EX-99.2 3 iret01312018exhibit992.htm EXHIBIT 99.2
Exhibit 99.2

Supplemental Financial and Operating Data
Table of Contents
January 31, 2018

| Page
Company Background | S-2
Key Financial Data |
Condensed Consolidated Balance Sheets | S-4
Condensed Consolidated Statements of Operations | S-5
Funds From Operations | S-6
Adjusted EBITDA | S-7
Debt and Capital Analysis |
Debt Analysis | S-8
Debt Detail | S-9
Capital Analysis | S-10
Portfolio Analysis |
Net Operating Income Detail | S-11
Same-Store Comparison | S-15
Portfolio Summary | S-16
Same-Store Capital Expenditures | S-17
Growth Analysis |
Fiscal 2018 Acquisition Summary | S-18
Definitions | S-19

| S-1 |

Company Background
Third Quarter Fiscal 2018
We are a multifamily real estate investment trust (REIT) focused on the ownership, management, acquisition, redevelopment, and development of multifamily apartment communities. As of January 31, 2018, we owned interests in 89 multifamily properties consisting of 13,786 apartment homes. IRET's common shares and Series C preferred shares are publicly traded on the New York Stock Exchange (NYSE symbols: IRET and IRET PRC, respectively).
Company Snapshot
(as of January 31, 2018)

Company Headquarters | Minot, North Dakota
Fiscal Year-End | April 30
Reportable Segments | Multifamily
Total Multifamily Properties | 89
Total Units | 13,786
Common Shares Outstanding (thousands) | 120,035
Limited Partnership Units Outstanding (thousands) | 14,168
Common Share Distribution – Quarter/Annualized | $0.07/$0.28
Annualized Dividend Yield | 4.9%
Total Capitalization (see p. S-10 for details) | $1.6 billion

Investor Information
(as of March 12, 2018)
Board of Trustees

Jeffrey P. Caira | Trustee and Chair
Michael T. Dance | Trustee, Chair of Audit Committee
Mark O. Decker, Jr. | Trustee, President, Chief Executive Officer and Chief Investment Officer
Emily Nagle Green | Trustee
Linda J. Hall | Trustee, Chair of Compensation Committee
Terrance P. Maxwell | Trustee
Jeffrey L. Miller | Trustee, Chair of the Nominating and Governance Committee
John A. Schissel | Trustee, Chair of Capital Markets Committee
Mary J. Twinem | Trustee

Management

Mark O. Decker, Jr. | President, Chief Executive Officer, and Chief Investment Officer; Trustee
John A. Kirchmann | Executive Vice President and Chief Financial Officer
Anne Olson | Executive Vice President, General Counsel and Secretary
Andrew Martin | Executive Vice President – Property Operations
Nancy B. Andersen | Senior Vice President and Chief Accounting Officer
Matthew M. Volpano | Senior Vice President – Capital Markets

Corporate Headquarters: | Investor Relations Contact:
1400 31st Avenue SW, Suite 60 | Matthew Volpano
P.O. Box 1988 | 701-837-7104
Minot, ND 58702-1988 | IR@iret.com
Trading Symbol for Common Shares: IRET |
Trading Symbol for Series C Preferred Shares: IRET PRC |
Stock Exchange Listing: NYSE |

| S-2 |

Common Share Data (NYSE: IRET)

|  | 3rd Quarter |  | 2nd Quarter |  | 1st Quarter |  | 4th Quarter |  | 3rd Quarter
|  | Fiscal Year 2018 |  | Fiscal Year 2018 |  | Fiscal Year 2018 |  | Fiscal Year 2017 |  | Fiscal Year 2017
High Closing Price |  | $ | 6.06 |  |  | $ | 6.32 |  |  | $ | 6.72 |  |  | $ | 6.61 |  |  | $ | 7.20 |
Low Closing Price |  | $ | 5.52 |  |  | $ | 5.81 |  |  | $ | 5.64 |  |  | $ | 5.67 |  |  | $ | 5.81 |
Average Closing Price |  | $ | 5.80 |  |  | $ | 6.09 |  |  | $ | 6.07 |  |  | $ | 6.09 |  |  | $ | 6.65 |
Closing Price at end of quarter |  | $ | 5.67 |  |  | $ | 5.85 |  |  | $ | 6.22 |  |  | $ | 5.91 |  |  | $ | 6.44 |
Common Share Distributions – annualized |  | $ | 0.28 |  |  | $ | 0.28 |  |  | $ | 0.28 |  |  | $ | 0.28 |  |  | $ | 0.28 |
Closing Dividend Yield – annualized |  | 4.9 | % |  | 4.8 | % |  | 4.5 | % |  | 4.7 | % |  | 4.3 | %
Closing common shares outstanding (thousands) |  | $ | 120,035 |  |  | $ | 120,188 |  |  | $ | 120,587 |  |  | $ | 121,199 |  |  | $ | 121,889 |
Closing limited partnership units outstanding (thousands) |  | $ | 14,168 |  |  | $ | 14,618 |  |  | $ | 14,657 |  |  | $ | 15,617 |  |  | $ | 16,034 |
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands) |  | $ | 760,931 |  |  | $ | 788,615 |  |  | $ | 841,218 |  |  | $ | 808,583 |  |  | $ | 888,224 |

This Supplemental Operating and Financial Data contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, which may be identified by the use of words such as “expects,” “plans,” “estimates,” “anticipates,” “projects,” “intends,” “believes,” “outlook” and similar expressions that do not relate to historical matters, specifically including our future plan and anticipated operating results, are based on our expectations, forecasts and assumptions at the time of this earnings release. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in such forward-looking statements.
Such risks, uncertainties and other factors that might cause such differences include, but are not limited to: intentions and expectations regarding future distributions on common shares and units; changes in operating costs; fluctuations in interest rates; adverse capital and credit market conditions that might affect our access to various sources of capital and cost of capital; our ability to manage our current debt levels and repay or refinance our indebtedness upon maturity or other payment dates; our ability to maintain financial covenant compliance under our debt agreements; adequate insurance coverage; the effect of government regulation; delays or inability to obtain necessary governmental permits and authorizations; changes in general and local economic and real estate market conditions; changes in demand for our properties that may result in lower-than-expected occupancy and/or rental rates; ability to acquire quality properties in targeted markets; ability to successfully dispose of certain assets; competition for tenants from similar competing properties; ability to attract and retain skilled personnel; cyber-intrusion; delays in completing development, redevelopment and/or lease up of properties and increased costs; ability to maintain effective internal controls over financial reporting and disclosure controls and procedures; and those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including our Form 10-K for the fiscal year ended April 30, 2017 subsequent quarterly reports on Form 10-Q, and other public filings. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

| S-3 |

IRET
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)

|  | 1/31/2018 |  | 10/31/2017 |  | 7/31/2017 |  | 4/30/2017 |  | 1/31/2017
ASSETS |  |  |  |  |  |  |  |  |  |
Real estate investments |  |  |  |  |  |  |  |  |  |
Property owned |  | $ | 1,568,725 |  |  | $ | 1,510,890 |  |  | $ | 1,424,251 |  |  | $ | 1,358,529 |  |  | $ | 1,367,806 |
Less accumulated depreciation |  | (304,149 | ) |  | (292,976 | ) |  | (280,563 | ) |  | (255,599 | ) |  | (252,546 | )
|  | 1,264,576 |  |  | 1,217,914 |  |  | 1,143,688 |  |  | 1,102,930 |  |  | 1,115,260 |
Development in progress |  | — |  |  | — |  |  | — |  |  | — |  |  | 11,531 |
Unimproved land |  | 15,123 |  |  | 15,216 |  |  | 15,195 |  |  | 18,455 |  |  | 19,076 |
Mortgage loans receivable |  | 10,329 |  |  | 10,329 |  |  | — |  |  | — |  |  | — |
Total real estate investments |  | 1,290,028 |  |  | 1,243,459 |  |  | 1,158,883 |  |  | 1,121,385 |  |  | 1,145,867 |
Assets held for sale and assets of discontinued operations |  | — |  |  | 239,688 |  |  | 280,083 |  |  | 283,023 |  |  | 387,454 |
Cash and cash equivalents |  | 22,666 |  |  | 42,464 |  |  | 23,801 |  |  | 28,819 |  |  | 56,999 |
Restricted cash |  | 121,337 |  |  | 3,782 |  |  | 3,713 |  |  | 27,981 |  |  | 5,136 |
Other assets |  | 21,664 |  |  | 21,634 |  |  | 15,870 |  |  | 13,306 |  |  | 13,633 |
TOTAL ASSETS |  | $ | 1,455,695 |  |  | $ | 1,551,027 |  |  | $ | 1,482,350 |  |  | $ | 1,474,514 |  |  | $ | 1,609,089 |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND EQUITY |  |  |  |  |  |  |  |  |  |
LIABILITIES |  |  |  |  |  |  |  |  |  |
Liabilities held for sale and liabilities of discontinued operations |  | $ | — |  |  | $ | 95,193 |  |  | $ | 127,413 |  |  | $ | 130,904 |  |  | $ | 154,528 |
Accounts payable and accrued expenses |  | 35,792 |  |  | 32,581 |  |  | 34,248 |  |  | 35,566 |  |  | 38,115 |
Revolving line of credit |  | 67,000 |  |  | 247,500 |  |  | 125,900 |  |  | 57,050 |  |  | 157,000 |
Term loan payable, net of loan costs |  | 69,483 |  |  | — |  |  | — |  |  | — |  |  | — |
Mortgages payable, net of loan costs |  | 553,388 |  |  | 561,798 |  |  | 565,705 |  |  | 565,978 |  |  | 591,505 |
Construction debt |  | — |  |  | 21,649 |  |  | 20,134 |  |  | 41,741 |  |  | 39,442 |
TOTAL LIABILITIES |  | 725,663 |  |  | 958,721 |  |  | 873,400 |  |  | 831,239 |  |  | 980,590 |
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES |  | 6,644 |  |  | 6,812 |  |  | 7,010 |  |  | 7,181 |  |  | 7,300 |
EQUITY |  |  |  |  |  |  |  |  |  |
Series B Preferred Shares of Beneficial Interest |  | — |  |  | — |  |  | 111,357 |  |  | 111,357 |  |  | 111,357 |
Series C Preferred Shares of Beneficial Interest |  | 99,456 |  |  | 99,467 |  |  | — |  |  | — |  |  | — |
Common Shares of Beneficial Interest |  | 910,173 |  |  | 910,683 |  |  | 912,625 |  |  | 916,121 |  |  | 921,735 |
Accumulated distributions in excess of net income |  | (364,684 | ) |  | (490,612 | ) |  | (488,535 | ) |  | (466,541 | ) |  | (486,015 | )
Accumulated other comprehensive income |  | 359 |  |  | — |  |  | — |  |  | — |  |  | — |
Total shareholders’ equity |  | 645,304 |  |  | 519,538 |  |  | 535,447 |  |  | 560,937 |  |  | 547,077 |
Noncontrolling interests – Operating Partnership |  | 76,915 |  |  | 64,291 |  |  | 64,789 |  |  | 73,233 |  |  | 72,007 |
Noncontrolling interests – consolidated real estate entities |  | 1,169 |  |  | 1,665 |  |  | 1,704 |  |  | 1,924 |  |  | 2,115 |
Total equity |  | 723,388 |  |  | 585,494 |  |  | 601,940 |  |  | 636,094 |  |  | 621,199 |
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND EQUITY |  | $ | 1,455,695 |  |  | $ | 1,551,027 |  |  | $ | 1,482,350 |  |  | $ | 1,474,514 |  |  | $ | 1,609,089 |

| S-4 |

IRET
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share amounts)

|  | Nine Months Ended |  |  | Three Months Ended
OPERATING RESULTS |  | 1/31/2018 |  | 1/31/2017 |  |  | 1/31/2018 |  | 10/31/2017 |  | 7/31/2017 |  | 4/30/2017 |  | 1/31/2017
Real estate revenue |  | $ | 127,380 |  |  | $ | 118,707 |  |  |  | $ | 43,254 |  |  | $ | 42,557 |  |  | $ | 41,569 |  |  | $ | 43,569 |  |  | $ | 40,228 |
Real estate expenses |  | 60,890 |  |  | 53,570 |  |  |  | 20,035 |  |  | 20,896 |  |  | 19,959 |  |  | 18,388 |  |  | 18,619 |
Net operating income |  | 66,490 |  |  | 65,137 |  |  |  | 23,219 |  |  | 21,661 |  |  | 21,610 |  |  | 25,181 |  |  | 21,609 |
Depreciation/amortization |  | (60,998 | ) |  | (33,193 | ) |  |  | (18,390 | ) |  | (17,270 | ) |  | (25,338 | ) |  | (11,060 | ) |  | (10,787 | )
Impairment of real estate investments |  | (256 | ) |  | (54,153 | ) |  |  | — |  |  | — |  |  | (256 | ) |  | (2,875 | ) |  | — |
General and administrative expenses |  | (10,131 | ) |  | (11,195 | ) |  |  | (3,011 | ) |  | (3,118 | ) |  | (4,002 | ) |  | (4,728 | ) |  | (4,172 | )
Development pursuit and other write-offs |  | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (3,224 | ) |  | — |
Interest expense |  | (25,876 | ) |  | (26,033 | ) |  |  | (9,236 | ) |  | (8,509 | ) |  | (8,131 | ) |  | (8,281 | ) |  | (8,832 | )
Loss on extinguishment of debt |  | (818 | ) |  | (458 | ) |  |  | (285 | ) |  | (334 | ) |  | (199 | ) |  | (1,193 | ) |  | (458 | )
Interest and other income |  | 916 |  |  | 685 |  |  |  | 433 |  |  | 255 |  |  | 228 |  |  | 461 |  |  | 427 |
Loss before income on sale of real estate and other investments and income from discontinued operations |  | (30,673 | ) |  | (59,210 | ) |  |  | (7,270 | ) |  | (7,315 | ) |  | (16,088 | ) |  | (5,719 | ) |  | (2,213 | )
Income on sale of real estate and other investments |  | 17,835 |  |  | 11,292 |  |  |  | 12,387 |  |  | 5,324 |  |  | 124 |  |  | 7,409 |  |  | 2,437 |
(Loss) income from continuing operations |  | (12,838 | ) |  | (47,918 | ) |  |  | 5,117 |  |  | (1,991 | ) |  | (15,964 | ) |  | 1,690 |  |  | 224 |
Income from discontinued operations |  | 164,626 |  |  | 44,803 |  |  |  | 146,811 |  |  | 15,130 |  |  | 2,685 |  |  | 31,950 |  |  | 24,965 |
Net income (loss) |  | $ | 151,788 |  |  | $ | (3,115 | ) |  |  | $ | 151,928 |  |  | $ | 13,139 |  |  | $ | (13,279 | ) |  | $ | 33,640 |  |  | $ | 25,189 |
Net loss (income) attributable to noncontrolling interest – Operating Partnership |  | (15,365 | ) |  | (403 | ) |  |  | (16,236 | ) |  | (773 | ) |  | 1,644 |  |  | (3,656 | ) |  | (2,525 | )
Net loss attributable to noncontrolling interests – consolidated real estate entities |  | 1,239 |  |  | 16,585 |  |  |  | 413 |  |  | 455 |  |  | 371 |  |  | 296 |  |  | 446 |
Net income (loss) attributable to controlling interests |  | 137,662 |  |  | 13,067 |  |  |  | 136,105 |  |  | 12,821 |  |  | (11,264 | ) |  | 30,280 |  |  | 23,110 |
Dividends to preferred shareholders |  | (6,864 | ) |  | (8,260 | ) |  |  | (1,766 | ) |  | (2,812 | ) |  | (2,286 | ) |  | (2,286 | ) |  | (2,503 | )
Redemption of Preferred Shares |  | (3,657 | ) |  | (1,435 | ) |  |  | (8 | ) |  | (3,649 | ) |  | — |  |  | — |  |  | (1,435 | )
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |  | $ | 127,141 |  |  | $ | 3,372 |  |  |  | $ | 134,331 |  |  | $ | 6,360 |  |  | $ | (13,550 | ) |  | $ | 27,994 |  |  | $ | 19,172 |
Per Share Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(Loss) earnings per common share from continuing operations – basic & diluted |  | $ | (0.16 | ) |  | $ | (0.30 | ) |  |  | $ | 0.03 |  |  | $ | (0.06 | ) |  | $ | (0.13 | ) |  | $ | — |  |  | $ | (0.03 | )
Earnings per common share from discontinued operations – basic & diluted |  | 1.22 |  |  | 0.33 |  |  |  | 1.09 |  |  | 0.11 |  |  | 0.02 |  |  | 0.23 |  |  | 0.19 |
Net (loss) income per common share – basic & diluted |  | $ | 1.06 |  |  | $ | 0.03 |  |  |  | $ | 1.12 |  |  | $ | 0.05 |  |  | $ | (0.11 | ) |  | $ | 0.23 |  |  | $ | 0.16 |
Percentage of Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate expenses |  | 47.8 | % |  | 45.1 | % |  |  | 46.3 | % |  | 49.1 | % |  | 48.0 | % |  | 42.2 | % |  | 46.3 | %
Depreciation/amortization |  | 47.9 | % |  | 28.0 | % |  |  | 42.5 | % |  | 40.6 | % |  | 61.0 | % |  | 25.4 | % |  | 26.8 | %
General and administrative expenses |  | 8.0 | % |  | 9.4 | % |  |  | 7.0 | % |  | 7.3 | % |  | 9.6 | % |  | 10.9 | % |  | 10.4 | %
Interest |  | 20.3 | % |  | 21.9 | % |  |  | 21.4 | % |  | 20.0 | % |  | 19.6 | % |  | 19.0 | % |  | 22.0 | %
Income from discontinued operations |  | 129.2 | % |  | 37.7 | % |  |  | 339.4 | % |  | 35.6 | % |  | 6.5 | % |  | 73.3 | % |  | 62.1 | %
Net (loss) income |  | 119.2 | % |  | (2.6 | )% |  |  | 351.2 | % |  | 30.9 | % |  | (31.9 | )% |  | 77.2 | % |  | 62.6 | %

| S-5 |

IRET
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO
IRET TO FFO AND CORE FFO (unaudited)
(in thousands, except per share and unit amounts)

|  | Nine Months Ended |  |  | Three Months Ended
|  | 1/31/2018 |  | 1/31/2017 |  |  | 1/31/2018 |  | 10/31/2017 |  | 7/31/2017 |  | 4/30/2017 |  | 1/31/2017
Funds From Operations(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) attributable to controlling interests |  | $ | 137,662 |  |  | $ | 13,067 |  |  |  | $ | 136,105 |  |  | $ | 12,821 |  |  | $ | (11,264 | ) |  | $ | 30,280 |  |  | $ | 23,110 |
Less dividends to preferred shareholders |  | (6,864 | ) |  | (8,260 | ) |  |  | (1,766 | ) |  | (2,812 | ) |  | (2,286 | ) |  | (2,286 | ) |  | (2,503 | )
Less redemption of preferred shares |  | (3,657 | ) |  | (1,435 | ) |  |  | (8 | ) |  | (3,649 | ) |  | — |  |  | — |  |  | (1,435 | )
Net (loss) income available to common shareholders |  | 127,141 |  |  | 3,372 |  |  |  | 134,331 |  |  | 6,360 |  |  | (13,550 | ) |  | 27,994 |  |  | 19,172 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncontrolling interests – Operating Partnership |  | 15,365 |  |  | 403 |  |  |  | 16,236 |  |  | 773 |  |  | (1,644 | ) |  | 3,656 |  |  | 2,525 |
Depreciation and amortization of real property |  | 67,030 |  |  | 39,341 |  |  |  | 19,017 |  |  | 19,894 |  |  | 28,119 |  |  | 13,222 |  |  | 12,933 |
Impairment of real estate investments attributable to controlling interests |  | 256 |  |  | 39,190 |  |  |  | — |  |  | — |  |  | 256 |  |  | 2,875 |  |  | — |
Gain on depreciable property sales |  | (181,477 | ) |  | (37,330 | ) |  |  | (163,791 | ) |  | (17,562 | ) |  | (124 | ) |  | (37,517 | ) |  | (21,972 | )
FFO applicable to common shares and Units |  | $ | 28,315 |  |  | $ | 44,976 |  |  |  | $ | 5,793 |  |  | $ | 9,465 |  |  | $ | 13,057 |  |  | $ | 10,230 |  |  | $ | 12,658 |
FFO per share and unit – basic and diluted |  | $ | 0.21 |  |  | $ | 0.33 |  |  |  | $ | 0.04 |  |  | $ | 0.07 |  |  | $ | 0.10 |  |  | $ | 0.07 |  |  | $ | 0.09 |
Adjustments to Core FFO: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease termination fees |  | — |  |  | (7 | ) |  |  | — |  |  | — |  |  | — |  |  | (3,244 | ) |  | (7 | )
Loss on extinguishment of debt |  | 7,326 |  |  | 1,979 |  |  |  | 6,787 |  |  | 340 |  |  | 199 |  |  | 2,910 |  |  | 1,907 |
Redemption of Preferred Shares |  | 3,657 |  |  | 1,435 |  |  |  | 8 |  |  | 3,649 |  |  | — |  |  | — |  |  | 1,435 |
Severance and transitions costs |  | 650 |  |  | — |  |  |  | — |  |  | 186 |  |  | 464 |  |  | 2,612 |  |  | — |
Development pursuit and other write-offs |  | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | 3,224 |  |  | — |
Core FFO applicable to common shares and Units |  | $ | 39,948 |  |  | $ | 48,383 |  |  |  | $ | 12,588 |  |  | $ | 13,640 |  |  | $ | 13,720 |  |  | $ | 15,732 |  |  | $ | 15,993 |
Core FFO per share and unit – basic and diluted |  | $ | 0.30 |  |  | $ | 0.35 |  |  |  | $ | 0.09 |  |  | $ | 0.10 |  |  | $ | 0.10 |  |  | $ | 0.11 |  |  | $ | 0.12 |
Weighted average shares and units |  | 134,870 |  |  | 137,404 |  |  |  | 134,175 |  |  | 134,767 |  |  | 135,549 |  |  | 136,952 |  |  | 137,375 |

(1) | See Definitions on page S-19.

| S-6 |

IRET
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO
IRET TO ADJUSTED EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION, AND AMORTIZATION (ADJUSTED EBITDA) (unaudited)
(in thousands)

|  | Nine Months Ended |  |  | Three Months Ended
|  | 1/31/2018 |  | 1/31/2017 |  |  | 1/31/2018 |  | 10/31/2017 |  | 7/31/2017 |  | 4/30/2017 |  | 1/31/2017
Adjusted EBITDA(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) attributable to controlling interests |  | $ | 137,662 |  |  | $ | 13,067 |  |  |  | $ | 136,105 |  |  | $ | 12,821 |  |  | $ | (11,264 | ) |  | $ | 30,280 |  |  | $ | 23,110 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncontrolling interests – Operating Partnership |  | 15,365 |  |  | 403 |  |  |  | 16,236 |  |  | 773 |  |  | (1,644 | ) |  | 3,656 |  |  | 2,525 |
Income (loss) before noncontrolling interests – Operating Partnership |  | 153,027 |  |  | 13,470 |  |  |  | 152,341 |  |  | 13,594 |  |  | (12,908 | ) |  | 33,936 |  |  | 25,635 |
Add: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  | 28,795 |  |  | 35,639 |  |  |  | 9,569 |  |  | 9,523 |  |  | 9,703 |  |  | 10,303 |  |  | 11,880 |
Loss on extinguishment of debt |  | 7,326 |  |  | 1,979 |  |  |  | 6,787 |  |  | 340 |  |  | 199 |  |  | 2,910 |  |  | 1,907 |
Depreciation/amortization related to real estate investments |  | 67,292 |  |  | 39,494 |  |  |  | 19,100 |  |  | 19,977 |  |  | 28,215 |  |  | 13,280 |  |  | 12,983 |
Amortization related to real estate revenues(2) |  | — |  |  | 75 |  |  |  | — |  |  | — |  |  | — |  |  | 20 |  |  | 21 |
Impairment of real estate investments attributable to controlling interests |  | 256 |  |  | 39,190 |  |  |  | — |  |  | — |  |  | 256 |  |  | 2,875 |  |  | — |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  | (1,288 | ) |  | (1,988 | ) |  |  | (408 | ) |  | (316 | ) |  | (564 | ) |  | (557 | ) |  | (816 | )
Gain on sale of real estate and other investments |  | (181,477 | ) |  | (37,330 | ) |  |  | (163,791 | ) |  | (17,562 | ) |  | (124 | ) |  | (37,517 | ) |  | (21,972 | )
Adjusted EBITDA |  | $ | 73,931 |  |  | $ | 90,529 |  |  |  | $ | 23,598 |  |  | $ | 25,556 |  |  | $ | 24,777 |  |  | $ | 25,250 |  |  | $ | 29,638 |
Ratios |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Adjusted EBITDA(1)/Interest expense |  | 2.46 | x |  | 2.51 | x |  |  | 2.36 | x |  | 2.57 | x |  | 2.45 | x |  | 2.45 | x |  | 2.47 | x
Adjusted EBITDA(1)/Interest expense plus preferred distributions |  | 2.00 | x |  | 2.04 | x |  |  | 2.01 | x |  | 2.00 | x |  | 2.00 | x |  | 2.00 | x |  | 2.04 | x

(1) | See Definitions on page S-19.

(2) | Included in real estate revenue in the Statement of Operations.

| S-7 |

IRET
DEBT ANALYSIS
(in thousands)
Debt Maturity Schedule
Annual Expirations

|  | Future Maturities of Debt(1)
Fiscal Year |  | Fixed Debt |  | Variable Debt |  | Total Debt |  | Weighted Average(2) |  | % of Total Debt
2018 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | — | % |  | — | %
2019 |  | 14,540 |  |  | 28,503 |  |  | 43,043 |  |  | 4.07 | % |  | 6.2 | %
2020 |  | 87,272 |  |  | 31,798 |  |  | 119,070 |  |  | 5.65 | % |  | 17.2 | %
2021 |  | 55,479 |  |  | — |  |  | 55,479 |  |  | 5.05 | % |  | 8.0 | %
2022 |  | 104,664 |  |  | 700 |  |  | 105,364 |  |  | 5.23 | % |  | 15.2 | %
2023 |  | 28,228 |  |  | — |  |  | 28,228 |  |  | 4.13 | % |  | 4.1 | %
2024 |  | 50,401 |  |  | — |  |  | 50,401 |  |  | 4.02 | % |  | 7.3 | %
2025 |  | — |  |  | — |  |  | — |  |  | — | % |  | — | %
2026 |  | 54,523 |  |  | — |  |  | 54,523 |  |  | 3.74 | % |  | 7.9 | %
2027 |  | 92,000 |  |  | — |  |  | 92,000 |  |  | 3.56 | % |  | 13.3 | %
Thereafter |  | 7,767 |  |  | — |  |  | 7,767 |  |  | 5.38 | % |  | 1.1 | %
Total secured maturing debt |  | $ | 494,874 |  |  | $ | 61,001 |  |  | $ | 555,875 |  |  | 4.63 | % |  | 80.3 | %
Unsecured line of credit |  | — |  |  | 67,000 |  |  | 67,000 |  |  | 3.45 | % |  | 9.6 | %
Unsecured term loan(3) |  | 70,000 |  |  | — |  |  | 70,000 |  |  | 4.01 | % |  | 10.1 | %
Total debt |  | $ | 564,874 |  |  | $ | 128,001 |  |  | $ | 692,875 |  |  | 4.45 | % |  | 100.0 | %

(1) | Includes line of credit and term loan.

(2) | Weighted average interest rate of debt that matures in fiscal year.

(3) | Term loan has a variable interest rate that is hedged with an interest rate swap and matures January 31, 2023.

|  | 1/31/2018 |  | 10/31/2017 |  | 7/31/2017 |  | 4/30/2017 |  | 1/31/2017
Debt Balances Outstanding(1) |  |  |  |  |  |  |  |  |  |
Secured fixed rate |  | $ | 494,874 |  |  | $ | 593,854 |  |  | $ | 605,028 |  |  | $ | 629,535 |  |  | $ | 658,224 |
Secured variable rate |  | 61,001 |  |  | 86,672 |  |  | 100,388 |  |  | 99,445 |  |  | 81,314 |
Unsecured line of credit |  | 67,000 |  |  | 247,500 |  |  | 125,900 |  |  | 57,050 |  |  | 157,000 |
Unsecured term loan |  | $ | 70,000 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Debt total |  | $ | 692,875 |  |  | $ | 928,026 |  |  | $ | 831,316 |  |  | $ | 786,030 |  |  | $ | 896,538 |
Weighted Average Interest Rate Secured |  | 4.63 | % |  | 4.63 | % |  | 4.62 | % |  | 4.63 | % |  | 4.71 | %
Line of Credit Rate |  | 3.45 | % |  | 3.08 | % |  | 2.98 | % |  | 2.74 | % |  | 2.55 | %
Term Loan Rate |  | 4.01 | % |  | — | % |  | — | % |  | — | % |  | — | %

(1) | Includes mortgages on properties held for sale.

| S-8 |

IRET
DEBT DETAIL
as of January 31, 2018
(in thousands)

Property |  | Maturity Date |  | Fiscal 2018 |  | Fiscal 2019 |  | Fiscal 2020 |  | Fiscal 2021 |  | Thereafter |  | Total(1)
Multifamily |  |  |  |  |  |  |  |  |  |  |  |  |  |
Homestead Gardens II – Rapid City, SD |  | 6/1/2018 |  | $ | — |  |  | $ | 3,011 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,011 |
Cardinal Point – Grand Forks, ND |  | 8/1/2018 |  | — |  |  | 23,157 |  |  | — |  |  | — |  |  | — |  |  | 23,157 |
Plaza – Minot, ND |  | 8/1/2018 |  | — |  |  | 11,529 |  |  | — |  |  | — |  |  | — |  |  | 11,529 |
Evergreen II – Isanti, MN |  | 11/1/2018 |  | — |  |  | 1,936 |  |  | — |  |  | — |  |  | — |  |  | 1,936 |
Greenfield – Omaha, NE |  | 2/1/2019 |  | — |  |  | 3,410 |  |  | — |  |  | — |  |  | — |  |  | 3,410 |
Monticello Village – Monticello, MN |  | 5/28/2019 |  | — |  |  | — |  |  | 2,828 |  |  | — |  |  | — |  |  | 2,828 |
Rimrock West – Billings, MT |  | 9/1/2019 |  | — |  |  | — |  |  | 3,110 |  |  | — |  |  | — |  |  | 3,110 |
Rocky Meadows – Billings, MT |  | 9/1/2019 |  | — |  |  | — |  |  | 4,822 |  |  | — |  |  | — |  |  | 4,822 |
Cimarron Hills – Omaha, NE |  | 10/1/2019 |  | — |  |  | — |  |  | 4,494 |  |  | — |  |  | — |  |  | 4,494 |
Cottonwood – Bismarck, ND |  | 10/1/2019 |  | — |  |  | — |  |  | 14,919 |  |  | — |  |  | — |  |  | 14,919 |
Forest Park – Grand Forks, ND |  | 10/1/2019 |  | — |  |  | — |  |  | 7,160 |  |  | — |  |  | — |  |  | 7,160 |
Renaissance Heights I – Williston, ND |  | 10/1/2019 |  | — |  |  | — |  |  | 22,922 |  |  | — |  |  | — |  |  | 22,922 |
Williston Garden – Williston, ND |  | 10/30/2019 |  | — |  |  | — |  |  | 7,190 |  |  | — |  |  | — |  |  | 7,190 |
Williston Garden – Williston, ND |  | 10/30/2019 |  | — |  |  | — |  |  | 158 |  |  | — |  |  | — |  |  | 158 |
Evergreen – Isanti, MN |  | 11/1/2019 |  | — |  |  | — |  |  | 1,884 |  |  | — |  |  | — |  |  | 1,884 |
Northridge – Bismarck, ND |  | 12/1/2019 |  | — |  |  | — |  |  | 5,891 |  |  | — |  |  | — |  |  | 5,891 |
Castlerock – Billings, MT |  | 1/1/2020 |  | — |  |  | — |  |  | 6,255 |  |  | — |  |  | — |  |  | 6,255 |
Thomasbrook – Lincoln, NE |  | 1/1/2020 |  | — |  |  | — |  |  | 5,604 |  |  | — |  |  | — |  |  | 5,604 |
Westwood Park – Bismarck, ND |  | 1/1/2020 |  | — |  |  | — |  |  | 1,851 |  |  | — |  |  | — |  |  | 1,851 |
Kirkwood Manor – Bismarck, ND |  | 2/1/2020 |  | — |  |  | — |  |  | 3,099 |  |  | — |  |  | — |  |  | 3,099 |
Brookfield Village – Topeka, KS |  | 3/1/2020 |  | — |  |  | — |  |  | 4,948 |  |  | — |  |  | — |  |  | 4,948 |
Crown Colony – Topeka, KS |  | 4/1/2020 |  | — |  |  | — |  |  | 7,658 |  |  | — |  |  | — |  |  | 7,658 |
Mariposa – Topeka, KS |  | 4/1/2020 |  | — |  |  | — |  |  | 2,772 |  |  | — |  |  | — |  |  | 2,772 |
Sherwood – Topeka, KS |  | 4/1/2020 |  | — |  |  | — |  |  | 11,505 |  |  | — |  |  | — |  |  | 11,505 |
Deer Ridge – Jamestown, ND |  | 5/1/2020 |  | — |  |  | — |  |  | — |  |  | 11,275 |  |  | — |  |  | 11,275 |
Valley Park – Grand Forks, ND |  | 6/1/2020 |  | — |  |  | — |  |  | — |  |  | 3,627 |  |  | — |  |  | 3,627 |
Country Meadows II – Billings, MT |  | 10/1/2020 |  | — |  |  | — |  |  | — |  |  | 3,305 |  |  | — |  |  | 3,305 |
Olympic Village – Billings, MT |  | 11/1/2020 |  | — |  |  | — |  |  | — |  |  | 9,992 |  |  | — |  |  | 9,992 |
Villa West Apartments – Topeka, KS |  | 12/1/2020 |  | — |  |  | — |  |  | — |  |  | 11,578 |  |  | — |  |  | 11,578 |
Park Meadows – Waite Park, MN |  | 1/1/2021 |  | — |  |  | — |  |  | — |  |  | 8,081 |  |  | — |  |  | 8,081 |
Sunset Trail – Rochester, MN |  | 2/1/2021 |  | — |  |  | — |  |  | — |  |  | 7,621 |  |  | — |  |  | 7,621 |
Summary of Debt due after Fiscal 2021 |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 336,041 |  |  | 336,041 |
Sub-Total Multifamily |  |  |  | $ | — |  |  | $ | 43,043 |  |  | $ | 119,070 |  |  | $ | 55,479 |  |  | $ | 336,041 |  |  | $ | 553,633 |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |
Summary of Debt due after Fiscal 2021 |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,242 |  |  | 2,242 |
Sub-Total All Other |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,242 |  |  | $ | 2,242 |
Total maturing debt |  |  |  | $ | — |  |  | $ | 43,043 |  |  | $ | 119,070 |  |  | $ | 55,479 |  |  | $ | 338,283 |  |  | $ | 555,875 |
Unsecured Line of Credit |  | 1/31/2021 |  | — |  |  | — |  |  | — |  |  | 67,000 |  |  | — |  |  | $ | 67,000 |
Unsecured Term Loan |  | 1/31/2023 |  | — |  |  | — |  |  | — |  |  | — |  |  | 70,000 |  |  | $ | 70,000 |
Total debt |  |  |  | $ | — |  |  | $ | 43,043 |  |  | $ | 119,070 |  |  | $ | 122,479 |  |  | $ | 408,283 |  |  | $ | 692,875 |

(1) | Totals are principal balances of mortgages, line of credit, and unsecured term loan as of January 31, 2018.

| S-9 |

IRET
CAPITAL ANALYSIS
(in thousands, except per share and unit amounts)

|  | Three Months Ended
|  | 1/31/2018 |  | 10/31/2017 |  | 7/31/2017 |  | 4/30/2017 |  | 1/31/2017
Equity Capitalization |  |  |  |  |  |  |  |  |  |
Common shares outstanding |  | 120,035 |  |  | 120,188 |  |  | 120,587 |  |  | 121,199 |  |  | 121,889 |
Operating partnership (OP) units outstanding |  | 14,168 |  |  | 14,618 |  |  | 14,657 |  |  | 15,617 |  |  | 16,034 |
Total common shares and OP units outstanding |  | 134,203 |  |  | 134,806 |  |  | 135,244 |  |  | 136,816 |  |  | 137,923 |
Market price per common share (closing price at end of period) |  | $ | 5.67 |  |  | $ | 5.85 |  |  | $ | 6.22 |  |  | $ | 5.91 |  |  | $ | 6.44 |
Equity capitalization-common shares and OP units |  | 760,931 |  |  | 788,615 |  |  | 841,218 |  |  | 808,583 |  |  | 888,224 |
Recorded book value of preferred shares |  | $ | 99,456 |  |  | $ | 99,467 |  |  | $ | 111,357 |  |  | $ | 111,357 |  |  | $ | 111,357 |
Total equity capitalization |  | $ | 860,387 |  |  | $ | 888,082 |  |  | $ | 952,575 |  |  | $ | 919,940 |  |  | $ | 999,581 |
Debt Capitalization |  |  |  |  |  |  |  |  |  |
Total debt |  | $ | 692,875 |  |  | $ | 927,968 |  |  | $ | 839,134 |  |  | $ | 793,827 |  |  | $ | 943,751 |
Total capitalization |  | $ | 1,553,262 |  |  | $ | 1,816,050 |  |  | $ | 1,791,709 |  |  | $ | 1,713,767 |  |  | $ | 1,943,332 |
Total debt to total capitalization |  | 0.45:1 |  |  | 0.51:1 |  |  | 0.47:1 |  |  | 0.46:1 |  |  | 0.49:1 |

|  | Nine Months Ended |  |  | Three Months Ended
|  | 1/31/2018 |  | 1/31/2017 |  |  | 1/31/2018 |  | 10/31/2017 |  | 7/31/2017 |  | 4/30/2017 |  | 1/31/2017
Earnings to fixed charges(1) |  | (2 | ) |  | (3 | ) |  |  | 1.56 | x |  | 1.09 | x |  | (5 | ) |  | 1.48 | x |  | 1.12 | x
Earnings to combined fixed charges and preferred distributions(1) |  | (2 | ) |  | (3 | ) |  |  | 1.33 | x |  | (4 | ) |  | (5 | ) |  | 1.21 | x |  | (6 | )
Debt service coverage ratio(1) |  | 1.79 | x |  | 1.65 | x |  |  | 1.78 | x |  | 1.84 | x |  | 1.75 | x |  | 1.69 | x |  | 1.67 | x
Distribution Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common shares and units outstanding at record date |  | 134,867 |  |  | 137,944 |  |  |  | 134,203 |  |  | 134,806 |  |  | 135,830 |  |  | 137,723 |  |  | 137,944 |
Total common distribution paid |  | $ | 28,389 |  |  | $ | 53,719 |  |  |  | $ | 9,420 |  |  | $ | 9,462 |  |  | $ | 9,509 |  |  | $ | 9,641 |  |  | $ | 17,929 |
Common distribution per share and unit(7) |  | $ | 0.21 |  |  | $ | 0.39 |  |  |  | $ | 0.07 |  |  | $ | 0.07 |  |  | $ | 0.07 |  |  | $ | 0.07 |  |  | $ | 0.13 |
Payout ratio (FFO per share and unit basis)(1) |  | 100.0 | % |  | 118.2 | % |  |  | 175.0 | % |  | 100.0 | % |  | 70.0 | % |  | 100.0 | % |  | 144.4 | %

(1) | Payout ratio (FFO per share and unit basis) is the ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual FFO per share and unit.

(2) | Earnings were inadequate to cover (a) fixed charges and (b) combined fixed charges and preferred distributions by $6.8 million and $13.7 million, respectively. Excluding non-cash depreciation charges related to a change in depreciable lives of $14.4 million in the nine months ended January 31, 2018, the ratio of earnings to fixed charges and of earnings to combined fixed charges and preferred distributions would have been 1.25x and 1.02x, respectively, for the nine months ended January 31, 2018.

(3) | Earnings were inadequate to cover fixed charges and combined fixed charges and preferred distributions by $26.5 million and $34.7 million, respectively. Excluding non-cash asset impairment and gain on sale charges of $54.1 million in the nine months ended January 31, 2017, the ratio of earnings to fixed charges and of earnings to combined fixed charges and preferred distributions would have been 1.77x and 1.44x, respectively, for the nine months ended January 31, 2017.

(4) | Earnings were inadequate to cover combined fixed charges and preferred distributions by $1.9 million. The ratio of earnings to combined fixed charges and preferred distributions was .85x for the three months ended October 31, 2017.

(5) | Earnings were inadequate to cover (a) fixed charges and (b) combined fixed charges and preferred distributions by $13.4 million and $15.7 million, respectively. Excluding non-cash depreciation charges related to a change in depreciable lives of $14.4 million in the three months ended July 31, 2017, the ratio of earnings to fixed charges and of earnings to combined fixed charges and preferred distributions would have been 1.10x and 0.90x, respectively, for the three months ended July 31, 2017.

(6) | Earnings were inadequate to cover combined fixed charges and preferred distributions by $1.1 million. The ratio of earnings to combined fixed charges and preferred distributions was .92x for the three months ended January 31, 2017.

(7) | Common distribution per share and unit for the three and nine months ended January 31, 2017 includes a special distribution of $0.06.

| S-10 |

IRET
NET OPERATING INCOME DETAIL
(in thousands)

|  | Three Months Ended January 31, 2018
|  | Reporting Segments
|  | Multifamily |  | All Other |  | Corporate and Other |  | Total
Real estate rental revenue |  |  |  |  |  |  |  |
Same-store |  | $ | 32,093 |  |  | $ | 1,391 |  |  | $ | — |  |  | $ | 33,484 |
Non-same-store |  | 9,186 |  |  | 584 |  |  | — |  |  | 9,770 |
Total |  | 41,279 |  |  | 1,975 |  |  | — |  |  | 43,254 |
Real estate expenses(1) |  |  |  |  |  |  |  |
Same-store |  | 14,457 |  |  | 359 |  |  | 1,085 |  |  | 15,901 |
Non-same-store |  | 3,774 |  |  | 190 |  |  | 170 |  |  | 4,134 |
Total |  | 18,231 |  |  | 549 |  |  | 1,255 |  |  | 20,035 |
Net operating income (NOI) |  |  |  |  |  |  |  |
Same-store |  | 17,636 |  |  | 1,032 |  |  | (1,085 | ) |  | 17,583 |
Non-same-store |  | 5,412 |  |  | 394 |  |  | (170 | ) |  | 5,636 |
Net operating income (loss) |  | $ | 23,048 |  |  | $ | 1,426 |  |  | $ | (1,255 | ) |  | $ | 23,219 |
Reconciliation of NOI to net income (loss) available to common shareholders |  |  |  |  |  |  |  |
Depreciation/amortization |  | $ | (17,543 | ) |  | $ | (770 | ) |  | $ | (77 | ) |  | $ | (18,390 | )
General and administrative expenses |  | — |  |  | — |  |  | (3,011 | ) |  | (3,011 | )
Interest expense |  | (6,882 | ) |  | (127 | ) |  | (2,227 | ) |  | (9,236 | )
Loss on debt extinguishment |  | (285 | ) |  | — |  |  | — |  |  | (285 | )
Interest and other income |  | — |  |  | — |  |  | 433 |  |  | 433 |
(Loss) income before gain on sale of real estate and other investments and income from discontinued operations |  | (1,662 | ) |  | 529 |  |  | (6,137 | ) |  | (7,270 | )
Gain on sale of real estate and other investments |  | 2,642 |  |  | 9,726 |  |  | 19 |  |  | 12,387 |
(Loss) income from continuing operations |  | 980 |  |  | 10,255 |  |  | (6,118 | ) |  | 5,117 |
Income from discontinued operations |  | — |  |  | 146,811 |  |  | — |  |  | 146,811 |
Net (loss) income |  | 980 |  |  | 157,066 |  |  | (6,118 | ) |  | 151,928 |
Net loss attributable to noncontrolling interests – Operating Partnership |  | — |  |  | — |  |  | (16,236 | ) |  | (16,236 | )
Net income attributable to noncontrolling interests – consolidated real estate entities |  | — |  |  | — |  |  | 413 |  |  | 413 |
Net (loss) income attributable to controlling interests |  | 980 |  |  | 157,066 |  |  | (21,941 | ) |  | 136,105 |
Dividends to preferred shareholders |  | — |  |  | — |  |  | (1,766 | ) |  | (1,766 | )
Redemption of Preferred Shares |  | — |  |  | — |  |  | (8 | ) |  | (8 | )
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS |  | $ | 980 |  |  | $ | 157,066 |  |  | $ | (23,715 | ) |  | $ | 134,331 |

(1) | Offsite costs associated with property management and casualty-related amounts are included in the Corporate and Other column.

| S-11 |

IRET
NET OPERATING INCOME DETAIL
(in thousands)

|  | Three Months Ended January 31, 2017
|  | Reporting Segments
|  | Multifamily |  | All Other |  | Corporate and Other |  | Total
Real estate rental revenue |  |  |  |  |  |  |  |
Same-store |  | $ | 30,506 |  |  | $ | 2,044 |  |  | $ | — |  |  | $ | 32,550 |
Non-same-store |  | 5,665 |  |  | 2,013 |  |  | — |  |  | 7,678 |
Total |  | 36,171 |  |  | 4,057 |  |  | — |  |  | 40,228 |
Real estate expenses(1) |  |  |  |  |  |  |  |
Same-store |  | 13,829 |  |  | 436 |  |  | 1,138 |  |  | 15,403 |
Non-same-store |  | 2,507 |  |  | 564 |  |  | 145 |  |  | 3,216 |
Total |  | 16,336 |  |  | 1,000 |  |  | 1,283 |  |  | 18,619 |
Net operating income (NOI) |  |  |  |  |  |  |  |
Same-store |  | 16,677 |  |  | 1,608 |  |  | (1,138 | ) |  | 17,147 |
Non-same-store |  | 3,158 |  |  | 1,449 |  |  | (145 | ) |  | 4,462 |
Net operating income (loss) |  | $ | 19,835 |  |  | $ | 3,057 |  |  | $ | (1,283 | ) |  | $ | 21,609 |
Reconciliation of NOI to net income (loss) available to common shareholders |  |  |  |  |  |  |  |
Depreciation/amortization |  | $ | (9,651 | ) |  | $ | (1,067 | ) |  | $ | (69 | ) |  | $ | (10,787 | )
General and administrative expenses |  | — |  |  | — |  |  | (4,172 | ) |  | (4,172 | )
Interest expense |  | (7,707 | ) |  | (505 | ) |  | (620 | ) |  | (8,832 | )
Loss on debt extinguishment |  | (249 | ) |  | (133 | ) |  | (76 | ) |  | (458 | )
Interest and other income |  | — |  |  | — |  |  | 427 |  |  | 427 |
(Loss) income (loss) before gain (loss) on sale of real estate and other investments and income from discontinued operations |  | 2,228 |  |  | 1,352 |  |  | (5,793 | ) |  | (2,213 | )
Gain (loss) gain on sale of real estate and other investments |  | — |  |  | 2,437 |  |  | — |  |  | 2,437 |
(Loss) income from continuing operations |  | 2,228 |  |  | 3,789 |  |  | (5,793 | ) |  | 224 |
Income from discontinued operations |  | — |  |  | 24,965 |  |  | — |  |  | 24,965 |
Net (loss) income |  | 2,228 |  |  | 28,754 |  |  | (5,793 | ) |  | 25,189 |
Net loss attributable to noncontrolling interests – Operating Partnership |  | — |  |  | — |  |  | (2,525 | ) |  | (2,525 | )
Net loss attributable to noncontrolling interests – consolidated real estate entities |  | — |  |  | — |  |  | 446 |  |  | 446 |
Net (loss) income attributable to controlling interests |  | 2,228 |  |  | 28,754 |  |  | (7,872 | ) |  | 23,110 |
Dividends to preferred shareholders |  | — |  |  | — |  |  | (2,503 | ) |  | (2,503 | )
Redemption of Preferred Shares |  | — |  |  | — |  |  | (1,435 | ) |  | (1,435 | )
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS |  | $ | 2,228 |  |  | $ | 28,754 |  |  | $ | (11,810 | ) |  | $ | 19,172 |

(1) | Offsite costs associated with property management and casualty-related amounts are included in the Corporate and Other column.

| S-12 |

IRET
NET OPERATING INCOME DETAIL
(in thousands)

|  | Nine Months Ended January 31, 2018
|  | Reporting Segments
|  | Multifamily |  | All Other |  | Corporate and Other |  | Total
Real estate rental revenue |  |  |  |  |  |  |  |
Same-store |  | $ | 95,961 |  |  | $ | 4,311 |  |  | $ | — |  |  | $ | 100,272 |
Non-same-store |  | 23,483 |  |  | 3,625 |  |  | — |  |  | 27,108 |
Total |  | 119,444 |  |  | 7,936 |  |  | — |  |  | 127,380 |
Real estate expenses(1) |  |  |  |  |  |  |  |
Same-store |  | 44,617 |  |  | 1,028 |  |  | 3,684 |  |  | 49,329 |
Non-same-store |  | 9,967 |  |  | 1,074 |  |  | 520 |  |  | 11,561 |
Total |  | 54,584 |  |  | 2,102 |  |  | 4,204 |  |  | 60,890 |
Net operating income (NOI) |  |  |  |  |  |  |  |
Same-store |  | 51,344 |  |  | 3,283 |  |  | (3,684 | ) |  | 50,943 |
Non-same-store |  | 13,516 |  |  | 2,551 |  |  | (520 | ) |  | 15,547 |
Net operating income (loss) |  | $ | 64,860 |  |  | $ | 5,834 |  |  | $ | (4,204 | ) |  | $ | 66,490 |
Reconciliation of NOI to net (loss) income available to common shareholders |  |  |  |  |  |  |  |
Depreciation/amortization |  | $ | (55,971 | ) |  | $ | (4,806 | ) |  | $ | (221 | ) |  | $ | (60,998 | )
Impairment of real estate investments |  | — |  |  | — |  |  | (256 | ) |  | (256 | )
General and administrative expenses |  | — |  |  | — |  |  | (10,131 | ) |  | (10,131 | )
Interest expense |  | (20,688 | ) |  | (512 | ) |  | (4,676 | ) |  | (25,876 | )
Loss on extinguishment of debt |  | (677 | ) |  | (141 | ) |  | — |  |  | (818 | )
Interest and other income |  | — |  |  | — |  |  | 916 |  |  | 916 |
(Loss) income before (loss) gain on sale of real estate and income from discontinued operations |  | (12,476 | ) |  | 375 |  |  | (18,572 | ) |  | (30,673 | )
Gain on sale of real estate and other investments |  | 2,717 |  |  | 15,085 |  |  | 33 |  |  | 17,835 |
(Loss) income from continuing operations |  | (9,759 | ) |  | 15,460 |  |  | (18,539 | ) |  | (12,838 | )
Income from discontinued operations |  | — |  |  | 164,626 |  |  | — |  |  | 164,626 |
Net (loss) income |  | (9,759 | ) |  | 180,086 |  |  | (18,539 | ) |  | 151,788 |
Net loss attributable to noncontrolling interests – Operating Partnership |  | — |  |  | — |  |  | (15,365 | ) |  | (15,365 | )
Net income attributable to noncontrolling interests – consolidated real estate entities |  | — |  |  | — |  |  | 1,239 |  |  | 1,239 |
Net (loss) income attributable to controlling interests |  | (9,759 | ) |  | 180,086 |  |  | (32,665 | ) |  | 137,662 |
Dividends to preferred shareholders |  | — |  |  | — |  |  | (6,864 | ) |  | (6,864 | )
Redemption of Preferred Shares |  | — |  |  | — |  |  | (3,657 | ) |  | (3,657 | )
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS |  | $ | (9,759 | ) |  | $ | 180,086 |  |  | $ | (43,186 | ) |  | $ | 127,141 |

(1) | Offsite costs associated with property management and casualty-related amounts are included in the Corporate and Other column.

| S-13 |

IRET
NET OPERATING INCOME DETAIL
(in thousands)

|  | Nine Months Ended January 31, 2017
|  | Reporting Segments
|  | Multifamily |  | All Other |  | Corporate and Other |  | Total
Real estate rental revenue |  |  |  |  |  |  |  |
Same-store |  | $ | 92,036 |  |  | $ | 4,981 |  |  | $ | — |  |  | $ | 97,017 |
Non-same-store |  | 15,364 |  |  | 6,326 |  |  | — |  |  | 21,690 |
Total |  | 107,400 |  |  | 11,307 |  |  | — |  |  | 118,707 |
Real estate expenses(1) |  |  |  |  |  |  |  |
Same-store |  | 40,077 |  |  | 1,082 |  |  | 3,619 |  |  | 44,778 |
Non-same-store |  | 6,704 |  |  | 1,705 |  |  | 383 |  |  | 8,792 |
Total |  | 46,781 |  |  | 2,787 |  |  | 4,002 |  |  | 53,570 |
Net operating income (NOI) |  |  |  |  |  |  |  |
Same-store |  | 51,959 |  |  | 3,899 |  |  | (3,619 | ) |  | 52,239 |
Non-same-store |  | 8,660 |  |  | 4,621 |  |  | (383 | ) |  | 12,898 |
Net operating income (loss) |  | $ | 60,619 |  |  | $ | 8,520 |  |  | $ | (4,002 | ) |  | $ | 65,137 |
Reconciliation of NOI to net income (loss) available to common shareholders |  |  |  |  |  |  |  |
Depreciation/amortization |  | $ | (29,772 | ) |  | $ | (3,211 | ) |  | $ | (210 | ) |  | $ | (33,193 | )
Impairment of real estate investments |  | (51,401 | ) |  | — |  |  | (2,752 | ) |  | (54,153 | )
General and administrative expenses |  | — |  |  | — |  |  | (11,195 | ) |  | (11,195 | )
Interest expense |  | (23,212 | ) |  | (1,537 | ) |  | (1,284 | ) |  | (26,033 | )
Loss on extinguishment of debt |  | (249 | ) |  | (133 | ) |  | (76 | ) |  | (458 | )
Interest and other income |  | — |  |  | — |  |  | 685 |  |  | 685 |
(Loss) income before gain on sale of real estate and other investments and income from discontinued operations |  | (44,015 | ) |  | 3,639 |  |  | (18,834 | ) |  | (59,210 | )
Gain (loss) on sale of real estate and other investments |  | — |  |  | 11,317 |  |  | (25 | ) |  | 11,292 |
(Loss) income from continuing operations |  | (44,015 | ) |  | 14,956 |  |  | (18,859 | ) |  | (47,918 | )
Income from discontinued operations |  | — |  |  | 44,803 |  |  | — |  |  | 44,803 |
Net (loss) income |  | (44,015 | ) |  | 59,759 |  |  | (18,859 | ) |  | (3,115 | )
Net loss attributable to noncontrolling interests – Operating Partnership |  | — |  |  | — |  |  | (403 | ) |  | (403 | )
Net income attributable to noncontrolling interests – consolidated real estate entities |  | — |  |  | — |  |  | 16,585 |  |  | 16,585 |
Net (loss) income attributable to controlling interests |  | (44,015 | ) |  | 59,759 |  |  | (2,677 | ) |  | 13,067 |
Dividends to preferred shareholders |  | — |  |  | — |  |  | (8,260 | ) |  | (8,260 | )
Redemption of Preferred Shares |  | — |  |  | — |  |  | (1,435 | ) |  | (1,435 | )
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS |  | $ | (44,015 | ) |  | $ | 59,759 |  |  | $ | (12,372 | ) |  | $ | 3,372 |

(1) | Offsite costs associated with property management and casualty-related amounts are included in the Corporate and Other column.

| S-14 |

IRET
SAME-STORE COMPARISON

|  | Rentable Units |  | Physical Occupancy 1/31/2018 |  | FY18Q3 Weighted Average Occupancy(1) |  | FY18Q3 % of Actual NOI |  | FY18Q3 Average Revenue Per Unit(2) |  | 3rd Quarter Increase (Decrease) From Prior Year's 3rd Quarter
Regions |  |  |  |  |  |  | Revenues |  | Expenses(3) |  | Net Operating Income |  | Average Rental Revenue |  | Weighted Average Occupancy
Rochester, MN |  | 1,711 |  |  | 95.6 | % |  | 94.0 | % |  | 20.2 | % |  | $ | 1,262 |  |  | 5.9 | % |  | 8.2 | % |  | 4.4 | % |  | (1.5 | )% |  | 7.4 | %
Omaha, NE |  | 1,370 |  |  | 96.1 | % |  | 94.9 | % |  | 11.6 | % |  | $ | 931 |  |  | 5.2 | % |  | 10.9 | % |  | 1.1 | % |  | 4.8 | % |  | 0.4 | %
St. Cloud, MN |  | 1,187 |  |  | 96.4 | % |  | 94.5 | % |  | 9.6 | % |  | $ | 995 |  |  | 13.5 | % |  | 6.0 | % |  | 21.9 | % |  | 7.9 | % |  | 5.6 | %
Grand Forks, ND |  | 1,303 |  |  | 94.6 | % |  | 94.3 | % |  | 9.5 | % |  | $ | 912 |  |  | 3.6 | % |  | 11.0 | % |  | (2.9 | )% |  | (3.8 | )% |  | 7.5 | %
Bismarck, ND |  | 977 |  |  | 92.5 | % |  | 91.2 | % |  | 8.0 | % |  | $ | 996 |  |  | (0.3 | )% |  | (4.4 | )% |  | 3.7 | % |  | (5.8 | )% |  | 5.4 | %
Minneapolis, MN |  | 688 |  |  | 94.9 | % |  | 93.5 | % |  | 7.9 | % |  | $ | 1,233 |  |  | 7.7 | % |  | 1.4 | % |  | 12.7 | % |  | 11.3 | % |  | (3.6 | )%
Topeka, KS |  | 1,042 |  |  | 95.4 | % |  | 94.6 | % |  | 7.7 | % |  | $ | 837 |  |  | 6.4 | % |  | 13.1 | % |  | 1.5 | % |  | 5.5 | % |  | 0.9 | %
Billings, MT |  | 770 |  |  | 91.3 | % |  | 90.1 | % |  | 7.3 | % |  | $ | 994 |  |  | 4.0 | % |  | 6.5 | % |  | 2.6 | % |  | 1.3 | % |  | 2.7 | %
Sioux Falls, SD |  | 969 |  |  | 97.1 | % |  | 94.7 | % |  | 7.1 | % |  | $ | 877 |  |  | 4.2 | % |  | (0.5 | )% |  | 9.1 | % |  | 0.2 | % |  | 4.0 | %
Minot, ND |  | 640 |  |  | 96.4 | % |  | 96.1 | % |  | 5.3 | % |  | $ | 1,006 |  |  | (2.0 | )% |  | (7.1 | )% |  | 3.7 | % |  | (6.8 | )% |  | 4.9 | %
Rapid City, SD |  | 474 |  |  | 96.6 | % |  | 96.1 | % |  | 4.4 | % |  | $ | 957 |  |  | 7.6 | % |  | 6.3 | % |  | 8.5 | % |  | 1.1 | % |  | 6.6 | %
Williston, ND |  | 189 |  |  | 96.8 | % |  | 95.6 | % |  | 1.4 | % |  | $ | 927 |  |  | 1.9 | % |  | (19.9 | )% |  | 44.8 | % |  | (9.2 | )% |  | 11.1 | %
Same-Store Total |  | 11,320 |  |  | 95.2 | % |  | 94.0 | % |  | 100.0 | % |  | $ | 1,006 |  |  | 5.2 | % |  | 4.5 | % |  | 5.8 | % |  | 0.8 | % |  | 4.4 | %

|  | Rentable Units |  | Physical Occupancy 1/31/2018 |  | FY18Q3 Weighted Average Occupancy(1) |  | FY18Q3 % of Actual NOI |  | FY18Q3 Average Revenue Per Unit(2) |  | 3rd Quarter Increase (Decrease) From 2nd Quarter
Regions |  |  |  |  |  |  | Revenues |  | Expenses(3) |  | Net Operating Income |  | Average Rental Revenue |  | Weighted Average Occupancy
Rochester, MN |  | 1,711 |  |  | 95.6 | % |  | 94.0 | % |  | 20.2 | % |  | $ | 1,262 |  |  | 0.1 | % |  | (5.5 | )% |  | 4.3 | % |  | (1.8 | )% |  | 1.8 | %
Omaha, NE |  | 1,370 |  |  | 96.1 | % |  | 94.9 | % |  | 11.6 | % |  | $ | 931 |  |  | 0.5 | % |  | (11.8 | )% |  | 12.8 | % |  | (0.3 | )% |  | 0.8 | %
St. Cloud, MN |  | 1,187 |  |  | 96.4 | % |  | 94.5 | % |  | 9.6 | % |  | $ | 995 |  |  | 1.2 | % |  | (8.2 | )% |  | 12.2 | % |  | 0.2 | % |  | 1.0 | %
Grand Forks, ND |  | 1,303 |  |  | 94.6 | % |  | 94.3 | % |  | 9.5 | % |  | $ | 912 |  |  | (2.6 | )% |  | 5.5 | % |  | (9.6 | )% |  | (2.1 | )% |  | (0.5 | )%
Bismarck, ND |  | 977 |  |  | 92.5 | % |  | 91.2 | % |  | 8.0 | % |  | $ | 996 |  |  | (2.5 | )% |  | (2.1 | )% |  | (2.8 | )% |  | (2.5 | )% |  | 0.1 | %
Minneapolis, MN |  | 688 |  |  | 94.9 | % |  | 93.5 | % |  | 7.9 | % |  | $ | 1,233 |  |  | 2.5 | % |  | (6.6 | )% |  | 10.1 | % |  | 1.6 | % |  | 0.9 | %
Topeka, KS |  | 1,042 |  |  | 95.4 | % |  | 94.6 | % |  | 7.7 | % |  | $ | 837 |  |  | — | % |  | 0.3 | % |  | (0.3 | )% |  | — | % |  | — | %
Billings, MT |  | 770 |  |  | 91.3 | % |  | 90.1 | % |  | 7.3 | % |  | $ | 994 |  |  | (2.0 | )% |  | (21.0 | )% |  | 14.9 | % |  | (2.5 | )% |  | 0.5 | %
Sioux Falls, SD |  | 969 |  |  | 97.1 | % |  | 94.7 | % |  | 7.1 | % |  | $ | 877 |  |  | 0.6 | % |  | (7.2 | )% |  | 9.2 | % |  | (0.9 | )% |  | 1.5 | %
Minot, ND |  | 640 |  |  | 96.4 | % |  | 96.1 | % |  | 5.3 | % |  | $ | 1,006 |  |  | 1.9 | % |  | (9.3 | )% |  | 16.1 | % |  | (0.9 | )% |  | 2.8 | %
Rapid City, SD |  | 474 |  |  | 96.6 | % |  | 96.1 | % |  | 4.4 | % |  | $ | 957 |  |  | 1.5 | % |  | (12.7 | )% |  | 14.2 | % |  | (2.0 | )% |  | 3.5 | %
Williston, ND |  | 189 |  |  | 96.8 | % |  | 95.6 | % |  | 1.4 | % |  | $ | 927 |  |  | (1.9 | )% |  | (19.4 | )% |  | 28.6 | % |  | (0.1 | )% |  | (1.8 | )%
Same-Store Total |  | 11,320 |  |  | 95.2 | % |  | 94.0 | % |  | 100.0 | % |  | $ | 1,006 |  |  | (0.1 | )% |  | (6.7 | )% |  | 6.1 | % |  | (1.1 | )% |  | 1.0 | %

|  | Rentable Units |  | Physical Occupancy 1/31/2018 |  | FY18Q3 YTD Weighted Average Occupancy(1) |  | FY18Q3 YTD % of Actual NOI |  | FY18Q3 YTD Average Revenue Per Unit(2) |  | 3rd Quarter YTD Increase (Decrease) From Prior Year's 3rd Quarter YTD
Regions |  |  |  |  |  |  | Revenues |  | Expenses(3) |  | Net Operating Income |  | Average Rental Revenue |  | Weighted Average Occupancy
Rochester, MN |  | 1,711 |  |  | 95.6 | % |  | 92.1 | % |  | 20.6 | % |  | $ | 1,278 |  |  | 4.7 | % |  | 14.7 | % |  | (1.4 | )% |  | — | % |  | 4.7 | %
Omaha, NE |  | 1,370 |  |  | 96.1 | % |  | 94.8 | % |  | 11.3 | % |  | $ | 928 |  |  | 4.4 | % |  | 10.2 | % |  | (0.1 | )% |  | 5.3 | % |  | (0.9 | )%
St. Cloud, MN |  | 1,187 |  |  | 96.4 | % |  | 93.7 | % |  | 9.3 | % |  | $ | 988 |  |  | 12.0 | % |  | 12.9 | % |  | 11.1 | % |  | 8.8 | % |  | 3.2 | %
Grand Forks, ND |  | 1,303 |  |  | 94.6 | % |  | 94.2 | % |  | 10.3 | % |  | $ | 920 |  |  | 2.4 | % |  | 12.9 | % |  | (5.7 | )% |  | (0.8 | )% |  | 3.1 | %
Bismarck, ND |  | 977 |  |  | 92.5 | % |  | 91.7 | % |  | 8.6 | % |  | $ | 1,014 |  |  | 1.5 | % |  | 12.8 | % |  | (6.5 | )% |  | (1.7 | )% |  | 3.2 | %
Minneapolis, MN |  | 688 |  |  | 94.9 | % |  | 93.9 | % |  | 7.8 | % |  | $ | 1,206 |  |  | 8.4 | % |  | 4.1 | % |  | 11.8 | % |  | 8.8 | % |  | (0.4 | )%
Topeka, KS |  | 1,042 |  |  | 95.4 | % |  | 94.8 | % |  | 8.0 | % |  | $ | 832 |  |  | 6.2 | % |  | 11.2 | % |  | 2.4 | % |  | 5.0 | % |  | 1.1 | %
Billings, MT |  | 770 |  |  | 91.3 | % |  | 89.1 | % |  | 6.9 | % |  | $ | 1,010 |  |  | 4.6 | % |  | 14.0 | % |  | (1.6 | )% |  | 6.8 | % |  | (2.2 | )%
Sioux Falls, SD |  | 969 |  |  | 97.1 | % |  | 94.1 | % |  | 6.8 | % |  | $ | 878 |  |  | 2.3 | % |  | 8.2 | % |  | (3.3 | )% |  | 3.5 | % |  | (1.2 | )%
Minot, ND |  | 640 |  |  | 96.4 | % |  | 94.9 | % |  | 5.1 | % |  | $ | 1,016 |  |  | (3.6 | )% |  | 9.7 | % |  | (15.1 | )% |  | (5.6 | )% |  | 2.0 | %
Rapid City, SD |  | 474 |  |  | 96.6 | % |  | 94.3 | % |  | 4.2 | % |  | $ | 965 |  |  | 4.3 | % |  | 8.8 | % |  | 1.0 | % |  | 5.4 | % |  | (1.1 | )%
Williston, ND |  | 189 |  |  | 96.8 | % |  | 93.0 | % |  | 1.1 | % |  | $ | 934 |  |  | (8.2 | )% |  | 8.9 | % |  | (25.8 | )% |  | (20.0 | )% |  | 11.8 | %
Same-Store Total |  | 11,320 |  |  | 95.2 | % |  | 93.3 | % |  | 100.0 | % |  | $ | 1,010 |  |  | 4.3 | % |  | 11.3 | % |  | (1.2 | )% |  | 2.3 | % |  | 1.9 | %

(1) | Weighted average occupancy is defined as scheduled rent less vacancy losses divided by scheduled rent for the period.

(2) | Average revenue is defined as total rental revenues divided by the weighted average occupied apartment units for the period.

(3) | Same-Store results by region do not include offsite costs associated with property management or casualty-related amounts, which increased by $0 and decreased $53,000, respectively, for FY18 Q3 as compared to FY18 Q2, and decrease by $50,000 and increased $6,000, respectively, for FY18 Q3 as compared to FY17 Q3, and decrease by $16,000 and increase by $529,000, respectively, for FY18 Q2 YTD as compared to FY17 Q2 YTD.

| S-15 |

IRET
PORTFOLIO SUMMARY(1)

|  | Three Months Ended
|  | 1/31/2018 |  | 10/31/2017 |  | 7/31/2017 |  | 4/30/2017 |  | 1/31/2017
Number of Units |  |  |  |  |  |  |  |  |  |
Same-Store |  | 11,320 |  |  | 11,384 |  |  | 11,384 |  |  | 10,512 |  |  | 10,513 |
Non-Same-Store |  | 2,466 |  |  | 2,192 |  |  | 2,019 |  |  | 2,693 |  |  | 2,652 |
All Properties |  | 13,786 |  |  | 13,576 |  |  | 13,403 |  |  | 13,205 |  |  | 13,165 |
Average Investment Per Unit |  |  |  |  |  |  |  |  |  |
Same-Store |  | $ | 88,329 |  |  | $ | 88,047 |  |  | $ | 87,876 |  |  | $ | 78,996 |  |  | $ | 78,499 |
Non-Same-Store |  | 202,277 |  |  | 185,150 |  |  | 166,261 |  |  | 164,715 |  |  | 165,367 |
All Properties |  | $ | 108,681 |  |  | $ | 102,760 |  |  | $ | 99,684 |  |  | $ | 96,485 |  |  | $ | 95,998 |
Average Scheduled Rent(2) per Unit |  |  |  |  |  |  |  |  |  |
Same-Store |  | $ | 957 |  |  | $ | 962 |  |  | $ | 954 |  |  | $ | 906 |  |  | $ | 902 |
Non-Same-Store |  | 1,355 |  |  | 1,330 |  |  | 1,182 |  |  | 1,267 |  |  | 1,289 |
All Properties |  | $ | 1,028 |  |  | $ | 1,018 |  |  | $ | 988 |  |  | $ | 980 |  |  | $ | 980 |
Average Revenue per Unit(3) |  |  |  |  |  |  |  |  |  |
Same-Store |  | $ | 1,007 |  |  | $ | 1,016 |  |  | $ | 1,007 |  |  | $ | 955 |  |  | $ | 941 |
Non-Same-Store |  | 1,407 |  |  | 1,276 |  |  | 1,230 |  |  | 1,334 |  |  | 1,325 |
All Properties |  | $ | 1,079 |  |  | $ | 1,058 |  |  | $ | 1,041 |  |  | $ | 1,032 |  |  | $ | 1,019 |
Occupancy |  |  |  |  |  |  |  |  |  |
Same-Store |  | 95.3 | % |  | 95.2 | % |  | 94.5 | % |  | 94.2 | % |  | 92.7 | %
Non-Same-Store |  | 90.1 | % |  | 92.4 | % |  | 89.3 | % |  | 88.8 | % |  | 86.9 | %
All Properties |  | 94.3 | % |  | 94.8 | % |  | 93.7 | % |  | 93.1 | % |  | 91.5 | %
Operating Expenses as a % of Scheduled Rent |  |  |  |  |  |  |  |  |  |
Same-Store |  | 47.8 | % |  | 50.9 | % |  | 49.7 | % |  | 46.6 | % |  | 47.7 | %
Non-Same-Store |  | 39.1 | % |  | 42.6 | % |  | 40.8 | % |  | 42.1 | % |  | 39.2 | %
All Properties |  | 45.7 | % |  | 49.2 | % |  | 48.1 | % |  | 45.4 | % |  | 45.5 | %
Capital Expenditures |  |  |  |  |  |  |  |  |  |
Total Capital Expenditures(2) per Unit – Same-Store |  | $ | 240 |  |  | $ | 396 |  |  | $ | 240 |  |  | $ | 281 |  |  | $ | 295 |
Value-Add Expenditures per Unit(4) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 8,213 |  |  | $ | 10,224 |

(1) | Previously reported amounts are not revised for discontinued operations or changes in the composition of the same-store properties pool.

(2) | See definition of scheduled rent on page S-19. Average scheduled rent is scheduled rent divided by the total number of units.

(3) | Total revenues divided by the weighted average occupied units for the period.

(4) | Cost per unit represents the average amount spent on completed and in-progress units during the period and also includes common area redevelopment costs at properties in the value add program.

| S-16 |

IRET
SAME-STORE CAPITAL EXPENDITURES
($ in thousands, except per unit amounts)

|  | Three Months Ended
|  | 1/31/2018 |  | 1/31/2017
Total Multifamily Same-Store Units |  | 11,320 |  |  | 11,321 |
Turnover |  | $ | 996 |  |  | $ | 1,047 |
Furniture & Equipment |  | 78 |  |  | 96 |
Building – Interior |  | 253 |  |  | 272 |
Building – Exterior |  | 833 |  |  | 1,156 |
Landscaping & Grounds |  | 561 |  |  | 461 |
Capital Expenditures |  | $ | 2,721 |  |  | $ | 3,032 |
CapEx per Unit |  | $ | 240 |  |  | $ | 268 |
Value Add |  | $ | — |  |  | $ | 4,262 |
Unallocated Accruals(1) |  | $ | (1,458 | ) |  | $ | (630 | )
Total Capital Spend |  | $ | 1,263 |  |  | $ | 6,664 |
Total Capital Spend per Unit |  | $ | 112 |  |  | $ | 589 |

|  | Nine Months Ended
|  | 1/31/2018 |  | 1/31/2017
Total Multifamily Same-Store Units |  | 11,320 |  |  | 11,321 |
Turnover |  | $ | 4,136 |  |  | $ | 3,383 |
Furniture & Equipment |  | 267 |  |  | 373 |
Building – Interior |  | 833 |  |  | 591 |
Building – Exterior |  | 2,773 |  |  | 3,172 |
Landscaping & Grounds |  | 2,036 |  |  | 1,597 |
Capital Expenditures |  | $ | 10,045 |  |  | $ | 9,116 |
CapEx per Unit |  | $ | 887 |  |  | $ | 805 |
Value Add |  | $ | 368 |  |  | $ | 14,083 |
Unallocated Accruals(1) |  | (1,691 | ) |  | 323 |
Total Capital Spend |  | $ | 8,722 |  |  | $ | 23,522 |
Total Capital Spend per Unit |  | $ | 771 |  |  | $ | 2,078 |

(1) | Amounts represent the change in the balance of unallocated capital accruals. During the quarter ended January 31, 2018, we fully allocated all remaining accruals to their respective capital expenditure categories and, as of January 31, 2018, no capital expenditures remained unallocated.

| S-17 |

IRET
FISCAL 2018 ACQUISITIONS SUMMARY
as of January 31, 2018
($ in thousands)

Property |  | Location |  | Segment |  | Acquisition Date |  | Apartment Homes |  | Occupancy At Acquisition |  | 1/31/2018 Occupancy |  | Acquisition Cost
Oxbo(1) |  | St. Paul, MN |  | Multifamily |  | May 26, 2017 |  | 191 |  |  | 29.3 | % |  | 67.0 | % |  | $ | 61,500 |
Park Place |  | Plymouth, MN |  | Multifamily |  | September 13, 2017 |  | 500 |  |  | 94.0 | % |  | 94.6 | % |  | $ | 92,250 |
Dylan |  | Denver, CO |  | Multifamily |  | November 28, 2017 |  | 274 |  |  | 79.9 | % |  | 81.4 | % |  | 90,600 |
|  |  |  |  |  | Total |  | 965 |  |  |  |  |  |  | $ | 244,350 |

(1) | Property includes 11,477 sq ft of retail space. Retail is 100% leased.

| S-18 |

Definitions
January 31, 2018
Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain/loss on sale of real estate and other investments, impairment of real estate investments, gain/loss on extinguishment of debt and gain/loss from involuntary conversion. We consider Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, the cost of debt, or non-operating gains and losses. Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA as calculated by us is not comparable to Adjusted EBITDA reported by other REITs that do not define Adjusted EBITDA exactly as we do.
Core funds from operations (Core FFO) is FFO as adjusted for non-routine items or items not considered core to our business operations. By further adjusting for items that are not considered part of our core business operations, we believe Core FFO provides investors with additional information to compare our core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income as an indication of financial performance, or as an alternative to cash flows from operations as a measure of liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions to shareholders. Core FFO is a non-GAAP and non-standardized measure and may be calculated differently by other REITs.
Debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet plus the market value of shares outstanding at the end of the period.
Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization.
Funds from operations (FFO) is defined by the National Association of Real Estate Investment Trusts, Inc. (NAREIT) as net income (computed in accordance with GAAP), excluding gains (or losses) associated with the sale of previously depreciated operating properties, real estate depreciation and amortization, impairments of depreciable assets, and adjustments for unconsolidated joint ventures to reflect FFO on the same basis. We believe that FFO, which is a standard supplemental measure for equity real estate investment trusts, is helpful to investors in understanding our operating performance, primarily because its calculation excludes depreciation and amortization expense on real estate assets, thereby providing an additional perspective on our operating results. We believe that GAAP historical cost depreciation of real estate assets generally is not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. In addition, the exclusion in NAREIT’s definition of FFO of impairment write-downs and gains and losses from the sale of previously depreciated operating real estate assets helps to identify the operating results of the long-term assets that form the base of our investments, and assists management and investors in comparing those operating results between periods.
Net Debt to Annualized Adjusted EBITDA is total debt less cash and cash equivalents and real estate deposits as reported for the end of the quarter divided by Adjusted EBITDA as reported for the end of the quarter multiplied by 4.
Net Operating Income (NOI) is a non-U.S. GAAP measure which we define as total real estate revenues less property operating expenses and real estate tax expense. We believe that NOI is an important supplemental measure of operating performance for a REIT’s operating real estate because it provides a measure of core operations that is unaffected by depreciation, amortization, financing and general and administrative expense. NOI does not represent cash generated by operating activities in accordance with U.S. GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.
Ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests - consolidated real estate entities, capitalized interest and preferred distributions. Fixed charges consist of mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest.
Ratio of earnings to combined fixed charges and preferred distributions is computed by dividing earnings by combined fixed charges and preferred distributions. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests – consolidated real estate entities, capitalized interest and preferred distributions. Combined fixed charges and preferred distributions consist of fixed charges (mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest) and preferred distributions.
Scheduled rent revenue is the total possible revenue from all leasable units and square footage, with occupied space valued at contract rates pursuant to leases and vacant units or square footage at market rates.

| S-19 |

Same-store properties are properties owned or in service for the entirety of the periods being compared (except for properties classified as held for sale), and which, in the case of development properties, have achieved a stabilized level of occupancy, which is generally 90%.
U.S. GAAP is defined as accounting principles generally accepted in the United States of America.

| S-20 |