North Dakota
|
45-0311232
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
1400 31st Avenue SW, Suite 60
|
|
Post Office Box 1988
|
|
Minot, ND 58702-1988
|
|
(Address of principal executive offices) (Zip code)
|
Yes R
|
No £
|
Yes R
|
No £
|
Large accelerated filer R
|
Accelerated filer £
|
|
Non-accelerated filer £
|
Smaller Reporting Company £
|
Yes £
|
No R
|
|
Page
|
|
|
3
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
For the Three Months ended July 31, 2014 and 2013
|
|
6
|
|
|
|
8
|
|
28
|
|
48
|
|
49
|
|
|
|
|
|
50
|
|
50
|
|
50
|
|
50
|
|
50
|
|
50
|
|
50
|
|
51
|
|
(in thousands, except share data)
|
|||
|
July 31, 2014
|
April 30, 2014
|
||
ASSETS
|
|
|
|
|
Real estate investments
|
|
|
|
|
Property owned
|
$
|
2,025,327
|
$
|
1,996,031
|
Less accumulated depreciation
|
|
(435,317)
|
|
(424,288)
|
|
|
1,590,010
|
|
1,571,743
|
Development in progress
|
|
131,862
|
|
104,609
|
Unimproved land
|
|
24,772
|
|
22,864
|
Total real estate investments
|
|
1,746,644
|
|
1,699,216
|
Real estate held for sale
|
|
6,508
|
|
2,951
|
Cash and cash equivalents
|
|
60,620
|
|
47,267
|
Other investments
|
|
329
|
|
329
|
Receivable arising from straight-lining of rents, net of allowance of $717 and $796, respectively
|
|
27,286
|
|
27,096
|
Accounts receivable, net of allowance of $306 and $248, respectively
|
|
7,013
|
|
10,206
|
Real estate deposits
|
|
3,741
|
|
145
|
Prepaid and other assets
|
|
3,428
|
|
4,639
|
Intangible assets, net of accumulated amortization of $25,497 and $24,071, respectively
|
|
31,478
|
|
32,639
|
Tax, insurance, and other escrow
|
|
20,451
|
|
20,880
|
Property and equipment, net of accumulated depreciation of $2,140 and $2,041, respectively
|
|
1,641
|
|
1,681
|
Goodwill
|
|
1,951
|
|
1,100
|
Deferred charges and leasing costs, net of accumulated amortization of $22,237 and $21,068, respectively
|
|
20,677
|
|
21,072
|
TOTAL ASSETS
|
$
|
1,931,767
|
$
|
1,869,221
|
LIABILITIES AND EQUITY
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Accounts payable and accrued expenses
|
$
|
62,517
|
$
|
59,105
|
Revolving line of credit
|
|
35,500
|
|
22,500
|
Mortgages payable
|
|
1,017,574
|
|
997,689
|
Other
|
|
83,666
|
|
63,178
|
TOTAL LIABILITIES
|
|
1,199,257
|
|
1,142,472
|
COMMITMENTS AND CONTINGENCIES (NOTE 6)
|
|
|
|
|
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES
|
|
6,313
|
|
6,203
|
EQUITY
|
|
|
|
|
Investors Real Estate Trust shareholders' equity
|
|
|
|
|
Series A Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at July 31, 2014 and April 30, 2014, aggregate liquidation preference of $28,750,000)
|
|
27,317
|
|
27,317
|
Series B Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 4,600,000 shares issued and outstanding at July 31, 2014 and April 30, 2014, aggregate liquidation preference of $115,000,000)
|
|
111,357
|
|
111,357
|
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 114,762,774 shares issued and outstanding at July 31, 2014, and 109,019,341 shares issued and outstanding at April 30, 2014)
|
|
884,415
|
|
843,268
|
Accumulated distributions in excess of net income
|
|
(407,052)
|
|
(389,758)
|
Total Investors Real Estate Trust shareholders' equity
|
|
616,037
|
|
592,184
|
Noncontrolling interests – Operating Partnership (17,975,440 units at July 31, 2014 and 21,093,445 units at April 30, 2014)
|
|
84,250
|
|
105,724
|
Noncontrolling interests – consolidated real estate entities
|
|
25,910
|
|
22,638
|
Total equity
|
|
726,197
|
|
720,546
|
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
|
$
|
1,931,767
|
$
|
1,869,221
|
|
(in thousands, except per share data)
|
|||
|
Three Months Ended
July 31
|
|||
|
|
2014
|
|
2013
|
REVENUE
|
|
|
|
|
Real estate rentals
|
$
|
57,126
|
$
|
53,623
|
Tenant reimbursement
|
|
10,711
|
|
11,475
|
TRS senior housing revenue
|
|
793
|
|
0
|
TOTAL REVENUE
|
|
68,630
|
|
65,098
|
EXPENSES
|
|
|
|
|
Depreciation/amortization related to real estate investments
|
|
16,184
|
|
18,056
|
Utilities
|
|
4,681
|
|
4,923
|
Maintenance
|
|
7,764
|
|
7,729
|
Real estate taxes
|
|
8,501
|
|
8,375
|
Insurance
|
|
1,736
|
|
1,301
|
Property management expenses
|
|
4,630
|
|
4,135
|
Other property expenses
|
|
206
|
|
177
|
TRS senior housing expenses
|
|
693
|
|
0
|
Administrative expenses
|
|
3,485
|
|
2,524
|
Advisory and trustee services
|
|
179
|
|
229
|
Other expenses
|
|
612
|
|
679
|
Amortization related to non-real estate investments
|
|
872
|
|
944
|
Impairment of real estate investments
|
|
2,320
|
|
0
|
TOTAL EXPENSES
|
|
51,863
|
|
49,072
|
Gain on involuntary conversion
|
|
0
|
|
966
|
Operating income
|
|
16,767
|
|
16,992
|
Interest expense
|
|
(14,664)
|
|
(14,596)
|
Interest income
|
|
560
|
|
188
|
Other income
|
|
131
|
|
22
|
Income before loss on sale of real estate and other investments and income from discontinued operations
|
|
2,794
|
|
2,606
|
Loss on sale of real estate and other investments
|
|
(2,993)
|
|
0
|
(Loss) income from continuing operations
|
|
(199)
|
|
2,606
|
Income from discontinued operations
|
|
0
|
|
610
|
NET (LOSS) INCOME
|
|
(199)
|
|
3,216
|
Net loss (income) attributable to noncontrolling interests – Operating Partnership
|
|
402
|
|
(50)
|
Net income attributable to noncontrolling interests – consolidated real estate entities
|
|
(354)
|
|
(88)
|
Net (loss) income attributable to Investors Real Estate Trust
|
|
(151)
|
|
3,078
|
Dividends to preferred shareholders
|
|
(2,879)
|
|
(2,879)
|
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
(3,030)
|
$
|
199
|
(Loss) earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted
|
$
|
(.03)
|
$
|
.00
|
Earnings per common share from discontinued operations – Investors Real Estate Trust – basic and diluted
|
|
.00
|
|
.00
|
NET (LOSS) INCOME PER COMMON SHARE – BASIC AND DILUTED
|
$
|
(.03)
|
$
|
.00
|
DIVIDENDS PER COMMON SHARE
|
$
|
.1300
|
$
|
.1300
|
|
(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
|
|||||
|
|
|
|
|
|
|
|
|
(as revised)
|
(as revised)
|
||
Balance April 30, 2013
|
5,750
|
$
|
138,674
|
101,488
|
$
|
784,454
|
$
|
(310,341)
|
$
|
142,657
|
$
|
755,444
|
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests
|
|
|
|
|
|
|
|
3,078
|
|
126
|
|
3,204
|
Distributions – common shares and units
|
|
|
|
|
|
|
|
(13,264)
|
|
(2,829)
|
|
(16,093)
|
Distributions – Series A preferred shares
|
|
|
|
|
|
|
|
(593)
|
|
|
|
(593)
|
Distributions – Series B preferred shares
|
|
|
|
|
|
|
|
(2,286)
|
|
|
|
(2,286)
|
Distribution reinvestment and share purchase plan
|
|
|
|
2,600
|
|
22,673
|
|
|
|
|
|
22,673
|
Share-based compensation
|
|
|
|
13
|
|
112
|
|
|
|
|
|
112
|
Partnership units issued
|
|
|
|
|
|
|
|
|
|
3,280
|
|
3,280
|
Redemption of units for common shares
|
|
|
|
125
|
|
706
|
|
|
|
(706)
|
|
0
|
Other
|
|
|
|
|
|
(17)
|
|
|
|
(367)
|
|
(384)
|
Balance July 31, 2013
|
5,750
|
$
|
138,674
|
104,226
|
$
|
807,928
|
$
|
(323,406)
|
$
|
142,161
|
$
|
765,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance April 30, 2014
|
5,750
|
$
|
138,674
|
109,019
|
$
|
843,268
|
$
|
(389,758)
|
$
|
128,362
|
$
|
720,546
|
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests
|
|
|
|
|
|
|
|
(151)
|
|
(157)
|
|
(308)
|
Distributions – common shares and units
|
|
|
|
|
|
|
|
(14,264)
|
|
(2,740)
|
|
(17,004)
|
Distributions – Series A preferred shares
|
|
|
|
|
|
|
|
(593)
|
|
|
|
(593)
|
Distributions – Series B preferred shares
|
|
|
|
|
|
|
|
(2,286)
|
|
|
|
(2,286)
|
Distribution reinvestment and share purchase plan
|
|
|
|
2,422
|
|
20,926
|
|
|
|
|
|
20,926
|
Share-based compensation
|
|
|
|
204
|
|
1,889
|
|
|
|
|
|
1,889
|
Redemption of units for common shares
|
|
|
|
3,118
|
|
18,332
|
|
|
|
(18,332)
|
|
0
|
Contributions from nonredeemable noncontrolling interests – consolidated real estate entities
|
|
|
|
|
|
|
|
|
|
3,212
|
|
3,212
|
Other
|
|
|
|
|
|
|
|
|
|
(185)
|
|
(185)
|
Balance July 31, 2014
|
5,750
|
$
|
138,674
|
114,763
|
$
|
884,415
|
$
|
(407,052)
|
$
|
110,160
|
$
|
726,197
|
|
(in thousands)
|
|||
|
Three Months Ended
July 31
|
|||
|
2014
|
2013
|
||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
Net (loss) income
|
$
|
(199)
|
$
|
3,216
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
17,463
|
|
20,087
|
Loss (gain) on sale of real estate, land, other investments and discontinued operations
|
|
2,993
|
|
(1,943)
|
Gain on involuntary conversion
|
|
0
|
|
(966)
|
Share-based compensation expense
|
|
1,763
|
|
229
|
Impairment of real estate investments
|
|
2,320
|
|
1,803
|
Bad debt expense
|
|
136
|
|
178
|
Changes in other assets and liabilities:
|
|
|
|
|
Increase in receivable arising from straight-lining of rents
|
|
(143)
|
|
(654)
|
Decrease (increase) in accounts receivable
|
|
1,229
|
|
(811)
|
Decrease in prepaid and other assets
|
|
1,197
|
|
367
|
Decrease (increase) in tax, insurance and other escrow
|
|
146
|
|
(640)
|
Increase in deferred charges and leasing costs
|
|
(926)
|
|
(897)
|
Decrease in accounts payable, accrued expenses, and other liabilities
|
|
(2,594)
|
|
(2,685)
|
Net cash provided by operating activities
|
|
23,385
|
|
17,284
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
Proceeds from real estate deposits
|
|
140
|
|
157
|
Payments for real estate deposits
|
|
(3,736)
|
|
(450)
|
Decrease in lender holdbacks for improvements
|
|
609
|
|
1,144
|
Increase in lender holdbacks for improvements
|
|
(326)
|
|
(279)
|
Proceeds from sale of discontinued operations
|
|
0
|
|
21,261
|
Proceeds from sale of real estate and other investments
|
|
6,416
|
|
7
|
Insurance proceeds received
|
|
2,054
|
|
1,004
|
Payments for acquisitions of real estate assets
|
|
(13,008)
|
|
(3,099)
|
Payments for development and re-development of real estate assets
|
|
(36,892)
|
|
(26,476)
|
Payments for improvements of real estate assets
|
|
(7,556)
|
|
(7,224)
|
Net cash used by investing activities
|
|
(52,299)
|
|
(13,955)
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from mortgages payable
|
|
25,000
|
|
4,100
|
Principal payments on mortgages payable
|
|
(18,090)
|
|
(22,916)
|
Proceeds from revolving line of credit and other debt
|
|
50,492
|
|
6,313
|
Principal payments on revolving line of credit and other debt
|
|
(17,000)
|
|
0
|
Proceeds from financing liability
|
|
0
|
|
7,900
|
Proceeds from sale of common shares under distribution reinvestment and share purchase program
|
|
16,941
|
|
15,941
|
Proceeds from noncontrolling partner – consolidated real estate entities
|
|
1,006
|
|
0
|
Distributions paid to common shareholders, net of reinvestment of $3,801 and $3,549, respectively
|
|
(10,463)
|
|
(9,715)
|
Distributions paid to preferred shareholders
|
|
(2,879)
|
|
(2,879)
|
Distributions paid to noncontrolling interests – Unitholders of the Operating Partnership, net of reinvestment of $185 and $183, respectively
|
|
(2,555)
|
|
(2,646)
|
Distributions paid to noncontrolling interests – consolidated real estate entities
|
|
(185)
|
|
(367)
|
Net cash provided (used) by financing activities
|
|
42,267
|
|
(4,269)
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
13,353
|
|
(940)
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
47,267
|
|
94,133
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
60,620
|
$
|
93,193
|
|
(in thousands)
|
|||
|
Three Months Ended
July 31
|
|||
|
2014
|
2013
|
||
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES FOR THE PERIOD
|
|
|
|
|
Distribution reinvestment plan
|
$
|
3,801
|
$
|
3,549
|
Operating partnership distribution reinvestment plan
|
|
185
|
|
183
|
Operating partnership units converted to shares
|
|
18,332
|
|
706
|
Increase in accounts receivable from sale of common shares under distribution reinvestment and share purchase program
|
|
0
|
|
3,000
|
Real estate assets acquired through the issuance of operating partnership units
|
|
0
|
|
3,280
|
Real estate assets acquired through assumption of indebtedness and accrued costs
|
|
12,169
|
|
0
|
Increase to accounts payable included within real estate investments
|
|
6,129
|
|
4,547
|
Real estate assets contributed by noncontrolling interests – consolidated real estate entities
|
|
2,206
|
|
0
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
Cash paid for interest, net of amounts capitalized of $1,030 and $580, respectively
|
$
|
13,099
|
$
|
14,220
|
|
(in thousands)
|
|||
|
July 31, 2014
|
April 30, 2014
|
||
Identified intangible assets (included in intangible assets):
|
|
|
|
|
Gross carrying amount
|
$
|
56,975
|
$
|
56,710
|
Accumulated amortization
|
|
(25,497)
|
|
(24,071)
|
Net carrying amount
|
$
|
31,478
|
$
|
32,639
|
|
|
|
|
|
Identified intangible liabilities (included in other liabilities):
|
|
|
|
|
Gross carrying amount
|
$
|
173
|
$
|
173
|
Accumulated amortization
|
|
(131)
|
|
(127)
|
Net carrying amount
|
$
|
42
|
$
|
46
|
Year Ended April 30,
|
(in thousands)
|
|
2016
|
$
|
19
|
2017
|
|
11
|
2018
|
|
(2)
|
2019
|
|
(3)
|
2020
|
|
(2)
|
Year Ended April 30,
|
(in thousands)
|
|
2016
|
$
|
4,567
|
2017
|
|
4,099
|
2018
|
|
3,667
|
2019
|
|
3,543
|
2020
|
|
3,457
|
|
(in thousands)
|
|||||
Three Months Ended July 31, 2013
|
As Previously Reported
|
Adjustment
|
As Revised
|
|||
Consolidated Statement of Equity
|
|
|
|
|
|
|
Noncontrolling Interests
|
|
|
|
|
|
|
Balance April 30, 2013
|
$
|
148,594
|
$
|
(5,937)
|
$
|
142,657
|
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests
|
|
138
|
|
(12)
|
|
126
|
Balance July 31, 2013
|
|
148,110
|
|
(5,949)
|
|
142,161
|
Total Equity
|
|
|
|
|
|
|
Balance April 30, 2013
|
|
761,381
|
|
(5,937)
|
|
755,444
|
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests
|
|
3,216
|
|
(12)
|
|
3,204
|
Balance July 31, 2013
|
|
771,306
|
|
(5,949)
|
|
765,357
|
|
(in thousands, except per share data)
|
|||
|
Three Months Ended
July 31
|
|||
|
2014
|
2013
|
||
NUMERATOR
|
|
|
|
|
(Loss) income from continuing operations – Investors Real Estate Trust
|
$
|
(151)
|
$
|
2,584
|
Income from discontinued operations – Investors Real Estate Trust
|
|
0
|
|
494
|
Net (loss) income attributable to Investors Real Estate Trust
|
|
(151)
|
|
3,078
|
Dividends to preferred shareholders
|
|
(2,879)
|
|
(2,879)
|
Numerator for basic earnings per share – net income available to common shareholders
|
|
(3,030)
|
|
199
|
Noncontrolling interests – Operating Partnership
|
|
(402)
|
|
50
|
Numerator for diluted earnings per share
|
$
|
(3,432)
|
$
|
249
|
DENOMINATOR
|
|
|
|
|
Denominator for basic earnings per share weighted average shares
|
|
111,039
|
|
102,358
|
Effect of convertible operating partnership units
|
|
20,293
|
|
21,821
|
Denominator for diluted earnings per share
|
|
131,332
|
|
124,179
|
(Loss) earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted
|
$
|
(.03)
|
$
|
.00
|
Earnings per common share from discontinued operations – Investors Real Estate Trust – basic and diluted
|
|
.00
|
|
.00
|
NET (LOSS) INCOME PER COMMON SHARE – BASIC & DILUTED
|
$
|
(.03)
|
$
|
.00
|
Three Months Ended July 31, 2014
|
(in thousands)
|
|||||||||||
Multi-Family
Residential |
Commercial-
Office |
Commercial-
Healthcare |
Commercial-
Industrial |
Commercial-
Retail |
Total
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate revenue
|
$
|
27,727
|
$
|
18,846
|
$
|
16,298
|
$
|
1,570
|
$
|
3,396
|
$
|
67,837
|
Real estate expenses
|
|
12,221
|
|
9,327
|
|
4,416
|
|
450
|
|
1,104
|
|
27,518
|
Net operating income
|
$
|
15,506
|
$
|
9,519
|
$
|
11,882
|
$
|
1,120
|
$
|
2,292
|
|
40,319
|
TRS senior housing revenue
|
|
|
|
|
|
|
|
|
|
|
|
793
|
TRS senior housing expenses
|
|
|
|
|
|
|
|
|
|
(693)
|
||
Depreciation/amortization
|
|
|
|
|
|
|
|
|
|
(17,056)
|
||
Administrative, advisory and trustee services
|
|
|
|
|
|
|
|
|
|
(3,664)
|
||
Impairment of real estate investments
|
|
|
|
|
|
|
|
|
|
(2,320)
|
||
Other expenses
|
|
|
|
|
|
|
|
|
|
(612)
|
||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
(14,664)
|
Interest and other income
|
|
|
|
|
|
|
|
|
|
|
|
691
|
Income before loss on sale of real estate and other investments
|
|
2,794
|
||||||||||
Loss on sale of real estate and other investments
|
|
(2,993)
|
||||||||||
Net (loss)
|
$
|
(199)
|
Three Months Ended July 31, 2013
|
(in thousands)
|
|||||||||||
Multi-Family
Residential |
Commercial-
Office |
Commercial-
Healthcare |
Commercial-
Industrial |
Commercial-
Retail |
Total
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate revenue
|
$
|
24,373
|
$
|
19,315
|
$
|
16,073
|
$
|
2,038
|
$
|
3,299
|
$
|
65,098
|
Real estate expenses
|
|
10,846
|
|
9,753
|
|
4,284
|
|
454
|
|
1,303
|
|
26,640
|
Gain on involuntary conversion
|
|
966
|
|
0
|
|
0
|
|
0
|
|
0
|
|
966
|
Net operating income
|
$
|
14,493
|
$
|
9,562
|
$
|
11,789
|
$
|
1,584
|
$
|
1,996
|
|
39,424
|
Depreciation/amortization
|
|
|
|
|
|
|
|
|
|
|
|
(19,000)
|
Administrative, advisory and trustee services
|
|
|
|
|
|
|
|
|
|
(2,753)
|
||
Other expenses
|
|
|
|
|
|
|
|
|
|
|
|
(679)
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
(14,596)
|
Interest and other income
|
|
|
|
|
|
|
|
|
|
|
|
210
|
Income from continuing operations
|
|
|
|
|
|
|
|
|
2,606
|
|||
Income from discontinued operations
|
|
|
|
|
|
|
|
|
|
610
|
||
Net income
|
$
|
3,216
|
|
(in thousands)
|
|||||||||||
As of July 31, 2014
|
Multi-Family
Residential |
Commercial-
Office |
Commercial-
Healthcare |
Commercial-
Industrial |
Commercial-
Retail |
Total
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Property owned
|
$
|
798,020
|
$
|
537,096
|
$
|
525,595
|
$
|
50,670
|
$
|
113,946
|
$
|
2,025,327
|
Less accumulated depreciation
|
|
(163,937)
|
|
(123,902)
|
|
(109,656)
|
|
(10,136)
|
|
(27,686)
|
|
(435,317)
|
Net property owned
|
$
|
634,083
|
$
|
413,194
|
$
|
415,939
|
$
|
40,534
|
$
|
86,260
|
|
1,590,010
|
Real estate held for sale
|
|
|
|
|
|
|
|
|
|
|
|
6,508
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
60,620
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
329
|
Receivables and other assets
|
|
|
|
|
|
|
|
|
|
|
|
117,666
|
Development in progress
|
|
|
|
|
|
|
|
|
|
|
|
131,862
|
Unimproved land
|
|
|
|
|
|
|
|
|
|
|
|
24,772
|
Total assets
|
|
|
|
|
|
|
|
|
|
|
$
|
1,931,767
|
|
(in thousands)
|
|||||||||||
As of April 30, 2014
|
Multi-Family
Residential |
Commercial-
Office |
Commercial-
Healthcare |
Commercial-
Industrial |
Commercial-
Retail |
Total
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Property owned
|
$
|
753,731
|
$
|
544,628
|
$
|
525,028
|
$
|
55,375
|
$
|
117,269
|
$
|
1,996,031
|
Less accumulated depreciation
|
|
(158,100)
|
|
(121,892)
|
|
(105,843)
|
|
(10,198)
|
|
(28,255)
|
|
(424,288)
|
Net property owned
|
$
|
595,631
|
$
|
422,736
|
$
|
419,185
|
$
|
45,177
|
$
|
89,014
|
|
1,571,743
|
Real estate held for sale
|
|
|
|
|
|
|
|
|
|
|
|
2,951
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
47,267
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
329
|
Receivables and other assets
|
|
|
|
|
|
|
|
|
|
|
|
119,458
|
Development in progress
|
|
|
|
|
|
|
|
|
|
|
|
104,609
|
Unimproved land
|
|
|
|
|
|
|
|
|
|
|
|
22,864
|
Total assets
|
$
|
1,869,221
|
|
|
|
(in thousands)
|
|
|||||
Project Name and Location
|
Planned Segment
|
Square Feet
or Number of Units
|
Anticipated
Total Cost
|
Costs as of
July 31, 2014(1)
|
Loans Closed or Committed
|
Anticipated Construction Completion
|
|||
Commons at Southgate - Minot, ND(2)
|
Multi-Family Residential
|
233 units
|
$
|
37,201
|
$
|
33,218
|
$
|
24,480
|
FY2015 Q2
|
Minot Wells Fargo Bank - Minot, ND
|
Commercial Office
|
4,998 sq ft
|
|
3,288
|
|
1,550
|
|
0
|
FY2015 Q2
|
Cypress Court II – St. Cloud, MN(3)
|
Multi-Family Residential
|
66 units
|
|
7,028
|
|
3,168
|
|
4,200
|
FY2015 Q3
|
Arcata - Golden Valley, MN
|
Multi-Family Residential
|
165 units
|
|
33,448
|
|
19,048
|
|
24,250
|
FY2015 Q3
|
Red 20 - Minneapolis, MN(4)
|
Multi-Family Residential and Commercial
|
130 units and 10,625 sq ft
|
|
29,462
|
|
20,399
|
|
21,726
|
FY2015 Q3
|
Renaissance Heights I - Williston, ND(5)
|
Multi-Family Residential
|
288 units
|
|
62,362
|
|
44,251
|
|
43,672
|
FY2015 Q4
|
Roseville 3075 Long Lake Rd - Roseville, MN
|
Commercial Industrial
|
202,807 sq ft
|
|
13,915
|
|
2,578
|
|
11,000
|
FY2015 Q4
|
Chateau II - Minot, ND(6)
|
Multi-Family Residential
|
72 units
|
|
14,711
|
|
5,681
|
|
0
|
FY2016 Q1
|
Cardinal Point - Grand Forks, ND
|
Multi-Family Residential
|
251 units
|
|
40,042
|
|
9,333
|
|
24,500
|
FY2016 Q1
|
71 France Phase I - Edina, MN(7)
|
Multi-Family Residential
|
109 units
|
|
29,660
|
|
4,255
|
|
20,365
|
FY2016 Q1
|
Edina 6565 France SMC III - Edina, MN
|
Commercial Medical
|
72,012 sq ft
|
|
34,665
|
|
4,204
|
|
0
|
FY2016 Q2
|
PrairieCare Medical - Brooklyn Park, MN
|
Commercial Medical
|
75,000 sq ft
|
|
24,251
|
|
4,486
|
|
15,000
|
FY2016 Q2
|
Deer Ridge – Jamestown, ND
|
Multi-Family Residential
|
163 units
|
|
24,519
|
|
1,793
|
|
0
|
FY2016 Q2
|
Other
|
n/a
|
n/a
|
|
n/a
|
|
874
|
|
n/a
|
n/a
|
|
|
|
$
|
354,552
|
$
|
154,838
|
$
|
189,193
|
|
(1)
|
Includes costs related to development projects that are placed in service in phases (Renaissance Heights I - $23.0 million).
|
(2)
|
The Company is currently an approximately 52.9% partner in the joint venture entity constructing this project; the anticipated total cost amount given is the total cost to the joint venture entity.
|
(3)
|
The Company is an approximately 86.1% partner in the joint venture entity constructing this project; the anticipated total cost amount given is the total cost to the joint venture entity.
|
(4)
|
The Company is an approximately 58.6% partner in the joint venture entity constructing this project; the anticipated total cost amount given is the total cost to the joint venture entity.
|
(5)
|
The Company is an approximately 70% partner in the joint venture entity constructing this project; the anticipated total cost amount given is the total cost to the joint venture entity.
|
(6)
|
On December 5, 2013, this development project was destroyed by fire. As of July 31, 2014, $4.0 million of expected insurance proceeds were included in accounts receivable on the Company's consolidated balance sheet. See Note 2 for additional information.
|
(7)
|
The Company is currently an approximately 55.3% partner in the joint venture entity constructing this project. The project will be constructed in three phases, and at the conclusion of construction of the third phase, the Company will have an approximately 50.5% interest in the project. The anticipated total cost amount given in the table above is the total cost to the joint venture entity of the project's first phase. The expected total project cost for all three phases is approximately $69.9 million for a total of approximately 241 residential units and approximately 21,772 square feet of commercial retail space.
|
·
|
a 68-unit multi-family residential property in Bismarck, North Dakota, for a purchase price of $8.5 million, of which approximately $8.4 million is to be paid in cash with the remainder in limited partnership units of the Operating Partnership valued at approximately $100,000;
|
·
|
an approximately 12.7-acre parcel of vacant land in Monticello, Minnesota, for a purchase price of $1.7 million, to be paid in cash;
|
·
|
a 119-unit multi-family residential property in Bismarck, North Dakota, for a purchase price of $15.0 million, of which approximately $14.3 million is to be paid in cash with the remainder in limited partnership units of the Operating Partnership valued at approximately $700,000; and
|
·
|
a 74-unit multi-family residential property in Grand Forks, North Dakota, for a purchase price of $9.3 million, of which approximately $8.9 million is to be paid in cash with the remainder in limited partnership units of the Operating Partnership valued at approximately $400,000.
|
·
|
a commercial office property in Maple Grove, Minnesota, for a sales price of $7.2 million;
|
·
|
a commercial retail property in Fargo, North Dakota, for a sales price of $2.8 million; and
|
·
|
a multi-family residential property in St. Cloud, Minnesota, for a sales price of $4.5 million.
|
|
(in thousands)
|
|
|
Three Months Ended
July 31, 2013
|
|
REVENUE
|
|
|
Real estate rentals
|
$
|
1,632
|
Tenant reimbursement
|
|
719
|
TOTAL REVENUE
|
|
2,351
|
EXPENSES
|
|
|
Depreciation/amortization related to real estate investments
|
|
537
|
Utilities
|
|
128
|
Maintenance
|
|
185
|
Real estate taxes
|
|
528
|
Insurance
|
|
49
|
Property management expenses
|
|
118
|
Amortization related to non-real estate investments
|
|
49
|
Impairment of real estate investments
|
|
1,803
|
TOTAL EXPENSES
|
|
3,397
|
Operating loss
|
|
(1,046)
|
Interest expense
|
|
(287)
|
Loss from discontinued operations before gain on sale
|
|
(1,333)
|
Gain on sale of discontinued operations
|
|
1,943
|
INCOME FROM DISCONTINUED OPERATIONS
|
$
|
610
|
|
|
(in thousands)
|
|||||||||||
|
|
Total
Acquisition
Cost
|
Form of Consideration
|
Investment Allocation
|
|||||||||
Acquisitions
|
Date Acquired
|
Cash
|
Other(1)
|
Land
|
Building
|
Intangible
Assets
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Residential
|
|
|
|
|
|
|
|
|
|
|
|
|
|
152 unit – Homestead Garden - Rapid City, SD(2)
|
2014-06-02
|
$
|
15,000
|
$
|
5,092
|
$
|
9,908
|
$
|
655
|
$
|
14,139
|
$
|
206
|
52 unit – Silver Springs - Rapid City, SD
|
2014-06-02
|
|
3,280
|
|
1,019
|
|
2,261
|
|
215
|
|
3,006
|
|
59
|
|
|
|
18,280
|
|
6,111
|
|
12,169
|
|
870
|
|
17,145
|
|
265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unimproved Land
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creekside Crossing – Bismarck, ND
|
2014-05-22
|
|
4,269
|
|
4,269
|
|
0
|
|
4,269
|
|
0
|
|
0
|
PrairieCare Medical – Brooklyn Park, MN
|
2014-06-05
|
|
2,616
|
|
2,616
|
|
0
|
|
2,616
|
|
0
|
|
0
|
71 France Phase I – Edina, MN(3)
|
2014-06-12
|
|
1,413
|
|
0
|
|
1,413
|
|
1,413
|
|
0
|
|
0
|
|
|
|
8,298
|
|
6,885
|
|
1,413
|
|
8,298
|
|
0
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Property Acquisitions
|
|
$
|
26,578
|
$
|
12,996
|
$
|
13,582
|
$
|
9,168
|
$
|
17,145
|
$
|
265
|
(1)
|
Consists of assumed debt (Homestead Garden I - $9.9 million, Silver Springs - $2.3 million) and value of land contributed by the joint venture partner (71 France - $1.4 million).
|
(2)
|
At acquisition the Company adjusted the assumed debt to fair value and recognized approximately $852,000 of goodwill.
|
(3)
|
Land is owned by a joint venture in which the Company currently has an approximately 55.3% interest. The joint venture is consolidated in IRET's financial statements.
|
|
|
(in thousands)
|
|||||||||||
|
|
Total
Acquisition
Cost
|
Form of Consideration
|
Investment Allocation
|
|||||||||
Acquisitions
|
Date Acquired
|
Cash
|
Units(1)
|
Land
|
Building
|
Intangible
Assets
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Residential
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71 unit - Alps Park - Rapid City, SD
|
2013-05-01
|
$
|
6,200
|
$
|
2,920
|
$
|
3,280
|
$
|
287
|
$
|
5,551
|
$
|
362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unimproved Land
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chateau II - Minot, ND
|
2013-05-21
|
|
179
|
|
179
|
|
0
|
|
179
|
|
0
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Property Acquisitions
|
|
$
|
6,379
|
$
|
3,099
|
$
|
3,280
|
$
|
466
|
$
|
5,551
|
$
|
362
|
(1)
|
Value of limited partnership units of the Operating Partnership at the acquisition date.
|
|
(in thousands)
|
|||
|
Three Months Ended
July 31
|
|||
|
2014
|
2013
|
||
Total revenue
|
$
|
362
|
$
|
186
|
Net (loss) income
|
$
|
20
|
$
|
(108)
|
|
|
(in thousands)
|
|||||
Development Projects Placed in Service (1)
|
Date Placed in
Service
|
Land
|
Building
|
Development
Cost
|
|||
|
|
|
|
|
|
|
|
Multi-Family Residential
|
|
|
|
|
|
|
|
44 unit – Dakota Commons - Williston, ND(2)
|
2014-07-15
|
|
823
|
|
9,442
|
|
10,265
|
|
|
|
|
|
|
|
|
Total Development Projects Placed in Service
|
|
$
|
823
|
$
|
9,442
|
$
|
10,265
|
(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 Note 6 for additional information on the Renaissance Heights I project, which was partially placed in service during the fiscal year 2014 and the three months ended July 31, 2014. |
(2)
|
Development property placed in service July 15, 2014. Costs paid in fiscal year 2014 totaled $8.1 million, including the land acquired in fiscal year 2013. Additional costs paid in fiscal year 2015 totaled $2.2 million, for a total project cost at July 31, 2014 of $10.3 million.
|
|
|
(in thousands)
|
|||||
Dispositions
|
Date
Disposed
|
Sales Price
|
Book Value
and Sales Cost
|
Gain/(Loss)
|
|||
|
|
|
|
|
|
|
|
Commercial Office
|
|
|
|
|
|
|
|
73,338 sq ft Dewey Hill - Edina, MN
|
2014-05-19
|
|
3,100
|
|
3,124
|
|
(24)
|
|
|
|
|
|
|
|
|
Commercial Industrial
|
|
|
|
|
|
|
|
198,600 sq ft Eagan 2785 & 2795 – Eagan, MN
|
2014-07-15
|
|
3,600
|
|
5,393
|
|
(1,793)
|
|
|
|
|
|
|
|
|
Commercial Retail
|
|
|
|
|
|
|
|
25,644 sq ft Weston Retail – Weston, WI
|
2014-07-28
|
|
n/a
|
|
1,176
|
|
(1,176)
|
|
|
|
|
|
|
|
|
Total Property Dispositions
|
|
$
|
6,700
|
$
|
9,693
|
$
|
(2,993)
|
|
|
(in thousands)
|
|||||
Dispositions
|
Date
Disposed
|
Sales Price
|
Book Value
and Sales Cost
|
Gain/(Loss)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Industrial
|
|
|
|
|
|
|
|
41,880 sq ft Bodycote Industrial Building- Eden Prairie, MN
|
2013-05-13
|
|
3,150
|
|
1,375
|
|
1,775
|
42,244 sq ft Fargo 1320 45th Street N - Fargo, ND
|
2013-05-13
|
|
4,700
|
|
4,100
|
|
600
|
49,620 sq ft Metal Improvement Company - New Brighton, MN
|
2013-05-13
|
|
2,350
|
|
1,949
|
|
401
|
172,057 sq ft Roseville 2929 Long Lake Road - Roseville, MN
|
2013-05-13
|
|
9,275
|
|
9,998
|
|
(723)
|
|
|
|
19,475
|
|
17,422
|
|
2,053
|
|
|
|
|
|
|
|
|
Commercial Retail
|
|
|
|
|
|
|
|
23,187 sq ft Eagan Community - Eagan, MN
|
2013-05-14
|
|
2,310
|
|
2,420
|
|
(110)
|
|
|
|
|
|
|
|
|
Total Property Dispositions
|
|
$
|
21,785
|
$
|
19,842
|
$
|
1,943
|
Fiscal year ended April 30,
|
(in thousands)
|
|
2015 (remainder)
|
$
|
70,760
|
2016
|
|
92,893
|
2017
|
|
214,722
|
2018
|
|
113,386
|
2019
|
|
132,793
|
Thereafter
|
|
393,020
|
Total payments
|
$
|
1,017,574
|
|
(in thousands)
|
|||||||
|
July 31, 2014
|
|||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||
ASSETS:
|
|
|
|
|
||||
Real estate investments
|
$
|
6,425
|
$
|
0
|
$
|
0
|
$
|
6,425
|
|
(in thousands)
|
|||||||
|
April 30, 2014
|
|||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||
ASSETS:
|
|
|
|
|
||||
Real estate investments
|
$
|
89,537
|
$
|
0
|
$
|
0
|
$
|
89,537
|
Real estate held for sale
|
|
2,951
|
|
0
|
|
0
|
|
2,951
|
|
(in thousands)
|
|||||||
|
July 31, 2014
|
April 30, 2014
|
||||||
|
Carrying Amount
|
Fair Value
|
Carrying Amount
|
Fair Value
|
||||
FINANCIAL ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
60,620
|
$
|
60,620
|
$
|
47,267
|
$
|
47,267
|
Other investments
|
|
329
|
|
329
|
|
329
|
|
329
|
FINANCIAL LIABILITIES
|
|
|
|
|
|
|
|
|
Other debt
|
|
83,624
|
|
83,727
|
|
63,132
|
|
63,250
|
Line of credit
|
|
35,500
|
|
35,500
|
|
22,500
|
|
22,500
|
Mortgages payable
|
|
1,017,574
|
|
1,173,786
|
|
997,689
|
|
1,130,262
|
|
(in thousands)
|
|
Balance at April 30, 2013
|
$
|
5,937
|
Net income
|
|
12
|
Balance at July 31, 2013
|
$
|
5,949
|
|
(in thousands)
|
|
Balance at April 30, 2014
|
$
|
6,203
|
Net income
|
|
110
|
Balance at July 31, 2014
|
$
|
6,313
|
Class of shares/units
|
Quarterly Amount
per Share or Unit
|
|
Record Date
|
|
Payment Date
|
Common shares and limited partnership units
|
$0.1300
|
|
September 15, 2014
|
|
October 1, 2014
|
Preferred shares:
|
|
|
|
|
|
Series A
|
$0.5156
|
|
September 15, 2014
|
|
September 30, 2014
|
Series B
|
$0.4968
|
|
September 15, 2014
|
|
September 30, 2014
|
·
|
The acquisition of two parcels of vacant land for possible future development: an approximately 35-acre parcel in Bismarck, North Dakota, for a purchase price of $4.3 million, and an approximately 10.5-acre parcel in Brooklyn Park, Minnesota, for a purchase price of $2.6 million.
|
·
|
The acquisition of two multi-family residential properties in Rapid City, South Dakota for a purchase price totaling $18.3 million, adding approximately 204 units to the Company's multi-family residential portfolio.
|
·
|
The disposition of a commercial office property in Edina, Minnesota, for a sale price of $3.1 million.
|
·
|
The placement into service of the Company's 44-unit Dakota Commons multi-family residential property in Williston, North Dakota, and of 54 units of the approximately 288-unit Renaissance Heights multi-family residential property in Williston, North Dakota, in which the Company has an approximately 70% interest.
|
·
|
The commencement of construction on the following development or redevelopment projects: 71 France (Phase I), an approximately 109-unit multi-family residential development in Edina, Minnesota; Edina 6565 France SMC III, an approximately 72,012 square foot medical office building in Edina, Minnesota; PrairieCare Medical, an approximately 75,000 square foot healthcare property in Brooklyn Park, Minnesota; Deer Ridge, an approximately 163-unit multi-family residential property in Jamestown, North Dakota; Minot Wells Fargo Bank, an approximately 4,998 square foot office property in Minot, North Dakota; and Roseville 3075 Long Lake Rd, an approximately 202,807 square foot industrial property in Roseville, Minnesota.
|
·
|
the acquisition of a multi-family residential property in Rapid City, South Dakota for $6.2 million, adding 71 units to the Company's multi-family residential portfolio;
|
·
|
the disposition of four commercial industrial properties and one commercial retail property, for a total sales price of approximately $21.8 million and a gain of approximately $1.9 million; and
|
·
|
the filing of a registration statement with the Securities and Exchange Commission to enable the Company to offer and sell, from time to time, in one or more offerings, an indeterminate amount of its common and preferred shares of beneficial interest and debt securities.
|
|
(in thousands, except percentages)
|
|||||||
|
Three Months Ended July 31
|
2014 vs 2013
|
||||||
|
2014
|
2013
|
$ Change
|
% Change
|
||||
Real estate rentals
|
$
|
57,126
|
$
|
53,623
|
$
|
3,503
|
6.5%
|
|
Tenant reimbursement
|
|
10,711
|
|
11,475
|
|
(764)
|
(6.7)%
|
|
TRS senior housing revenue
|
|
793
|
|
0
|
|
793
|
n/a
|
|
TOTAL REVENUE
|
|
68,630
|
|
65,098
|
|
3,532
|
5.4%
|
|
Depreciation/amortization related to real estate investments
|
|
16,184
|
|
18,056
|
|
(1,872)
|
(10.4)%
|
|
Utilities
|
|
4,681
|
|
4,923
|
|
(242)
|
(4.9)%
|
|
Maintenance
|
|
7,764
|
|
7,729
|
|
35
|
0.5%
|
|
Real estate taxes
|
|
8,501
|
|
8,375
|
|
126
|
1.5%
|
|
Insurance
|
|
1,736
|
|
1,301
|
|
435
|
33.4%
|
|
Property management expenses
|
|
4,630
|
|
4,135
|
|
495
|
12.0%
|
|
Other property expenses
|
|
206
|
|
177
|
|
29
|
16.4%
|
|
TRS senior housing expenses
|
|
693
|
|
0
|
|
693
|
n/a
|
|
Administrative expenses
|
|
3,485
|
|
2,524
|
|
961
|
38.1%
|
|
Advisory and trustee services
|
|
179
|
|
229
|
|
(50)
|
(21.8)%
|
|
Other expenses
|
|
612
|
|
679
|
|
(67)
|
(9.9)%
|
|
Amortization related to non-real estate investments
|
|
872
|
|
944
|
|
(72)
|
(7.6)%
|
|
Impairment of real estate investments
|
|
2,320
|
|
0
|
|
2,320
|
n/a
|
|
TOTAL EXPENSES
|
|
51,863
|
|
49,072
|
|
2,791
|
5.7%
|
|
Gain on involuntary conversion
|
|
0
|
|
966
|
|
(966)
|
(100.0)%
|
|
Operating income
|
|
16,767
|
|
16,992
|
|
(225)
|
(1.3)%
|
|
Interest expense
|
|
(14,664)
|
|
(14,596)
|
|
(68)
|
0.5%
|
|
Interest income
|
|
560
|
|
188
|
|
372
|
197.9%
|
|
Other income
|
|
131
|
|
22
|
|
109
|
495.5%
|
|
Income before loss on sale of real estate and other investments and income from discontinued operations
|
|
2,794
|
|
2,606
|
|
188
|
7.2%
|
|
Loss on sale of real estate and other investments
|
|
(2,993)
|
|
0
|
|
(2,993)
|
n/a
|
|
(Loss) income from continuing operations
|
|
(199)
|
|
2,606
|
|
(2,805)
|
(107.6)%
|
|
Income from discontinued operations
|
|
0
|
|
610
|
|
(610)
|
(100.0)%
|
|
NET (LOSS) INCOME
|
|
(199)
|
|
3,216
|
|
(3,415)
|
(106.2)%
|
|
Net loss (income) attributable to noncontrolling interests – Operating Partnership
|
|
402
|
|
(50)
|
|
452
|
(904.0)%
|
|
Net income attributable to noncontrolling interests – consolidated real estate entities
|
|
(354)
|
|
(88)
|
|
(266)
|
302.3%
|
|
Net (loss) income attributable to Investors Real Estate Trust
|
|
(151)
|
|
3,078
|
|
(3,229)
|
(104.9)%
|
|
Dividends to preferred shareholders
|
|
(2,879)
|
|
(2,879)
|
|
0
|
0.0%
|
|
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
(3,030)
|
$
|
199
|
|
(3,229)
|
(1622.6)%
|
|
(in thousands)
|
|
|
Increase in Total
Revenue
Three Months
ended July 31, 2014
|
|
Rent in Fiscal 2015 primarily from properties acquired and development projects placed in service in Fiscal 2015
|
$
|
413
|
Rent in Fiscal 2015 primarily from properties acquired and development projects placed in service in Fiscal 2014 in excess of that received in Fiscal 2014 from the same properties
|
|
2,569
|
Decrease in rent primarily from properties disposed in Fiscal 2015
|
|
(490)
|
Increase in rent on same-store properties(1)
|
|
247
|
TRS senior housing revenue in excess of that received in Fiscal 2014(2)
|
|
793
|
Net increase in total revenue
|
$
|
3,532
|
(1)
|
See analysis of NOI by segment on pages 35-39 of the MD&A for additional information.
|
(2)
|
See discussion in TRS Senior Housing Expenses paragraph below.
|
|
(in thousands)
Three Months Ended July 31
|
2014 vs. 2013
|
||||||
|
2014
|
2013
|
$ Change
|
% Change
|
||||
Mortgage debt
|
$
|
13,409
|
$
|
14,170
|
$
|
(761)
|
(5.4%)
|
|
Line of credit
|
|
422
|
|
132
|
|
290
|
219.7%
|
|
Other
|
|
833
|
|
294
|
|
539
|
183.3%
|
|
Total interest expense
|
$
|
14,664
|
$
|
14,596
|
$
|
68
|
0.5%
|
|
Same-store Properties
|
|
All Properties
|
||
|
As of July 31,
|
|
As of July 31,
|
||
Segments
|
2014
|
2013
|
|
2014
|
2013
|
Multi-Family Residential
|
93.8%
|
93.4%
|
|
93.4%
|
92.8%
|
Commercial Office
|
81.3%
|
81.5%
|
|
81.3%
|
80.8%
|
Commercial Healthcare
|
96.3%
|
95.4%
|
|
96.5%
|
95.4%
|
Commercial Industrial
|
100.0%
|
91.0%
|
|
100.0%
|
79.8%
|
Commercial Retail
|
86.3%
|
81.9%
|
|
86.3%
|
80.3%
|
|
(in thousands, except percentages)
|
||||||
Three Months Ended July 31
|
|||||||
|
2014
|
2013
|
$ Change
|
% Change
|
|||
All Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate revenue
|
|
|
|
|
|
|
|
Same-store
|
$
|
64,407
|
$
|
64,159
|
$
|
248
|
0.4%
|
Non-same-store(1)
|
|
3,430
|
|
939
|
|
2,491
|
265.3%
|
Total
|
$
|
67,837
|
$
|
65,098
|
$
|
2,739
|
4.2%
|
|
|
|
|
|
|
|
|
Real estate expenses
|
|
|
|
|
|
|
|
Same-store
|
$
|
26,284
|
$
|
26,137
|
$
|
147
|
0.6%
|
Non-same-store(1)
|
|
1,234
|
|
503
|
|
731
|
145.3%
|
Total
|
$
|
27,518
|
$
|
26,640
|
$
|
878
|
3.3%
|
|
|
|
|
|
|
|
|
Gain on involuntary conversion
|
|
|
|
|
|
|
|
Same-store
|
$
|
0
|
$
|
0
|
$
|
0
|
n/a
|
Non-same-store(1)
|
|
0
|
|
966
|
|
(966)
|
(100.0)%
|
Total
|
$
|
0
|
$
|
966
|
$
|
(966)
|
(100.0)%
|
|
|
|
|
|
|
|
|
Net operating income
|
|
|
|
|
|
|
|
Same-store
|
$
|
38,123
|
$
|
38,022
|
$
|
101
|
0.3%
|
Non-same-store(1)
|
|
2,196
|
|
1,402
|
|
794
|
56.6%
|
Total
|
$
|
40,319
|
$
|
39,424
|
$
|
895
|
2.3%
|
TRS senior housing revenue
|
|
793
|
|
0
|
|
|
|
TRS senior housing expenses
|
|
(693)
|
|
0
|
|
|
|
Depreciation/amortization
|
|
(17,056)
|
|
(19,000)
|
|
|
|
Administrative, advisory and trustee services
|
|
(3,664)
|
|
(2,753)
|
|
|
|
Other expenses
|
|
(612)
|
|
(679)
|
|
|
|
Impairment of real estate investments
|
|
(2,320)
|
|
0
|
|
|
|
Interest expense
|
|
(14,664)
|
|
(14,596)
|
|
|
|
Interest and other income
|
|
691
|
|
210
|
|
|
|
Income before loss on sale of real estate and other investments and income from discontinued operations
|
|
2,794
|
|
2,606
|
|
|
|
Loss on sale of real estate and other investments
|
|
(2,993)
|
|
0
|
|
|
|
(Loss) income from continuing operations
|
|
(199)
|
|
2,606
|
|
|
|
Income from discontinued operations(2)
|
|
0
|
|
610
|
|
|
|
Net (loss) income
|
$
|
(199)
|
$
|
3,216
|
|
|
|
(1)
|
Non-same-store properties consist of the following properties (re-development and in-service development properties are listed in bold type):
|
|
FY2015 -
|
Multi-Family Residential -
|
Colonial Villa, Burnsville, MN; Cypress Court, St. Cloud, MN; Dakota Commons, Williston, ND; Homestead Garden, Rapid City, SD; Landing at Southgate, Minot, ND; Pinecone Villas, Sartell, MN; Renaissance Heights I, Williston, ND; River Ridge, Bismarck, ND; Silver Springs, Rapid City, SD and Southpoint, Grand Forks, ND.
Total number of units, 1,102.
|
Commercial Healthcare -
|
Spring Creek Fruitland, Fruitland, ID.
Total rentable square footage, 39,500.
|
|
Commercial Industrial -
|
Roseville 3075 Long Lake Road, Roseville, MN.
Total rentable square footage, 17,750.
|
FY2014 -
|
Multi-Family Residential -
|
Colonial Villa, Burnsville, MN
Total number of units, 240.
|
Commercial Industrial -
|
Roseville 3075 Long Lake Road, Roseville, MN.
Total rentable square footage, 17,750.
|
Sold -
|
Commercial Office -
|
Dewey Hill Business Center, Edina, MN.
NOI for the three months ended July 31, 2014 and 2013, respectively, $2 and $(1).
|
Commercial Industrial -
|
Eagan 2785 & 2795 Hwy 55, Eagan, MN.
NOI for the three months ended July 31, 2014 and 2013, respectively, $5 and $(51).
|
|
Commercial Retail -
|
Weston Retail, Weston, WI.
NOI for the three months ended July 31, 2014 and 2013, respectively, $0 and $(10).
|
(2)
|
Discontinued operations include gain on disposals and income from operations for:
|
2014 Dispositions – Anoka Strip Center, API Building, Bloomington Business Plaza, Bodycote Industrial Building, Brooklyn Park 7401 Boone Ave, Burnsville 2 Strip Center, Cedar Lake Business Center, Clive 2075 NW 94th Street, Dixon Avenue Industrial Park, Eagan Community, East Park, Fargo 1320 45th Street N, Lighthouse, Metal Improvement Company, Minnetonka 13600 County Road 62, Nicollet VII, Pillsbury Business Center, Roseville 2929 Long Lake Road, Sycamore Village and Winsted Industrial Building.
|
|
(in thousands, except percentages)
|
||||||
|
Three Months Ended July 31,
|
||||||
|
2014
|
2013
|
$ Change
|
% Change
|
|||
Multi-Family Residential
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate revenue
|
|
|
|
|
|
|
|
Same-store
|
$
|
24,547
|
$
|
24,007
|
$
|
540
|
2.2%
|
Non-same-store
|
|
3,180
|
|
366
|
|
2,814
|
768.9%
|
Total
|
$
|
27,727
|
$
|
24,373
|
$
|
3,354
|
13.8%
|
|
|
|
|
|
|
|
|
Real estate expenses
|
|
|
|
|
|
|
|
Same-store
|
$
|
11,151
|
$
|
10,539
|
$
|
612
|
5.8%
|
Non-same-store
|
|
1,070
|
|
307
|
|
763
|
248.5%
|
Total
|
$
|
12,221
|
$
|
10,846
|
$
|
1,375
|
12.7%
|
|
|
|
|
|
|
|
|
Gain on involuntary conversion
|
|
|
|
|
|
|
|
Same-store
|
$
|
0
|
$
|
0
|
$
|
0
|
n/a
|
Non-same-store
|
|
0
|
|
966
|
|
(966)
|
(100.0)%
|
Total
|
$
|
0
|
$
|
966
|
$
|
(966)
|
(100.0)%
|
|
|
|
|
|
|
|
|
Net operating income
|
|
|
|
|
|
|
|
Same-store
|
$
|
13,396
|
$
|
13,468
|
$
|
(72)
|
(0.5)%
|
Non-same-store
|
|
2,110
|
|
1,025
|
|
1,085
|
105.9%
|
Total
|
$
|
15,506
|
$
|
14,493
|
$
|
1,013
|
7.0%
|
Occupancy
|
2014
|
2013
|
|
Same-store
|
93.8%
|
93.4%
|
|
Non-same-store
|
89.5%
|
66.3%
|
|
Total
|
93.4%
|
92.8%
|
|
Number of Units
|
2014
|
2013
|
|
Same-store
|
9,978
|
9,979
|
|
Non-same-store
|
1,102
|
240
|
|
Total
|
11,080
|
10,219
|
|
|
(in thousands, except percentages)
|
||||||
|
Three Months Ended July 31,
|
||||||
|
2014
|
2013
|
$ Change
|
% Change
|
|||
Commercial Office
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate revenue
|
|
|
|
|
|
|
|
Same-store
|
$
|
18,837
|
$
|
19,262
|
$
|
(425)
|
(2.2)%
|
Non-same-store
|
|
9
|
|
53
|
|
(44)
|
(83.0)%
|
Total
|
$
|
18,846
|
$
|
19,315
|
$
|
(469)
|
(2.4)%
|
|
|
|
|
|
|
|
|
Real estate expenses
|
|
|
|
|
|
|
|
Same-store
|
$
|
9,320
|
$
|
9,699
|
$
|
(379)
|
(3.9)%
|
Non-same-store
|
|
7
|
|
54
|
|
(47)
|
(87.0)%
|
Total
|
$
|
9,327
|
$
|
9,753
|
$
|
(426)
|
(4.4)%
|
|
|
|
|
|
|
|
|
Net operating income
|
|
|
|
|
|
|
|
Same-store
|
$
|
9,517
|
$
|
9,563
|
$
|
(46)
|
(0.5)%
|
Non-same-store
|
|
2
|
|
(1)
|
|
3
|
(300.0)%
|
Total
|
$
|
9,519
|
$
|
9,562
|
$
|
(43)
|
(0.5)%
|
Occupancy
|
2014
|
2013
|
|
Same-store
|
81.3%
|
81.5%
|
|
Non-same-store
|
n/a
|
35.7%
|
|
Total
|
81.3%
|
80.8%
|
|
Rentable Square Footage
|
2014
|
2013
|
|
Same-store
|
4,758,672
|
4,755,421
|
|
Non-same-store
|
0
|
73,338
|
|
Total
|
4,758,672
|
4,828,759
|
|
|
(in thousands, except percentages)
|
||||||
|
Three Months Ended July 31,
|
||||||
|
2014
|
2013
|
$ Change
|
% Change
|
|||
Commercial Healthcare
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate revenue
|
|
|
|
|
|
|
|
Same-store
|
$
|
16,130
|
$
|
16,073
|
$
|
57
|
0.4%
|
Non-same-store
|
|
168
|
|
0
|
|
168
|
n/a
|
Total
|
$
|
16,298
|
$
|
16,073
|
$
|
225
|
1.4%
|
|
|
|
|
|
|
|
|
Real estate expenses
|
|
|
|
|
|
|
|
Same-store
|
$
|
4,364
|
$
|
4,284
|
$
|
80
|
1.9%
|
Non-same-store
|
|
52
|
|
0
|
|
52
|
n/a
|
Total
|
$
|
4,416
|
$
|
4,284
|
$
|
132
|
3.1%
|
|
|
|
|
|
|
|
|
Net operating income
|
|
|
|
|
|
|
|
Same-store
|
$
|
11,766
|
$
|
11,789
|
$
|
(23)
|
(0.2)%
|
Non-same-store
|
|
116
|
|
0
|
|
116
|
n/a
|
Total
|
$
|
11,882
|
$
|
11,789
|
$
|
93
|
0.8%
|
Occupancy
|
2014
|
2013
|
|
Same-store
|
96.3%
|
95.4%
|
|
Non-same-store
|
100.0%
|
n/a
|
|
Total
|
96.5%
|
95.4%
|
|
Rentable Square Footage
|
2014
|
2013
|
|
Same-store
|
2,956,216
|
2,956,022
|
|
Non-same-store
|
137,674
|
0
|
|
Total
|
3,093,890
|
2,956,022
|
|
|
(in thousands, except percentages)
|
||||||
|
Three Months Ended July 31,
|
||||||
|
2014
|
2013
|
$ Change
|
% Change
|
|||
Commercial Industrial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate revenue
|
|
|
|
|
|
|
|
Same-store
|
$
|
1,497
|
$
|
1,518
|
$
|
(21)
|
(1.4)%
|
Non-same-store
|
|
73
|
|
520
|
|
(447)
|
(86.0)%
|
Total
|
$
|
1,570
|
$
|
2,038
|
$
|
(468)
|
(23.0)%
|
|
|
|
|
|
|
|
|
Real estate expenses
|
|
|
|
|
|
|
|
Same-store
|
$
|
345
|
$
|
322
|
$
|
23
|
7.1%
|
Non-same-store
|
|
105
|
|
132
|
|
(27)
|
(20.5)%
|
Total
|
$
|
450
|
$
|
454
|
$
|
(4)
|
(0.9)%
|
|
|
|
|
|
|
|
|
Net operating income
|
|
|
|
|
|
|
|
Same-store
|
$
|
1,152
|
$
|
1,196
|
$
|
(44)
|
(3.7)%
|
Non-same-store
|
|
(32)
|
|
388
|
|
(420)
|
(108.2)%
|
Total
|
$
|
1,120
|
$
|
1,584
|
$
|
(464)
|
(29.3)%
|
Occupancy
|
2014
|
2013
|
|
Same-store
|
100.0%
|
91.0%
|
|
Non-same-store
|
100.0%
|
53.6%
|
|
Total
|
100.0%
|
79.8%
|
|
Rentable Square Footage
|
2014
|
2013
|
|
Same-store
|
1,002,361
|
1,002,361
|
|
Non-same-store
|
17,750
|
427,672
|
|
Total
|
1,020,111
|
1,430,033
|
|
|
(in thousands, except percentages)
|
||||||
|
Three Months Ended July 31,
|
||||||
|
2014
|
2013
|
$ Change
|
% Change
|
|||
Commercial Retail
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate revenue
|
|
|
|
|
|
|
|
Same-store
|
$
|
3,396
|
$
|
3,299
|
$
|
97
|
2.9%
|
Non-same-store
|
|
0
|
|
0
|
|
0
|
n/a
|
Total
|
$
|
3,396
|
$
|
3,299
|
$
|
97
|
2.9%
|
|
|
|
|
|
|
|
|
Real estate expenses
|
|
|
|
|
|
|
|
Same-store
|
$
|
1,104
|
$
|
1,293
|
$
|
(189)
|
(14.6)%
|
Non-same-store
|
|
0
|
|
10
|
|
(10)
|
(100.0)%
|
Total
|
$
|
1,104
|
$
|
1,303
|
$
|
(199)
|
(15.3)%
|
|
|
|
|
|
|
|
|
Net operating income
|
|
|
|
|
|
|
|
Same-store
|
$
|
2,292
|
$
|
2,006
|
$
|
286
|
14.3%
|
Non-same-store
|
|
0
|
|
(10)
|
|
10
|
(100.0)%
|
Total
|
$
|
2,292
|
$
|
1,996
|
$
|
296
|
14.8%
|
Occupancy
|
2014
|
2013
|
|
Same-store
|
86.3%
|
81.9%
|
|
Non-same-store
|
n/a
|
0.0%
|
|
Total
|
86.3%
|
80.3%
|
|
Rentable Square Footage
|
2014
|
2013
|
|
Same-store
|
1,282,678
|
1,282,518
|
|
Non-same-store
|
0
|
25,644
|
|
Total
|
1,282,678
|
1,308,162
|
|
Lessee
|
% of Total Commercial
Segments' Minimum Rents
as of July 1, 2014
|
Affiliates of Edgewood Vista
|
14.4%
|
St. Luke's Hospital of Duluth, Inc.
|
3.7%
|
Fairview Health Services
|
3.7%
|
Applied Underwriters
|
2.4%
|
HealthEast Care System
|
1.8%
|
Affiliates of Siemens USA (NYSE: SI)
|
1.4%
|
Nebraska Orthopaedic Hospital(1)
|
1.4%
|
Microsoft (NASDAQ: MSFT)
|
1.3%
|
Arcadis Corporate Services, Inc.
|
1.3%
|
State of Idaho Department of Health and Welfare
|
1.2%
|
All Others
|
67.4%
|
Total Monthly Commercial Rent as of July 1, 2014
|
100.0%
|
(1)
|
The tenant in the Company's Nebraska Orthopaedic Hospital property has exercised its option to purchase the property. The Company and its tenant are currently engaged in an arbitration proceeding pursuant to the lease agreement to determine the purchase price. The Company currently can give no assurance that the sale of the property pursuant to the purchase option will be completed.
|
|
Square Feet of
New Leases(1)
|
Square Feet of
Leases Renewed(1)
|
Total
Square Feet of
Leases Executed(1)
|
|
Occupancy
|
||||
|
|
||||||||
Segments
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
|
2014
|
2013
|
Office
|
39,120
|
126,992
|
126,732
|
57,545
|
165,852
|
184,537
|
|
81.3%
|
81.5%
|
Healthcare
|
8,947
|
21,503
|
39,016
|
13,528
|
47,963
|
35,031
|
|
96.3%
|
95.4%
|
Industrial
|
0
|
50,040
|
0
|
222,077
|
0
|
272,117
|
|
100.0%
|
91.0%
|
Retail
|
24,222
|
91,957
|
51,944
|
12,565
|
76,166
|
104,522
|
|
86.3%
|
81.9%
|
Total
|
72,289
|
290,492
|
217,692
|
305,715
|
289,981
|
596,207
|
|
88.3%
|
86.6%
|
(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 GAAP. Results include properties classified in discontinued operations; prior periods reflect amounts previously reported and exclude retroactive adjustments for properties reclassified to discontinued operations in the current period.
|
|
Square Feet of
New Leases(1)
|
Average Term
in Years
|
Average
Effective Rent(2)
|
Estimated Tenant Improvement Cost per Square Foot(1)
|
Leasing
Commissions per Square Foot(1)
|
||||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
|||||||||||
Office
|
|
39,120
|
|
126,992
|
|
4.9
|
|
4.9
|
$
|
12.90
|
$
|
13.01
|
$
|
10.98
|
$
|
15.17
|
$
|
4.18
|
$
|
4.32
|
|
Healthcare
|
|
8,947
|
|
21,503
|
|
8.6
|
|
5.6
|
|
21.10
|
|
21.94
|
|
29.69
|
|
49.69
|
|
9.10
|
|
5.30
|
|
Industrial
|
|
0
|
|
50,040
|
|
0.0
|
|
4.3
|
|
0.00
|
|
4.10
|
|
0.00
|
|
0.00
|
|
0.00
|
|
0.34
|
|
Retail
|
|
24,222
|
|
91,957
|
|
4.5
|
|
4.3
|
|
9.00
|
|
3.62
|
|
14.96
|
|
0.57
|
|
5.47
|
|
4.20
|
|
Total
|
|
72,289
|
|
290,492
|
|
5.3
|
|
4.9
|
$
|
12.61
|
$
|
9.17
|
$
|
14.63
|
$
|
10.49
|
$
|
5.22
|
$
|
3.67
|
(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 GAAP. Results include properties classified in discontinued operations; prior periods reflect amounts previously reported and exclude retroactive adjustments for properties reclassified to discontinued operations in the current period. Tenant improvements and leasing commissions presented are based on square feet leased during the period.
|
(2)
|
Effective rents represent average annual base rental payments, on a straight-line basis for the term of each lease, excluding operating expense reimbursements. The underlying leases contain various expense structures including gross, modified gross, net and triple net.
|
|
Square Feet of Leases Renewed(1)
|
Percent of Expiring Leases Renewed(2)
|
Average Term
in Years
|
Weighted Average Growth (Decline)
in Effective Rents(3)
|
Estimated
Tenant Improvement
Cost per Square Foot(1)
|
Leasing Commissions per Square Foot(1)
|
||||||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Office
|
|
126,732
|
|
57,545
|
|
52.1%
|
|
90.5%
|
|
3.3
|
|
3.5
|
|
23.6%
|
|
1.7%
|
$
|
6.04
|
$
|
2.20
|
$
|
1.93
|
$
|
1.79
|
Healthcare
|
|
39,016
|
|
13,528
|
|
90.7%
|
|
100.0%
|
|
5.6
|
|
7.5
|
|
4.5%
|
|
7.3%
|
|
5.03
|
|
25.76
|
|
2.01
|
|
2.82
|
Industrial
|
|
0
|
|
222,077
|
|
0.0%
|
|
47.9%
|
|
0.0
|
|
3.3
|
|
0.0%
|
|
5.7%
|
|
0.00
|
|
0.00
|
|
0.00
|
|
0.30
|
Retail
|
|
51,944
|
|
12,565
|
|
25.6%
|
|
5.8%
|
|
4.3
|
|
4.2
|
|
27.0%
|
|
3.1%
|
|
4.78
|
|
0.00
|
|
0.13
|
|
0.00
|
Total
|
|
217,692
|
|
305,715
|
|
48.9%
|
|
56.8%
|
|
4.1
|
|
4.0
|
|
18.0%
|
|
4.5%
|
$
|
5.56
|
$
|
1.55
|
$
|
1.51
|
$
|
0.68
|
(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 GAAP. Results include properties classified in discontinued operations; prior periods reflect amounts previously reported and exclude retroactive adjustments for properties reclassified to discontinued operations in the current period. Tenant improvements and leasing commissions are based on square feet leased during the period.
|
(2)
|
Renewal percentage of expiring leases is based on square footage of renewed leases and not the number of leases renewed.
|
(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.
|
Fiscal Year of Lease Expiration
|
# of Leases
|
Square Footage of
Expiring Leases(3)
|
|
Percentage of Total
Commercial Segments
Leased Square Footage
|
Annualized Base
Rent of Expiring Leases at Expiration(2) |
|
Percentage of Total
Commercial Segments
Annualized Base Rent
|
|
2015(remainder)(1)
|
140
|
947,360
|
|
10.5%
|
$
|
13,122,352
|
|
10.7%
|
2016
|
125
|
1,253,811
|
|
14.0%
|
|
17,005,039
|
|
13.8%
|
2017
|
132
|
1,199,203
|
|
13.4%
|
|
19,622,750
|
|
15.9%
|
2018
|
90
|
721,809
|
|
8.0%
|
|
11,956,009
|
|
9.7%
|
2019
|
86
|
1,321,573
|
|
14.7%
|
|
16,344,306
|
|
13.3%
|
2020
|
43
|
652,264
|
|
7.2%
|
|
7,267,734
|
|
5.9%
|
2021
|
43
|
359,401
|
|
4.0%
|
|
5,436,404
|
|
4.4%
|
2022
|
42
|
1,352,847
|
|
15.1%
|
|
16,735,550
|
|
13.6%
|
2023
|
11
|
468,709
|
|
5.2%
|
|
2,021,818
|
|
1.7%
|
2024
|
46
|
428,590
|
|
4.8%
|
|
7,045,221
|
|
5.7%
|
Thereafter
|
16
|
276,677
|
|
3.1%
|
|
6,479,584
|
|
5.3%
|
Totals
|
774
|
8,982,244
|
|
100.0%
|
$
|
123,036,767
|
|
100.0%
|
(1)
|
Includes month-to-month leases. As of July 31, 2014 month-to-month leases accounted for 455,380 square feet.
|
(2)
|
Annualized Base Rent is monthly scheduled rent as of July 1, 2014, multiplied by 12.
|
(3)
|
Assuming that none of the tenants exercise renewal or termination options, and including leases renewed prior to expiration. Also excludes 98,174 square feet of income producing real estate operated within a TRS.
|
·
|
a 152-unit multi-family residential property in Rapid City, South Dakota, on approximately 10.0 acres of land, for a purchase price of $15.0 million, of which $9.9 million consisted of the assumption of existing debt, with the remainder paid in cash;
|
·
|
a 52-unit multi-family residential property in Rapid City, South Dakota, on approximately 2.0 acres of land, for a purchase price of $3.3 million, of which $2.3 million consisted of the assumption of existing debt, with the remainder paid in cash;
|
·
|
an approximately 35-acre parcel of vacant land in Bismarck, North Dakota, acquired for possible future development, for a purchase price of $4.3 million, paid in cash;
|
·
|
an approximately 10.5-acre parcel of vacant land in Brooklyn Park, Minnesota, acquired for development as the PrairieCare Medical project, for a purchase price of $2.6 million, paid in cash; and
|
·
|
an approximately 55.3% interest in a joint venture entity currently constructing the 71 France Phase I project in Edina, Minnesota, a 109-unit multi-family residential property.
|
|
|
|
|
(in thousands)
|
|
|
|
||||
Project Name and Location
|
Segment
|
Total Rentable
Square Feet
or Number of Units
|
Percentage
Leased
or Committed
|
Anticipated
Total
Cost(1)
|
Costs as of July 31, 2014(1)
|
Cost per
Square Foot
or Unit(1)
|
Date Placed in Service
|
Anticipated Same-Store Date
|
|||
Dakota Commons - Williston, ND
|
Multi-Family Residential
|
44 units
|
40.9%
|
$
|
10,736
|
$
|
10,265
|
$
|
244,000
|
FY2015 Q1
|
FY2017 Q1
|
(1)
|
Excludes tenant improvements and leasing commissions.
|
|
|
|
|
(in thousands)
|
|
|||
Project Name and Location
|
Planned Segment
|
Square Feet
or Number of Units
|
Percentage
Leased
or Committed
|
Anticipated
Total Cost
|
Costs as of
July 31, 2014(1)
|
Anticipated Construction Completion
|
||
Commons at Southgate - Minot, ND(2)
|
Multi-Family Residential
|
233 units
|
43.0%
|
$
|
37,201
|
$
|
33,218
|
FY2015 Q2
|
Minot Wells Fargo Bank - Minot, ND
|
Commercial Office
|
4,998 sq ft
|
100%
|
|
3,288
|
|
1,550
|
FY2015 Q2
|
Cypress Court II – St. Cloud, MN(3)
|
Multi-Family Residential
|
66 units
|
0%
|
|
7,028
|
|
3,168
|
FY2015 Q3
|
Arcata - Golden Valley, MN
|
Multi-Family Residential
|
165 units
|
0%
|
|
33,448
|
|
19,048
|
FY2015 Q3
|
Red 20 - Minneapolis, MN(4)
|
Multi-Family Residential and Commercial
|
130 units and 10,625 sq ft
|
21.0%
|
|
29,462
|
|
20,399
|
FY2015 Q3
|
Renaissance Heights I - Williston, ND(5)
|
Multi-Family Residential
|
288 units
|
42.8%
|
|
62,362
|
|
44,251
|
FY2015 Q4
|
Roseville 3075 Long Lake Rd - Roseville, MN
|
Commercial Industrial
|
202,807 sq ft
|
5.38%
|
|
13,915
|
|
2,578
|
FY2015 Q4
|
Chateau II - Minot, ND(6)
|
Multi-Family Residential
|
72 units
|
0%
|
|
14,711
|
|
5,681
|
FY2016 Q1
|
Cardinal Point - Grand Forks, ND
|
Multi-Family Residential
|
251 units
|
0%
|
|
40,042
|
|
9,333
|
FY2016 Q1
|
71 France Phase I - Edina, MN(7)
|
Multi-Family Residential
|
109 units
|
0%
|
|
29,660
|
|
4,255
|
FY2016 Q1
|
Edina 6565 France SMC III - Edina, MN
|
Commercial Medical
|
72,012 sq ft
|
0%
|
|
34,665
|
|
4,204
|
FY2016 Q2
|
PrairieCare Medical - Brooklyn Park, MN
|
Commercial Medical
|
75,000 sq ft
|
100%
|
|
24,251
|
|
4,486
|
FY2016 Q2
|
Deer Ridge – Jamestown, ND
|
Multi-Family Residential
|
163 units
|
0%
|
|
24,519
|
|
1,793
|
FY2016 Q2
|
Other
|
n/a
|
n/a
|
n/a
|
|
n/a
|
|
874
|
n/a
|
|
|
|
|
$
|
354,552
|
$
|
154,838
|
|
(1)
|
Includes costs related to development projects that are placed in service in phases (Renaissance Heights I - $23.0 million).
|
(2)
|
The Company is currently an approximately 52.9% partner in the joint venture entity constructing this project; the anticipated total cost amount given is the total cost to the joint venture entity.
|
(3)
|
The Company is an approximately 86.1% partner in the joint venture entity constructing this project; the anticipated total cost amount given is the total cost to the joint venture entity.
|
(4)
|
The Company is an approximately 58.6% partner in the joint venture entity constructing this project; the anticipated total cost amount given is the total cost to the joint venture entity.
|
(5)
|
The Company is an approximately 70% partner in the joint venture entity constructing this project; the anticipated total cost amount given is the total cost to the joint venture entity.
|
(6)
|
On December 5, 2013, this development project was destroyed by fire. As of July 31, 2014, $4.0 million of expected insurance proceeds were included in accounts receivable on the Company's consolidated balance sheet. See Note 2 for additional information.
|
(7)
|
The Company is currently an approximately 55.3% partner in the joint venture entity constructing this project. The project will be constructed in three phases, and at the conclusion of construction of the third phase, the Company will have an approximately 50.5% interest in the project. The anticipated total cost amount given in the table above is the total cost to the joint venture entity of the project's first phase. The expected total project cost for all three phases is approximately $69.9 million for a total of approximately 241 residential units and approximately 21,772 square feet of commercial retail space.
|
Three Months Ended July 31,
|
(in thousands, except per share amounts)
|
|||||||||
2014
|
2013
|
|||||||||
|
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
|
$
|
(151)
|
|
|
|
$
|
3,078
|
|
|
|
Less dividends to preferred shareholders
|
|
(2,879)
|
|
|
|
|
(2,879)
|
|
|
|
Net income available to common shareholders
|
|
(3,030)
|
111,039
|
$
|
(0.03)
|
|
199
|
102,358
|
$
|
0.00
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest – Operating Partnership
|
|
(402)
|
20,293
|
|
|
|
50
|
21,821
|
|
|
Depreciation and amortization(1)
|
|
17,037
|
|
|
|
|
19,555
|
|
|
|
Impairment of real estate investments
|
|
2,320
|
|
|
|
|
1,803
|
|
|
|
Gain on depreciable property sales
|
|
2,993
|
|
|
|
|
(1,943)
|
|
|
|
Funds from operations applicable to common shares
and Units |
$
|
18,918
|
131,332
|
$
|
0.14
|
$
|
19,664
|
124,179
|
$
|
0.16
|
(2) | UPREIT Units of the Operating Partnership are exchangeable for cash, or, at the Company's discretion, 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. |
Month
|
Fiscal Year 2015
|
Fiscal Year 2014
|
||
July
|
$
|
.1300
|
$
|
.1300
|
|
(in thousands)
|
||||||||||||||||||||||
|
Future Principal Payments
|
||||||||||||||||||||||
Mortgages
|
Remaining
Fiscal 2015
|
|
Fiscal 2016
|
|
Fiscal 2017
|
|
Fiscal 2018
|
|
Fiscal 2019
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||
Fixed Rate
|
$
|
70,629
|
|
$
|
92,714
|
|
$
|
199,535
|
|
$
|
91,193
|
|
$
|
127,768
|
|
$
|
390,303
|
|
$
|
972,142
|
|
$
|
1,128,354
|
Average Fixed Interest Rate(1)
|
|
5.30%
|
|
|
5.17%
|
|
|
4.72%
|
|
|
5.10%
|
|
|
4.90%
|
|
|
|
|
|
|
|
|
|
Variable Rate
|
$
|
131
|
|
$
|
179
|
|
$
|
15,187
|
|
$
|
22,193
|
|
$
|
5,025
|
|
$
|
2,717
|
|
$
|
45,432
|
|
$
|
45,432
|
Average Variable Interest Rate(1)
|
|
2.96%
|
|
|
2.97%
|
|
|
3.03%
|
|
|
3.12%
|
|
|
3.64%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,017,574
|
|
$
|
1,173,786
|
|
(in thousands)
|
|
|||||||||||||||||||
|
Future Interest Payments
|
|
|||||||||||||||||||
Mortgages
|
Remaining
Fiscal 2015
|
|
Fiscal 2016
|
|
Fiscal 2017
|
|
Fiscal 2018
|
|
Fiscal 2019
|
|
Thereafter
|
|
Total
|
|
|||||||
Fixed Rate
|
$
|
38,606
|
|
$
|
46,566
|
|
$
|
38,170
|
|
$
|
31,053
|
|
$
|
25,393
|
|
$
|
46,698
|
|
$
|
226,486
|
|
Variable Rate
|
|
1,010
|
|
|
1,344
|
|
|
1,315
|
|
|
438
|
|
|
252
|
|
|
16
|
|
|
4,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
230,861
|
|
(1)
|
Interest rate given is for the entire year.
|
Exhibit No.
|
Description
|
Calculation of Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Share Distributions
|
|
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
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 July 31, 2014 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
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
Date: September 9, 2014
|
|
Exhibit No.
|
Description
|
Calculation of Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Share Distributions
|
|
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
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 July 31, 2014 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.
|
|
|
Three Months
Ended
|
Fiscal Year Ended
April 30,
|
||||||||||
|
|
July 31, 2014
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
$
|
(199)
|
$
|
(23,390)
|
$
|
20,677
|
$
|
8,644
|
$
|
4,679
|
$
|
5,710
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined fixed charges and preferred distributions (see below)
|
|
18,573
|
|
73,933
|
|
73,657
|
|
68,172
|
|
64,954
|
|
71,497
|
|
Amortization of capitalized interest
|
|
14
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Income) loss noncontrolling interests – consolidated real estate entities
|
|
(354)
|
|
(910)
|
|
(809)
|
|
(135)
|
|
180
|
|
(22)
|
|
Interest capitalized
|
|
(1,030)
|
|
(2,856)
|
|
(742)
|
|
(571)
|
|
(57)
|
|
(19)
|
|
Preferred distributions
|
|
(2,879)
|
|
(11,514)
|
|
(9,229)
|
|
(2,372)
|
|
(2,372)
|
|
(2,372)
|
Total earnings
|
$
|
14,125
|
$
|
35,263
|
$
|
83,554
|
$
|
73,738
|
$
|
67,384
|
$
|
74,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expensed
|
$
|
14,664
|
$
|
59,563
|
|
63,686
|
|
65,229
|
|
62,525
|
|
69,106
|
|
Interest capitalized
|
|
1,030
|
|
2,856
|
|
742
|
|
571
|
|
57
|
|
19
|
Total fixed charges
|
$
|
15,694
|
$
|
62,419
|
$
|
64,428
|
$
|
65,800
|
$
|
62,582
|
$
|
69,125
|
|
|
Preferred distributions
|
|
2,879
|
|
11,514
|
|
9,229
|
|
2,372
|
|
2,372
|
|
2,372
|
Total combined fixed charges and preferred distributions
|
$
|
18,573
|
$
|
73,933
|
$
|
73,657
|
$
|
68,172
|
$
|
64,954
|
$
|
71,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of earnings to fixed charges
|
|
(1)
|
|
(2)
|
|
1.30x
|
|
1.12x
|
|
1.08x
|
|
1.08x
|
|
Ratio of earnings to combined fixed charges and preferred distributions
|
|
(1)
|
|
(2)
|
|
1.13x
|
|
1.08x
|
|
1.04x
|
|
1.05x
|
(1)
|
Due to non-cash asset impairment and loss on sale charges of $5.3 million, earnings were inadequate to cover fixed charges and combined fixed charges and preferred distributions by $1.6 million and $4.5 million, respectively. Excluding the asset impairment and loss on sale charges, the ratios of earnings to fixed charges and earnings to combined fixed charges and preferred distributions would have been 1.24 and 1.05, respectively, for the three months ended July 31, 2014.
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(2)
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Due to non-cash asset impairment charges of $42.6 million, earnings were inadequate to cover fixed charges and combined fixed charges and preferred distributions by $27.2 million and $38.7 million, respectively. Excluding the asset impairment charge, the ratios of earnings to fixed charges and earnings to combined fixed charges and preferred distributions would have been 1.25 and 1.05, respectively, for the fiscal year ended April 30, 2014.
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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:
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/s/ Timothy, P. Mihalick
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Timothy, P. Mihalick, President & CEO
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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:
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/s/ Diane K. Bryantt
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Diane K. Bryantt, Executive Vice President & CFO
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/s/ Timothy P. Mihalick
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Timothy P. Mihalick
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President and Chief Executive Officer
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Date: September 9, 2014
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/s/ Diane K. Bryantt
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Diane K. Bryantt
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Executive Vice President and Chief Financial Officer
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Date: September 9, 2014
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DISCONTINUED OPERATIONS (Details) (USD $)
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3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jul. 31, 2014
|
Jul. 31, 2013
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Jul. 31, 2013
Discontinued Operations [Member]
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Jan. 31, 2014
Multi Family Residential [Member]
Property
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Jan. 31, 2014
Commercial Industrial [Member]
Property
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Jan. 31, 2014
Commercial Retail [Member]
Property
|
Jan. 31, 2014
Commercial Office [Member]
Property
|
|
Significant Acquisitions and Disposals [Line Items] | |||||||
Number of properties sold | 2 | 12 | 3 | 3 | |||
REVENUE | |||||||
Real estate rentals | $ 57,126,000 | $ 53,623,000 | $ 1,632,000 | ||||
Tenant reimbursement | 10,711,000 | 11,475,000 | 719,000 | ||||
TOTAL REVENUE | 68,630,000 | 65,098,000 | 2,351,000 | ||||
EXPENSES | |||||||
Depreciation/amortization related to real estate investments | 16,184,000 | 18,056,000 | 537,000 | ||||
Utilities | 4,681,000 | 4,923,000 | 128,000 | ||||
Maintenance | 7,764,000 | 7,729,000 | 185,000 | ||||
Real estate taxes | 8,501,000 | 8,375,000 | 528,000 | ||||
Insurance | 1,736,000 | 1,301,000 | 49,000 | ||||
Property management expenses | 4,630,000 | 4,135,000 | 118,000 | ||||
Other property expenses | 612,000 | 679,000 | 0 | ||||
Amortization related to non-real estate investments | 872,000 | 944,000 | 49,000 | ||||
Impairment of real estate investments | 2,320,000 | 1,803,000 | 1,803,000 | ||||
TOTAL EXPENSES | 51,863,000 | 49,072,000 | 3,397,000 | ||||
Operating income (loss) | (1,046,000) | ||||||
Interest expense | (14,664,000) | (14,596,000) | (287,000) | ||||
Other income | 131,000 | 22,000 | 0 | ||||
Income (loss) from discontinued operations before gain (loss) on sale | (1,333,000) | ||||||
Gain on sale of discontinued operations | (2,993,000) | 1,943,000 | 1,943,000 | ||||
INCOME FROM DISCONTINUED OPERATIONS | $ 0 | $ 610,000 | $ 610,000 |
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