IRET Reports Second Quarter 2020 Financial and Operating Results

MINOT, N.D., Aug. 3, 2020

		Three Months Ended June 30,								Six Months Ended June 30,
Per Share		2020				2019				2020 ARIVA.DE Börsen-Geflüster Kurse Investors Real Estate Trust SBI -   0,00%				2019
Net Income (Loss) - diluted		$	(0.44)			$	0.11			$	(1.13)			$	(0.43)
FFO - diluted		$	0.93			$	1.45			$	1.58			$	2.22
Core FFO - diluted		$	0.91			$	1.00			$	1.81			$	1.77

NOI, FFO, and Core FFO are non-GAAP financial measures.  For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to "Non-GAAP Financial Measures and Reconciliations" below.

Second Quarter 2020 Highlights

• Our Net Loss was $(0.44) per diluted share for the second quarter of 2020, compared to Net Income of $0.11 per diluted share for the same period of 2019;
• Core FFO increased 2.3% to $1.81 per diluted share for the six months ended June 30, 2020, compared to $1.77 per diluted share for the same period of 2019;
• Core FFO increased 1.1% to $0.91 per diluted share for the three months ended June 30, 2020, compared to $0.90 for the three months ended March 31, 2020;
• Total collections were 99.1% for the second quarter of 2020, compared to 99.6% for the same period of 2019;
• Same-store controllable expenses (which exclude taxes and insurance) decreased 4.3% for the second quarter of 2020 as compared to the same period of 2019, resulting in NOI growth of 1.1% for the second quarter of 2020 compared to the same period of 2019;
• Same-store NOI increased 3.4% for the three months ended June 30, 2020, compared to the three months ended March 31, 2020;
• We continued to strengthen our balance sheet by issuing approximately 624,000 common shares under our 2019 ATM Program for net proceeds of $44.8 million;
• We announced that we will include Nashville as one of our target markets; and
• We were recognized as a Minnesota Top Workplace for 2020 by the Minneapolis Star Tribune, which is based on several factors, including employee engagement, company leadership, pay, benefits, and workplace flexibility.

Operations Update

Our operating results for the month ended July 31, 2020, included the following:

• Total collections for same-store communities for the month ended July 31, 2020 were 99.0%.
• We entered into eight deferrals agreements in July, representing 0.1% of revenue at all communities. As of July 31, 2020, a total of approximately $40,000 remained outstanding under resident repayment plans.
• Physical occupancy for same-store communities as of July 31, 2020 was 95.2%, compared to 93.8% as of July 31, 2019 and 96.1% as of March 31, 2020.

Acquisitions and Dispositions

During the quarter, we disposed of our sole remaining parcel of unimproved land for a total sale price of $1.3 million. We did not have any acquisitions during the quarter.

Balance Sheet

At the end of the second quarter, we had $239.7 million of total liquidity on our balance sheet, including $187.0 million available under our line of credit and cash and cash equivalents of $52.7 million.

2020 Financial Outlook

On March 27, 2020 we issued a press release indicating that in light of the impact of COVID-19 on our business and results of operations, we were withdrawing our 2020 Financial Outlook. Given the ongoing impact of COVID-19, we are not providing an updated 2020 Financial Outlook at this time.

Upcoming Events

IRET is scheduled to participate in the BMO 2020 Real Assets Conference, which will be held virtually on September 2-3, 2020.

COVID-19 Developments

The COVID-19 pandemic, including the associated economic disruptions, has continued to impact our business and operations since March 2020. Our first priority continues to be the health and well-being of our residents, team members, and the communities we serve. In the second quarter, we began to implement a re-opening plan in the common spaces in our communities and offices while continuing to adhere to state and local guidelines. We are prepared to suspend re-opening plans in any markets in which an increase in COVID-19 cases and other factors make it unsafe to do so in accordance with state and local guidelines.

COVID-19 continues to impact our residents, our team members, and the economy. The safety and health of people we serve and our team has remained our priority in these uncertain times. As the COVID-19 pandemic continues to unfold, we acknowledge the potential effects on our financial condition, results of operations, and cash flows, including the following:

• reductions in economic activity and rising unemployment that potentially could impact our residents' ability to pay rent on a timely basis or their desire to seek lease deferment payment plans or rent reductions, which in turn could result in increases in our uncollectible receivables and reductions in rental income and reduce our NOI and cash flow;
• the potential financial impact of the pandemic on the credit market and our future compliance with financial covenants contained in our credit facility and other debt agreements;
• weaker economic conditions that could cause us to recognize impairment in the value of our tangible or intangible assets; and
• rising costs related to our COVID-19 response that could cause us to record loss contingencies and increased expenses.

The extent to which the COVID-19 pandemic impacts our operations and those of our residents will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity, and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.

For a more detailed description of the risks and uncertainties affecting our business, see the risk factors presented in  our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as updated under Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, and in our subsequent current and periodic reports filed with the Securities and Exchange Commission at www.sec.gov.

Quarterly Distributions

Effective June 5, 2020, IRET's Board of Trustees declared a regular quarterly distribution of $0.70 per share/unit, which was paid on July 10, 2020, to common shareholders and unitholders of record on June 30, 2020.  IRET has paid cash dividends to common shareholders and unitholders every quarter since its initial dividend payment in 1971.

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