EX-99.3 5 iretexhibit993-12122011.htm ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Exhibit 99.3
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
Investors Real Estate Trust
Minot, North Dakota
We have audited the accompanying consolidated balance sheets of Investors Real Estate Trust and subsidiaries (the "Company") as of April 30, 2011 and 2010, and the related consolidated statements of operations, equity, and cash flows for each of the three years in the period ended April 30, 2011. Our audits also included the consolidated financial statement schedules listed in the Index at Item 15. We also have audited the Company's internal control over financial reporting as of April 30, 2011, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for these financial statements and financial statement schedules, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting (not presented herein). Our responsibility is to express an opinion on these financial statements and financial statement schedules and an opinion on the Company's internal control over financial reporting based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
2011 Annual Report F-1

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Investors Real Estate Trust and subsidiaries as of April 30, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended April 30, 2011, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 30, 2011, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
/s/ DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
July 14, 2011 (December 12, 2011, as to the effects of discontinued operations as disclosed in Note 12)
2011 Annual Report F-2

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
April 30, 2011 and 2010

|  | (in thousands) |
|  | April 30, 2011 |  |  | April 30, 2010 |
ASSETS |  |  |  |  |  |
Real estate investments |  |  |  |  |  |
Property owned |  | $ | 1,770,798 |  |  | $ | 1,800,519 |
Less accumulated depreciation |  |  | (328,952 | ) |  |  | (308,626 | )
|  |  | 1,441,846 |  |  |  | 1,491,893 |
Development in progress |  |  | 9,693 |  |  |  | 2,831 |
Unimproved land |  |  | 6,550 |  |  |  | 6,007 |
Mortgage loans receivable, net of allowance of $3 and $3, respectively |  |  | 156 |  |  |  | 158 |
Total real estate investments |  |  | 1,458,245 |  |  |  | 1,500,889 |
Other assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  | 41,191 |  |  |  | 54,791 |
Marketable securities – available-for-sale |  |  | 625 |  |  |  | 420 |
Receivable arising from straight-lining of rents, net of allowance of $996 and $912, respectively |  |  | 18,933 |  |  |  | 17,320 |
Accounts receivable, net of allowance of $317 and $257, respectively |  |  | 5,646 |  |  |  | 4,916 |
Real estate deposits |  |  | 329 |  |  |  | 516 |
Prepaid and other assets |  |  | 2,351 |  |  |  | 1,189 |
Intangible assets, net of accumulated amortization of $42,154 and $39,571, respectively |  |  | 49,832 |  |  |  | 50,700 |
Tax, insurance, and other escrow |  |  | 15,268 |  |  |  | 9,301 |
Property and equipment, net of accumulated depreciation of $1,231 and $924, respectively |  |  | 1,704 |  |  |  | 1,392 |
Goodwill |  |  | 1,127 |  |  |  | 1,388 |
Deferred charges and leasing costs, net of accumulated amortization of $13,675 and $13,131, respectively |  |  | 20,112 |  |  |  | 18,108 |
TOTAL ASSETS |  | $ | 1,615,363 |  |  | $ | 1,660,930 |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |
LIABILITIES |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 37,879 |  |  | $ | 38,514 |
Revolving lines of credit |  |  | 30,000 |  |  |  | 6,550 |
Mortgages payable |  |  | 993,803 |  |  |  | 1,057,619 |
Other |  |  | 8,404 |  |  |  | 1,320 |
TOTAL LIABILITIES |  |  | 1,070,086 |  |  |  | 1,104,003 |
COMMITMENTS AND CONTINGENCIES (NOTE 15) |  |  |  |  |  |  |  |
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES |  |  | 987 |  |  |  | 1,812 |
EQUITY |  |  |  |  |  |  |  |
Investors Real Estate Trust shareholder’s equity |  |  |  |  |  |  |  |
Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at April 30, 2011 and April 30, 2010, aggregate liquidation preference of $28,750,000) |  |  | 27,317 |  |  |  | 27,317 |
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 80,523,265 shares issued and outstanding at April 30, 2011, and 75,805,159 shares issued and outstanding at April 30, 2010) |  |  | 621,936 |  |  |  | 583,618 |
Accumulated distributions in excess of net income |  |  | (237,563 | ) |  |  | (201,412 | )
Total Investors Real Estate Trust shareholders’ equity |  |  | 411,690 |  |  |  | 409,523 |
Noncontrolling interests – Operating Partnership (20,067,350 units at April 30, 2011 and 20,521,365 units at April 30, 2010) |  |  | 123,627 |  |  |  | 134,970 |
Noncontrolling interests – consolidated real estate entities |  |  | 8,973 |  |  |  | 10,622 |
Total equity |  |  | 544,290 |  |  |  | 555,115 |
TOTAL LIABILITIES AND EQUITY |  | $ | 1,615,363 |  |  | $ | 1,660,930 |

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2011 Annual Report F-3

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the years ended April 30, 2011, 2010, and 2009

|  | (in thousands, except per share data) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
REVENUE |  |  |  |  |  |  |  |  |
Real estate rentals |  | $ | 192,178 |  |  | $ | 186,321 |  |  | $ | 183,153 |
Tenant reimbursement |  |  | 45,007 |  |  |  | 44,994 |  |  |  | 45,167 |
TOTAL REVENUE |  |  | 237,185 |  |  |  | 231,315 |  |  |  | 228,320 |
EXPENSES |  |  |  |  |  |  |  |  |  |  |  |
Depreciation/amortization related to real estate investments |  |  | 55,809 |  |  |  | 55,054 |  |  |  | 52,335 |
Utilities |  |  | 18,238 |  |  |  | 17,101 |  |  |  | 18,112 |
Maintenance |  |  | 29,240 |  |  |  | 26,972 |  |  |  | 26,431 |
Real estate taxes |  |  | 30,852 |  |  |  | 30,210 |  |  |  | 29,077 |
Insurance |  |  | 2,304 |  |  |  | 3,615 |  |  |  | 2,864 |
Property management expenses |  |  | 21,276 |  |  |  | 18,380 |  |  |  | 16,716 |
Administrative expenses |  |  | 6,617 |  |  |  | 5,716 |  |  |  | 4,430 |
Advisory and trustee services |  |  | 605 |  |  |  | 502 |  |  |  | 452 |
Other expenses |  |  | 1,774 |  |  |  | 2,513 |  |  |  | 1,440 |
Amortization related to non-real estate investments |  |  | 2,679 |  |  |  | 2,362 |  |  |  | 2,060 |
Impairment of real estate investments |  |  | 0 |  |  |  | 708 |  |  |  | 0 |
TOTAL EXPENSES |  |  | 169,394 |  |  |  | 163,133 |  |  |  | 153,917 |
Gain on involuntary conversion |  |  | 0 |  |  |  | 1,660 |  |  |  | 0 |
Interest expense |  |  | (63,941 | ) |  |  | (65,581 | ) |  |  | (64,928 | )
Interest income |  |  | 259 |  |  |  | 539 |  |  |  | 599 |
Other income |  |  | 282 |  |  |  | 355 |  |  |  | 314 |
Income from continuing operations |  |  | 4,391 |  |  |  | 5,155 |  |  |  | 10,388 |
Income (loss) from discontinued operations |  |  | 19,960 |  |  |  | (570 | ) |  |  | 325 |
NET INCOME |  |  | 24,351 |  |  |  | 4,585 |  |  |  | 10,713 |
Net income attributable to noncontrolling interests – Operating Partnership |  |  | (4,449 | ) |  |  | (562 | ) |  |  | (2,227 | )
Net loss (income) attributable to noncontrolling interests – consolidated real estate entities |  |  | 180 |  |  |  | (22 | ) |  |  | 40 |
Net income attributable to Investors Real Estate Trust |  |  | 20,082 |  |  |  | 4,001 |  |  |  | 8,526 |
Dividends to preferred shareholders |  |  | (2,372 | ) |  |  | (2,372 | ) |  |  | (2,372 | )
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS |  | $ | 17,710 |  |  | $ | 1,629 |  |  | $ | 6,154 |
Earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted |  | $ | .02 |  |  | $ | .04 |  |  | $ | .10 |
Earnings (loss) per common share from discontinued operations – Investors Real Estate Trust – basic and diluted |  |  | .20 |  |  |  | (.01 | ) |  |  | .01 |
NET INCOME PER COMMON SHARE – BASIC & DILUTED |  | $ | .22 |  |  | $ | .03 |  |  | $ | .11 |
DIVIDENDS PER COMMON SHARE |  | $ | .6860 |  |  | $ | .6845 |  |  | $ | .6770 |

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2011 Annual Report F-4

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
for the years ended April 30, 2011, 2010, and 2009

|  | (in thousands) |
|  | NUMBER OF PREFERRED SHARES |  |  | PREFERRED SHARES |  |  | NUMBER OF COMMON SHARES |  |  | COMMON SHARES |  |  | ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET INCOME |  |  | NONCONTROLLING INTERESTS |  |  | TOTAL EQUITY |
BALANCE APRIL 30, 2008 |  |  | 1,150 |  |  | $ | 27,317 |  |  |  | 57,732 |  |  | $ | 439,255 |  |  | $ | (122,498 | ) |  | $ | 173,557 |  |  | $ | 517,631 |
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 8,526 |  |  |  | 2,134 |  |  |  | 10,660 |
Distributions - common shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (39,612 | ) |  |  | (14,383 | ) |  |  | (53,995 | )
Distributions - preferred shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,372 | ) |  |  |  |  |  |  | (2,372 | )
Distribution reinvestment plan |  |  |  |  |  |  |  |  |  |  | 1,186 |  |  |  | 11,385 |  |  |  |  |  |  |  |  |  |  |  | 11,385 |
Shares issued |  |  |  |  |  |  |  |  |  |  | 641 |  |  |  | 5,978 |  |  |  |  |  |  |  |  |  |  |  | 5,978 |
Partnership units issued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,730 |  |  |  | 3,730 |
Redemption of units for common shares |  |  |  |  |  |  |  |  |  |  | 746 |  |  |  | 5,034 |  |  |  |  |  |  |  | (5,034 | ) |  |  | 0 |
Adjustments to redeemable noncontrolling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6 |  |  |  |  |  |  |  |  |  |  |  | 6 |
Fractional shares repurchased |  |  |  |  |  |  |  |  |  |  | (1 | ) |  |  | (10 | ) |  |  |  |  |  |  |  |  |  |  | (10 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 394 |  |  |  | 394 |
BALANCE APRIL 30, 2009 |  |  | 1,150 |  |  | $ | 27,317 |  |  |  | 60,304 |  |  | $ | 461,648 |  |  | $ | (155,956 | ) |  | $ | 160,398 |  |  | $ | 493,407 |
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,001 |  |  |  | 524 |  |  |  | 4,525 |
Distributions - common shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (47,085 | ) |  |  | (14,261 | ) |  |  | (61,346 | )
Distributions - preferred shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,372 | ) |  |  |  |  |  |  | (2,372 | )
Distribution reinvestment plan |  |  |  |  |  |  |  |  |  |  | 1,240 |  |  |  | 10,534 |  |  |  |  |  |  |  |  |  |  |  | 10,534 |
Shares issued |  |  |  |  |  |  |  |  |  |  | 13,555 |  |  |  | 108,421 |  |  |  |  |  |  |  |  |  |  |  | 108,421 |
Partnership units issued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,897 |  |  |  | 3,897 |
Redemption of units for common shares |  |  |  |  |  |  |  |  |  |  | 707 |  |  |  | 3,755 |  |  |  |  |  |  |  | (3,755 | ) |  |  | 0 |
Adjustments to redeemable noncontrolling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (192 | ) |  |  |  |  |  |  |  |  |  |  | (192 | )
Fractional shares repurchased |  |  |  |  |  |  |  |  |  |  | (1 | ) |  |  | (11 | ) |  |  |  |  |  |  |  |  |  |  | (11 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (537 | ) |  |  |  |  |  |  | (1,211 | ) |  |  | (1,748 | )
BALANCE APRIL 30, 2010 |  |  | 1,150 |  |  | $ | 27,317 |  |  |  | 75,805 |  |  | $ | 583,618 |  |  | $ | (201,412 | ) |  | $ | 145,592 |  |  | $ | 555,115 |
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 20,082 |  |  |  | 4,282 |  |  |  | 24,364 |
Distributions - common shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (53,861 | ) |  |  | (13,803 | ) |  |  | (67,664 | )
Distributions - preferred shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,372 | ) |  |  |  |  |  |  | (2,372 | )
Distribution reinvestment plan |  |  |  |  |  |  |  |  |  |  | 1,334 |  |  |  | 11,373 |  |  |  |  |  |  |  |  |  |  |  | 11,373 |
Shares issued |  |  |  |  |  |  |  |  |  |  | 2,376 |  |  |  | 19,851 |  |  |  |  |  |  |  |  |  |  |  | 19,851 |
Partnership units issued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,996 |  |  |  | 4,996 |
Redemption of units for common shares |  |  |  |  |  |  |  |  |  |  | 1,009 |  |  |  | 6,905 |  |  |  |  |  |  |  | (6,905 | ) |  |  | 0 |
Adjustments to redeemable noncontrolling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 370 |  |  |  |  |  |  |  |  |  |  |  | 370 |
Fractional shares repurchased |  |  |  |  |  |  |  |  |  |  | (1 | ) |  |  | (10 | ) |  |  |  |  |  |  |  |  |  |  | (10 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (171 | ) |  |  |  |  |  |  | (1,562 | ) |  |  | (1,733 | )
BALANCE APRIL 30, 2011 |  |  | 1,150 |  |  | $ | 27,317 |  |  |  | 80,523 |  |  | $ | 621,936 |  |  | $ | (237,563 | ) |  | $ | 132,600 |  |  | $ | 544,290 |

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2011 Annual Report F-5

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended April 30, 2011, 2010, and 2009

|  | (in thousands) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |  |  |  |  |
Net Income |  | $ | 24,351 |  |  | $ | 4,585 |  |  | $ | 10,713 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 61,344 |  |  |  | 61,184 |  |  |  | 57,832 |
Gain on sale of real estate, land and other investments |  |  | (19,365 | ) |  |  | (68 | ) |  |  | (54 | )
Gain on involuntary conversion |  |  | 0 |  |  |  | (1,660 | ) |  |  | 0 |
Impairment of real estate investments |  |  | 0 |  |  |  | 1,678 |  |  |  | 338 |
Donation of real estate investments |  |  | 0 |  |  |  | 450 |  |  |  | 0 |
Bad debt expense |  |  | 733 |  |  |  | 1,399 |  |  |  | 2,472 |
Changes in other assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Increase in receivable arising from straight-lining of rents |  |  | (1,732 | ) |  |  | (1,443 | ) |  |  | (2,403 | )
Increase in accounts receivable |  |  | (914 | ) |  |  | (3,371 | ) |  |  | (603 | )
Increase in prepaid and other assets |  |  | (1,162 | ) |  |  | (138 | ) |  |  | (702 | )
Decrease (increase) in tax, insurance and other escrow |  |  | 1,469 |  |  |  | (2,040 | ) |  |  | 1,381 |
Increase in deferred charges and leasing costs |  |  | (6,501 | ) |  |  | (4,731 | ) |  |  | (5,686 | )
Increase (decrease) in accounts payable, accrued expenses and other liabilities |  |  | 551 |  |  |  | 5,567 |  |  |  | (3,153 | )
Net cash provided by operating activities |  |  | 58,774 |  |  |  | 61,412 |  |  |  | 60,135 |
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from real estate deposits |  |  | 2,766 |  |  |  | 2,588 |  |  |  | 3,645 |
Payments for real estate deposits |  |  | (2,579 | ) |  |  | (3,016 | ) |  |  | (2,354 | )
Principal proceeds on mortgage loans receivable |  |  | 2 |  |  |  | 2 |  |  |  | 389 |
Proceeds from sale of marketable securities - available-for-sale |  |  | 95 |  |  |  | 0 |  |  |  | 0 |
Purchase of marketable securities - available-for-sale |  |  | (300 | ) |  |  | 0 |  |  |  | 0 |
Increase in lender holdbacks for improvements |  |  | (7,436 | ) |  |  | 0 |  |  |  | 0 |
Proceeds from sale of real estate - discontinued operations |  |  | 81,539 |  |  |  | 103 |  |  |  | 68 |
Proceeds from sale of real estate and other investments |  |  | 74 |  |  |  | 40 |  |  |  | 0 |
Insurance proceeds received |  |  | 347 |  |  |  | 1,395 |  |  |  | 2,962 |
Payments for acquisitions and improvements of real estate investments |  |  | (62,824 | ) |  |  | (80,069 | ) |  |  | (59,077 | )
Net cash provided (used) by investing activities |  |  | 11,684 |  |  |  | (78,957 | ) |  |  | (54,367 | )
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from mortgages payable |  |  | 139,947 |  |  |  | 166,490 |  |  |  | 73,530 |
Principal payments on mortgages payable |  |  | (213,658 | ) |  |  | (180,482 | ) |  |  | (67,230 | )
Principal payments on revolving lines of credit and other debt |  |  | (25,650 | ) |  |  | (15,567 | ) |  |  | (14,073 | )
Proceeds from revolving lines of credit and other debt |  |  | 56,300 |  |  |  | 15,500 |  |  |  | 20,500 |
Proceeds from sale of common shares, net of issue costs |  |  | 19,598 |  |  |  | 108,271 |  |  |  | 5,978 |
Repurchase of fractional shares and partnership units |  |  | (10 | ) |  |  | (11 | ) |  |  | (10 | )
Net (payments) proceeds from noncontrolling partner – consolidated real estate entities |  |  | (425 | ) |  |  | (475 | ) |  |  | 717 |
Distributions paid to common shareholders, net of reinvestment of $10,627, $9,762 and $10,603, respectively |  |  | (43,234 | ) |  |  | (37,323 | ) |  |  | (29,009 | )
Distributions paid to preferred shareholders |  |  | (2,372 | ) |  |  | (2,372 | ) |  |  | (2,372 | )
Distributions paid to noncontrolling interests – Unitholders of the Operating Partnership, net reinvestment of $746, $772 and $782, respectively |  |  | (13,057 | ) |  |  | (13,489 | ) |  |  | (13,601 | )
Distributions paid to noncontrolling interests – consolidated real estate entities |  |  | (1,055 | ) |  |  | (1,273 | ) |  |  | (165 | )
Distributions paid to redeemable noncontrolling interests-consolidated real estate entities |  |  | (442 | ) |  |  | (177 | ) |  |  | (112 | )
Redemption of partnership units |  |  | 0 |  |  |  | 0 |  |  |  | (158 | )
Net cash (used) provided by financing activities |  |  | (84,058 | ) |  |  | 39,092 |  |  |  | (26,005 | )
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |  |  | (13,600 | ) |  |  | 21,547 |  |  |  | (20,237 | )
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |  |  | 54,791 |  |  |  | 33,244 |  |  |  | 53,481 |
CASH AND CASH EQUIVALENTS AT END OF YEAR |  | $ | 41,191 |  |  | $ | 54,791 |  |  | $ | 33,244 |

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2011 Annual Report F-6

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
for the years ended April 30, 2011, 2010, and 2009

|  | (in thousands) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |  |  |  |  |  |  |  |  |
Distribution reinvestment plan |  | $ | 10,627 |  |  | $ | 9,762 |  |  | $ | 10,603 |
Operating partnership distribution reinvestment plan |  |  | 746 |  |  |  | 772 |  |  |  | 782 |
Assets acquired through the issuance of operating partnership units |  |  | 4,996 |  |  |  | 3,897 |  |  |  | 3,730 |
Operating partnership units converted to shares |  |  | 6,905 |  |  |  | 3,755 |  |  |  | 5,034 |
Real estate investment acquired through assumption of indebtedness and accrued costs |  |  | 9,895 |  |  |  | 2,569 |  |  |  | 0 |
Adjustments to accounts payable included within real estate investments |  |  | 933 |  |  |  | 324 |  |  |  | (90 | )
Fair value adjustments to redeemable noncontrolling interests |  |  | 370 |  |  |  | (192 | ) |  |  | 6 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |  |  |  |  |  |  |  |  |  |  |  |
Cash paid during the year for: |  |  |  |  |  |  |  |  |  |  |  |
Interest on mortgages |  | $ | 63,163 |  |  | $ | 67,234 |  |  | $ | 67,947 |
Interest other |  |  | 1,399 |  |  |  | 682 |  |  |  | 421 |
|  | $ | 64,562 |  |  | $ | 67,916 |  |  | $ | 68,368 |

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2011 Annual Report F-7

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2011, 2010, and 2009
NOTE 1 • ORGANIZATION
Investors Real Estate Trust (“IRET” or the “Company”) is a self-advised real estate investment trust engaged in acquiring, owning and leasing multi-family and commercial real estate. IRET has elected to be taxed as a Real Estate Investment Trust (“REIT”) under Sections 856-860 of the Internal Revenue Code of 1986, as amended. REITs are subject to a number of organizational and operational requirements, including a requirement to distribute 90% of ordinary taxable income to shareholders, and, generally, are not subject to federal income tax on net income, except for taxes on undistributed REIT taxable income and taxes on the income generated by our taxable REIT subsidiary (“TRS”). Our TRS is subject to corporate federal and state income tax on its taxable income at regular statutory rates. We have considered estimated future taxable income and have determined that there were no material income tax provisions or material net deferred income tax items for our TRS for the years ended April 30, 2011 and 2010. IRET’s multi-family residential properties and commercial properties are located mainly in the states of North Dakota and Minnesota, but also in the states of Colorado, Idaho, Iowa, Kansas, Michigan, Missouri, Montana, Nebraska, South Dakota, Wisconsin and Wyoming. As of April 30, 2011, IRET owned 78 multi-family residential properties with approximately 8,661 apartment units and 176 commercial properties, consisting of commercial office, commercial medical, commercial industrial and commercial retail properties, totaling approximately 12.2 million net rentable square feet. IRET conducts a majority of its business activities through its consolidated operating partnership, IRET Properties, a North Dakota Limited Partnership (the “Operating Partnership”), as well as through a number of other subsidiary entities.
All references to IRET or the Company refer to Investors Real Estate Trust and its consolidated subsidiaries.
NOTE 2 • BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of IRET and all subsidiaries in which it maintains a controlling interest. All intercompany balances and transactions are eliminated in consolidation. The Company’s fiscal year ends April 30th.
The accompanying consolidated financial statements include the accounts of IRET and its general partnership interest in the Operating Partnership. The Company’s interest in the Operating Partnership was 80.1% and 78.7%, respectively, as of April 30, 2011 and 2010, which includes 100% of the general partnership interest. The limited partners have a redemption option that they may exercise. Upon exercise of the redemption option by the limited partners, IRET has the option of redeeming the limited partners’ interests (“Units”) for IRET common shares of beneficial interest, on a one-for-one basis, or for cash payment to the unitholder. The redemption generally may be exercised by the limited partners at any time after the first anniversary of the date of the acquisition of the Units (provided, however, that not more than two redemptions by a limited partner may occur during each calendar year, and each limited partner may not exercise the redemption for less than 1,000 Units, or, if such limited partner holds less than 1,000 Units, for all of the Units held by such limited partner). Some limited partners have contractually agreed to a holding period of greater than one year.
The consolidated financial statements also reflect the ownership by the Operating Partnership of certain joint venture entities in which the Operating Partnership has a general partner or controlling interest. These entities are consolidated into IRET’s other operations with noncontrolling interests reflecting the noncontrolling partners’ share of ownership and income and expenses.
RECENT ACCOUNTING PRONOUNCEMENTS
In January 2011, the Financial Accounting Standards Board (“FASB”) issued an update to the guidance contained in Accounting Standards Codification (“ASC”) 310, Receivables. The new guidance requires companies to provide more information about the credit quality of their financing receivables in the disclosures to financial statements including, but not limited to, significant purchases and sales of financing receivables, aging information and credit quality indicators. The adoption of this accounting guidance did not have a significant impact on the Company’s consolidated financial statements.
2011 Annual Report F-8

NOTE 2 • continued
In January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures About Fair Value (“ASU 2010-06”), which requires new disclosures about fair value measurements. Specifically, a reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. Additionally, the reconciliation for Level 3 fair value measurements should present separately information about purchasers, sales, issuances and settlements. To date, the Company has not had any transfers in and out of Level 1 and Level 2 fair value measurements, nor does it have any Level 3 fair value measurements. Therefore, ASU 2010-06 did not have any impact on the fair value disclosures included in the Company’s consolidated financial statements.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
REAL ESTATE INVESTMENTS
Real estate investments are recorded at cost less accumulated depreciation and an adjustment for impairment, if any. Acquisitions of real estate investments are recorded based upon preliminary allocations of the purchase price which are subject to adjustment as additional information is obtained, but in no case more than one year after the date of acquisition. The Company allocates the purchase price based on the relative fair values of the tangible and intangible assets of an acquired property (which includes the land, building, and personal property) which are determined by valuing the property as if it were vacant and to fair value of the intangible assets (which include in-place leases.) The as-if-vacant value is allocated to land, buildings, and personal property based on management’s determination of the relative fair values of these assets. The estimated fair value of the property is the amount that would be recoverable upon the disposition of the property. Techniques used to estimate fair value include discounted cash flow analysis and reference to recent sales of comparables. A land value is assigned based on the purchase price if land is acquired separately or based on estimated fair value if acquired in a merger or in a single or portfolio acquisition.
Above-market and below-market in-place lease intangibles for acquired properties are recorded at fair value based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease.
Other intangible assets acquired include amounts for in-place lease values that are based upon the Company’s evaluation of the specific characteristics of the leases. Factors considered in the fair value analysis include an estimate of carrying costs and foregone rental income during hypothetical expected lease-up periods, considering current market conditions, and costs to execute similar leases. The Company also considers information about each property obtained during its pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible and intangible assets acquired.
Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. The Company uses a 20-40 year estimated life for buildings and improvements and a 5-12 year estimated life for furniture, fixtures and equipment.
Expenditures for ordinary maintenance and repairs are expensed to operations as incurred. Renovations and improvements that improve and/or extend the useful life of the asset are capitalized and depreciated over their estimated useful life, generally five to ten years. Property sales or dispositions are recorded when title transfers and sufficient consideration has been received by the Company and the Company has no significant involvement with the property sold.
The Company periodically evaluates its long-lived assets, including its investments in real estate, for impairment indicators. The judgments regarding the existence of impairment indicators are based on factors such as operational
2011 Annual Report F-9

NOTE 2 • continued
performance, market conditions, expected holding period of each asset and legal and environmental concerns. If indicators exist, the Company compares the expected future undiscounted cash flows for the long-lived asset against the carrying amount of that asset. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recorded for the difference between the estimated fair value and the carrying amount of the asset. If our anticipated holding period for properties, the estimated fair value of properties or other factors change based on market conditions or otherwise, our evaluation of impairment charges may be different and such differences could be material to our consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses. No impairment losses were recorded in fiscal year 2011. During fiscal year 2010, the Company incurred a loss of $1.7 million due to impairment of three properties. The Company recorded a charge for impairment of approximately $818,000 on a commercial retail property in Ladysmith, Wisconsin, based upon receipt of a market offer to purchase and the Company’s probable intention to dispose of the property. The Company recorded a charge for impairment of approximately $152,000 on its former headquarters building in Minot, North Dakota, based upon receipt and acceptance of a market offer to purchase. These two properties were subsequently sold and the related impairment charges for fiscal year 2010 are reported in discontinued operations. See Note 12 for additional information. The Company also recorded an impairment charge of approximately $708,000 on a commercial retail property located in Kentwood, Michigan, in fiscal year 2010. This property’s tenant vacated the premises but continued to pay rent under a lease agreement that expired on October 29, 2010. Broker representations and market data for this commercial retail property provided the basis for the impairment charge. During fiscal year 2009, the Company incurred a loss of approximately $338,000 due to impairment of the property formerly used as IRET’s Minot headquarters. This property was subsequently sold and the related impairment charge for fiscal year 2009 is reported in discontinued operations. See Note 12 for additional information.
REAL ESTATE HELD FOR SALE
Real estate held for sale is stated at the lower of its carrying amount or estimated fair value less disposal costs. Depreciation is not recorded on assets classified as held for sale.
The application of current accounting principles that govern the classification of any of our properties as held-for-sale on the balance sheet requires management to make certain significant judgments. The Company makes a determination as to the point in time that it is probable that a sale will be consummated. It is not unusual for real estate sales contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract. In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance. As a result, properties under contract may not close within the expected time period, or may not close at all. Due to these uncertainties, it is not likely that the Company can meet the criteria of the current accounting principles governing the classification of properties as held-for-sale prior to a sale formally closing. Therefore, any properties categorized as held-for-sale represent only those properties that management has determined are probable to close within the requirements set forth in current accounting principles.
The Company reports, in discontinued operations, the results of operations of a property that has either been disposed of or is classified as held for sale and the related gains or losses.
IDENTIFIED INTANGIBLE ASSETS AND LIABILITIES AND GOODWILL
Upon acquisition of real estate, the Company records the intangible assets and liabilities acquired (for example, if the leases in place for the real estate property acquired carry rents above the market rent, the difference is classified as an intangible asset) at their estimated fair value separate and apart from goodwill. The Company amortizes identified intangible assets and liabilities that are determined to have finite lives based on the period over which the assets and liabilities are expected to affect, directly or indirectly, the future cash flows of the real estate property acquired (generally the life of the lease). In the twelve months ended April 30, 2011 and 2010, respectively, the Company added approximately $6.5 million and $7.5 million of new intangible assets and $32,000 and $20,000 of new intangible liabilities. The weighted average lives of the intangible assets and intangible liabilities acquired in the twelve months ended April 30, 2011 and 2010 are 9.5 years and 17.4 years, respectively. Amortization of
2011 Annual Report F-10

NOTE 2 • continued
intangibles related to above or below-market leases is recorded in real estate rentals in the consolidated statements of operations. Amortization of other intangibles is recorded in depreciation/amortization related to real estate investments in the consolidated statements of operations. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its estimated fair value.
The Company’s identified intangible assets and intangible liabilities at April 30, 2011 and 2010 were as follows:

|  | (in thousands) |
|  | April 30, 2011 |  |  | April 30, 2010 |
Identified intangible assets (included in intangible assets): |  |  |  |  |  |
Gross carrying amount |  | $ | 91,986 |  |  | $ | 90,271 |
Accumulated amortization |  |  | (42,154 | ) |  |  | (39,571 | )
Net carrying amount |  | $ | 49,832 |  |  | $ | 50,700 |
Indentified intangible liabilities (included in other liabilities): |  |  |  |  |  |  |  |
Gross carrying amount |  | $ | 1,104 |  |  | $ | 1,260 |
Accumulated amortization |  |  | (900 | ) |  |  | (940 | )
Net carrying amount |  | $ | 204 |  |  | $ | 320 |

The effect of amortization of acquired below-market leases and acquired above-market leases on rental income was approximately $(72,000) and $(45,000) for the twelve months ended April 30, 2011 and 2010, respectively. The estimated annual amortization of acquired below-market leases, net of acquired above-market leases for each of the five succeeding fiscal years is as follows:

Year Ended April 30, |  | (in thousands) |
2012 |  | $ | 45 |
2013 |  |  | 32 |
2014 |  |  | 35 |
2015 |  |  | 18 |
2016 |  |  | 14 |

Amortization of all other identified intangible assets (a component of depreciation/amortization related to real estate investments) was $7.1 million and $8.7 million for the twelve months ended April 30, 2011 and 2010, respectively. The estimated annual amortization of all other identified intangible assets for each of the five succeeding fiscal years is as follows:

Year Ended April 30, |  | (in thousands) |
2012 |  | $ | 5,521 |
2013 |  |  | 4,546 |
2014 |  |  | 4,140 |
2015 |  |  | 3,783 |
2016 |  |  | 3,566 |

The excess of the cost of an acquired business over the net of the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed is recorded as goodwill. The Company’s goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill book values as of April 30, 2011 and 2010 were $1.1 million and $1.4 million, respectively. The annual reviews of goodwill compared the fair value of the business units that have been assigned goodwill to their carrying value (investment cost less accumulated depreciation), with the results for these periods indicating no impairment. In fiscal year 2011 the Company disposed of four multi-family residential properties that had goodwill assigned, and as result, approximately $261,000 of goodwill was derecognized.
2011 Annual Report F-11

NOTE 2 • continued
PROPERTY AND EQUIPMENT
Property and equipment consists of the equipment contained at IRET’s headquarters in Minot, North Dakota, a corporate office in Minneapolis, Minnesota, and additional property management offices in Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota and South Dakota. The balance sheet reflects these assets at cost, net of accumulated depreciation. As of April 30, 2011 and 2010, the cost was $2.9 million and $2.3 million, respectively. Accumulated depreciation was approximately $1.2 million and $924,000 as of April 30, 2011 and 2010, respectively.
MORTGAGE LOANS RECEIVABLE
Mortgage loans receivable (which include contracts for deed) are stated at the outstanding principal balance, net of an allowance for uncollectibility. Interest income is accrued and reflected in the balance sheet. Non-performing loans are recognized as impaired. The Company evaluates the collectibility of both interest and principal of each of its loans, if circumstances warrant, to determine whether the loan is impaired. A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. An allowance is recorded to reduce impaired loans to their estimated fair value. Interest on impaired loans is recognized on a cash basis.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include all cash and highly liquid investments purchased with maturities of three months or less. Cash and cash equivalents consist of the Company’s bank deposits and short-term investment certificates acquired subject to repurchase agreements, and the Company’s deposits in a money market mutual fund.
COMPENSATING BALANCES
The Company maintains compensating balances, not restricted as to withdrawal, with several financial institutions in connection with financing received from those institutions and/or to ensure future credit availability, as follows: Dacotah Bank, Minot, North Dakota, a deposit of $350,000; United Community Bank, Minot, North Dakota, deposit of $275,000; Commerce Bank, A Minnesota Banking Corporation, deposit of $250,000; First International Bank, Watford City, North Dakota, deposit of $6.0 million; Peoples State Bank of Velva, North Dakota, deposit of $150,000; Associated Bank, Green Bay, Wisconsin, deposit of $200,000, and Equity Bank, Minnetonka, Minnesota, deposit of $300,000.
MARKETABLE SECURITIES
IRET’s investments in marketable securities are classified as “available-for-sale.” The securities classified as “available-for-sale” represent investments in debt and equity securities which the Company intends to hold for an indefinite period of time. These securities are valued at current fair value with the resulting unrealized gains and losses excluded from earnings and reported as a separate component of equity until realized. GAAP establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based upon our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. At April 30, 2011, our marketable securities are carried at fair value measured on a recurring basis. Fair values are determined through the use of unadjusted quoted prices in active markets, which are inputs that are classified as Level 1 in the valuation hierarchy. Gains or losses on these securities are computed based on the amortized cost of the specific securities when sold.
All securities with unrealized losses are subjected to the Company’s process for identifying other-than-temporary impairments. The Company records a charge to earnings to write down to fair value securities that it deems to be other-than-temporarily impaired in the period the securities are deemed to be other-than-temporarily impaired. The
2011 Annual Report F-12

NOTE 2 • continued
assessment of whether such impairment has occurred is based on management’s case-by-case evaluation of the underlying reasons for the decline in fair value. Management considers a wide range of factors in making this assessment. Those factors include, but are not limited to, the length and severity of the decline in value and changes in the credit quality of the issuer or underlying assets, as well as the Company’s ability and intent to hold the security until recovery. The Company does not engage in trading activities.
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Management evaluates the appropriate amount of the allowance for doubtful accounts by assessing the recoverability of individual real estate mortgage loans and rent receivables, through a comparison of their carrying amount with their estimated realizable value. Management considers tenant financial condition, credit history and current economic conditions in establishing these allowances. Receivable balances are written off when deemed uncollectible. Recoveries of receivables previously written off, if any, are recorded when received. A summary of the changes in the allowance for doubtful accounts for fiscal years ended April 30, 2011, 2010 and 2009 is as follows:

|  | (in thousands) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Balance at beginning of year |  | $ | 1,172 |  |  | $ | 1,131 |  |  | $ | 1,264 |
Provision |  |  | 733 |  |  |  | 1,399 |  |  |  | 2,472 |
Write-off |  |  | (589 | ) |  |  | (1,358 | ) |  |  | (2,605 | )
Balance at close of year |  | $ | 1,316 |  |  | $ | 1,172 |  |  | $ | 1,131 |

TAX, INSURANCE, AND OTHER ESCROW
Tax, insurance, and other escrow includes funds deposited with a lender for payment of real estate tax and insurance, and reserves for funds to be used for replacement of structural elements and mechanical equipment of certain projects. The funds are under the control of the lender. Disbursements are made after supplying written documentation to the lender.
REAL ESTATE DEPOSITS
Real estate deposits include funds held by escrow agents to be applied toward the purchase of real estate or the payment of loan costs associated with loan placement or refinancing.
DEFERRED LEASING AND LOAN ACQUISITION COSTS
Costs and commissions incurred in obtaining tenant leases are amortized on the straight-line method over the terms of the related leases. Costs incurred in obtaining long-term financing are amortized to interest expense over the life of the loan using the straight-line method, which approximates the effective interest method.
NONCONTROLLING INTERESTS
Interests in the Operating Partnership held by limited partners are represented by Units. The Operating Partnership’s income is allocated to holders of Units based upon the ratio of their holdings to the total Units outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to noncontrolling interests in accordance with the terms of the Operating Partnership agreement.
IRET reflects noncontrolling interests in Mendota Properties LLC, IRET-Golden Jack LLC, and IRET-1715 YDR LLC on the balance sheet for the portion of properties consolidated by IRET that are not wholly owned by IRET. The earnings or losses from these properties attributable to the noncontrolling interests are reflected as net income attributable to noncontrolling interests–consolidated real estate entities in the consolidated statements of operations.
Noncontrolling interests are reported as a separate component of equity. Amounts attributable to the parent for income from continuing operations and discontinued operations are as follows:
2011 Annual Report F-13

NOTE 2 • continued

| (in thousands) |
| For Years Ended April 30, |
Amounts Attributable to Investors Real Estate Trust | 2011 |  | 2010 |  | 2009 |
Income from continuing operations – Investors Real Estate Trust |  | $ | 4,111 |  |  | $ | 4,444 |  |  | $ | 8,284 |
Discontinued Operations – Investors Real Estate Trust |  |  | 15,971 |  |  |  | (443 | ) |  |  | 242 |
Net income attributable to Investors Real Estate Trust |  | $ | 20,082 |  |  | $ | 4,001 |  |  | $ | 8,526 |

INCOME TAXES
IRET operates in a manner intended to enable it to continue to qualify as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended. Under those sections, a REIT which distributes at least 90% of its REIT taxable income as a dividend to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to shareholders. For the fiscal years ended April 30, 2011, 2010 and 2009, the Company distributed in excess of 90% of its taxable income and realized capital gains from property dispositions within the prescribed time limits; accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even as a REIT, the Company may be subject to certain state and local income and property taxes, and to federal income and excise taxes on undistributed taxable income. In general, however, if the Company qualifies as a REIT, no provisions for federal income taxes are necessary except for taxes on undistributed REIT taxable income and taxes on the income generated by a taxable REIT subsidiary (TRS).
The Company has one TRS, acquired during the fourth quarter of fiscal year 2010, which is subject to corporate federal and state income taxes on its taxable income at regular statutory rates. For fiscal years 2011 and 2010, the Company’s TRS had a net operating loss. There were no income tax provisions or material deferred income tax items for our TRS for the fiscal years ended April 30, 2011 and 2010. The Company’s TRS is the tenant in the Company’s Wyoming assisted living facilities.
IRET conducts its business activity as an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) through its Operating Partnership. UPREIT status allows IRET to accept the contribution of real estate in exchange for Units. Generally, such a contribution to a limited partnership allows for the deferral of gain by an owner of appreciated real estate.
Distributions for the calendar year ended December 31, 2010 were characterized, for federal income tax purposes, as 28.53% ordinary income and 71.47% return of capital.
REVENUE RECOGNITION
Residential rental properties are leased under operating leases with terms generally of one year or less. Commercial properties are leased under operating leases to tenants for various terms generally exceeding one year. Lease terms often include renewal options. Rental revenue is recognized on the straight-line basis, which averages minimum required rents over the terms of the leases. Rents recognized in advance of collection are reflected as receivable arising from straight-lining of rents, net of allowance for doubtful accounts. Rent concessions, including free rent, are amortized on a straight-line basis over the terms of the related leases.
Reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as revenue in the period the applicable expenditures are incurred. IRET receives payments for these reimbursements from substantially all of its multi-tenant commercial tenants throughout the year.
2011 Annual Report F-14

NOTE 2 • continued
A number of the commercial leases provide for a base rent plus a percentage rent based on gross sales in excess of a stipulated amount. These percentage rents are recorded once the required sales level is achieved.
Interest on mortgage loans receivable is recognized in income as it accrues during the period the loan is outstanding. In the case of non-performing loans, income is recognized as discussed above in the Mortgage Loans Receivable section of this Note 2.
NET INCOME PER SHARE
Basic net income per share is computed as net income available to common shareholders divided by the weighted average number of common shares outstanding for the period. The Company has no potentially dilutive financial interests; the potential exchange of Units for common shares will have no effect on net income per share because Unitholders and common shareholders effectively share equally in the net income of the Operating Partnership.
NOTE 3 • CREDIT RISK
The Company is potentially exposed to credit risk for cash deposited with FDIC-insured financial institutions in accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.
IRET has entered into a cash management arrangement with First Western Bank, the “Bank” with respect to deposit accounts that exceed FDIC Insurance coverage. On a daily basis, account balances are swept into a repurchase account. The Bank pledges fractional interests in US Government Securities owned by the Bank at an amount equal to the excess over the uncollected balance in the repurchase account. The amounts deposited by IRET pursuant to the repurchase agreement are not insured by FDIC. At April 30, 2011 and 2010, these amounts totaled $23.5 million and $25.2 million, respectively.
NOTE 4 • PROPERTY OWNED
Property, consisting principally of real estate, is stated at cost less accumulated depreciation and totaled $1.4 billion and $1.5 billion as of April 30, 2011, and 2010, respectively.
Construction period interest of approximately $152,000, $19,000, and $912,000 has been capitalized for the years ended April 30, 2011, 2010, and 2009, respectively.
The future minimum lease receipts to be received under non-cancellable leases for commercial properties as of April 30, 2011, assuming that no options to renew or buy out the lease are exercised, are as follows:

Year Ended April 30, |  | (in thousands) |
2012 |  | $ | 111,017 |
2013 |  |  | 100,265 |
2014 |  |  | 88,497 |
2015 |  |  | 75,722 |
2016 |  |  | 64,316 |
Thereafter |  |  | 302,096 |
|  | $ | 741,913 |

During fiscal year 2011, the Company incurred no losses due to impairment. During fiscal year 2010, the Company incurred a loss of $1.7 million due to impairment of three properties. Two of these properties were subsequently sold and the related impairment charges of $970,000 are reported in discontinued operations for fiscal year 2010. See Note 12 for additional information. For the year ended April 30, 2009, the Company incurred a loss of approximately $338,000 due to impairment of the property formerly used as IRET’s Minot headquarters. This property was subsequently sold and the related impairment charge for fiscal year 2009 is reported in discontinued operations. See Note 12 for additional information.
During fiscal year 2010, the Company reached an agreement for final settlement of insurance claims related to a fiscal year 2009 fire loss and realized a $1.7 million gain from involuntary conversion, as the total proceeds of $2.4 million exceeded our estimated basis in the assets requiring replacement.
2011 Annual Report F-15

NOTE 5 • MORTGAGE LOANS RECEIVABLE - NET
The mortgage loans receivable consists of one contract for deed that is collateralized by real estate. The interest rate on this loan is 7.0% and it matures in fiscal 2013. Future principal payments due under this mortgage loan as of April 30, 2011, are as follows:

Year Ended April 30, |  | (in thousands) |
2012 |  | $ | 2 |
2013 |  |  | 157 |
|  |  | 159 |
Less allowance for doubtful accounts |  |  | (3 | )
|  | $ | 156 |

There were no non-performing mortgage loans receivable as of April 30, 2011 and 2010.
NOTE 6 • MARKETABLE SECURITIES
The amortized cost and fair value of marketable securities available-for-sale at April 30, 2011 and 2010 are as follows.

| (in thousands) |
2011 | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |
Bank certificates of deposit |  | $ | 625 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 625 |
|  | $ | 625 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 625 |

| (in thousands) |
2010 | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |
Bank certificates of deposit |  | $ | 420 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 420 |
|  | $ | 420 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 420 |

As of April 30, 2011, $275,000 of the investment in bank certificates of deposit will mature in less than one year, $50,000 will mature in May 2012 and the remaining $300,000 will mature in March 2014.
There were no realized gains or losses on sales of securities available-for-sale for the fiscal years ended April 30, 2011, 2010 and 2009. There were no other-than-temporary impairment losses incurred on the securities available-for-sale for the fiscal years ended April 30, 2011, 2010 and 2009.
NOTE 7 • LINE OF CREDIT
IRET has a line of credit with one financial institution as lead bank as of April 30, 2011. Interest payments on outstanding borrowings are due monthly. This credit facility is summarized in the following table:

|  | (in thousands) |
Financial Institution |  | Amount Available |  | Amount Outstanding as of April 30, 2011 |  | Amount Outstanding as of April 30, 2010 |  |  | Applicable Interest Rate as of April 30, 2011 |  | Maturity Date |  | Weighted Average Int. Rate on Borrowings during fiscal year 2011 |
First International Bank & Trust |  | $ | 50,000 |  |  | $ | 30,000 |  |  | $ | 0 | (1) |  |  | 5.65 | % | 8/11/13 |  |  | 5.73 | %

2011 Annual Report F-16

NOTE 7 • continued
As of April 30, 2011, the Company had one secured line of credit with First International Bank and Trust, Watford City, North Dakota, as lead bank. This line of credit matures on August 11, 2013, and had, as of April 30, 2011, lending commitments of $50.0 million, with the capacity to grow to $60.0 million, subject to identifying additional interested participating banks. Participants in the line of credit include several banks whose previous separate credit lines to the Company were terminated during the second quarter of fiscal year 2011 following their consolidation into the First International Bank-led facility. Participants in this secured credit facility as of April 30, 2011 included, in addition to First International Bank, the following financial institutions: The Bank of North Dakota; First Western Bank and Trust; Dacotah Bank; United Community Bank of North Dakota; American State Bank & Trust Company and Town & Country Credit Union. As of April 30, 2011, the Company had advanced $30.0 million under the line of credit. The line of credit has a minimum outstanding principal balance requirement of $10.0 million. The interest rate on borrowings under the facility is Wall Street Journal Prime Rate +1.0%, with a floor of 5.65% and a cap of 8.65% during the initial three-year term of the facility; interest-only payments are due monthly based on the total amount of advances outstanding. The line of credit may be prepaid at par at any time. The facility includes customary loan covenants including restrictions regarding minimum debt-service ratios to be maintained in the aggregate and individually on properties in the collateral pool, and the Company is also required to maintain minimum depository account(s) totaling $6.0 million with First International, of which $1.5 million is to be held in a non-interest bearing account. As of April 30, 2011, 26 properties with a total cost of $122.1 million collateralized this line of credit. As of April 30, 2011, the management of the Company believes it is in compliance with the facility covenants.

(1) | As of April 30, 2010, the Company had $4.0 million in borrowings outstanding under a $14.0 million line of credit with First International Bank and Trust. This $14.0 million line of credit, and three other lines of credit that were outstanding at various times during fiscal years 2011, 2010 and 2009, with, respectively, First Western Bank and Trust, United Community Bank and Dacotah Bank, were replaced by the current multi-bank line of credit. As of April 30, 2010, the Company had outstanding borrowings at United Community Bank and Dacotah Bank of $1.1 million and $1.5 million, respectively.

NOTE 8 • MORTGAGES PAYABLE
The Company’s mortgages payable are collateralized by substantially all of its properties owned. The majority of the Company’s mortgages payable are secured by individual properties or groups of properties, and are non-recourse to the Company, other than for standard carve-out obligations such as fraud, waste, failure to insure, environmental conditions and failure to pay real estate taxes. As of April 30, 2011, the management of the Company believes there are no defaults or material compliance issues in regard to any mortgages payable. Interest rates on mortgages payable range from 2.82% to 8.25%, and the mortgages have varying maturity dates from June 1, 2011, through June 9, 2035.
Of the mortgages payable, the balance of fixed rate mortgages totaled $992.3 million at April 30, 2011 and $1.0 billion at April 30, 2010, and the balances of variable rate mortgages totaled $1.5 million and $29.0 million as of April 30, 2011, and 2010, respectively. The Company does not utilize derivative financial instruments to mitigate its exposure to changes in market interest rates. Most of the fixed rate mortgages have substantial pre-payment penalties. As of April 30, 2011, the weighted average rate of interest on the Company’s mortgage debt was 5.92%, compared to 6.17% on April 30, 2010. The aggregate amount of required future principal payments on mortgages payable as of April 30, 2011, is as follows:

Year Ended April 30, |  | (in thousands) |
2012 |  | $ | 58,741 |
2013 |  |  | 50,092 |
2014 |  |  | 65,354 |
2015 |  |  | 92,548 |
2016 |  |  | 77,771 |
Thereafter |  |  | 649,297 |
Total payments |  | $ | 993,803 |

2011 Annual Report F-17

NOTE 9 • TRANSACTIONS WITH RELATED PARTIES
BANKING SERVICES
The Company has an ongoing banking relationship with First International Bank and Trust, Watford City, North Dakota (First International). Stephen L. Stenehjem, a member of the Company’s Board of Trustees and Audit Committee, is the President and Chief Executive Officer of First International, and the bank is owned by Mr. Stenehjem and members of his family. Currently, and during fiscal year 2011, the Company has two mortgage loans outstanding with First International, with original principal balances of $3.2 million (Grand Forks MedPark Mall) and $2.4 million (Georgetown Square/Fox River), respectively, bearing interest at 6.25% and 7.25% per annum. For a portion of fiscal year 2011, the Company had outstanding a third mortgage loan with First International in the amount of approximately $406,000 (Dakota West Plaza), bearing interest at 7.63% per annum; this loan was repaid in the first quarter of fiscal year 2011. The Company paid interest on these loans of approximately $190,000, $165,000 and $3,000, respectively, in fiscal year 2011, and paid $32,000 in origination fees and closing costs on the Grand Forks MedPark Mall loan. For a portion of fiscal year 2011, the Company maintained a $14.0 million unsecured line of credit with First International, for which it paid a total of approximately $72,000 in interest during fiscal year 2011. This line of credit was terminated during the second quarter of fiscal year 2011 and replaced with a multi-bank line of credit with a current capacity of $50.0 million, of which First International is the lead bank and a participant with a $12.0 million commitment. In fiscal year 2011, the Company paid First International a total of $212,000 in interest on First International’s portion of the outstanding balance of this credit line, and paid fees of $219,000. In connection with this multi-bank line of credit, the Company maintains compensating balances with First International totaling $6.0 million, of which $1.5 million is held in a non-interest bearing account, and $4.5 million is held in an account that pays the Company interest on the deposited amount of 0.75% per annum. The Company also maintains a number of checking accounts with First International. In fiscal year 2011, the Company paid less than $500 in total in various bank service and other fees charged on these checking accounts.
In fiscal years 2010 and 2009, the Company paid interest of approximately $238,000 and $91,000, respectively, for borrowing under the $14.0 million line of credit that was subsequently terminated in fiscal year 2011, and paid a $10,000 renewal fee for the line of credit in fiscal year 2010. In fiscal year 2010, the Company paid interest and fees on outstanding mortgage loans totaling approximately $789,000, and paid interest in fiscal year 2009 on mortgage loans outstanding of approximately $204,000. In fiscal year 2010 and 2009, the Company paid under $500 in total in various bank service and other fees charged on checking accounts maintained with First International.
Total payments of interest and fees from the Company to First International Bank in fiscal year 2011 were approximately $893,000, in fiscal year 2010 were $1.0 million and in fiscal year 2009 were $295,000.
NOTE 10 • ACQUISITIONS AND DISPOSITIONS IN FISCAL YEARS 2011 AND 2010
PROPERTY ACQUISITIONS
IRET Properties paid approximately $45.6 million for real estate properties added to its portfolio during fiscal year 2011, compared to $55.4 million in fiscal year 2010. Of the $45.6 million paid for real estate properties added to the Company’s portfolio in fiscal year 2011, approximately $5.0 million consisted of the value of limited partnership units of the Operating Partnership and approximately $9.9 million consisted of the assumption of mortgage debt, with the remainder paid in cash. The Company expensed approximately $179,000 of transaction costs related to the acquisitions in fiscal year 2011. Of the $55.4 million paid in fiscal year 2010, approximately $3.9 million was paid in the form of limited partnership units of the Operating Partnership and approximately $2.6 million consisted of the assumption of mortgage debt, with the remainder paid in cash. The Company expensed approximately $230,000 of transaction costs related to the acquisitions in fiscal year 2010. The fiscal year 2011 and 2010 additions are detailed below.
2011 Annual Report F-18

NOTE 10 • continued
Fiscal 2011 (May 1, 2010 to April 30, 2011)

|  | (in thousands) |
Acquisitions |  | Land |  |  | Building |  |  | Intangible Assets |  |  | Acquisition Cost |
Multi-Family Residential |  |  |  |  |  |  |  |  |  |  |  |
24 unit - North Pointe 2 - Bismarck, ND |  | $ | 159 |  |  | $ | 1,713 |  |  | $ | 0 |  |  | $ | 1,872 |
44 unit - Sierra Vista - Sioux Falls, SD |  |  | 241 |  |  |  | 2,097 |  |  |  | 0 |  |  |  | 2,338 |
|  |  | 400 |  |  |  | 3,810 |  |  |  | 0 |  |  |  | 4,210 |
Commercial Office |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
58,574 sq. ft. Omaha 10802 Farnam Dr - Omaha, NE |  |  | 2,462 |  |  |  | 4,374 |  |  |  | 1,459 |  |  |  | 8,295 |
Commercial Medical |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
14,705 sq. ft. Billings 2300 Grant Road - Billings, MT |  |  | 649 |  |  |  | 1,216 |  |  |  | 657 |  |  |  | 2,522 |
14,640 sq. ft. Missoula 3050 Great Northern - Missoula, MT |  |  | 640 |  |  |  | 1,331 |  |  |  | 752 |  |  |  | 2,723 |
108,503 sq. ft. Edgewood Vista Minot - Minot, ND |  |  | 1,046 |  |  |  | 11,590 |  |  |  | 2,545 |  |  |  | 15,181 |
23,965 sq. ft. Edgewood Vista Spearfish Expansion - Spearfish, SD1 |  |  | 0 |  |  |  | 2,777 |  |  |  | 0 |  |  |  | 2,777 |
|  |  | 2,335 |  |  |  | 16,914 |  |  |  | 3,954 |  |  |  | 23,203 |
Commercial Industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
42,244 sq. ft. Fargo 1320 45th St N - Fargo, ND2 |  |  | 0 |  |  |  | 1,634 |  |  |  | 0 |  |  |  | 1,634 |
Commercial Retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
47,709 sq. ft. Minot 1400 31st Ave - Minot, ND |  |  | 1,026 |  |  |  | 6,143 |  |  |  | 1,081 |  |  |  | 8,250 |
Total Property Acquisitions |  | $ | 6,223 |  |  | $ | 32,875 |  |  | $ | 6,494 |  |  | $ | 45,592 |

(1) | Expansion project placed in service January 10, 2011. Approximately $497,000 of this cost was incurred in the three months ended April 30, 2011.

(2) | Development property placed in service June 22, 2010. Additional costs incurred in fiscal year 2010 totaled $2.3 million, for a total project cost at April 30, 2011 of $3.9 million.

2011 Annual Report F-19

NOTE 10 • continued
Fiscal 2010 (May 1, 2009 to April 30, 2010)

|  | (in thousands) |
Acquisitions |  | Land |  |  | Building |  |  | Intangible Assets |  |  | Acquisition Cost |
Multi-Family Residential |  |  |  |  |  |  |  |  |  |  |  |
16-unit Northern Valley Apartments - Rochester, MN |  | $ | 110 |  |  | $ | 610 |  |  | $ | 0 |  |  | $ | 720 |
48-unit Crown Apartments - Rochester, MN |  |  | 261 |  |  |  | 3,289 |  |  |  | 0 |  |  |  | 3,550 |
|  |  | 371 |  |  |  | 3,899 |  |  |  | 0 |  |  |  | 4,270 |
Commercial Office |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
15,000 sq. ft. Minot 2505 16th Street SW - Minot, ND |  |  | 372 |  |  |  | 1,724 |  |  |  | 304 |  |  |  | 2,400 |
Commercial Medical |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
65,160 sq. ft. Casper 1930 E. 12th Street (Park Place) - Casper, WY |  |  | 439 |  |  |  | 5,780 |  |  |  | 1,120 |  |  |  | 7,339 |
35,629 sq. ft. Casper 3955 E. 12th Street (Meadow Wind) - Casper, WY |  |  | 338 |  |  |  | 5,881 |  |  |  | 1,120 |  |  |  | 7,339 |
47,509 sq. ft. Cheyenne 4010 N. College Drive (Aspen Wind) - Cheyenne, WY |  |  | 628 |  |  |  | 9,869 |  |  |  | 1,960 |  |  |  | 12,457 |
54,072 sq. ft. Cheyenne 4606 N. College Drive (Sierra Hills) - Cheyenne, WY |  |  | 695 |  |  |  | 7,455 |  |  |  | 1,410 |  |  |  | 9,560 |
35,629 sq. ft. Laramie 1072 N. 22nd Street (Spring Wind) - Laramie, WY |  |  | 406 |  |  |  | 6,634 |  |  |  | 1,265 |  |  |  | 8,305 |
|  |  | 2,506 |  |  |  | 35,619 |  |  |  | 6,875 |  |  |  | 45,000 |
Commercial Industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
42,180 sq. ft. Clive 2075 NW 94th Street - Clive, IA |  |  | 408 |  |  |  | 2,610 |  |  |  | 332 |  |  |  | 3,350 |
Unimproved Land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fargo 1320 45th Street N. - Fargo, ND |  |  | 395 |  |  |  | 0 |  |  |  | 0 |  |  |  | 395 |
Total Property Acquisitions |  | $ | 4,052 |  |  | $ | 43,852 |  |  | $ | 7,511 |  |  | $ | 55,415 |

PROPERTY DISPOSITIONS
During fiscal year 2011, the Company disposed of six properties and one patio home for an aggregate sale price of $83.3 million, compared to two small properties for an aggregate sale price of approximately $560,000, during fiscal year 2010. The Company’s dispositions during fiscal 2011 and 2010 are detailed below.
2011 Annual Report F-20

NOTE 10 • continued
Fiscal 2011 (May 1, 2010 to April 30, 2011)

|  | (in thousands) |
Dispositions |  | Sales Price |  |  | Book Value and Sales Cost |  |  | Gain/(Loss) |
Multi-Family Residential |  |  |  |  |  |  |  |  |
504 unit - Dakota Hill at Valley Ranch - Irving, TX |  | $ | 36,100 |  |  | $ | 30,909 |  |  | $ | 5,191 |
192 unit - Neighborhood Apartments - Colorado Springs, CO |  |  | 11,200 |  |  |  | 9,664 |  |  |  | 1,536 |
195 unit - Pinecone Apartments - Fort Collins, CO |  |  | 15,875 |  |  |  | 10,422 |  |  |  | 5,453 |
210 unit - Miramont Apartments - Fort Collins, CO |  |  | 17,200 |  |  |  | 10,732 |  |  |  | 6,468 |
|  |  | 80,375 |  |  |  | 61,727 |  |  |  | 18,648 |
Commercial Medical |  |  |  |  |  |  |  |  |  |  |  |
1,410 sq. ft. Edgewood Vista Patio Home 4330 - Fargo, ND |  |  | 205 |  |  |  | 220 |  |  |  | (15 | )
Commercial Industrial |  |  |  |  |  |  |  |  |  |  |  |
29,440 sq. ft. Waconia Industrial Building - Waconia, MN |  |  | 2,300 |  |  |  | 1,561 |  |  |  | 739 |
Commercial Retail |  |  |  |  |  |  |  |  |  |  |  |
41,000 sq. ft. Ladysmith Pamida - Ladysmith, WI |  |  | 450 |  |  |  | 457 |  |  |  | (7 | )
Total Property Dispositions |  | $ | 83,330 |  |  | $ | 63,965 |  |  | $ | 19,365 |

Fiscal 2010 (May 1, 2009 to April 30, 2010)

|  | (in thousands) |
Dispositions |  | Sales Price |  |  | Book Value and Sales Cost |  |  | Gain/(Loss) |
Multi-Family Residential 42 unit - Sweetwater Apartments - Grafton, ND |  | $ | 450 |  |  | $ | 382 |  |  | $ | 68 |
Commercial Office |  |  |  |  |  |  |  |  |  |  |  |
10,126 sq. ft. 12 South Main - Minot, ND |  |  | 110 |  |  |  | 110 |  |  |  | 0 |
Total Property Dispositions |  | $ | 560 |  |  | $ | 492 |  |  | $ | 68 |

NOTE 11 • OPERATING SEGMENTS
IRET reports its results in five reportable segments: multi-family residential, commercial office, commercial medical (including senior housing), commercial industrial and commercial retail properties. The Company’s reportable segments are aggregations of similar properties. The accounting policies of each of these segments are the same as those described in Note 2.
2011 Annual Report F-21

NOTE 11 • continued
Segment information in this report is presented based on net operating income, which we define as total real estate revenues less real estate expenses and real estate taxes (excluding depreciation and amortization related to real estate investments and impairment of real estate investments). The following tables present real estate revenues and net operating income for the fiscal years ended April 30, 2011, 2010 and 2009 from our five reportable segments, and reconcile net operating income of reportable segments to net income as reported in the consolidated financial statements. Segment assets are also reconciled to Total Assets as reported in the consolidated financial statements.

| (in thousands) |
Year Ended April 30, 2011 | Multi-Family Residential |  |  | Commercial Office |  |  | Commercial Medical |  |  | Commercial Industrial |  |  | Commercial Retail |  |  | Total |
Real estate revenue |  | $ | 66,838 |  |  | $ | 77,747 |  |  | $ | 66,048 |  |  | $ | 13,165 |  |  | $ | 13,387 |  |  | $ | 237,185 |
Real estate expenses |  |  | 34,129 |  |  |  | 36,055 |  |  |  | 22,466 |  |  |  | 4,328 |  |  |  | 4,932 |  |  |  | 101,910 |
Net operating income |  | $ | 32,709 |  |  | $ | 41,692 |  |  | $ | 43,582 |  |  | $ | 8,837 |  |  | $ | 8,455 |  |  |  | 135,275 |
Depreciation/amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (58,488 | )
Administrative, advisory and trustee services |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (7,222 | )
Other expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1,774 | )
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (63,941 | )
Interest and other income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 541 |
Income from continuing operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,391 |
Income from discontinued operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 19,960 |
Net income |  |  | $ | 24,351 |

| (in thousands) |
Year Ended April 30, 2010 | Multi-Family Residential |  |  | Commercial Office |  |  | Commercial Medical |  |  | Commercial Industrial |  |  | Commercial Retail |  |  | Total |
Real estate revenue |  | $ | 65,478 |  |  | $ | 82,079 |  |  | $ | 57,439 |  |  | $ | 13,095 |  |  | $ | 13,224 |  |  | $ | 231,315 |
Real estate expenses |  |  | 32,615 |  |  |  | 36,833 |  |  |  | 17,904 |  |  |  | 4,121 |  |  |  | 4,805 |  |  |  | 96,278 |
Gain on involuntary conversion |  |  | 1,660 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,660 |
Net operating income |  | $ | 34,523 |  |  | $ | 45,246 |  |  | $ | 39,535 |  |  | $ | 8,974 |  |  | $ | 8,419 |  |  |  | 136,697 |
Depreciation/amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (57,416 | )
Administrative, advisory and trustee services |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (6,218 | )
Other expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,513 | )
Impairment of real estate investment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (708 | )
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (65,581 | )
Interest and other income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 894 |
Income from continuing operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,155 |
Loss from discontinued operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (570 | )
Net income |  |  | $ | 4,585 |

| (in thousands) |
Year Ended April 30, 2009 | Multi-Family Residential |  |  | Commercial Office |  |  | Commercial Medical |  |  | Commercial Industrial |  |  | Commercial Retail |  |  | Total |
Real estate revenue |  | $ | 65,632 |  |  | $ | 83,446 |  |  | $ | 52,547 |  |  | $ | 12,488 |  |  | $ | 14,207 |  |  | $ | 228,320 |
Real estate expenses |  |  | 31,315 |  |  |  | 37,644 |  |  |  | 16,046 |  |  |  | 3,142 |  |  |  | 5,053 |  |  |  | 93,200 |
Net operating income |  | $ | 34,317 |  |  | $ | 45,802 |  |  | $ | 36,501 |  |  | $ | 9,346 |  |  | $ | 9,154 |  |  |  | 135,120 |
Depreciation/amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (54,395 | )
Administrative, advisory and trustee fees |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (4,882 | )
Other expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1,440 | )
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (64,928 | )
Interest and other income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 913 |
Income from continuing operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,388 |
Income from discontinued operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 325 |
Net income |  |  |  | 10,713 |

2011 Annual Report F-22

NOTE 11 • continued
Segment Assets and Accumulated Depreciation

| (in thousands) |
As of April 30, 2011 | Multi-Family Residential |  |  | Commercial Office |  |  | Commercial Medical |  |  | Commercial Industrial |  |  | Commercial Retail |  |  | Total |
Segment assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property owned |  | $ | 484,815 |  |  | $ | 595,491 |  |  | $ | 447,831 |  |  | $ | 117,602 |  |  | $ | 125,059 |  |  | $ | 1,770,798 |
Less accumulated depreciation |  |  | (117,718 | ) |  |  | (104,650 | ) |  |  | (65,367 | ) |  |  | (17,713 | ) |  |  | (23,504 | ) |  |  | (328,952 | )
Total property owned |  | $ | 367,097 |  |  | $ | 490,841 |  |  | $ | 382,464 |  |  | $ | 99,889 |  |  | $ | 101,555 |  |  | $ | 1,441,846 |
Cash and cash equivalents |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 41,191 |
Marketable securities – available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 625 |
Receivables and other assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 115,302 |
Development in progress |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 9,693 |
Unimproved land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6,550 |
Mortgage loans receivable, net of allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 156 |
Total Assets |  |  | $ | 1,615,363 |

| (in thousands) |
As of April 30, 2010 | Multi-Family Residential |  |  | Commercial Office |  |  | Commercial Medical |  |  | Commercial Industrial |  |  | Commercial Retail |  |  | Total |
Segment assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property owned |  | $ | 556,867 |  |  | $ | 582,943 |  |  | $ | 430,229 |  |  | $ | 113,249 |  |  | $ | 117,231 |  |  | $ | 1,800,519 |
Less accumulated depreciation |  |  | (129,922 | ) |  |  | (88,656 | ) |  |  | (53,641 | ) |  |  | (15,481 | ) |  |  | (20,926 | ) |  |  | (308,626 | )
Total property owned |  | $ | 426,945 |  |  | $ | 494,287 |  |  | $ | 376,588 |  |  | $ | 97,768 |  |  | $ | 96,305 |  |  | $ | 1,491,893 |
Cash and cash equivalents |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 54,791 |
Marketable securities – available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 420 |
Receivables and other assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 104,830 |
Development in progress |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,831 |
Unimproved land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6,007 |
Mortgage loans receivable, net of allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 158 |
Total Assets |  |  | $ | 1,660,930 |

NOTE 12 • DISCONTINUED OPERATIONS
The Company reports in discontinued operations the results of operations of a property that has either been disposed of or is classified as held for sale. The Company also reports any gains or losses from the sale of a property in discontinued operations. There were no properties classified as held for sale as of April 30, 2011, 2010 and 2009. The following information shows the effect on net income and the gains or losses from the sale of properties classified as discontinued operations for the fiscal years ended April 30, 2011, 2010 and 2009. The financial statements have been restated to reflect the property sold during the six months ended October 31, 2011. During the second quarter of fiscal year 2012 the Company sold a retail property in Livingston, Montana.
2011 Annual Report F-23

NOTE 12 • continued

|  | (in thousands) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
REVENUE |  |  |  |  |  |  |  |  |
Real estate rentals |  | $ | 6,123 |  |  | $ | 11,393 |  |  | $ | 11,605 |
Tenant reimbursement |  |  | 36 |  |  |  | 67 |  |  |  | 80 |
TOTAL REVENUE |  |  | 6,159 |  |  |  | 11,460 |  |  |  | 11,685 |
EXPENSES |  |  |  |  |  |  |  |  |  |  |  |
Depreciation/amortization related to real estate investments |  |  | 1,182 |  |  |  | 2,339 |  |  |  | 2,311 |
Utilities |  |  | 558 |  |  |  | 957 |  |  |  | 863 |
Maintenance |  |  | 708 |  |  |  | 1,236 |  |  |  | 1,172 |
Real estate taxes |  |  | 638 |  |  |  | 1,319 |  |  |  | 1,366 |
Insurance |  |  | 110 |  |  |  | 290 |  |  |  | 187 |
Property management expenses |  |  | 856 |  |  |  | 1,461 |  |  |  | 1,363 |
Other expenses |  |  | 1 |  |  |  | 0 |  |  |  | 0 |
Amortization related to non-real estate investments |  |  | 4 |  |  |  | 8 |  |  |  | 8 |
Impairment of real estate investments |  |  | 0 |  |  |  | 970 |  |  |  | 338 |
TOTAL EXPENSES |  |  | 4,057 |  |  |  | 8,580 |  |  |  | 7,608 |
Interest expense |  |  | (1,512 | ) |  |  | (3,525 | ) |  |  | (3,815 | )
Interest income |  |  | 5 |  |  |  | 7 |  |  |  | 9 |
Income (loss) from discontinued operations before gain on sale |  |  | 595 |  |  |  | (638 | ) |  |  | 271 |
Gain on sale of discontinued operations |  |  | 19,365 |  |  |  | 68 |  |  |  | 54 |
INCOME (LOSS) FROM DISCONTINUED OPERATIONS |  | $ | 19,960 |  |  | $ | (570 | ) |  | $ | 325 |
Segment Data |  |  |  |  |  |  |  |  |  |  |  |
Multi-Family Residential |  | $ | 19,224 |  |  | $ | 437 |  |  | $ | 560 |
Commercial Office |  |  | 0 |  |  |  | (169 | ) |  |  | (338 | )
Commercial Medical |  |  | (8 | ) |  |  | 14 |  |  |  | 11 |
Commercial Industrial |  |  | 726 |  |  |  | (23 | ) |  |  | (12 | )
Commercial Retail |  |  | 18 |  |  |  | (829 | ) |  |  | 104 |
Total |  | $ | 19,960 |  |  | $ | (570 | ) |  | $ | 325 |

|  | (in thousands) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Property Sale Data |  |  |  |  |  |  |  |  |
Sales price |  | $ | 83,330 |  |  | $ | 560 |  |  | $ | 70 |
Net book value and sales costs |  |  | (63,965 | ) |  |  | (492 | ) |  |  | (16 | )
Gain on sale of discontinued operations |  | $ | 19,365 |  |  | $ | 68 |  |  | $ | 54 |

NOTE 13 • EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. The Company has no outstanding options, warrants, convertible stock or other contractual obligations requiring issuance of additional common shares that would result in a dilution of earnings. Units can be exchanged for shares on a one-for-one basis after a minimum holding period of one year. The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted earnings per share reported in the consolidated financial statements for the fiscal years ended April 30, 2011, 2010 and 2009:
2011 Annual Report F-24

NOTE 13 • continued

|  | For Years Ended April 30, |
|  | (in thousands, except per share data) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
NUMERATOR |  |  |  |  |  |  |  |  |
Income from continuing operations – Investors Real Estate Trust |  | $ | 4,116 |  |  | $ | 4,444 |  |  | $ | 8,284 |
Income (loss) from discontinued operations – Investors Real Estate Trust |  |  | 15,966 |  |  |  | (443 | ) |  |  | 242 |
Net income attributable to Investors Real Estate Trust |  |  | 20,082 |  |  |  | 4,001 |  |  |  | 8,526 |
Dividends to preferred shareholders |  |  | (2,372 | ) |  |  | (2,372 | ) |  |  | (2,372 | )
Numerator for basic earnings per share – net income available to common shareholders |  |  | 17,710 |  |  |  | 1,629 |  |  |  | 6,154 |
Noncontrolling interests – Operating Partnership |  |  | 4,449 |  |  |  | 562 |  |  |  | 2,227 |
Numerator for diluted earnings per share |  | $ | 22,159 |  |  | $ | 2,191 |  |  | $ | 8,381 |
DENOMINATOR |  |  |  |  |  |  |  |  |  |  |  |
Denominator for basic earnings per share weighted average shares |  |  | 78,628 |  |  |  | 69,093 |  |  |  | 58,603 |
Effect of convertible operating partnership units |  |  | 20,154 |  |  |  | 20,825 |  |  |  | 21,217 |
Denominator for diluted earnings per share |  |  | 98,782 |  |  |  | 89,918 |  |  |  | 79,820 |
Earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted |  | $ | .02 |  |  | $ | .04 |  |  | $ | .10 |
Earnings (loss) per common share from discontinued operations – Investors Real Estate Trust – basic and diluted |  |  | .20 |  |  |  | (.01 | ) |  |  | .01 |
NET INCOME PER COMMON SHARE – BASIC & DILUTED |  | $ | .22 |  |  | $ | .03 |  |  | $ | .11 |

NOTE 14 • RETIREMENT PLANS
IRET sponsors a defined contribution profit sharing retirement plan and a defined contribution 401(k) plan. IRET’s defined contribution profit sharing retirement plan is available to employees over the age of 21 who have completed one year of service. Participation in IRET’s defined contribution 401(k) plan is available to employees over the age of 21 who have completed one year of service and who work at least 1,000 hours per calendar year, and employees participating in the 401(k) plan may contribute up to maximum levels established by the IRS. Employer contributions to the profit sharing and 401(k) plans are at the discretion of the Company’s management. IRET expects to contribute not more than 3.5% of the salary of each employee participating in the profit sharing plan, and currently matches, dollar for dollar, employee contributions to the 401(k) plan in an amount equal to up to 4.0% of the salary of each employee participating in the 401(k) plan, for a total expected contribution of not more than 7.5% of the salary of each of the employees participating in both plans. Contributions by IRET to the profit sharing plan are subject to a vesting schedule; contributions by IRET under the 401(k) plan are fully vested when made. IRET’s contributions to these plans on behalf of employees totaled approximately $598,000 in fiscal year 2011, $400,000 in fiscal year 2010 and $356,000 in fiscal year 2009.
NOTE 15 • COMMITMENTS AND CONTINGENCIES
Ground Leases. As of April 30, 2011, the Company is a tenant under operating ground or air rights leases on eleven of its properties. The Company pays a total of approximately $501,000 per year in rent under these ground leases, which have remaining terms ranging from 1.3 to 90 years, and expiration dates ranging from July 2012 to October 2100. The Company has renewal options for five of the eleven ground leases, and rights of first offer or first refusal for the remainder.
The expected timing of ground and air rights lease payments as of April 30, 2011 is as follows:

| (in thousands) |
Year Ended April 30, | Lease Payments |
2012 |  | $ | 501 |
2013 |  |  | 499 |
2014 |  |  | 500 |
2015 |  |  | 501 |
2016 |  |  | 473 |
Thereafter |  |  | 22,486 |
Total |  | $ | 24,960 |

2011 Annual Report F-25

NOTE 15 • continued
Legal Proceedings. IRET is involved in various lawsuits arising in the normal course of business. Management believes that such matters will not have a material effect on the Company’s financial statements.
Environmental Matters. It is generally IRET’s policy to obtain a Phase I environmental assessment of each property that the Company seeks to acquire. Such assessments have not revealed, nor is the Company aware of, any environmental liabilities that IRET believes would have a material adverse effect on IRET’s financial position or results of operations. IRET owns properties that contain or potentially contain (based on the age of the property) asbestos or lead, or have underground fuel storage tanks. For certain of these properties, the Company estimated the fair value of the conditional asset retirement obligation and chose not to book a liability, because the amounts involved were immaterial. With respect to certain other properties, the Company has not recorded any related asset retirement obligation, as the fair value of the liability cannot be reasonably estimated, due to insufficient information. IRET believes it does not have sufficient information to estimate the fair value of the asset retirement obligations for these properties because a settlement date or range of potential settlement dates has not been specified by others, and, additionally, there are currently no plans or expectation of plans to sell or to demolish these properties, or to undertake major renovations that would require removal of the asbestos, lead and/or underground storage tanks. These properties are expected to be maintained by repairs and maintenance activities that would not involve the removal of the asbestos, lead and/or underground storage tanks. Also, a need for renovations caused by tenant changes, technology changes or other factors has not been identified.
Tenant Improvements. In entering into leases with tenants, IRET may commit itself to fund improvements or build-outs of the rented space to suit tenant requirements. These tenant improvements are typically funded at the beginning of the lease term, and IRET is accordingly exposed to some risk of loss if a tenant defaults prior to the expiration of the lease term, and the rental income that was expected to cover the cost of the tenant improvements is not received. As of April 30, 2011, the Company is committed to fund approximately $5.1 million in tenant improvements, within approximately the next 12 months.
Purchase Options. The Company has granted options to purchase certain IRET properties to tenants in these properties, under lease agreements. In general, the options grant the tenant the right to purchase the property at the greater of such property’s appraised value or an annual compounded increase of a specified percentage of the initial cost of the property to IRET. The property cost and gross rental revenue of these properties are as follows:
2011 Annual Report F-26

NOTE 15 • continued

|  | (in thousands) |
|  |  |  |  | Gross Rental Revenue |
Property |  | Investment Cost |  |  | 2011 |  |  | 2010 |  |  | 2009 |
Billings 2300 Grant Road - Billings, MT |  | $ | 2,522 |  |  | $ | 226 |  |  | $ | 0 |  |  | $ | 0 |
Edgewood Vista-Belgrade, MT |  |  | 2,135 |  |  |  | 191 |  |  |  | 196 |  |  |  | 196 |
Edgewood Vista-Billings, MT |  |  | 4,274 |  |  |  | 384 |  |  |  | 396 |  |  |  | 396 |
Edgewood Vista-Bismarck, ND |  |  | 10,903 |  |  |  | 1,031 |  |  |  | 1,008 |  |  |  | 1,008 |
Edgewood Vista-Brainerd, MN |  |  | 10,667 |  |  |  | 1,010 |  |  |  | 988 |  |  |  | 988 |
Edgewood Vista-Columbus, NE |  |  | 1,481 |  |  |  | 131 |  |  |  | 136 |  |  |  | 136 |
Edgewood Vista-East Grand Forks, MN |  |  | 4,996 |  |  |  | 475 |  |  |  | 465 |  |  |  | 464 |
Edgewood Vista-Fargo, ND |  |  | 26,087 |  |  |  | 2,415 |  |  |  | 2,387 |  |  |  | 2,065 |
Edgewood Vista-Fremont, NE |  |  | 588 |  |  |  | 72 |  |  |  | 72 |  |  |  | 72 |
Edgewood Vista-Grand Island, NE |  |  | 1,431 |  |  |  | 129 |  |  |  | 132 |  |  |  | 132 |
Edgewood Vista-Hastings, NE |  |  | 606 |  |  |  | 76 |  |  |  | 76 |  |  |  | 76 |
Edgewood Vista-Hermantown I, MN |  |  | 21,510 |  |  |  | 2,404 |  |  |  | 2,359 |  |  |  | 2,040 |
Edgewood Vista-Hermantown II, MN |  |  | 12,359 |  |  |  | 1,170 |  |  |  | 1,144 |  |  |  | 1,144 |
Edgewood Vista-Kalispell, MT |  |  | 624 |  |  |  | 76 |  |  |  | 76 |  |  |  | 76 |
Edgewood Vista-Missoula, MT |  |  | 999 |  |  |  | 96 |  |  |  | 96 |  |  |  | 96 |
Edgewood Vista-Norfolk, NE |  |  | 1,332 |  |  |  | 122 |  |  |  | 124 |  |  |  | 124 |
Edgewood Vista-Omaha, NE |  |  | 676 |  |  |  | 80 |  |  |  | 80 |  |  |  | 80 |
Edgewood Vista-Sioux Falls, SD |  |  | 3,353 |  |  |  | 312 |  |  |  | 312 |  |  |  | 312 |
Edgewood Vista-Spearfish, SD |  |  | 9,569 |  |  |  | 642 |  |  |  | 628 |  |  |  | 628 |
Edgewood Vista-Virginia, MN |  |  | 17,132 |  |  |  | 2,054 |  |  |  | 2,008 |  |  |  | 1,736 |
Fargo 1320 45th Street N - Fargo, ND |  |  | 4,160 |  |  |  | 333 |  |  |  | 0 |  |  |  | 0 |
Great Plains - Fargo, ND |  |  | 15,375 |  |  |  | 1,876 |  |  |  | 1,876 |  |  |  | 1,876 |
Healtheast St John & Woodwinds - Maplewood & Woodbury, MN |  |  | 21,601 |  |  |  | 2,152 |  |  |  | 2,152 |  |  |  | 2,052 |
Minnesota National Bank - Duluth, MN |  |  | 1,745 |  |  |  | 105 |  |  |  | 164 |  |  |  | 211 |
Missoula 3050 Great Northern - Missoula, MT |  |  | 2,723 |  |  |  | 243 |  |  |  | 0 |  |  |  | 0 |
Sartell 2000 23rd Street South - Sartell, MN |  |  | 12,693 |  |  |  | 1,209 |  |  |  | 1,173 |  |  |  | 1,292 |
St. Michael Clinic - St. Michael, MN |  |  | 2,851 |  |  |  | 244 |  |  |  | 241 |  |  |  | 240 |
Stevens Point - Stevens Point, WI |  |  | 15,020 |  |  |  | 1,104 |  |  |  | 1,356 |  |  |  | 1,356 |
Total |  | $ | 209,412 |  |  | $ | 20,362 |  |  | $ | 19,645 |  |  | $ | 18,796 |

Income Guarantees. In connection with its acquisition in April 2004 of a portfolio of properties located in and near Duluth, Minnesota, the Company received from the seller of the properties a guarantee, for five years from the closing date of the acquisition, of a specified minimum amount of annual net operating income, before debt service (principal and interest payments), from two of the properties included in the portfolio. The income guarantee expired on April 30, 2009, and the final payment of approximately $215,000 was received in July 2009.
Restrictions on Taxable Dispositions. Approximately 136 of the Company’s properties, consisting of approximately 7.5 million square feet of our combined commercial segment’s properties and 3,888 apartment units, are subject to restrictions on taxable dispositions under agreements entered into with some of the sellers or contributors of the properties. The real estate investment amount of these properties (net of accumulated depreciation) was approximately $854.6 million at April 30, 2011. The restrictions on taxable dispositions are effective for varying periods. The terms of these agreements generally prevent us from selling the properties in taxable transactions. The Company does not believe that the agreements materially affect the conduct of its business or its decisions whether to dispose of restricted properties during the restriction period because the Company generally holds these and its other properties for investment purposes, rather than for sale. Historically, however, where the Company has deemed it to be in its shareholders’ best interests to dispose of restricted properties, the Company has done so through transactions structured as tax-deferred transactions under Section 1031 of the Internal Revenue Code.
Redemption Value of UPREIT Units. The limited partnership units (“UPREIT Units”) of the Company’s operating partnership, IRET Properties, are redeemable at the option of the holder for cash, or, at our option, for the Company’s common shares of beneficial interest on a one-for-one basis, after a minimum one-year holding period. All UPREIT Units receive the same cash distributions as those paid on common shares. UPREIT Units are redeemable for an amount of cash per Unit equal to the average of the daily market price of an IRET common share
2011 Annual Report F-27

NOTE 15 • continued
for the ten consecutive trading days immediately preceding the date of valuation of the Unit. As of April 30, 2011 and 2010, the aggregate redemption value of the then-outstanding UPREIT Units of the operating partnership owned by limited partners was approximately $188.0 million and $180.3 million, respectively.
Joint Venture Buy/Sell Options. Certain of IRET’s joint venture agreements contain buy/sell options in which each party under certain circumstances has the option to acquire the interest of the other party, but do not generally require that the Company buy its partners’ interests. IRET has one joint venture which allows IRET’s unaffiliated partner, at its election, to require that IRET buy its interest at a purchase price to be determined by an appraisal conducted in accordance with the terms of the agreement, or at a negotiated price. The redeemable noncontrolling interests in this joint venture are presented on the consolidated balance sheets at the greater of their carrying amount or redemption value at the end of each reporting period. The Company has not recorded a liability or the related asset that would result from the acquisition in connection with the above potential obligation because the probability of the unaffiliated partner requiring IRET to buy their interest is not currently determinable.
Pending Acquisitions. As of April 30, 2011, the Company had signed purchase agreements to acquire the following properties; all of these pending acquisitions are subject to various closing conditions and contingencies, and no assurances can be given that any of these acquisitions will be completed:
A 147-unit multi-family residential property in St. Cloud, Minnesota for a purchase price totaling approximately $10.9 million, of which approximately $7.2 million would consist of the assumption of existing debt, with the remaining approximately $3.7 million paid in cash (approximately $2.2 million) and by the issuance of limited partnership units of the Operating Partnership valued at approximately $1.5 million; and
Six senior housing projects located in Boise, Idaho and towns surrounding Boise, with a total of approximately 209 units, for a total purchase price of approximately $29.5 million. The Company has solicited multiple offers for debt placement and currently expects that this acquisition will close in the second quarter of the current fiscal year.
Development Projects. The Company has various contracts outstanding with third parties in connection with ongoing development projects. As of April 30, 2011, contractual commitments for development projects are as follows:
Multi-Family Conversion, Minot, North Dakota: The Company is planning to convert an existing approximately 15,000 square foot commercial office building in Minot, North Dakota to a 24-unit multi-family residential property, for an estimated total cost of $2.2 million. As of April 30, 2011, the Company had incurred approximately $280,000 of these project costs. Work on this project has been postponed, as Company employees and other resources are directed to the supervision of repairs at Company properties damaged by the recent flooding in Minot, North Dakota.
Buffalo Mall Theaters, Jamestown, North Dakota: The Company committed to fund the construction of six movie theaters at its existing Buffalo Mall property in Jamestown, North Dakota, for an estimated construction cost of $2.1 million and expected completion in the first quarter of fiscal year 2012. As of April 30, 2011, the Company had incurred approximately $1.5 million of these construction costs. A certificate of occupancy was issued for this project in June 2011.
Senior Housing Memory Care Conversion and Additional Assisted Living Units, Wyoming: The Company has committed and funded construction and remodeling costs to convert a portion of the Company’s existing Wyoming senior housing facility at Cheyenne, Wyoming to incorporate a specialized memory care unit. In the third quarter of fiscal year 2011, the Company had incurred $309,000, the total expected cost of the memory-care conversion. A certificate of occupancy for the memory care unit was issued in March 2011. Additionally, the Company is currently constructing an additional approximately 28 assisted living units and 16 memory care units at its existing Meadow Wind senior housing facility in Casper, Wyoming. The Company estimates that construction costs for this expansion project will total approximately $4.5 million and the project will be completed in the second quarter of fiscal year 2012.
2011 Annual Report F-28

NOTE 15 • continued
Trinity Hospital Build-to-Suit, Minot, North Dakota: The Company has committed to construct an approximately 25,000 square-foot, one-story medical clinic for Trinity Health, a non-profit healthcare organization based in Minot, North Dakota, on land owned by the Company adjacent to the Company’s existing headquarters building in Minot. Construction of this build-to-suit facility began in the second quarter of fiscal year 2011, with completion and occupancy by Trinity expected in the second quarter of fiscal year 2012. Estimated total project costs (excluding the value of the land) are $7.4 million, of which, as of April 30, 2011, the Company had incurred approximately $4.8 million.
In addition to the above contractually committed development projects, the Company is also renovating and upgrading the eight existing condominium units at its Georgetown Square Condominium project in Grand Chute, Wisconsin (formerly known as Fox River). The Company is evaluating the construction of additional units, based on market needs. The Company estimates total renovation costs for the existing eight units at a maximum of $280,000.
NOTE 16 • FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of each class of financial instruments.
Mortgage Loans Receivable. Fair values are based on the discounted value of future cash flows expected to be received for a loan using current rates at which similar loans would be made to borrowers with similar credit risk and the same remaining maturities. Terms are short term in nature and carrying value approximates the estimated fair value.
Cash and Cash Equivalents. The carrying amount approximates fair value because of the short maturity.
Marketable Securities. The fair values of these instruments are estimated based on quoted market prices for the security.
Other Debt. The fair value of other debt is estimated based on the discounted cash flows of the loan using current market rates.
Lines of Credit. The carrying amount approximates fair value because the variable rate debt re-prices frequently.
Mortgages Payable. For variable rate loans that re-price frequently, fair values are based on carrying values. The fair value of fixed rate loans is estimated based on the discounted cash flows of the loans using current market rates.
The estimated fair values of the Company’s financial instruments as of April 30, 2011 and 2010, are as follows:

|  | (in thousands) |
|  | 2011 |  |  | 2010 |
|  | Carrying Amount |  |  | Fair Value |  |  | Carrying Amount |  |  | Fair Value |
FINANCIAL ASSETS |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans receivable |  | $ | 156 |  |  | $ | 156 |  |  | $ | 158 |  |  | $ | 158 |
Cash and cash equivalents |  |  | 41,191 |  |  |  | 41,191 |  |  |  | 54,791 |  |  |  | 54,791 |
Marketable securities - available-for-sale |  |  | 625 |  |  |  | 625 |  |  |  | 420 |  |  |  | 420 |
FINANCIAL LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other debt |  |  | 8,200 |  |  |  | 7,279 |  |  |  | 1,000 |  |  |  | 1,142 |
Lines of credit |  |  | 30,000 |  |  |  | 30,000 |  |  |  | 6,550 |  |  |  | 6,550 |
Mortgages payable |  |  | 993,803 |  |  |  | 1,013,713 |  |  |  | 1,057,619 |  |  |  | 1,015,879 |

NOTE 17 • COMMON AND PREFERRED SHARES OF BENEFICIAL INTEREST AND EQUITY
Distribution Reinvestment and Share Purchase Plan. During fiscal years 2011 and 2010, IRET issued 1.7 million and 1.4 million common shares, respectively, pursuant to its distribution reinvestment and share purchase plan, at a total value at issuance of $14.5 million and $11.9 million, respectively. The shares issued under the distribution reinvestment and share purchase plan during fiscal year 2011 consisted of 1.3 million shares valued at issuance at $11.4 million that were issued for reinvested distributions and approximately 372,000 shares valued at $3.1 million
2011 Annual Report F-29

NOTE 17 • continued
at issuance that were sold for voluntary cash contributions. The shares issued under the distribution reinvestment and share purchase plan during fiscal year 2010 consisted of 1.2 million shares valued at issuance at $10.5 million that were issued for reinvested distributions and approximately 165,000 shares valued at $1.4 million at issuance that were sold for voluntary cash contributions. IRET’s distribution reinvestment plan is available to common shareholders of IRET and all limited partners of IRET Properties. Under the distribution reinvestment plan, shareholders or limited partners may elect to have all or a portion of their distributions used to purchase additional IRET common shares, and may elect to make voluntary cash contributions for the purchase of IRET common shares, at a discount (currently 5%) from the market price.
Conversion of Units to Common Shares. During fiscal years 2011 and 2010, respectively, approximately 1.0 million and 707,000 Units were converted to common shares, with a total value of $6.9 million and $3.8 million included in equity.
Issuance of Common Shares. In September 2008, the Company filed a shelf registration statement on Form S-3 to offer for sale from time to time common shares and preferred shares. This registration statement was declared effective in October 2008. The Company may sell any combination of common shares and preferred shares up to an aggregate initial offering price of $150.0 million during the period that the registration statement remains effective.
During fiscal year 2011, the Company sold 1.8 million common shares under this registration statement, under its continuous offering program with Robert W. Baird & Co. Incorporated as sales agent, for net proceeds of approximately $15.0 million, before offering expenses but after underwriting discounts and commissions. As of April 30, 2011, the Company had available securities under this registration statement in the aggregate amount of approximately $18.2 million. This amount is reserved for issuance under the Company’s continuous offering program with Robert W. Baird & Co. Incorporated.
In April 2010, the Company filed a shelf registration statement on Form S-3 to register any combination of common shares and preferred shares up to an aggregate initial offering price of $150.0 million during the period that the registration statement remains effective. To date the Company has not issued any common or preferred shares under this registration statement.
Series A Cumulative Redeemable Preferred Shares of Beneficial Interest. During fiscal year 2004, the Company issued 1,150,000 shares of 8.25% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest for total proceeds of $27.3 million, net of selling costs. Holders of the Company’s Series A Cumulative Redeemable Preferred Shares of Beneficial Interest are entitled to receive dividends at an annual rate of 8.25% of the liquidation preference of $25 per share, or $2.0625 per share per annum. These dividends are cumulative and payable quarterly in arrears. The shares are not convertible into or exchangeable for any other property or any other securities of the Company at the election of the holders. However, the Company, at its option, may redeem the shares at a redemption price of $25.00 per share, plus any accrued and unpaid distributions through the date of redemption. The shares have no maturity date and will remain outstanding indefinitely unless redeemed by the Company.
NOTE 18 • QUARTERLY RESULTS OF CONSOLIDATED OPERATIONS (unaudited)

|  | (in thousands, except per share data) |
QUARTER ENDED |  | July 31, 2010 |  |  | October 31, 2010 |  |  | January 31, 2011 |  |  | April 30, 2011 |
Total revenue as previously reported |  | $ | 59,176 |  |  | $ | 58,904 |  |  | $ | 60,203 |  |  | $ | 59,124 |
Reclassified to discontinued operations |  | $ | 51 |  |  | $ | 57 |  |  | $ | 57 |  |  | $ | 57 |
Adjusted total revenues |  | $ | 59,125 |  |  | $ | 58,847 |  |  | $ | 60,146 |  |  | $ | 59,067 |
Net Income available to common shareholders |  | $ | 1,393 |  |  | $ | 5,226 |  |  | $ | 11,240 |  |  | $ | (149 | )
Net Income per common share - basic & diluted |  | $ | .02 |  |  | $ | .07 |  |  | $ | .14 |  |  | $ | (.01 | )

2011 Annual Report F-30

NOTE 18 • continued

|  | (in thousands, except per share data) |
QUARTER ENDED |  | July 31, 2009 |  |  | October 31, 2009 |  |  | January 31, 2010 |  |  | April 30, 2010 |
Total revenue as previously reported |  | $ | 58,009 |  |  | $ | 56,758 |  |  | $ | 57,335 |  |  | $ | 59,409 |
Reclassified to discontinued operations |  | $ | 49 |  |  | $ | 49 |  |  | $ | 49 |  |  | $ | 49 |
Adjusted total revenues |  | $ | 57,960 |  |  | $ | 56,709 |  |  | $ | 57,286 |  |  | $ | 59,360 |
Net Income available to common shareholders |  | $ | 1,424 |  |  | $ | (308 | ) |  | $ | (141 | ) |  | $ | 654 |
Net Income per common share - basic & diluted |  | $ | .02 |  |  | $ | .00 |  |  | $ | .00 |  |  | $ | .01 |

The above financial information is unaudited. In the opinion of management, all adjustments (which are of a normal recurring nature) have been included for a fair presentation.
NOTE 19 • REDEEMABLE NONCONTROLLING INTERESTS
Redeemable noncontrolling interests on our consolidated balance sheets represent the noncontrolling interest in a joint venture of the Company in which the Company’s unaffiliated partner, at its election, can require the Company to buy its interest at a purchase price to be determined by an appraisal conducted in accordance with the terms of the agreement, or at a negotiated price. Redeemable noncontrolling interests are presented at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to common shares of beneficial interest on our consolidated balance sheets. As of April 30, 2011, 2010 and 2009, the estimated redemption value of the redeemable noncontrolling interests was $987,000, $1.8 million and $1.7 million, respectively. Below is a table reflecting the activity of the redeemable noncontrolling interests.

|  | (in thousands) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Balance at beginning of fiscal year |  | $ | 1,812 |  |  | $ | 1,737 |  |  | $ | 1,802 |
Net income |  |  | (13 | ) |  |  | 60 |  |  |  | 53 |
Net distributions |  |  | (442 | ) |  |  | (177 | ) |  |  | (112 | )
Mark-to-market adjustments |  |  | (370 | ) |  |  | 192 |  |  |  | (6 | )
Balance at close of fiscal year |  | $ | 987 |  |  | $ | 1,812 |  |  | $ | 1,737 |

NOTE 20 • SUBSEQUENT EVENTS
Common and Preferred Share Distributions. On June 30, 2011, the Company paid a distribution of 51.56 cents per share on the Company’s Series A Cumulative Redeemable Preferred Shares to preferred shareholders of record on June 15, 2011. On July 1, 2011, the Company paid a distribution of 17.15 cents per share on the Company’s common shares and units, to common shareholders and Unitholders of record on June 15, 2011. Subsequent to the end of fiscal year 2011, the Company’s Board of Trustees approved a plan to reduce the Company’s quarterly distribution to $0.1300 from $0.1715 per common share and limited partnership unit, effective with the next quarterly distribution planned for October 3, 2011. The Board currently intends to maintain this level of cash distribution for at least the next four quarters. All future distributions remain subject to the discretion of the Company’s Board of Trustees.
Pending Acquisitions. Subsequent to the end of fiscal year 2011, the Company signed purchase agreements to acquire the following properties; all of these pending acquisitions are subject to various closing conditions and contingencies, and no assurances can be given that any of these acquisitions will be completed:
Two multi-family residential projects in Billings, Montana with a total of 36 units, for a purchase price totaling approximately $2.1 million, of which approximately $2.0 million would be paid through the issuance of limited partnership units of the Operating Partnership; and
Two multi-family residential properties in Sioux Falls, South Dakota, with 50 units and 24 units, respectively, for purchase prices of $4.7 million and $2.3 million, respectively, to be paid in cash.
Subsequent to the end of fiscal year 2011, the Company terminated its previously-disclosed agreement for the purchase of a retail property located in Robbinsdale, Minnesota.
2011 Annual Report F-31

NOTE 20 • continued
Development Project. In addition to the ongoing development projects discussed in Note 15 above, subsequent to the end of fiscal year 2011, in June 2011, the Company commenced construction on an approximately 159-unit apartment project in Rochester, Minnesota, located adjacent to its existing Quarry Ridge Apartment Homes. The Company currently estimates that construction costs will total approximately $19.4 million, and that the project will be completed in approximately 14 months.
Flood Damage. The Company has two properties in Minot, North Dakota that were directly affected by the recent extensive Souris River flooding. The Company’s Arrowhead Shopping Center and Chateau Apartments were flooded in late June 2011. The Company carries flood insurance covering both properties, with a total deductible of $200,000. The approximately 78,095 net rentable square foot Arrowhead Shopping Center has an investment cost (initial cost plus improvements) of approximately $7.2 million, and was 100.0% occupied as of April 30, 2011. The building is insured for $7.5 million in building value, plus an additional $250,000 or 20% of the amount of damage from which such costs resulted, whichever is greater, for debris removal. Additionally, the Company is insured for loss of rents at the property for one year. Total gross revenue from the Arrowhead Shopping Center in fiscal year 2011 was approximately $711,000.
The 64-unit Chateau Apartment building has an investment cost of approximately $3.6 million, and was 98.4% occupied as of April 30, 2011. The building is insured for $4.5 million in building value, plus an additional $250,000 or 20% of the amount of damage from which such costs resulted, whichever is greater, for debris removal. Additionally, the Company is insured for loss of rents at the property for one year. Total gross revenue from the Chateau Apartments in fiscal year 2011 was approximately $648,000. The Company had been in the process of refinancing its mortgage on the Chateau Apartment property, which matured on July 1, 2011; the Company instead paid off the $1.7 million mortgage using available cash.
The Company continues to monitor closely its Cottonwood and Westwood Apartments in Bismarck, North Dakota, both of which have been sandbagged as the Missouri River in Bismarck continues at high levels in June and July 2011. The Company’s Arbor Apartments in South Sioux City, Nebraska are also being closely monitored, as Missouri River flood risk continues there. The Company currently does not expect material financial or operational disruptions due to these above-described flood incidents and flood risk.
2011 Annual Report F-32

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  | Initial Cost to Company |  | Gross amount at which carried at close of period |  |  |
Description | Encumbrances(a) | Land | Buildings & Improvements | Costs capitalized subsequent to acquisition | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Construction or Acquisition | Life on which depreciation in latest income statement is computed
Multi-Family Residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
11th Street 3 Plex - Minot, ND | $ | 0 | $ | 11 | $ | 53 | $ | 5 | $ | 11 | $ | 58 | $ | 69 | $ | (4) |  | 2008 | 40 years
4th Street 4 Plex - Minot, ND |  | 0 |  | 15 |  | 74 |  | 1 |  | 15 |  | 75 |  | 90 |  | (6) |  | 2008 | 40 years
Apartments on Main - Minot, ND |  | 0 |  | 158 |  | 1,123 |  | 18 |  | 175 |  | 1,124 |  | 1,299 |  | (91) |  | 1987 | 24-40 years
Arbors - S Sioux City, NE |  | 4,143 |  | 350 |  | 6,625 |  | 941 |  | 584 |  | 7,332 |  | 7,916 |  | (1,008) |  | 2006 | 40 years
Boulder Court - Eagan, MN |  | 3,675 |  | 1,067 |  | 5,498 |  | 2,389 |  | 1,277 |  | 7,677 |  | 8,954 |  | (1,476) |  | 2003 | 40 years
Brookfield Village - Topeka, KS |  | 5,534 |  | 509 |  | 6,698 |  | 1,067 |  | 600 |  | 7,674 |  | 8,274 |  | (1,503) |  | 2003 | 40 years
Brooklyn Heights - Minot, ND |  | 893 |  | 145 |  | 1,450 |  | 688 |  | 198 |  | 2,085 |  | 2,283 |  | (722) |  | 1997 | 12-40 years
Campus Center - St. Cloud, MN |  | 1,417 |  | 395 |  | 2,244 |  | 115 |  | 398 |  | 2,356 |  | 2,754 |  | (253) |  | 2007 | 40 years
Campus Heights - St. Cloud, MN |  | 0 |  | 110 |  | 628 |  | 32 |  | 112 |  | 658 |  | 770 |  | (72) |  | 2007 | 40 years
Campus Knoll - St. Cloud, MN |  | 944 |  | 266 |  | 1,512 |  | 58 |  | 271 |  | 1,565 |  | 1,836 |  | (172) |  | 2007 | 40 years
Campus Plaza - St. Cloud, MN(1) |  | 0 |  | 54 |  | 311 |  | 26 |  | 55 |  | 336 |  | 391 |  | (37) |  | 2007 | 40 years
Campus Side - St. Cloud, MN(1) |  | 0 |  | 107 |  | 615 |  | 62 |  | 114 |  | 670 |  | 784 |  | (73) |  | 2007 | 40 years
Campus View - St. Cloud, MN(1) |  | 0 |  | 107 |  | 615 |  | 48 |  | 109 |  | 661 |  | 770 |  | (71) |  | 2007 | 40 years
Candlelight - Fargo, ND |  | 1,315 |  | 80 |  | 758 |  | 1,048 |  | 221 |  | 1,665 |  | 1,886 |  | (745) |  | 1992 | 24-40 years
Canyon Lake - Rapid City, SD |  | 2,593 |  | 305 |  | 3,958 |  | 575 |  | 328 |  | 4,510 |  | 4,838 |  | (1,063) |  | 2001 | 40 years
Castlerock - Billings, MT |  | 6,947 |  | 736 |  | 4,864 |  | 1,486 |  | 860 |  | 6,226 |  | 7,086 |  | (1,997) |  | 1998 | 40 years
Chateau - Minot, ND |  | 1,730 |  | 122 |  | 2,224 |  | 1,297 |  | 169 |  | 3,474 |  | 3,643 |  | (1,044) |  | 1998 | 12-40 years
Cimarron Hills - Omaha, NE |  | 5,010 |  | 706 |  | 9,588 |  | 3,732 |  | 1,192 |  | 12,834 |  | 14,026 |  | (3,444) |  | 2001 | 40 years
Colonial Villa - Burnsville, MN |  | 7,350 |  | 2,401 |  | 11,515 |  | 2,799 |  | 2,708 |  | 14,007 |  | 16,715 |  | (2,922) |  | 2003 | 40 years
Colton Heights - Minot, ND |  | 502 |  | 80 |  | 672 |  | 322 |  | 113 |  | 961 |  | 1,074 |  | (634) |  | 1984 | 40 years
Cornerstone - St. Cloud, MN(1) |  | 0 |  | 54 |  | 311 |  | 31 |  | 55 |  | 341 |  | 396 |  | (37) |  | 2007 | 40 years
Cottonwood - Bismarck, ND |  | 16,373 |  | 1,056 |  | 17,372 |  | 2,524 |  | 1,292 |  | 19,660 |  | 20,952 |  | (4,748) |  | 1997 | 40 years
Country Meadows - Billings, MT |  | 6,990 |  | 491 |  | 7,809 |  | 963 |  | 527 |  | 8,736 |  | 9,263 |  | (2,722) |  | 1995 | 33-40 years
Crestview - Bismarck, ND |  | 4,123 |  | 235 |  | 4,290 |  | 892 |  | 464 |  | 4,953 |  | 5,417 |  | (2,278) |  | 1994 | 24-40 years
Crown - Rochester, MN |  | 2,520 |  | 261 |  | 3,289 |  | 40 |  | 261 |  | 3,329 |  | 3,590 |  | (87) |  | 2010 | 40 years
Crown Colony - Topeka, KS |  | 8,588 |  | 620 |  | 9,956 |  | 1,722 |  | 759 |  | 11,539 |  | 12,298 |  | (3,294) |  | 1999 | 40 years
East Park - Sioux Falls, SD |  | 1,530 |  | 115 |  | 2,405 |  | 605 |  | 155 |  | 2,970 |  | 3,125 |  | (735) |  | 2002 | 40 years
Evergreen - Isanti, MN |  | 2,105 |  | 380 |  | 2,720 |  | 58 |  | 380 |  | 2,778 |  | 3,158 |  | (182) |  | 2008 | 40 years
Fairmont - Minot, ND |  | 0 |  | 28 |  | 337 |  | 9 |  | 28 |  | 346 |  | 374 |  | (26) |  | 2008 | 40 years
Forest Park - Grand Forks, ND |  | 8,044 |  | 810 |  | 5,579 |  | 5,647 |  | 1,296 |  | 10,740 |  | 12,036 |  | (3,826) |  | 1993 | 24-40 years
Greenfield - Omaha, NE |  | 3,650 |  | 578 |  | 4,122 |  | 401 |  | 730 |  | 4,371 |  | 5,101 |  | (376) |  | 2007 | 40 years
Heritage Manor - Rochester, MN |  | 4,470 |  | 403 |  | 6,968 |  | 1,899 |  | 451 |  | 8,819 |  | 9,270 |  | (2,782) |  | 1998 | 40 years

2011 Annual Report F-33

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  | Initial Cost to Company |  | Gross amount at which carried at close of period |  |  |
Description | Encumbrances(a) | Land | Buildings & Improvements | Costs capitalized subsequent to acquisition | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Construction or Acquisition | Life on which depreciation in latest income statement is computed
Multi-Family Residential - continued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Indian Hills - Sioux City, IA(1) | $ | 0 | $ | 294 | $ | 2,921 | $ | 2,686 | $ | 365 | $ | 5,536 | $ | 5,901 | $ | (576) |  | 2007 | 40 years
Kirkwood Manor - Bismarck, ND |  | 3,451 |  | 449 |  | 2,725 |  | 1,254 |  | 537 |  | 3,891 |  | 4,428 |  | (1,358) |  | 1997 | 12-40 years
Lancaster - St. Cloud, MN |  | 981 |  | 289 |  | 2,899 |  | 773 |  | 437 |  | 3,524 |  | 3,961 |  | (1,098) |  | 2000 | 40 years
Landmark - Grand Forks, ND |  | 1,815 |  | 184 |  | 1,514 |  | 829 |  | 273 |  | 2,254 |  | 2,527 |  | (765) |  | 1997 | 40 years
Legacy - Grand Forks, ND |  | 16,841 |  | 1,362 |  | 21,727 |  | 5,168 |  | 2,018 |  | 26,239 |  | 28,257 |  | (7,108) |  | 1995-2005 | 24-40 years
Mariposa - Topeka, KS |  | 3,110 |  | 399 |  | 5,110 |  | 310 |  | 419 |  | 5,400 |  | 5,819 |  | (884) |  | 2004 | 40 years
Monticello Village - Monticello, MN |  | 3,023 |  | 490 |  | 3,756 |  | 355 |  | 612 |  | 3,989 |  | 4,601 |  | (771) |  | 2004 | 40 years
North Pointe - Bismarck, ND |  | 2,051 |  | 303 |  | 3,957 |  | 226 |  | 320 |  | 4,166 |  | 4,486 |  | (972) |  | 1995-2011 | 24-40 years
Northern Valley - Rochester, MN |  | 0 |  | 110 |  | 610 |  | 12 |  | 111 |  | 621 |  | 732 |  | (16) |  | 2010 | 40 years
Oakmont Estates - Sioux Falls, SD |  | 3,605 |  | 423 |  | 4,838 |  | 333 |  | 495 |  | 5,099 |  | 5,594 |  | (1,186) |  | 2002 | 40 years
Oakwood Estates - Sioux Falls, SD |  | 4,250 |  | 543 |  | 2,784 |  | 3,700 |  | 758 |  | 6,269 |  | 7,027 |  | (2,579) |  | 1993 | 40 years
Olympic Village - Billings, MT |  | 11,298 |  | 1,164 |  | 10,441 |  | 1,795 |  | 1,433 |  | 11,967 |  | 13,400 |  | (3,363) |  | 2000 | 40 years
Olympik Village - Rochester, MN |  | 4,815 |  | 1,034 |  | 6,109 |  | 1,131 |  | 1,116 |  | 7,158 |  | 8,274 |  | (1,140) |  | 2005 | 40 years
Oxbow Park - Sioux Falls, SD |  | 4,150 |  | 404 |  | 3,152 |  | 2,277 |  | 478 |  | 5,355 |  | 5,833 |  | (2,163) |  | 1994 | 24-40 years
Park Meadows - Waite Park, MN |  | 8,798 |  | 1,143 |  | 9,099 |  | 4,180 |  | 1,497 |  | 12,925 |  | 14,422 |  | (5,094) |  | 1997 | 40 years
Pebble Springs - Bismarck, ND(1) |  | 0 |  | 7 |  | 748 |  | 92 |  | 39 |  | 808 |  | 847 |  | (254) |  | 1999 | 40 years
Pinehurst - Billings, MT |  | 345 |  | 72 |  | 687 |  | 113 |  | 74 |  | 798 |  | 872 |  | (195) |  | 2002 | 40 years
Pines - Minot, ND |  | 143 |  | 35 |  | 215 |  | 92 |  | 40 |  | 302 |  | 342 |  | (103) |  | 2002 | 40 years
Plaza - Minot, ND(1) |  | 0 |  | 793 |  | 0 |  | 14,814 |  | 794 |  | 14,813 |  | 15,607 |  | (865) |  | 2009 | 40 years
Pointe West - Rapid City, SD |  | 2,826 |  | 240 |  | 3,538 |  | 1,139 |  | 349 |  | 4,568 |  | 4,917 |  | (1,926) |  | 1994 | 24-40 years
Prairie Winds - Sioux Falls, SD |  | 1,511 |  | 144 |  | 1,816 |  | 391 |  | 209 |  | 2,142 |  | 2,351 |  | (997) |  | 1993 | 24-40 years
Prairiewood Meadows - Fargo, ND |  | 2,494 |  | 280 |  | 2,531 |  | 924 |  | 340 |  | 3,395 |  | 3,735 |  | (955) |  | 2000 | 40 years
Quarry Ridge - Rochester, MN |  | 12,136 |  | 1,312 |  | 13,362 |  | 370 |  | 1,335 |  | 13,709 |  | 15,044 |  | (1,604) |  | 2006 | 40 years
Ridge Oaks - Sioux City, IA |  | 0 |  | 178 |  | 4,073 |  | 1,935 |  | 256 |  | 5,930 |  | 6,186 |  | (1,685) |  | 2001 | 40 years
Rimrock West - Billings, MT |  | 3,490 |  | 330 |  | 3,489 |  | 1,303 |  | 402 |  | 4,720 |  | 5,122 |  | (1,212) |  | 1999 | 40 years
Rocky Meadows - Billings, MT |  | 5,411 |  | 656 |  | 5,726 |  | 805 |  | 750 |  | 6,437 |  | 7,187 |  | (2,401) |  | 1995 | 40 years
Rum River - Isanti, MN |  | 3,801 |  | 843 |  | 4,823 |  | 40 |  | 844 |  | 4,862 |  | 5,706 |  | (493) |  | 2007 | 40 years
Sherwood - Topeka, KS |  | 12,886 |  | 1,145 |  | 14,684 |  | 2,335 |  | 1,487 |  | 16,677 |  | 18,164 |  | (4,834) |  | 1999 | 40 years
Sierra Vista - Sioux Falls, SD |  | 1,500 |  | 241 |  | 2,097 |  | 6 |  | 241 |  | 2,103 |  | 2,344 |  | (11) |  | 2011 | 40 years
South Pointe - Minot, ND |  | 9,254 |  | 550 |  | 9,548 |  | 1,931 |  | 1,250 |  | 10,779 |  | 12,029 |  | (4,109) |  | 1995 | 24-40 years
Southview - Minot, ND(1) |  | 0 |  | 185 |  | 469 |  | 266 |  | 219 |  | 701 |  | 920 |  | (280) |  | 1994 | 24-40 years
Southwind - Grand Forks, ND |  | 5,910 |  | 400 |  | 5,034 |  | 2,082 |  | 706 |  | 6,810 |  | 7,516 |  | (2,571) |  | 1995 | 24-40 years
Summit Park - Minot, ND |  | 1,238 |  | 161 |  | 1,898 |  | 824 |  | 241 |  | 2,642 |  | 2,883 |  | (915) |  | 1995 | 24-40 years

2011 Annual Report F-34

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  | Initial Cost to Company |  | Gross amount at which carried at close of period |  |  |
Description | Encumbrances(a) | Land | Buildings & Improvements | Costs capitalized subsequent to acquisition | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Construction or Acquisition | Life on which depreciation in latest income statement is computed
Multi-Family Residential - continued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sunset Trail - Rochester, MN | $ | 8,480 | $ | 336 | $ | 12,814 | $ | 2,045 | $ | 493 | $ | 14,702 | $ | 15,195 | $ | (3,780) |  | 1999 | 40 years
Sycamore Village - Sioux Falls, SD |  | 861 |  | 101 |  | 1,317 |  | 424 |  | 149 |  | 1,693 |  | 1,842 |  | (432) |  | 2002 | 40 years
Temple - Minot, ND |  | 0 |  | 0 |  | 0 |  | 224 |  | 0 |  | 224 |  | 224 |  | (29) |  | 2006 | 40 years
Terrace Heights - Minot, ND |  | 206 |  | 29 |  | 312 |  | 82 |  | 38 |  | 385 |  | 423 |  | (149) |  | 2006 | 40 years
Terrace On The Green - Moorhead, MN |  | 2,236 |  | 24 |  | 1,490 |  | 1,829 |  | 130 |  | 3,213 |  | 3,343 |  | (2,216) |  | 1970 | 33-40 years
The Meadows - Jamestown, ND(1) |  | 943 |  | 590 |  | 4,519 |  | 1,035 |  | 639 |  | 5,505 |  | 6,144 |  | (1,520) |  | 1998 | 40 years
Thomasbrook - Lincoln, NE |  | 6,237 |  | 600 |  | 10,306 |  | 2,693 |  | 1,065 |  | 12,534 |  | 13,599 |  | (3,268) |  | 1999 | 40 years
University Park Place - St. Cloud, MN(1) |  | 0 |  | 78 |  | 450 |  | 35 |  | 78 |  | 485 |  | 563 |  | (52) |  | 2007 | 40 years
Valley Park - Grand Forks, ND |  | 4,057 |  | 294 |  | 4,137 |  | 2,258 |  | 437 |  | 6,252 |  | 6,689 |  | (1,873) |  | 1999 | 40 years
Village Green - Rochester, MN |  | 1,407 |  | 234 |  | 2,296 |  | 471 |  | 332 |  | 2,669 |  | 3,001 |  | (540) |  | 2003 | 40 years
West Stonehill - Waite Park, MN |  | 9,077 |  | 939 |  | 10,167 |  | 4,052 |  | 1,216 |  | 13,942 |  | 15,158 |  | (5,619) |  | 1995 | 40 years
Westridge - Minot, ND |  | 0 |  | 68 |  | 1,887 |  | 35 |  | 70 |  | 1,920 |  | 1,990 |  | (144) |  | 2008 | 40 years
Westwood Park - Bismarck, ND |  | 2,068 |  | 116 |  | 1,909 |  | 1,597 |  | 239 |  | 3,383 |  | 3,622 |  | (1,003) |  | 1998 | 40 years
Winchester - Rochester, MN |  | 3,444 |  | 748 |  | 5,622 |  | 1,222 |  | 990 |  | 6,602 |  | 7,592 |  | (1,379) |  | 2003 | 40 years
Woodridge - Rochester, MN |  | 1,999 |  | 370 |  | 6,028 |  | 1,560 |  | 467 |  | 7,491 |  | 7,958 |  | (2,801) |  | 1997 | 40 years
Total Multi-Family Residential | $ | 272,594 | $ | 33,445 | $ | 345,817 | $ | 105,553 | $ | 42,696 | $ | 442,119 | $ | 484,815 | $ | (117,718) |  |  |
Commercial Office |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1st Avenue Building - Minot, ND | $ | 0 | $ | 30 | $ | 80 | $ | (37) | $ | 33 | $ | 40 | $ | 73 | $ | 295 |  | 1981 | 33-40 years
2030 Cliff Road - Eagan, MN |  | 0 |  | 146 |  | 835 |  | 90 |  | 158 |  | 913 |  | 1,071 |  | (219) |  | 2007 | 40 years
610 Business Center IV - Brooklyn Park, MN |  | 7,234 |  | 975 |  | 5,542 |  | 2,886 |  | 980 |  | 8,423 |  | 9,403 |  | (1,015) |  | 2001 | 19-40 years
7800 West Brown Deer Road - Milwaukee, WI |  | 11,054 |  | 1,455 |  | 8,756 |  | 2,031 |  | 1,475 |  | 10,767 |  | 12,242 |  | (2,503) |  | 2003 | 40 years
American Corporate Center - Mendota Heights, MN |  | 9,116 |  | 893 |  | 16,768 |  | 3,516 |  | 893 |  | 20,284 |  | 21,177 |  | (6,266) |  | 2002 | 40 years
Ameritrade - Omaha, NE |  | 3,533 |  | 327 |  | 7,957 |  | 65 |  | 327 |  | 8,022 |  | 8,349 |  | (2,412) |  | 1999 | 40 years
Benton Business Park - Sauk Rapids, MN |  | 687 |  | 188 |  | 1,261 |  | 78 |  | 188 |  | 1,339 |  | 1,527 |  | (285) |  | 2003 | 40 years
Bismarck 715 East Broadway - Bismarck, ND |  | 0 |  | 389 |  | 0 |  | 2,362 |  | 401 |  | 2,350 |  | 2,751 |  | (119) |  | 2008 | 40 years
Bloomington Business Plaza - Bloomington, MN |  | 0 |  | 1,300 |  | 6,106 |  | 749 |  | 1,305 |  | 6,850 |  | 8,155 |  | (1,976) |  | 2001 | 40 years
Brenwood - Minnetonka, MN |  | 0 |  | 1,688 |  | 12,138 |  | 3,264 |  | 1,697 |  | 15,393 |  | 17,090 |  | (4,201) |  | 2002 | 40 years
Brook Valley I - La Vista, NE |  | 1,384 |  | 347 |  | 1,671 |  | 81 |  | 347 |  | 1,752 |  | 2,099 |  | (252) |  | 2005 | 40 years
Burnsville Bluffs II - Burnsville, MN |  | 1,792 |  | 300 |  | 2,154 |  | 903 |  | 301 |  | 3,056 |  | 3,357 |  | (998) |  | 2001 | 40 years
Cold Spring Center - St. Cloud, MN |  | 5,975 |  | 588 |  | 7,808 |  | 907 |  | 592 |  | 8,711 |  | 9,303 |  | (2,402) |  | 2001 | 40 years
Corporate Center West - Omaha, NE |  | 17,315 |  | 3,880 |  | 17,509 |  | 303 |  | 4,167 |  | 17,525 |  | 21,692 |  | (2,048) |  | 2006 | 40 years

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  | Initial Cost to Company |  | Gross amount at which carried at close of period |  |  |
Description | Encumbrances(a) | Land | Buildings & Improvements | Costs capitalized subsequent to acquisition | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Construction or Acquisition | Life on which depreciation in latest income statement is computed
Commercial Office - continued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crosstown Centre - Eden Prairie, MN | $ | 14,139 | $ | 2,884 | $ | 14,569 | $ | 1,235 | $ | 2,900 | $ | 15,788 | $ | 18,688 | $ | (2,543) |  | 2004 | 40 years
Dewey Hill Business Center - Edina, MN |  | 0 |  | 985 |  | 3,507 |  | 921 |  | 995 |  | 4,418 |  | 5,413 |  | (1,399) |  | 2000 | 40 years
Farnam Executive Center - Omaha, NE |  | 12,160 |  | 2,188 |  | 11,404 |  | 0 |  | 2,188 |  | 11,404 |  | 13,592 |  | (1,319) |  | 2006 | 40 years
Flagship - Eden Prairie, MN |  | 21,565 |  | 1,899 |  | 21,638 |  | 822 |  | 2,013 |  | 22,346 |  | 24,359 |  | (2,817) |  | 2006 | 40 years
Gateway Corporate Center - Woodbury, MN |  | 8,700 |  | 1,637 |  | 7,763 |  | 90 |  | 1,637 |  | 7,853 |  | 9,490 |  | (932) |  | 2006 | 40 years
Golden Hills Office Center - Golden Valley, MN |  | 18,500 |  | 3,018 |  | 18,325 |  | 3,424 |  | 3,018 |  | 21,749 |  | 24,767 |  | (5,494) |  | 2003 | 40 years
Great Plains - Fargo, ND |  | 3,140 |  | 126 |  | 15,240 |  | 10 |  | 126 |  | 15,250 |  | 15,376 |  | (4,464) |  | 1997 | 40 years
Highlands Ranch I - Highlands Ranch, CO |  | 8,640 |  | 2,268 |  | 8,362 |  | 428 |  | 2,268 |  | 8,790 |  | 11,058 |  | (987) |  | 2006 | 40 years
Highlands Ranch II - Highlands Ranch, CO |  | 8,447 |  | 1,437 |  | 9,549 |  | 996 |  | 1,437 |  | 10,545 |  | 11,982 |  | (1,995) |  | 2004 | 40 years
Interlachen Corporate Center - Edina, MN |  | 9,293 |  | 1,650 |  | 14,983 |  | 965 |  | 1,652 |  | 15,946 |  | 17,598 |  | (3,786) |  | 2001 | 40 years
Intertech Building - Fenton, MO |  | 4,631 |  | 2,130 |  | 3,968 |  | 75 |  | 2,130 |  | 4,043 |  | 6,173 |  | (355) |  | 2007 | 40 years
IRET Corporate Plaza - Minot, ND(1) |  | 0 |  | 389 |  | 5,444 |  | 3,433 |  | 590 |  | 8,676 |  | 9,266 |  | (590) |  | 2009 | 40 years
Mendota Office Center I - Mendota Heights, MN |  | 3,925 |  | 835 |  | 6,169 |  | 367 |  | 835 |  | 6,536 |  | 7,371 |  | (1,687) |  | 2002 | 40 years
Mendota Office Center II - Mendota Heights, MN |  | 5,800 |  | 1,121 |  | 10,085 |  | 1,461 |  | 1,121 |  | 11,546 |  | 12,667 |  | (3,327) |  | 2002 | 40 years
Mendota Office Center III - Mendota Heights, MN |  | 3,986 |  | 970 |  | 5,734 |  | 253 |  | 970 |  | 5,987 |  | 6,957 |  | (1,491) |  | 2002 | 40 years
Mendota Office Center IV - Mendota Heights, MN |  | 4,739 |  | 1,070 |  | 7,635 |  | 578 |  | 1,070 |  | 8,213 |  | 9,283 |  | (2,077) |  | 2002 | 40 years
Minnesota National Bank - Duluth, MN |  | 917 |  | 287 |  | 1,454 |  | 4 |  | 288 |  | 1,457 |  | 1,745 |  | (256) |  | 2004 | 40 years
Minot 2505 16th Street SW - Minot, ND(1) |  | 0 |  | 298 |  | 1,724 |  | 0 |  | 298 |  | 1,724 |  | 2,022 |  | (66) |  | 2009 | 40 years
Miracle Hills One - Omaha, NE |  | 8,895 |  | 1,974 |  | 10,117 |  | 1,258 |  | 2,120 |  | 11,229 |  | 13,349 |  | (1,662) |  | 2006 | 40 years
Nicollett VII - Burnsville, MN |  | 0 |  | 429 |  | 6,931 |  | 140 |  | 436 |  | 7,064 |  | 7,500 |  | (1,785) |  | 2001 | 40 years
Northgate I - Maple Grove, MN |  | 5,504 |  | 1,062 |  | 6,358 |  | 832 |  | 1,077 |  | 7,175 |  | 8,252 |  | (1,224) |  | 2004 | 40 years
Northgate II - Maple Grove, MN |  | 979 |  | 359 |  | 1,944 |  | 144 |  | 403 |  | 2,044 |  | 2,447 |  | (625) |  | 1999 | 40 years
Northpark Corporate Center - Arden Hills, MN |  | 13,058 |  | 2,034 |  | 14,584 |  | 1,104 |  | 2,034 |  | 15,688 |  | 17,722 |  | (2,119) |  | 2006 | 40 years
Omaha 10802 Farnam Dr - Omaha, NE |  | 5,507 |  | 2,462 |  | 4,374 |  | 0 |  | 2,462 |  | 4,374 |  | 6,836 |  | (41) |  | 2010 | 40 years
Pacific Hills - Omaha, NE |  | 16,770 |  | 4,220 |  | 11,988 |  | 1,249 |  | 4,478 |  | 12,979 |  | 17,457 |  | (1,684) |  | 2006 | 40 years
Pillsbury Business Center - Bloomington, MN |  | 0 |  | 284 |  | 1,556 |  | 120 |  | 284 |  | 1,676 |  | 1,960 |  | (437) |  | 2001 | 40 years
Plaza VII - Boise, ID |  | 1,107 |  | 300 |  | 3,058 |  | 414 |  | 351 |  | 3,421 |  | 3,772 |  | (828) |  | 2003 | 40 years
Plymouth 5095 Nathan Lane - Plymouth, MN |  | 1,274 |  | 604 |  | 1,253 |  | 40 |  | 604 |  | 1,293 |  | 1,897 |  | (123) |  | 2007 | 40 years
Plymouth I - Plymouth, MN |  | 1,234 |  | 530 |  | 1,133 |  | 27 |  | 530 |  | 1,160 |  | 1,690 |  | (208) |  | 2004 | 40 years
Plymouth II - Plymouth, MN |  | 1,234 |  | 367 |  | 1,264 |  | 41 |  | 367 |  | 1,305 |  | 1,672 |  | (233) |  | 2004 | 40 years
Plymouth III - Plymouth, MN |  | 1,518 |  | 507 |  | 1,495 |  | 350 |  | 507 |  | 1,845 |  | 2,352 |  | (345) |  | 2004 | 40 years
Plymouth IV & V - Plymouth, MN |  | 7,168 |  | 1,336 |  | 12,693 |  | 1,317 |  | 1,338 |  | 14,008 |  | 15,346 |  | (3,823) |  | 2001 | 40 years

2011 Annual Report F-36

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  | Initial Cost to Company |  | Gross amount at which carried at close of period |  |  |
Description | Encumbrances(a) | Land | Buildings & Improvements | Costs capitalized subsequent to acquisition | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Construction or Acquisition | Life on which depreciation in latest income statement is computed
Commercial Office - continued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prairie Oak Business Center - Eden Prairie, MN | $ | 3,466 | $ | 531 | $ | 4,069 | $ | 1,468 | $ | 563 | $ | 5,505 | $ | 6,068 | $ | (1,497) |  | 2003 | 40 years
Rapid City 900 Concourse Drive - Rapid City, SD |  | 2,014 |  | 285 |  | 6,600 |  | 276 |  | 321 |  | 6,840 |  | 7,161 |  | (1,838) |  | 2000 | 40 years
Riverport - Maryland Heights, MO |  | 19,690 |  | 1,891 |  | 18,982 |  | 26 |  | 1,917 |  | 18,982 |  | 20,899 |  | (2,197) |  | 2006 | 40 years
Southeast Tech Center - Eagan, MN |  | 1,762 |  | 560 |  | 5,496 |  | 352 |  | 569 |  | 5,839 |  | 6,408 |  | (1,802) |  | 1999 | 40 years
Spring Valley IV - Omaha, NE |  | 824 |  | 178 |  | 916 |  | 60 |  | 186 |  | 968 |  | 1,154 |  | (159) |  | 2005 | 40 years
Spring Valley V - Omaha, NE |  | 907 |  | 212 |  | 1,123 |  | 251 |  | 240 |  | 1,346 |  | 1,586 |  | (203) |  | 2005 | 40 years
Spring Valley X - Omaha, NE |  | 841 |  | 180 |  | 1,024 |  | 32 |  | 180 |  | 1,056 |  | 1,236 |  | (155) |  | 2005 | 40 years
Spring Valley XI - Omaha, NE |  | 824 |  | 143 |  | 1,094 |  | 35 |  | 151 |  | 1,121 |  | 1,272 |  | (160) |  | 2005 | 40 years
Superior Office Building - Duluth, MN |  | 1,378 |  | 336 |  | 2,200 |  | 2 |  | 336 |  | 2,202 |  | 2,538 |  | (388) |  | 2004 | 40 years
TCA Building - Eagan, MN |  | 7,968 |  | 627 |  | 8,571 |  | 807 |  | 684 |  | 9,321 |  | 10,005 |  | (2,040) |  | 2003 | 40 years
Three Paramount Plaza - Bloomington, MN(1) |  | 0 |  | 1,261 |  | 6,149 |  | 1,825 |  | 1,298 |  | 7,937 |  | 9,235 |  | (2,003) |  | 2002 | 40 years
Thresher Square - Minneapolis, MN |  | 0 |  | 1,094 |  | 10,026 |  | 1,678 |  | 1,104 |  | 11,694 |  | 12,798 |  | (2,859) |  | 2002 | 40 years
Timberlands - Leawood, KS |  | 13,155 |  | 2,375 |  | 12,218 |  | 659 |  | 2,495 |  | 12,757 |  | 15,252 |  | (1,759) |  | 2006 | 40 years
UHC Office - International Falls, MN |  | 1,168 |  | 119 |  | 2,366 |  | 80 |  | 119 |  | 2,446 |  | 2,565 |  | (445) |  | 2004 | 40 years
US Bank Financial Center - Bloomington, MN |  | 14,016 |  | 3,117 |  | 13,350 |  | 580 |  | 3,119 |  | 13,928 |  | 17,047 |  | (2,164) |  | 2005 | 40 years
Viromed - Eden Prairie, MN |  | 907 |  | 666 |  | 4,197 |  | 1 |  | 666 |  | 4,198 |  | 4,864 |  | (1,281) |  | 1999 | 40 years
Wells Fargo Center - St Cloud, MN |  | 6,336 |  | 869 |  | 8,373 |  | 1,083 |  | 869 |  | 9,456 |  | 10,325 |  | (1,512) |  | 2005 | 40 years
West River Business Park - Waite Park, MN |  | 687 |  | 235 |  | 1,195 |  | 47 |  | 235 |  | 1,242 |  | 1,477 |  | (258) |  | 2003 | 40 years
Westgate - Boise, ID |  | 4,373 |  | 1,000 |  | 10,618 |  | 1,911 |  | 1,000 |  | 12,529 |  | 13,529 |  | (2,627) |  | 2003 | 40 years
Whitewater Plaza - Minnetonka, MN |  | 3,965 |  | 530 |  | 4,860 |  | 716 |  | 577 |  | 5,529 |  | 6,106 |  | (1,345) |  | 2002 | 40 years
Wirth Corporate Center - Golden Valley, MN |  | 3,777 |  | 970 |  | 7,659 |  | 868 |  | 971 |  | 8,526 |  | 9,497 |  | (2,172) |  | 2002 | 40 years
Woodlands Plaza IV - Maryland Heights, MO |  | 4,360 |  | 771 |  | 4,609 |  | 741 |  | 837 |  | 5,284 |  | 6,121 |  | (663) |  | 2006 | 40 years
Total Commercial Office | $ | 343,338 | $ | 72,116 | $ | 470,581 | $ | 52,794 | $ | 73,828 |  | 521,663 | $ | 595,491 | $ | (104,650) |  |  |
Commercial Medical |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2800 Medical Building - Minneapolis, MN | $ | 5,763 | $ | 204 | $ | 7,135 | $ | 2,149 | $ | 229 | $ | 9,259 | $ | 9,488 | $ | (1,582) |  | 2005 | 40 years
2828 Chicago Avenue - Minneapolis, MN |  | 8,669 |  | 726 |  | 11,319 |  | 5,628 |  | 729 |  | 16,944 |  | 17,673 |  | (1,517) |  | 2007 | 40 years
Airport Medical - Bloomington, MN |  | 1,640 |  | 0 |  | 4,678 |  | 0 |  | 0 |  | 4,678 |  | 4,678 |  | (1,263) |  | 2002 | 40 years
Barry Pointe Office Park - Kansas City, MO |  | 1,493 |  | 384 |  | 2,366 |  | 104 |  | 392 |  | 2,462 |  | 2,854 |  | (259) |  | 2007 | 40 years
Billings 2300 Grant Road - Billings, MT |  | 1,976 |  | 649 |  | 1,216 |  | 0 |  | 649 |  | 1,216 |  | 1,865 |  | (24) |  | 2010 | 40 years
Burnsville 303 Nicollet Medical (Ridgeview) - Burnsville, MN |  | 7,574 |  | 1,071 |  | 6,842 |  | 723 |  | 1,071 |  | 7,565 |  | 8,636 |  | (591) |  | 2008 | 40 years
Burnsville 305 Nicollet Medical (Ridgeview South) - Burnsville, MN |  | 4,734 |  | 189 |  | 5,127 |  | 550 |  | 189 |  | 5,677 |  | 5,866 |  | (466) |  | 2008 | 40 years

2011 Annual Report F-37

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  | Initial Cost to Company |  | Gross amount at which carried at close of period |  |  |
Description | Encumbrances(a) | Land | Buildings & Improvements | Costs capitalized subsequent to acquisition | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Construction or Acquisition | Life on which depreciation in latest income statement is computed
Commercial Medical - continued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Casper 1930 E 12th Street (Park Place) - Casper, WY(1) | $ | 0 | $ | 439 | $ | 5,780 | $ | (47) | $ | 439 | $ | 5,733 | $ | 6,172 | $ | (196) |  | 2009 | 40 years
Casper 3955 E 12th Street (Meadow Wind) - Casper, WY(1) |  | 0 |  | 338 |  | 5,881 |  | (2) |  | 338 |  | 5,879 |  | 6,217 |  | (202) |  | 2009 | 40 years
Cheyenne 4010 N College Drive (Aspen Wind) - Cheyenne, WY(1) |  | 0 |  | 628 |  | 9,869 |  | (2) |  | 628 |  | 9,867 |  | 10,495 |  | (339) |  | 2009 | 40 years
Cheyenne 4606 N College Drive (Sierra Hills) - Cheyenne, WY(1) |  | 0 |  | 695 |  | 7,455 |  | 0 |  | 695 |  | 7,455 |  | 8,150 |  | (256) |  | 2009 | 40 years
Denfeld Clinic - Duluth, MN |  | 1,859 |  | 501 |  | 2,597 |  | 1 |  | 501 |  | 2,598 |  | 3,099 |  | (458) |  | 2004 | 40 years
Eagan 1440 Duckwood Medical - Eagan, MN |  | 1,894 |  | 521 |  | 1,547 |  | 519 |  | 521 |  | 2,066 |  | 2,587 |  | (259) |  | 2008 | 40 years
Edgewood Vista - Belgrade, MT |  | 0 |  | 35 |  | 779 |  | 0 |  | 35 |  | 779 |  | 814 |  | (61) |  | 2008 | 40 years
Edgewood Vista - Billings, MT |  | 2,026 |  | 115 |  | 1,782 |  | (15) |  | 115 |  | 1,767 |  | 1,882 |  | (142) |  | 2008 | 40 years
Edgewood Vista - Bismarck, ND |  | 5,854 |  | 511 |  | 9,193 |  | 36 |  | 511 |  | 9,229 |  | 9,740 |  | (1,296) |  | 2005 | 40 years
Edgewood Vista - Brainerd, MN |  | 5,786 |  | 587 |  | 8,999 |  | 34 |  | 587 |  | 9,033 |  | 9,620 |  | (1,268) |  | 2005 | 40 years
Edgewood Vista - Columbus, NE(1) |  | 0 |  | 43 |  | 824 |  | 0 |  | 43 |  | 824 |  | 867 |  | (64) |  | 2008 | 40 years
Edgewood Vista - East Grand Forks, MN |  | 3,087 |  | 290 |  | 1,383 |  | (31) |  | 290 |  | 1,352 |  | 1,642 |  | (109) |  | 2000 | 40 years
Edgewood Vista - Fargo, ND |  | 13,720 |  | 775 |  | 20,870 |  | 0 |  | 775 |  | 20,870 |  | 21,645 |  | (1,630) |  | 2008 | 40 years
Edgewood Vista - Fremont, NE |  | 624 |  | 56 |  | 490 |  | 42 |  | 56 |  | 532 |  | 588 |  | (129) |  | 2008 | 40 years
Edgewood Vista - Grand Island, NE(1) |  | 0 |  | 33 |  | 773 |  | 0 |  | 33 |  | 773 |  | 806 |  | (60) |  | 2000 | 40 years
Edgewood Vista - Hastings, NE |  | 643 |  | 49 |  | 517 |  | 41 |  | 49 |  | 558 |  | 607 |  | (139) |  | 2008 | 40 years
Edgewood Vista - Hermantown I, MN |  | 17,251 |  | 288 |  | 9,871 |  | 1,501 |  | 288 |  | 11,372 |  | 11,660 |  | (2,736) |  | 2000 | 40 years
Edgewood Vista - Hermantown II, MN |  | 6,705 |  | 719 |  | 10,517 |  | 33 |  | 719 |  | 10,550 |  | 11,269 |  | (1,482) |  | 2005 | 40 years
Edgewood Vista - Kalispell, MT |  | 645 |  | 70 |  | 502 |  | 52 |  | 70 |  | 554 |  | 624 |  | (135) |  | 2001 | 40 years
Edgewood Vista - Minot, ND |  | 9,865 |  | 1,046 |  | 11,590 |  | 0 |  | 1,046 |  | 11,590 |  | 12,636 |  | (133) |  | 2010 | 40 years
Edgewood Vista - Missoula, MT |  | 916 |  | 109 |  | 854 |  | 36 |  | 109 |  | 890 |  | 999 |  | (312) |  | 1996 | 40 years
Edgewood Vista - Norfolk, NE(1) |  | 0 |  | 42 |  | 722 |  | 0 |  | 42 |  | 722 |  | 764 |  | (56) |  | 2008 | 40 years
Edgewood Vista - Omaha, NE |  | 408 |  | 89 |  | 547 |  | 40 |  | 89 |  | 587 |  | 676 |  | (142) |  | 2001 | 40 years
Edgewood Vista - Sioux Falls, SD |  | 1,161 |  | 314 |  | 1,001 |  | (27) |  | 314 |  | 974 |  | 1,288 |  | (79) |  | 2008 | 40 years
Edgewood Vista - Spearfish, SD |  | 3,645 |  | 315 |  | 8,584 |  | 35 |  | 315 |  | 8,619 |  | 8,934 |  | (839) |  | 2005 | 40 years
Edgewood Vista - Virginia, MN |  | 14,674 |  | 246 |  | 11,823 |  | 76 |  | 246 |  | 11,899 |  | 12,145 |  | (2,461) |  | 2002 | 40 years
Edina 6363 France Medical - Edina, MN(1) |  | 0 |  | 0 |  | 12,675 |  | 20 |  | 0 |  | 12,695 |  | 12,695 |  | (1,397) |  | 2008 | 40 years
Edina 6405 France Medical - Edina, MN |  | 9,347 |  | 0 |  | 12,201 |  | 0 |  | 0 |  | 12,201 |  | 12,201 |  | (1,232) |  | 2008 | 40 years
Edina 6517 Drew Avenue - Edina, MN |  | 1,192 |  | 353 |  | 660 |  | 524 |  | 372 |  | 1,165 |  | 1,537 |  | (341) |  | 2002 | 40 years
Edina 6525 France SMC II - Edina, MN |  | 10,500 |  | 755 |  | 8,054 |  | 5,945 |  | 1,003 |  | 13,751 |  | 14,754 |  | (3,955) |  | 2003 | 40 years
Edina 6545 France SMC I - Edina MN |  | 31,836 |  | 3,480 |  | 30,743 |  | 11,020 |  | 3,480 |  | 41,763 |  | 45,243 |  | (10,938) |  | 2001 | 40 years
Fresenius - Duluth, MN |  | 841 |  | 50 |  | 1,520 |  | 2 |  | 50 |  | 1,522 |  | 1,572 |  | (268) |  | 2004 | 40 years

2011 Annual Report F-38

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  | Initial Cost to Company |  | Gross amount at which carried at close of period |  |  | Life on which depreciation in latest income statement is computed
Description | Encumbrances(a) | Land | Buildings & Improvements | Costs capitalized subsequent to acquisition | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Construction or Acquisition
Commercial Medical - continued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Garden View - St. Paul, MN | $ | 2,270 | $ | 0 | $ | 7,408 | $ | 484 | $ | 0 | $ | 7,892 | $ | 7,892 | $ | (1,814) |  | 2002 | 40 years
Gateway Clinic - Sandstone, MN |  | 1,076 |  | 66 |  | 1,699 |  | 1 |  | 66 |  | 1,700 |  | 1,766 |  | (299) |  | 2004 | 40 years
Healtheast St John & Woodwinds - Maplewood & Woodbury, MN |  | 12,678 |  | 3,239 |  | 18,362 |  | 0 |  | 3,239 |  | 18,362 |  | 21,601 |  | (5,030) |  | 2000 | 40 years
High Pointe Health Campus - Lake Elmo, MN |  | 2,243 |  | 1,305 |  | 10,528 |  | 1,378 |  | 1,322 |  | 11,889 |  | 13,211 |  | (2,023) |  | 2004 | 40 years
Laramie 1072 N 22nd Street (Spring Wind) - Laramie, WY(1) |  | 0 |  | 406 |  | 6,634 |  | (2) |  | 406 |  | 6,632 |  | 7,038 |  | (228) |  | 2009 | 40 years
Mariner Clinic - Superior, WI |  | 2,354 |  | 0 |  | 3,781 |  | 21 |  | 20 |  | 3,782 |  | 3,802 |  | (669) |  | 2004 | 40 years
Minneapolis 701 25th Avenue Medical - Minneapolis, MN |  | 6,580 |  | 0 |  | 7,873 |  | 0 |  | 0 |  | 7,873 |  | 7,873 |  | (615) |  | 2008 | 40 years
Missoula 3050 Great Northern - Missoula, MT |  | 2,092 |  | 640 |  | 1,331 |  | 0 |  | 640 |  | 1,331 |  | 1,971 |  | (26) |  | 2010 | 40 years
Nebraska Orthopedic Hospital - Omaha, NE |  | 12,780 |  | 0 |  | 20,272 |  | 1,526 |  | 0 |  | 21,798 |  | 21,798 |  | (3,588) |  | 2004 | 40 years
Park Dental - Brooklyn Center, MN |  | 940 |  | 185 |  | 2,767 |  | 0 |  | 185 |  | 2,767 |  | 2,952 |  | (597) |  | 2002 | 40 years
Pavilion I - Duluth, MN |  | 6,203 |  | 1,245 |  | 8,898 |  | 31 |  | 1,245 |  | 8,929 |  | 10,174 |  | (1,541) |  | 2004 | 40 years
Pavilion II - Duluth, MN |  | 11,414 |  | 2,715 |  | 14,673 |  | 1,939 |  | 2,717 |  | 16,610 |  | 19,327 |  | (3,691) |  | 2004 | 40 years
Ritchie Medical Plaza - St Paul, MN |  | 6,898 |  | 1,615 |  | 7,851 |  | 943 |  | 1,647 |  | 8,762 |  | 10,409 |  | (1,306) |  | 2005 | 40 years
Sartell 2000 23rd Street South - Sartell, MN |  | 4,684 |  | 0 |  | 11,781 |  | 912 |  | 0 |  | 12,693 |  | 12,693 |  | (2,810) |  | 2002 | 40 years
St Michael Clinic - St Michael, MN |  | 1,996 |  | 328 |  | 2,259 |  | 264 |  | 328 |  | 2,523 |  | 2,851 |  | (257) |  | 2007 | 40 years
Stevens Point - Stevens Point, WI |  | 10,170 |  | 442 |  | 3,888 |  | 10,495 |  | 442 |  | 14,383 |  | 14,825 |  | (1,618) |  | 2006 | 40 years
Wells Clinic - Hibbing, MN |  | 1,642 |  | 162 |  | 2,497 |  | 1 |  | 162 |  | 2,498 |  | 2,660 |  | (439) |  | 2004 | 40 years
Total Commercial Medical | $ | 262,348 | $ | 29,063 | $ | 371,788 | $ | 46,980 | $ | 29,437 |  | 418,394 | $ | 447,831 | $ | (65,367) |  |  |
Commercial Industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
API Building - Duluth, MN | $ | 934 | $ | 115 | $ | 1,605 | $ | 3 | $ | 115 | $ | 1,608 | $ | 1,723 | $ | (283) |  | 2004 | 40 years
Bloomington 2000 W 94th Street - Bloomington, MN |  | 3,890 |  | 2,133 |  | 4,097 |  | 993 |  | 2,133 |  | 5,090 |  | 7,223 |  | (533) |  | 2006 | 40 years
Bodycote Industrial Building - Eden Prairie, MN |  | 1,186 |  | 198 |  | 1,154 |  | 800 |  | 198 |  | 1,954 |  | 2,152 |  | (760) |  | 1992 | 40 years
Brooklyn Park 7401 Boone Avenue - Brooklyn Park, MN |  | 6,571 |  | 1,368 |  | 11,643 |  | 1,780 |  | 1,368 |  | 13,423 |  | 14,791 |  | (2,861) |  | 2007 | 40 years
Cedar Lake Business Center - St. Louis Park, MN |  | 2,389 |  | 895 |  | 2,810 |  | 50 |  | 895 |  | 2,860 |  | 3,755 |  | (285) |  | 2009 | 40 years
Clive 2075 NW 94th Street - Clive, IA |  | 2,250 |  | 408 |  | 2,611 |  | 48 |  | 408 |  | 2,659 |  | 3,067 |  | (113) |  | 2002 | 40 years
Dixon Avenue Industrial Park - Des Moines, IA |  | 7,296 |  | 1,439 |  | 10,758 |  | 1,102 |  | 1,439 |  | 11,860 |  | 13,299 |  | (2,823) |  | 2008 | 40 years
Eagan 2785 & 2795 Highway 55 - Eagan, MN |  | 3,624 |  | 3,058 |  | 2,570 |  | 0 |  | 3,058 |  | 2,570 |  | 5,628 |  | (208) |  | 1999 | 40 years
Fargo 1320 45th Street N - Fargo, ND(1) |  | 0 |  | 395 |  | 3,518 |  | 246 |  | 395 |  | 3,764 |  | 4,159 |  | (78) |  | 2010 | 40 years
Lexington Commerce Center - Eagan, MN |  | 2,447 |  | 453 |  | 4,352 |  | 1,833 |  | 480 |  | 6,158 |  | 6,638 |  | (1,993) |  | 2004 | 40 years
Lighthouse - Duluth, MN |  | 981 |  | 90 |  | 1,788 |  | 7 |  | 90 |  | 1,795 |  | 1,885 |  | (318) |  | 2002 | 40 years
Metal Improvement Company - New Brighton, MN |  | 1,557 |  | 240 |  | 2,189 |  | 78 |  | 240 |  | 2,267 |  | 2,507 |  | (526) |  | 2009 | 40 years

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  | Initial Cost to Company |  | Gross amount at which carried at close of period |  |  | Life on which depreciation in latest income statement is computed
Description | Encumbrances(a) | Land | Buildings & Improvements | Costs capitalized subsequent to acquisition | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Construction or Acquisition
Commercial Industrial - continued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minnetonka 13600 County Road 62 - Minnetonka, MN | $ | 2,412 | $ | 809 | $ | 434 | $ | 2,459 | $ | 809 | $ | 2,893 | $ | 3,702 | $ | (163) |  | 2006 | 40 years
Roseville 2929 Long Lake Road - Roseville, MN |  | 5,721 |  | 1,966 |  | 7,272 |  | 1,483 |  | 1,980 |  | 8,741 |  | 10,721 |  | (985) |  | 1995 | 40 years
Stone Container - Fargo, ND |  | 2,334 |  | 440 |  | 6,597 |  | 104 |  | 440 |  | 6,701 |  | 7,141 |  | (2,273) |  | 2001 | 40 years
Stone Container - Roseville, MN |  | 3,743 |  | 810 |  | 7,440 |  | 32 |  | 810 |  | 7,472 |  | 8,282 |  | (1,744) |  | 2007 | 40 years
Urbandale 3900 106th Street - Urbandale, IA |  | 10,800 |  | 3,680 |  | 10,089 |  | 493 |  | 3,721 |  | 10,541 |  | 14,262 |  | (1,106) |  | 2000 | 40 years
Winsted Industrial Building - Winsted, MN |  | 411 |  | 100 |  | 901 |  | 48 |  | 100 |  | 949 |  | 1,049 |  | (282) |  | 2001 | 40 years
Woodbury 1865 Woodlane - Woodbury, MN |  | 2,810 |  | 1,108 |  | 2,628 |  | 1,882 |  | 1,121 |  | 4,497 |  | 5,618 |  | (379) |  | 2007 | 40 years
Total Commercial Industrial | $ | 61,356 | $ | 19,705 | $ | 84,456 | $ | 13,441 | $ | 19,800 |  | 97,802 | $ | 117,602 | $ | (17,713) |  |  |
Commercial Retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
17 South Main - Minot, ND | $ | 0 | $ | 15 | $ | 75 | $ | 197 | $ | 17 | $ | 270 | $ | 287 | $ | (175) |  | 2000 | 40 years
Anoka Strip Center - Anoka, MN |  | 0 |  | 123 |  | 602 |  | 25 |  | 134 |  | 616 |  | 750 |  | (127) |  | 2003 | 40 years
Burnsville 1 Strip Center - Burnsville, MN |  | 461 |  | 208 |  | 773 |  | 208 |  | 208 |  | 981 |  | 1,189 |  | (200) |  | 2003 | 40 years
Burnsville 2 Strip Center - Burnsville, MN |  | 366 |  | 291 |  | 469 |  | 214 |  | 294 |  | 680 |  | 974 |  | (148) |  | 2003 | 40 years
Champlin South Pond - Champlin, MN |  | 1,729 |  | 842 |  | 2,703 |  | 48 |  | 866 |  | 2,727 |  | 3,593 |  | (502) |  | 2004 | 40 years
Chan West Village - Chanhassen, MN |  | 13,722 |  | 5,035 |  | 14,665 |  | 1,734 |  | 5,606 |  | 15,828 |  | 21,434 |  | (3,410) |  | 2003 | 40 years
Dakota West Plaza - Minot , ND |  | 379 |  | 92 |  | 493 |  | 28 |  | 106 |  | 507 |  | 613 |  | (66) |  | 2006 | 40 years
Duluth Denfeld Retail - Duluth, MN |  | 2,624 |  | 276 |  | 4,699 |  | 62 |  | 276 |  | 4,761 |  | 5,037 |  | (839) |  | 2004 | 40 years
Duluth NAPA - Duluth, MN |  | 794 |  | 130 |  | 1,800 |  | 4 |  | 131 |  | 1,803 |  | 1,934 |  | (317) |  | 2004 | 40 years
Eagan Community - Eagan, MN |  | 1,399 |  | 702 |  | 1,588 |  | 858 |  | 703 |  | 2,445 |  | 3,148 |  | (488) |  | 2003 | 40 years
East Grand Station - East Grand Forks, MN |  | 110 |  | 150 |  | 1,235 |  | 314 |  | 151 |  | 1,548 |  | 1,699 |  | (392) |  | 1999 | 40 years
Fargo Express Community - Fargo, ND |  | 1,041 |  | 374 |  | 1,420 |  | 126 |  | 386 |  | 1,534 |  | 1,920 |  | (298) |  | 2003-2005 | 40 years
Forest Lake Auto - Forest Lake, MN(1) |  | 0 |  | 50 |  | 446 |  | 13 |  | 50 |  | 459 |  | 509 |  | (97) |  | 2003 | 40 years
Forest Lake Westlake Center - Forest Lake, MN |  | 4,473 |  | 2,446 |  | 5,304 |  | 458 |  | 2,480 |  | 5,728 |  | 8,208 |  | (1,188) |  | 2003 | 40 years
Grand Forks Carmike - Grand Forks, ND |  | 1,753 |  | 184 |  | 2,360 |  | 2 |  | 184 |  | 2,362 |  | 2,546 |  | (974) |  | 1994 | 40 years
Grand Forks Medpark Mall - Grand Forks, ND |  | 3,132 |  | 681 |  | 4,808 |  | 218 |  | 722 |  | 4,985 |  | 5,707 |  | (1,416) |  | 2000 | 40 years
Jamestown Buffalo Mall - Jamestown, ND(2) |  | 1,058 |  | 566 |  | 3,209 |  | 2,457 |  | 871 |  | 5,361 |  | 6,232 |  | (997) |  | 2003 | 40 years
Jamestown Business Center - Jamestown, ND |  | 590 |  | 297 |  | 1,023 |  | 1,312 |  | 333 |  | 2,299 |  | 2,632 |  | (616) |  | 2003 | 40 years
Kalispell Retail Center - Kalispell, MT |  | 1,419 |  | 250 |  | 2,250 |  | 972 |  | 253 |  | 3,219 |  | 3,472 |  | (603) |  | 2003 | 40 years
Kentwood Thomasville Furniture - Kentwood, MI |  | 0 |  | 225 |  | 1,889 |  | (698) |  | 225 |  | 1,191 |  | 1,416 |  | (647) |  | 1996 | 40 years
Lakeville Strip Center - Lakeville, MN |  | 1,036 |  | 46 |  | 1,142 |  | 827 |  | 94 |  | 1,921 |  | 2,015 |  | (490) |  | 2003 | 40 years
Livingston Pamida - Livingston, MT |  | 1,195 |  | 227 |  | 1,573 |  | 0 |  | 227 |  | 1,573 |  | 1,800 |  | (323) |  | 2003 | 40 years
Minot 1400 31st Ave - Minot, ND |  | 0 |  | 1,026 |  | 6,143 |  | 275 |  | 1,026 |  | 6,418 |  | 7,444 |  | (58) |  | 2010 | 40 years
Minot Arrowhead - Minot, ND |  | 2,356 |  | 100 |  | 1,064 |  | 6,015 |  | 716 |  | 6,463 |  | 7,179 |  | (2,464) |  | 1973 | 15 1/2-40 years
Minot Plaza - Minot, ND |  | 828 |  | 50 |  | 453 |  | 129 |  | 80 |  | 552 |  | 632 |  | (260) |  | 1993 | 40 years
Monticello C Store - Monticello, MN(1) |  | 0 |  | 65 |  | 770 |  | 37 |  | 97 |  | 775 |  | 872 |  | (165) |  | 2003 | 40 years

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  | Initial Cost to Company |  | Gross amount at which carried at close of period |  |  |
Description | Encumbrances(a) | Land | Buildings & Improvements | Costs capitalized subsequent to acquisition | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Construction or Acquisition | Life on which depreciation in latest income statement is computed
Commercial Retail - continued |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Omaha Barnes & Noble - Omaha, NE | $ | 2,692 | $ | 600 | $ | 3,099 | $ | 0 | $ | 600 | $ | 3,099 | $ | 3,699 | $ | (1,201) |  | 1995 | 40 years
Pine City C-Store - Pine City, MN |  | 310 |  | 83 |  | 357 |  | 12 |  | 83 |  | 369 |  | 452 |  | (74) |  | 2003 | 40 years
Pine City Evergreen Square - Pine City, MN |  | 1,906 |  | 154 |  | 2,646 |  | 582 |  | 385 |  | 2,997 |  | 3,382 |  | (693) |  | 2003 | 40 years
Rochester Maplewood Square - Rochester, MN(1) |  | 0 |  | 3,275 |  | 8,610 |  | 876 |  | 3,652 |  | 9,109 |  | 12,761 |  | (2,641) |  | 1999 | 40 years
St. Cloud Westgate - St. Cloud, MN |  | 3,373 |  | 1,219 |  | 5,535 |  | 632 |  | 1,242 |  | 6,144 |  | 7,386 |  | (1,013) |  | 2004 | 40 years
Weston Retail - Weston, WI |  | 0 |  | 79 |  | 1,575 |  | 27 |  | 80 |  | 1,601 |  | 1,681 |  | (328) |  | 2003 | 40 years
Weston Walgreens - Weston, WI |  | 3,200 |  | 66 |  | 1,718 |  | 672 |  | 67 |  | 2,389 |  | 2,456 |  | (294) |  | 2006 | 40 years
Total Commercial Retail | $ | 51,946 | $ | 19,927 | $ | 86,496 | $ | 18,636 | $ | 22,345 |  | 102,714 | $ | 125,059 | $ | (23,504) |  |  |
Subtotal | $ | 991,582 | $ | 174,256 | $ | 1,359,138 | $ | 237,404 | $ | 188,106 | $ | 1,582,692 | $ | 1,770,798 | $ | (328,952) |  |  |

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

|  | Initial Cost to Company |  | Gross amount at which carried at close of period |  |  |
Description | Encumbrances(a) | Land | Buildings & Improvements | Costs capitalized subsequent to acquisition | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Construction or Acquisition | Life on which depreciation in latest income statement is computed
Unimproved Land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bismarck 2130 S 12th St - Bismarck, ND | $ | 0 | $ | 576 | $ | 0 | $ | 13 | $ | 589 | $ | 0 | $ | 589 | $ | 0 |  | 2008 |
Bismarck 700 E Main - Bismarck, ND |  | 0 |  | 314 |  | 0 |  | 556 |  | 870 |  | 0 |  | 870 |  | 0 |  | 2008 |
Eagan Unimproved Land - Eagan, MN |  | 0 |  | 423 |  | 0 |  | 0 |  | 423 |  | 0 |  | 423 |  | 0 |  | 2006 |
Georgetown Square Unimproved Land - Grand Chute, WI |  | 2,221 |  | 1,860 |  | 0 |  | 0 |  | 1,860 |  | 0 |  | 1,860 |  | 0 |  | 2006 |
IRET Corporate Plaza Retention Pond - Minot, ND |  | 0 |  | 75 |  | 0 |  | 87 |  | 162 |  | 0 |  | 162 |  | 0 |  | 2009 |
Kalispell Unimproved Land - Kalispell, MT |  | 0 |  | 1,400 |  | 0 |  | 23 |  | 1,411 |  | 12 |  | 1,423 |  | 0 |  | 2003 |
Monticello Unimproved Land - Monticello, MN |  | 0 |  | 115 |  | 0 |  | 2 |  | 117 |  | 0 |  | 117 |  | 0 |  | 2006 |
River Falls Unimproved Land - River Falls, WI |  | 0 |  | 176 |  | 0 |  | 5 |  | 179 |  | 2 |  | 181 |  | 0 |  | 2003 |
Urbandale Unimproved Land - Urbandale, IA |  | 0 |  | 5 |  | 0 |  | 108 |  | 113 |  | 0 |  | 113 |  | 0 |  | 2009 |
Weston Unimproved Land - Weston, WI |  | 0 |  | 812 |  | 0 |  | 0 |  | 812 |  | 0 |  | 812 |  | 0 |  | 2006 |
Total Unimproved Land | $ | 2,221 | $ | 5,756 | $ | 0 | $ | 794 | $ | 6,536 | $ | 14 | $ | 6,550 | $ | 0 |  |  |
Development in Progress |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1st Avenue Building - Minot, ND | $ | 0 | $ | 0 | $ | 0 | $ | 280 | $ | 0 | $ | 280 | $ | 280 | $ | 0 |  | 1981 |
Jamestown Buffalo Mall Theater - Jamestown, ND |  | 0 |  | 0 |  | 1,436 |  | 97 |  | 0 |  | 1,533 |  | 1,533 |  | 0 |  | 2003 |
Georgetown Square Development - Grand Chute, WI |  | 0 |  | 240 |  | 1,708 |  | (173) |  | 242 |  | 1,533 |  | 1,775 |  | 0 |  | 2006 |
IRET Corporate Plaza 2 - Minot, ND(2) |  | 0 |  | 568 |  | 0 |  | 4,183 |  | 568 |  | 4,183 |  | 4,751 |  | 0 |  | 2009 |
Quarry Ridge 2 - Rochester, MN |  | 0 |  | 942 |  | 412 |  | 0 |  | 942 |  | 412 |  | 1,354 |  | 0 |  | 2006 |
Total Development in Progress | $ | 0 | $ | 1,750 | $ | 3,556 | $ | 4,387 | $ | 1,752 | $ | 7,941 | $ | 9,693 | $ | 0 |  |  |
Total | $ | 993,803 | $ | 181,762 | $ | 1,362,694 | $ | 242,585 | $ | 196,394 | $ | 1,590,647 | $ | 1,787,041 | $ | (328,952) |  |  |

(a) | Amounts in this column are the mortgages payable balances as of April 30, 2011. These amounts do not include amounts owing under the Company’s multi-bank line of credit or under the Company’s two loans financed with Recovery Zone Facility Bonds.

(1) | As of April 30, 2011, this property was included in the collateral pool securing the Company’s $50.0 million multi-bank line of credit. The Company may add and remove eligible properties from the collateral pool if certain minimum collateral requirements are satisfied. Advances under the facility may not exceed 60% of the value of properties provided as security.

(2) | This property is collateral for a loan to the Company financed by Recovery Zone Facility Bonds.

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
April 30, 2011
Schedule III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Reconciliations of total real estate carrying value for the three years ended April 30, 2011, 2010, and 2009 are as follows:

|  | (in thousands) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Balance at beginning of year |  | $ | 1,800,519 |  |  | $ | 1,729,585 |  |  | $ | 1,648,259 |
Additions during year |  |  |  |  |  |  |  |  |  |  |  |
Multi-Family Residential |  |  | 4,210 |  |  |  | 4,270 |  |  |  | 23,215 |
Commercial Office |  |  | 6,836 |  |  |  | 2,096 |  |  |  | 8,573 |
Commercial Medical |  |  | 19,249 |  |  |  | 38,125 |  |  |  | 19,084 |
Commercial Industrial |  |  | 3,914 |  |  |  | 3,066 |  |  |  | 4,337 |
Commercial Retail |  |  | 7,169 |  |  |  | 0 |  |  |  | 0 |
Improvements and Other |  |  | 23,183 |  |  |  | 29,343 |  |  |  | 27,971 |
|  |  | 1,865,080 |  |  |  | 1,806,485 |  |  |  | 1,731,439 |
Deductions during year |  |  |  |  |  |  |  |  |  |  |  |
Cost of real estate sold |  |  | (86,994 | ) |  |  | (1,217 | ) |  |  | (49 | )
Impairment charge |  |  | 0 |  |  |  | (1,678 | ) |  |  | (338 | )
Other(A) |  |  | (7,288 | ) |  |  | (3,071 | ) |  |  | (1,467 | )
Balance at close of year(B) |  | $ | 1,770,798 |  |  | $ | 1,800,519 |  |  | $ | 1,729,585 |

Reconciliations of accumulated depreciation/amortization for the three years ended April 30, 2011, 2010, and 2009, are as follows:

|  | (in thousands) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Balance at beginning of year |  | $ | 308,626 |  |  | $ | 262,871 |  |  | $ | 219,379 |
Additions during year |  |  |  |  |  |  |  |  |  |  |  |
Provisions for depreciation |  |  | 49,375 |  |  |  | 48,152 |  |  |  | 44,227 |
Deductions during year |  |  |  |  |  |  |  |  |  |  |  |
Accumulated depreciation on real estate sold |  |  | (25,366 | ) |  |  | (737 | ) |  |  | (36 | )
Other(C) |  |  | (3,683 | ) |  |  | (1,660 | ) |  |  | (699 | )
Balance at close of year |  | $ | 328,952 |  |  | $ | 308,626 |  |  | $ | 262,871 |

(A) | Consists of miscellaneous disposed assets and assets moved to Development in Progress.

(B) | The net basis of the Company’s real estate investments for Federal Income Tax purposes is approximately $1.2 billion.

(C) | Consists of miscellaneous disposed assets.

2011 Annual Report F-43

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2011
Schedule IV
INVESTMENTS IN MORTGAGE LOANS ON REAL ESTATE

|  |  |  |  |  | (in thousands) |
|  | Interest Rate |  | Final Maturity Date | Payment Terms | Prior Liens |  | Face Amt. of Mortgages |  |  | Carrying Amt. of Mortgages |  | Prin. Amt of Loans Subject to Delinquent Prin. or Int. |
First Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liberty Holdings, LLC |  |  | 7.00 | % | 11/01/12 | Monthly/ Balloon |  |  | 0 |  |  |  | 167 |  |  |  | 159 |  |  |  | 0 |
|  |  |  |  |  |  |  | $ | 0 |  |  | $ | 167 |  |  | $ | 159 |  |  | $ | 0 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for Loan Losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (3 | ) |  |  |  |
|  |  | $ | 156 |  |  |  |  |

|  | (in thousands) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
MORTGAGE LOANS RECEIVABLE, BEGINNING OF YEAR |  | $ | 158 |  |  | $ | 160 |  |  | $ | 541 |
New participations in and advances on mortgage loans |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 158 |  |  | $ | 160 |  |  | $ | 541 |
Collections |  |  | (2 | ) |  |  | (2 | ) |  |  | (381 | )
Transferred to other assets |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
MORTGAGE LOANS RECEIVABLE, END OF YEAR |  | $ | 156 |  |  | $ | 158 |  |  | $ | 160 |

2011 Annual Report F-44