TRANSACTIONS WITH RELATED PARTIES

12 Months Ended

Apr. 30, 2016

TRANSACTIONS WITH RELATED PARTIES [Abstract]

TRANSACTIONS WITH RELATED PARTIES

NOTE 9 • TRANSACTIONS WITH RELATED PARTIES

BANKING SERVICES – FIRST INTERNATIONAL BANK AND TRUST

We have an ongoing banking relationship with First International Bank. Stephen L. Stenehjem, a member of our Board of Trustees, is the Chief Executive Officer and Chairman of First International Bank and the Chief Executive Officer of Watford City BancShares, Inc., its bank holding company, and the bank holding company is owned by Mr. Stenehjem and members of his family. We have one mortgage loan outstanding with First International Bank, with an original principal balance of $43.0 million (Renaissance Heights I) bearing variable interest at 5.24% per annum as of April 30, 2016. We paid interest on this loan of $2.2 million in fiscal year 2016 and it had a balance of $42.2 million at April 30, 2016. We have a multi-bank line of credit with a capacity of $100.0 million, of which First International Bank is the lead bank and a participant with an $11.0 million commitment. In fiscal year 2016, we paid First International Bank a total of approximately $186,000 in interest on First International Bank’s portion of the outstanding balance of this credit line, and paid fees of $77,000. In connection with this multi-bank line of credit, we maintain compensating balances with First International Bank totaling $6.0 million, of which $1.5 million is held in a non-interest bearing account, and $4.5 million is held in an account that pays us interest on the deposited amount of 0.20%per annum. We also maintain checking accounts with First International Bank. In fiscal year 2016, we paid less than $500 in total in various bank service and other fees charged on these checking accounts.

In fiscal years 2015 and 2014, we paid interest and fees on outstanding mortgage and construction loans of approximately $1.7 million and $1.0 million respectively. In fiscal years 2015 and 2014, respectively, we paid First International Bank $245,000 and $125,000 in interest on First International Bank’s portion of the multi-bank line of credit and paid fees of $40,000 in both years. Also in both fiscal years 2015 and 2014, we paid under $500 in total in various bank service and other fees charged on checking accounts maintained with First International Bank. Total payments of interest and fees from us to First International Bank were approximately $2.5 million, $2.0 million and $1.2 million in fiscal years 2016, 2015 and 2014, respectively.

LEASE AND SALE TRANSACTIONS

In fiscal year 2013, we entered into an agreement with First International Bank to construct an approximately 3,700 square-foot building on an outlot of our Arrowhead Shopping Center in Minot, North Dakota, to be leased by First International Bank under a 20-year lease for use as a branch bank location. The project was completed in fiscal year 2013 at a cost of $1.3 million. Net rental payments received in fiscal years 2016, 2015 and 2014 totaled $108,000,  $109,000 and $109,000, respectively.  We sold the property to First International Bank during fiscal year 2016 for a sales price of $1.7 million.

SALES AGREEMENT

We have an investment banking relationship with Robert W. Baird & Co. Incorporated (“Baird”). Terrance P. Maxwell, a member of our Board of Trustees, was appointed the Chief Financial Officer of Baird in March 2015 and has served as a Managing Director and member of the Executive Committee since May 2014. On August 30, 2013, we and our Operating Partnership entered into an at-the-market, or ATM, sales agreement with Baird as sales agent. Under the terms of this agreement, we may from time to time issue and sell through Baird our common shares having an aggregate offering price of up to $75.0 million. Baird will be entitled to compensation of up to 2.0% of the gross sales price per share for common shares sold under the agreement. The agreement remains in force until terminated pursuant to its terms, including automatic termination upon the sale of all such shares through Baird. We have not issued any common shares under this program during fiscal years 2016, 2015 and 2014.