iret_Current_Folio

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): June 29, 2016

INVESTORS REAL ESTATE TRUST

(Exact name of Registrant as specified in its charter)



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

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

(Address of principal executive offices) (Zip code)

(701) 837-4738

(Registrant’s telephone number, including area code)

Not Applicable

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

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

☐Written communications pursuant to Rule 425 under the Securities Act

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

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

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

Item 2.02. Results of Operations and Financial Condition.

and

Item 7.01. Regulation FD Disclosure.

An earnings release issued by the Company on June 29, 2016, regarding financial and operational results for the three and twelve months ended April 30, 2016, is attached as Exhibit 99.1, and certain supplemental information regarding the Company’s capital, portfolio and tenant analyses and development and acquisition activity not included in the earnings release is attached as Exhibit 99.2.

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

ITEM 9.01Financial Statements and Exhibits

(d)

Exhibits


Exhibit
Number	Description

99.1	Earnings Release issued June 29, 2016, regarding financial and operational results for the three and twelve months ended April 30, 2016

99.2	Supplemental information

SIGNATURE

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


	INVESTORS REAL ESTATE TRUST

	By	/s/ Timothy P. Mihalick
		Timothy P. Mihalick
Date: June 29, 2016		President & Chief Executive Officer

iret_Ex99_1

Exhibit 99.1

Earnings Release

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INVESTORS REAL ESTATE TRUST ANNOUNCES FINANCIAL AND OPERATING RESULTS

FOR THE QUARTER AND FISCAL YEAR ENDED APRIL 30, 2016

-Increases Total Revenue by 7.5% and 5.0% Year over Year for Fourth Quarter and Fiscal Year 2016-

-Reports Funds From Operations of $0.14 and $0.76 per Share/Unit for Fourth Quarter and Fiscal Year 2016-

-Initiates FFO Guidance for Fiscal Year 2017 of $0.48 to $0.54 per Share/Unit-

(Minot, ND) – June 29, 2016 - Investors Real Estate Trust (NYSE: IRET) (NYSE: IRETPR) (NYSE: IRETPRB), a self-administered, equity real estate investment trust investing in income-producing properties located primarily in the upper Midwest, today reported its financial and operating results for the quarter and fiscal year ended April 30, 2016.

Fourth Quarter Highlights

Same-store multifamily Net Operating Income (“NOI”) growth year over year was up 4.8%, excluding energy impacted markets

Reported Funds from Operations (“FFO”) of $19.2 million or $0.14 per share/unit

For the same-store multifamily portfolio, excluding energy impacted markets, weighted average occupancy was 95.0%, compared to 94.4% in the fourth quarter of fiscal year 2015

For the same-store multifamily portfolio, excluding energy impacted markets, average rental rate was $900 per unit per month, up 2.5% from the fourth quarter of fiscal year 2015

Acquired 393 multifamily units at four properties in Rochester, MN, for a total purchase price of $71.8 million

Placed into service two multifamily development projects, containing 414 units, and representing aggregate investment of $74.6 million

Disposed of eight student housing properties, one healthcare property, one retail property and one parcel of unimproved land for sales prices totaling $31.8 million

Fiscal Year Highlights

Same-store multifamily NOI growth year over year was up 1.4%, excluding energy impacted markets

Reported FFO of $103.9 million or $0.76 per share/unit

For the same-store multifamily portfolio, excluding energy impacted markets, average rental rate was $895 per unit per month, up 2.7% from the prior year

Acquired one healthcare property and 743 multifamily units at six properties, for a total purchase price of $143.5 million

Placed into service seven development projects totaling $211.8 million

Disposed of 8 student housing properties, 40 office properties, 2 healthcare properties, 18 retail properties and 3 parcels of unimproved land for a total sales price of $414.1 million and transferred ownership of 9 office properties pursuant to a deed in lieu transaction

President and Chief Executive Officer Tim Mihalick commented, “Our fourth quarter and full year results, which included increases in revenue of 7.5% and 5.0% respectively, show the value of our continued efforts to reposition the portfolio and focus our strategy. Within our multifamily portfolio, we continue to drive strong NOI growth in our total portfolio as we complete and lease up our development pipeline, and we captured strong same store NOI growth across most of our platform, with the exception of our energy-affected markets.”

Mr. Mihalick continued, “During the fourth quarter, our disposition volume totaled approximately $32 million, bringing our total sales price for assets sold in fiscal year 2016 to $414.1 million. Moving forward, we will continue to execute on our strategic and capital plans to further simplify our platform and transition to a pure-play multifamily REIT, improve operations and maximize margins, execute on our redevelopment initiatives, and optimize our capital allocation and balance sheet. We believe that the successful execution of this strategy will enhance our long term growth profile and is the best path for value creation for our shareholders.”

Financial Results for the Three and Twelve Months Ended April 30, 2016 Compared to the Prior Year Period

Net Income Available to Common Shareholders for the quarter ended April 30, 2016 was $8.1 million compared to $7.9 million for the same period of the prior fiscal year. Net Income Available to Common Shareholders for the twelve month period ending April 30, 2016 was $60.5 million compared to $12.6 million for the same period of the prior fiscal year. The increase in Net Income Available to Common Shareholders was primarily due to gain on extinguishment of debt of $36.5 million and gain on sale of discontinued operations of $23.8 million recognized in the twelve months ended April 30, 2016.

Funds from Operations (“FFO”) for the quarter ending April 30, 2016 was $19.2 million or $0.14 per share/unit. FFO for the twelve months ending April 30, 2016 was $103.9 million or $0.76 per share/unit. Excluding gain or loss on extinguishment of debt, default interest, and gain on bargain purchase, FFO would have been $0.55 for the twelve months ended April 30, 2016.

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


	Fiscal Year Ended			Q4 ended	Q3 ended		Q2 ended		Q1 ended
	April 30, 2016			April 30, 2016	January 31, 2016		October 31, 2015		July 31, 2015
FFO per share	$	.76	$	.14	$	.40	$	.06	$	.16
AFFO per share	$	.51	$	.11	$	.13	$	.11	$	.16

Operating Results for the Three Months Ended April 30, 2016 Compared to the Prior Year Period

Total revenue for the Company increased by $3.4 million, or 7.5%, in the three months ended April 30, 2016 compared to same period one year ago.

Net Operating Income (NOI) from all properties increased by $1.4 million, or 5.3% for the quarter ending April 30, 2016 compared to the same period one year ago. Non-Same-Store properties, primarily the Company’s multifamily developments, provided for an increase in NOI of $1.9 million while Same-Store NOI decreased by approximately $518,000 for the quarter ending April 30, 2016 compared to the same period one year ago. The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North.

Operating Results for the Twelve Months Ended April 30, 2016 Compared to the Prior Year Period

Total revenues for the Company increased by $9.0 million, or 5.0%, in the twelve months ended April 30, 2016 compared to same period one year ago.

NOI from all properties increased by $3.0 million, or 2.9% for the twelve month period ending April 30, 2016 compared to the same period one year ago. Non-Same-Store properties, primarily the Company’s multifamily developments, provided for an increase in NOI of $4.6 million while Same-Store NOI decreased by $1.6 million. The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North Dakota.

Multifamily Results for the Three Months Ended April 30, 2016 Compared to the Prior Year Period

Multifamily (including non-same-store) NOI increased by approximately $1.0 million or 5.8% for the quarter ending April 30, 2016 compared to the same period one year ago. Continued completion and lease up of the Company’s development projects is having a positive effect on total operations.

Multifamily Results for the Twelve Months Ended April 30, 2016 Compared to the Prior Year Period

Multifamily (including non-same store) NOI increased by approximately $3.3 million or 4.9% for the twelve month period ending April 30, 2016 compared to the same period one year ago. Continued completion and lease up of the Company’s development projects and accretive acquisitions in the period are having a positive effect on total operations.

Same-Store Multifamily Results for the Three Months Ended April 30, 2016 Compared to the Prior Year Period

Same-Store Multifamily NOI decreased by approximately $550,000 for the quarter ending April 30, 2016 compared to the same period one year ago. The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North Dakota.

The Company’s operating margins of Same-Store Multifamily NOI to Gross Revenues improved by 164 basis points quarter over quarter to 54.96% for the fourth quarter of fiscal year 2016, as compared to the third quarter of fiscal year 2016.

The table below represents Same-Store Multifamily performance for the fourth quarter ending April 30, 2016 compared to the same period one year ago. Excluding the highly impacted energy markets of Minot and Williston, North Dakota, the balance of the same-store portfolio showed improving NOI results year over year.


				FY16Q4		FY16Q4		FY16Q4		4th Quarter Increase (Decrease) From Prior Year’s 4th Quarter
				Weighted		% of		Average						Net		Average		Weighted
	Rentable	Occupancy		Average		Actual		Rental						Operating		Rental		Average
Regions	Units	4/30/2016		Occupancy(1)		NOI		Rate(2)		Revenues		Expenses		Income		Rate		Occupancy
Billings, MT	770	90.8	%	92.0	%	8.3	%	$	909	(1.2)	%	(0.3)	%	(1.8)	%	3.4	%	(4.6)	%
Bismarck, ND	909	90.4	%	89.8	%	11.4	%	$	1,046	(2.2)	%	(1.1)	%	(2.9)	%	1.9	%	(4.1)	%
Grand Forks, ND	1,230	94.9	%	94.1	%	12.2	%	$	908	(1.7)	%	(5.8)	%	2.1	%	(1.4)	%	(0.3)	%
Minneapolis, MN	319	99.1	%	98.6	%	3.3	%	$	910	7.6	%	8.4	%	6.9	%	5.6	%	2.0	%
Omaha, NE	1,370	96.9	%	96.4	%	13.2	%	$	858	5.3	%	5.5	%	5.2	%	0.8	%	4.5	%
Rapid City, SD	270	96.7	%	96.5	%	2.5	%	$	841	3.8	%	17.6	%	(5.6)	%	3.7	%	0.0	%
Rochester, MN	1,104	97.0	%	96.2	%	15.7	%	$	1,075	4.7	%	(3.0)	%	9.5	%	4.2	%	0.5	%
Sioux Falls, SD	969	97.9	%	97.7	%	8.0	%	$	814	4.7	%	6.0	%	3.4	%	4.0	%	0.7	%
St. Cloud, MN	991	96.0	%	94.8	%	7.2	%	$	848	8.3	%	5.5	%	12.3	%	4.5	%	3.8	%
Topeka, KS	1,042	97.0	%	96.9	%	9.8	%	$	767	6.9	%	(3.0)	%	15.1	%	3.6	%	3.3	%
Same Store Subtotals	8,974	95.5	%	95.0	%	91.6	%	$	900	3.2	%	1.2	%	4.8	%	2.5	%	0.6	%
Minot, ND(3)	734	91.1	%	90.6	%	6.2	%	$	920	(22.4)	%	6.9	%	(40.5)	%	(19.6)	%	(2.8)	%
Williston, ND(3)	145	66.2	%	73.1	%	2.2	%	$	1,658	(54.1)	%	(26.0)	%	(64.3)	%	(45.7)	%	(8.4)	%
Same Store Property Totals	9,853	94.8	%	94.1	%	100.0	%	$	912	(1.7)	%	1.0	%	(3.8)	%	(1.6)	%	(0.1)	%

(1)

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

(2)

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

(3)

Denotes markets with high exposure to energy-related industries.

Same-Store Multifamily Results for the Twelve Months Ended April 30, 2016 Compared to the Prior Year Period

Same-Store Multifamily NOI decreased by $2.9 million for the twelve months ended April 30, 2016 compared to the same period one year ago. The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North Dakota.

The Company’s operating margins of Same-Store Multifamily NOI to Gross Revenues decreased by 256 basis points year over year to 54.05% for the twelve months ended April 30, 2016.

The table below represents Same-Store Multifamily performance for the twelve months ended April 30, 2016 compared to the same period one year ago. Excluding the highly impacted energy markets of Minot and Williston, North Dakota, the

iii

balance of the same-store portfolio showed improving NOI results year over year.


				FY16Q		FY16			FY16	Increase (Decrease) From Prior Year
				Weighted		% of			Average					Net		Average		Weighted
	Rentable	Occupancy		Average		Actual			Rental					Operating		Rental		Average
Regions	Units	4/30/2016		Occupancy(1)		NOI			Rate(2)	Revenues		Expenses		Income		Rate		Occupancy
Billings, MT	770	90.8	%	92.8	%	8.0	%	$	899	(1.6)	%	6.0	%	(6.6)	%	2.6	%	(4.2)	%
Bismarck, ND	909	90.4	%	92.5	%	11.7	%	$	1,049	(0.6)	%	10.1	%	(6.3)	%	3.8	%	(4.4)	%
Grand Forks, ND	1,230	94.9	%	94.4	%	12.9	%	$	917	(1.8)	%	(0.5)	%	(2.7)	%	0.8	%	(2.6)	%
Minneapolis, MN	319	99.1	%	98.1	%	3.1	%	$	886	6.6	%	4.6	%	8.5	%	4.1	%	2.5	%
Omaha, NE	1,370	96.9	%	96.3	%	12.7	%	$	863	6.6	%	9.6	%	3.9	%	1.6	%	5.0	%
Rapid City, SD	270	96.7	%	97.0	%	2.5	%	$	829	2.0	%	4.4	%	(0.1)	%	2.2	%	(0.2)	%
Rochester, MN	1,104	97.0	%	96.3	%	14.9	%	$	1,062	5.9	%	0.4	%	9.8	%	4.1	%	1.8	%
Sioux Falls, SD	969	97.9	%	97.5	%	7.6	%	$	803	4.6	%	7.9	%	1.0	%	3.7	%	0.9	%
St. Cloud, MN	991	96.0	%	94.3	%	6.8	%	$	832	4.3	%	7.4	%	0.0	%	3.1	%	1.2	%
Topeka, KS	1,042	97.0	%	96.1	%	9.0	%	$	757	5.3	%	(0.6)	%	10.7	%	2.4	%	2.9	%
Same Store Subtotals	8,974	95.5	%	95.2	%	89.2	%	$	895	3.0	%	4.9	%	1.4	%	2.7	%	0.3	%
Minot, ND(3)	734	91.1	%	90.8	%	8.0	%	$	1,040	(13.2)	%	12.7	%	(27.8)	%	(7.9)	%	(5.3)	%
Williston, ND(3)	145	66.2	%	73.8	%	2.8	%	$	2,051	(42.5)	%	(1.3)	%	(55.5)	%	(28.4)	%	(14.1)	%
Same Store Property Totals	9,853	94.8	%	94.2	%	100.0	%	$	922	(0.5)	%	5.3	%	(5.0)	%	0.4	%	(0.9)	%

(1)

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

(2)

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

(3)

Denotes markets with high exposure to energy-related industries.

In addition to these initiatives to grow the multifamily portfolio through acquisitions and development, the Company has launched a value add program whereby IRET will be committing an estimated $3.5 million per quarter to rehab approximately 1,500 units in fiscal year 2017. Apartments will be remodeled as the leases expire and upgrades will include a variety of new appliances, flooring, lighting, kitchen cabinets, and bathroom upgrades. Management expects these upgrades to range from $7,000 to $13,000 per unit and result in a return on investment of approximately 8% to 10% per year per unit. During fiscal year 2016, under the value add program the Company completed remodeling of 539 units at an average cost of $7,553 with an average return on investment for leased units of 11.3%.

FFO per Share and Unit for the Quarter and Fiscal Year Ended April 30, 2016

		January 31, 2016		January 31, 2015
		Q4 Ended April 30, 2016		Fiscal Year Ended April 30, 2016
FFO per share and unit	$	0.14	$	0.76
Less gain on extinguishment of debt and plus default interest		—		0.19
Less gain on bargain purchase per share and unit		0.02		0.02
FFO per share and unit, excluding gain on extinguishment of debt, default interest and gain on bargain purchase	$	0.12	$	0.55

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


	Same-Store as of		Same-Store as of		All Properties as of		All Properties as of
Segments	April 30, 2016		April 30, 2015		April 30, 2016		4/30/2015
Multifamily	94.8	%	95.1	%	90.8	%	92.0	%
Healthcare	95.6	%	95.3	%	89.4	%	91.5	%

Development Projects in Progress

As of April 30, 2016, the following projects are being developed:

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

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

Development Projects Placed in Service

During the three months ended April 30, 2016 two development projects totaling $74.6 million were placed in service. During the twelve months ended April 30, 2016, seven development projects totaling $211.8 million were placed in service.

The following table reflects the projects placed into service during the twelve months ended April 30, 2016:

Occupancy

Development Cost

Rentable Sq Ft or

as of

Anticipated

Project Name and Location

Segment

Number of Units

April 30, 2016

Same Store Date

Chateau II-Minot, ND

Multifamily

72 units

84.7

14,648

1Q 2019

Edina 6565 France SMC III-Edina, MN(1)

Healthcare

57,624 sq ft

24.5

33,041

1Q 2019

Renaissance Heights-Williston, ND

Multifamily

288 units

43.8

62,514

1Q 2019

Minot Southgate Retail-Minot, ND

Other

7,963 sq ft

2,623

1Q 2019

PrairieCare Medical-Brooklyn Park, MN

Healthcare

70,756 sq ft

100.0

24,440

1Q 2018

Cardinal Point - Grand Forks, ND

Multifamily

251 units

50.9

49,732

1Q 2019

Deer Ridge - Jamestown, ND

Multifamily

163 units

44.2

24,837

1Q 2019

211,835

(1)

Percentage leased or committed as of June 23, 2016, was 88.0%.

Disposition Activity

During the three months ended April 30, 2016, the Company disposed of the following properties:

Eight student housing properties in St. Cloud, MN, for a sales price totaling $5.6 million.

One healthcare property in Omaha, NE, for a sales price of $24.5 million, due to the exercise of the tenant’s purchase option.

One retail property in Minot, ND, for a sales price of $1.7 million.

One parcel of unimproved land in River Falls, WI, for approximately $20,000.

During the twelve months ended April 30, 2016, the Company disposed of 8 multifamily properties, 40 office properties, 2 healthcare properties, 18 retail properties, and 3 parcels of unimproved land for a total sales price of $414.1 million and transferred ownership of 9 office properties pursuant to a deed in lieu transaction.

Liquidity

At April 30, 2016, the Company had $66.7 million cash on hand and $82.5 million available on its line of credit, which matures September 1, 2017.

Quarterly Distribution

On April 1, 2016, the Company paid a quarterly distribution of $0.1300 per common share and unit of IRET Properties. This was the Company’s 180th consecutive distribution. The Company also paid, on March 31, 2016, a quarterly distribution of $0.5156 per share on its Series A preferred shares and a quarterly distribution of $0.4968 per share on its Series B preferred shares.

Subsequent to the end of the fourth quarter of fiscal year 2016, on June 2, 2016, the Board of Trustees declared a regular quarterly distribution of $0.1300 per common share and unit, payable July 1, 2016 to common shareholders and unitholders of record on June 15, 2016.

Also on June 2, 2016, the Board declared a distribution of $0.5156 per share on the Company’s Series A preferred shares, payable June 30, 2016 to Series A preferred shareholders of record on June 15, 2016, and declared a distribution of $0.4968 per share on the Company’s Series B preferred shares, payable June 30, 2016 to Series B preferred shareholders of record on June 15, 2016.

Guidance

For the fiscal year ending April 30, 2017, management expects to report FFO in the range of $0.48 to $0.54 per share/unit. This guidance reflects management’s view of current market conditions, as well as the earnings impact of certain events referenced in this release and discussed during the scheduled fourth quarter and fiscal year 2016 conference call. This guidance does not include the operational or capital impact of any future acquisition, development, disposition, or capital markets activity, including potential transactions discussed as part of the Company’s strategic initiatives. This guidance is also based on management’s assumption of same-store multifamily NOI growth of 2% to 4%. A number of factors could impact the Company’s ability to meet its guidance and assumption, and there can be no assurance that the Company can achieve such results. This guidance and assumption are subject to change.

Conference Call Information

The Conference Call for 4th Quarter Earnings is scheduled for Thursday, June 30, 2016 at 10:00 A.M. Eastern Time. Conference call access information is as follows:

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

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

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

About IRET

The Company is a self-administered, equity real estate investment trust investing in income-producing properties located primarily in the upper Midwest. As of April 30, 2016, it held for investment a portfolio of 146 properties consisting of 99 multifamily properties, consisting of 12,950 units, 31 healthcare properties, and 16 other commercial properties with a total of 2.9 million square feet of leasable space. The Company’s common shares, Series A preferred shares and Series B preferred shares are publicly traded on the New York Stock Exchange (NYSE symbols: IRET, IRETPR and IRETPRB, respectively). The Company’s press releases and supplemental information are available on its website at www.iret.com or by contacting Investor Relations at 203-682-8377.

Supplemental Information

The Company produced the Supplemental Operating and Financial Data for the Quarter Ended April 30, 2016 (“Supplemental Information”), which is available on the Company’s website at www.iret.com.

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

Forward-Looking Statements

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

Such risks, uncertainties and other factors that might cause such differences include, but are not limited to: intentions and

expectations regarding future distributions on common shares and units; fluctuations in interest rates; adverse capital and credit market conditions that might affect the Company’s access to various sources of capital and cost of capital; adequate insurance coverage; the effect of government regulation; delays or inability to obtain necessary governmental permits and authorizations; changes in general and local economic and real estate market conditions; changes in demand for Company properties that may result in lower than expected occupancy and/or rental rates; ability to acquire quality properties in the Company’s targeted markets; ability to successfully dispose of certain assets; competition for tenants from similar competing properties; the Company’s ability to attract and retain skilled personnel; cyber-intrusion; abandonment of development or redevelopment opportunities for which the Company has already incurred costs; delays in completing development, redevelopment and/or lease up of properties and increased costs; and those risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including the Company’s Form 10-K for the fiscal year ended April 30, 2016 and subsequent quarterly reports on Form 10-Q.

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

vii

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)


	(in thousands, except share data)
	April 30, 2016		April 30, 2015
ASSETS
Real estate investments
Property owned	$	1,681,471	$	1,335,687
Less accumulated depreciation		(312,889)		(279,417)
		1,368,582		1,056,270
Development in progress		51,681		153,994
Unimproved land		20,939		25,827
Total real estate investments		1,441,202		1,236,091
Assets held for sale and assets of discontinued operations		220,761		675,764
Cash and cash equivalents		66,698		48,970
Other investments		50		329
Receivable arising from straight-lining of rents, net of allowance of $333 and $222, respectively		7,179		6,504
Accounts receivable, net of allowance of $97 and $439, respectively		1,524		2,390
Real estate deposits		0		2,489
Prepaid and other assets		2,937		3,134
Intangible assets, net of accumulated amortization of $6,230 and $6,112, respectively		1,858		1,388
Tax, insurance, and other escrow		5,450		9,499
Property and equipment, net of accumulated depreciation of $1,058 and $1,374, respectively		1,011		1,027
Goodwill		1,680		1,718
Deferred charges and leasing costs, net of accumulated amortization of $8,716 and $7,524, respectively		9,827		8,534
TOTAL ASSETS	$	1,760,177	$	1,997,837
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
LIABILITIES
Liabilities held for sale and liabilites of discontinued operations	$	77,712	$	401,299
Accounts payable and accrued expenses		39,727		55,540
Revolving line of credit		17,500		60,500
Mortgages payable		817,324		596,965
Construction debt and other		82,130		136,211
TOTAL LIABILITIES		1,034,393		1,250,515
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES		7,522		6,368
EQUITY
Investors Real Estate Trust shareholders’ equity
Series A Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at April 30, 2016 and April 30, 2015, aggregate liquidation preference of $28,750,000)		27,317		27,317
Series B Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 4,600,000 shares issued and outstanding at April 30, 2016 and April 30, 2015, aggregate liquidation preference of $115,000,000)		111,357		111,357
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 121,091,249 shares issued and outstanding at April 30, 2016, and 124,455,624 shares issued and outstanding at April 30, 2015)		922,084		951,868
Accumulated distributions in excess of net income		(442,000)		(438,432)
Total Investors Real Estate Trust shareholders’ equity		618,758		652,110
Noncontrolling interests – Operating Partnership (13,863,575 units at January 31, 2016 and 13,999,725 units at April 30, 2015)		78,484		58,325
Noncontrolling interests – consolidated real estate entities		21,020		30,519
Total equity		718,262		740,954
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	$	1,760,177	$	1,997,837

viii

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)


	(in thousands, except per share data)
		Three Months Ended				Twelve Months Ended
		April 30				April 30
		2016		2015		2016		2015
REVENUE
Real estate rentals		$	44,065	$	40,629	$	170,698	$	159,969
Tenant reimbursement			4,458		4,512		17,622		19,352
TOTAL REVENUE			48,523		45,141		188,320		179,321
EXPENSES
Property operating expenses, excluding real estate taxes			14,907		13,661		58,859		53,535
Real estate taxes			5,617		4,883		20,241		19,602
Depreciation and amortization			13,517		11,180		49,832		42,784
Impairment of real estate investments			2,223		—		5,543		4,663
General and administrative expenses			2,951		2,516		11,267		11,824
Acquisition and investment related costs			397		125		830		362
Other expenses			950		207		2,231		1,647
TOTAL EXPENSES			40,562		32,572		148,803		134,417
Operating income			7,961		12,569		39,517		44,904
Interest expense			(10,062)		(8,972)		(35,768)		(34,447)
Loss on extinguishment of debt			—		—		(106)		—
Interest income			569		557		2,256		2,238
Other income			31		347		317		718
(Loss) income before gain (loss) on sale of real estate and other investments and income from discontinued operations			(1,501)		4,501		6,216		13,413
Gain (loss) on sale of real estate and other investments			8,369		6,904		9,640		6,093
Gain on bargain purchase			3,424		—		3,424		0
Income from continuing operations			10,292		11,405		19,280		19,506
Income from discontinued operations			1,463		2,457		57,322		9,178
NET INCOME			11,755		13,862		76,602		28,684
Net income attributable to noncontrolling interests – Operating Partnership			(1,092)		(908)		(7,032)		(1,526)
Net loss (income) attributable to noncontrolling interests – consolidated real estate entities			340		(2,201)		2,436		(3,071)
Net income attributable to Investors Real Estate Trust			11,003		10,753		72,006		24,087
Dividends to preferred shareholders			(2,878)		(2,878)		(11,514)		(11,514)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS		$	8,125	$	7,875	$	60,492	$	12,573
Earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted		$	.06	$	.05	$	.08	$	.04
Earnings per common share from discontinued operations – Investors Real Estate Trust – basic and diluted			.01		.02		.41		.07
NET INCOME PER COMMON SHARE – BASIC AND DILUTED		$	.07	$	.07	$	.49	$	.11
DIVIDENDS PER COMMON SHARE		$	.13	$	.13	$	.52	$	.52

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO

INVESTORS REAL ESTATE TRUST TO FUNDS FROM OPERATIONS


	(in thousands, except per share amounts)
Three Months Ended April 30,		2016					2015
				Per					Per
			Weighted	Share				Weighted	Share
			Avg Shares	And				Avg Shares	And
	Amount		and Units(1)	Unit(2)			Amount	and Units(1)	Unit(2)
Net income attributable to Investors Real Estate Trust	$	11,003				$	10,753
Less dividends to preferred shareholders		(2,878)					(2,878)
Net income available to common shareholders		8,125	120,943	$	0.07		7,875	123,286	$	0.05
Adjustments:
Noncontrolling interest – Operating Partnership		1,092	15,495				908	14,126
Depreciation and amortization of real property		15,694					18,083
Impairment of real estate investments		2,223					—
Gain on depreciable property sales		(7,910)					(4,890)
FFO applicable to Common Shares and Units(1)(3)	$	19,224	136,438	$	0.14	$	21,976	137,412	$	0.17


		(in thousands, except per share amounts)
Twelve Months Ended April 30,	2016					2015
				Per					Per
			Weighted	Share				Weighted	Share
			Avg Shares	And				Avg Shares	And
	Amount		and Units(1)	Unit(2)		Amount		and Units(1)	Unit(2)
Net income attributable to Investors Real Estate Trust	$	72,006				$	24,087
Less dividends to preferred shareholders		(11,514)					(11,514)
Net income available to common shareholders		60,492	123,094	$	0.49		12,573	118,004	$	0.11
Adjustments:
Noncontrolling interest – Operating Partnership		7,032	14,278				1,526	16,594
Depreciation and amortization of real property		63,789					70,450
Impairment of real estate investments		5,983					6,105
Gain on depreciable property sales		(33,422)					(4,079)
FFO applicable to Common Shares and Units(1)(3)	$	103,874	137,372	$	0.76	$	86,575	134,598	$	0.64

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

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

(3)Excluding gain or loss on extinguishment of debt, default interest and gain on bargain purchase, FFO would have been $15.8 million and $0.12 per Common Share and Unit for the three months ended April 30, 2016 and $75.9 million and $0.55 per Common Share and Unit for the twelve months ended April 30, 2016.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILATION OF NET OPERATING INCOME TO THE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	(in thousands)
Three Months Ended April 30, 2016	Multifamily		Healthcare		All Other		Total
Real estate revenue	$	34,116	$	11,632	$	2,775	$	48,523
Real estate expenses		15,623		4,263		638		20,524
Net operating income	$	18,493	$	7,369	$	2,137		27,999
Depreciation and amortization								(13,517)
Impairment of real estate investments								(2,223)
General and administrative expenses								(2,951)
Acquisition and investment related costs								(397)
Other expenses								(950)
Interest expense								(10,062)
Interest and other income								600
Loss before gain on sale of real estate and other investments, gain on bargain purchase and income from discontinued operations								(1,501)
Gain on sale of real estate and other investments								8,369
Gain on bargain purchase								3,424
Income from continuing operations								10,292
Income from discontinued operations								1,463
Net income							$	11,755


	(in thousands)
Three Months Ended April 30, 2015	Multifamily		Healthcare		All Other		Total
Real estate revenue	$	30,949	$	10,693	$	3,499	$	45,141
Real estate expenses		13,469		4,055		1,020		18,544
Net operating income	$	17,480	$	6,638	$	2,479		26,597
Depreciation and amortization								(11,180)
General and administrative expenses								(2,516)
Acquisition and investment related costs								(125)
Other expenses								(207)
Interest expense								(8,972)
Interest and other income								904
Income before gain on sale of real estate and other investments and income from discontinued operations								4,501
Gain on sale of real estate and other investments								6,904
Income from continuing operations								11,405
Income from discontinued operations								2,457
Net income							$	13,862

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

RECONCILATION OF NET OPERATING INCOME TO THE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	(in thousands)
Twelve Months Ended April 30, 2016	Multifamily		Healthcare		All Other		Total
Real estate revenue	$	131,149	$	45,621	$	11,550	$	188,320
Real estate expenses		60,477		16,021		2,602		79,100
Net operating income	$	70,672	$	29,600	$	8,948		109,220
Depreciation and amortization								(49,832)
Impairment of real estate investments								(5,543)
General and administrative expenses								(11,267)
Acquisition and investment related costs								(830)
Other expenses								(2,231)
Interest expense								(35,768)
Loss on debt extinguishment								(106)
Interest and other income								2,573
Income before gain on sale of real estate and other investments, gain on bargain purchase and income from discontinued operations								6,216
Gain on sale of real estate and other investments								9,640
Gain on bargain purchase								3,424
Income from continuing operations								19,280
Income from discontinued operations								57,322
Net income							$	76,602


	(in thousands)
Twelve Months Ended April, 2015	Multifamily		Healthcare		All Other		Total
Real estate revenue	$	118,526	$	44,153	$	16,642	$	179,321
Real estate expenses		51,172		16,240		5,725		73,137
Net operating income	$	67,354	$	27,913	$	10,917		106,184
Depreciation and amortization								(42,784)
Impairment of real estate investments								(4,663)
General and administrative expenses								(11,824)
Acquisition and investment related costs								(362)
Other expenses								(1,647)
Interest expense								(34,447)
Interest and other income								2,956
Income before loss on sale of real estate and other investments and income from discontinued operations								13,413
Loss on sale of real estate and other investments								6,093
Income from continuing operations								19,506
Income from discontinued operations								9,178
Net income							$	28,684

xii

iret_Ex99_2

Exhibit 99.2

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Supplemental Financial and Operating Data

Table of Contents

April 30, 2016


		Page

Company Background		2

Property Cost by Segment and by State		4

Key Financial Data
Condensed Consolidated Balance Sheets		5
Condensed Consolidated Statements of Operations		6
Funds From Operations		7
Adjusted EBITDA		8

Capital Analysis
Long-Term Mortgage Debt Analysis		9
Long-Term Mortgage Debt Detail		10
Capital Analysis		11

Portfolio Analysis
Same-Store Properties Net Operating Income Summary		12
Net Operating Income Detail		13-16
Same-Store Properties and All Properties Occupancy Levels by Segment		17

Tenant Analysis
Multifamily Summary		18
Commercial Leasing Summary		19-21
10 Largest Commercial Tenants - Based on Annualized Base Rent		23
Commercial Lease Expirations		23

Growth Analysis
Acquisitions and Development Summary		24
Acquisitions and Development Liquidity Profile		25

Definitions		26

Company Background

Fourth Quarter Fiscal 2016

We are a self-administered, equity real estate investment trust (REIT) investing in a portfolio of income-producing properties located primarily in the upper Midwest. Our portfolio consists of multifamily and healthcare segments.

As of April 30, 2016, we held for investment a portfolio of 146 properties consisting of 99 multifamily properties, 31 healthcare properties, and 16 other commercial properties. Our common shares, Series A preferred shares and Series B preferred shares are publicly traded on the New York Stock Exchange (NYSE symbols: IRET, IRETPR and IRETPRB, respectively).

Company Snapshot

(as of April 30, 2016)

Company Headquarters	Minot, North Dakota
Fiscal Year-End	April 30
Reportable Segments	Multifamily and Healthcare
Total Properties Held for Investment	146
Total Units Held for Investment
(multifamily properties)	12,950
Total Square Feet Held for Investment
(commercial properties)	2.9 million
Common Shares Outstanding (thousands)	121,091
Limited Partnership Units Outstanding (thousands)	16,285
Common Share Distribution - Quarter/Annualized	$0.13/$0.52
Dividend Yield	8.6%
Total Capitalization (see p.12 for detail)	$2.0 billion

Investor Information

Board of Trustees

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

Management

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

Corporate Headquarters:

1400 31st Avenue SW, Suite 60

Post Office Box 1988

Minot, North Dakota 58702-1988

Trading Symbol for Common Shares: IRET

Stock Exchange Listing: NYSE

Investor Relations Contact:

Stephen Swett

203-682-8377

IR@iret.com

Common Share Data (NYSE: IRET)


	4th Quarter			3rd Quarter			2nd Quarter			1st Quarter			4th Quarter
	Fiscal Year 2016			Fiscal Year 2016			Fiscal Year 2016			Fiscal Year 2015			Fiscal Year 2015
High Closing Price	$	7.48		$	8.39		$	8.16		$	7.44		$	8.31
Low Closing Price	$	5.97		$	6.24		$	6.51		$	6.93		$	7.09
Average Closing Price	$	6.71		$	7.35		$	7.39		$	7.22		$	7.52
Closing Price at end of quarter	$	6.02		$	6.52		$	8.12		$	7.21		$	7.17
Common Share Distributions—annualized	$	0.52		$	0.52		$	0.52		$	0.52		$	0.52
Closing Dividend Yield - annualized		8.6	%		8.0	%		6.4	%		7.2	%		7.3	%
Closing common shares outstanding (thousands)		121,091			121,034			122,798			125,520			124,456
Closing limited partnership units outstanding (thousands)		16,285			13,864			13,890			13,921			14,000
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)	$	827,004		$	879,535		$	1,109,907		$	1,005,370		$	992,729

Certain statements in these supplemental disclosures are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from projected results. Such risks, uncertainties and other factors include, but are not limited to: intentions and expectations regarding future distributions on our common shares and units, fluctuations in interest rates, the effect of government regulation, the availability of capital, changes in general and local economic and real estate market conditions, competition, our ability to attract and retain skilled personnel, and those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including our Form 10-K for fiscal year 2016. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Fourth Quarter Fiscal 2016

Property Cost by Segment for Properties Held for Investment

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

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INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)


	4/30/2016		1/31/2016		10/31/2015		7/31/2015		4/30/2015
ASSETS
Real estate investments
Property owned	$	1,681,471	$	1,589,921	$	1,552,448	$	1,408,251	$	1,335,687
Less accumulated depreciation		(312,889)		(308,876)		(296,927)		(290,269)		(279,417)
		1,368,582		1,281,045		1,255,521		1,117,982		1,056,270
Development in progress		51,681		78,341		89,843		133,794		153,994
Unimproved land		20,939		22,304		22,485		24,542		25,827
Total real estate investments		1,441,202		1,381,690		1,367,849		1,276,318		1,236,091
Assets held for sale and assets of discontinued operations		220,761		231,956		325,095		664,758		675,764
Cash and cash equivalents		66,698		47,117		55,133		44,770		48,970
Other investments		50		50		329		329		329
Receivable arising from straight-lining of rents, net of allowance		7,179		6,662		6,185		5,905		6,504
Accounts receivable, net of allowance		1,524		2,180		3,015		2,715		2,390
Real estate deposits		0		1,250		444		6,614		2,489
Prepaid and other assets		2,937		3,868		3,243		2,195		3,134
Intangible assets, net of accumulated amortization		1,858		1,590		2,132		1,188		1,388
Tax, insurance, and other escrow		5,450		7,221		6,752		8,227		9,499
Property and equipment, net of accumulated depreciation		1,011		948		897		945		1,027
Goodwill		1,680		1,697		1,697		1,718		1,718
Deferred charges and leasing costs, net of accumulated amortization		9,827		9,580		9,182		8,991		8,534
TOTAL ASSETS	$	1,760,177	$	1,695,809	$	1,781,953	$	2,024,673	$	1,997,837

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
LIABILITIES
Liabilities held for sale and liabilites of discontinued operations	$	77,712	$	89,348	$	223,918	$	387,802	$	401,299
Accounts payable and accrued expenses		39,727		47,636		54,631		59,802		55,540
Revolving line of credit		17,500		17,500		17,500		83,500		60,500
Mortgages payable		817,324		692,788		659,348		599,348		596,965
Construction debt and other		82,130		132,364		120,578		157,973		136,211
TOTAL LIABILITIES		1,034,393		979,636		1,075,975		1,288,425		1,250,515

REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES		7,522		7,244		7,105		6,361		6,368
EQUITY
Investors Real Estate Trust shareholders’ equity
Series A Preferred Shares of Beneficial Interest		27,317		27,317		27,317		27,317		27,317
Series B Preferred Shares of Beneficial Interest		111,357		111,357		111,357		111,357		111,357
Common Shares of Beneficial Interest		922,084		924,658		936,893		957,707		951,868
Accumulated distributions in excess of net income		(442,000)		(434,388)		(455,508)		(452,971)		(438,432)
Total Investors Real Estate Trust shareholders’ equity		618,758		628,944		620,059		643,410		652,110
Noncontrolling interests – Operating Partnership		78,484		58,254		55,957		56,120		58,325
Noncontrolling interests – consolidated real estate entities		21,020		21,731		22,857		30,357		30,519
Total equity		718,262		708,929		698,873		729,887		740,954
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	$	1,760,177	$	1,695,809	$	1,781,953	$	2,024,673	$	1,997,837

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)


	Twelve Months Ended						Three Months Ended
OPERATING RESULTS	4/30/2016			4/30/2015			4/30/2016			1/31/2016			10/31/2015			7/31/2015			4/30/2015
Real estate revenue	$	188,320		$	179,321		$	48,523		$	48,406		$	46,346		$	45,045		$	45,141
Real estate expenses		79,100			73,137			20,524			20,321			19,951			18,304			18,544
Net operating income		109,220			106,184			27,999			28,085			26,395			26,741			26,597
Depreciation/amortization		(49,832)			(42,784)			(13,517)			(12,693)			(12,405)			(11,217)			(11,180)
Impairment of real estate investments		(5,543)			(4,663)			(2,223)			(162)			(1,873)			(1,285)			—
General and administrative expenses		(11,267)			(11,824)			(2,951)			(2,929)			(2,933)			(2,454)			(2,516)
Acquisition and investment related costs		(830)			(362)			(397)			(35)			(391)			(7)			(125)
Other expenses		(2,231)			(1,647)			(950)			(51)			(813)			(417)			(207)
Interest expense		(35,768)			(34,447)			(10,062)			(9,151)			(8,741)			(7,814)			(8,972)
Loss on extinguishment of debt		(106)			—			—			—			(106)			—			—
Interest and other income		2,573			2,956			600			701			665			607			904
Income before income (loss) on sale of real estate and other investments and income (loss) from discontinued operations		6,216			13,413			(1,501)			3,765			(202)			4,154			4,501
Income (loss) on sale of real estate and other investments		9,640			6,093			8,369			1,446			—			(175)			6,904
Gain on bargain purchase		3,424			—			3,424			—			—			—			—
Income from continuing operations		19,280			19,506			10,292			5,211			(202)			3,979			11,405
Income (loss) from discontinued operations		57,322			9,178			1,463			38,232			16,879			748			2,457
Net income	$	76,602		$	28,684		$	11,755		$	43,443		$	16,677		$	4,727		$	13,862

Net income attributable to noncontrolling interest – Operating Partnership		(7,032)			(1,526)			(1,092)			(4,227)			(1,527)			(186)			(908)
Net loss (income) attributable to noncontrolling interests – consolidated real estate entities		2,436			(3,071)			340			581			1,516			(1)			(2,201)
Net income attributable to Investors Real Estate Trust		72,006			24,087			11,003			39,797			16,666			4,540			10,753
Dividends to preferred shareholders		(11,514)			(11,514)			(2,878)			(2,879)			(2,878)			(2,879)			(2,878)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	60,492		$	12,573		$	8,125		$	36,918		$	13,788		$	1,661		$	7,875

Per Share Data
Earnings per common share from continuing operations – Investors Real Estate Trust – basic & diluted	$	0.08		$	0.04		$	0.06		$	0.02		$	(0.01)		$	0.01		$	0.05
Earnings (loss) per common share from discontinued operations – Investors Real Estate Trust – basic & diluted		0.41			0.07			0.01			0.28			0.12			—			0.02
Net income per common share – basic & diluted	$	0.49		$	0.11		$	0.07		$	0.30		$	0.11		$	0.01		$	0.07

Percentage of Revenues
Real estate expenses		42.0	%		40.8	%		42.3	%		42.0	%		43.0	%		40.6	%		41.1	%
Depreciation/amortization		26.5	%		23.9	%		27.9	%		26.2	%		26.8	%		24.9	%		24.8	%
General and administrative expenses		6.0	%		6.6	%		6.8	%		6.1	%		6.3	%		5.4	%		5.6	%
Interest		19.0	%		19.2	%		20.7	%		18.9	%		18.9	%		17.3	%		19.9	%
Income (loss) from discontinued operations		30.4	%		5.1	%		3.0	%		79.0	%		36.4	%		1.7	%		5.4	%
Net income		40.7	%		16.0	%		25.1	%		89.7	%		36.0	%		10.5	%		30.7	%

Ratios
Adjusted EBITDA(1)/Interest expense		2.54	x		2.63	x		2.76	x		2.29	x		2.08	x		2.28	x		2.41	x
Adjusted EBITDA(1)/Interest expense plus preferred distributions		2.10	x		2.20	x		2.23	x		1.92	x		1.74	x		1.95	x		2.05	x

(1)

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

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FUNDS FROM OPERATIONS (unaudited)

(in thousands, except per share and unit data)


	Twelve Months Ended				Three Months Ended
	4/30/2016		4/30/2015		4/30/2016		1/31/2016		10/31/2015		7/31/2015		4/30/2015
Funds From Operations(1)
Net income attributable to Investors Real Estate Trust	$	72,006	$	24,087	$	11,003	$	39,797	$	16,666	$	4,540	$	10,753
Less dividends to preferred shareholders		(11,514)		(11,514)		(2,878)		(2,879)		(2,878)		(2,879)		(2,878)
Net income available to common shareholders		60,492		12,573		8,125		36,918		13,788		1,661		7,875
Adjustments:
Noncontrolling interests – Operating Partnership		7,032		1,526		1,092		4,227		1,527		186		908
Depreciation and amortization of real properyty		63,789		70,450		15,694		14,975		14,860		18,259		18,083
Impairment of real estate investments		5,983		6,105		2,223		162		1,873		1,725		—
(Gain) loss on depreciable property sales	$	(33,422)	$	(4,079)		(7,910)		(1,778)		(23,909)		175		(4,890)
FFO applicable to common shares and Units(2)		103,874		86,575	$	19,224	$	54,504	$	8,139	$	22,006	$	21,976

FFO per share and unit - basic and diluted	$	0.76	$	0.64	$	0.14	$	0.40	$	0.06	$	0.16	$	0.16

Adjusted funds from operations(1)
FFO applicable to common shares and Units	$	103,874	$	86,575	$	19,224	$	54,504	$	8,139	$	22,006	$	21,976
Adjustments:
Tenant improvements at same-store(3) properties		(1,509)		(7,589)		(778)		(383)		(157)		(191)		(2,939)
Leasing costs at same-store properties(3)		(587)		(2,290)		(89)		(102)		(59)		(336)		(684)
Recurring capital expenditures(1)(3)		(5,553)		(6,135)		(825)		(1,406)		(1,713)		(1,636)		(1,342)
Straight-line rents		(859)		12		(238)		(554)		(309)		242		198
Non-real estate depreciation		354		388		93		80		80		101		100
Acquisition costs(4)		253		112		91		9		153		—		112
Default interest		4,683		528		—		1,566		1,567		1,550		528
(Gain) loss on extinguishment of debt		(29,230)		—		—		(36,456)		7,226		—		—
Gain on bargain purchase		(3,424)		—		(3,424)		—		—		—		—
Share-based compensation expense		2,256		2,215		864		787		539		66		280
AFFO applicable to common shares and Units	$	70,258	$	73,816	$	14,918	$	18,045	$	15,466	$	21,802	$	18,229

AFFO per share and unit - basic and diluted	$	0.51	$	0.55	$	0.11	$	0.13	$	0.11	$	0.16	$	0.13

Weighted average shares and units		137,372		134,598		136,438		135,741		138,565		138,806		137,412

(1)

See Definitions on page 27.

(2)

Excluding gain or loss on extinguishment of debt and default interest, FFO would have been $15.8 million and $0.12 per share and unit for the three months ended April 30, 2016 and $75.9 million and $0.55 per share and unit for the twelve months ended April 30, 2016.

(3)

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

(4)

Twelve months ended 4/30/15 and three months ended 7/31/15 and 4/30/15 revised to include acquisition costs.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

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

(in thousands)


	Twelve Months Ended				Three Months Ended
	4/30/2016		4/30/2015		4/30/2016		1/31/2016		10/31/2015		7/31/2015		4/30/2015
Adjusted EBITDA(1)
Net income attributable to Investors Real Estate Trust	$	72,006	$	24,087	$	11,003	$	39,797	$	16,666	$	4,540	$	10,753
Adjustments:
Noncontrolling interests – Operating Partnership		7,032		1,526		1,092		4,227		1,527		186		908
Income before noncontrolling interests – Operating Partnership		79,038		25,613		12,095		44,024		18,193		4,726		11,661
Add:
Interest expense		54,174		59,020		11,475		13,976		13,762		14,961		15,162
(Gain) loss on extinguishment of debt		(29,230)		—		—		(36,456)		7,226		—		—
Depreciation/amortization related to real estate investments		63,998		70,607		15,765		15,024		14,903		18,306		18,133
Amortization related to real estate revenues(2)		146		231		23		31		38		54		50
Impairment of real estate investments		5,983		6,105		2,223		162		1,873		1,725		—
Less:
Interest income		(2,257)		(2,238)		(570)		(566)		(565)		(556)		(557)
(Gain) loss on sale of real estate and other investments		(34,193)		(4,079)		(7,911)		(1,777)		(24,680)		175		(4,890)
Adjusted EBITDA	$	137,659	$	155,259		33,100		34,418		30,750		39,391		39,559

(1)

See Definitions on page 27.

(2)

Included in real estate revenue in the Statement of Operations.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT* ANALYSIS

(in thousands)

Debt Maturity Schedule

Annual Expirations

Total Mortgage Debt*


	Future Maturities of Mortgage Debt(1)
							Weighted		% of
Fiscal Year	Fixed Debt		Variable Debt		Total Debt		Average(2)		Total Debt
2017	$	64,832	$	65,341	$	130,173	3.28	%	14.7	%
2018		17,771		27,982		45,753	3.90	%	5.2	%
2019		34,121		52,210		86,331	3.99	%	9.7	%
2020		101,773		51,268		153,041	5.46	%	17.3	%
2021		130,335		—		130,335	5.03	%	14.7	%
2022		108,805		—		108,805	5.59	%	12.3	%
2023		40,670		—		40,670	4.25	%	4.6	%
2024		64,080		—		64,080	4.27	%	7.2	%
2025		19,365		—		19,365	4.04	%	2.2	%
2026		55,890		—		55,890	3.74	%	6.3	%
Thereafter		51,704		—		51,704	4.12	%	5.8	%
Total maturities	$	689,346	$	196,801	$	886,147	4.54	%	100.0	%

(1)

Includes mortgages on properties held for sale.

(2)

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


	4/30/2016			1/31/2016			10/31/2015			7/31/2015			4/30/2015
Balances Outstanding(1)
Mortgage
Fixed rate	$	689,346		$	682,312		$	920,234		$	1,106,257		$	1,054,455
Variable rate		196,801			89,994			89,826			82,664			69,967
Mortgage total	$	886,147		$	772,306		$	1,010,060		$	1,188,921		$	1,124,422

Weighted Average Interest Rates Secured		4.54	%		4.83	%		5.04	%		5.12	%		5.16	%

(1)

Includes mortgages on properties held for sale.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

LONG-TERM MORTGAGE DEBT* DETAIL AS OF APRIL 30, 2016

(in thousands)


Property	Maturity Date	Fiscal 2017		Fiscal 2018		Fiscal 2019		Fiscal 2020		Thereafter		Total(1)

Multifamily
Pebble Springs – Bismarck, ND	7/1/2016	$	738	$	—	$	—	$	—	$	—	$	738
Southview – Minot, ND	7/1/2016		1,009		—		—		—		—		1,009
Homestead Gardens I – Rapid City, SD(2)	7/11/2016		6,553		—		—		—		—		6,553
Commons at Southgate-Minot, ND	9/1/2016		21,760		—		—		—		—		21,760
Landing at Southgate-Minot, ND	9/1/2016		10,240		—		—		—		—		10,240
Arcata Apartments-Golden Valley, MN	2/15/2017		23,321		—		—		—		—		23,321
Williston Garden - Williston, ND	4/30/2017		7,550		—		—		—		—		7,550
Williston Garden - Williston, ND	4/30/2017		2,520		—		—		—		—		2,520
River Ridge – Bismarck, ND	6/30/2017		—		13,000		—		—		—		13,000
Evergreen II – Isanti, MN	11/1/2017		—		2,020		—		—		—		2,020
Ponds – Sartell, MN	11/1/2017		—		3,749		—		—		—		3,749
Homestead Gardens II - Rapid City, SD	6/1/2018		—		—		3,282		—		—		3,282
Plaza - Minot, ND	8/1/2018		—		—		5,212		—		—		5,212
Greenfield - Omaha, NE	2/1/2019		—		—		3,503		—		—		3,503
Brooklyn Heights - Minot, ND	4/1/2019		—		—		636		—		—		636
Colton Heights - Minot, ND	4/1/2019		—		—		358		—		—		358
Pines - Minot, ND	4/1/2019		—		—		102		—		—		102
Summit Park - Minot, ND	4/1/2019		—		—		882		—		—		882
Terrace Heights - Minot, ND	4/1/2019		—		—		147		—		—		147
Avalon Cove-Rochester, MN	4/5/2019		—		—		25,900		—		—		25,900
Crystal Bay-Rochester, MN	4/5/2019		—		—		8,000		—		—		8,000
French Creek-Rochester, MN	4/5/2019		—		—		3,100		—		—		3,100
Monticello Village - Monticello, MN	5/28/2019		—		—		—		2,901		—		2,901
Rimrock West - Billings, MT	9/1/2019		—		—		—		3,223		—		3,223
Rocky Meadows - Billings, MT	9/1/2019		—		—		—		4,997		—		4,997
Cimarron Hills - Omaha, NE	10/1/2019		—		—		—		4,648		—		4,648
Cottonwood - Bismarck, ND	10/1/2019		—		—		—		15,358		—		15,358
Forest Park - Grand Forks, ND	10/1/2019		—		—		—		7,422		—		7,422
Renaissance Heights I - Williston, ND	10/1/2019		—		—		—		42,221		—		42,221
Evergreen - Isanti, MN	11/1/2019		—		—		—		1,951		—		1,951
Pinehurst - Billings, MT	11/1/2019		—		—		—		164		—		164
Northridge - Bismarck, ND	12/1/2019		—		—		—		6,146		—		6,146
Castlerock - Billings, MT	1/1/2020		—		—		—		6,465		—		6,465
Thomasbrook - Lincoln, NE	1/1/2020		—		—		—		5,793		—		5,793
Westwood Park - Bismarck, ND	1/1/2020		—		—		—		1,916		—		1,916
Kirkwood Manor - Bismarck, ND	2/1/2020		—		—		—		3,204		—		3,204
Brookfield Village - Topeka, KS	3/1/2020		—		—		—		5,124		—		5,124
Crown Colony - Topeka, KS	4/1/2020		—		—		—		7,936		—		7,936
Mariposa - Topeka, KS	4/1/2020		—		—		—		2,872		—		2,872
Sherwood - Topeka, KS	4/1/2020		—		—		—		11,918		—		11,918
Summary of Debt due after Fiscal 2020			—		—		—		—		345,838		345,838
Sub-Total Multifamily		$	73,691	$	18,769	$	51,122	$	134,259	$	345,838	$	623,679


Healthcare
Sartell 2000 23rd St S – Sartell, MN(3)	12/1/2016		662		—		—		—		—		662
Billings 2300 Grant Road – Billings, MT	12/31/2016		980		—		—		—		—		980
Missoula 3050 Great Northern Ave – Missoula, MT	12/31/2016		997		—		—		—		—		997
Edgewood Vista – Fargo, ND(3)	2/25/2017		11,297		—		—		—		—		11,297
Edgewood Vista – Fremont, NE(3)	2/25/2017		528		—		—		—		—		528


Property	Maturity Date	Fiscal 2017		Fiscal 2018		Fiscal 2019		Fiscal 2020		Thereafter		Total (1)
Edgewood Vista – Hastings, NE(3)	2/25/2017		544		—		—		—		—		544
Edgewood Vista – Hermantown I, MN(3)	2/25/2017		14,576		—		—		—		—		14,576
Edgewood Vista – Kalispell, MT(3)	2/25/2017		545		—		—		—		—		545
Edgewood Vista – Missoula, MT(3)	2/25/2017		774		—		—		—		—		774
Edgewood Vista – Omaha, NE(3)	2/25/2017		345		—		—		—		—		345
Edgewood Vista – Virginia, MN(3)	2/25/2017		12,399		—		—		—		—		12,399
High Pointe Health Campus – Lake Elmo, MN	4/1/2017		7,500		—		—		—		—		7,500
Edgewood Vista – Billings, MT(3)	4/10/2017		1,723		—		—		—		—		1,723
Edgewood Vista – East Grand Forks, MN(3)	4/10/2017		2,625		—		—		—		—		2,625
Edgewood Vista – Sioux Falls, SD(3)	4/10/2017		987		—		—		—		—		987
St Michael Clinic – St. Michael, MN	4/1/2018		—		1,736		—		—		—		1,736
PrairieCare Medical - Brooklyn Park, MN	4/10/2018		—		14,982		—		—		—		14,982
Garden View Medical – St. Paul, MN	6/30/2018		—		—		6,890		—		—		6,890
Ritchie Medical Plaza – St. Paul, MN	6/30/2018		—		—		8,320		—		—		8,320
Spring Creek - American Falls - American Falls, ID(3)	9/1/2018		—		—		1,955		—		—		1,955
Spring Creek - Eagle - Eagle, ID(3)	9/1/2018		—		—		1,799		—		—		1,799
Spring Creek - Meridian - Meridian, ID(3)	9/1/2018		—		—		2,972		—		—		2,972
Spring Creek - Soda Springs - Soda Springs, ID(3)	9/1/2018		—		—		703		—		—		703
Health East St John & Woodwinds - Maplewood & Woodbury, MN	2/1/2019		—		—		5,654		—		—		5,654
Denfeld Clinic - Duluth, MN	8/1/2019		—		—		—		1,308		—		1,308
Gateway Clinic - Sandstone, MN	8/1/2019		—		—		—		757		—		757
Mariner Clinic - Superior, WI	8/1/2019		—		—		—		1,657		—		1,657
Pavilion I - Duluth, MN	8/1/2019		—		—		—		4,366		—		4,366
Pavilion II - Duluth, MN	8/1/2019		—		—		—		8,034		—		8,034
Wells Clinic - Hibbing, MN	8/1/2019		—		—		—		1,156		—		1,156
Summary of Debt due after Fiscal 2020			—		—		—		—		121,384		121,384
Sub-Total Healthcare		$	56,482	$	16,718	$	28,293	$	17,278	$	121,384	$	240,155

All Other
Urbandale 3900 106th Street – Urbandale, IA	7/5/2017		—		10,266		—		—		—		10,266
Plaza 16 – Minot, ND	8/1/2018		—		—		6,916		—		—		6,916
Lexington Commerce Center - Eagan, MN	2/1/2020		—		—		—		1,504		—		1,504
Summary of Debt due after Fiscal 2020			—		—		—		—		3,627		3,627
Sub-Total All Other		$	—	$	10,266	$	6,916	$	1,504	$	3,627	$	22,313

Total		$	130,173	$	45,753	$	86,331	$	153,041	$	470,849	$	886,147

* Mortgage debt does not include our multi-bank line of credit or construction loans. The line of credit has a maturity date of September 1, 2017. As of April 30, 2016, we had borrowings of $17.5 million outstanding under this line. Construction loans and other debt totaled $82.1 million as of April 30, 2016.

(1)Totals are principal balances as of April 30, 2016.

(2)Mortgage was paid off subsequent to April 30, 2016.

(3)Property is classified as held for sale at April 30, 2016.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CAPITAL ANALYSIS

(in thousands, except per share and unit amounts)


	Three Months Ended
	4/30/2016		1/31/2016		10/31/2015		7/31/2015		4/30/2015
Equity Capitalization
Common shares outstanding		121,091		121,034		122,798		125,520		124,456
Operating partnership (OP) units outstanding		16,285		13,864		13,890		13,921		14,000
Total common shares and OP units outstanding		137,376		134,898		136,688		139,441		138,456
Market price per common share (closing price at end of period)	$	6.02	$	6.52	$	8.12	$	7.21	$	7.17
Equity capitalization-common shares and OP units	$	827,004	$	879,535	$	1,109,907	$	1,005,370	$	992,730
Recorded book value of preferred shares	$	138,674	$	138,674	$	138,674	$	138,674	$	138,674
Total equity capitalization	$	965,678	$	1,018,209	$	1,248,581	$	1,144,044	$	1,131,404

Debt Capitalization
Total debt	$	993,323	$	940,294	$	1,007,825	$	1,211,621	$	1,178,851
Total capitalization	$	1,959,001	$	1,958,503	$	2,256,406	$	2,355,665	$	2,310,255

Total debt to total capitalization		0.51:1		0.48:1		0.45:1		0.51:1		0.51:1


	Twelve Months Ended						Three Months Ended
	4/30/2016			4/30/2015			4/30/2016			1/31/2016			10/31/2015			7/31/2015			4/30/2015
Earnings to fixed charges(1)		1.29	x		1.18	x		1.85	x		1.32	x		1.02	x		1.10	x		1.48	x
Earnings to combined fixed charges and preferred distributions(1)		1.08	x		1.00	x		1.49	x		1.11	x		(2)	x		(3)	x		1.26	x
Debt service coverage ratio(1)		1.75	x		1.75	x		1.86	x		1.65	x		1.63	x		1.63	x		1.64	x

Distribution Data
Common shares and units outstanding at record date		134,897			137,596			134,897			135,408			139,540			138,576			137,596
Total common distribution paid on shares and units	$	71,290		$	69,854		$	17,536		$	17,603		$	18,136		$	18,015		$	17,879
Common distribution per share and unit	$	0.52		$	0.52		$	0.13		$	0.13		$	0.13		$	0.13		$	0.13
Payout ratio (FFO per share and unit basis)(1)		68.4	%		81.3	%		92.9	%		32.5	%		216.7	%		81.3	%		81.3	%
Payout ratio (AFFO per share and unit basis)(1)		102.0	%		94.5	%		118.2	%		100	%		118.2	%		81.3	%		100	%

(1)

See Definitions on page 27.

(2)

Earnings were inadequate to cover combined fixed charges and preferred distributions by $2.6 million. Excluding non-cash asset impairment and loss on sale charges of $1.9 million in the three months ended October 31, 2015, the ratio of earnings to combined fixed charges and preferred distributions would have been .96x for the three months ended October 31, 2015.

(3)

Earnings were inadequate to cover combined fixed charges and preferred distributions by $1.2 million. Excluding non-cash asset impairment and loss on sale charges of $1.5 million in the three months ended July 31, 2015, the ratio of earnings to combined fixed charges and preferred distributions would have been 1.01x for the three months ended October 31, 2015.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

SAME-STORE PROPERTIES NET OPERATING INCOME SUMMARY

(in thousands)


	Same Store Properties						Same Store Properties
	Three Months Ended						Twelve Months Ended
	April 30						April 30
					%						%
Segment	2016		2015		Change		2016		2015		Change
Multi-Family Residential	$	13,946	$	14,496	(3.8)	%	$	55,508	$	58,444	(5.0)	%
Healthcare		6,424		6,298	2.0	%		26,174		25,676	1.9	%
All Other		1,753		1,847	(5.1)	%		7,430		6,600	12.6	%
	$	22,123	$	22,641	(2.3)	%	$	89,112	$	90,720	(1.8)	%

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)


	Three Months Ended April 30, 2016
	Reporting Segments
							Corporate and
	Multifamily		Healthcare		All Other		Other		Total
Real estate rental revenue
Same-store	$	25,377	$	10,241	$	2,274	$	—	$	37,892
Non-same-store		8,739		1,391		501		—		10,631
Total		34,116		11,632		2,775		—		48,523

Real estate expenses
Same-store		11,431		3,817		521		—		15,769
Non-same-store		4,192		446		117		—		4,755
Total		15,623		4,263		638		—		20,524

Net operating income (NOI)
Same-store		13,946		6,424		1,753		—		22,123
Non-same-store		4,547		945		384		—		5,876
Net operating income	$	18,493	$	7,369	$	2,137	$	—	$	27,999

Reconciliation of NOI to net income (loss) available to common shareholders
Depreciation/amortization	$	(9,418)	$	(3,109)	$	(913)	$	(77)	$	(13,517)
Impairment of real estate investments		—		(1,898)				(325)		(2,223)
General and administrative expenses		—		—		—		(2,951)		(2,951)
Acquisition and investment related costs		—		—		—		(397)		(397)
Other expenses		—		—		—		(950)		(950)
Interest expense		(7,365)		(2,115)		(368)		(214)		(10,062)
Interest and other income		—		—		—		600		600
Income before gain (loss) on sale of real estate and other investments, gain on bargain purchase and income from discontinued operations		1,710		247		856		(4,314)		(1,501)
Gain (loss) on sale of real estate and other investments		(32)		7,982		420		(1)		8,369
Gain on bargain purchase		3,424		—		—		—		3,424
Income (loss) from continuing operations		5,102		8,229		1,276		(4,315)		10,292
Income from discontinued operations		—		1,320		143		—		1,463
Net income (loss)		5,102		9,549		1,419		(4,315)		11,755
Net income attributable to noncontrolling interests – Operating Partnership		—		—		—		(1,092)		(1,092)
Net loss attributable to noncontrolling interests – consolidated real estate entities		—		—		—		340		340
Net income (loss) attributable to Investors Real Estate Trust		5,102		9,549		1,419		(5,067)		11,003
Dividends to preferred shareholders		—		—		—		(2,878)		(2,878)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	5,102	$	9,549	$	1,419	$	(7,945)	$	8,125

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)


	Three Months Ended April 30, 2015
	Reporting Segments
							Corporate and
	Multifamily		Healthcare		All Other		Other		Total
Real estate rental revenue
Same-store	$	25,818	$	10,138	$	2,300	$	—	$	38,256
Non-same-store		5,131		555		1,199		—		6,885
Total		30,949		10,693		3,499		—		45,141

Real estate expenses
Same-store		11,322		3,840		453		—		15,615
Non-same-store		2,147		215		567		—		2,929
Total		13,469		4,055		1,020		—		18,544

Net operating income (NOI)
Same-store		14,496		6,298		1,847		—		22,641
Non-same-store		2,984		340		632		—		3,956
Net operating income	$	17,480	$	6,638	$	2,479	$	—	$	26,597

Reconciliation of NOI to net income (loss) available to common shareholders
Depreciation/amortization	$	(7,519)	$	(2,650)	$	(926)	$	(85)	$	(11,180)
General and administrative expenses		—	$	—	$	—		(2,516)		(2,516)
Acquisition and investment related costs		—		—		—		(125)		(125)
Other expenses		—		—		—		(207)		(207)
Interest expense		(5,921)		(1,994)		(1,078)		21		(8,972)
Interest and other income		—		—		—		904		904
Income (loss) before gain on sale of real estate and other investments and (loss) income from discontinued operations		4,040		1,994		475		(2,008)		4,501
Gain on sale of real estate and other investments		—		4,109		3,141		(346)		6,904
Income (loss) from continuing operations		4,040		6,103		3,616		(2,354)		11,405
(Loss) income from discontinued operations		—		—		2,457		—		2,457
Net income (loss)		4,040		6,103		6,073		(2,354)		13,862
Net income attributable to noncontrolling interests – Operating Partnership		—		—		—		(908)		(908)
Net income attributable to noncontrolling interests – consolidated real estate entities		—		—		—		(2,201)		(2,201)
Net income (loss) attributable to Investors Real Estate Trust		4,040		6,103		6,073		(5,463)		10,753
Dividends to preferred shareholders		—		—		—		(2,878)		(2,878)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	4,040		6,103		6,073		(8,341)		7,875

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)


	Twelve Months Ended April 30, 2016
	Reporting Segments
							Corporate and
	Multifamily		Healthcare		All Other		Other		Total
Real estate rental revenue
Same-store	$	102,694	$	40,715	$	9,601	$	—	$	153,010
Non-same-store		28,455		4,906		1,949		—		35,310
Total		131,149		45,621		11,550		—		188,320

Real estate expenses
Same-store		47,186		14,541		2,171		—		63,898
Non-same-store		13,291		1,480		431		—		15,202
Total		60,477		16,021		2,602		—		79,100

Net operating income (NOI)
Same-store		55,508		26,174		7,430		—		89,112
Non-same-store		15,164		3,426		1,518		—		20,108
Net operating income	$	70,672	$	29,600	$	8,948	$	—	$	109,220

Reconciliation of NOI to net income (loss) available to common shareholders
Depreciation/amortization	$	(34,396)	$	(11,496)	$	(3,648)	$	(292)	$	(49,832)
Impairment of real estate investments		(1,873)		(1,898)		—		(1,772)		(5,543)
General and dministrative expenses		—	$	—	$	—		(11,267)		(11,267)
Acquisition and investment related costs		—		—		—		(830)		(830)
Other expenses		—		—		—		(2,231)		(2,231)
Interest expense		(26,742)		(8,607)		(1,584)		1,165		(35,768)
Loss on extinguishment of debt		(93)		—		(13)		—		(106)
Interest and other income		—		—		—		2,573		2,573
Income (loss) before gain (loss) on sale of real estate, gain on bargain purchase and other investments and (loss) income from discontinued operations		7,568		7,599		3,703		(12,654)		6,216
Gain (loss) on sale of real estate and other investments		(32)		7,982		1,705		(15)		9,640
Gain on bargain purchase		3,424		—		—		—		3,424
Income (loss) from continuing operations		10,960		15,581		5,408		(12,669)		19,280
(Loss) income from discontinued operations		—		5,926		51,396		—		57,322
Net income (loss)		10,960		21,507		56,804		(12,669)		76,602
Net income attributable to noncontrolling interests – Operating Partnership		—		—		—		(7,081)		(7,081)
Net loss attributable to noncontrolling interests – consolidated real estate entities		—		—		—		2,436		2,436
Net income (loss) attributable to Investors Real Estate Trust		10,960		21,507		56,804		(17,314)		71,957
Dividends to preferred shareholders		—		—		—		(11,514)		(11,514)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	10,960	$	21,507	$	56,804	$	(28,828)	$	60,443

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NET OPERATING INCOME DETAIL

(in thousands)


	Twelve Months Ended April 30, 2015
	Reporting Segments
							Corporate and
	Multifamily		Healthcare		All Other		Other		Total
Real estate rental revenue
Same-store	$	103,238	$	40,885	$	9,299	$	—	$	153,422
Non-same-store		15,288		3,268		7,343		—		25,899
Total		118,526		44,153		16,642		—		179,321

Real estate expenses
Same-store		44,794		15,209		2,699		—		62,702
Non-same-store		6,378		1,031		3,026		—		10,435
Total		51,172		16,240		5,725		—		73,137

Net operating income (NOI)
Same-store		58,444		25,676		6,600		—		90,720
Non-same-store		8,910		2,237		4,317		—		15,464
Net operating income	$	67,354	$	27,913	$	10,917	$	—	$	106,184

Reconciliation of NOI to net income (loss) available to common shareholders
Depreciation/amortization	$	(26,638)	$	(10,855)	$	(4,963)	$	(328)	$	(42,784)
Impairment of real estate investments		—		—		(3,369)		(1,294)		(4,663)
General and dministrative expenses		—	$	—	$	—		(11,824)		(11,824)
Acquisition and investment related costs		—		—		—		(362)		(362)
Other expenses		—		—		—		(1,647)		(1,647)
Interest expense		(22,782)		(8,898)		(3,122)		355		(34,447)
Interest and other income		—		—		—		2,956		2,956
Income (loss) before gain (loss) on sale of real estate and other investments and (loss) income from discontinued operations		17,934		8,160		(537)		(12,144)		13,413
Gain (loss) on sale of real estate and other investments		1,418		4,109		2,107		(1,541)		6,093
Income (loss) from continuing operations		19,352		12,269		1,570		(13,685)		19,506
(Loss) income from discontinued operations		—		6,832		2,346		—		9,178
Net income (loss)		19,352		19,101		3,916		(13,685)		28,684
Net income attributable to noncontrolling interests – Operating Partnership		—		—		—		(1,526)		(1,526)
Net income attributable to noncontrolling interests – consolidated real estate entities		—		—		—		(3,071)		(3,071)
Net income (loss) attributable to Investors Real Estate Trust		19,352		19,101		3,916		(18,282)		24,087
Dividends to preferred shareholders		—		—		—		(11,514)		(11,514)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	19,352	$	19,101	$	3,916	$	(29,796)	$	12,573

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

SAME-STORE PROPERTIES AND ALL PROPERTIES OCCUPANCY LEVELS BY SEGMENT

April 30, 2016 vs. April 30, 2015


Segments	Same-Store Properties				All Properties
	April 30, 2016		April 30, 2015		April 30, 2016		April 30, 2015
Multifamily	94.8	%	95.1	%	90.8	%	92.0	%
Healthcare	95.6	%	95.3	%	89.4	%	91.5	%

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

MULTIFAMILY SUMMARY(1)


	Three Months Ended
	04/30/16				01/31/16			10/31/15			07/31/15			04/30/15
Number of Units
Same-Store		9,853			9,877			9,877			10,268			9,895
Non-Same-Store		3,121			2,915			2,783			1,759			1,949
All Properties		12,974			12,792			12,660			12,027			11,844

Average Investment Per Unit
Same-Store	$	72,986		$	72,696		$	72,308		$	69,992		$	66,741
Non-Same-Store		161,851			142,111			134,136			149,281			146,337
All Properties	$	94,092		$	88,228		$	84,701		$	81,180		$	79,617

Average Scheduled Rent(2) per Unit
Same-Store	$	871		$	877		$	885		$	861		$	843
Non-Same-Store		1,244			1,229			1,218			1,445			1,452
All Properties	$	960		$	956		$	952		$	944		$	942

Total Receipts per Unit(3)
Same-Store	$	859		$	861		$	877		$	848		$	838
Non-Same-Store		949			911			826			1,037			1,062
All Properties	$	880		$	872		$	866		$	875		$	874

Total Recurring Capital Expenditures(2) per Unit	$	84		$	142		$	173		$	159		$	136

Occupancy
Same-Store		94.8	%		94.9	%		95.4	%		93.5	%		94.7	%
Non-Same-Store		78.4	%		78.1	%		79.5	%		77.7	%		78.6	%
All Properties		90.8	%		91.1	%		91.9	%		91.2	%		92.0	%

Operating Expenses as a % of Scheduled Rent
Same-Store		44.4	%		45.9	%		47.1	%		44.4	%		44.2	%
Non-Same-Store		36.6	%		34.0	%		39.9	%		31.9	%		30.0	%
All Properties		42.0	%		42.4	%		45.2	%		41.7	%		40.7	%

(1)

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

(2)

See Definitions on page 27.

(3)

Includes vacant units.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING SUMMARY (Same-Store Properties)

Commercial Leasing Activity

During fiscal year 2016, we executed new and renewal leases for our same-store healthcare properties on 33,785 square feet for the three months ended April 30, 2016 and 201,989 square feet for the twelve months ended April 30, 2016. Due to our leasing efforts, occupancy in our same-store healthcare portfolio has remained strong at 95.6% as of April 30, 2016, compared to 95.3% as of April 30, 2015.

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

Three Months Ended April 30, 2016 and 2015


					Total
	Square Feet of		Square Feet of		Square Feet of
	New Leases(1)		Leases Renewed(1)		Leases Executed(1		Occupancy
Segments	2016	2015	2016	2015	2016	2015	2016		2015
Healthcare	361	3,174	33,424	1,270	33,785	4,444	95.6	%	95.3	%

(1)

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

Twelve Months Ended April 30, 2016 and 2015


					Total
	Square Feet of		Square Feet of		Square Feet of
	New Leases(1)		Leases Renewed(1)		Leases Executed(1)		Occupancy
Segments	2016	2015	2016	2015	2016	2015	2016		2015
Healthcare	45,446	21,153	156,543	109,661	201,989	130,814	95.6	%	95.3	%

(1)

New Leases

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

Three Months Ended April 30, 2016 and 2015


									Estimated Tenant				Leasing
	Square Feet of		Average Term		Average				Improvement Cost per				Commissions per
	New Leases(1		in Years		Effective Rent(2				Square Foot(1)				Square Foot(1
Segments	2016	2015	2016	2015		2016		2015		2016		2015		2016		2015
Healthcare	361	3,174	0.5	0.3	$	19.28	$	3.78	$	0.00	$	0.00	$	0.00	$	0.00

(1)

(2)

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

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING SUMMARY (Same-Store Properties)

Twelve Months Ended April 30, 2016 and 2015


									Estimated Tenant				Leasing
	Square Feet of		Average Term		Average				Improvement Cost per				Commissions per
	New Leases(1)		in Years		Effective Rent(2)				Square Foot(1)				Square Foot(1)
	2016	2015	2016	2015	2016		2015		2016		2015		2016		2015
Healthcare	45,446	21,153	6.6	5.4	$	19.97	$	17.57	$	12.99	$	31.58	$	3.24	$	5.81

(1)

(2)

Our ability to maintain or increase occupancy rates is a principal driver of maintaining and increasing the average effective rents in our healthcare segment. The increase in the average effective rental rates of new leases executed in our healthcare segment in fiscal year 2016 when compared to new leases executed in the prior year is due to the signing of a 3,174 square foot lease for storage space at our St. Paul, Minnesota Ritchie Medical Plaza property for $3.78 per square foot in fiscal year 2015. Absent this transaction, the average effective rental rate for leases executed in our healthcare segment in fiscal year 2015 would have been $20.00 per square foot.

Lease Renewals

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

Three Months Ended April 30, 2016 and 2015


													Estimated
									Weighted Average				Tenant Improvement				Leasing
	Square Feet of Leases		Percent of Expiring				Average Term		Growth (Decline)				Cost per Square				Commissions per
	Renewed(1)		Leases Renewed(2)				in Years		in Effective Rents(3)				Foot(1)				Square Foot(1)
	2016	2015	2016		2015		2016	2015	2016		2015		2016		2015		2016		2015
Healthcare	33,424	1,270	95.8	%	72.9	%	4.2	3.0	5.4	%	(0.1)	%	$	10.20	$	0.00	$	1.97	$	3.15

(1)

(2)

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

(3)

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

Twelve Months Ended April 31, 2016 and 2015


													Estimated
									Weighted Average				Tenant Improvement				Leasing
	Square Feet of Leases		Percent of Expiring				Average Term		Growth (Decline)				Cost per Square				Commissions per
	Renewed(1)		Leases Renewed(2)				in Years		in Effective Rents(3)				Foot(1)				Square Foot(1
	2016	2015	2016		2015		2016	2015	2016		2015		2016		2015		2016		2015
Healthcare	156,543	109,661	92.2	%	73.2	%	4.7	5.8	5.7	%	(3.5)	%	$	9.40	$	10.87	$	2.65	$	1.56

(1)

(2)

(3)

The increase in the average growth in effective rents for the healthcare segment in fiscal year 2016 when compared to the prior fiscal year is due to a 45,081 square foot lease renewal executed with the existing single tenant at our Pavilion I property in Duluth, Minnesota in fiscal year 2015. This lease was renewed at a lower rate than the previous expiring lease due to very low leasing transaction costs associated with the lease renewal. Absent this transaction, the weighted average growth rate in effective rents for fiscal year 2015 would have been 3.8%.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASING SUMMARY (Same-Store Properties)

Lease Expirations

Our ability to maintain and improve occupancy rates, and base rents, primarily depends upon our continuing ability to re-lease expiring space. The following table reflects the in-service portfolio lease expiration schedule of our healthcare properties, including square footage and annualized base rent for expiring leases, as of April 30, 2016.


			Percentage of Total		Annualized Base		Percentage of Total
		Square Footage of	Commercial Segments		Rent of Expiring		Commercial Segments
Fiscal Year of Lease Expiration	# of Leases	Expiring Leases(2)	Leased Square Footage		Leases at Expiration(3)		Annualized Base Rent
2017(1)	42	128,903	9.6	%	$	2,489,085	8.4	%
2018	19	179,143	13.3	%		4,400,887	15.0	%
2019	17	206,208	15.3	%		4,159,949	14.2	%
2020	13	68,513	5.1	%		1,426,988	4.9	%
2021	22	109,019	8.1	%		2,310,744	7.9	%
2022	13	67,243	5.0	%		1,223,686	4.2	%
2023	11	52,511	3.9	%		847,350	2.9	%
2024	25	154,575	11.5	%		3,562,151	12.2	%
2025	5	76,691	5.7	%		1,661,344	5.7	%
2026	8	99,024	7.4	%		1,716,891	5.9	%
Thereafter	14	202,534	15.1	%		5,476,247	18.7	%
Totals	189	1,344,364	100.0	%	$	29,275,322	100.0	%

(1)

Includes month-to-month leases. As of April 30, 2016, month-to-month leases accounted for 20,687 square feet.

(2)

Assuming that none of the tenants exercise renewal or termination options, and including leases renewed prior to expiration. Also excludes 1,361 square feet of space occupied by us.

(3)

Annualized Base Rent is monthly scheduled rent as of April 1, 2016, multiplied by 12.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

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

as of April 30, 2016


			% of Total
		Average	Commercial			% of Aggregate
		Remaining	Segments’		Aggregate	Occupied
	Number of	Lease Term	Minimum		Rentable	Square
Tenant	Properties	in Months	Rents		Square Feet	Feet
Affiliates of Edgewood Vista	33	53	28.4	%	1,521,147	35.3	%
Fairview Health Services	8	52	7.2	%	240,243	5.6	%
St. Luke’s Hospital of Duluth, Inc.	5	96	6.3	%	186,331	4.3	%
PrairieCare Medical LLC	2	228	4.3	%	100,292	2.3	%
HealthEast Care System	1	34	3.4	%	114,316	2.7	%
Quality Manufacturing Corp	1	81	2.0	%	427,798	9.9	%
Westrock CP LLC	1	112	1.8	%	195,075	4.5	%
Allina Health	4	47	1.6	%	56,306	1.3	%
Children’s Hospitals & Clinics	3	58	1.6	%	51,088	1.2	%
Noran Neurological Clinic	1	264	1.4	%	38,506	0.9	%
Total/Weighted Average		64	58.0	%	2,931,102	68.0	%

(1)See Definitions on page 27.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

COMMERCIAL LEASE EXPIRATIONS

as of April 30, 2016


	(dollars in thousands except average rental rates)
							Average		% of
	Number of	Rentable	% of Rentable		Annualized		Rental		Annualized
Fiscal Year	Leases	Square Feet(1)	Square Feet		Rent(2)		Rate		Base Rent
Healthcare
2017 (3)	42	128,903	9.6	%	$	2,489	$	19.31	8.5	%
2018	19	179,143	13.3	%		4,401		24.57	15.0	%
2019	17	206,208	15.4	%		4,160		20.17	14.2	%
2020	13	68,513	5.1	%		1,427		20.83	4.9	%
2021	22	109,019	8.1	%		2,310		21.19	7.9	%
2022 and thereafter	76	652,578	48.5	%		14,488		22.20	49.5	%
	189	1,344,364	100.0	%	$	29,275	$	21.78	100.0	%

(1)Excludes 1,361 square feet of space occupied by us.

(2)Annualized Base Rent is monthly scheduled rent as of April 1, 2016 (cash basis), multiplied by 12.

(3)Includes month-to-month leases. As of April 30, 2016 month-to-month leases accounted for 20,687 square feet.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

FISCAL 2016 ACQUISITIONS AND DEVELOPMENT SUMMARY

as of April 30, 2016

(dollars in thousands)

Acquisitions


					Occupancy		January 31,
			Acquisition	Square	At		2016		Acquisition
Property	Location	Segment	Date	Feet/Units	Acquisition		Occupancy		Cost
Lakeside Medical Plaza	Omaha, NE	Healthcare	8/20/15	27,819	100	%	100	%	$	6,500
Gardens	Grand Forks, ND	Multifamily	9/10/15	74	36.5	%	100.0	%		9,250
GrandeVille at Cascade Lake	Rochester, MN	Multifamily	10/29/15	276	94.6	%	74.6	%		56,000
Avalon Cove	Rochester, MN	Multifamily	3/22/16	187	98.4	%	95.7	%		36,250
Cascade Shores	Rochester, MN	Multifamily	3/22/16	90	96.7	%	93.3	%		18,500
Crystal Bay	Rochester, MN	Multifamily	3/22/16	76	97.4	%	94.7	%		12,000
French Creek	Rochester, MN	Multifamily	3/22/16	40	100.0	%	100.0	%		5,000
			Total Sq Ft	27,819					$	143,500
			Total Units	743

Developments Placed in Service


				Rentable	Occupancy at		Occupancy		Development
			Date Placed in	Square	Date Placed in		as of		Cost as of
Property(1)	Location	Segment	Service	Feet/Units	Service		April 30, 2016		April 30, 2016
Chateau II	Minot, ND	Multifamily	6/1/15	72	27.8	%	84.7	%	$	14,648
Edina 6565 France SMC III(2)	Edina, MN	Healthcare	6/1/15	57,624	24.5	%	24.5	%		33,041
Renaissance Heights(3)	Williston, ND	Multifamily	7/27/15	288	42.4	%	43.8	%		62,514
PrairieCare Medical	Brooklyn Park, MN	Healthcare	9/8/15	70,756	100.0	%	100.0	%		24,440
Minot Southgate Retail	Minot, ND	Other	10/1/15	7,963	—	%	—	%		2,623
Deer Ridge	Jamestown, ND	Multifamily	2/22/16	163	33.1	%	50.9	%		24,837
Cardinal Point	Grand Forks, ND	Multifamily	3/18/16	251	42.2	%	44.2	%		49,732
			Total Sq Ft	136,343					$	211,835
			Total Units	774

(1)

Development projects that are placed in service in phases are excluded from this table until the entire project has been placed in service. See Developments in Progress for additional information on the 71 France project, which was partially placed in service during the twelve months ended April 30, 2016.

(2)

Percentage leased or committed as of June 23, 2016 was 88.0%.

(3)

We are currently an approximately 70.0% partner in the joint venture entity constructing this project; the anticipated total cost amount given is the total cost to the joint venture entity.

Developments in Progress

(in fiscal years)

Percentage

(in thousands)

Anticipated

Leased

Anticipated

Costs as of

Construction

Project Name and Location

Location

Planned Segment

Number of Units

or Committed

Total Cost(1)

April 30, 2016

Completion

71 France(2)

Edina, MN

Multifamily

241 units

49.4

73,290

71,727

1Q 2017

Monticello Crossings

Monticello, MN

Multifamily

202 units

5.5

31,784

17,507

2Q 2017

Other

n/a

3,729

n/a

105,074

92,963

(1)

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

(2)

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

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

ACQUISITIONS AND DEVELOPMENT LIQUIDITY PROFILE

as of April 30, 2016

(in millions)


Sources of Liquidity			Liquidity Needs
Liquidity Source	Amount		Liquidity Need	Amount
Cash on balance sheet as of 4/30/16(1)	$	67	Development	$	19
Line of credit availability(2)	$	82	Acquisitions	$	—
Disposition proceeds(3)	$	13
Construction loan proceeds	$	26
Total Potential Liquidity	$	188	Total Liquidity Needs	$	19
Excess Liquidity / (Need)	$	169

Capital Sources
FY2016			FY2015
	Proceeds			Proceeds
Capital Source	Generated		Capital Source	Generated
Sale of common shares under dividend reinvestment and share purchase plan	$	1	Sale of common shares under dividend reinvestment and share purchase plan	$	39
Proceeds from sales of real estate and discontinued operations	$	406	Proceeds from sales of real estate and discontinued operations	$	27
Total Capital Generated	$	407	Total Capital Generated	$	66

(1)

Includes compensating balances of $14 million.

(2)

Line of credit of $100 million less $18 million drawn as of 4/30/16.

(3)

Disposition proceeds consists of $14 million of estimated gross proceeds, less estimated outstanding debt and estimated closing costs of $1 million from closed and pending sales for the period from 4/30/16 through 6/29/16. No assurances can be given that pending transactions will be completed on terms currently proposed, or at all.

Definitions

April 30, 2016

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

Adjusted funds from operations (AFFO) is calculated by subtracting from Funds from operations (FFO) (1) tenant improvements and leasing costs at same-store properties, and recurring capital expenditures that are capitalized and amortized and are necessary to maintain our properties and revenue stream and (2) straight line rents, then adding (3) non-real estate depreciation and amortization and (4) share-based compensation expense. We may also adjust FFO for certain unusual non-recurring items that do not produce cash available for distribution to shareholders or are otherwise not representative of our ongoing operating performance. Our calculation subtracts from FFO leasing commissions and tenant improvements at same-store properties only, since we consider tenant improvement and leasing cost levels at non-same-store properties unrepresentative of expected levels at same-store properties. Previously-reported AFFO amounts are not revised for changes in the composition of the same-store properties pool. AFFO is included herein because we consider it to be a measure of a REIT's ability to incur and service debt and to pay distributions to its shareholders. AFFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.

Annualized base rent (ABR) is calculated as monthly base rent (cash basis) per the lease, as of the reporting period, multiplied by 12.

Debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet plus the market value of shares outstanding at the end of the period.

Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization.

Funds from operations (FFO) - The National Association of Real Estate Investment Trusts, Inc. (NAREIT) defines FFO as “net income (computed in accordance with generally accepted accounting principles, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.” In addition, in October 2011 NAREIT clarified its computation of FFO to exclude impairment charges for all periods presented. FFO is a non-GAAP measure. We consider FFO, which is a standard supplemental measure for equity real estate investment trusts, helpful to investors because it facilitates an understanding of the operating performance of properties without giving effect to impairment write-downs and to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead historically rise or fall with market conditions, we believe that FFO provides investors and management with a more accurate indication of our financial and operating results.

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

Payout ratio (FFO per share and unit basis) - The ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual FFO per share and unit.

Ratio of earnings to fixed charges - The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests - consolidated real estate entities, capitalized interest and preferred distributions. Fixed charges consist of mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest.

Ratio of earnings to combined fixed charges and preferred distributions - The ratio of earnings to combined fixed charges and preferred distributions is computed by dividing earnings by combined fixed charges and preferred distributions. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests - consolidated real estate entities, capitalized interest and preferred distributions. Combined fixed charges and preferred distributions consist of fixed charges (mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest) and preferred distributions.

Recurring capital expenditures are expenditures (excluding capital expenditures recoverable from tenants and capital expenditures at properties sold during the period) made on a regular or recurring basis to maintain a property’s competitive position within its market, generally with a depreciable life of 5 to 12 years, but excluding (a) capital expenditures made in the year of acquisition and in subsequent periods until the property is classified as same-store (i.e., excluding capital expenditures on non-same-store properties), (b) improvements associated with the expansion or re-development of a building, (c) renovations to a building which change the underlying classification of the building (for example, from industrial to office or Class C office to Class A office) or (d) capital improvements that represent the addition of something new to a property, rather than the replacement of an existing item.

Scheduled rent revenue is the total possible revenue from all leasable units and square footage, with occupied space valued at contract rates pursuant to leases and vacant units or square footage at market rates.

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

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