ix) | to file applications, communicate, and otherwise deal with any and all governmental agencies having jurisdiction over, or in any way affecting, the Partnership's assets or any other aspect of the Partnership business; |
(x) | to make or revoke any election permitted or required of the Partnership by any taxing authority; |
(xi) | to maintain such insurance coverage for public liability, fire and casualty, and any and all other insurance for the protection of the Partnership, for the conservation of Partnership assets, or for any other purpose convenient or beneficial to the Partnership, in such amounts and such types, as it shall determine from time to time; |
(xii) | to determine whether or not to apply any insurance proceeds for any property to the restoration of such property or to distribute the same; |
(xiii) | to establish one or more divisions of the Partnership, to hire and dismiss employees of the Partnership or any division of the Partnership, and to retain legal counsel, accountants, consultants, real estate brokers, and such other persons, as the General Partner may deem necessary or appropriate in connection with the Partnership business and to pay therefor such reasonable remuneration as the General Partner may deem reasonable and proper; |
(xvi) | to maintain accurate accounting records and to file promptly all federal, state and local income tax returns on behalf of the Partnership in accordance with Article X of this Agreement; |
(xvii) | to distribute Partnership cash or other Partnership assets in accordance with this Agreement; |
(xviii) | to form or acquire an interest in, and contribute property to, any further limited or general partnerships, joint ventures or other relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of property to IRET, its Subsidiaries and any other Person in which it has an equity interest from time to time); |
(xix) | to establish Partnership reserves for working capital, capital expenditures, contingent liabilities, or any other valid Partnership purpose; and |
(xx) | to take such other action, execute, acknowledge, swear to or deliver such other documents and instruments, and perform any and all other acts that the General Partner deems necessary or appropriate for the formation, continuation and conduct of the business and affairs of the Partnership (including, without limitation, all actions consistent with allowing IRET at all times to qualify as a IRET unless IRET voluntarily terminates its REIT status and to possess and enjoy all of the rights and powers of a general partner as provided by the Act. |
(b) | Except as otherwise provided herein, to the extent the duties of the General Partner require expenditures of funds to be paid to third parties, the General Partner shall not have any obligations hereunder except to the extent that partnership funds are reasonably available to it for the performance of such duties, and nothing herein contained shall be deemed to authorize or require the General Partner, in its capacity as such, to expend its individual funds for payment to third parties or to undertake any individual liability or obligation on behalf of the Partnership. |
(a) | The Partnership shall indemnify an Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Partnership as set forth in this Agreement in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it is established that: (i) the act or omission of the |
(b) | The Partnership shall reimburse an Indemnitee for reasonable expenses incurred by an Indemnitee who is a party to a proceeding in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in this Section 6.03 has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met. |
(c) | The indemnification provided by this Section 6.03 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity. |
(d) | The Partnership may purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership's activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement. |
(e) | For purposes of this Section 6.03, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of this Section 6.03; and actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership. |
(f) | In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement. |
(g) | An Indemnitee shall not be denied indemnification in whole or in part under this Section 6.03 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement. |
(h) | The provisions of this Section 6.03 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. |
(a) | Notwithstanding anything to the contrary set forth in this Agreement, the General Partner shall not be liable for monetary damages to the Partnership or any Partners for losses sustained or liabilities incurred as a result of errors in judgment or of any act or omission if the General Partner acted in good faith. The General Partner shall not be in breach of any duty that the General Partner may owe to the Limited Partners or the Partnership or any other Persons under this Agreement or if any duty stated or implied by law or equity provided the General Partner, acting in good faith, abides by the terms of this Agreement. |
(b) | The Limited Partners expressly acknowledge that the General Partner is acting on behalf of the Partnership, IRET and the Company's shareholders collectively, that the General Partner is under no obligation to consider the separate interests of the Limited Partners (including, without limitation, the tax consequences to Limited Partners or the tax consequences of same, but not all, of the Limited Partners) in deciding whether to cause the Partnership to take (or decline to take) any actions. In the event of a conflict between the interests of the shareholders of IRET on one hand and the Limited Partners on the other, the General Partner shall endeavor in good faith to resolve the conflict in a manner not adverse to either the shareholders of IRET or the Limited Partners; provided, however, that for so long as IRET, directly or the General Partner owns a controlling interest in the Partnership, any such conflict that cannot be resolved in a manner not adverse to either the shareholders of IRET or the Limited Partners shall be resolved in favor of the shareholders. The General Partner shall not be liable for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with such decisions, provided that the General Partner has acted in good faith. |
(c) | Subject to its obligations and duties as General Partner set forth in Section 6.01 hereof, the General Partner may exercise any of the powers granted to it under this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents. The General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by it in good faith. |
(d) | Notwithstanding any other provisions of this Agreement or the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order (i) to protect the ability of IRET to continue to qualify as a REIT or (ii) to prevent IRET from incurring any taxes under Section 857, Section 4981, or any other provision of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners. |
(e) | Any amendment, modification or repeal of this Section 6.04 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the General Partner's liability to the Partnership and the Limited Partners under this Section 6.04 as in effect immediately prior to such amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted. |
(a) | The General Partner shall not transfer all or any portion of its General Partnership Interest or withdraw as General Partner except as provided in Section 7.01(c) or in connection with a transaction described in Section 7.01(d). |
(b) | The General Partner agrees that it and IRET will at all times own in the aggregate at least 20% of the Partnership. |
(c) | Except as otherwise provided in Section 6.06(b) or Section 7.01(d) hereof, IRET shall not engage in any merger, consolidation or other combination with or into another Person or sale of all or substantially all of its assets, or any reclassification, or any recapitalization or change of outstanding IRET Shares (a "Transaction"), unless (i) the Transaction also includes a merger of the Partnership or sale of substantially all of the assets of the Partnership as a result of which all Limited Partners will receive for each Partnership Unit an amount of cash, securities, or other property equal to the product of the Conversion Factor and the greatest amount of cash, securities or other property paid in the Transaction to a holder of one IRET Share in consideration of one IRET Share, provided that if, in connection with the Transaction, a purchase, tender or exchange offer ("Offer") shall have been made to and accepted by the holders of more than 50% of the outstanding IRET Shares, each holder of Partnership Units shall be given the option to exchange its Partnership Units for the greatest amount of cash, securities, or other property which a Limited Partner would have received had it (A) exercised its Exchange Right and (B) sold, tendered or exchanged pursuant to the Offer the IRET Shares received upon exercise of the Exchange Right immediately prior to the expiration of the Offer; and (ii) no more than 75% of the equity securities of the acquiring Person in such Transaction is owned, after consummation of such Transaction, by IRET, the General Partner or Persons who were Affiliates of the Company, the Partnership or the General Partner immediately prior to the date on which the Transaction is consummated. |
(d) | Notwithstanding Section 7.01(c), IRET or the General Partner may merge with or into or consolidate with another entity if immediately after such merger or consolidation (i) substantially all of the assets of the successor or surviving entity (the "Survivor"), other than Partnership Units held by IRET or the General Partner, are contributed, directly or indirectly, to the Partnership as a Capital Contribution in exchange for Partnership Units with a fair market value equal to the value of the assets so contributed as determined by the Survivor in good faith and (ii) the Survivor expressly agrees to assume all obligations of the General Partner or IRET, as appropriate, hereunder. Upon such contribution and assumption, the Survivor shall have the right and duty to amend this Agreement as set forth in this Section 7.01(d). The Survivor shall in good faith arrive at a new method for the calculation of the Cash Amount, the IRET Shares Amount and Conversion Factor for a Partnership Unit after any such merger or consolidation so as to approximate the existing method for such calculation as closely as reasonably possible. Such calculation shall take into account, among other things, the kind and amount of securities, cash and other property that was receivable upon such merger or consolidation by a holder of IRET Shares or options, warrants or other rights relating thereto, and to which a holder of Partnership Units could have acquired had such Partnership Units been exchanged immediately prior to such merger or consolidation. Such amendment to this Agreement shall provide for adjustment to such method of calculation, which shall be as nearly equivalent as may be practicable to the adjustments provided for with respect to the Conversion Factor. The Survivor also shall in good faith modify the |
(a) | a majority in interest of the Limited Partners (other than IRET) shall have consented in writing to the admission of the substitute or additional General Partner, which consent may be withheld in the sole discretion of such Limited Partners; |
(b) | the Person to be admitted as a substitute or additional General Partner shall have accepted and agreed to be bound by all the terms and provisions of this Agreement by executing a counterpart thereof and such other documents or instruments as may be required or appropriate in order to effect the admission of such Person as a General Partner, and a certificate evidencing the admission of such Person as a General Partner shall have been filed for recordation and all other actions required by Section 2.05 hereof in connection with such admission shall have been performed; |
(c) | if the Person to be admitted as a substitute or additional General Partner is a corporation or a partnership it shall have provided the Partnership with evidence satisfactory to counsel for the Partnership of such Person's authority to become a General Partner and to be bound by the terms and provisions of this Agreement; and |
(d) | counsel for the Partnership shall have rendered an opinion (relying on such opinions from other counsel and the state or any other jurisdiction as may be necessary) that the admission of the person to be admitted as a substitute or additional General Partner is in conformity with the Act, that none of the actions taken in connection with the admission of such Person as a substitute or additional General Partner will cause (i) the Partnership to be classified other than as a partnership for federal income tax purposes, or (ii) the loss of any Limited Partner's limited liability. |
(a) | Upon the occurrence of an Event of Bankruptcy as to a General Partner (and its removal pursuant to Section 7.04(a) hereof or the death, withdrawal, removal or dissolution of a General Partner (except that, if a General Partner is on the date of such occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such partnership shall be deemed not to be a dissolution of such General Partner if the business of such General Partner is continued by the remaining partner or partners), the Partnership shall be dissolved and terminated unless the Partnership is continued pursuant to Section 7.03(b) hereof. |
(b) | Following the occurrence of an Event of Bankruptcy as to a General Partner (and its removal pursuant to Section 7.04(a) hereof or the death, withdrawal, removal or dissolution of a General Partner (except that, if a General Partner is on the date of such occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such partnership shall be deemed not to be a dissolution of such General Partner if the business of such General Partner is continued by the remaining partner or partners), the Limited Partners, within 90 days after such occurrence, may elect to reconstitute the Partnership and continue the business of the Partnership for the balance of the term specified in Section 2.04 hereof by selecting, subject to Section 7.02 hereof and any other provisions of this Agreement, a substitute General Partner by unanimous consent of the Limited Partners. If the Limited Partners elect to reconstitute the Partnership and admit a substitute General Partner, the relationship with the Partners and of any Person who has acquired an interest of a Partner in the Partnership shall be governed by this Agreement. |
(a) | Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of, a General Partner, such General Partner shall be deemed to be removed automatically; provided, however, that if a General Partner is on the date of such occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to or removal of a partner in such partnership shall be deemed not to be a dissolution of the General Partner if the business of such General Partner is continued by the remaining partner or partners. |
(b) | If a General Partner has been removed pursuant to this Section 7.04 and the Partnership is continued pursuant to Section 7.03 hereof, such General Partner shall promptly transfer and assign its General Partnership Interest in the Partnership to the substitute General Partner approved by a majority in interest of the Limited Partners in accordance with Section 7.03(b) hereof and otherwise admitted to the Partnership in accordance with Section 7.02 hereof. At the time of assignment, the removed General Partner shall be entitled to receive from the substitute General Partner the fair market value of the General Partnership Interest of such removed General Partner as reduced by |
(c) | The General Partnership Interest of a removed General Partner, during the time after default until transfer under Section 7.04(b), shall be converted to that of a special Limited Partner; provided, however, such removed General Partner shall not have any rights to participate in the management and affairs of the Partnership, and shall not be entitled to an portion of the income, expense, profit, gain or loss allocations or cash distributions allocable or payable, as the case may be, to the Limited Partners. Instead, such removed General Partner shall receive and be entitled only to retain distributions or allocations of such items that it would have been entitled to receive in its capacity as General Partner, until the transfer is effective pursuant to Section 7.04(b). |
(d) | All Partners shall have given and hereby do give such consents, shall take such actions and shall execute such documents as shall be legally necessary and sufficient to effect all the foregoing provisions of this Section. |
(a) | Subject to Sections 8.05(b), 8.05(c), 8.05(d) and 8.05(e), on or after the date which is one year after the acquisition of such units, each Limited Partner, other than IRET, shall have the right (the "Exchange Right") to require the Partnership to redeem on a Specified Exchange Date all or a portion of the Partnership Units held by such Limited Partner at an exchange price equal to and in the form of the Cash Amount to be paid by the Partnership. The Exchange Right shall be exercised pursuant to a Notice of Exchange (a form of which is attached as Exhibit A hereto) delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Exchange Right (the "Exchanging Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Exchange Right if IRET and/or the General Partner elects to purchase the Partnership Units subject to the Notice of Exchange pursuant to Section 8.05(b); and provided, further, that no Limited Partner may deliver more than two Notices of Exchange during each calendar year. A Limited Partner may not exercise the Exchange Right for less than 100 Partnership Units or, if such Limited Partner holds less than 100 Partnership Units, all of the Partnership Units held by such Partner. The Exchanging Partner shall have no right, with respect to any Partnership Units so exchanged, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Exchange Date. |
(b) | Notwithstanding the provisions of Section 8.05(a), a Limited Partner that exercises the Exchange Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Exchange to the General Partner |
(c) | Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a Limited Partner shall not be entitled to exercise the Exchange Right if the delivery of IRET Shares to such Partner on the Specified Exchange Date by the General Partner or IRET pursuant to Section 8.05(b) (regardless of whether or not the General Partner or IRET would in fact exercise its rights under Section 8.05(b)) would (i) result in such Partner or any other person owning, directly or indirectly, IRET Shares in excess of the ownership Limitation (as defined in IRET's Declaration of Trust) and calculated in accordance therewith, except as provided in IRET's Declaration of Trust, (ii) result in IRET Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in IRET's Declaration of Trust, (iii) result in IRET being "closely held" within the meaning of Section 856(h) of the Code, (iv) cause IRET to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner's, the Partnership's, or a Subsidiary Partnership's, real property, within the meaning of Section 856(d)(2)(D) of the Code, or (v) cause the acquisition of IRET Shares by such Partner to be "integrated" with any other distribution of IRET Shares for purposes of complying with the registration provisions of the Securities Act of |
(d) | Any Cash Amount to be paid to an Exchanging Partner pursuant to this Section 8.05 shall be paid on the Specified Exchange Date; provided, however, that IRET or the General Partner may elect to cause the Specified Exchange Date to be delayed for up to an additional 180 days to the extent required for IRET to cause additional IRET Shares to be issued to provide financing to be used to make such payment of the Cash Amount. Notwithstanding the foregoing, IRET and the General Partner agree to use their best efforts to cause the closing of the acquisition of exchanged Partnership Units hereunder to occur as quickly as reasonably possible. |
(e) | Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Exchange Rights as and if deemed necessary to ensure that the Partnership does not constitute a "publicly traded partnership" under section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a "Restriction Notice") to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the Partnership being treated as a "publicly traded partnership" under section 7704 of the Code. |
(a) | Shelf Registration of the IRET Shares. Prior to or on the first date upon which the Partnership Units owned by any Limited Partner may be exchanged (or such other date as may be required under applicable provisions of the Securities Act), the Company agrees to file with the Securities and Exchange Commission (the "Commission) a shelf registration statement on Form S-3 under Rule 415 of the Securities Act (a "Registration Statement"), or any similar rule that may be adopted by the Commission, with respect to all of the IRET Shares that may be issued upon exchange of such Partnership Units pursuant to Section 8.05 hereof ("Exchange Shares"). IRET will use its best efforts to have the Registration Statement declared effective under the Securities Act. IRET need not file a separate Registration Statement, but may file one Registration Statement covering Exchange Shares issuable to more than one Limited Partner. IRET further agrees to supplement or make amendments to each Registration Statement, if required by the rules, regulations or instructions applicable to the registration form utilized by IRET or by the Securities Act or rules and regulations thereunder for such Registration Statement. |
(b) | If a Registration Statement under subsection (a) above is not available under the securities laws or the rules of the Commission, or if required to permit the |
(c) | Listing on Securities Exchange. If IRET shall list or maintain the listing of any of its shares of Beneficial Interest on any securities exchange or national market system, it will, as necessary to permit the registration and sale of the Exchange Shares hereunder, list thereon, maintain and, when necessary, increase such listing to include such Exchange Shares. |
(b) | Each Limited Partner agrees that he will not sell, assign or otherwise transfer his Partnership Interest or any fraction thereof, whether voluntarily or by operation of law or at judicial sale or otherwise, to any Person who does not make the representations and warranties to the General Partner set forth in Section 9.01(a) above and similarly agree not to sell, assign or transfer such Partnership Interest or fraction thereof to any Person who does not similarly represent, warrant and agree. |
(a) | Subject to the provisions of 9.02(b), (c) and (d), a Limited Partner may offer, sell, assign, hypothecate, pledge or otherwise transfer all or any portion of his Limited Partnership Interest, or any of such Limited Partner's economic rights as a Limited Partner, whether voluntarily or by operation of law or at judicial sale or otherwise (collectively, a "Transfer") with or without the consent of the General Partner. The General Partner may require, as a condition of any Transfer, that the transferor assume all costs incurred by the Partnership in connection therewith. |
(b) | No Limited Partner may effect a Transfer of its Limited Partnership Interest, in whole or in part, if, in the opinion of legal counsel for the Partnership, such |
(c) | No transfer by a Limited Partner of its Partnership Units, in whole or in part, may be made to any Person if (i) in the opinion of legal counsel for the Partnership, the transfer would result in the Partnership's being treated as an association taxable as a corporation (other than a qualified REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) in the opinion of legal counsel for the Partnership, it would adversely affect the ability of IRET to continue to qualify as a REIT or subject IRET to any additional taxes under Section 857 or section 4981 of the Code, or (iii) such transfer is effectuated through an "established securities market" or a "secondary market (or the substantial equivalent thereof)" within the meaning of Section 7704 of the Code. |
(d) | No transfer of any Partnership Units may be made to a lender to the Partnership or any Person who is related (within the meaning of Regulations Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a nonrecourse liability (within the meaning of Regulations Section 1.752-1(a)(2)), without the consent of the General Partner, which may be withheld in its sole and absolute discretion, provided that as a condition to such consent the lender will be required to enter into an arrangement with the Partnership and the General Partner to exchange or redeem for the Cash Amount any Partnership Units in which a security interest is held simultaneously with the time at which such lender would be deemed to be a partner in the Partnership for purposes of allocating liabilities to such lender under Section 752 of the Code. |
(e) | Any Transfer in contravention of any of the provisions of this Article IX shall be void and ineffectual and shall not be binding upon, or recognized by, the Partnership. |
(a) | Subject to the other provisions of this Article IX, an assignee of the Limited Partnership Interest of a Limited Partner (which shall be understood to include any purchaser, transferee, donee, or other recipient of any disposition of such Limited Partnership Interest) shall be deemed admitted as a Limited Partner of the Partnership only upon the satisfactory completion of the following: |
(i) | The assignee shall have accepted and agreed to be bound by the terms and provisions of this Agreement by executing a counterpart or an amendment thereof, or such other form as shall be provided by the Partnership, and such other documents or instruments as the General Partner may require in order to effect the admission of such Person as a Limited Partner. |
(ii) | To the extent required, an amended Certificate evidencing the admission of such Person as a Limited Partner shall have been signed, acknowledged and filed for record in accordance with the Act. |
(iii) | The assignee shall have delivered a letter containing the representation set forth in Section 9.01(a) hereof and the agreement set forth in Section 9.01(b) hereof. |
(iv) | If the assignee is a corporation, partnership or trust, the assignee shall have provided the General Partner with evidence satisfactory to counsel or the Partnership of the assignee's authority to become a Limited Partner under the terms and provisions of this Agreement. |
(v) | The assignee shall have executed a power of attorney containing the terms and provisions set forth in Section 8.02 hereof. |
(vi) | The assignee shall have paid all reasonable legal fees of the Partnership and the General Partner and filing and publication costs in connection with its substitution as a Limited Partner. |
(vii) | The assignee has obtained the prior written consent of the General Partner to its admission as a Substitute Limited Partner, which consent may be given or denied in the exercise of the General Partner's sole and absolute discretion. |
(b) | For the purpose of allocating Profits and Losses and distributing cash received by the Partnership, a Substitute Limited Partner shall be treated as having become, and appearing in the records of the Partnership as, a Partner upon the filing of the Certificate described in Section 9.03(a)(ii) hereof or, if no such filing is required, the later of the date specified in the transfer documents or the date on which the General Partner has received all necessary instruments of transfer and substitution. |
(c) | The General Partner shall cooperate with the Person seeking to become a Substitute Limited Partner by preparing the documentation required by this Section and making all official filings and publications. The Partnership shall take all such action as promptly as practicable after the satisfaction of the conditions in this Article-IX to the admission of such Person as a Limited Partner of the Partnership. |
(a) | Subject to the provisions of Sections 9.01 and 9.02 hereof, except as required by operation of law, the Partnership shall not be obligated for any purposes whatsoever to recognize the assignment by any Limited Partner of its Partnership Interest until the Partnership has received notice thereof. |
(b) | Any Person who is the assignee of all or any portion of a Limited Partner's Limited Partnership Interest, but does not become a Substitute Limited Partner and desires to make a further assignment of such Limited Partnership Interest, shall be subject to all the provisions of this Article IX to the same extent and in the same manner as any Limited Partner desiring to make an assignment of its Limited Partnership Interest. |
(a) | All funds of the Partnership not otherwise invested shall be deposited in one or more accounts maintained in such banking or brokerage institutions as the General Partner shall determine, and withdrawals shall be made only on such signature or signatures as the General Partner may, from time to time, determine. |
(b) | All deposits and other funds not needed in the operation of the business of the Partnership may be invested by the General Partner in investment grade instruments (or investment companies whose portfolio consists primarily thereof), government obligations, certificates of deposit, bankers' acceptances and municipal notes and bonds. The funds of the Partnership shall not be commingled with the funds of any other Person except for such commingling as may necessarily result from an investment in those investment companies permitted by this Section 10.02(b). |
(a) | The General Partner, or any Person designated by the General Partner, (the “Partnership Representative”) is hereby designated as the “partnership representative” of the Company for purposes of Sections 6222 through 6241 of the Code and any Treasury Regulations thereunder and comparable provisions of state and local law (the “Partnership Audit Rules”). The Partnership Representative shall have all of the powers and responsibilities of such position as provided in the Code and Treasury regulations and may take any action or make any elections contemplated by Partnership Audit Rules. The Partnership Representative shall not resign from such role unless, on the effective date of such resignation, the Partnership has designated another person as Partnership Representative, and such other person has given its consent in writing to its appointment as Partnership Representative. The Partnership Representative shall receive no additional compensation from the Partnership for its services in that capacity, but all expenses incurred by the |
(b) | The General Partner may, in its sole and absolute discretion, make or revoke any tax election that the General Partner deems appropriate, including without limitation an election under Section 754 of the Code. |
(c) | Notwithstanding anything contained in Article V of this Agreement, any adjustments made pursuant to Section 754 shall affect only the successor in interest to the transferring Partner and in no event shall be taken into account in establishing, maintaining or computing Capital Accounts for the other Partners for any purpose under this Agreement. Each Partner will furnish the Partnership with all information necessary to give effect to such election. |
(a) | As soon as practicable, but in no event later than one hundred five (105) days after the close of each taxable year (as described in Section 10.04), the General Partner shall cause to be mailed to each Limited Partner of record as of the close of such taxable year, financial statements of the Partnership, or |
(b) | As soon as practicable after the close of each calendar quarter (except the last calendar quarter of each year), the General Partner shall cause to be mailed to each Limited Partner of record as of the last day of the calendar quarter, a report containing unaudited financial statements of the Partnership, or of IRET if such statements are prepared solely on a consolidated basis with IRET, for such calendar quarter, presented in accordance with generally accepted accounting principles. |
(c) | The General Partner shall have satisfied its obligations under Section 10.06(a) and Section 10.06(b) by posting or making available the reports required by this Section 10.06 on the website maintained from time to time by the Partnership or the General Partner, provided that such reports are able to be printed or downloaded from such website. |
(d) | Any Partner shall further have the right to a private audit of the books and records of the Partnership, provided such audit is made for Partnership purposes, at the expense of the Partner desiring it and is made during normal business hours. |
(a) | any amendment affecting the operation of the Conversion Factor or the Exchange Right (except as provided in Section 8.05(d) or 7.01(d) hereof) in a manner adverse to the Limited Partners; |
(b) | any amendment that would adversely affect the rights of the Limited Partners to receive the distributions payable to them hereunder, other than with respect to the issuance of additional Partnership Units pursuant to Section 4.02 hereof; |
(c) | any amendment that would alter the Partnership's allocations of Profit and Loss to the Limited Partners, other than with respect to the issuance of additional Partnership Units pursuant to Section 4.02 hereof; or |
(d) | any amendment that would impose on the Limited Partners any obligation to make additional Capital Contributions to the Partnership. |
Name of Subsidiary | State of Incorporation or Organization | |
IRET-71 France, LLC | North Dakota | |
IRET - Ashland Apartments, LLC | Delaware | |
IRET - Canyon Lake, LLC | North Dakota | |
IRET - Cardinal Point, LLC | North Dakota | |
IRET - Cimarron Hills, LLC | North Dakota | |
IRET - Colony Apartments (NE), LLC | Delaware | |
IRET Corporate Plaza, LLC | North Dakota | |
IRET-Cottage Gables, LLC | North Dakota | |
IRET - Country Meadows 2, LLC | North Dakota | |
IRET-Cypress Court Apartments, LLC | North Dakota | |
IRET - Forest Park, LLC | Delaware | |
IRET – Grandeville, LLC | North Dakota | |
IRET - Grand Gateway Apartments, LLC | Delaware | |
IRET - Homestead Gardens I, LLC | Delaware | |
IRET - Homestead Gardens II, LLC | Delaware | |
IRET, Inc. | North Dakota | |
IRET - Kirkwood Apartments, LLC | North Dakota | |
IRET - Lakeside Apartments (NE), LLC | Delaware | |
IRET - Minot Apartments, LLC | North Dakota | |
IRET - North Pointe Apartments, LLC | North Dakota | |
IRET - Olympic Village (MT), LLC | North Dakota | |
IRET - Park Meadows, LLC | Delaware | |
IRET Properties, a North Dakota Limited Partnership | North Dakota | |
IRET-QR, LLC | Delaware | |
IRET-Quarry Ridge, LLC | Delaware | |
IRET-RED 20, LLC | North Dakota | |
IRET-Ridge Oaks, LLC | Iowa | |
IRET - Rimrock, LLC | North Dakota | |
IRET - River Ridge Apartments, LLC | North Dakota | |
IRET - Rocky Meadows, LLC | North Dakota | |
IRET - SH1, LLC | North Dakota | |
IRET - Silver Spring, LLC | Delaware | |
IRET - Southbrook & Mariposa, LLC | North Dakota | |
IRET - Sunset Trail, LLC | Delaware | |
IRET - Thomasbrook Apartments, LLC | North Dakota | |
IRET - Valley Park Manor, LLC | North Dakota | |
IRET - Villa West Apartments, LLC | North Dakota | |
IRET - Westwood Park, LLC | North Dakota | |
IRET - Whispering Ridge Apartments, LLC | Delaware | |
IRET-Williston Garden Apartments, LLC | North Dakota | |
IRET - WRH1, LLC | North Dakota | |
Mendota Properties LLC | Minnesota | |
WRH Holding, LLC | North Dakota |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; |
(b) | and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | February 27, 2019 | ||
By: | /s/ Mark O. Decker, Jr. | ||
Mark O. Decker, Jr., President & CEO |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | February 27, 2019 | ||
By: | /s/ John A. Kirchmann | ||
John A. Kirchmann, Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Mark O. Decker, Jr. | |
Mark O. Decker, Jr. | |
President and Chief Executive Officer | |
February 27, 2019 |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ John A. Kirchmann | ||
John A. Kirchmann | ||
Chief Financial Officer | ||
February 27, 2019 |
D
M:3J;LWB?P]JUQ-;I /8/COXGEL-*U*Z
M;5=&NS:3W263,^'LE6&-W$84H4R,#8^3EA7UQ_P4$_9U^)7[4'PMTGP5X!US
M0M&L6OQ=ZPNM3SPBY2,9AC4Q129 */AQXI\?RZ
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M7A^M:OX=^#?BKP'J'PH_:M\5_%CQ+J/B2PTR3P?J_BR#Q+#J-K+,J3CRXES
M5C+/YI_NX&"0:^E/VKOAN/B9XP^!UA>^%_\ A*_#]OXO:?5K:?3_ +9:1V_V
M"Z4/<*590F\H,OQN*]\5Q/Q&^ =E^S)\5-!^,GPB\!6[Z>[II/BWPKX9%'1ASQ7FVJ? +XX0?".7X 'X4Z#XBT2VU
M*:\T7XJ_\)-'9-8RM/)/#?-;!#<"YC,AW,GWB2/F4DG?\%_LE^.%\#_"?P5X
M[\&Z)XEL_#?C^^U37M0DNXKVWUNUFMKEOM\T,X!W-+.B&/#ME-V N, ',KX'
M_9Z^$_Q>^$S_ +-7B6Q'C?4_$]O::AI/A?Q3-JL-]I95S=_:D,TRJD<89P3M
MY'&<9'V'^U1XP/@']FWXFZ^K^7-9^'KTPMGI*T+)'_X^RUT/@GX,_#_X9WEQ
M>>$/ OAKPI=W$?E37&B:1;V
:'XN
M7EHXYR,+YA08R>B]ZK#]BOQAX8P?!'[2GQ/TC;_JX?$%W#K<,?;:$E1?E X
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M9W_Y/L_:Y_[E'_TURU]55\J_L[_\GV?M<_\ ME6W9+9E^9OG.&.2N%P1M7 !T%%<_'X'TZ/R<7.L'R8GA7=K5ZV5
M;=DMF7YF^
M;J&^M8;FVE2XMYD62.6-@RNI&0P(Z@@YS7Y$?\
M!9#]I9/$_B[1_@]H5ZLNGZ&PU'6S"^5:\92(H3CO'&Q8CUE'=:[']@#]KSXX
M_$3X4VGP]\$>#?#/BF]\&V\5M)J>O:XUK)]E9G$ \H(2P15";E)P$4$9(R ?
MJ717RPJ_MH:UC=)\%?#<)&?E75+N<$'G"8(Y]>E ^#?[56M?\ ']^T3H'A
MOCIHO@>WNN0?6>3N/RP..] 'U/17RPW[(?Q/UC/]O?M1>/KC(Q_Q)K6TTWOD
M?<4^^?7CL,4K?\$^O#NI;AK_ ,6_C%XI5LY35_&4K+C.0,(B# /(% 'U#=74
M-C T]Q-';PK]Z25@JCG')-<9K?QU^&WAG?\ VQ\0O"NE;,[OMVM6T.W!P<[G
M&,'BO%K?_@FA^SQYXN-0\$7.N70)Q/JNNZA.V#U/MZY/3.379Z+^Q%\ M
MVFV^$7A*7!S_ *;ID=UVQ_RU#?YYZT 5M<_;L_9^\/;_ +5\6_#$NW.?L-X+
MOIUQY(;/X=>U
">G6@#ZGHHHH **** "BBB@#Y5_9W_ .3[/VN?
M^Y1_]-