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ACQUISITIONS, DEVELOPMENTS PLACED IN SERVICE AND DISPOSITIONS | 3 Months Ended
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Jul. 31, 2015
ACQUISITIONS, DEVELOPMENTS PLACED IN SERVICE AND DISPOSITIONS [Abstract] |
ACQUISITIONS, DEVELOPMENTS PLACED IN SERVICE AND DISPOSITIONS | NOTE 8 • ACQUISITIONS, DEVELOPMENTS PLACED IN SERVICE AND DISPOSITIONS PROPERTY ACQUISITIONS The Company added no new real estate properties to its portfolio through property acquisitions during the three months ended July 31, 2015, compared to $26.6 million in the three months ended July 31, 2014. The Company expensed approximately $75,000 of transaction costs related to the acquisitions in the three months ended July 31, 2014. The Company’s acquisitions during the three months ended January 31, 2014 are detailed below. Three Months Ended July 31, 2014
|  |  |  |  | (in thousands) |
|  |  |  |  | Total |  |  | Form of Consideration |  |  | Investment Allocation |
Acquisitions |  | Date Acquired |  |  | Acquisition Cost |  |  | Cash |  |  | Other(1) |  |  | Land |  |  | Building |  |  | Intangible Assets |
Multi-Family Residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
152 unit - Homestead Garden - Rapid City, SD(2) |  |  | 2014-06-02 |  |  | $ | 15,000 |  |  | $ | 5,092 |  |  | $ | 9,908 |  |  | $ | 655 |  |  | $ | 14,139 |  |  | $ | 206 |
52 unit - Silver Springs - Rapid City, SD |  |  | 2014-06-02 |  |  |  | 3,280 |  |  |  | 1,019 |  |  |  | 2,261 |  |  |  | 215 |  |  |  | 3,006 |  |  |  | 59 |
|  |  |  |  |  |  | 18,280 |  |  |  | 6,111 |  |  |  | 12,169 |  |  |  | 870 |  |  |  | 17,145 |  |  |  | 265 |
Unimproved Land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Creekside Crossing - Bismarck, ND |  |  | 2014-05-22 |  |  |  | 4,269 |  |  |  | 4,269 |  |  |  | 0 |  |  |  | 4,269 |  |  |  | 0 |  |  |  | 0 |
PrairieCare Medical - Brooklyn Park, MN |  |  | 2014-06-05 |  |  |  | 2,616 |  |  |  | 2,616 |  |  |  | 0 |  |  |  | 2,616 |  |  |  | 0 |  |  |  | 0 |
71 France Phase I - Edina, MN(3) |  |  | 2014-06-12 |  |  |  | 1,413 |  |  |  | 0 |  |  |  | 1,413 |  |  |  | 1,413 |  |  |  | 0 |  |  |  | 0 |
|  |  |  |  |  |  | 8,298 |  |  |  | 6,885 |  |  |  | 1,413 |  |  |  | 8,298 |  |  |  | 0 |  |  |  | 0 |
Total Property Acquisitions |  |  |  |  |  | $ | 26,578 |  |  | $ | 12,996 |  |  | $ | 13,582 |  |  | $ | 9,168 |  |  | $ | 17,145 |  |  | $ | 265 |
(1) | Consists of assumed debt (Homestead Garden I: $9.9 million, Silver Springs: $2.3 million) and value of land contributed by the joint venture partner (71 France: $1.4 million).
(2) | At acquisition, the Company adjusted the assumed debt to fair value and recognized approximately $852,000 of goodwill.
(3) | Land was contributed to a joint venture in which the Company has an approximately 52.6% interest. The joint venture is consolidated in IRET’s financial statements.
There were no acquisitions in the three months ended July 31, 2015. Acquisitions in the three months ended July 31, 2014 are immaterial to our real estate portfolio both individually and in the aggregate, and consequently no proforma information is presented. The results of operations from acquired properties are included in the Condensed Consolidated Statements of Operations as of their acquisition date. The revenue and net income of our acquisitions in the three months ended July 31, 2014, respectively, (excluding development projects placed in service) are detailed below.
|  | (in thousands) |
Three Months Ended July 31, |  | 2014 |
Total revenue |  | $ | 362 |
Net income |  |  | 20 |
DEVELOPMENT PROJECTS PLACED IN SERVICE The Operating Partnership placed $105.8 million and $10.3 million of development projects in service during the three months ended July 31, 2015 and 2014, respectively, as detailed below. Three Months Ended July 31, 2015
|  |  |  |  | (in thousands) |
Development Projects Placed in Service |  | Date Placed in Service |  |  | Land |  |  | Building |  |  | Development Cost |
Multi-Family Residential |  |  |  |  |  |  |  |  |  |  |  |
72 unit – Chateau II - Minot, ND(1) |  |  | 2015-06-01 |  |  | $ | 240 |  |  | $ | 14,360 |  |  | $ | 14,600 |
288 unit – Renaissance Heights - Williston, ND(2) |  |  | 2015-07-27 |  |  |  | 3,080 |  |  |  | 59,259 |  |  |  | 62,339 |
|  |  |  |  |  |  | 3,320 |  |  |  | 73,619 |  |  |  | 76,939 |
Healthcare |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
57,624 sq ft Edina 6565 France SMC III - Edina, MN(3) |  |  | 2015-06-01 |  |  |  | 0 |  |  |  | 28,816 |  |  |  | 28,816 |
Total Development Projects Placed in Service |  |  |  |  |  | $ | 3,320 |  |  | $ | 102,435 |  |  | $ | 105,755 |
(1) | Costs paid in prior fiscal years totaled $12.3 million. Additional costs paid in fiscal year 2016 totaled $2.3 million, for a total project cost at July 31, 2015 of $14.6 million.
(2) | Costs paid in prior fiscal years totaled $57.7 million. Additional costs paid in fiscal year 2016 totaled $4.6 million, for a total project cost at July 31, 2015 of $62.3 million. The project is owned by a joint venture entity in which the Company has an approximately 70.0% interest. The joint venture is consolidated in IRET’s financial statements.
(3) | Costs paid in prior fiscal years totaled $20.8 million. Additional costs paid in fiscal year 2016 totaled $8.0 million, for a total project cost at July 31, 2015 of $28.8 million.
Three Months Ended July 31, 2014
|  |  |  |  | (in thousands) |
Development Projects Placed in Service |  | Date Placed in Service |  |  | Land |  |  | Building |  |  | Development Cost |
Multi-Family Residential |  |  |  |  |  |  |  |  |  |  |  |
44 unit - Dakota Commons - Williston, ND(1) |  |  | 2014-07-15 |  |  | $ | 823 |  |  | $ | 9,442 |  |  | $ | 10,265 |
Total Development Projects Placed in Service |  |  |  |  |  | $ | 823 |  |  | $ | 9,442 |  |  | $ | 10,265 |
(1) | Costs paid in prior fiscal years totaled $8.1 million. Additional costs paid in fiscal year 2015 totaled $2.2 million for a total project cost at July 31, 2014 of $10.3 million.
PROPERTY DISPOSITIONS During the first quarter of fiscal year 2016, the Company sold one office property for a total sales price of $7.0 million. During the first quarter of fiscal year 2015, the Company sold one office property and one industrial property for a total sales price of $6.7 million. The Company also demolished a building at a retail property in Weston, Wisconsin. The following table details the Company’s dispositions during the three months ended July 31, 2015 and 2014: Three Months Ended July 31, 2015
|  |  |  |  | (in thousands) |
Dispositions |  | Date Disposed |  |  | Sales Price |  |  | Book Value and Sales Cost |  |  | Gain/(Loss) |
Other |  |  |  |  |  |  |  |  |  |  |  |
117,144 sq ft Thresher Square - Minneapolis, MN |  |  | 2015-05-18 |  |  | $ | 7,000 |  |  | $ | 7,175 |  |  | $ | (175 | )
Total Property Dispositions |  |  |  |  |  | $ | 7,000 |  |  | $ | 7,175 |  |  | $ | (175 | )
Three Months Ended July 31, 2014
|  |  |  |  | (in thousands) |
Dispositions |  | Date Disposed |  |  | Sales Price |  |  | Book Value and Sales Cost |  |  | Gain/(Loss) |
Industrial |  |  |  |  |  |  |  |  |  |  |  |
198,600 sq ft Eagan 2785 & 2795 – Eagan, MN |  |  | 2014-07-15 |  |  | $ | 3,600 |  |  | $ | 5,393 |  |  | $ | (1,793 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
73,338 sq ft Dewey Hill - Edina, MN |  |  | 2014-05-19 |  |  |  | 3,100 |  |  |  | 3,124 |  |  |  | (24 | )
25,644 sq ft Weston Retail – Weston, WI |  |  | 2014-07-28 |  |  |  | n/a |  |  |  | 1,176 |  |  |  | (1,176 | )
|  |  |  |  |  |  | 3,100 |  |  |  | 4,300 |  |  |  | (1,200 | )
Total Property Dispositions |  |  |  |  |  | $ | 6,700 |  |  | $ | 9,693 |  |  | $ | (2,993 | )

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