IRET Announces Fiscal First Quarter 2018 Results

MINOT, N.D., Sept. 11, 2017

		Three Months Ended
		July 31,
Per Share		2017			2016
Net Income ARIVA.DE Börsen-Geflüster Kurse Investors Real Estate Trust SBI -   0,00%		$	(0.11)		$	(0.20)
FFO		$	0.10		$	0.12
Core FFO		$	0.10		$	0.11

"I'm very pleased with what we achieved this quarter," said Mark O. Decker, Jr., IRET's President and CEO.  "Our team remains focused on providing outstanding service to our residents and executing on our stated business plan while completing our senior management transition.  We are committed to our ongoing transformation and dedicated to building a high-quality multifamily portfolio, supported by a strong and efficient operating platform that delivers consistent growth to our investors."

First Quarter Fiscal Year 2018 Highlights

• Achieved multifamily same-store revenue and occupancy growth over both year-over-year and sequential time periods through a combination of initiatives, including implementation of a revenue management system across the portfolio, expansion of utility billings to residents, and completion of revenue-generating capital expenditures.
• Experienced elevated multifamily same-store expense increase year-over-year. The primary drivers of this increase were capital expenditure policy changes and increased turnover costs related to a reduction in revenue generating capital spend. Additionally, we experienced higher labor costs and increased real estate taxes, primarily attributable to stabilizing developments and higher North Dakota levy rates.
• Closed the previously announced acquisition of Oxbo Apartments and, subsequent to quarter end, executed a purchase agreement and concluded due diligence on Park Place Apartments, which we believe has opportunity for revenue-generating capital upgrades. Both properties advanced our portfolio transition and added to our holdings in the Minneapolis-St. Paul MSA, which continues to exhibit economic strength and attract capital from national and international investors.
• Established a new senior management team to complete and enhance the portfolio transition and continue the operational improvements.

Acquisitions

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

Subsequent to quarter end, we signed an agreement to acquire Park Place Apartments, a 500-unit multifamily property in Plymouth, MN, for $92.3 million.  Our due diligence investigation is complete, and we expect to close the acquisition of this property before the end of September 2017.

Dispositions

During the quarter, we sold a retail property in Minot, ND, for $3.4 million.

Subsequent to quarter end, 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, and a healthcare property in Eagan, MN, for $2.1 million,

Other Investments

In July 2017, we originated a $16.2 million loan on a multifamily development located in New Hope, MN, a suburb of Minneapolis.  The investment will be funded through the third quarter of fiscal year 2018.  As of July 31, 2017, we had funded $3.0 million. The investment has an initial return of 6.0% and matures in 2023.  Additionally, the investment provides IRET an option to purchase the development before the loan matures.

Balance Sheet

At the end of the first quarter we had $117.9 million of total liquidity on our balance sheet, including $94.1 million available on our corporate revolver.  Net debt to annualized Adjusted EBITDA totaled 8.2x, and total debt to total market capitalization was 46.8%.

During the quarter, the Company repurchased and retired approximately 682,000 common shares for an aggregate cost of $3.9 million.  In addition, we redeemed approximately 960,000 Units for an aggregate cost of $5.7 million.

Quarterly Distributions

On September 6, 2017, IRET's Board of Trustees declared a regular quarterly distribution of $0.07 per share/unit payable on October 2, 2017, to common shareholders and unitholders of record on September 15, 2017.  This distribution will be the 186th 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 4.5% based on IRET's closing share price as of September 8, 2017.

The Board of Trustees also declared a distribution of $0.496875 per share on the 7.95% Series B Cumulative Redeemable Preferred Shares (NYSE: IRET PRB) payable on October 2, 2017, to holders of record on September 15, 2017.  Series B preferred share distributions are cumulative and payable quarterly in arrears at an annual rate of $1.9875 per share.

Earnings Call

Live webcast and replay: http://ir.iretapartments.com
Live Conference Call			Conference Call Replay
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