North Dakota
|
45-0311232
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
Post Office Box 1988
|
|
1400 31st Avenue SW, Suite 60
|
|
Minot, ND 58702-1988
|
|
(Address of principal executive offices) (Zip code)
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Page
|
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3
|
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3
|
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4
|
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5
|
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6
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8
|
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24
|
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39
|
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40
|
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41
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41
|
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41
|
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41
|
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41
|
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41
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41
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42
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(in thousands, except share data)
|
||||||||
|
January 31, 2012
|
April 30, 2011
|
||||||
ASSETS
|
||||||||
Real estate investments
|
||||||||
Property owned
|
$ | 1,861,321 | $ | 1,770,798 | ||||
Less accumulated depreciation
|
(364,190 | ) | (328,952 | ) | ||||
1,497,131 | 1,441,846 | |||||||
Development in progress
|
22,281 | 9,693 | ||||||
Unimproved land
|
6,390 | 6,550 | ||||||
Mortgage loans receivable, net of allowance of $0 and $3, respectively
|
0 | 156 | ||||||
Total real estate investments
|
1,525,802 | 1,458,245 | ||||||
Other assets
|
||||||||
Cash and cash equivalents
|
35,502 | 41,191 | ||||||
Other investments
|
633 | 625 | ||||||
Receivable arising from straight-lining of rents, net of allowance of $1,156 and $996, respectively
|
21,965 | 18,933 | ||||||
Accounts receivable, net of allowance of $185 and $317, respectively
|
3,977 | 5,646 | ||||||
Real estate deposits
|
578 | 329 | ||||||
Prepaid and other assets
|
4,107 | 2,351 | ||||||
Intangible assets, net of accumulated amortization of $46,674 and $42,154, respectively
|
49,055 | 49,832 | ||||||
Tax, insurance, and other escrow
|
11,427 | 15,268 | ||||||
Property and equipment, net of accumulated depreciation of $1,499 and $1,231, respectively
|
1,464 | 1,704 | ||||||
Goodwill
|
1,120 | 1,127 | ||||||
Deferred charges and leasing costs, net of accumulated amortization of $16,622 and $13,675, respectively
|
22,014 | 20,112 | ||||||
TOTAL ASSETS
|
$ | 1,677,644 | $ | 1,615,363 | ||||
LIABILITIES AND EQUITY
|
||||||||
LIABILITIES
|
||||||||
Accounts payable and accrued expenses
|
$ | 43,439 | $ | 37,879 | ||||
Revolving line of credit
|
49,000 | 30,000 | ||||||
Mortgages payable
|
1,038,717 | 993,803 | ||||||
Other
|
6,326 | 8,404 | ||||||
TOTAL LIABILITIES
|
1,137,482 | 1,070,086 | ||||||
COMMITMENTS AND CONTINGENCIES (NOTE 6)
|
||||||||
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES
|
0 | 987 | ||||||
EQUITY
|
||||||||
Investors Real Estate Trust shareholders’ equity
|
||||||||
Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at January 31, 2012 and April 30, 2011, aggregate liquidation preference of $28,750,000)
|
27,317 | 27,317 | ||||||
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 85,743,308 shares issued and outstanding at January 31, 2012, and 80,523,265 shares issued and outstanding at April 30, 2011)
|
657,304 | 621,936 | ||||||
Accumulated distributions in excess of net income
|
(269,942 | ) | (237,563 | ) | ||||
Total Investors Real Estate Trust shareholders’ equity
|
414,679 | 411,690 | ||||||
Noncontrolling interests – Operating Partnership (19,596,222 units at January 31, 2012 and 20,067,350 units at April 30, 2011)
|
114,852 | 123,627 | ||||||
Noncontrolling interests – consolidated real estate entities
|
10,631 | 8,973 | ||||||
Total equity
|
540,162 | 544,290 | ||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 1,677,644 | $ | 1,615,363 |
(in thousands, except per share data)
|
||||||||||||||||
Three Months Ended
January 31
|
Nine Months Ended
January 31
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
REVENUE
|
||||||||||||||||
Real estate rentals
|
$ | 50,318 | $ | 47,792 | $ | 148,981 | $ | 143,333 | ||||||||
Tenant reimbursement
|
10,705 | 12,354 | 32,301 | 34,785 | ||||||||||||
TOTAL REVENUE
|
61,023 | 60,146 | 181,282 | 178,118 | ||||||||||||
EXPENSES
|
||||||||||||||||
Depreciation/amortization related to real estate investments
|
14,359 | 13,892 | 42,710 | 41,573 | ||||||||||||
Utilities
|
4,526 | 4,775 | 13,424 | 13,184 | ||||||||||||
Maintenance
|
6,395 | 8,358 | 20,185 | 22,001 | ||||||||||||
Real estate taxes
|
8,049 | 7,780 | 23,528 | 23,068 | ||||||||||||
Insurance
|
890 | 646 | 2,552 | 1,866 | ||||||||||||
Property management expenses
|
4,989 | 5,474 | 15,836 | 15,525 | ||||||||||||
Administrative expenses
|
1,493 | 1,716 | 5,356 | 5,055 | ||||||||||||
Advisory and trustee services
|
166 | 134 | 588 | 482 | ||||||||||||
Other expenses
|
359 | 441 | 1,509 | 1,357 | ||||||||||||
Amortization related to non-real estate investments
|
903 | 689 | 2,395 | 1,978 | ||||||||||||
Impairment of real estate investments
|
135 | 0 | 135 | 0 | ||||||||||||
TOTAL EXPENSES
|
42,264 | 43,905 | 128,218 | 126,089 | ||||||||||||
Interest expense
|
(16,533 | ) | (15,868 | ) | (48,756 | ) | (48,335 | ) | ||||||||
Interest income
|
25 | 75 | 115 | 194 | ||||||||||||
Other income
|
270 | 32 | 546 | 217 | ||||||||||||
Income from continuing operations
|
2,521 | 480 | 4,969 | 4,105 | ||||||||||||
Income from discontinued operations
|
0 | 14,108 | 616 | 19,936 | ||||||||||||
NET INCOME
|
2,521 | 14,588 | 5,585 | 24,041 | ||||||||||||
Net income attributable to noncontrolling interests – Operating Partnership
|
(351 | ) | (2,793 | ) | (723 | ) | (4,485 | ) | ||||||||
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities
|
(43 | ) | 38 | (29 | ) | 82 | ||||||||||
Net income attributable to Investors Real Estate Trust
|
2,127 | 11,833 | 4,833 | 19,638 | ||||||||||||
Dividends to preferred shareholders
|
(593 | ) | (593 | ) | (1,779 | ) | (1,779 | ) | ||||||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
|
$ | 1,534 | $ | 11,240 | $ | 3,054 | $ | 17,859 | ||||||||
Earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted
|
.02 | .00 | .03 | .03 | ||||||||||||
Earnings per common share from discontinued operations – Investors Real Estate Trust – basic and diluted
|
.00 | .14 | .01 | .20 | ||||||||||||
NET INCOME PER COMMON SHARE – BASIC AND DILUTED
|
$ | .02 | $ | .14 | $ | .04 | $ | .23 | ||||||||
DIVIDENDS PER COMMON SHARE
|
$ | .1300 | $ | .1715 | $ | .4315 | $ | .5145 |
(in thousands)
|
||||||||||||||||||||||||||||
NUMBER
OF
PREFERRED
SHARES
|
PREFERRED
SHARES
|
NUMBER
OF COMMON
SHARES
|
COMMON
SHARES
|
ACCUMULATED
DISTRIBUTIONS
IN EXCESS OF
NET INCOME
|
NONCONTROLLING
INTERESTS
|
TOTAL
EQUITY
|
||||||||||||||||||||||
Balance April 30, 2010
|
1,150 | $ | 27,317 | 75,805 | $ | 583,618 | $ | (201,412 | ) | $ | 145,592 | $ | 555,115 | |||||||||||||||
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests
|
19,638 | 4,408 | 24,046 | |||||||||||||||||||||||||
Distributions – common shares and units
|
(40,131 | ) | (10,365 | ) | (50,496 | ) | ||||||||||||||||||||||
Distributions – preferred shares
|
(1,779 | ) | (1,779 | ) | ||||||||||||||||||||||||
Distribution reinvestment and share purchase plan
|
1,212 | 10,130 | 10,130 | |||||||||||||||||||||||||
Shares issued
|
1,999 | 16,637 | 16,637 | |||||||||||||||||||||||||
Partnership units issued
|
3,252 | 3,252 | ||||||||||||||||||||||||||
Redemption of units for common shares
|
831 | 6,007 | (6,007 | ) | 0 | |||||||||||||||||||||||
Adjustments to redeemable noncontrolling interests
|
570 | 570 | ||||||||||||||||||||||||||
Other
|
(1 | ) | (261 | ) | (1,164 | ) | (1,425 | ) | ||||||||||||||||||||
Balance January 31, 2011
|
1,150 | $ | 27,317 | 79,846 | $ | 616,701 | $ | (223,684 | ) | $ | 135,716 | $ | 556,050 | |||||||||||||||
Balance April 30, 2011
|
1,150 | $ | 27,317 | 80,523 | $ | 621,936 | $ | (237,563 | ) | $ | 132,600 | $ | 544,290 | |||||||||||||||
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests
|
4,833 | 740 | 5,573 | |||||||||||||||||||||||||
Distributions – common shares and units
|
(35,433 | ) | (8,513 | ) | (43,946 | ) | ||||||||||||||||||||||
Distributions – preferred shares
|
(1,779 | ) | (1,779 | ) | ||||||||||||||||||||||||
Distribution reinvestment and share purchase plan
|
3,992 | 28,831 | 28,831 | |||||||||||||||||||||||||
Shares issued
|
471 | 3,413 | 3,413 | |||||||||||||||||||||||||
Partnership units issued
|
2,469 | 2,469 | ||||||||||||||||||||||||||
Redemption of units for common shares
|
759 | 3,454 | (3,454 | ) | 0 | |||||||||||||||||||||||
Other
|
(2 | ) | (330 | ) | 1,641 | 1,311 | ||||||||||||||||||||||
Balance January 31, 2012
|
1,150 | $ | 27,317 | 85,743 | $ | 657,304 | $ | (269,942 | ) | $ | 125,483 | $ | 540,162 |
(in thousands)
|
||||||||
Nine Months Ended
January 31
|
||||||||
|
2012
|
2011
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 5,585 | $ | 24,041 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
46,328 | 45,951 | ||||||
Gain on sale of real estate, land and other investments
|
(589 | ) | (19,365 | ) | ||||
Impairment of real estate investments
|
135 | 0 | ||||||
Bad debt expense
|
771 | 487 | ||||||
Changes in other assets and liabilities:
|
||||||||
Increase in receivable arising from straight-lining of rents
|
(3,370 | ) | (1,441 | ) | ||||
Decrease (increase) in accounts receivable
|
946 | (4,033 | ) | |||||
Increase in prepaid and other assets
|
(1,756 | ) | (1,663 | ) | ||||
(Increase) decrease in tax, insurance and other escrow
|
(901 | ) | 630 | |||||
Increase in deferred charges and leasing costs
|
(5,480 | ) | (5,015 | ) | ||||
Increase (decrease) in accounts payable, accrued expenses, and other liabilities
|
2,759 | (1,208 | ) | |||||
Net cash provided by operating activities
|
44,428 | 38,384 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Proceeds from real estate deposits
|
1,640 | 2,297 | ||||||
Payments for real estate deposits
|
(1,889 | ) | (2,035 | ) | ||||
Principal proceeds on mortgage loans receivable
|
159 | 1 | ||||||
(Increase) decrease in other investments
|
(8 | ) | 95 | |||||
Decrease in lender holdbacks for improvements
|
5,056 | 968 | ||||||
Increase in lender holdbacks for improvements
|
(315 | ) | (10,764 | ) | ||||
Proceeds from sale of real estate – discontinued operations
|
2,088 | 81,539 | ||||||
Proceeds from sale of real estate and other investments
|
438 | 0 | ||||||
Insurance proceeds received
|
5,644 | 329 | ||||||
Payments for acquisitions and improvements of real estate investments
|
(101,791 | ) | (55,437 | ) | ||||
Net cash (used) provided by investing activities
|
(88,978 | ) | 16,993 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds from mortgages payable
|
84,195 | 97,654 | ||||||
Principal payments on mortgages payable
|
(53,661 | ) | (160,632 | ) | ||||
Principal payments on revolving line of credit and other debt
|
(60 | ) | (25,650 | ) | ||||
Proceeds from revolving line of credit and other debt
|
24,227 | 36,300 | ||||||
Proceeds from sale of common shares, net of issue costs
|
2,970 | 16,384 | ||||||
Proceeds from sale of common shares under distribution reinvestment and share purchase program
|
20,778 | 1,774 | ||||||
Repurchase of fractional shares and partnership units
|
(13 | ) | (10 | ) | ||||
Payments for acquisition of noncontrolling interests – consolidated real estate entities
|
(1,289 | ) | (425 | ) | ||||
Distributions paid to common shareholders, net of reinvestment of $7,548 and $7,831, respectively
|
(27,885 | ) | (32,300 | ) | ||||
Distributions paid to preferred shareholders
|
(1,779 | ) | (1,779 | ) | ||||
Distributions paid to noncontrolling interests – Unitholders of the Operating Partnership, net of reinvestment of $504 and $525, respectively
|
(8,009 | ) | (9,840 | ) | ||||
Distributions paid to noncontrolling interests – consolidated real estate entities
|
(586 | ) | (737 | ) | ||||
Distributions paid to redeemable noncontrolling interests – consolidated real estate entities
|
(27 | ) | 0 | |||||
Net cash provided (used) by financing activities
|
38,861 | (79,261 | ) | |||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(5,689 | ) | (23,884 | ) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
41,191 | 54,791 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 35,502 | $ | 30,907 |
(in thousands)
|
||||||||
Nine Months Ended
January 31
|
||||||||
|
2012
|
2011
|
||||||
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES FOR THE PERIOD
|
||||||||
Distribution reinvestment plan
|
$ | 7,548 | $ | 7,831 | ||||
Operating partnership distribution reinvestment plan
|
504 | 525 | ||||||
Operating partnership units converted to shares
|
3,454 | 6,007 | ||||||
Real estate investment acquired through the issuance of operating partnership units
|
2,469 | 3,252 | ||||||
Real estate investment acquired through assumption of indebtedness and accrued costs
|
7,190 | 4,288 | ||||||
Adjustments to accounts payable included within real estate investments
|
(3,244 | ) | (1,421 | ) | ||||
Noncontrolling partnership interest
|
2,227 | 0 | ||||||
Fair value adjustments to redeemable noncontrolling interests
|
35 | (570 | ) | |||||
Involuntary conversion of assets due to flood damage
|
2,638 | 0 | ||||||
Construction debt reclassified to mortgages payable
|
7,190 | 0 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
Cash paid during the period for:
|
||||||||
Interest on mortgages
|
45,321 | 48,340 | ||||||
Interest other
|
2,098 | 892 | ||||||
$ | 47,419 | $ | 49,232 |
(in thousands)
|
||||||||
|
January 31, 2012
|
April 30, 2011
|
||||||
Identified intangible assets (included in intangible assets):
|
||||||||
Gross carrying amount
|
$ | 95,729 | $ | 91,986 | ||||
Accumulated amortization
|
(46,674 | ) | (42,154 | ) | ||||
Net carrying amount
|
$ | 49,055 | $ | 49,832 | ||||
Indentified intangible liabilities (included in other liabilities):
|
||||||||
Gross carrying amount
|
$ | 1,104 | $ | 1,104 | ||||
Accumulated amortization
|
(954 | ) | (900 | ) | ||||
Net carrying amount
|
$ | 150 | $ | 204 |
Year Ended April 30,
|
(in thousands)
|
|||
2013
|
$ | 32 | ||
2014
|
35 | |||
2015
|
18 | |||
2016
|
14 | |||
2017
|
6 |
Year Ended April 30,
|
(in thousands)
|
|||
2013
|
$ | 4,921 | ||
2014
|
4,515 | |||
2015
|
4,158 | |||
2016
|
3,940 | |||
2017
|
3,471 |
(in thousands, except per share data)
|
||||||||||||||||
Three Months Ended
January 31
|
Nine Months Ended
January 31
|
|||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
NUMERATOR
|
||||||||||||||||
Income from continuing operations – Investors Real Estate Trust
|
$ | 2,127 | $ | 534 | $ | 4,337 | $ | 3,691 | ||||||||
Income from discontinued operations – Investors Real Estate Trust
|
0 | 11,299 | 496 | 15,947 | ||||||||||||
Net income attributable to Investors Real Estate Trust
|
2,127 | 11,833 | 4,833 | 19,638 | ||||||||||||
Dividends to preferred shareholders
|
(593 | ) | (593 | ) | (1,779 | ) | (1,779 | ) | ||||||||
Numerator for basic earnings per share – net income available to common shareholders
|
1,534 | 11,240 | 3,054 | 17,859 | ||||||||||||
Noncontrolling interests – Operating Partnership
|
351 | 2,793 | 723 | 4,485 | ||||||||||||
Numerator for diluted earnings per share
|
$ | 1,885 | $ | 14,033 | $ | 3,777 | $ | 22,344 | ||||||||
DENOMINATOR
|
||||||||||||||||
Denominator for basic earnings per share weighted average shares
|
84,339 | 79,398 | 82,424 | 78,140 | ||||||||||||
Effect of convertible operating partnership units
|
19,596 | 19,957 | 19,752 | 20,171 | ||||||||||||
Denominator for diluted earnings per share
|
103,935 | 99,355 | 102,176 | 98,311 | ||||||||||||
Earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted
|
$ | .02 | $ | .00 | $ | .03 | $ | .03 | ||||||||
Earnings per common share from discontinued operations – Investors Real Estate Trust – basic and diluted
|
.00 | .14 | .01 | .20 | ||||||||||||
NET INCOME PER COMMON SHARE – BASIC & DILUTED
|
$ | .02 | $ | .14 | $ | .04 | $ | .23 |
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31, 2012
|
Multi-Family
Residential
|
Commercial-
Office
|
Commercial-
Medical
|
Commercial-
Industrial
|
Commercial-
Retail
|
Total
|
||||||||||||||||||
Real estate revenue
|
$ | 18,836 | $ | 18,541 | $ | 16,609 | $ | 3,596 | $ | 3,441 | $ | 61,023 | ||||||||||||
Real estate expenses
|
8,668 | 8,695 | 5,220 | 1,078 | 1,188 | 24,849 | ||||||||||||||||||
Net operating income
|
$ | 10,168 | $ | 9,846 | $ | 11,389 | $ | 2,518 | $ | 2,253 | 36,174 | |||||||||||||
Depreciation/amortization
|
(15,262 | ) | ||||||||||||||||||||||
Administrative, advisory and trustee services
|
(1,659 | ) | ||||||||||||||||||||||
Other expenses
|
(359 | ) | ||||||||||||||||||||||
Impairment of real estate investments
|
(135 | ) | ||||||||||||||||||||||
Interest expense
|
(16,533 | ) | ||||||||||||||||||||||
Interest and other income
|
295 | |||||||||||||||||||||||
Income from continuing operations
|
2,521 | |||||||||||||||||||||||
Income from discontinued operations
|
0 | |||||||||||||||||||||||
Net income
|
$ | 2,521 |
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31, 2011
|
Multi-Family
Residential
|
Commercial-
Office
|
Commercial-
Medical
|
Commercial-
Industrial
|
Commercial-
Retail
|
Total
|
||||||||||||||||||
Real estate revenue
|
$ | 16,884 | $ | 19,343 | $ | 16,993 | $ | 3,349 | $ | 3,577 | $ | 60,146 | ||||||||||||
Real estate expenses
|
8,903 | 9,507 | 5,894 | 1,203 | 1,526 | 27,033 | ||||||||||||||||||
Net operating income
|
$ | 7,981 | $ | 9,836 | $ | 11,099 | $ | 2,146 | $ | 2,051 | 33,113 | |||||||||||||
Depreciation/amortization
|
(14,581 | ) | ||||||||||||||||||||||
Administrative, advisory and trustee services
|
(1,850 | ) | ||||||||||||||||||||||
Other expenses
|
(441 | ) | ||||||||||||||||||||||
Interest expense
|
(15,868 | ) | ||||||||||||||||||||||
Interest and other income
|
107 | |||||||||||||||||||||||
Income from continuing operations
|
480 | |||||||||||||||||||||||
Income from discontinued operations
|
14,108 | |||||||||||||||||||||||
Net income
|
$ | 14,588 |
(in thousands)
|
||||||||||||||||||||||||
Nine Months Ended January 31, 2012
|
Multi-Family
Residential
|
Commercial-
Office
|
Commercial-
Medical
|
Commercial-
Industrial
|
Commercial-
Retail
|
Total
|
||||||||||||||||||
Real estate revenue
|
$ | 54,699 | $ | 55,723 | $ | 50,299 | $ | 10,597 | $ | 9,964 | $ | 181,282 | ||||||||||||
Real estate expenses
|
25,791 | 26,451 | 16,709 | 3,178 | 3,396 | 75,525 | ||||||||||||||||||
Net operating income
|
$ | 28,908 | $ | 29,272 | $ | 33,590 | $ | 7,419 | $ | 6,568 | 105,757 | |||||||||||||
Depreciation/amortization
|
(45,105 | ) | ||||||||||||||||||||||
Administrative, advisory and trustee services
|
(5,944 | ) | ||||||||||||||||||||||
Other expenses
|
(1,509 | ) | ||||||||||||||||||||||
Impairment of real estate investments
|
(135 | ) | ||||||||||||||||||||||
Interest expense
|
(48,756 | ) | ||||||||||||||||||||||
Interest and other income
|
661 | |||||||||||||||||||||||
Income from continuing operations
|
4,969 | |||||||||||||||||||||||
Income from discontinued operations
|
616 | |||||||||||||||||||||||
Net income
|
$ | 5,585 |
(in thousands)
|
||||||||||||||||||||||||
Nine Months Ended January 31, 2011
|
Multi-Family
Residential
|
Commercial-
Office
|
Commercial-
Medical
|
Commercial-
Industrial
|
Commercial-
Retail
|
Total
|
||||||||||||||||||
Real estate revenue
|
$ | 49,596 | $ | 58,839 | $ | 49,547 | $ | 9,890 | $ | 10,246 | $ | 178,118 | ||||||||||||
Real estate expenses
|
25,247 | 27,082 | 16,563 | 3,123 | 3,629 | 75,644 | ||||||||||||||||||
Net operating income
|
$ | 24,349 | $ | 31,757 | $ | 32,984 | $ | 6,767 | $ | 6,617 | 102,474 | |||||||||||||
Depreciation/amortization
|
(43,551 | ) | ||||||||||||||||||||||
Administrative, advisory and trustee services
|
(5,537 | ) | ||||||||||||||||||||||
Other expenses
|
(1,357 | ) | ||||||||||||||||||||||
Interest expense
|
(48,335 | ) | ||||||||||||||||||||||
Interest and other income
|
411 | |||||||||||||||||||||||
Income from continuing operations
|
4,105 | |||||||||||||||||||||||
Income from discontinued operations
|
19,936 | |||||||||||||||||||||||
Net income
|
$ | 24,041 |
(in thousands)
|
||||||||||||||||||||||||
As of January 31, 2012
|
Multi-Family
Residential
|
Commercial-
Office
|
Commercial-
Medical
|
Commercial-
Industrial
|
Commercial-
Retail
|
Total
|
||||||||||||||||||
Segment Assets
|
||||||||||||||||||||||||
Property owned
|
$ | 516,135 | $ | 603,315 | $ | 493,703 | $ | 118,767 | $ | 129,401 | $ | 1,861,321 | ||||||||||||
Less accumulated depreciation
|
(127,797 | ) | (117,237 | ) | (75,244 | ) | (20,007 | ) | (23,905 | ) | (364,190 | ) | ||||||||||||
Total property owned
|
$ | 388,338 | $ | 486,078 | $ | 418,459 | $ | 98,760 | $ | 105,496 | 1,497,131 | |||||||||||||
Cash and cash equivalents
|
35,502 | |||||||||||||||||||||||
Other investments
|
633 | |||||||||||||||||||||||
Receivables and other assets
|
115,707 | |||||||||||||||||||||||
Development in progress
|
22,281 | |||||||||||||||||||||||
Unimproved land
|
6,390 | |||||||||||||||||||||||
Total Assets
|
$ | 1,677,644 |
(in thousands)
|
||||||||||||||||||||||||
As of April 30, 2011
|
Multi-Family
Residential
|
Commercial-
Office
|
Commercial-
Medical
|
Commercial-
Industrial
|
Commercial-
Retail
|
Total
|
||||||||||||||||||
Segment assets
|
||||||||||||||||||||||||
Property owned
|
$ | 484,815 | $ | 595,491 | $ | 447,831 | $ | 117,602 | $ | 125,059 | $ | 1,770,798 | ||||||||||||
Less accumulated depreciation
|
(117,718 | ) | (104,650 | ) | (65,367 | ) | (17,713 | ) | (23,504 | ) | (328,952 | ) | ||||||||||||
Total property owned
|
$ | 367,097 | $ | 490,841 | $ | 382,464 | $ | 99,889 | $ | 101,555 | 1,441,846 | |||||||||||||
Cash and cash equivalents
|
41,191 | |||||||||||||||||||||||
Other investments
|
625 | |||||||||||||||||||||||
Receivables and other assets
|
115,302 | |||||||||||||||||||||||
Development in progress
|
9,693 | |||||||||||||||||||||||
Unimproved land
|
6,550 | |||||||||||||||||||||||
Mortgage loans receivable, net of allowance
|
156 | |||||||||||||||||||||||
Total Assets
|
$ | 1,615,363 |
Three Months Ended
January 31
|
Nine Months Ended
January 31
|
|||||||||||
(in thousands)
|
||||||||||||
2011
|
2012
|
2011
|
||||||||||
REVENUE
|
||||||||||||
Real estate rentals
|
$ | 304 | $ | 57 | $ | 6,066 | ||||||
Tenant reimbursement
|
0 | 0 | 36 | |||||||||
TOTAL REVENUE
|
304 | 57 | 6,102 | |||||||||
EXPENSES
|
||||||||||||
Depreciation/amortization related to real estate investments
|
51 | 8 | 1,172 | |||||||||
Utilities
|
60 | 0 | 558 | |||||||||
Maintenance
|
74 | 0 | 708 | |||||||||
Real estate taxes
|
16 | 0 | 638 | |||||||||
Insurance
|
0 | 0 | 110 | |||||||||
Property management expenses
|
105 | 2 | 853 | |||||||||
Other expenses
|
0 | 0 | 1 | |||||||||
Amortization related to non-real estate investments
|
0 | 0 | 4 | |||||||||
TOTAL EXPENSES
|
306 | 10 | 4,044 | |||||||||
Interest expense
|
149 | (20 | ) | (1,492 | ) | |||||||
Interest income
|
0 | 0 | 5 | |||||||||
Income from discontinued operations before gain on sale
|
147 | 27 | 571 | |||||||||
Gain on sale of discontinued operations
|
13,961 | 589 | 19,365 | |||||||||
INCOME FROM DISCONTINUED OPERATIONS
|
$ | 14,108 | $ | 616 | $ | 19,936 |
(in thousands)
|
|||||||||||||||||
Acquisitions and Development Projects Placed in Service
|
Date Acquired
|
Land
|
Building
|
Intangible Assets
|
Acquisition Cost
|
||||||||||||
Multi-Family Residential
|
|||||||||||||||||
147 unit - Regency Park Estates - St. Cloud, MN
|
8/1/11
|
$ | 702 | $ | 10,198 | $ | 0 | $ | 10,900 | ||||||||
50 unit - Cottage West Twin Homes - Sioux Falls, SD
|
10/12/11
|
968 | 3,762 | 0 | 4,730 | ||||||||||||
24 unit - Gables Townhomes - Sioux Falls, SD
|
10/12/11
|
349 | 1,921 | 0 | 2,270 | ||||||||||||
36 unit - Evergreen II - Isanti, MN
|
11/1/11
|
701 | 2,774 | 0 | 3,475 | ||||||||||||
2,720 | 18,655 | 0 | 21,375 | ||||||||||||||
Commercial Medical
|
|||||||||||||||||
17,273 sq. ft Spring Creek American Falls - American Falls, ID
|
9/1/11
|
137 | 3,409 | 524 | 4,070 | ||||||||||||
15,571 sq. ft Spring Creek Soda Springs - Soda Springs, ID
|
9/1/11
|
66 | 2,122 | 42 | 2,230 | ||||||||||||
15,559 sq. ft Spring Creek Eagle - Eagle, ID
|
9/1/11
|
250 | 3,191 | 659 | 4,100 | ||||||||||||
31,820 sq. ft Spring Creek Meridian - Meridian, ID
|
9/1/11
|
428 | 5,499 | 1,323 | 7,250 | ||||||||||||
26,605 sq. ft Spring Creek Overland - Boise, ID
|
9/1/11
|
656 | 5,001 | 1,068 | 6,725 | ||||||||||||
16,311 sq. ft Spring Creek Boise - Boise, ID
|
9/1/11
|
711 | 4,236 | 128 | 5,075 | ||||||||||||
26,605 sq. ft Spring Creek Ustick - Meridian, ID
|
9/1/11
|
467 | 3,833 | 0 | 4,300 | ||||||||||||
Meadow Wind Land - Casper, WY
|
9/1/11
|
50 | 0 | 0 | 50 | ||||||||||||
24,795 sq. ft Trinity at Plaza 16 - Minot, ND1
|
9/23/11
|
0 | 5,562 | 0 | 5,562 | ||||||||||||
3,431 sq. ft Edina 6525 Drew Ave S - Edina, MN
|
10/13/11
|
388 | 117 | 0 | 505 | ||||||||||||
22,193 sq. ft Meadow Winds Addition - Casper, WY2
|
12/30/11
|
0 | 3,840 | 0 | 3,840 | ||||||||||||
3,153 | 36,810 | 3,744 | 43,707 | ||||||||||||||
Commercial Retail
|
|||||||||||||||||
19,037 sq. ft. Jamestown Buffalo Mall - Jamestown, ND3
|
6/15/11
|
0 | 822 | 0 | 822 | ||||||||||||
Unimproved Land
|
|||||||||||||||||
Industrial-Office Build-to-Suit - Minot, ND
|
9/7/11
|
416 | 0 | 0 | 416 | ||||||||||||
Total Property Acquisitions
|
$ | 6,289 | $ | 56,287 | $ | 3,744 | $ | 66,320 |
(1)
|
Development property placed in service September 23, 2011. Additional costs paid in fiscal year 2011 totaled $3.3 million, for a total project cost at January 31, 2012 of $8.8 million.
|
(2)
|
Expansion project placed in service December 30, 2011.
|
(3)
|
Construction project placed in service June 15, 2011. Additional costs paid in fiscal year 2011 totaled $1.4 million, for a total project cost at January 31, 2012 of $2.3 million.
|
(in thousands)
|
|||||||||||||||||
Acquisitions and Development Projects Placed in Service
|
Date Acquired
|
Land
|
Building
|
Intangible Assets
|
Acquisition Cost
|
||||||||||||
Commercial Office
|
|||||||||||||||||
58,574 sq. ft. Omaha 10802 Farnam Dr - Omaha, NE
|
12/16/10
|
$ | 2,462 | $ | 4,374 | $ | 1,459 | $ | 8,295 | ||||||||
Commercial Medical
|
|||||||||||||||||
14,705 sq. ft. Billings 2300 Grant Road - Billings, MT
|
7/15/10
|
649 | 1,216 | 657 | 2,522 | ||||||||||||
14,640 sq. ft. Missoula 3050 Great Northern - Missoula, MT
|
7/15/10
|
640 | 1,331 | 752 | 2,723 | ||||||||||||
108,503 sq. ft. Edgewood Vista Minot - Minot, ND
|
11/10/10
|
1,046 | 11,590 | 2,545 | 15,181 | ||||||||||||
23,965 sq. ft. Edgewood Vista Spearfish Expansion - Spearfish, SD1
|
1/10/11
|
0 | 2,280 | 0 | 2,280 | ||||||||||||
2,335 | 16,417 | 3,954 | 22,706 | ||||||||||||||
Commercial Industrial
|
|||||||||||||||||
42,244 sq. ft. Fargo 1320 45th St N - Fargo, ND2
|
6/22/10
|
0 | 1,634 | 0 | 1,634 | ||||||||||||
Commercial Retail
|
|||||||||||||||||
47,709 sq. ft. Minot 1400 31st Ave - Minot, ND
|
12/10/10
|
1,026 | 6,143 | 1,081 | 8,250 | ||||||||||||
Total Property Acquisitions
|
$ | 5,823 | $ | 28,568 | $ | 6,494 | $ | 40,885 |
(1)
|
Expansion project placed in service January 10, 2011.
|
(2)
|
Development property placed in service June 22, 2010. Additional costs incurred in fiscal year 2010 totaled $2.3 million, for a total project cost at January 31, 2011 of $3.9 million.
|
(in thousands)
|
||||||||||||
Dispositions
|
Sales Price
|
Book Value
and Sales Cost
|
Gain/(Loss)
|
|||||||||
Commercial Retail
|
||||||||||||
41,200 sq ft. Livingstone Pamida - Livingston, MT
|
$ | 2,175 | $ | 1,586 | $ | 589 | ||||||
Total Property Dispositions
|
$ | 2,175 | $ | 1,586 | $ | 589 |
(in thousands)
|
||||||||||||
Dispositions
|
Sales Price
|
Book Value
and Sales Cost
|
Gain/(Loss)
|
|||||||||
Multi-Family Residential
|
||||||||||||
504 unit - Dakota Hill at Valley Ranch - Irving, TX
|
$ | 36,100 | $ | 30,909 | $ | 5,191 | ||||||
192 unit - Neighborhood Apartments - Colorado Springs, CO
|
11,200 | 9,664 | 1,536 | |||||||||
195 unit - Pinecone Apartments - Fort Collins, CO
|
15,875 | 10,422 | 5,453 | |||||||||
210 unit - Miramont Apartments - Fort Collins, CO
|
17,200 | 10,732 | 6,468 | |||||||||
80,375 | 61,727 | 18,648 | ||||||||||
Commercial Medical
|
||||||||||||
1,410 sq. ft. Edgewood Vista Patio Home 4330 - Fargo, ND
|
205 | 220 | (15 | ) | ||||||||
Commercial Industrial
|
||||||||||||
29,440 sq. ft. Waconia Industrial Building - Waconia, MN
|
2,300 | 1,561 | 739 | |||||||||
Commercial Retail
|
||||||||||||
41,000 sq. ft. Ladysmith Pamida - Ladysmith, WI
|
450 | 457 | (7 | ) | ||||||||
Total Property Dispositions
|
$ | 83,330 | $ | 63,965 | $ | 19,365 |
Year Ended April 30,
|
(in thousands)
|
|||
2012 (remainder)
|
$ | 13,417 | ||
2013
|
51,724 | |||
2014
|
66,024 | |||
2015
|
106,207 | |||
2016
|
86,182 | |||
Thereafter
|
715,163 | |||
Total payments
|
$ | 1,038,717 |
(in thousands)
|
||||||||||||||||
January 31, 2012
|
April 30, 2011
|
|||||||||||||||
Carrying Amount
|
Fair Value
|
Carrying Amount
|
Fair Value
|
|||||||||||||
FINANCIAL ASSETS
|
||||||||||||||||
Mortgage loans receivable
|
$ | 0 | $ | 0 | $ | 156 | $ | 156 | ||||||||
Cash and cash equivalents
|
35,502 | 35,502 | 41,191 | 41,191 | ||||||||||||
Other investments
|
633 | 633 | 625 | 625 | ||||||||||||
FINANCIAL LIABILITIES
|
||||||||||||||||
Other debt
|
6,176 | 6,255 | 8,200 | 7,279 | ||||||||||||
Line of credit
|
49,000 | 49,000 | 30,000 | 30,000 | ||||||||||||
Mortgages payable
|
1,038,717 | 1,086,940 | 993,803 | 1,013,713 |
(in thousands)
|
||||
Balance at April 30, 2010
|
$ | 1,812 | ||
Net loss
|
(5 | ) | ||
Distributions
|
0 | |||
Mark-to-market adjustments
|
(570 | ) | ||
Balance at January 31, 2011
|
$ | 1,237 |
(in thousands)
|
||||
Balance at April 30, 2011
|
$ | 987 | ||
Net income
|
12 | |||
Distributions
|
(27 | ) | ||
Mark-to-market adjustments
|
35 | |||
Acquisition of joint venture partner’s interest
|
(1,007 | ) | ||
Balance at January 31, 2012
|
$ | 0 |
|
•
|
68 commercial office properties containing approximately 5.1 million square feet of leasable space and having a total real estate investment amount net of accumulated depreciation of $486.1 million;
|
|
•
|
65 commercial medical properties (including senior housing) containing approximately 2.9 million square feet of leasable space and having a total real estate investment amount net of accumulated depreciation of $418.4 million;
|
|
•
|
19 commercial industrial properties containing approximately 2.9 million square feet of leasable space and having a total real estate investment amount net of accumulated depreciation of $98.8 million; and
|
|
•
|
32 commercial retail properties containing approximately 1.4 million square feet of leasable space and having a total real estate investment amount net of accumulated depreciation of $105.5 million.
|
(in thousands)
|
||||||||
|
Increase in Total
Revenue
Three Months
ended January 31, 2012
|
Increase in Total
Revenue
Nine Months
ended January 31, 2012
|
||||||
Rent in Fiscal 2012 primarily from 8 properties acquired in Fiscal 2011 in excess of that received in Fiscal 2011 from the same 8 properties
|
$ | 311 | $ | 2,342 | ||||
Rent in Fiscal 2012 primarily from 12 properties acquired in Fiscal 2012
|
1,564 | 2,517 | ||||||
Decrease in rental income on stabilized properties due to a decrease in tenant reimbursements in commercial segments related to the overall increase in commercial segments’ vacancy
|
(1,888 | ) | (2,445 | ) | ||||
Increase in straight line rent
|
498 | 1,687 | ||||||
Decrease (increase) in tenant concessions
|
392 | (937 | ) | |||||
Net increase in total revenue
|
$ | 877 | $ | 3,164 |
Three Months Ended January 31, 2012
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
All Segments
|
||||||||||||||||||
Non-stabilized real estate revenue
|
$ | 799 | $ | 138 | $ | 888 | $ | 0 | $ | 50 | $ | 1,875 | ||||||||||||
Stabilized real estate revenue
|
1,044 | (1,135 | ) | (1,923 | ) | 281 | (155 | ) | (1,888 | ) | ||||||||||||||
Straight line rent
|
0 | (21 | ) | 620 | 3 | (104 | ) | 498 | ||||||||||||||||
Concessions
|
108 | 216 | 32 | (37 | ) | 73 | 392 | |||||||||||||||||
Total increase (decrease) in real estate revenue
|
$ | 1,951 | $ | (802 | ) | $ | (383 | ) | $ | 247 | $ | (136 | ) | $ | 877 |
Nine Months Ended January 31, 2012
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
All Segments
|
||||||||||||||||||
Non-stabilized real estate revenue
|
$ | 1,520 | $ | 802 | $ | 2,119 | $ | 67 | $ | 351 | $ | 4,859 | ||||||||||||
Stabilized real estate revenue
|
3,632 | (3,599 | ) | (2,639 | ) | 576 | (415 | ) | (2,445 | ) | ||||||||||||||
Straight line rent
|
0 | 134 | 1,188 | 325 | 40 | 1,687 | ||||||||||||||||||
Concessions
|
(49 | ) | (454 | ) | 84 | (261 | ) | (257 | ) | (937 | ) | |||||||||||||
Total increase (decrease) in real estate revenue
|
$ | 5,103 | $ | (3,117 | ) | $ | 752 | $ | 707 | $ | (281 | ) | $ | 3,164 |
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31, 2012
|
Multi-Family
Residential
|
Commercial-
Office
|
Commercial-
Medical
|
Commercial-
Industrial
|
Commercial-
Retail
|
All Segments
|
||||||||||||||||||
Real estate revenue
|
$ | 18,836 | $ | 18,541 | $ | 16,609 | $ | 3,596 | $ | 3,441 | $ | 61,023 | ||||||||||||
Real estate expenses
|
||||||||||||||||||||||||
Utilities
|
1,831 | 1,698 | 782 | 71 | 144 | 4,526 | ||||||||||||||||||
Maintenance
|
2,386 | 2,516 | 1,049 | 143 | 301 | 6,395 | ||||||||||||||||||
Real estate taxes
|
1,760 | 3,545 | 1,500 | 685 | 559 | 8,049 | ||||||||||||||||||
Insurance
|
436 | 211 | 131 | 60 | 52 | 890 | ||||||||||||||||||
Property management
|
2,255 | 725 | 1,758 | 119 | 132 | 4,989 | ||||||||||||||||||
Total expenses
|
$ | 8,668 | $ | 8,695 | $ | 5,220 | $ | 1,078 | $ | 1,188 | $ | 24,849 | ||||||||||||
Net operating income
|
$ | 10,168 | $ | 9,846 | $ | 11,389 | $ | 2,518 | $ | 2,253 | $ | 36,174 | ||||||||||||
Stabilized net operating income
|
$ | 9,772 | $ | 9,670 | $ | 10,037 | $ | 2,409 | $ | 2,149 | $ | 34,037 | ||||||||||||
Non-stabilized net operating income
|
396 | 176 | 1,352 | 109 | 104 | 2,137 | ||||||||||||||||||
Total net operating income
|
$ | 10,168 | $ | 9,846 | $ | 11,389 | $ | 2,518 | $ | 2,253 | $ | 36,174 |
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31, 2011
|
Multi-Family
Residential
|
Commercial-
Office
|
Commercial-
Medical
|
Commercial-
Industrial
|
Commercial-
Retail
|
All Segments
|
||||||||||||||||||
Real estate revenue
|
$ | 16,884 | $ | 19,343 | $ | 16,993 | $ | 3,349 | $ | 3,577 | $ | 60,146 | ||||||||||||
Real estate expenses
|
||||||||||||||||||||||||
Utilities
|
1,851 | 1,837 | 812 | 117 | 158 | 4,775 | ||||||||||||||||||
Maintenance
|
2,857 | 3,189 | 1,347 | 308 | 657 | 8,358 | ||||||||||||||||||
Real estate taxes
|
1,676 | 3,571 | 1,375 | 626 | 532 | 7,780 | ||||||||||||||||||
Insurance
|
319 | 144 | 117 | 37 | 29 | 646 | ||||||||||||||||||
Property management
|
2,200 | 766 | 2,243 | 115 | 150 | 5,474 | ||||||||||||||||||
Total expenses
|
$ | 8,903 | $ | 9,507 | $ | 5,894 | $ | 1,203 | $ | 1,526 | $ | 27,033 | ||||||||||||
Net operating income
|
$ | 7,981 | $ | 9,836 | $ | 11,099 | $ | 2,146 | $ | 2,051 | $ | 33,113 | ||||||||||||
Stabilized net operating income
|
$ | 7,981 | $ | 9,719 | $ | 10,621 | $ | 2,033 | $ | 1,973 | $ | 32,327 | ||||||||||||
Non-stabilized net operating income
|
0 | 117 | 478 | 113 | 78 | 786 | ||||||||||||||||||
Total net operating income
|
$ | 7,981 | $ | 9,836 | $ | 11,099 | $ | 2,146 | $ | 2,051 | $ | 33,113 |
(in thousands)
|
||||||||||||||||||||||||
Nine Months Ended January 31, 2012
|
Multi-Family
Residential
|
Commercial-
Office
|
Commercial-
Medical
|
Commercial-
Industrial
|
Commercial-
Retail
|
All Segments
|
||||||||||||||||||
Real estate revenue
|
$ | 54,699 | $ | 55,723 | $ | 50,299 | $ | 10,597 | $ | 9,964 | $ | 181,282 | ||||||||||||
Real estate expenses
|
||||||||||||||||||||||||
Utilities
|
4,805 | 5,850 | 2,408 | 19 | 342 | 13,424 | ||||||||||||||||||
Maintenance
|
7,840 | 7,777 | 3,154 | 536 | 878 | 20,185 | ||||||||||||||||||
Real estate taxes
|
5,104 | 10,242 | 4,477 | 2,063 | 1,642 | 23,528 | ||||||||||||||||||
Insurance
|
1,190 | 654 | 395 | 169 | 144 | 2,552 | ||||||||||||||||||
Property management
|
6,852 | 1,928 | 6,275 | 391 | 390 | 15,836 | ||||||||||||||||||
Total expenses
|
$ | 25,791 | $ | 26,451 | $ | 16,709 | $ | 3,178 | $ | 3,396 | $ | 75,525 | ||||||||||||
Net operating income
|
$ | 28,908 | $ | 29,272 | $ | 33,590 | $ | 7,419 | $ | 6,568 | $ | 105,757 | ||||||||||||
Stabilized net operating income
|
$ | 28,127 | $ | 28,673 | $ | 30,834 | $ | 7,093 | $ | 6,227 | $ | 100,954 | ||||||||||||
Non-stabilized net operating income
|
781 | 599 | 2,756 | 326 | 341 | 4,803 | ||||||||||||||||||
Total net operating income
|
$ | 28,908 | $ | 29,272 | $ | 33,590 | $ | 7,419 | $ | 6,568 | $ | 105,757 |
(in thousands)
|
||||||||||||||||||||||||
Nine Months Ended January 31, 2011
|
Multi-Family
Residential
|
Commercial-
Office
|
Commercial-
Medical
|
Commercial-
Industrial
|
Commercial-
Retail
|
All Segments
|
||||||||||||||||||
Real estate revenue
|
$ | 49,596 | $ | 58,839 | $ | 49,547 | $ | 9,890 | $ | 10,246 | $ | 178,118 | ||||||||||||
Real estate expenses
|
||||||||||||||||||||||||
Utilities
|
4,586 | 5,630 | 2,404 | 211 | 353 | 13,184 | ||||||||||||||||||
Maintenance
|
8,139 | 8,572 | 3,461 | 587 | 1,242 | 22,001 | ||||||||||||||||||
Real estate taxes
|
4,894 | 10,453 | 4,279 | 1,907 | 1,535 | 23,068 | ||||||||||||||||||
Insurance
|
910 | 426 | 339 | 115 | 76 | 1,866 | ||||||||||||||||||
Property management
|
6,718 | 2,001 | 6,080 | 303 | 423 | 15,525 | ||||||||||||||||||
Total expenses
|
$ | 25,247 | $ | 27,082 | $ | 16,563 | $ | 3,123 | $ | 3,629 | $ | 75,644 | ||||||||||||
Net operating income
|
$ | 24,349 | $ | 31,757 | $ | 32,984 | $ | 6,767 | $ | 6,617 | $ | 102,474 | ||||||||||||
Stabilized net operating income
|
$ | 24,349 | $ | 31,648 | $ | 32,358 | $ | 6,514 | $ | 6,539 | $ | 101,408 | ||||||||||||
Non-stabilized net operating income
|
0 | 109 | 626 | 253 | 78 | 1,066 | ||||||||||||||||||
Total net operating income
|
$ | 24,349 | $ | 31,757 | $ | 32,984 | $ | 6,767 | $ | 6,617 | $ | 102,474 |
•
|
Physical Occupancy. As of January 31, 2012, physical occupancy levels on a stabilized basis and on an all property basis increased from the year earlier period in three of our five reportable segments, decreasing in our commercial office and commercial medical segments. We attribute the decrease in commercial office occupancy primarily to continued challenging economic conditions in certain of our markets, as discussed above in the Overview section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations. Multi-family residential market conditions improved from the year earlier period. Physical occupancy
rates on a stabilized property and all property basis for January 31, 2012, compared to the January 31, 2011, are shown below:
|
Stabilized Properties
|
All Properties
|
|||||||||||||||
January 31,
|
January 31,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Multi-Family Residential
|
93.5 | % | 91.1 | % | 93.2 | % | 91.1 | % | ||||||||
Commercial Office
|
77.6 | % | 79.8 | % | 77.9 | % | 80.1 | % | ||||||||
Commercial Medical
|
93.8 | % | 95.8 | % | 94.5 | % | 96.1 | % | ||||||||
Commercial Industrial
|
94.4 | % | 81.4 | % | 94.5 | % | 81.7 | % | ||||||||
Commercial Retail
|
87.0 | % | 81.9 | % | 87.5 | % | 82.0 | % |
•
|
Increased Concessions. Our overall level of tenant concessions decreased in the three month period ended January 31, 2012 compared to the year-earlier period and increased in the nine month period ended January 31, 2012 compared to the year-earlier period. To maintain or increase physical occupancy levels at our properties, we may offer tenant incentives, generally in the form of lower or abated rents, which results in decreased revenues and income from operations at our properties. Additionally, as discussed below, in the three and nine months ended January 31, 2012, we abated rents at our Chateau Apartments and Arrowhead Shopping Center properties
for tenants displaced by the flooding in Minot, North Dakota in June 2011, and those abated rents are reflected in the amounts reported in the table below. Rent concessions offered during the three and nine months ended January 31, 2012 will lower, over the lives of the respective leases, our operating revenues by approximately $1.1 million and $4.6 million, as compared to an approximately $1.5 million and $3.6 million reduction, over the lives of the respective leases, in operating revenues attributable to rent concessions offered in the three and nine months ended January 31, 2011, as shown in the table below:
|
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
Multi-Family Residential
|
$ | 278 | $ | 386 | $ | (108 | ) | $ | 1,234 | $ | 1,185 | $ | 49 | |||||||||||
Commercial Office
|
697 | 913 | (216 | ) | 2,179 | 1,725 | 454 | |||||||||||||||||
Commercial Medical
|
24 | 56 | (32 | ) | 150 | 234 | (84 | ) | ||||||||||||||||
Commercial Industrial
|
94 | 57 | 37 | 569 | 308 | 261 | ||||||||||||||||||
Commercial Retail
|
49 | 122 | (73 | ) | 448 | 191 | 257 | |||||||||||||||||
Total
|
$ | 1,142 | $ | 1,534 | $ | (392 | ) | $ | 4,580 | $ | 3,643 | $ | 937 |
|
The amounts in the table above include abated rent at our Chateau Apartments and Arrowhead Shopping Center properties, which were extensively damaged in the flooding that occurred in Minot, North Dakota in June 2011. Abated rent included in the table above totaled $39,000 and $282,000 for the three and nine months ended January 31, 2012, respectively, at our Chateau Apartments; and $17,000 and $248,000 for the three and nine months ended January 31, 2012, respectively, at our Arrowhead Shopping Center property.
|
•
|
Utility Expense. Utility expense totaled $4.5 million for the three months ended January 31, 2012, compared to $4.8 million for the three months ended January 31, 2011, a decrease of 5.2%, over the year-earlier period. Utility expenses at properties newly acquired in fiscal years 2012 and 2011 added $88,000 to the utility expense category for the three months ended January 31, 2012. Utility expenses at existing properties decreased by $337,000 resulting in an overall decrease of $249,000 for the three months ended January 31, 2012 compared to the three months ended January 31, 2011. The decrease in utility costs at our stabilized properties for the three
months ended January 31, 2012 compared to the year earlier period is due primarily to a decrease in heat and electricity expenses due to the mild winter. Utility expense totaled $13.4 million for the nine months ended January 31, 2012, compared to $13.2 million for the nine months ended January 31, 2011, an increase of 1.8% over the year-earlier periods. Utility expenses at properties newly acquired in fiscal years 2012 and 2011 added $256,000 to the utility expense category for the nine months ended January 31, 2012. Utility expenses at existing properties decreased by $16,000 resulting in an overall increase of $240,000 for the nine months ended January 31, 2012 compared to the nine months ended January 31, 2011. The decrease in utility costs at our stabilized properties for the nine months ended January 31, 2012 compared to the year earlier period is due primarily to a the
timing of payments for an electrical bill-back in our commercial industrial segment offset by the increase in electricity for lights at our commercial office segment.
|
|
Utility expenses by reportable segment for the three and nine months ended January 31, 2012 and 2011 are as follows:
|
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 1,831 | $ | 1,698 | $ | 782 | $ | 71 | $ | 144 | $ | 4,526 | ||||||||||||
2011
|
$ | 1,851 | $ | 1,837 | $ | 812 | $ | 117 | $ | 158 | $ | 4,775 | ||||||||||||
Change
|
$ | (20 | ) | $ | (139 | ) | $ | (30 | ) | $ | (46 | ) | $ | (14 | ) | $ | (249 | ) | ||||||
% change
|
(1.1 | %) | (7.6 | %) | (3.7 | %) | (39.3 | %) | (8.9 | %) | (5.2 | %) | ||||||||||||
Stabilized
|
$ | (89 | ) | $ | (165 | ) | $ | (28 | ) | $ | (46 | ) | $ | (9 | ) | $ | (337 | ) | ||||||
Non-stabilized
|
$ | 69 | $ | 26 | $ | (2 | ) | $ | 0 | $ | (5 | ) | $ | 88 | ||||||||||
Change
|
$ | (20 | ) | $ | (139 | ) | $ | (30 | ) | $ | (46 | ) | $ | (14 | ) | $ | (249 | ) |
(in thousands)
|
||||||||||||||||||||||||
Nine Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 4,805 | $ | 5,850 | $ | 2,408 | $ | 19 | $ | 342 | $ | 13,424 | ||||||||||||
2011
|
$ | 4,586 | $ | 5,630 | $ | 2,404 | $ | 211 | $ | 353 | $ | 13,184 | ||||||||||||
Change
|
$ | 219 | $ | 220 | $ | 4 | $ | (192 | ) | $ | (11 | ) | $ | 240 | ||||||||||
% change
|
4.8 | % | 3.9 | % | 0.2 | % | (91.0 | %) | (3.1 | %) | 1.8 | % | ||||||||||||
Stabilized
|
$ | 57 | $ | 124 | $ | 1 | $ | (192 | ) | $ | (6 | ) | $ | (16 | ) | |||||||||
Non-stabilized
|
$ | 162 | $ | 96 | $ | 3 | $ | 0 | $ | (5 | ) | $ | 256 | |||||||||||
Change
|
$ | 219 | $ | 220 | $ | 4 | $ | (192 | ) | $ | (11 | ) | $ | 240 |
•
|
Decreased Maintenance Expense. Maintenance expenses totaled $6.4 million and $20.2 million for the three and nine months ended January 31, 2012 compared to $8.4 million and $22.0 million for the three and nine months ended January 31, 2011. Maintenance expenses at properties newly acquired in fiscal year 2012 and 2011 added $141,000 and $341,000, respectively, to the maintenance expenses category for the three and nine months ended January 31, 2012 compared to the corresponding period in fiscal year 2011. Maintenance expenses at existing properties decreased by $2.1 million and $2.2 million, respectively, for the three and nine months ended
January 31, 2012 compared to the corresponding period in fiscal year 2011, resulting in a net decrease in maintenance expenses of $2.0 million and $1.8 million, or 23.5% and 8.3% for the three and nine months ended January 31, 2012 compared to the corresponding period in fiscal year 2011. The decrease in maintenance costs at our stabilized properties for the three and nine months ended January 31, 2012 compared to the three and nine months ended January 31, 2011 is primarily due to a decrease in snow removal costs.
|
|
Maintenance expenses by reportable segment for the three and nine months ended January 31, 2012 and 2011 are as follows:
|
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 2,386 | $ | 2,516 | $ | 1,049 | $ | 143 | $ | 301 | $ | 6,395 | ||||||||||||
2011
|
$ | 2,857 | $ | 3,189 | $ | 1,347 | $ | 308 | $ | 657 | $ | 8,358 | ||||||||||||
Change
|
$ | (471 | ) | $ | (673 | ) | $ | (298 | ) | $ | (165 | ) | $ | (356 | ) | $ | (1,963 | ) | ||||||
% change
|
(16.5 | %) | (21.1 | %) | (22.1 | %) | (53.6 | %) | (54.2 | %) | (23.5 | %) | ||||||||||||
Stabilized
|
$ | (568 | ) | $ | (705 | ) | $ | (304 | ) | $ | (165 | ) | $ | (362 | ) | $ | (2,104 | ) | ||||||
Non-stabilized
|
$ | 97 | $ | 32 | $ | 6 | $ | 0 | $ | 6 | $ | 141 | ||||||||||||
Change
|
$ | (471 | ) | $ | (673 | ) | $ | (298 | ) | $ | (165 | ) | $ | (356 | ) | $ | (1,963 | ) |
(in thousands)
|
||||||||||||||||||||||||
Nine Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 7,840 | $ | 7,777 | $ | 3,154 | $ | 536 | $ | 878 | $ | 20,185 | ||||||||||||
2011
|
$ | 8,139 | $ | 8,572 | $ | 3,461 | $ | 587 | $ | 1,242 | $ | 22,001 | ||||||||||||
Change
|
$ | (299 | ) | $ | (795 | ) | $ | (307 | ) | $ | (51 | ) | $ | (364 | ) | $ | (1,816 | ) | ||||||
% change
|
(3.7 | %) | (9.3 | %) | (8.9 | %) | (8.7 | %) | (29.3 | %) | (8.3 | %) | ||||||||||||
Stabilized
|
$ | (485 | ) | $ | (929 | ) | $ | (314 | ) | $ | (51 | ) | $ | (378 | ) | $ | (2,157 | ) | ||||||
Non-stabilized
|
$ | 186 | $ | 134 | $ | 7 | $ | 0 | $ | 14 | $ | 341 | ||||||||||||
Change
|
$ | (299 | ) | $ | (795 | ) | $ | (307 | ) | $ | (51 | ) | $ | (364 | ) | $ | (1,816 | ) |
•
|
Increased Real Estate Tax Expense. Real estate taxes on properties newly acquired in fiscal years 2012 and 2011 added $213,000 and $437,000 to real estate tax expense in the three and nine months ended January 31, 2012, compared to the three and nine months ended January 31, 2011. Real estate taxes on stabilized properties increased by $56,000 and $23,000 in the three and nine months ended January 31, 2012, resulting in an increase of $269,000 and $460,000, or 3.5% and 2.0% for the three and nine months ended January 31, 2012, compared to the three and nine months ended January 31, 2011. The increase in real estate taxes for our stabilized properties for
the three months ended January 31, 2012 compared to the three months ended January 31, 2011 was due to higher value assessments and increased tax levies in all segments, with the exception of our multi-family residential and commercial office segments where value assessments and tax levies decreased as a result of certain successful tax appeals. The increase in real estate taxes for our stabilized properties for the nine months ended January 31, 2012 compared to the nine months ended January 31, 2011 was due to higher value assessments and increased tax levies in all segments, with the exception of our commercial office segment where value assessments and tax levies decreased as a result of certain successful tax appeals.
|
|
Real estate tax expense by reportable segment for the three and nine months ended January 31, 2012 and 2011 is as follows:
|
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 1,760 | $ | 3,545 | $ | 1,500 | $ | 685 | $ | 559 | $ | 8,049 | ||||||||||||
2011
|
$ | 1,676 | $ | 3,571 | $ | 1,375 | $ | 626 | $ | 532 | $ | 7,780 | ||||||||||||
Change
|
$ | 84 | $ | (26 | ) | $ | 125 | $ | 59 | $ | 27 | $ | 269 | |||||||||||
% change
|
5.0 | % | (0.7 | %) | 9.1 | % | 9.4 | % | 5.1 | % | 3.5 | % | ||||||||||||
Stabilized
|
$ | (16 | ) | $ | (45 | ) | $ | 46 | $ | 54 | $ | 17 | $ | 56 | ||||||||||
Non-stabilized
|
$ | 100 | $ | 19 | $ | 79 | $ | 5 | $ | 10 | $ | 213 | ||||||||||||
Change
|
$ | 84 | $ | (26 | ) | $ | 125 | $ | 59 | $ | 27 | $ | 269 |
(in thousands)
|
||||||||||||||||||||||||
Nine Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 5,104 | $ | 10,242 | $ | 4,477 | $ | 2,063 | $ | 1,642 | $ | 23,528 | ||||||||||||
2011
|
$ | 4,894 | $ | 10,453 | $ | 4,279 | $ | 1,907 | $ | 1,535 | $ | 23,068 | ||||||||||||
Change
|
$ | 210 | $ | (211 | ) | $ | 198 | $ | 156 | $ | 107 | $ | 460 | |||||||||||
% change
|
4.3 | % | (2.0 | %) | 4.6 | % | 8.2 | % | 7.0 | % | 2.0 | % | ||||||||||||
Stabilized
|
$ | 35 | $ | (299 | ) | $ | 75 | $ | 156 | $ | 56 | $ | 23 | |||||||||||
Non-stabilized
|
$ | 175 | $ | 88 | $ | 123 | $ | 0 | $ | 51 | $ | 437 | ||||||||||||
Change
|
$ | 210 | $ | (211 | ) | $ | 198 | $ | 156 | $ | 107 | $ | 460 |
•
|
Increased Insurance Expense. Insurance expense totaled $890,000 and $2.6 million for the three and nine months ended January 31, 2012 compared to $646,000 and $1.9 million for the three and nine months ended January 31, 2011. Insurance expenses at properties newly acquired in fiscal years 2012 and 2011 added $24,000 and $41,000 to the insurance expense category, while insurance expense at existing properties increased by $220,000 and $645,000 resulting in a net increase in
|
|
insurance expenses of $244,000 and $686,000 in the three and nine months ended January 31, 2012, a 37.8% and 36.8% increase over insurance expenses in the three and nine months ended January 31, 2011. The increase in insurance expense at stabilized properties is due primarily to the effect of the deductible under our insurance policy covering damages as a result of the flooding in North Dakota, in addition to other deductible adjustments in the prior year.
|
|
Insurance expense by reportable segment for the three and nine months ended January 31, 2012 and 2011 is as follows:
|
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 436 | $ | 211 | $ | 131 | $ | 60 | $ | 52 | $ | 890 | ||||||||||||
2011
|
$ | 319 | $ | 144 | $ | 117 | $ | 37 | $ | 29 | $ | 646 | ||||||||||||
Change
|
$ | 117 | $ | 67 | $ | 14 | $ | 23 | $ | 23 | $ | 244 | ||||||||||||
% change
|
36.7 | % | 46.5 | % | 12.0 | % | 62.2 | % | 79.3 | % | 37.8 | % | ||||||||||||
Stabilized
|
$ | 105 | $ | 65 | $ | 9 | $ | 23 | $ | 18 | $ | 220 | ||||||||||||
Non-stabilized
|
$ | 12 | $ | 2 | $ | 5 | $ | 0 | $ | 5 | $ | 24 | ||||||||||||
Change
|
$ | 117 | $ | 67 | $ | 14 | $ | 23 | $ | 23 | $ | 244 |
(in thousands)
|
||||||||||||||||||||||||
Nine Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 1,190 | $ | 654 | $ | 395 | $ | 169 | $ | 144 | $ | 2,552 | ||||||||||||
2011
|
$ | 910 | $ | 426 | $ | 339 | $ | 115 | $ | 76 | $ | 1,866 | ||||||||||||
Change
|
$ | 280 | $ | 228 | $ | 56 | $ | 54 | $ | 68 | $ | 686 | ||||||||||||
% change
|
30.8 | % | 53.5 | % | 16.5 | % | 47.0 | % | 89.5 | % | 36.8 | % | ||||||||||||
Stabilized
|
$ | 259 | $ | 222 | $ | 52 | $ | 53 | $ | 59 | $ | 645 | ||||||||||||
Non-stabilized
|
$ | 21 | $ | 6 | $ | 4 | $ | 1 | $ | 9 | $ | 41 | ||||||||||||
Change
|
$ | 280 | $ | 228 | $ | 56 | $ | 54 | $ | 68 | $ | 686 |
•
|
Property Management Expense. Property management expense totaled $5.0 million for the three months ended January 31, 2012 and compared to $5.5 million for the three months ended January 31, 2011. Property management expenses at properties newly acquired in fiscal years 2012 and 2011 added $130,000 to the property management expenses category in the three months ended January 31, 2012. Property management expenses at stabilized properties decreased by $615,000 for the three months ended January 31, 2012 compared to the three months ended January 31, 2011, primarily as a result of decreased operating expenses in the Wyoming TRS properties
following the sale of our TRS entity in the commercial medical segment, resulting in a decrease of $485,000 or 8.9% in the three months ended January 31, 2012 compared to the year-earlier periods. Property management expense totaled $15.8 million for the nine months ended January 31, 2012, compared to $15.5 million for the nine months ended January 31, 2011. Property management expenses at properties newly acquired in fiscal years 2012 and 2011 added $227,000 to the property management expenses category in the nine months ended January 31, 2012. Property management expenses at stabilized properties increased by $84,000 for the nine months ended January 31, 2012 compared to the nine months ended January 31, 2011, primarily as a result of bad debt provisions in the commercial medical segment.
|
|
Property management expense by reportable segment for the three and nine months ended January 31, 2012 and 2011 is as follows:
|
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 2,255 | $ | 725 | $ | 1,758 | $ | 119 | $ | 132 | $ | 4,989 | ||||||||||||
2011
|
$ | 2,200 | $ | 766 | $ | 2,243 | $ | 115 | $ | 150 | $ | 5,474 | ||||||||||||
Change
|
$ | 55 | $ | (41 | ) | $ | (485 | ) | $ | 4 | $ | (18 | ) | $ | (485 | ) | ||||||||
% change
|
2.5 | % | (5.4 | %) | (21.6 | %) | 3.5 | % | (12.0 | %) | (8.9 | %) | ||||||||||||
Stabilized
|
$ | (60 | ) | $ | (43 | ) | $ | (491 | ) | $ | 5 | $ | (26 | ) | $ | (615 | ) | |||||||
Non-stabilized
|
$ | 115 | $ | 2 | $ | 6 | $ | (1 | ) | $ | 8 | $ | 130 | |||||||||||
Change
|
$ | 55 | $ | (41 | ) | $ | (485 | ) | $ | 4 | $ | (18 | ) | $ | (485 | ) |
(in thousands)
|
||||||||||||||||||||||||
Nine Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 6,852 | $ | 1,928 | $ | 6,275 | $ | 391 | $ | 390 | $ | 15,836 | ||||||||||||
2011
|
$ | 6,718 | $ | 2,001 | $ | 6,080 | $ | 303 | $ | 423 | $ | 15,525 | ||||||||||||
Change
|
$ | 134 | $ | (73 | ) | $ | 195 | $ | 88 | $ | (33 | ) | $ | 311 | ||||||||||
% change
|
2.0 | % | (3.6 | %) | 3.2 | % | 29.0 | % | (7.8 | %) | 2.0 | % | ||||||||||||
Stabilized
|
$ | (47 | ) | $ | (84 | ) | $ | 183 | $ | 88 | $ | (56 | ) | $ | 84 | |||||||||
Non-stabilized
|
$ | 181 | $ | 11 | $ | 12 | $ | 0 | $ | 23 | $ | 227 | ||||||||||||
Change
|
$ | 134 | $ | (73 | ) | $ | 195 | $ | 88 | $ | (33 | ) | $ | 311 |
Decrease in Net Income
|
||||||||
(in thousands)
|
||||||||
|
Three Months
ended January 31, 2012
|
Nine Months
ended January 31, 2012
|
||||||
Net income for Fiscal 2011
|
$ | 14,588 | $ | 24,041 | ||||
Increase in NOI
|
3,061 | 3,283 | ||||||
Increase in depreciation/amortization due to depreciation of tenant and capital improvements
|
(681 | ) | (1,554 | ) | ||||
Decrease (increase) in administrative, advisory and trustee fees due to additional corporate staff and overhead and increased trustee fees
|
191 | (407 | ) | |||||
Decrease (increase) in other expenses
|
82 | (152 | ) | |||||
Increase in impairment of real estate investments
|
(135 | ) | (135 | ) | ||||
Increase in interest expense
|
(665 | ) | (421 | ) | ||||
Increase in interest and other income
|
188 | 250 | ||||||
Decrease in income from discontinued operations
|
(14,108 | ) | (19,320 | ) | ||||
Net income for Fiscal 2012
|
$ | 2,521 | $ | 5,585 |
•
|
Mortgage Interest Expense. Our mortgage interest expense increased approximately $146,000, or 1.0%, to approximately $15.4 million during the third quarter of fiscal year 2012, compared to $15.3 million in the third quarter of fiscal year 2011. Mortgage interest expense decreased approximately $866,000, or 1.9%, to approximately $45.5 million during the nine month period ended January 31, 2012, compared to $46.3 million in the nine month period ended January 31, 2011.
|
|
Mortgage interest expense for properties newly acquired in fiscal years 2012 and 2011 added $572,000 and $1.4 million, respectively to our total mortgage interest expense in the three and nine months ended January 31, 2012, while mortgage interest expense on existing properties decreased $426,000 and $2.3 million, respectively for the three and nine months ended January 31, 2012. The decrease in mortgage interest expense is due to refinancings in our stabilized properties portfolio. The mortgage interest expense category does not include interest expense on the multi-bank line of credit we entered into in the first quarter of fiscal year 2011, which totaled approximately $775,000 and $1.8 million in the three and nine months ended January 31, 2012. Mortgage interest
expense and interest expense on our line of credit are all components of “Interest expense” on our consolidated statement of operations. Our overall weighted average interest rate on all outstanding mortgage debt (excluding borrowings under our secured line of credit) was 5.81% as of January 31, 2012 and 6.05% as of January 31, 2011. Our mortgage debt on January 31, 2012 increased approximately $44.9 million, or 4.5% from April 30, 2011. Mortgage debt does not include our multi-bank line of credit which appears on our consolidated balance sheet in “Revolving line of credit.”
|
|
Mortgage interest expense by reportable segment for the three and nine months ended January 31, 2012 and 2011 is as follows:
|
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 4,435 | $ | 5,293 | $ | 4,134 | $ | 865 | $ | 719 | $ | 15,446 | ||||||||||||
2011
|
$ | 4,171 | $ | 5,281 | $ | 4,130 | $ | 948 | $ | 770 | $ | 15,300 | ||||||||||||
Change
|
$ | 264 | $ | 12 | $ | 4 | $ | (83 | ) | $ | (51 | ) | $ | 146 | ||||||||||
% change
|
6.3 | % | 0.2 | % | 0.1 | % | (8.8 | %) | (6.6 | %) | 1.0 | % | ||||||||||||
Stabilized
|
$ | 32 | $ | (47 | ) | $ | (277 | ) | $ | (83 | ) | $ | (51 | ) | $ | (426 | ) | |||||||
Non-stabilized
|
$ | 232 | $ | 59 | $ | 281 | $ | 0 | $ | 0 | $ | 572 | ||||||||||||
Change
|
$ | 264 | $ | 12 | $ | 4 | $ | (83 | ) | $ | (51 | ) | $ | 146 |
(in thousands)
|
||||||||||||||||||||||||
Nine Months Ended January 31,
|
Multi-Family
Residential
|
Commercial
Office
|
Commercial
Medical
|
Commercial
Industrial
|
Commercial
Retail
|
Total
|
||||||||||||||||||
2012
|
$ | 12,869 | $ | 15,690 | $ | 12,065 | $ | 2,621 | $ | 2,217 | $ | 45,462 | ||||||||||||
2011
|
$ | 12,549 | $ | 16,253 | $ | 12,345 | $ | 2,857 | $ | 2,324 | $ | 46,328 | ||||||||||||
Change
|
$ | 320 | $ | (563 | ) | $ | (280 | ) | $ | (236 | ) | $ | (107 | ) | $ | (866 | ) | |||||||
% change
|
2.6 | % | (3.5 | %) | (2.3 | %) | (8.3 | %) | (4.6 | %) | (1.9 | %) | ||||||||||||
Stabilized
|
$ | (66 | ) | $ | (775 | ) | $ | (1,085 | ) | $ | (236 | ) | $ | (107 | ) | $ | (2,269 | ) | ||||||
Non-stabilized
|
$ | 386 | $ | 212 | $ | 805 | $ | 0 | $ | 0 | $ | 1,403 | ||||||||||||
Change
|
$ | 320 | $ | (563 | ) | $ | (280 | ) | $ | (236 | ) | $ | (107 | ) | $ | (866 | ) |
|
In addition to IRET’s mortgage interest expense, the Company incurs interest expense for a line of credit, amortization of loan costs, security deposits, and special assessments offset by capitalized construction interest. For the three months ended January 31, 2012 and 2011 these amounts were $1.1 million and $568,000, respectively, for a total interest expense for the three months ended January 31, 2012 and 2011 of $16.5 million and $15.9 million, respectively, an increase of $665,000. For the nine months ended
January 31, 2012 and 2011 these amounts were $3.3 million and $2.0 million, respectively, for a total interest expense for the nine months ended January 31, 2012 and 2011 of $48.8 million and $48.3 million, respectively, an increase of $421,000.
|
•
|
Decreased Amortization Expense. The Company allocates a portion of the purchase price paid for properties to in-place lease intangible assets. The amortization period of these intangible assets is the term of the respective lease. Amortization expense related to in-place leases totaled $1.2 million and $4.4 million in the three and nine months ended January 31, 2012 compared to $1.7 million and $5.5 million in the three and nine months ended January 31, 2011.
|
Lessee
|
% of Total Commercial
Segments’ Minimum Rents
as of January 1, 2012
|
Affiliates of Edgewood Vista
|
12.4%
|
St. Lukes Hospital of Duluth, Inc.
|
3.5%
|
Fairview Health Services
|
3.4%
|
Applied Underwriters
|
2.2%
|
Affiliates of Siemens USA (NYSE: SI)
|
1.6%
|
HealthEast Care System
|
1.6%
|
Affiliates of Hewlett Packard (NASDAQ: HPQ)
|
1.4%
|
Microsoft (NASDAQ: MSFT)
|
1.4%
|
Smurfit - Stone Container (NASDAQ: SSCC)
|
1.3%
|
Nebraska Orthopedic Hospital
|
1.3%
|
All Others
|
69.9%
|
Total Monthly Commercial Rent as of January 1, 2012
|
100.0%
|
(in thousands, except per share amounts)
|
||||||||||||||||||||||||
Three Months Ended January 31,
|
2012
|
2011
|
||||||||||||||||||||||
Amount
|
Weighted
Avg Shares
and Units(2)
|
Per
Share and
Unit(3)
|
Amount
|
Weighted
Avg Shares
and Units(2)
|
Per
Share
And
Unit(3)
|
|||||||||||||||||||
Net income attributable to Investors Real Estate Trust
|
$ | 2,127 | $ | 11,833 | ||||||||||||||||||||
Less dividends to preferred shareholders
|
(593 | ) | (593 | ) | ||||||||||||||||||||
Net income available to common shareholders
|
1,534 | 84,339 | $ | 0.02 | 11,240 | 79,398 | $ | 0.14 | ||||||||||||||||
Adjustments:
|
||||||||||||||||||||||||
Noncontrolling interest – Operating Partnership
|
351 | 19,596 | 2,793 | 19,957 | ||||||||||||||||||||
Depreciation and amortization(1)
|
15,179 | 14,577 | ||||||||||||||||||||||
Impairment of real estate investments
|
135 | 0 | ||||||||||||||||||||||
Gain on depreciable property sales
|
0 | (13,961 | ) | |||||||||||||||||||||
Funds from operations applicable to common shares
and Units
|
$ | 17,199 | 103,935 | $ | 0.16 | 14,649 | 99,355 | $ | 0.14 |
(in thousands, except per share amounts)
|
||||||||||||||||||||||||
Nine Months Ended January 31,
|
2012
|
2011
|
||||||||||||||||||||||
Amount
|
Weighted
Avg Shares
and Units(2)
|
Per
Share and
Unit(3)
|
Amount
|
Weighted
Avg Shares
and Units(2)
|
Per
Share
And
Unit(3)
|
|||||||||||||||||||
Net income attributable to Investors Real Estate Trust
|
$ | 4,833 | $ | 19,638 | ||||||||||||||||||||
Less dividends to preferred shareholders
|
(1,779 | ) | (1,779 | ) | ||||||||||||||||||||
Net income available to common shareholders
|
3,054 | 82,424 | $ | 0.04 | 17,859 | 78,140 | $ | 0.23 | ||||||||||||||||
Adjustments:
|
||||||||||||||||||||||||
Noncontrolling interest – Operating Partnership
|
723 | 19,752 | 4,485 | 20,171 | ||||||||||||||||||||
Depreciation and amortization(4)
|
44,892 | 44,525 | ||||||||||||||||||||||
Impairment of real estate investments
|
135 | 0 | ||||||||||||||||||||||
Gain on depreciable property sales
|
(589 | ) | (19,365 | ) | ||||||||||||||||||||
Funds from operations applicable to common shares
and Units
|
$ | 48,215 | 102,176 | $ | 0.47 | 47,504 | 98,311 | $ | 0.48 |
(1)
|
Real estate depreciation and amortization consists of the sum of depreciation/amortization related to real estate investments and amortization related to non-real estate investments from the Condensed Consolidated Statements of Operations, totaling $15,262 and $14,581, and depreciation/amortization from Discontinued Operations of $0 and $51, less corporate-related depreciation and amortization on office equipment and other assets of $83 and $55, for the three months ended January 31, 2012 and 2011, respectively.
|
(2)
|
UPREIT Units of the Operating Partnership are exchangeable for common shares of beneficial interest on a one-for-one basis.
|
(3)
|
Net income attributable to Investors Real Estate Trust is calculated on a per share basis. FFO is calculated on a per share and unit basis.
|
(4)
|
Real estate depreciation and amortization consists of the sum of depreciation/amortization related to real estate investments and amortization related to non-real estate investments from the Condensed Consolidated Statements of Operations, totaling $45,105 and $43,551, and depreciation/amortization from Discontinued Operations of $8 and $1,172, less corporate-related depreciation and amortization on office equipment and other assets of $221 and $198, for the nine months ended January 31, 2012 and 2011, respectively.
|
Month
|
Fiscal Year 2012
|
Fiscal Year 2011
|
||||||
July
|
$ | .1715 | $ | .1715 | ||||
October
|
.1300 | .1715 | ||||||
January
|
.1300 | .1715 |
(in thousands)
|
||||||||||||||||||||||||||||||||
Future Principal Payments
|
||||||||||||||||||||||||||||||||
Mortgages
|
Remaining
Fiscal 2012
|
Fiscal 2013
|
Fiscal 2014
|
Fiscal 2015
|
Fiscal 2016
|
Thereafter
|
Total
|
Fair Value
|
||||||||||||||||||||||||
Fixed Rate
|
$ | 13,364 | $ | 51,607 | $ | 65,425 | $ | 96,457 | $ | 86,182 | $ | 715,163 | $ | 1,028,198 | $ | 1,076,421 | ||||||||||||||||
Average Fixed Interest Rate(1)
|
5.77 | % | 5.76 | % | 5.72 | % | 5.60 | % | 5.53 | % | ||||||||||||||||||||||
Variable Rate
|
$ | 53 | $ | 117 | $ | 599 | $ | 9,750 | $ | 0 | $ | 0 | $ | 10,519 | $ | 10,519 | ||||||||||||||||
Average Variable Interest Rate(1)
|
5.00 | % | 5.46 | % | 5.32 | % | 5.57 | % | 0 | |||||||||||||||||||||||
$ | 1,038,717 | $ | 1,086,940 |
(in thousands)
|
||||||||||||||||||||||||||||
Future Interest Payments
|
||||||||||||||||||||||||||||
Mortgages
|
Remaining
Fiscal 2012
|
Fiscal 2013
|
Fiscal 2014
|
Fiscal 2015
|
Fiscal 2016
|
Thereafter
|
Total
|
|||||||||||||||||||||
Fixed Rate
|
$ | 15,020 | $ | 58,489 | $ | 55,113 | $ | 50,268 | $ | 44,326 | $ | 117,398 | $ | 340,614 | ||||||||||||||
Variable Rate
|
135 | 571 | 550 | 136 | 0 | 0 | 1,392 | |||||||||||||||||||||
$ | 342,006 |
(1)
|
Interest rate given is for the entire year.
|
Exhibit No.
|
Description
|
12
|
Calculation of Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Share Distributions
|
31.1
|
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
The following materials from our Quarterly Report on Form 10-Q for the quarter ended January 31, 2012 formatted in eXtensible Business Reporting Language ( “XBRL”): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) notes to these condensed consolidated financial statements.
|
/s/ Timothy P. Mihalick
|
Timothy P. Mihalick
|
President and Chief Executive Officer
|
/s/ Diane K. Bryantt
|
Diane K. Bryantt
|
Senior Vice President and Chief Financial Officer
|
Exhibit No.
|
Description
|
12
|
Calculation of Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Share Distributions
|
31.1
|
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
The following materials from our Quarterly Report on Form 10-Q for the quarter ended January 31, 2012 formatted in eXtensible Business Reporting Language ( “XBRL”): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) notes to these condensed consolidated financial statements.
|
Nine Months
Ended
|
Fiscal Year Ended
April 30,
|
||||||||||||||||||||||||
January 31, 2012
|
2011
|
2010
|
2009
|
2008
|
2007
|
||||||||||||||||||||
Earnings
|
|||||||||||||||||||||||||
Income from continuing operations
|
$ | 4,969 | $ | 4,391 | $ | 5,155 | $ | 10,388 | $ | 14,459 | $ | 14,335 | |||||||||||||
Add:
|
|||||||||||||||||||||||||
Combined fixed charges and preferred distributions (see below)
|
50,785 | 67,882 | 71,497 | 72,027 | 66,317 | 61,280 | |||||||||||||||||||
Less:
|
|||||||||||||||||||||||||
(Income) loss noncontrolling interests – consolidated real estate entities
|
(29 | ) | 180 | (22 | ) | 40 | 136 | 26 | |||||||||||||||||
Interest capitalized
|
(230 | ) | (57 | ) | (19 | ) | (912 | ) | (506 | ) | (69 | ) | |||||||||||||
Preferred distributions
|
(1,779 | ) | (2,372 | ) | (2,372 | ) | (2,372 | ) | (2,372 | ) | (2,372 | ) | |||||||||||||
Total earnings
|
$ | 53,716 | $ | 70,024 | $ | 74,239 | $ | 79,171 | $ | 78,034 | $ | 73,200 | |||||||||||||
Fixed charges
|
|||||||||||||||||||||||||
Interest expensed
|
$ | 48,776 | $ | 65,453 | $ | 69,106 | $ | 68,743 | $ | 63,439 | $ | 58,839 | |||||||||||||
Interest capitalized
|
230 | 57 | 19 | 912 | 506 | 69 | |||||||||||||||||||
Total Fixed charges
|
$ | 49,006 | $ | 65,510 | $ | 69,125 | $ | 69,655 | $ | 63,945 | $ | 58,908 | |||||||||||||
Preferred distributions
|
1,779 | 2,372 | 2,372 | 2,372 | 2,372 | 2,372 | |||||||||||||||||||
Total Combined fixed charges and preferred distributions
|
$ | 50,785 | $ | 67,882 | $ | 71,497 | $ | 72,027 | $ | 66,317 | $ | 61,280 | |||||||||||||
Ratio of earnings to fixed charges
|
1.10 | 1.07 | 1.07 | 1.14 | 1.22 | 1.24 | |||||||||||||||||||
Ratio of earnings to combined fixed charges and preferred distributions
|
1.06 | 1.03 | 1.04 | 1.10 | 1.18 | 1.19 |
1.
|
I have reviewed this quarterly report on Form 10-Q of Investors Real Estate Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Timothy, P. Mihalick
|
Timothy, P. Mihalick , President & CEO
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Investors Real Estate Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date: March 12, 2012
|
By:
|
/s/ Diane K. Bryantt
|
Diane K. Bryantt, Senior Vice President & CFO
|
/s/ Timothy P. Mihalick
|
Timothy P. Mihalick
|
President and Chief Executive Officer
|
Date: March 12, 2012
|
/s/ Diane K. Bryantt
|
Diane K. Bryantt
|
Senior Vice President and Chief Financial Officer
|
Date: March 12, 2012
|
EARNINGS PER SHARE
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes To Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | NOTE 3 . EARNINGS PER SHARE Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted earnings per share reported in the condensed consolidated financial statements for the three and nine months ended January 31, 2012 and 2011:
|