Toggle SGML Header (+)


Section 1: 8-K (8-K)

iret_Current_Folio_8K

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  December 11, 2017

 

INVESTORS REAL ESTATE TRUST

(Exact name of Registrant as specified in its charter)

 


 

 

 

 

 

 

 

 

 

 

North Dakota

 

001-35624

 

45-0311232

(State or Other Jurisdiction

of Incorporation or Organization)

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 

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

(Address of principal executive offices) (Zip code)

 

(701) 837-4738

(Registrant’s telephone number, including area code)

 

Not Applicable

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

 

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

Written communications pursuant to Rule 425 under the Securities Act

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

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 


 

 

Item 2.02. Results of Operations and Financial Condition.

 

Investors Real Estate Trust (the “Company”) issued an earnings release on December 11, 2017 announcing financial and operational results for the three and six months ended October  31, 2017. A copy of the press release is attached hereto as Exhibit 99.1.

 

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished pursuant to Item 9.01, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933.

 

Item 7.01. Regulation FD Disclosure.

 

Certain supplemental information regarding the Company’s capital, portfolio and tenant analyses and development activity not included in the earnings release is attached as Exhibit 99.2. The foregoing information is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in filings under the Securities Act of 1933.

 

ITEM 9.01Financial Statements and Exhibits

 

(d)

Exhibits

 

 

 

Exhibit

 

Number

Description

 

 

99.1

Earnings Release issued December 11, 2017, regarding financial and operational results for the three and six months ended October  31, 2017

 

 

99.2

Supplemental information 

 

 

SIGNATURE

 

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

 

 

 

 

 

 

INVESTORS REAL ESTATE TRUST

 

 

 

By

/s/ Mark O.  Decker, Jr.

 

 

Mark O.  Decker, Jr.

Date:  December 11, 2017

 

President and Chief Executive Officer

 


(Back To Top)

Section 2: EX-99.1 (EX-99.1)

iret_Ex99_1

Exhibit 99.1

Earnings Release

C:\Users\nandersen\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\V90Q6TCB\IRET_Logo_Trans-PNG--300x2701.png

 

 

IRET Announces Fiscal Second Quarter 2018 Results

 

MINOT, N.D., December 11, 2017 – IRET (NYSE: IRET) announced today its fiscal second quarter 2018 financial and operating results.  Net income and Funds from Operations (“FFO”) per share for the three and six months ended October 31, 2017, are detailed below.  Core FFO adjusts FFO for certain non-routine items, and both FFO and Core FFO are reconciled to net income in the tables accompanying this earnings release. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended 

 

 

 

October 31,

 

October 31,

 

Per Share

        

2017

  

2016

 

2017

 

2016

 

Net Income

 

$

0.05

 

$

0.07

 

$

(0.06)

 

$

(0.13)

 

FFO

 

$

0.07

 

$

0.12

 

$

0.17

 

$

0.24

 

Core FFO

 

$

0.10

 

$

0.12

 

$

0.20

 

$

0.24

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly
Comparison

 

Sequential
Comparison

 

YTD
Comparison

 

Multifamily Same-Store Results

2Q18 vs. 2Q17

 

2Q18 vs. 1Q18

 

2Q18 vs. 2Q17

 

Revenues

3.8

%

 

1.1

%

 

3.8

%

 

Expenses

16.0

%

 

5.8

%

 

15.0

%

 

Net Operating Income ("NOI")

(5.5)

%

 

(2.8)

%

 

(4.5)

%

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily Same Store Results

    2Q18

 

    1Q18

 

    2Q17

 

Physical Occupancy

95.2

%

 

94.4

%

 

92.4

%

 

Weighted Average Occupancy

93.1

%

 

92.9

%

 

91.4

%

 

“We experienced strong revenue growth this quarter as we continued to increase occupancy across our portfolio,” said Mark O. Decker, Jr., IRET’s President and CEO.  “We also drove growth in our rental rates thanks to the efforts of our operations team. While expenses are significantly higher than last year, these increases were within our expectations and were offset by a decrease in capital expenditures and an increase in revenue growth. With the pending sale of our medical office portfolio and the announced sale of our other non-core assets, we are nearing the completion of our transformation to a focused multifamily REIT, which will enable us to devote management resources to our core business of developing and growing our multifamily properties.”

Second Quarter Fiscal Year 2018 Highlights

·

Achieved same store multifamily revenue growth of 3.8% compared to the prior year (3.8% YTD).  Improved performance is due primarily to increases in occupancy in the multifamily portfolio and better-than-anticipated rent growth.

·

Experienced elevated multifamily same-store expense increases year-over-year and sequentially.  The primary drivers of these increases were the previously disclosed change in our capitalization policies and additional costs related to increasing occupancy.  Additionally, we experienced higher labor costs and increased real estate taxes, primarily attributable to stabilizing developments and higher levy rates in select markets.

1


 

·

Closed the previously-announced acquisition of Park Place Apartments, deepening our holdings in the Minneapolis-St. Paul MSA, and, subsequent to quarter end, acquired Dylan Apartments in Denver, CO, our inaugural investment in another top-25 MSA.  Both Minneapolis-St. Paul and Denver have healthy and diverse economies and will be key markets in IRET’s push to achieve portfolio growth and improve operating efficiency. 

·

Closed the acquisition of Park Place using capital from our unsecured line of credit in anticipation of pending non-core asset sales.  Accordingly, the quarter-end debt balances increased over the first quarter.  As dispositions occur during the remainder of the fiscal year, we expect to use a portion of the sales proceeds to pay down debt.

·

Sold $105.4 million of commercial and non-core multifamily assets, including $63.4 million during the quarter and $42.0 million subsequent to quarter-end, and used the proceeds to deploy into targeted multifamily acquisitions.

·

Announced on November 30, 2017, that we signed an agreement to sell 28 healthcare properties and one office property for $417.5 million. While the transaction is subject to standard contingencies, upon closing, IRET will have substantially completed the transformation first announced in fiscal year 2016 to become a focused multifamily REIT. The sale of these assets will be used to fund future multifamily acquisitions and reduce debt.

·

Issued 4,118,460 shares of 6.625% Series C preferred shares for gross proceeds of $103.0 million and redeemed all 4,600,000 shares of 7.95% Series B preferred shares for an aggregate cost, including accrued dividends, of $115.8 million, which will result in a reduction of $2.3 million in annual preferred dividend payments.

·

Increased the commitments to our line of credit by $50 million and, subsequent to quarter-end, entered into a $70 million unsecured term loan.

Acquisitions

We added one new property to our portfolio during the quarter:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

 

 

 

 

 

 

Total

 

 

Total

 

% Leased

 

Property Name

 

Location

 

Units

 

 

Cost

 

as of 10/31/17

 

Park Place

 

Plymouth, MN

 

500

 

$

92.3      

 

95.6%

 

 

Subsequent to quarter-end, we acquired Dylan Apartments, a 274-unit multifamily property in Denver, CO, for $90.6 million.  Located in the fast-growing River North Art District, Dylan marks IRET’s entrance into the Denver MSA where, as previously announced, we expect to establish a sizeable presence over time and benefit from the strong growth and diverse drivers in this dynamic market.

Dispositions

During the quarter, we sold a parcel of unimproved land in Bismarck, ND, for $3.2 million, an industrial property in Eagan, MN, for $9.0 million, 13 multifamily properties in Minot, ND, for $12.3 million, a healthcare property in Eagan, MN, for $2.1 million, and two healthcare properties in Hermantown, MN, for $36.9 million.

Subsequent to quarter-end, we sold an industrial property in Urbandale, IA, for $16.7 million, an industrial property in Roseville, MN, for $18.7 million, and two multifamily properties in Rochester, MN, for $6.7 million.  In addition, we announced on November 30, 2017, that we signed an agreement to sell 28 healthcare properties and one office property for $417.5 million.

Balance Sheet

At the end of the second quarter, we had $95.0 million of total liquidity on our balance sheet, including $52.5 million available on our corporate revolver. 

During the quarter, we issued 4,118,460 shares of 6.625% Series C Cumulative Redeemable Preferred Shares for gross proceeds of $103.0 million and redeemed all 4,600,000 shares of our 7.95% Series B Cumulative Redeemable Preferred Shares for an aggregate cost of $115.8 million.  In addition, we repurchased and retired approximately 398,000 common shares and redeemed approximately 40,000 Units for an aggregate cost of approximately $2.6 million, representing an average price of approximately $5.86 per share.  Finally, we increased the commitments under our unsecured line of credit by $50 million and, subsequent to quarter-end, obtained a $70 million unsecured term loan that matures in 2023 and executed a swap agreement to synthetically fix the interest rate for the full duration of the loan.

2


 

Quarterly Distributions

On December 5, 2017, IRET’s Board of Trustees declared a regular quarterly distribution of $0.07 per share/unit payable on January 16, 2018, to common shareholders and unitholders of record on January 2, 2018.  This distribution will be the 187th consecutive quarterly distribution paid by IRET since its inception in 1970.  It represents an annualized rate of $0.28 per share/unit with an annualized yield of 4.8%  based on IRET’s closing share price as of December 8, 2017.

The Board of Trustees also declared a distribution of $0.41866 per share on the 6.625% Series C Cumulative Redeemable Preferred Shares (NYSE: IRET PRC) payable on January 2, 2018, to holders of record on December 15, 2017.  Series C preferred share distributions are cumulative and payable quarterly in arrears at an annual rate of $1.65625 per share.

Earnings Call

 

 

 

 

 

Live webcast and replay:  http://ir.iretapartments.com

 

 

 

Live Conference Call

 

Conference Call Replay

Tuesday, December 12, 2017, at 10:00 AM ET

 

Replay available until December 26, 2017

USA Toll Free Number

1-877-509-9785

 

USA Toll Free Number

1-877-344-7529

International Toll Free Number

1-412-902-4132

 

International Toll Free Number

1-412-317-0088

Canada Toll Free Number

1-855-669-9657

 

Canada Toll Free Number

1-855-669-9658

 

 

 

Conference Number

10114610

Supplemental Information

Supplemental Operating and Financial Data for the Quarter Ended October 31, 2017 (“Supplemental Information”) is available in the Investors section on IRET’s website at www.iretapartments.com or by calling Investor Relations at 701-837-7104.  Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined and reconciled in the Supplemental Information, which accompanies this earnings release.

About IRET

IRET is a real estate company focused on the ownership, management, acquisition, redevelopment, and development of multifamily apartment communities.  As of October 31, 2017, IRET owned interests in 89 multifamily properties consisting of 13,576 apartment homes and 40 commercial properties, including 28 healthcare and 12 other commercial properties, with a total of 2.5 million square feet of leasable space.  IRET's common shares and Series C preferred shares are publicly traded on the New York Stock Exchange (NYSE symbols: IRET and IRET PRC, respectively).

Forward Looking Statements

Certain statements in this press release are based on our current expectations and assumptions, and are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and variations of those words and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to be materially different from projected results. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance our expectations will be achieved. Any statements contained herein that are not statements of historical fact should be deemed forward-looking statements. As a result, reliance should not be placed on these forward-looking statements as these statements are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from our actual results and performance.  Such risks and uncertainties those risks and uncertainties detailed from time to time in our filings with the SEC, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended April 30, 2017, in subsequent quarterly reports on Form 10-Q and in other public reports.  We assume no obligation to update or supplement forward-looking statements that become untrue due to subsequent events. 

 

 

3


 

 

IRET

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO

IRET TO FFO AND CORE FFO

 

z

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except per share amounts)

 

Three Months Ended October 31,

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

Per

 

 

 

 

 

 

Per

 

 

 

 

 

 

Weighted

 

Share

 

 

 

 

Weighted

 

Share

 

 

 

 

 

 

Avg Shares

 

And

 

 

 

 

Avg Shares

 

And

 

 

  

Amount

  

and Units(1)

  

Unit(2)

  

 

Amount

  

and Units(1)

  

Unit(2)

 

Net income attributable to controlling interests

 

$

12,821

 

 

 

$

 

 

$

11,600

 

 

 

$

 

 

Less dividends to preferred shareholders

 

 

(2,812)

 

 

 

 

 

 

 

(2,878)

 

 

 

 

 

 

Less redemption of preferred shares

 

 

(3,649)

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

Net loss available to common shareholders

 

 

6,360

 

120,144

 

 

0.05

 

 

8,722

 

121,154

 

 

0.07

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interest – Operating Partnership

 

 

773

 

14,623

 

 

 

 

 

1,174

 

16,264

 

 

 

 

Depreciation and amortization

 

 

19,894

 

 

 

 

 

 

 

12,971

 

 

 

 

 

 

Gains on depreciable property sales attributable to controlling interests

 

 

(17,562)

 

 

 

 

 

 

 

(6,400)

 

 

 

 

 

 

FFO applicable to Common Shares and Units(1)

 

$

9,465

 

134,767

 

$

0.07

 

$

16,467

 

137,418

 

$

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to Core FFO:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

 

340

 

 

 

 

 

 

 

72

 

 

 

 

 

 

Redemption of Preferred Shares

 

 

3,649

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

Severance and transition costs

 

 

186

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

Core FFO applicable to common shares and Units(1)

 

$

13,640

 

134,767

 

$

0.10

 

$

16,539

 

137,418

 

$

0.12

 


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

(2)Net income attributable to IRET is calculated on a per Common Share basis. FFO is calculated on a per Common Share and Unit basis.

4


 

IRET

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO

IRET TO FFO AND CORE FFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except per share amounts)

 

Six Months Ended October 31,

 

2017

 

2016

 

 

 

 

 

    

 

 

Per

 

 

 

 

 

Per

 

 

 

 

 

 

Weighted

 

Share

 

 

 

Weighted

 

Share

 

 

 

 

 

 

Avg Shares

 

And

 

 

 

Avg Shares

 

And

 

 

    

Amount

 

and Units(1)

    

Unit(2)

    

Amount

    

and Units(1)

    

Unit(2)

 

Net income (loss) attributable to controlling interests

   

$

1,557

 

 

 

$

 

 

$

(10,043)

 

 

 

$

 

 

Less dividends to preferred shareholders

 

 

(5,098)

 

 

 

 

 

 

 

(5,757)

 

 

 

 

 

 

Less redemption of preferred shares

 

 

(3,649)

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

Net income available to common shareholders

 

 

(7,190)

 

120,283

 

 

(0.06)

 

 

(15,800)

 

121,135

 

 

(0.13)

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interest – Operating Partnership

 

 

(871)

 

14,794

 

 

 

 

 

(2,122)

 

16,276

 

 

 

 

Depreciation and amortization

 

 

48,013

 

 

 

 

 

 

 

26,408

 

 

 

 

 

 

Impairment of real estate investments attributable to controlling interests

 

 

256

 

 

 

 

 

 

 

39,190

 

 

 

 

 

 

Gains on depreciable property sales attributable to controlling interests

 

 

(17,686)

 

 

 

 

 

 

 

(15,358)

 

 

 

 

 

 

FFO applicable to Common Shares and Units(1)

 

$

22,522

 

135,077

 

$

0.17

 

$

32,318

 

137,411

 

$

0.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to Core FFO:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

 

539

 

 

 

 

 

 

 

72

 

 

 

 

 

 

Redemption of Preferred Shares

 

 

3,649

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

Severance and transition costs

 

 

650

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

Core FFO applicable to common shares and Units(1)

 

$

27,360

 

135,077

 

$

0.20

 

$

32,390

 

137,411

 

$

0.24

 

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

(2)Net income attributable to IRET is calculated on a per Common Share basis. FFO is calculated on a per Common Share and Unit basis.

5


 

IRET

RECONCILATION OF NET OPERATING INCOME TO THE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

Three Months Ended October 31, 2017

 

Multifamily

 

Healthcare

 

All Other

 

Amounts Not
Allocated To
Segments

 

Total

 

Real estate revenue

    

$

39,734

 

 

11,449

 

 

2,738

 

$

 —

 

$

53,921

 

Real estate expenses

 

 

18,888

 

 

4,373

 

 

698

 

 

1,338

 

 

25,297

 

Net operating income (loss)

 

$

20,846

 

$

7,076

 

$

2,040

 

$

(1,338)

 

 

28,624

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,694)

 

General and administrative expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,118)

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,666)

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(334)

 

Interest and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

256

 

Loss before gain on sale of real estate and other investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,932)

 

Gain on sale of real estate and other investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,324

 

Income from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

392

 

Income from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,747

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

13,139

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

Three Months Ended October 31, 2016

 

Multifamily

 

Healthcare

 

All Other

 

Amounts Not
Allocated To
Segments

 

Total

 

Real estate revenue

    

$

36,187

 

$

11,661

 

$

2,761

 

$

 —

 

$

50,609

 

Real estate expenses

 

 

15,566

 

 

4,151

 

 

730

 

 

1,126

 

 

21,573

 

Net operating income (loss)

 

$

20,621

 

$

7,510

 

$

2,031

 

$

(1,126)

 

 

29,036

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,531)

 

General and administrative expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,522)

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,626)

 

Interest and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

93

 

Income before loss on sale of real estate and other investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,450

 

Loss on sale of real estate and other investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(103)

 

Income from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,347

 

Income from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,943

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

12,290

 

 

6


 

IRET

RECONCILATION OF NET OPERATING INCOME TO THE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

Six Months Ended October 31, 2017

    

Multifamily

    

Healthcare

    

All Other

    

Amounts Not
Allocated To
Segments

 

Total

 

Real estate revenue

 

$

78,164

 

$

22,827

 

$

5,665

 

 

 —

 

$

106,656

 

Real estate expenses

 

 

36,353

 

 

8,658

 

 

1,491

 

 

3,045

 

 

49,547

 

Net operating income (loss)

 

$

41,811

 

$

14,169

 

$

4,174

 

$

(3,045)

 

 

57,109

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(49,621)

 

Impairment of real estate investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(256)

 

General and administrative expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,120)

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,961)

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(533)

 

Interest and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

487

 

Loss before gain on sale of real estate and other investments and income from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,895)

 

Gain on sale of real estate and other investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,448

 

Loss from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,447)

 

Income from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,307

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(140)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

Six Months Ended October 31, 2016

 

Multifamily

 

Healthcare

 

All Other

 

Amounts Not
Allocated To
Segments

 

Total

 

Real estate revenue

    

$

71,229

 

$

23,202

 

$

5,789

 

$

 —

 

$

100,220

 

Real estate expenses

 

 

30,445

 

 

8,343

 

 

1,456

 

 

2,963

 

 

43,207

 

Net operating income (loss)

 

$

40,784

 

$

14,859

 

$

4,333

 

$

(2,963)

 

 

57,013

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,798)

 

Impairment of real estate investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(54,153)

 

General and administrative expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,023)

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,990)

 

Interest and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

281

 

Loss before gain on sale of real estate and other investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(52,670)

 

Gain on sale of real estate and other investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,855

 

Loss from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(43,815)

 

Income from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,511

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(28,304)

 

.

(1)

 

 

 

 

 

 

7


(Back To Top)

Section 3: EX-99.2 (EX-99.2)

iret_Ex99_2

Exhibit 99.2

C:\Users\nandersen\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Word\Q2 2018.jpg

 


 

 

Supplemental Financial and Operating Data

Table of Contents

October  31, 2017

 

 

 

 

 

    

Page

 

 

 

Company Background

 

S-2 

 

 

 

Key Financial Data

 

 

Condensed Consolidated Balance Sheets

 

S-4 

Condensed Consolidated Statements of Operations

 

S-5 

Funds From Operations

 

S-6 

Adjusted EBITDA

 

S-7 

 

 

 

Debt and Capital Analysis

 

 

Debt Analysis

 

S-8 

Debt Detail

 

S-9 

Capital Analysis

 

S-11 

 

 

 

Portfolio Analysis

 

 

Net Operating Income Detail

 

S-12 

 

 

 

Tenant Analysis

 

 

Same-Store Multifamily Comparison

 

S-16

Multifamily Summary

 

S-17 

Same-Store Multifamily Capital Expenditures

 

S-18 

Healthcare Leasing Summary

 

S-19 

10 Largest Commercial Tenants

 

S-21 

 

 

 

Growth Analysis

 

 

Fiscal 2018 Acquisition Summary

 

S-22 

 

 

 

Definitions

 

S-23 

 

S-1

 


 

Company Background

Second Quarter Fiscal 2018

We are a multifamily real estate investment trust (REIT) focused on the ownership, management, acquisition, redevelopment, and development of multifamily apartment communities.  As of October 31, 2017, we owned interests in 89 multifamily properties consisting of 13,576 apartment homes and 40 commercial properties, including 28 healthcare and 12 other commercial properties, with a total of 2.5 million square feet of leasable space.  IRET's common shares and Series C preferred shares are publicly traded on the New York Stock Exchange (NYSE symbols: IRET and IRET PRC, respectively).  All of our Series B preferred shares were redeemed on October 30, 2017.

 

Company Snapshot

(as of October  31, 2017)

 

Company Headquarters

Minot, North Dakota

Fiscal Year-End

April 30

Reportable Segments

Multifamily and Healthcare

Total Properties Held for Investment

129

Total Units Held for Investment

 

(multifamily properties)

13,576

Total Square Feet Held for Investment

 

(healthcare and other commercial properties)

2.5 million

Common Shares Outstanding (thousands)

120,188(1)

Limited Partnership Units Outstanding (thousands)

14,618

Common Share Distribution - Quarter/Annualized

$0.07/$0.28

Annualized Dividend Yield

4.8%

Total Capitalization (see p. S-11 for details)

$1.8 billion

 

 

Investor Information

Board of Trustees

Jeffrey P. Caira

Trustee and Chair

Michael T. Dance

Trustee, Chair of Audit Committee

Mark O. Decker, Jr.

Trustee, President, Chief Executive Officer and Chief Investment Officer

Linda J. Hall

Trustee, Chair of Compensation Committee

Terrance P. Maxwell

Trustee

Jeffrey L. Miller

Trustee, Chair of the Nominating and Governance Committee

John A. Schissel

Trustee, Chair of Capital Markets Committee

John D. Stewart

Trustee

 

 

Management

 

 

Mark O. Decker, Jr.

President, Chief Executive Officer, and Chief Investment Officer; Trustee

John A. Kirchmann

Executive Vice President and Chief Financial Officer

Anne Olson

Executive Vice President, General Counsel and Secretary

Andrew Martin

Executive Vice President – Property Operations

Nancy B. Andersen

Senior Vice President and Chief Accounting Officer

Matthew M. Volpano

Senior Vice President – Capital Markets

 

 

 

 

 

Corporate Headquarters:

Investor Relations Contact:

1400 31st Avenue SW, Suite 60

Matthew Volpano

P.O. Box 1988

701-837-7104

Minot, ND 58702-1988

IR@iret.com

 

 

Trading Symbol for Common Shares:  IRET

Trading Symbol for Series C Preferred Shares: IRET PRC

 

Stock Exchange Listing:  NYSE

 

S-2

 


 

 

Common Share Data (NYSE: IRET)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

    

 

2nd Quarter

 

 

1st Quarter

 

 

4th Quarter 

 

 

3rd Quarter 

    

 

2nd Quarter 

 

 

 

 

Fiscal Year 2018

 

 

Fiscal Year 2018

 

 

Fiscal Year 2017

 

 

Fiscal Year 2017

 

 

Fiscal Year 2017

High Closing Price

 

 

$

6.32

 

$

6.72

 

$

6.61

 

$

7.20

 

$

6.67

Low Closing Price

 

 

$

5.81

 

$

5.64

 

$

5.67

 

$

5.81

 

$

5.67

Average Closing Price

 

 

$

6.09

 

$

6.07

 

$

6.09

 

$

6.65

 

$

6.21

Closing Price at end of quarter

 

 

$

5.85

 

$

6.22

 

$

5.91

 

$

6.44

 

$

6.07

Common Share Distributions—annualized

 

 

$

0.28

 

$

0.28

 

$

0.28

 

$

0.28

 

$

0.52

Closing Dividend Yield - annualized

 

 

 

4.8

%

 

4.5

%

 

4.7

%

 

4.3

%  

 

8.6%

Closing common shares outstanding (thousands)

 

 

 

120,188

 

 

120,587

 

 

121,199

 

 

121,889

 

 

121,701

Closing limited partnership units outstanding (thousands)

 

 

 

14,618

 

 

14,657

 

 

15,617

 

 

16,034

 

 

16,229

Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)

 

 

$

788,615

 

$

841,218

 

$

808,583

 

$

888,224

 

$

837,235

 

This Supplemental Operating and Financial Data contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, which may be identified by the use of words such as “expects,” “plans,” “estimates,” “anticipates,” “projects,” “intends,” “believes,” “outlook” and similar expressions that do not relate to historical matters, specifically including our future plan and anticipated operating results, are based on our expectations, forecasts and assumptions at the time of this earnings release. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in such forward-looking statements.

Such risks, uncertainties and other factors that might cause such differences include, but are not limited to: intentions and expectations regarding future distributions on common shares and units; changes in operating costs; fluctuations in interest rates; adverse capital and credit market conditions that might affect our access to various sources of capital and cost of capital; our ability to manage our current debt levels and repay or refinance our indebtedness upon maturity or other payment dates; our ability to maintain financial covenant compliance under our debt agreements; adequate insurance coverage; the effect of government regulation; delays or inability to obtain necessary governmental permits and authorizations; changes in general and local economic and real estate market conditions; changes in demand for our properties that may result in lower-than-expected occupancy and/or rental rates; ability to acquire quality properties in targeted markets; ability to successfully dispose of certain assets; competition for tenants from similar competing properties; ability to attract and retain skilled personnel; cyber-intrusion; delays in completing development, redevelopment and/or lease up of properties and increased costs; ability to maintain effective internal controls over financial reporting and disclosure controls and procedures; and those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including our Form 10-K for the fiscal year ended April 30, 2017 subsequent quarterly reports on Form 10-Q, and other public filings.  We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

 

 

 

 

S-3

 


 

IRET

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

10/31/2017

    

7/31/2017

    

4/30/2017

 

1/31/2017

    

10/31/2016

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property owned

 

$

1,831,181

 

$

1,744,252

 

$

1,677,481

 

$

1,685,823

 

$

1,665,354

 

Less accumulated depreciation

 

 

(384,402)

 

 

(368,769)

 

 

(340,417)

 

 

(334,875)

 

 

(321,790)

 

 

 

 

1,446,779

 

 

1,375,483

 

 

1,337,064

 

 

1,350,948

 

 

1,343,564

 

Development in progress

 

 

 —

 

 

 —

 

 

 —

 

 

11,531

 

 

20,921

 

Unimproved land

 

 

15,216

 

 

15,195

 

 

18,455