NOTE 8 • ACQUISITIONS, DEVELOPMENTS PLACED IN SERVICE AND DISPOSITIONS

PROPERTY ACQUISITIONS

We added no new real estate properties to our portfolio through property acquisitions during the three and nine months ended January 31, 2017, and the three months ended January 31, 2016. We expensed approximately $162,000 of transaction costs related to the acquisitions in the nine months ended January 31, 2016. Our acquisitions during the nine months ended January 31, 2016 are detailed below.

Nine Months Ended January 31, 2016


		(in thousands)
		Total		Form of Consideration				Investment Allocation
	Date	Acquisition										Intangible
Acquisitions	Acquired	Cost		Cash		Units(1)		Land		Building		Assets
Multifamily
74 unit - Gardens - Grand Forks, ND	2015-09-10	$	9,250	$	8,850	$	400	$	518	$	8,672	$	60
276 unit - GrandeVille at Cascade Lake - Rochester, MN	2015-10-29		56,000		56,000		—		5,003		50,363		634
			65,250		64,850		400		5,521		59,035		694

Healthcare
27,819 sq ft Lakeside Medical Plaza - Omaha, NE	2015-08-20		6,500		6,500		—		903		5,109		488

Total Property Acquisitions		$	71,750	$	71,350	$	400	$	6,424	$	64,144	$	1,182

(1)

Value of Units of the Operating Partnership at the acquisition date.

Acquisitions in the nine months ended January 31, 2017 and 2016 are immaterial to our real estate portfolio both individually and in the aggregate, and consequently no proforma information is presented. The results of operations from acquired properties are included in the Condensed Consolidated Statements of Operations as of their acquisition date. The revenue and net income of our acquisitions in the nine months ended January 31, 2017 and 2016, respectively, (excluding development projects placed in service) are detailed below.


	(in thousands)
Nine Months Ended January 31,	2017		2016
Total revenue	$	—	$	1,969
Net loss	$	—	$	(62)

DEVELOPMENT PROJECTS PLACED IN SERVICE

The Operating Partnership placed $72.4 million and $136.8 million of development projects in service during the nine months ended January 31, 2017 and 2016, respectively, as detailed below.

Nine Months Ended January 31, 2017


		(in thousands)
	Date Placed					Development
Development Projects Placed in Service(1)	in Service	Land		Building		Cost
Multifamily
241 unit - 71 France - Edina, MN(2)	2016-05-01	$	4,721	$	67,642	$	72,363

Total Development Projects Placed in Service		$	4,721	$	67,642	$	72,363

(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 Monticello Crossings project, which was partially placed in service during the nine months ended January 31, 2017.

(2)

Costs paid in prior fiscal years totaled $70.9 million. Additional costs incurred in fiscal year 2017 totaled $1.5 million, for a total project cost at January 31, 2017 of $72.4 million. The project is owned by a joint venture entity in which we currently have an approximately 52.6% interest. The joint venture is consolidated in our financial statements.

Nine Months Ended January 31, 2016


		(in thousands)
	Date Placed					Development
Development Projects Placed in Service	in Service	Land		Building		Cost

Multifamily
72 unit - Chateau II - Minot, ND (1)	2015-06-01	$	240	$	14,401	$	14,641
288 unit - Renaissance Heights - Williston, ND(2)	2015-07-27		3,080		59,371		62,451
			3,320		73,772		77,092

Healthcare
57,624 sq ft Edina 6565 France SMC III - Edina, MN(3)	2015-06-01		—		32,725		32,725
70,756 sq ft PrairieCare Medical - Brooklyn Park, MN(4)	2015-09-08		2,610		21,748		24,358
			2,610		54,473		57,083

Other
7,963 sq ft Minot Southgate Retail - Minot, ND(5)	2015-10-01		889		1,734		2,623

Total Development Projects Placed in Service		$	6,819	$	129,979	$	136,798

(1)

Costs paid in prior fiscal years totaled $12.3 million. Additional costs paid in fiscal year 2016 totaled $2.3 million, for a total project cost at January 31, 2016 of $14.6 million.

(2)

Costs paid in prior fiscal years totaled $57.7 million. Additional costs paid in fiscal year 2016 totaled $4.8 million, for a total project cost at January 31, 2016 of $62.5 million. The project is owned by a joint venture entity in which we currently have an approximately 86.6% interest. The joint venture is consolidated in our financial statements. An impairment charge of $36.7 million was recorded for this property in the first quarter of fiscal year 2017. See Note 2 for additional information.

(3)

Costs paid in prior fiscal years totaled $20.8 million. Additional costs paid in fiscal year 2016 totaled $11.9 million, for a total project cost at January 31, 2016 of $32.7 million.

(4)

Costs paid in prior fiscal years totaled $17.3 million. Additional costs paid in fiscal year 2016 totaled $7.1 million, for a total project cost at January 31, 2016 of $24.4 million.

(5)

Costs paid in prior fiscal years totaled $2.1 million. Additional costs paid in fiscal year 2016 totaled approximately $500,000, for a total project cost at January 31, 2016 of $2.6 million.

PROPERTY DISPOSITIONS

During the third quarter of fiscal year 2017, we sold one retail property and five healthcare properties for a total sales price of $73.9 million. During the third quarter of fiscal year 2016, we sold 3 retail properties for a total sales price of $3.5 million and transferred ownership of nine office properties pursuant to a deed in lieu transaction. The following table details our dispositions during the nine months ended January 31, 2017 and 2016:

Nine Months Ended January 31, 2017


		(in thousands)
	Date			Book Value
Dispositions	Disposed	Sales Price		and Sales Cost		Gain/(Loss)

Healthcare
189,244 sq ft Idaho Spring Creek Senior Housing Portfolio(1)	2016-10-31	$	43,900	$	37,397	$	6,503
426,652 sq ft 5 Edgewood Vista Senior Housing Properties(2)	2017-01-18		69,928		50,393		19,535
			113,828		87,790		26,038

Other
195,075 sq ft Stone Container - Fargo, ND	2016-07-25		13,400		4,418		8,982
28,528 sq ft Grand Forks Carmike - Grand Forks, ND	2016-12-29		4,000		1,563		2,437
			17,400		5,981		11,419

Unimproved Land
Georgetown Square Unimproved Land - Grand Chute, WI	2016-05-06		250		274		(24)

Total Property Dispositions		$	131,478	$	94,045	$	37,433

(1)

The properties included in this portfolio disposition are: Spring Creek American Falls, Spring Creek Boise, Spring Creek Eagle, Spring Creek Fruitland, Spring Creek Fruitland Unimproved, Spring Creek Meridian, Spring Creek Overland, Spring Creek Soda Springs and Spring Creek Ustick.

(2)

The properties included in this portfolio disposition are: Edgewood Vista Bismarck, Edgewood Vista Brainerd, Edgewood Vista East Grand Forks, Edgewood Vista Fargo and Edgewood Vista Spearfish.

Nine Months Ended January 31, 2016


			(in thousands)
	Date				Book Value
Dispositions	Disposed	Sales Price			and Sales Cost			Gain/(Loss)

Other
117,144 sq ft Thresher Square – Minneapolis, MN	2015-05-18	$	7,000		$	7,175		$	(175)
2,549,222 sq ft Office Sale Portfolio(1)	2015-08-03		250,000			231,537			18,463
420,216 sq ft Mendota Office Center Portfolio – Mendota Heights, MN(2)	2015-08-12		40,000			41,574			(1,574)
1,027,208 sq ft Retail Sale Portfolio(3)	2015-09-30		78,960			71,913			7,047
48,700 sq ft Eden Prairie 6101 Blue Circle Drive – Eden Prairie, MN	2015-10-19		2,900			2,928			(28)
8,526 sq ft Burnsville I Strip Center – Burnsville, MN	2015-12-23		1,300			913			387
4,800 sq ft Pine City C-Store – Pine City, MN	2016-01-08		300			355			(55)
11,003 sq ft Minot Plaza – Minot, ND	2016-01-19		1,854			393			1,461
937,518 sq ft 9-Building Office Portfolio(4)(5)	2016-01-29		122,610	(5)		86,154	(5)		36,456	(5)

Total Property Dispositions		$	504,924		$	442,942		$	61,982

(1)

The properties included in this portfolio disposition are: 610 Business Center, 7800 West Brown Deer Road, Ameritrade, Barry Pointe Office Park, Benton Business Park, Brenwood, Brook Valley I, Crosstown Centre, Golden Hills Office Center, Granite Corporate Center, Great Plains, Highlands Ranch I, Highlands Ranch II, Interlachen Corporate Center, Intertech Building, Minnesota National Bank, Northpark Corporate Center, Omaha 10802 Farnam Dr, Plaza VII, Plymouth 5095 Nathan Lane, Prairie Oak Business Center, Rapid City 900Concourse Drive, Spring Valley IV, Spring Valley V, Spring Valley X, Spring Valley XI, Superior Office Building, TCA Building, Three Paramount Plaza, UHC Office, US Bank Financial Center, Wells Fargo Center, West River Business Park and Westgate.

(2)

The properties included in this portfolio disposition are: Mendota Office Center I, Mendota Office Center II, Mendota Office Center III, Mendota Office Center IV and American Corporate Center.

(3)

The properties included in this portfolio disposition are: Mendota Office Center I, Mendota Office Center II, Mendota Office Center III,

Mendota Office Center IV and American Corporate Center.

(4)

The properties included in this portfolio disposition are: Champlin South Pond, Chan West Village, Duluth 4615 Grand, Duluth Denfeld

Retail, Forest Lake Auto, Forest Lake Westlake Center, Grand Forks Medpark Mall, Jamestown Buffalo Mall, Jamestown Business Center,

Lakeville Strip Center, Monticello C Store & vacant land, Omaha Barnes & Noble, Pine City Evergreen Square, Rochester Maplewood

Square and St. Cloud Westgate.

(5)

On January 29, 2016, we transferred ownership of nine properties to the mortgage lender on a $122.6 million non-recourse loan and the debt obligation and accrued interest from our balance sheet. The properties had an estimated fair value of $89.3 million on the transfer date. Upon completion of this transfer, we recognized a gain on extinguishment of debt of $36.5 million, representing the difference between the loan and accrued interest payable extinguished over the carrying value of the properties, cash, accounts payable and accounts receivable transferred as of the transfer date and related closing costs.