8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 3, 2020

INVESTORS REAL ESTATE TRUST

(Exact name of Registrant as specified in its charter)

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

1400 31st Avenue SW, Suite 60, Post Office Box 1988, Minot, ND 58702-1988

(Address of principal executive offices) (Zip code)

(701) 837-4738

(Registrant’s telephone number, including area code)

Not Applicable

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

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares of Beneficial Interest, no par value	IRET	New York Stock Exchange
Series C Cumulative Redeemable Preferred Shares	IRET-PC	New York Stock Exchange

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

☐ Written communications pursuant to Rule 425 under the Securities Act

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

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

Investors Real Estate Trust (the “Company”) issued an earnings release on August 3, 2020, announcing certain financial and operational results for the three and six months ended June 30, 2020. A copy of the press release is attached hereto as Exhibit 99.1.

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished pursuant to Item 9.01, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933.

Item 7.01. Regulation FD Disclosure.

Certain supplemental operating and financial data regarding the Company not included in the earnings release is attached as Exhibit 99.1. The foregoing information is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in filings under the Securities Act of 1933.

ITEM 9.01    Financial Statements and Exhibits

Exhibits

Exhibit
Number	Description
99.1*	Earnings Release and Supplemental Operating and Financial Data, dated August 3, 2020.
101	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL Document.

* Filed herewith

SIGNATURE

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

	INVESTORS REAL ESTATE TRUST
	By	/s/ Mark O. Decker, Jr.
		Mark O. Decker, Jr.
Date: August 3, 2020		President and Chief Executive Officer

EX-99.1

Exhibit 99.1

Earnings Release

IRET Reports Second Quarter 2020 Financial and Operating Results

MINOT, ND, August 3, 2020 – IRET (NYSE: IRET) announced today its financial and operating results for the quarter ended June 30, 2020. The tables below show Net Income (Loss), Funds from Operations (“FFO”), and Core FFO, all on a per share basis, for the three and six months ended June 30, 2020; Same-Store Revenues, Expenses, and Net Operating Income ("NOI") over comparable periods; and Same-Store Weighted-Average Occupancy for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019.

	Three Months Ended June 30,					Six Months Ended June 30,
Per Share	2020			2019		2020			2019
Net Income (Loss) - diluted	$	(0.44	)	$	0.11	$	(1.13	)	$	(0.43	)
FFO - diluted	$	0.93		$	1.45	$	1.58		$	2.22
Core FFO - diluted	$	0.91		$	1.00	$	1.81		$	1.77

	Year-Over-Year Comparison		Sequential Comparison		YTD Comparison
Same-Store Results	Q2 2020 vs. Q2 2019		Q2 2020 vs. Q1 2020		2020 vs. 2019
Revenues	1.4	%	(1.2	)%	2.6	%
Expenses	1.8	%	(7.3	)%	2.9	%
NOI	1.1	%	3.4	%	2.4	%

	Three months ended
Same-Store Results	June 30, 2020		March 31, 2020		June 30, 2019
Weighted Average Occupancy	94.6	%	95.4	%	94.3	%

NOI, FFO, and Core FFO are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to "Non-GAAP Financial Measures and Reconciliations" below.

Second Quarter 2020 Highlights

• Our Net Loss was $(0.44) per diluted share for the second quarter of 2020, compared to Net Income of $0.11 per diluted share for the same period of 2019;

• Core FFO increased 2.3% to $1.81 per diluted share for the six months ended June 30, 2020, compared to $1.77 per diluted share for the same period of 2019;

• Core FFO increased 1.1% to $0.91 per diluted share for the three months ended June 30, 2020, compared to $0.90 for the three months ended March 31, 2020;

• Total collections were 99.1% for the second quarter of 2020, compared to 99.6% for the same period of 2019;

• Same-store controllable expenses (which exclude taxes and insurance) decreased 4.3% for the second quarter of 2020 as compared to the same period of 2019, resulting in NOI growth of 1.1% for the second quarter of 2020 compared to the same period of 2019;

• Same-store NOI increased 3.4% for the three months ended June 30, 2020, compared to the three months ended March 31, 2020;

• We continued to strengthen our balance sheet by issuing approximately 624,000 common shares under our 2019 ATM Program for net proceeds of $44.8 million;

• We announced that we will include Nashville as one of our target markets; and

• We were recognized as a Minnesota Top Workplace for 2020 by the Minneapolis Star Tribune, which is based on several factors, including employee engagement, company leadership, pay, benefits, and workplace flexibility.

1

Operations Update

Our operating results for the month ended July 31, 2020, included the following:

• Total collections for same-store communities for the month ended July 31, 2020 were 99.0%.

• We entered into eight deferrals agreements in July, representing 0.1% of revenue at all communities. As of July 31, 2020, a total of approximately $40,000 remained outstanding under resident repayment plans.

• Physical occupancy for same-store communities as of July 31, 2020 was 95.2%, compared to 93.8% as of July 31, 2019 and 96.1% as of March 31, 2020.

Acquisitions and Dispositions

During the quarter, we disposed of our sole remaining parcel of unimproved land for a total sale price of $1.3 million. We did not have any acquisitions during the quarter.

Balance Sheet

At the end of the second quarter, we had $239.7 million of total liquidity on our balance sheet, including $187.0 million available under our line of credit and cash and cash equivalents of $52.7 million.

2020 Financial Outlook

On March 27, 2020 we issued a press release indicating that in light of the impact of COVID-19 on our business and results of operations, we were withdrawing our 2020 Financial Outlook. Given the ongoing impact of COVID-19, we are not providing an updated 2020 Financial Outlook at this time.

Upcoming Events

IRET is scheduled to participate in the BMO 2020 Real Assets Conference, which will be held virtually on September 2-3, 2020.

COVID-19 Developments

The COVID-19 pandemic, including the associated economic disruptions, has continued to impact our business and operations since March 2020. Our first priority continues to be the health and well-being of our residents, team members, and the communities we serve. In the second quarter, we began to implement a re-opening plan in the common spaces in our communities and offices while continuing to adhere to state and local guidelines. We are prepared to suspend re-opening plans in any markets in which an increase in COVID-19 cases and other factors make it unsafe to do so in accordance with state and local guidelines.

COVID-19 continues to impact our residents, our team members, and the economy. The safety and health of people we serve and our team has remained our priority in these uncertain times. As the COVID-19 pandemic continues to unfold, we acknowledge the potential effects on our financial condition, results of operations, and cash flows, including the following:

• reductions in economic activity and rising unemployment that potentially could impact our residents’ ability to pay rent on a timely basis or their desire to seek lease deferment payment plans or rent reductions, which in turn could result in increases in our uncollectible receivables and reductions in rental income and reduce our NOI and cash flow;

• the potential financial impact of the pandemic on the credit market and our future compliance with financial covenants contained in our credit facility and other debt agreements;

• weaker economic conditions that could cause us to recognize impairment in the value of our tangible or intangible assets; and

• rising costs related to our COVID-19 response that could cause us to record loss contingencies and increased expenses.

The extent to which the COVID-19 pandemic impacts our operations and those of our residents will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity, and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.

For a more detailed description of the risks and uncertainties affecting our business, see the risk factors presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as updated under Item 1A of our Quarterly Report

2

on Form 10-Q for the quarter ended June 30, 2020, and in our subsequent current and periodic reports filed with the Securities and Exchange Commission at www.sec.gov.

Quarterly Distributions

Effective June 5, 2020, IRET’s Board of Trustees declared a regular quarterly distribution of $0.70 per share/unit, which was paid on July 10, 2020, to common shareholders and unitholders of record on June 30, 2020. IRET has paid cash dividends to common shareholders and unitholders every quarter since its initial dividend payment in 1971.

Effective June 5, 2020, IRET's Board of Trustees also declared a distribution of $0.4140625 per share on the 6.625% Series C Cumulative Redeemable Preferred Shares (NYSE: IRET-PC), which was paid on June 30, 2020, to holders of record on June 15, 2020. Series C preferred share distributions are cumulative and payable quarterly in arrears at an annual rate of $1.65625 per share.

Earnings Call

Live webcast and replay:  http://ir.iretapartments.com
Live Conference Call		Conference Call Replay
Tuesday, August 4, 2020, at 10:00 AM ET		Replay available until August 18, 2020
USA Toll Free Number	1-877-509-9785	USA Toll Free Number	1-877-344-7529
International Toll Free Number	1-412-902-4132	International Toll Free Number	1-412-317-0088
Canada Toll Free Number	1-855-669-9657	Canada Toll Free Number	1-855-669-9658
		Conference Number	10145476

Supplemental Information

Supplemental Operating and Financial Data for the quarter ended June 30, 2020 included herein (“Supplemental Information”), is available in the Investors section on IRET’s website at www.iretapartments.com or by calling Investor Relations at 701-837-7104.  

About IRET

IRET is a real estate company focused on the ownership, management, acquisition, redevelopment, and development of apartment communities.  As of June 30, 2020, we owned interests in 70 apartment communities consisting of 12,135 apartment homes.  IRET's common shares and Series C preferred shares are publicly traded on the New York Stock Exchange (NYSE symbols: "IRET" and "IRET PC," respectively).

Forward-Looking Statements

Certain statements in this press release and the accompanying Supplemental Operating and Financial Data are based on our current expectations and assumptions, and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial conditions, or plans expressed or implied by the forward-looking statements. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be achieved. Such risks, uncertainties, and other factors that might cause such differences include, but are not limited to those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2019, in our subsequent quarterly reports on Form 10-Q, including the COVID-19 risk factors set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, and in other public reports. We assume no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.

Investor Relations Contact Information

Emily Miller

Investor Relations

Phone: 701-837-7104

E-mail: IR@iret.com

3

Supplemental Financial and Operating Data

Table of Contents

June 30, 2020

	Page
Common Share Data	S-1
Key Financial Data
Condensed Consolidated Statements of Operations	S-2
Condensed Consolidated Balance Sheets	S-3
Non-GAAP Financial Measures and Reconciliations
Net Operating Income	S-4
Funds From Operations	S-5
Adjusted EBITDA	S-8
Debt and Capital Analysis
Debt Analysis	S-9
Capital Analysis	S-10
COVID-19 Update	S-11
Portfolio Analysis
Same-Store Comparison	S-12
Portfolio Summary	S-15
Capital Expenditures	S-16

Common Share Data (NYSE: IRET)

	2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter
	2020			2020			2019			2019			2019
High closing price	$	76.82		$	84.68		$	78.91		$	74.67		$	61.28
Low closing price	$	44.36		$	52.55		$	71.74		$	59.22		$	57.19
Average closing price	$	63.91		$	71.62		$	74.67		$	66.83		$	59.54
Closing price at end of quarter	$	70.49		$	55.00		$	72.50		$	74.67		$	58.67
Common share distributions – annualized	$	2.80		$	2.80		$	2.80		$	2.80		$	2.80
Closing dividend yield – annualized	4.0		%	5.1		%	3.9		%	3.8		%	4.8		%
Closing common shares outstanding (thousands)	12,827			12,164			12,099			11,625			11,656
Closing limited partnership units outstanding (thousands)	1,022			1,044			1,058			1,223			1,224
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)	$	976,216		$	726,440		$	953,883		$	959,360		$	755,670

S-1

IRET

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands)

	Three Months Ended															Six Months Ended
	6/30/2020			3/31/2020			12/31/2019			9/30/2019			6/30/2019			6/30/2020			6/30/2019
REVENUE	$	43,910		$	44,406		$	45,777		$	47,436		$	46,934		$	88,316		$	92,542
EXPENSES
Property operating expenses, excluding real estate taxes	12,360			13,468			14,018			14,485			13,942			25,828			28,746
Real estate taxes	5,410			5,465			4,835			5,425			5,574			10,875			10,806
Property management expense	1,345			1,554			1,634			1,553			1,445			2,899			2,999
Casualty loss	913			327			205			178			92			1,240			733
Depreciation/amortization	18,156			18,160			18,972			18,751			18,437			36,316			36,548
General and administrative expenses	3,202			3,428			3,647			3,448			3,549			6,630			7,355
TOTAL EXPENSES	$	41,386		$	42,402		$	43,311		$	43,840		$	43,039		$	83,788		$	87,187
Operating income (loss)	2,524			2,004			2,466			3,596			3,895			4,528			5,355
Interest expense	(6,940		)	(6,911		)	(7,357		)	(7,694		)	(7,590		)	(13,851		)	(15,486		)
Loss on extinguishment of debt	(17		)	—			(864		)	(1,087		)	(407		)	(17		)	(409		)
Interest and other income (loss)	538			(2,777		)	702			498			468			(2,239		)	892
Income (loss) before gain (loss) on sale of real estate and other investments, and gain (loss) on litigation settlement	(3,895		)	(7,684		)	(5,053		)	(4,687		)	(3,634		)	(11,579		)	(9,648		)
Gain (loss) on sale of real estate and other investments	(190		)	—			57,850			39,105			615			(190		)	669
Gain (loss) on litigation settlement	—			—			—			300			6,286			—			6,286
Net income (loss)	$	(4,085	)	$	(7,684	)	$	52,797		$	34,718		$	3,267		$	(11,769	)	$	(2,693	)
Dividends to preferred unitholders	(160		)	(160		)	(160		)	(160		)	(160		)	(320		)	(217		)
Net (income) loss attributable to noncontrolling interest – Operating Partnership	447			692			(4,202		)	(3,145		)	(148		)	1,139			595
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities	(5		)	145			223			183			154			140			730
Net income (loss) attributable to controlling interests	(3,803		)	(7,007		)	48,658			31,596			3,113			(10,810		)	(1,585		)
Dividends to preferred shareholders	(1,609		)	(1,705		)	(1,705		)	(1,705		)	(1,706		)	(3,314		)	(3,411		)
Discount on redemption of preferred shares	25			273			—			—			—			298			—
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	(5,387	)	$	(8,439	)	$	46,953		$	29,891		$	1,407		$	(13,826	)	$	(4,996	)
Per Share Data - Basic
Net earnings (loss) per common share – basic	$	(0.44	)	$	(0.69	)	$	3.95		$	2.57		$	0.11		$	(1.13	)	$	(0.43	)
Per Share Data - Diluted
Net earnings (loss) per common share – diluted	$	(0.44	)	$	(0.67	)	$	3.89		$	2.54		$	0.11		$	(1.13	)	$	(0.43	)

S-2

IRET

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

	6/30/2020			3/31/2020			12/31/2019			9/30/2019			6/30/2019
ASSETS
Real estate investments
Property owned	$	1,694,033		$	1,687,436		$	1,643,078		$	1,720,352		$	1,663,539
Less accumulated depreciation	(383,917		)	(366,307		)	(349,122		)	(370,492		)	(380,321		)
	1,310,116			1,321,129			1,293,956			1,349,860			1,283,218
Unimproved land	—			1,376			1,376			1,376			1,746
Mortgage loans receivable	10,961			16,775			16,140			10,140			10,140
Total real estate investments	1,321,077			1,339,280			1,311,472			1,361,376			1,295,104
Cash and cash equivalents	52,714			26,338			26,579			8,500			17,406
Restricted cash	2,535			2,344			19,538			3,339			4,672
Other assets	16,484			21,124			34,829			30,589			30,626
TOTAL ASSETS	$	1,392,810		$	1,389,086		$	1,392,418		$	1,403,804		$	1,347,808
LIABILITIES, MEZZANINE EQUITY, AND EQUITY
LIABILITIES
Accounts payable and accrued expenses	$	54,883		$	52,337		$	47,155		$	40,546		$	44,766
Revolving line of credit	63,000			83,000			50,079			103,143			177,939
Notes payable, net of loan costs	269,155			269,106			269,058			269,006			144,082
Mortgages payable, net of loan costs	323,705			328,367			329,664			360,886			370,461
TOTAL LIABILITIES	$	710,743		$	732,810		$	695,956		$	773,581		$	737,248
SERIES D PREFERRED UNITS	$	16,560		$	16,560		$	16,560		16,560			16,560
EQUITY
Series C Preferred Shares of Beneficial Interest	93,579			96,046			99,456			99,456			99,456
Common Shares of Beneficial Interest	958,292			912,653			917,400			886,598			888,541
Accumulated distributions in excess of net income	(421,515		)	(407,150		)	(390,196		)	(428,680		)	(450,433		)
Accumulated other comprehensive income (loss)	(18,139		)	(17,360		)	(7,607		)	(9,793		)	(7,598		)
Total shareholders’ equity	$	612,217		$	584,189		$	619,053		$	547,581		$	529,966
Noncontrolling interests – Operating Partnership	52,558			54,777			55,284			60,169			57,902
Noncontrolling interests – consolidated real estate entities	732			750			5,565			5,913			6,132
Total equity	$	665,507		$	639,716		$	679,902		$	613,663		$	594,000
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY	$	1,392,810		$	1,389,086		$	1,392,418		$	1,403,804		$	1,347,808

S-3

IRET

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (unaudited)

This release contains certain non-GAAP financial measures. The non-GAAP measures should not be considered a substitute for operating results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The definitions and calculations of these non-GAAP measures, as calculated by us, may not be comparable to non-GAAP measures reported by other REITs that do not define each of the non-GAAP measures exactly as we do.

We provide certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or in service for the entirety of the periods being compared, and, in the case of development properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate full period-over-period operating comparisons for existing apartment communities and their contribution to net income. We believe that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of our communities are performing year-over-year. We use this measure to assess whether or not we have been successful in increasing NOI, renewing the leases on existing residents, controlling operating costs, and making prudent capital improvements.

Reconciliation of Operating Income (Loss) to Net Operating Income

Net operating income, or NOI, is a non-GAAP measure which we define as total real estate revenues less property operating expenses, including real estate taxes. We believe that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.

	(in thousands, except percentages)
	Three Months Ended						Sequential					Year-Over-Year
	6/30/2020		3/31/2020		6/30/2019		$ Change			% Change		$ Change			% Change
Operating income (loss)	$	2,524	$	2,004	$	3,895	$	520		25.9	%	$	(1,371	)	(35.2	)%
Adjustments:
Property management expenses	1,345		1,554		1,445		(209		)	(13.4	)%	(100		)	(6.9	)%
Casualty loss	913		327		92		586			179.2	%	821			892.4	%
Depreciation and amortization	18,156		18,160		18,437		(4		)	—		(281		)	(1.5	)%
General and administrative expenses	3,202		3,428		3,549		(226		)	(6.6	)%	(347		)	(9.8	)%
Net operating income	$	26,140	$	25,473	$	27,418	$	667		2.6	%	$	(1,278	)	(4.7	)%
Revenue
Same-store	$	39,335	$	39,820	$	38,794	$	(485	)	(1.2	)%	$	541		1.4	%
Non-same-store	4,157		3,511		1,073		646			18.4	%	3,084			287.4	%
Other properties and dispositions	418		1,075		7,067		(657		)	(61.1	)%	(6,649		)	(94.1	)%
Total	43,910		44,406		46,934		(496		)	(1.1	)%	(3,024		)	(6.4	)%
Property operating expenses, including real estate taxes
Same-store	16,006		17,258		15,726		(1,252		)	(7.3	)%	280			1.8	%
Non-same-store	1,515		1,320		477		195			14.8	%	1,038			217.6	%
Other properties and dispositions	249		355		3,313		(106		)	(29.9	)%	(3,064		)	(92.5	)%
Total	17,770		18,933		19,516		(1,163		)	(6.1	)%	(1,746		)	(8.9	)%
Net operating income
Same-store	23,329		22,562		23,068		767			3.4	%	261			1.1	%
Non-same-store	2,642		2,191		596		451			20.6	%	2,046			343.3	%
Other properties and dispositions	169		720		3,754		(551		)	(76.5	)%	(3,585		)	(95.5	)%
Total	$	26,140	$	25,473	$	27,418	$	667		2.6	%	$	(1,278	)	(4.7	)%

S-4

	Six Months Ended June 30,
	2020		2019		$ Change			% Change
Operating income (loss)	$	4,528	$	5,355	$	(827	)	(15.4	)%
Adjustments:
Property management expenses	2,899		2,999		(100		)	(3.3	)%
Casualty loss	1,240		733		507			69.2	%
Depreciation and amortization	36,316		36,548		(232		)	(0.6	)%
General and administrative expenses	6,630		7,355		(725		)	(9.9	)%
Net operating income	$	51,613	$	52,990	$	(1,377	)	(2.6	)%
Revenue
Same-store	$	79,155	$	77,122	$	2,033		2.6	%
Non-same-store	7,668		1,484		6,184			416.7	%
Other properties and dispositions	1,493		13,936		(12,443		)	(89.3	)%
Total	88,316		92,542		(4,226		)	(4.6	)%
Property operating expenses, including real estate taxes
Same-store	33,264		32,327		937			2.9	%
Non-same-store	2,835		647		2,188			338.2	%
Other properties and dispositions	604		6,578		(5,974		)	(90.8	)%
Total	36,703		39,552		(2,849		)	(7.2	)%
Net operating income
Same-store	45,891		44,795		1,096			2.4	%
Non-same-store	4,833		837		3,996			477.4	%
Other properties and dispositions	889		7,358		(6,469		)	(87.9	)%
Total	$	51,613	$	52,990	$	(1,377	)	(2.6	)%

Same-Store Property Operating Expense Comparison

	(in thousands, except percentages)
	Three Months Ended June 30,									Six Months Ended June 30,
	2020		2019		$ Change			% Change		2020		2019		$ Change			% Change
Controllable expenses
On-site compensation(1)	$	4,240	$	4,181	$	59		1.4	%	$	8,859	$	8,292	$	567		6.8	%
Repairs and maintenance	2,558		2,905		(347		)	(11.9	)%	5,019		5,974		(955		)	(16.0	)%
Utilities	2,262		2,397		(135		)	(5.6	)%	5,293		5,699		(406		)	(7.1	)%
Administrative and marketing	888		908		(20		)	(2.2	)%	1,783		1,930		(147		)	(7.6	)%
Total	$	9,948	$	10,391	$	(443	)	(4.3	)%	$	20,954	$	21,895	$	(941	)	(4.3	)%
Non-controllable expenses
Real estate taxes	$	4,756	$	4,456	$	300		6.7	%	$	9,666	$	8,740	$	926		10.6	%
Insurance	1,302		879		423			48.1	%	2,644		1,692		952			56.3	%
Total	$	6,058	$	5,335	$	723		13.6	%	$	12,310	$	10,432	$	1,878		18.0	%
Total	$	16,006	$	15,726	$	280		1.8	%	$	33,264	$	32,327	$	937		2.9	%

(1) On-site compensation for administration, leasing, and maintenance personnel.

Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations

We believe that FFO, which is a standard supplemental measure for equity real estate investment trusts, is helpful to investors in understanding our operating performance, primarily because its calculation does not assume that the value of real estate

S-5

assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation.

We use the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding:

• depreciation and amortization related to real estate;

• gains and losses from the sale of certain real estate assets; 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.

The exclusion in Nareit’s definition of FFO of impairment write-downs and gains and losses from the sale of real estate assets helps to identify the operating results of the long-term assets that form the base of our investments, and assists management and investors in comparing those operating results between periods.

Due to the limitations of the Nareit FFO definition, we have made certain interpretations in applying this definition. We believe that all such interpretations not specifically identified in the Nareit definition are consistent with this definition. Nareit's FFO White Paper 2018 Restatement clarified that impairment write-downs of land related to a REIT's main business are excluded from FFO and a REIT has the option to exclude impairment write-downs of assets that are incidental to its main business.

While FFO is widely used by us as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO in the same way. Accordingly, FFO presented here is not necessarily comparable to FFO presented by other real estate companies. FFO should not be considered as an alternative to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of sufficient cash flow to fund all of our needs or our ability to service indebtedness or make distributions.

Core Funds from Operations ("Core FFO") is FFO as adjusted for non-routine items or items not considered core to our business operations. By further adjusting for items that are not considered part of our core business operations, we believe that Core FFO provides investors with additional information to compare our core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income as an indication of financial performance, or as an alternative to cash flows from operations as a measure of liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions to shareholders. Core FFO is a non-GAAP and non-standardized measure that may be calculated differently by other REITs and should not be considered a substitute for operating results determined in accordance with GAAP.

S-6

	(in thousands, except per share amounts)
	Three Months Ended															Six Months Ended
	6/30/2020			3/31/2020			12/31/2019			9/30/2019			6/30/2019			6/30/2020			6/30/2019
Funds From Operations
Net income (loss) available to common shareholders	$	(5,387	)	$	(8,439	)	$	46,953		$	29,891		$	1,407		$	(13,826	)	$	(4,996	)
Adjustments:
Noncontrolling interests – Operating Partnership	(447		)	(692		)	4,202			3,145			148			(1,139		)	(595		)
Depreciation and amortization	18,156			18,160			18,972			18,751			18,437			36,316			36,548
Less depreciation – non real estate	(88		)	(93		)	(88		)	(71		)	(79		)	(181		)	(164		)
Less depreciation – partially owned entities	(33		)	(282		)	(454		)	(452		)	(474		)	(315		)	(1,152		)
(Gain) loss on sale of real estate	190			—			(57,850		)	(39,105		)	(615		)	190			(669		)
FFO applicable to common shares and Units	$	12,391		$	8,654		$	11,735		$	12,159		$	18,824		$	21,045		$	28,972
Adjustments to Core FFO:
Loss on extinguishment of debt	17			—			864			1,087			407			17			409
Gain on litigation settlement	—			—			—			(300		)	(6,286		)	—			(6,286		)
(Gain) loss on marketable securities	(175		)	3,553			(113		)	—			—			3,378			—
Discount on redemption of preferred shares	(25		)	(273		)	—			—			—			(298		)	—
Core FFO applicable to common shares and Units	$	12,208		$	11,934		$	12,486		$	12,946		$	12,945		$	24,142		$	23,095
Funds from operations applicable to common shares and Units	$	12,391		$	8,654		$	11,735		$	12,159		$	18,824		$	21,045		$	28,972
Dividends to preferred unitholders	160			160			160			160			160			320			217
Funds from operations applicable to common shares and Units - diluted	$	12,551		$	8,814		$	11,895		$	12,319		$	18,984		$	21,365		$	29,189
Core funds from operations applicable to common shares and Units	$	12,208		$	11,934		$	12,486		$	12,946		$	12,945		$	24,142		$	23,095
Dividends to preferred unitholders	160			160			160			160			160			320			217
Core funds from operations applicable to common shares and Units - diluted	$	12,368		$	12,094		$	12,646		$	13,106		$	13,105		$	24,462		$	23,312
Per Share Data
Earnings (loss) per share and Unit - diluted	$	(0.44	)	$	(0.67	)	$	3.89		$	2.54		$	0.11		$	(1.13	)	$	(0.43	)
FFO per share and Unit - diluted	$	0.93		$	0.66		$	0.90		$	0.93		$	1.45		$	1.58		$	2.22
Core FFO per share and Unit - diluted	$	0.91		$	0.90		$	0.96		$	0.99		$	1.00		$	1.81		$	1.77
Weighted average shares and Units - diluted	13,558			13,401			13,188			13,087			13,197			13,482			13,220

S-7

Reconciliation of Net Income (Loss) Available to Common Shareholders to Adjusted EBITDA

Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain/loss on sale of real estate and other investments, impairment of real estate investments, gain/loss on extinguishment of debt, gain on litigation settlement, and gain/loss from involuntary conversion. We consider Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, the cost of debt, or non-operating gains and losses. Adjusted EBITDA is a non-GAAP measure and should not be considered a substitute for operating results determined in accordance with GAAP.

	(in thousands)
	Three Months Ended															Six Months Ended
	6/30/2020			3/31/2020			12/31/2019			9/30/2019			6/30/2019			6/30/2020			6/30/2019
Adjusted EBITDA
Net income (loss) available to common shareholders	$	(3,803	)	$	(7,007	)	$	48,658		$	31,596		$	3,113		$	(10,810	)	$	(1,585	)
Adjustments:
Dividends to preferred unitholders	160			160			160			160			160			320			217
Noncontrolling interests – Operating Partnership	(447		)	(692		)	4,202			3,145			148			(1,139		)	(595		)
Income (loss) before noncontrolling interests – Operating Partnership	$	(4,090	)	$	(7,539	)	$	53,020		$	34,901		$	3,421		$	(11,629	)	$	(1,963	)
Adjustments:
Interest expense	6,926			6,764			7,112			7,448			7,343			13,690			14,901
Loss on extinguishment of debt	17			—			864			1,087			407			17			409
Depreciation/amortization related to real estate investments	18,123			17,878			18,518			18,299			17,963			36,001			35,396
Interest income	(331		)	(597		)	(415		)	(402		)	(402		)	(928		)	(809		)
(Gain) loss on sale of real estate and other investments	190			—			(57,850		)	(39,105		)	(615		)	190			(669		)
Gain on litigation settlement	—			—			—			(300		)	(6,286		)	—			(6,286		)
(Gain) loss on marketable securities	(175		)	3,553			(113		)	—			—			3,378			—
Adjusted EBITDA	$	20,660		$	20,059		$	21,136		$	21,928		$	21,831		$	40,719		$	40,979

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IRET

DEBT ANALYSIS

(in thousands)

Debt Maturity Schedule

Annual Expirations

	Future Maturities of Debt
	Secured Fixed Debt		Unsecured Fixed Debt(1)		Unsecured Variable Debt		Total Debt		% of Total Debt		Weighted Average Interest Rate(2)
2020 (remainder)	$	9,406	$	—	$	—	$	9,406	1.4	%	4.85	%
2021	35,556		—		—		35,556		5.4	%	5.36	%
2022	33,987		50,000		13,000		96,987		14.7	%	3.28	%
2023	44,266		—		—		44,266		6.7	%	4.02	%
2024	—		70,000		—		70,000		10.7	%	3.62	%
Thereafter	202,015		200,000		—		402,015		61.1	%	3.89	%
Total debt	$	325,230	$	320,000	$	13,000	$	658,230	100.0	%	3.87	%

(1) Term loans have variable interest rates that are fixed with interest rate swaps and $50.0 million of our variable interest, line of credit is fixed with an interest rate swap.

(2) Weighted average interest rate of debt that matures during the year, including the effect of interest rate swaps on the term loans and line of credit.

	6/30/2020			3/31/2020			12/31/2019			9/30/2019			6/30/2019
Debt Balances Outstanding
Secured fixed rate	$	325,230		$	329,988		$	331,376		$	362,731		$	371,951
Unsecured fixed rate line of credit(1)	50,000			50,000			50,000			50,000			50,000
Secured line of credit(2)	—			—			—			—			15,000
Unsecured variable rate line of credit	13,000			33,000			79			53,143			112,939
Unsecured term loans	145,000			145,000			145,000			145,000			145,000
Unsecured senior notes	125,000			125,000			125,000			125,000			—
Debt total	$	658,230		$	682,988		$	651,455		$	735,874		$	694,890
Mortgage debt weighted average interest rate	4.01		%	4.01		%	4.02		%	4.15		%	4.37		%
Lines of credit rate (rate with swap)	2.97		%	3.18		%	3.52		%	3.73		%	3.91		%
Term loan rate (rate with swap)	4.12		%	4.13		%	4.19		%	4.14		%	4.14		%
Senior notes rate	3.78		%	3.78		%	3.78		%	3.78		%	—

(1) A portion of our primary line of credit is fixed through an interest rate swap.

(2) Our revolving line of credit consists primarily of unsecured borrowings. A portion of the line was secured in connection with our acquisition of SouthFork Townhomes, under an agreement which allowed us to offer the seller tax protection upon purchase.

S-9

IRET 

CAPITAL ANALYSIS 

(in thousands, except per share and unit amounts)

	Three Months Ended
	6/30/2020			3/31/2020			12/31/2019			9/30/2019			6/30/2019
Equity Capitalization
Common shares outstanding	12,827			12,164			12,099			11,625			11,656
Operating partnership units outstanding	1,022			1,044			1,058			1,223			1,224
Total common shares and units outstanding	13,849			13,208			13,157			12,848			12,880
Market price per common share (closing price at end of period)	$	70.49		$	55.00		$	72.50		$	74.67		$	58.67
Equity capitalization-common shares and units	$	976,216		$	726,440		$	953,883		$	959,360		$	755,670
Recorded book value of preferred shares	$	93,579		$	96,046		$	99,456		$	99,456		$	99,456
Total equity capitalization	$	1,069,795		$	822,486		$	1,053,339		$	1,058,816		$	855,126
Series D Preferred Units	$	16,560		$	16,560		$	16,560		$	16,560		$	16,560
Debt Capitalization
Total debt	$	658,230		$	682,988		$	651,455		$	735,874		$	694,889
Total capitalization	$	1,744,585		$	1,522,034		$	1,721,354		$	1,811,250		$	1,566,575
Total debt to total capitalization(1)	37.7		%	44.9		%	37.8		%	40.6		%	44.4		%

(1) Total debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet, plus the market value of common shares and operating partnership units, and book value of Series C preferred shares and Series D preferred units outstanding at the end of the period.

	Three Months Ended															Six Months Ended
	6/30/2020			3/31/2020			12/31/2019			9/30/2019			6/30/2019			6/30/2020			6/30/2019
Debt service coverage ratio(1)	2.48		x	2.42		x	2.39		x	2.26		x	2.24		x	2.45		x	2.04		x
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization	2.05		x	1.97		x	1.98		x	1.90		x	1.88		x	2.01		x	1.73		x
Net debt/Adjusted EBITDA(2)	7.33		x	8.18		x	7.19		x	8.29		x	7.76		x	7.44		x	8.27		x
Net debt and preferred equity/Adjusted EBITDA(2)	8.66		x	9.59		x	8.56		x	9.62		x	9.09		x	8.86		x	9.48		x
Distribution Data
Common shares and Units outstanding at record date	13,849			13,208			13,157			12,848			12,914			13,849			12,914
Total common distribution declared	$	9,694		$	9,245		$	9,210		$	8,994		$	9,039		$	18,939		$	18,234
Common distribution per share and Unit	$	0.70		$	0.70		$	0.70		$	0.70		$	0.70		$	1.40		$	1.40
Payout ratio (Core FFO per share and unit basis) (3)	76.9		%	77.8		%	72.9		%	70.7		%	70.0		%	77.3		%	79.1		%

(1) Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization. This term is a non-GAAP measure and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.

(2) Net debt is the total debt balance less cash and cash equivalents and net tax deferred exchange proceeds (included within restricted cash). Adjusted EBITDA is annualized for periods less than one year. Net debt and adjusted EBITDA are non-GAAP measures and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.

(3) Payout ratio (Core FFO per share and unit basis) is the ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual Core FFO per share and unit. This term is a non-GAAP measure and should not be considered a substitute for operating results determined in accordance with GAAP.

S-10

IRET

COVID-19 UPDATE

(in thousands, except property data amounts and percentages)

Collections by State

			Three Months Ended June 30, 2020
State	Number of Communities	Number of Homes	% of Total Revenue		Bad Debt(1) as % of Total Revenue
Minnesota	32	5,438	48.7	%	1.1	%
Colorado	3	992	12.4	%	1.2	%
Nebraska	6	1,370	9.2	%	0.6	%
North Dakota	19	3,112	21.5	%	0.2	%
South Dakota	5	474	3.2	%	0.7	%
Montana	5	749	5.0	%	2.3	%
Total	70	12,135	100.0	%	0.9	%

(1) Bad debt is reported as a reduction of revenue.

Operating Statistics

	Month Ended				Three Months Ended
	July 31, 2020		July 31, 2019		June 30, 2020		March 31, 2020		June 30, 2019
Bad debt as a % of total revenue	1.0	%	0.6	%	0.9	%	0.2	%	0.4	%
Percent of rent deferrals to total revenue	0.1	%	N/A		0.5	%	N/A		N/A
Same-Store Communities
New lease rates	1.1	%	0.7	%	(1.2	)%	(4.3	)%	4.3	%
Renewal rates	0.1	%	4.9	%	3.3	%	2.9	%	5.9	%
Weighted average occupancy	94.3	%	93.1	%	94.6	%	95.4	%	94.3	%
Physical occupancy, at end of period	95.2	%	93.8	%	94.8	%	96.1	%	94.0	%

Liquidity and Near-Term Funding Obligations

Liquidity Profile	June 30, 2020		March 31, 2020
Unsecured credit facility - committed	$	250,000	$	250,000
Balance outstanding	63,000		83,000
Amount available on line of credit	$	187,000	$	167,000
Cash and cash equivalents	52,714		26,338
Total liquidity	$	239,714	$	193,338
Near-Term Funding Obligations
Unfunded construction loan and mezzanine loan commitments - 2020 and 2021	$	34,272	$	38,479
2020 and 2021 Debt maturities	44,962		45,297
Total	$	79,234	$	83,776
Ratio of liquidity to near-term funding obligations	3.0		2.3

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IRET

SAME-STORE SECOND QUARTER COMPARISONS

(in thousands, except property data amounts and percentages)

	Apartment Homes Included	Revenues						Expenses						NOI
Regions		Q2 2020		Q2 2019		% Change		Q2 2020		Q2 2019		% Change		Q2 2020		Q2 2019		% Change
Minneapolis, MN	1,987	$	9,068	$	8,904	1.8	%	$	3,485	$	3,636	(4.2	)%	$	5,583	$	5,268	6.0	%
Rochester, MN	1,711	6,370		6,290		1.2	%	2,802		2,450		14.4	%	3,568		3,840		(7.1	)%
Denver, CO	664	3,701		3,780		(2.1	)%	1,095		1,195		(8.4	)%	2,606		2,585		0.8	%
Grand Forks, ND	1,555	4,344		4,218		3.0	%	1,823		1,909		(4.5	)%	2,521		2,309		9.2	%
Omaha, NE	1,370	3,838		3,705		3.6	%	1,783		1,635		9.1	%	2,055		2,070		(0.7	)%
St. Cloud, MN	1,190	3,546		3,585		(1.1	)%	1,524		1,525		(0.1	)%	2,022		2,060		(1.8	)%
Bismarck, ND	845	2,766		2,671		3.6	%	1,053		1,031		2.1	%	1,713		1,640		4.5	%
Billings, MT	749	2,139		2,125		0.7	%	838		752		11.4	%	1,301		1,373		(5.2	)%
Minot, ND	712	2,161		2,145		0.7	%	969		1,036		(6.5	)%	1,192		1,109		7.5	%
Rapid City, SD	474	1,402		1,371		2.3	%	634		557		13.8	%	768		814		(5.7	)%
Same-Store Total	11,257	$	39,335	$	38,794	1.4	%	$	16,006	$	15,726	1.8	%	$	23,329	$	23,068	1.1	%

	% of NOI Contribution		Weighted Average Occupancy (1)						Average Monthly Rental Rate (2)						Average Monthly Revenue per Occupied Home (3)
Regions			Q2 2020		Q2 2019		Growth		Q2 2020		Q2 2019		% Change		Q2 2020		Q2 2019		% Change
Minneapolis, MN	23.9	%	94.0	%	93.3	%	0.7	%	$	1,494	$	1,471	1.6	%	$	1,619	$	1,600	1.1	%
Rochester, MN	15.3	%	95.3	%	95.4	%	(0.1	)%	1,248		1,233		1.2	%	1,303		1,285		1.3	%
Denver, CO	11.2	%	92.9	%	94.5	%	(1.6	)%	1,827		1,828		(0.1	)%	2,001		2,008		(0.5	)%
Grand Forks, ND	10.8	%	94.6	%	93.5	%	1.1	%	906		912		(0.7	)%	985		967		1.9	%
Omaha, NE	8.8	%	94.9	%	93.3	%	1.6	%	904		884		2.3	%	984		966		2.0	%
St. Cloud, MN	8.7	%	93.7	%	95.4	%	(1.7	)%	955		951		0.4	%	1,060		1,053		0.6	%
Bismarck, ND	7.3	%	96.2	%	93.6	%	2.6	%	1,053		1,044		0.9	%	1,134		1,126		1.0	%
Billings, MT	5.6	%	94.4	%	95.6	%	(1.2	)%	944		924		2.2	%	1,008		989		1.9	%
Minot, ND	5.1	%	97.0	%	95.0	%	2.0	%	992		1,000		(0.8	)%	1,043		1,057		(1.3	)%
Rapid City, SD	3.3	%	94.3	%	95.0	%	(0.7	)%	966		945		2.2	%	1,046		1,015		3.0	%
Same-Store Total	100.0	%	94.6	%	94.3	%	0.3	%	$	1,142	$	1,132	0.9	%	$	1,232	$	1,219	1.1	%

(1) Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rent.

(2) Average monthly rental rate is scheduled rent divided by the total number of apartment homes. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.

(3) Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.

S-12

IRET

SAME-STORE SEQUENTIAL QUARTER COMPARISONS

(in thousands, except property data amounts and percentages)

	Apartment Homes Included	Revenues						Expenses						NOI
Regions		Q2 2020		Q1 2020		% Change		Q2 2020		Q1 2020		% Change		Q2 2020		Q1 2020		% Change
Minneapolis, MN	1,987	$	9,068	$	9,112	(0.5	)%	$	3,485	$	3,911	(10.9	)%	$	5,583	$	5,201	7.3	%
Rochester, MN	1,711	6,370		6,539		(2.6	)%	2,802		2,824		(0.7	)%	3,568		3,715		(4.0	)%
Denver, CO	664	3,701		3,927		(5.8	)%	1,095		1,258		(13.0	)%	2,606		2,669		(2.4	)%
Grand Forks, ND	1,555	4,344		4,337		0.2	%	1,823		2,225		(18.1	)%	2,521		2,112		19.4	%
Omaha, NE	1,370	3,838		3,814		0.6	%	1,783		1,626		9.7	%	2,055		2,188		(6.1	)%
St. Cloud, MN	1,190	3,546		3,611		(1.8	)%	1,524		1,756		(13.2	)%	2,022		1,855		9.0	%
Bismarck, ND	845	2,766		2,735		1.1	%	1,053		1,169		(9.9	)%	1,713		1,566		9.4	%
Billings, MT	749	2,139		2,179		(1.8	)%	838		826		1.5	%	1,301		1,353		(3.8	)%
Minot, ND	712	2,161		2,125		1.7	%	969		1,011		(4.2	)%	1,192		1,114		7.0	%
Rapid City, SD	474	1,402		1,441		(2.7	)%	634		652		(2.8	)%	768		789		(2.7	)%
Same-Store Total	11,257	$	39,335	$	39,820	(1.2	)%	$	16,006	$	17,258	(7.3	)%	$	23,329	$	22,562	3.4	%

	% of NOI Contribution		Weighted Average Occupancy						Average Monthly Rental Rate						Average Monthly Revenue per Occupied Home
Regions			Q2 2020		Q1 2020		Growth		Q2 2020		Q1 2020		% Change		Q2 2020		Q1 2020		% Change
Minneapolis, MN	23.9	%	94.0	%	94.2	%	(0.2	)%	$	1,494	$	1,485	0.6	%	$	1,619	$	1,624	(0.3	)%
Rochester, MN	15.3	%	95.3	%	97.1	%	(1.8	)%	1,248		1,239		0.7	%	1,303		1,312		(0.8	)%
Denver, CO	11.2	%	92.9	%	95.1	%	(2.2	)%	1,827		1,845		(1.0	)%	2,001		2,072		(3.6	)%
Grand Forks, ND	10.8	%	94.6	%	95.4	%	(0.8	)%	906		900		0.7	%	985		975		1.0	%
Omaha, NE	8.8	%	94.9	%	94.3	%	0.6	%	904		893		1.2	%	984		984		—
St. Cloud, MN	8.7	%	93.7	%	94.9	%	(1.2	)%	955		945		1.1	%	1,060		1,066		(0.6	)%
Bismarck, ND	7.3	%	96.2	%	96.4	%	(0.2	)%	1,053		1,044		0.9	%	1,134		1,119		1.3	%
Billings, MT	5.6	%	94.4	%	95.8	%	(1.4	)%	944		935		1.0	%	1,008		1,012		(0.4	)%
Minot, ND	5.1	%	97.0	%	95.1	%	1.9	%	992		990		0.2	%	1,043		1,046		(0.2	)%
Rapid City, SD	3.3	%	94.3	%	96.9	%	(2.6	)%	966		951		1.6	%	1,046		1,045		(0.1	)%
Same-Store Total	100.0	%	94.6	%	95.4	%	(0.8	)%	$	1,142	$	1,135	0.6	%	$	1,232	$	1,237	(0.4	)%

S-13

IRET

SAME-STORE YEAR-TO-DATE COMPARISONS

(in thousands, except property data amounts and percentages)

	Apartment Homes Included	Revenues						Expenses						NOI
Regions		2020		2019		% Change		2020		2019		% Change		2020		2019		% Change
Minneapolis, MN	1,987	$	18,180	$	17,684	2.8	%	$	7,395	$	7,275	1.6	%	$	10,785	$	10,409	3.6	%
Rochester, MN	1,711	12,908		12,516		3.1	%	5,625		4,905		14.7	%	7,283		7,611		(4.3	)%
Denver, CO	664	7,628		7,479		2.0	%	2,354		2,417		(2.6	)%	5,274		5,062		4.2	%
Grand Forks, ND	1,555	8,682		8,359		3.9	%	4,048		4,075		(0.7	)%	4,634		4,284		8.2	%
Omaha, NE	1,370	7,652		7,459		2.6	%	3,409		3,409		—		4,243		4,050		4.8	%
St. Cloud, MN	1,190	7,157		7,059		1.4	%	3,281		3,333		(1.6	)%	3,876		3,726		4.0	%
Bismarck, ND	845	5,501		5,335		3.1	%	2,222		2,162		2.8	%	3,279		3,173		3.3	%
Billings, MT	749	4,317		4,230		2.1	%	1,664		1,575		5.7	%	2,653		2,655		(0.1	)%
Minot, ND	712	4,287		4,263		0.6	%	1,980		2,043		(3.1	)%	2,307		2,220		3.9	%
Rapid City, SD	474	2,843		2,738		3.8	%	1,286		1,133		13.5	%	1,557		1,605		(3.0	)%
Same-Store Total	11,257	$	79,155	$	77,122	2.6	%	$	33,264	$	32,327	2.9	%	$	45,891	$	44,795	2.4	%

	% of NOI Contribution		Weighted Average Occupancy						Average Monthly Rental Rate						Average Monthly Revenue per Occupied Home
Regions			2020		2019		Growth		2020		2019		% Change		2020		2019		% Change
Minneapolis, MN	23.6	%	94.1	%	94.1	%	—		$	1,490	$	1,457	2.3	%	$	1,621	$	1,577	2.8	%
Rochester, MN	15.9	%	96.2	%	95.9	%	0.3	%	1,243		1,220		1.9	%	1,307		1,271		2.8	%
Denver, CO	11.5	%	94.0	%	94.4	%	(0.4	)%	1,836		1,817		1.0	%	2,037		1,988		2.4	%
Grand Forks, ND	10.1	%	95.0	%	93.7	%	1.3	%	903		907		(0.4	)%	980		957		2.6	%
Omaha, NE	9.2	%	94.6	%	94.3	%	0.3	%	898		879		2.2	%	984		963		2.3	%
St. Cloud, MN	8.4	%	94.3	%	95.6	%	(1.3	)%	950		945		0.5	%	1,063		1,035		2.7	%
Bismarck, ND	7.1	%	96.3	%	95.3	%	1.0	%	1,048		1,037		1.1	%	1,126		1,104		2.1	%
Billings, MT	5.8	%	95.1	%	96.0	%	(0.9	)%	939		915		2.6	%	1,010		981		3.0	%
Minot, ND	5.0	%	96.1	%	95.4	%	0.7	%	991		997		(0.6	)%	1,044		1,046		(0.1	)%
Rapid City, SD	3.4	%	95.6	%	95.9	%	(0.3	)%	959		938		2.2	%	1,046		1,003		4.1	%
Same-Store Total	100.0	%	95.0	%	94.9	%	0.1	%	$	1,139	$	1,123	1.4	%	$	1,234	$	1,204	2.5	%

S-14

IRET

PORTFOLIO SUMMARY⁽¹⁾ 

	Three Months Ended
	6/30/2020			3/31/2020			12/31/2019			9/30/2019			6/30/2019
Number of Apartment Homes at Period End
Same-Store	11,257			11,257			10,402			11,785			12,848
Non-Same-Store	878			878			1,551			1,551			1,127
All Communities	12,135			12,135			11,953			13,336			13,975
Average Monthly Rental Rate(2)
Same-Store	$	1,142		$	1,135		$	1,085		$	1,062		$	1,028
Non-Same-Store	1,594			1,572			1,722			1,742			1,692
All Communities	$	1,175		$	1,163		$	1,168		$	1,123		$	1,081
Average Monthly Revenue per Occupied Apartment Home(3)
Same-Store	$	1,232		$	1,237		$	1,169		$	1,141		$	1,101
Non-Same-Store	1,681			1,658			1,869			1,887			1,848
All Communities	$	1,264		$	1,263		$	1,260		$	1,210		$	1,161
Weighted Average Occupancy(4)
Same-Store	94.6		%	95.4		%	94.0		%	93.3		%	94.3		%
Non-Same-Store	93.9		%	93.3		%	93.0		%	94.2		%	94.8		%
All Communities	94.5		%	95.2		%	93.8		%	93.4		%	94.4		%
Operating Expenses as a % of Scheduled Rent
Same-Store	41.5		%	45.0		%	43.5		%	43.0		%	42.8		%
Non-Same-Store	36.1		%	37.0		%	33.8		%	38.1		%	37.4		%
All Communities	41.0		%	44.3		%	41.6		%	42.3		%	42.2		%
Capital Expenditures
Total Capital Expenditures per Apartment Home – Same-Store	$	262		$	151		$	427		$	178		$	192

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

(2) Average monthly rental rate is scheduled rent divided by the total number of apartment homes. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.

(3) Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.

(4) Weighted average occupancy is the percentage resulting from dividing actual rental revenue by scheduled rent. We believe that weighted average occupancy is a meaningful measure of occupancy because it considers the value of each vacant unit at its estimated market rate. Weighted average occupancy may not completely reflect short-term trends in physical occupancy and our calculation of weighted average occupancy may not be comparable to that disclosed by other REITs.

S-15

IRET

CAPITAL EXPENDITURES

($ in thousands, except per home amounts)

	Three Months Ended					Six Months Ended
	6/30/2020			6/30/2019		6/30/2020		6/30/2019
Total Same-Store Apartment Homes	11,257			11,257		11,257		11,257
Turnover	$	893		$	908	$	1,580	$	1,422
Furniture & Equipment	112			107		241		160
Building – Interior	69			100		218		178
Building – Exterior	1,505			394		2,219		603
Landscaping & Grounds	367			539		383		545
Capital Expenditures - Same-Store	$	2,946		$	2,048	$	4,641	$	2,908
Capital Expenditures per Apartment Home - Same-Store	$	262		$	182	$	412	$	258
Value Add	$	2,604		$	701	$	4,166	$	989
Total Capital Spend - Same-Store	$	5,550		$	2,749	$	8,807	$	3,897
Total Capital Spend per Apartment Home - Same-Store	$	493		$	244	$	782	$	346
All Properties - Weighted Average Apartment Homes	12,135			13,975		12,074		13,975
Capital Expenditures	$	3,373		$	2,571	$	5,183	$	3,727
Capital Expenditures per Apartment Home	$	277		$	184	$	429	$	267
Value Add	4,165			747		6,196		1,119
Acquisition Capital(1)	(943		)	66		535		254
Total Capital Spend	6,595			3,384		11,914		5,100
Total Capital Spend per Apartment Home	$	544		$	242	$	987	$	365

(1) Negative amounts consist of balances originally classified as acquisition capital and subsequently reclassified to capital expenditures.

S-16

XML

Cover Page Cover Page	Aug. 03, 2020
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Aug. 03, 2020
Entity Registrant Name	INVESTORS REAL ESTATE TRUST
Entity Incorporation, State or Country Code	ND
Entity File Number	001-35624
Entity Tax Identification Number	45-0311232
Entity Address, Address Line One	1400 31st Avenue SW
Entity Address, Address Line Two	Suite 60
Entity Address, Address Line Three	Post Office Box 1988
Entity Address, City or Town	Minot
Entity Address, State or Province	ND
Entity Address, Postal Zip Code	58702
City Area Code	701
Local Phone Number	837-4738
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000798359
Amendment Flag	false
Common Shares
Entity Information [Line Items]
Title of 12(b) Security	Common Shares of Beneficial Interest, no par value
Trading Symbol	IRET
Security Exchange Name	NYSE
Series C Cumulative Redeemable Preferred Shares
Entity Information [Line Items]
Title of 12(b) Security	Series C Cumulative Redeemable Preferred Shares
Trading Symbol	IRET-PC
Security Exchange Name	NYSE