Investors Real Estate Trust Announces Financial And Operating Results For The Quarter Ended July 31, 2016

MINOT, N.D., Sept. 8, 2016

First Quarter Highlights

• Total revenue for the Company was $49.6 million, up 10.1% from the first quarter of fiscal year 2016
• Net (loss) income available to common shareholders was $(24.5) million compared to $1.7 million for the first quarter of fiscal year 2016. The decrease in net income available to common shareholders was primarily due to non-cash impairment expense of $54.2 million, net of gain on sale of real estate of $9.0 million recognized in the three months ended July 31, 2016
• Reported Funds from Operations ("FFO") of $15.9 million or $0.12 per share/unit
• Placed into service one multifamily development project containing 241 units and representing aggregate investment of $72.2 million
• Disposed of one non-core industrial property and one parcel of unimproved land for sales prices totaling $13.7 million
• Same store multifamily Net Operating Income ("NOI") growth year over year was up 1.1%, excluding energy impacted markets
• Subsequent to quarter end, the Company announced the execution of sales agreements to dispose of 26 senior housing assets for $236.0 million. These sales are in addition to the previously announced exercise of purchase options by the tenant in 8 senior housing assets the Company owns in Idaho for a total of approximately $43.5 million. If all these transactions close, the Company will have completely disposed of its senior housing portfolio for a total of approximately $279.5 million.

Chief Executive Officer Tim Mihalick commented, "Overall we are pleased with the quarter's operating results.  Though we are witnessing a near term supply demand imbalance in certain of our multifamily markets, we drove strong revenue growth in many of our target markets, and our newer, non-same store multifamily assets are accelerating the earnings power of the Company as a whole. Reflective of this, we made continued progress with our development pipeline with the delivery of 71 France in Edina, Minnesota and we expect that the completion of our development program will provide a strong runway for future earnings growth."

Mr. Mihalick continued, "With the recently announced pending sale of $236 million of senior housing assets, which represents our exit from that business, we continue to refine our portfolio and execute on our strategy to transition to a pure-play multifamily REIT. Additionally, within our multifamily segment, we intend to identify smaller, less relevant assets and begin disposing of outliers. As an organization, we are focused on maximizing value by enhancing our operations, prudently allocating our capital and strengthening our balance sheet. By doing so, we will provide our shareholders with a higher quality earnings stream with better margins and most importantly, a differentiated opportunity to invest in a growing, best in class multifamily operator in the Midwest.  Given all the Company's activities in the last quarter we are very pleased with our progress."

Financial Results for the Three Months Ended July 31, 2016 Compared to the Prior Year Period

Net (loss) income available to common shareholders for the quarter ended July 31, 2016 was $(24.5) million compared to $1.7 million for the same period of the prior fiscal year.  The decrease in net income available to common shareholders was primarily due to non-cash impairment expense of $54.2 million, net of gain on sale of real estate of $9.0 million recognized in the three months ended July 31, 2016.

Funds from Operations ("FFO") for the quarter ending July 31, 2016 was $15.9 million or $0.12 per share/unit.