EX-99.1 2 iret9302019exhibit991.htm EXHIBIT 99.1
Exhibit 99.1

Earnings Release
IRET Reports Third Quarter 2019 Financial Results and Updates 2019 Guidance
MINOT, ND, November 6, 2019 – IRET (NYSE: IRET) announced today its third quarter 2019 financial and operating results. The tables below show Net Income (Loss), Funds from Operations (“FFO”) and Core FFO per share for the three and nine months ended September 30, 2019; same-store revenues, expenses, and net operating income ("NOI") over comparable periods; and same-store weighted-average occupancy for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018.

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Per Share |  | 2019 |  | 2018 |  | 2019 |  | 2018
Net Income (Loss) - diluted |  | $ | 2.54 |  |  | $ | 0.08 |  |  | $ | 2.11 |  |  | $ | (1.34 | )
FFO - diluted |  | $ | 0.93 |  |  | $ | 0.82 |  |  | $ | 3.15 |  |  | $ | 2.38 |
Core FFO - diluted |  | $ | 0.99 |  |  | $ | 0.86 |  |  | $ | 2.76 |  |  | $ | 2.49 |

|  | Year-Over-Year Comparison |  | Sequential Comparison |  | YTD Comparison
Same-Store Results |  | 3Q19 vs. 3Q18 |  | 3Q19 vs. 2Q19 |  | CY19 vs. CY18
Revenues |  | 4.0 | % |  | 0.6 | % |  | 3.7 | %
Expenses |  | 2.2 | % |  | 2.5 | % |  | 2.8 | %
NOI |  | 5.3 | % |  | (0.8 | )% |  | 4.4 | %

|  | Three months ended
Same-Store Results |  | September 30, 2019 |  | June 30, 2019 |  | September 30, 2018
Weighted Average Occupancy |  | 93.3 | % |  | 94.3 | % |  | 91.9 | %

Third Quarter 2019 Highlights

• | We reported Net Income of $2.54 per diluted share for the third quarter of 2019, compared to Net Income of $0.08 per share for the same quarter in 2018;

• | Core FFO grew by 15.1%, increasing to $0.99 per diluted share for the third quarter of 2019, compared to $0.86 per share for the same quarter in 2018;

• | Same-store revenue increased year-over-year by 4.0% driven by 2.6% growth in rental revenue and 1.4% growth in occupancy, while same-store operating expenses grew 2.2% year-over-year, primarily due to real estate taxes. The combination of 4.0% revenue growth and expense control initiatives that reduced same-store controllable expenses by 2.1% over the same period in 2018, led to same-store NOI growth of 5.3%, our eighth consecutive quarter of year-over-year NOI growth;

• | We entered into a $59.9 million mortgage loan and a $150.0 million private shelf agreement. Of the $150.0 million available under the private shelf agreement, we funded $75.0 million of Series A unsecured senior notes and $50.0 million of Series B unsecured senior notes;

• | We updated earnings guidance with respect to projected same-store growth for calendar year 2019 as follows:

◦ | raised the midpoint of full-year net income per diluted share guidance from net loss of $(1.22) to net income of $2.77. This increase was due to gains from the sale of real estate assets;

◦ | increased the range of full-year Core FFO per diluted share from $3.68 to $3.78, which increased the midpoint from $3.67 to $3.73. This increase is due to better operating results, disposition and redeployment execution, and interest savings from favorable debt refinancing;

◦ | raised the midpoint of full-year NOI to 3.75% from 3.50% by narrowing the range from 3.00%-4.00% to 3.50%-4.00%;

◦ | narrowed the range of revenue growth from 3.00%-4.00% to 3.25%-3.75%, which left the midpoint unchanged; and

◦ | narrowed the range for expenses from 2.75%-3.75% to 3.00%-3.50% and reaffirmed the midpoint of 3.25%.

• | We repurchased approximately 39,000 common shares for an aggregate total cost of $2.3 million, representing an average price of $59.57 per common share.

| 1 |

Acquisitions and Dispositions
During the third quarter, we acquired FreightYard Townhomes and Flats, a 96-home apartment community in Minneapolis, Minnesota, and Lugano at Cherry Creek, a 328-home apartment community in Denver, Colorado, for an aggregate purchase price of $125.3 million. During the third quarter, we sold one apartment community in Billings, Montana and our entire portfolio in Topeka, Kansas for an aggregate sale price of $84.4 million. We also sold one parcel of unimproved land for $600,000.
Balance Sheet
At the end of the third quarter, we had $155.4 million of total liquidity on our balance sheet, including $146.9 million available under our corporate revolver.
2019 Financial Overview
We are raising our earnings guidance for calendar year 2019 based on actual results through September 30, 2019 and expected results through the remainder of the calendar year as specified below.

| 2019 Revised |  | 2019 Guidance
| Range |  | Current Midpoint |  | Prior Midpoint |  | Change
Net income (loss) per share - diluted | $2.72 to $2.82 |  | $2.77 |  | $(1.22) |  | $3.99
Core FFO per share and Unit- diluted | $3.68 to $3.78 |  | $3.73 |  | $3.67 |  | $0.06
Same-Store Growth |  |  |  |  |  |  |
Revenue | 3.25% to 3.75% |  | 3.50% |  | 3.50% |  | —
Expenses | 3.00% to 3.50% |  | 3.25% |  | 3.25% |  | —
NOI | 3.50% to 4.00% |  | 3.75% |  | 3.50% |  | 0.25%

Recent Developments
On October 29, 2019, we sold five apartment communities containing 414 apartment homes in Bismarck, North Dakota for a sale price of $24.0 million. These properties included Crestview, Kirkwood Manor, North Pointe, Pebble Springs, and Westwood Park. The sale of these properties enabled us to retire $11.3 million of mortgage debt.
On November 1, 2019, we sold a commercial property in Woodbury, Minnesota for a sale price of $5.8 million.
Upcoming Events
IRET is scheduled to participate in the upcoming National Association of Real Estate Investment Trusts ("Nareit") REITworld: 2019 Annual Conference in Los Angeles, California, from November 12-14, 2019.
Quarterly Distributions
Effective September 5, 2019, IRET’s Board of Trustees declared a regular quarterly distribution of $0.70 per share/unit payable on September 30, 2019, to common shareholders and unitholders of record on September 16, 2019. IRET has paid cash dividends to common shareholders and unitholders every quarter since its initial dividend payment in 1971.
Effective September 5, 2019, IRET's Board of Trustees also declared a distribution of $0.4140625 per share on the 6.625% Series C Cumulative Redeemable Preferred Shares (NYSE: IRET PRC) payable on September 30, 2019, to holders of record on September 16, 2019. Series C preferred share distributions are cumulative and payable quarterly in arrears at an annual rate of $1.65625 per share.

| 2 |

Earnings Call

Live webcast and replay: http://ir.iretapartments.com
Live Conference Call |  | Conference Call Replay
Thursday, November 7, 2019, at 10:00 AM ET |  | Replay available until November 21, 2019
USA Toll Free Number | 1-877-509-9785 |  | USA Toll Free Number | 1-877-344-7529
International Toll Free Number | 1-412-902-4132 |  | International Toll Free Number | 1-412-317-0088
Canada Toll Free Number | 1-855-669-9657 |  | Canada Toll Free Number | 1-855-669-9658
|  |  | Conference Number | 10135927

Supplemental Information
Supplemental Operating and Financial Data for the quarter ended September 30, 2019 included herein (“Supplemental Information”), is available in the Investors section on IRET’s website at www.iretapartments.com or by calling Investor Relations at 701-837-7104. FFO, Core FFO, NOI, and Adjusted EBITDA are non-GAAP financial measures. These measures and other capitalized terms, as used in this earnings release, are defined and reconciled in the Supplemental Information that accompanies this earnings release.
About IRET
IRET is a real estate company focused on the ownership, management, acquisition, redevelopment, and development of apartment communities. As of September 30, 2019, we owned interests in 84 apartment communities consisting of 13,336 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).
Forward-Looking Statements
Certain statements in this press release and the accompanying Supplemental Operating and Financial Data are based on our current expectations and assumptions, and are “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 involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial conditions, or plans expressed or implied by the forward-looking statements. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be achieved. Such risks, uncertainties, and other factors that might cause such differences include, but are not limited to those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” contained in our Transition Report on Form 10-KT for the transition period ended December 31, 2018, in our subsequent quarterly reports on Form 10-Q, and in other public reports. We assume no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.
Investor Relations Contact Information
Jonathan Bishop
Vice President - Finance
Phone: 701-837-7104
E-mail: IR@iret.com

| 3 |

Supplemental Financial and Operating Data
Table of Contents
September 30, 2019

| Page
Common Share Data | S-1
Key Financial Data |
Condensed Consolidated Statements of Operations | S-2
Condensed Consolidated Balance Sheets | S-3
Non-GAAP Financial Measures and Reconciliations |
Net Operating Income | S-4
Funds From Operations | S-5
Adjusted EBITDA | S-7
Debt and Capital Analysis |
Debt Analysis | S-8
Capital Analysis | S-9
Portfolio Analysis |
Same-Store Comparison | S-10
Portfolio Summary | S-13
Same-Store Capital Expenditures | S-14
Financial Outlook | S-15

Common Share Data (NYSE: IRET)

|  | 3rd Quarter |  | 2nd Quarter |  | 1st Quarter |  | 4th Quarter |  | 3rd Quarter
|  | Calendar Year 2019 |  | Calendar Year 2019 |  | Calendar Year 2019 |  | Calendar Year 2018 |  | Calendar Year 2018
High closing price |  | $ | 74.67 |  |  | $ | 61.28 |  |  | $ | 61.50 |  |  | $ | 59.10 |  |  | $ | 59.80 |
Low closing price |  | $ | 59.22 |  |  | $ | 57.19 |  |  | $ | 49.92 |  |  | $ | 47.00 |  |  | $ | 53.30 |
Average closing price |  | $ | 66.83 |  |  | $ | 59.54 |  |  | $ | 58.11 |  |  | $ | 53.40 |  |  | $ | 54.99 |
Closing price at end of quarter |  | $ | 74.67 |  |  | $ | 58.67 |  |  | $ | 59.91 |  |  | $ | 49.07 |  |  | $ | 59.80 |
Common share distributions – annualized |  | $ | 2.80 |  |  | $ | 2.80 |  |  | $ | 2.80 |  |  | $ | 2.80 |  |  | $ | 2.80 |
Closing dividend yield – annualized |  | 3.8 | % |  | 4.8 | % |  | 4.7 | % |  | 5.7 | % |  | 4.7 | %
Closing common shares outstanding (thousands) |  | 11,625 |  |  | 11,656 |  |  | 11,768 |  |  | 11,942 |  |  | 11,961 |
Closing limited partnership units outstanding (thousands) |  | 1,223 |  |  | 1,224 |  |  | 1,365 |  |  | 1,368 |  |  | 1,379 |
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands) |  | $ | 959,360 |  |  | $ | 755,670 |  |  | $ | 786,798 |  |  | $ | 653,122 |  |  | $ | 797,732 |

| S-1 |

IRET
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands)

|  | Three Months Ended |  |  | Nine months ended
|  | 9/30/2019 |  | 6/30/2019 |  | 3/31/2019 |  | 12/31/2018 |  | 9/30/2018 |  |  | 9/30/2019 |  | 9/30/2018
REVENUE |  | $ | 47,436 |  |  | $ | 46,934 |  |  | $ | 45,608 |  |  | $ | 45,730 |  |  | $ | 45,406 |  |  |  | $ | 139,978 |  |  | $ | 134,638 |
EXPENSES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property operating expenses, excluding real estate taxes |  | 14,485 |  |  | 13,942 |  |  | 14,804 |  |  | 13,292 |  |  | 14,438 |  |  |  | 43,231 |  |  | 42,618 |
Real estate taxes |  | 5,425 |  |  | 5,574 |  |  | 5,232 |  |  | 5,098 |  |  | 5,049 |  |  |  | 16,231 |  |  | 15,073 |
Property management expense |  | 1,553 |  |  | 1,445 |  |  | 1,554 |  |  | 1,447 |  |  | 1,269 |  |  |  | 4,552 |  |  | 4,090 |
Casualty loss |  | 178 |  |  | 92 |  |  | 641 |  |  | 540 |  |  | 225 |  |  |  | 911 |  |  | 275 |
Depreciation/amortization |  | 18,751 |  |  | 18,437 |  |  | 18,111 |  |  | 18,812 |  |  | 19,164 |  |  |  | 55,299 |  |  | 58,812 |
Impairment of real estate investments |  | — |  |  | — |  |  | — |  |  | 1,221 |  |  | — |  |  |  | — |  |  | 17,809 |
General and administrative expenses |  | 3,448 |  |  | 3,549 |  |  | 3,806 |  |  | 3,769 |  |  | 3,147 |  |  |  | 10,803 |  |  | 11,114 |
TOTAL EXPENSES |  | $ | 43,840 |  |  | $ | 43,039 |  |  | $ | 44,148 |  |  | $ | 44,179 |  |  | $ | 43,292 |  |  |  | $ | 131,027 |  |  | $ | 149,791 |
Operating income (loss) |  | 3,596 |  |  | 3,895 |  |  | 1,460 |  |  | 1,551 |  |  | 2,114 |  |  |  | 8,951 |  |  | (15,153 | )
Interest expense |  | (7,694 | ) |  | (7,590 | ) |  | (7,896 | ) |  | (7,682 | ) |  | (8,193 | ) |  |  | (23,180 | ) |  | (25,051 | )
Loss on extinguishment of debt |  | (1,087 | ) |  | (407 | ) |  | (2 | ) |  | (5 | ) |  | (540 | ) |  |  | (1,496 | ) |  | (673 | )
Interest and other income |  | 498 |  |  | 468 |  |  | 424 |  |  | 483 |  |  | 395 |  |  |  | 1,390 |  |  | 1,544 |
Income (loss) before gain (loss) on sale of real estate and other investments, gain (loss) on litigation settlement, and income (loss) from discontinued operations |  | (4,687 | ) |  | (3,634 | ) |  | (6,014 | ) |  | (5,653 | ) |  | (6,224 | ) |  |  | (14,335 | ) |  | (39,333 | )
Gain (loss) on sale of real estate and other investments |  | 39,105 |  |  | 615 |  |  | 54 |  |  | 612 |  |  | 9,095 |  |  |  | 39,774 |  |  | 11,399 |
Gain (loss) on litigation settlement |  | 300 |  |  | 6,286 |  |  | — |  |  | — |  |  | — |  |  |  | 6,586 |  |  | — |
Income (loss) from continuing operations |  | 34,718 |  |  | 3,267 |  |  | (5,960 | ) |  | (5,041 | ) |  | 2,871 |  |  |  | 32,025 |  |  | (27,934 | )
Income (loss) from discontinued operations |  | — |  |  | — |  |  | — |  |  | — |  |  | 570 |  |  |  | — |  |  | 14,690 |
Net income (loss) |  | $ | 34,718 |  |  | $ | 3,267 |  |  | $ | (5,960 | ) |  | $ | (5,041 | ) |  | $ | 3,441 |  |  |  | $ | 32,025 |  |  | $ | (13,244 | )
Dividends to preferred unitholders |  | (160 | ) |  | (160 | ) |  | (57 | ) |  | — |  |  | — |  |  |  | (377 | ) |  | — |
Net (income) loss attributable to noncontrolling interest – Operating Partnership |  | (3,145 | ) |  | (148 | ) |  | 743 |  |  | 665 |  |  | (112 | ) |  |  | (2,550 | ) |  | 1,888 |
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities |  | 183 |  |  | 154 |  |  | 576 |  |  | 270 |  |  | (676 | ) |  |  | 913 |  |  | 439 |
Net income (loss) attributable to controlling interests |  | 31,596 |  |  | 3,113 |  |  | (4,698 | ) |  | (4,106 | ) |  | 2,653 |  |  |  | 30,011 |  |  | (10,917 | )
Dividends to preferred shareholders |  | (1,705 | ) |  | (1,706 | ) |  | (1,705 | ) |  | (1,705 | ) |  | (1,705 | ) |  |  | (5,116 | ) |  | (5,116 | )
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |  | $ | 29,891 |  |  | $ | 1,407 |  |  | $ | (6,403 | ) |  | $ | (5,811 | ) |  | $ | 948 |  |  |  | $ | 24,895 |  |  | $ | (16,033 | )
Per Share Data - Basic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earnings (loss) per common share from continuing operations – basic |  | $ | 2.57 |  |  | $ | 0.11 |  |  | $ | (0.54 | ) |  | $ | (0.49 | ) |  | $ | 0.04 |  |  |  | $ | 2.11 |  |  | $ | (2.44 | )
Earnings (loss) per common share from discontinued operations – basic |  | — |  |  | — |  |  | — |  |  | — |  |  | 0.04 |  |  |  | — |  |  | 1.10 |
Net earnings (loss) per common share – basic |  | $ | 2.57 |  |  | $ | 0.11 |  |  | $ | (0.54 | ) |  | $ | (0.49 | ) |  | $ | 0.08 |  |  |  | $ | 2.11 |  |  | $ | (1.34 | )
Per Share Data - Diluted |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earnings (loss) per common share from continuing operations – diluted |  | $ | 2.54 |  |  | $ | 0.11 |  |  | $ | (0.54 | ) |  | $ | (0.49 | ) |  | $ | 0.04 |  |  |  | $ | 2.11 |  |  | $ | (2.44 | )
Earnings per common share from discontinued operations – diluted |  | — |  |  | — |  |  | — |  |  | — |  |  | $ | 0.04 |  |  |  | — |  |  | $ | 1.10 |
Net earnings (loss) per common share – diluted |  | $ | 2.54 |  |  | $ | 0.11 |  |  | $ | (0.54 | ) |  | $ | (0.49 | ) |  | $ | 0.08 |  |  |  | $ | 2.11 |  |  | $ | (1.34 | )
Percentage of Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property operating expenses, excluding real estate taxes |  | 30.5 | % |  | 29.7 | % |  | 32.5 | % |  | 29.1 | % |  | 31.8 | % |  |  | 30.9 | % |  | 31.7 | %
General and administrative expenses |  | 7.3 | % |  | 7.6 | % |  | 8.3 | % |  | 8.2 | % |  | 6.9 | % |  |  | 7.7 | % |  | 8.3 | %
Interest |  | 16.2 | % |  | 16.2 | % |  | 17.3 | % |  | 16.8 | % |  | 18.0 | % |  |  | 16.6 | % |  | 18.6 | %
Income (loss) from discontinued operations |  | — |  |  | — |  |  | — |  |  | — |  |  | 1.3 | % |  |  | — |  |  | 10.9 | %
Net income (loss) |  | 73.2 | % |  | 7.0 | % |  | (13.1 | )% |  | (11.0 | )% |  | 7.6 | % |  |  | 22.9 | % |  | (9.8 | )%

| S-2 |

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

|  | 9/30/2019 |  | 6/30/2019 |  | 3/31/2019 |  | 12/31/2018 |  | 9/30/2018
ASSETS |  |  |  |  |  |  |  |  |  |
Real estate investments |  |  |  |  |  |  |  |  |  |
Property owned |  | $ | 1,720,352 |  |  | $ | 1,663,539 |  |  | $ | 1,673,158 |  |  | $ | 1,627,636 |  |  | $ | 1,638,909 |
Less accumulated depreciation |  | (370,492 | ) |  | (380,321 | ) |  | (371,672 | ) |  | (353,871 | ) |  | (339,515 | )
|  | 1,349,860 |  |  | 1,283,218 |  |  | 1,301,486 |  |  | 1,273,765 |  |  | 1,299,394 |
Unimproved land |  | 1,376 |  |  | 1,746 |  |  | 2,252 |  |  | 5,301 |  |  | 6,522 |
Mortgage loans receivable |  | 10,140 |  |  | 10,140 |  |  | 10,260 |  |  | 10,410 |  |  | 10,530 |
Total real estate investments |  | 1,361,376 |  |  | 1,295,104 |  |  | 1,313,998 |  |  | 1,289,476 |  |  | 1,316,446 |
Cash and cash equivalents |  | 8,500 |  |  | 17,406 |  |  | 23,329 |  |  | 13,792 |  |  | 36,910 |
Restricted cash |  | 3,339 |  |  | 4,672 |  |  | 4,819 |  |  | 5,464 |  |  | 4,669 |
Other assets |  | 30,589 |  |  | 30,626 |  |  | 29,166 |  |  | 27,265 |  |  | 28,472 |
TOTAL ASSETS |  | $ | 1,403,804 |  |  | $ | 1,347,808 |  |  | $ | 1,371,312 |  |  | $ | 1,335,997 |  |  | $ | 1,386,497 |
LIABILITIES, MEZZANINE EQUITY, AND EQUITY |  |  |  |  |  |  |  |  |  |
LIABILITIES |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 40,546 |  |  | $ | 44,766 |  |  | $ | 40,697 |  |  | $ | 40,892 |  |  | $ | 38,203 |
Revolving line of credit |  | 103,143 |  |  | 177,939 |  |  | 118,677 |  |  | 57,500 |  |  | 71,000 |
Notes payable, net of loan costs |  | 269,006 |  |  | 144,082 |  |  | 144,036 |  |  | 143,991 |  |  | 143,937 |
Mortgages payable, net of loan costs |  | 360,886 |  |  | 370,461 |  |  | 430,950 |  |  | 444,197 |  |  | 463,052 |
TOTAL LIABILITIES |  | $ | 773,581 |  |  | $ | 737,248 |  |  | $ | 734,360 |  |  | $ | 686,580 |  |  | $ | 716,192 |
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES |  | — |  |  | — |  |  | — |  |  | $ | 5,968 |  |  | $ | 6,130 |
SERIES D PREFERRED UNITS |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |  |  | — |  |  | — |
EQUITY |  |  |  |  |  |  |  |  |  |
Series C Preferred Shares of Beneficial Interest |  | 99,456 |  |  | 99,456 |  |  | 99,456 |  |  | 99,456 |  |  | 99,456 |
Common Shares of Beneficial Interest |  | 886,598 |  |  | 888,541 |  |  | 895,381 |  |  | 899,234 |  |  | 900,368 |
Accumulated distributions in excess of net income |  | (428,680 | ) |  | (450,433 | ) |  | (443,661 | ) |  | (429,048 | ) |  | (414,900 | )
Accumulated other comprehensive income (loss) |  | (9,793 | ) |  | (7,598 | ) |  | (3,139 | ) |  | (856 | ) |  | 2,760 |
Total shareholders’ equity |  | $ | 547,581 |  |  | $ | 529,966 |  |  | $ | 548,037 |  |  | $ | 568,786 |  |  | $ | 587,684 |
Noncontrolling interests – Operating Partnership |  | 60,169 |  |  | 57,902 |  |  | 66,060 |  |  | 67,916 |  |  | 69,578 |
Noncontrolling interests – consolidated real estate entities |  | 5,913 |  |  | 6,132 |  |  | 6,295 |  |  | 6,747 |  |  | 6,913 |
Total equity |  | $ | 613,663 |  |  | $ | 594,000 |  |  | $ | 620,392 |  |  | $ | 643,449 |  |  | $ | 664,175 |
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY |  | $ | 1,403,804 |  |  | $ | 1,347,808 |  |  | $ | 1,371,312 |  |  | $ | 1,335,997 |  |  | $ | 1,386,497 |

| S-3 |

IRET
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (unaudited)
This release contains certain non-GAAP financial measures. The non-GAAP measures should not be considered a substitute for operating results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The definitions and calculations of these non-GAAP measures, as calculated by us, may not be comparable to non-GAAP measures reported by other REITs that do not define each of the non-GAAP measures exactly as we do.
We provide certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or in service for the entirety of the periods being compared, and, in the case of development properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate full period-over-period operating comparisons for existing apartment communities and their contribution to net income. We believe that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of our communities are performing year-over-year. We use this measure to assess whether or not we have been successful in increasing NOI, renewing the leases on existing residents, controlling operating costs, and making prudent capital improvements.
Reconciliation of Operating Income (Loss) to Net Operating Income
Net operating income, or NOI, is a non-GAAP measure which we define as total real estate revenues less property operating expenses, including real estate taxes. We believe that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with 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.

| (in thousands, except percentages)
| Three Months Ended September 30, |  |  | Nine Months Ended September 30,
| 2019 |  | 2018 |  | $ Change |  | % Change |  |  | 2019 |  | 2018 |  | $ Change |  | % Change
Operating income (loss) | $ | 3,596 |  |  | $ | 2,114 |  |  | $ | 1,482 |  |  | 70.1 | % |  |  | $ | 8,951 |  |  | $ | (15,153 | ) |  | $ | 24,104 |  |  | (159.1 | )%
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property management expenses | 1,553 |  |  | 1,269 |  |  | 284 |  |  | 22.4 | % |  |  | 4,552 |  |  | 4,090 |  |  | 462 |  |  | 11.3 | %
Casualty loss | 178 |  |  | 225 |  |  | (47 | ) |  | (20.9 | )% |  |  | 911 |  |  | 275 |  |  | 636 |  |  | 231.3 | %
Depreciation and amortization | 18,751 |  |  | 19,164 |  |  | (413 | ) |  | (2.2 | )% |  |  | 55,299 |  |  | 58,812 |  |  | (3,513 | ) |  | (6.0 | )%
Impairment | — |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | 17,809 |  |  | (17,809 | ) |  | (100.0 | )%
General and administrative expenses | 3,448 |  |  | 3,147 |  |  | 301 |  |  | 9.6 | % |  |  | 10,803 |  |  | 11,114 |  |  | (311 | ) |  | (2.8 | )%
Net operating income | $ | 27,526 |  |  | $ | 25,919 |  |  | $ | 1,607 |  |  | 6.2 | % |  |  | $ | 80,516 |  |  | $ | 76,947 |  |  | $ | 3,569 |  |  | 4.6 | %
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same-store | $ | 37,633 |  |  | $ | 36,198 |  |  | $ | 1,435 |  |  | 4.0 | % |  |  | $ | 112,052 |  |  | $ | 108,031 |  |  | $ | 4,021 |  |  | 3.7 | %
Non-same-store | 6,283 |  |  | 4,687 |  |  | 1,596 |  |  | 34.1 | % |  |  | 17,405 |  |  | 11,038 |  |  | 6,367 |  |  | 57.7 | %
Other properties and dispositions | 3,520 |  |  | 4,521 |  |  | (1,001 | ) |  | (22.1 | )% |  |  | 10,521 |  |  | 15,569 |  |  | (5,048 | ) |  | (32.4 | )%
Total | 47,436 |  |  | 45,406 |  |  | 2,030 |  |  | 4.5 | % |  |  | 139,978 |  |  | 134,638 |  |  | 5,340 |  |  | 4.0 | %
Property operating expenses, including real estate taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same-store | 16,147 |  |  | 15,795 |  |  | 352 |  |  | 2.2 | % |  |  | 48,561 |  |  | 47,227 |  |  | 1,334 |  |  | 2.8 | %
Non-same-store | 2,308 |  |  | 1,696 |  |  | 612 |  |  | 36.1 | % |  |  | 6,327 |  |  | 4,115 |  |  | 2,212 |  |  | 53.8 | %
Other properties and dispositions | 1,455 |  |  | 1,996 |  |  | (541 | ) |  | (27.1 | )% |  |  | 4,574 |  |  | 6,349 |  |  | (1,775 | ) |  | (28.0 | )%
Total | 19,910 |  |  | 19,487 |  |  | 423 |  |  | 2.2 | % |  |  | 59,462 |  |  | 57,691 |  |  | 1,771 |  |  | 3.1 | %
Net operating income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same-store | 21,486 |  |  | 20,403 |  |  | 1,083 |  |  | 5.3 | % |  |  | 63,491 |  |  | 60,804 |  |  | 2,687 |  |  | 4.4 | %
Non-same-store | 3,975 |  |  | 2,991 |  |  | 984 |  |  | 32.9 | % |  |  | 11,078 |  |  | 6,923 |  |  | 4,155 |  |  | 60.0 | %
Other properties and dispositions | 2,065 |  |  | 2,525 |  |  | (460 | ) |  | (18.2 | )% |  |  | 5,947 |  |  | 9,220 |  |  | (3,273 | ) |  | (35.5 | )%
Total | $ | 27,526 |  |  | $ | 25,919 |  |  | $ | 1,607 |  |  | 6.2 | % |  |  | $ | 80,516 |  |  | $ | 76,947 |  |  | $ | 3,569 |  |  | 4.6 | %

| S-4 |

Same-Store Property Operating Expense Comparison

| (in thousands, except percentages)
| Three Months Ended September 30, |  |  | Nine Months Ended September 30,
| 2019 |  | 2018 |  | $ Change |  | % Change |  |  | 2019 |  | 2018 |  | $ Change |  | % Change
Controllable expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation | $ | 4,368 |  |  | $ | 4,362 |  |  | $ | 6 |  |  | 0.1 | % |  |  | $ | 12,889 |  |  | $ | 13,520 |  |  | $ | (631 | ) |  | (4.7 | )%
Repairs and maintenance | 3,078 |  |  | 3,277 |  |  | (199 | ) |  | (6.1 | )% |  |  | 9,296 |  |  | 8,987 |  |  | 309 |  |  | 3.4 | %
Utilities | 2,608 |  |  | 2,614 |  |  | (6 | ) |  | (0.2 | )% |  |  | 8,388 |  |  | 8,304 |  |  | 84 |  |  | 1.0 | %
Administrative and marketing | 778 |  |  | 810 |  |  | (32 | ) |  | (4.0 | )% |  |  | 2,530 |  |  | 2,401 |  |  | 129 |  |  | 5.4 | %
Total | $ | 10,832 |  |  | $ | 11,063 |  |  | $ | (231 | ) |  | (2.1 | )% |  |  | $ | 33,103 |  |  | $ | 33,212 |  |  | $ | (109 | ) |  | (0.3 | )%
Non-controllable expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate taxes | $ | 4,173 |  |  | $ | 3,973 |  |  | $ | 200 |  |  | 5.0 | % |  |  | $ | 12,506 |  |  | $ | 12,032 |  |  | $ | 474 |  |  | 3.9 | %
Insurance | 1,142 |  |  | 759 |  |  | 383 |  |  | 50.5 | % |  |  | 2,952 |  |  | 1,983 |  |  | 969 |  |  | 48.9 | %
Total | $ | 5,315 |  |  | $ | 4,732 |  |  | $ | 583 |  |  | 12.3 | % |  |  | $ | 15,458 |  |  | $ | 14,015 |  |  | $ | 1,443 |  |  | 10.3 | %
Total | $ | 16,147 |  |  | $ | 15,795 |  |  | $ | 352 |  |  | 2.2 | % |  |  | $ | 48,561 |  |  | $ | 47,227 |  |  | $ | 1,334 |  |  | 2.8 | %

Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations
We use the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding:

• | depreciation and amortization related to real estate;

• | gains and losses from the sale of certain real estate assets; and

• | impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.

Due to the limitations of the Nareit FFO definition, we have made certain interpretations in applying this definition. We believe that all such interpretations not specifically identified in the Nareit definition are consistent with this definition. Nareit's FFO White Paper 2018 Restatement clarified that impairment write-downs of land related to a REIT's main business are excluded from FFO and a REIT has the option to exclude impairment write-downs of assets that are incidental to its main business.
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 is not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. The exclusion in Nareit’s definition of FFO of impairment write-downs and gains and losses from the sale of 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.
While FFO is widely used by us as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO in the same way. Accordingly, FFO presented here is not necessarily comparable to FFO presented by other real estate companies. FFO should not be considered as an alternative to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of sufficient cash flow to fund all of our needs or our ability to service indebtedness or make distributions.
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 that 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 that may be calculated differently by other REITs and should not be considered a substitute for operating results determined in accordance with GAAP.

| S-5 |

|  | (in thousands, except per share amounts)
|  | Three Months Ended |  |  | Nine Months Ended
|  | 9/30/2019 |  | 6/30/2019 |  | 3/31/2019 |  | 12/31/2018 |  | 9/30/2018 |  |  | 9/30/2019 |  | 9/30/2018
Funds From Operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) available to common shareholders |  | $ | 29,891 |  |  | $ | 1,407 |  |  | $ | (6,403 | ) |  | $ | (5,811 | ) |  | $ | 948 |  |  |  | $ | 24,895 |  |  | $ | (16,033 | )
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncontrolling interests – Operating Partnership |  | 3,145 |  |  | 148 |  |  | (743 | ) |  | (665 | ) |  | 112 |  |  |  | 2,550 |  |  | (1,888 | )
Depreciation and amortization |  | 18,751 |  |  | 18,437 |  |  | 18,111 |  |  | 18,812 |  |  | 19,164 |  |  |  | 55,299 |  |  | 58,814 |
Less depreciation – non real estate |  | (71 | ) |  | (79 | ) |  | (85 | ) |  | (76 | ) |  | (76 | ) |  |  | (235 | ) |  | (231 | )
Less depreciation – partially owned entities |  | (452 | ) |  | (474 | ) |  | (678 | ) |  | (680 | ) |  | (673 | ) |  |  | (1,604 | ) |  | (2,115 | )
Impairment of real estate |  | — |  |  | — |  |  | — |  |  | 1,221 |  |  | — |  |  |  | — |  |  | 17,809 |
(Gain) loss on sale of real estate |  | (39,105 | ) |  | (615 | ) |  | (54 | ) |  | (612 | ) |  | (8,499 | ) |  |  | (39,774 | ) |  | (24,633 | )
FFO applicable to common shares and Units |  | $ | 12,159 |  |  | $ | 18,824 |  |  | $ | 10,148 |  |  | $ | 12,189 |  |  | $ | 10,976 |  |  |  | $ | 41,131 |  |  | $ | 31,723 |
Adjustments to Core FFO: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Casualty loss write off |  | — |  |  | — |  |  | — |  |  | 43 |  |  | — |  |  |  | — |  |  | — |
Loss on extinguishment of debt |  | 1,087 |  |  | 407 |  |  | 2 |  |  | 5 |  |  | 540 |  |  |  | 1,496 |  |  | 673 |
Gain on litigation settlement |  | (300 | ) |  | (6,286 | ) |  | — |  |  | — |  |  | — |  |  |  | (6,586 | ) |  | — |
Severance and transition costs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | 811 |
Core FFO applicable to common shares and Units |  | $ | 12,946 |  |  | $ | 12,945 |  |  | $ | 10,150 |  |  | $ | 12,237 |  |  | $ | 11,516 |  |  |  | $ | 36,041 |  |  | $ | 33,207 |
Funds from operations applicable to common shares and Units |  | $ | 12,159 |  |  | $ | 18,824 |  |  | $ | 10,148 |  |  | $ | 12,189 |  |  | $ | 10,976 |  |  |  | $ | 41,131 |  |  | $ | 31,723 |
Dividends to preferred unitholders |  | 160 |  |  | 160 |  |  | 57 |  |  | — |  |  | — |  |  |  | 377 |  |  | — |
Funds from operations applicable to common shares and Units - diluted |  | $ | 12,319 |  |  | $ | 18,984 |  |  | $ | 10,205 |  |  | $ | 12,189 |  |  | $ | 10,976 |  |  |  | $ | 41,508 |  |  | $ | 31,723 |
Core funds from operations applicable to common shares and Units |  | $ | 12,946 |  |  | $ | 12,945 |  |  | $ | 10,150 |  |  | $ | 12,237 |  |  | $ | 11,516 |  |  |  | $ | 36,041 |  |  | $ | 33,207 |
Dividends to preferred unitholders |  | 160 |  |  | 160 |  |  | 57 |  |  | — |  |  | — |  |  |  | 377 |  |  | — |
Core funds from operations applicable to common shares and Units - diluted |  | $ | 13,106 |  |  | $ | 13,105 |  |  | $ | 10,207 |  |  | $ | 12,237 |  |  | $ | 11,516 |  |  |  | $ | 36,418 |  |  | $ | 33,207 |
Per Share Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earnings (loss) per share and Unit - diluted |  | $ | 2.54 |  |  | $ | 0.12 |  |  | $ | (0.54 | ) |  | $ | (0.49 | ) |  | $ | 0.08 |  |  |  | $ | 2.11 |  |  | $ | (1.34 | )
FFO per share and Unit - diluted |  | $ | 0.93 |  |  | $ | 1.45 |  |  | $ | 0.77 |  |  | $ | 0.92 |  |  | $ | 0.82 |  |  |  | $ | 3.15 |  |  | $ | 2.38 |
Core FFO per share and Unit - diluted |  | $ | 0.99 |  |  | $ | 1.00 |  |  | $ | 0.77 |  |  | $ | 0.92 |  |  | $ | 0.86 |  |  |  | $ | 2.76 |  |  | $ | 2.49 |
Weighted average shares and Units - diluted |  | 13,087 |  |  | 13,197 |  |  | 13,230 |  |  | 13,317 |  |  | 13,318 |  |  |  | 13,174 |  |  | 13,351 |

| S-6 |

Reconciliation of Net Income (Loss) Available to Common Shareholders to Adjusted EBITDA
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, gain on litigation settlement, 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 and should not be considered a substitute for operating results determined in accordance with GAAP. Adjusted EBITDA as calculated by us may not be comparable to Adjusted EBITDA reported by other REITs that do not define Adjusted EBITDA exactly as we do.

|  | (in thousands)
|  | Three Months Ended |  |  | Nine Months Ended
|  | 9/30/2019 |  | 6/30/2019 |  | 3/31/2019 |  | 12/31/2018 |  | 9/30/2018 |  |  | 9/30/2019 |  | 9/30/2018
Adjusted EBITDA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) available to common shareholders |  | $ | 31,596 |  |  | $ | 3,113 |  |  | $ | (4,698 | ) |  | $ | (4,106 | ) |  | $ | 2,653 |  |  |  | $ | 30,011 |  |  | $ | (10,917 | )
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends to preferred unitholders |  | 160 |  |  | 160 |  |  | 57 |  |  | — |  |  | — |  |  |  | 377 |  |  | — |
Noncontrolling interests – Operating Partnership |  | 3,145 |  |  | 148 |  |  | (743 | ) |  | (665 | ) |  | 112 |  |  |  | 2,550 |  |  | (1,888 | )
Income (loss) before noncontrolling interests – Operating Partnership |  | $ | 34,901 |  |  | $ | 3,421 |  |  | $ | (5,384 | ) |  | $ | (4,771 | ) |  | $ | 2,765 |  |  |  | $ | 32,938 |  |  | $ | (12,805 | )
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  | 7,448 |  |  | 7,343 |  |  | 7,558 |  |  | 7,336 |  |  | 7,828 |  |  |  | 22,349 |  |  | 23,857 |
Loss on extinguishment of debt |  | 1,087 |  |  | 407 |  |  | 2 |  |  | 4 |  |  | 541 |  |  |  | 1,496 |  |  | 673 |
Depreciation/amortization related to real estate investments |  | 18,299 |  |  | 17,963 |  |  | 17,433 |  |  | 18,133 |  |  | 18,491 |  |  |  | 53,695 |  |  | 56,699 |
Impairment of real estate investments |  | — |  |  | — |  |  | — |  |  | 1,221 |  |  | — |  |  |  | — |  |  | 17,809 |
Interest income |  | (402 | ) |  | (402 | ) |  | (407 | ) |  | (465 | ) |  | (366 | ) |  |  | (1,211 | ) |  | (1,468 | )
(Gain) loss on sale of real estate and other investments |  | (39,105 | ) |  | (615 | ) |  | (54 | ) |  | (611 | ) |  | (8,499 | ) |  |  | (39,774 | ) |  | (24,633 | )
Gain on litigation settlement |  | (300 | ) |  | (6,286 | ) |  | — |  |  | — |  |  | — |  |  |  | (6,586 | ) |  | — |
Adjusted EBITDA |  | $ | 21,928 |  |  | $ | 21,831 |  |  | $ | 19,148 |  |  | $ | 20,847 |  |  | $ | 20,760 |  |  |  | $ | 62,907 |  |  | $ | 60,132 |

| S-7 |

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

|  | Future Maturities of Debt
|  | Secured Fixed Debt |  | Unsecured Fixed Debt(1) |  | Unsecured Variable Debt |  | Total Debt |  | % of Total Debt |  | Weighted Average Interest Rate(2)
2019 (remainder) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
2020 |  | $ | 17,550 |  |  | $ | — |  |  | $ | 293 |  |  | $ | 17,843 |  |  | 2.4 | % |  | 5.31 | %
2021 |  | 51,876 |  |  | — |  |  | — |  |  | 51,876 |  |  | 7.0 | % |  | 5.42 | %
2022 |  | 38,093 |  |  | 50,000 |  |  | 52,850 |  |  | 140,943 |  |  | 19.2 | % |  | 3.84 | %
2023 |  | 48,520 |  |  | — |  |  | — |  |  | 48,520 |  |  | 6.6 | % |  | 4.02 | %
Thereafter |  | 206,692 |  |  | 270,000 |  |  | — |  |  | 476,692 |  |  | 64.8 | % |  | 3.87 | %
Total debt |  | $ | 362,731 |  |  | $ | 320,000 |  |  | $ | 53,143 |  |  | $ | 735,874 |  |  | 100.0 | % |  | 4.02 | %

(1) | Term loans have variable interest rates that are fixed with interest rate swaps and $50.0 million of our variable interest, primary line of credit is fixed with an interest rate swap.

(2) | Weighted average interest rate of debt that matures during the year, including the effect of interest rate swaps on the term loans and line of credit.

|  | 9/30/2019 |  | 6/30/2019 |  | 3/31/2019 |  | 12/31/2018 |  | 9/30/2018
Debt Balances Outstanding(1) |  |  |  |  |  |  |  |  |  |
Secured fixed rate |  | $ | 362,731 |  |  | $ | 371,951 |  |  | $ | 432,588 |  |  | $ | 445,974 |  |  | $ | 464,964 |
Unsecured fixed rate line of credit(2) |  | 50,000 |  |  | 50,000 |  |  | — |  |  | — |  |  | — |
Secured line of credit(3) |  | — |  |  | 15,000 |  |  | 15,000 |  |  | — |  |  | — |
Unsecured variable rate line of credit |  | 53,143 |  |  | 112,939 |  |  | 103,677 |  |  | 57,500 |  |  | 71,000 |
Unsecured term loans |  | 145,000 |  |  | 145,000 |  |  | 145,000 |  |  | 145,000 |  |  | 145,000 |
Unsecured senior notes |  | 125,000 |  |  | — |  |  | — |  |  | — |  |  | — |
Debt total |  | $ | 735,874 |  |  | $ | 694,890 |  |  | $ | 696,265 |  |  | $ | 648,474 |  |  | $ | 680,964 |
Mortgage debt weighted average interest rate |  | 4.15 | % |  | 4.37 | % |  | 4.54 | % |  | 4.58 | % |  | 4.65 | %
Lines of credit rate (rate with swap) |  | 3.73 | % |  | 3.91 | % |  | 3.89 | % |  | 3.72 | % |  | 3.67 | %
Term loan rate (rate with swap) |  | 4.14 | % |  | 4.14 | % |  | 3.99 | % |  | 4.01 | % |  | 3.97 | %
Senior notes rate |  | 3.78 | % |  | — |  |  | — |  |  | — |  |  | — |

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

(2) | A portion of our primary line of credit is fixed through an interest rate swap.

(3) | Our revolving line of credit consists primarily of unsecured borrowings. A portion of the line was secured in connection with our acquisition of SouthFork Townhomes, under an agreement which allowed us to offer the seller tax protection upon purchase.

| S-8 |

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

|  | Three Months Ended
|  | 9/30/2019 |  | 6/30/2019 |  | 3/31/2019 |  | 12/31/2018 |  | 9/30/2018
Equity Capitalization |  |  |  |  |  |  |  |  |  |
Common shares outstanding |  | 11,625 |  |  | 11,656 |  |  | 11,768 |  |  | 11,942 |  |  | 11,961 |
Operating partnership units outstanding |  | 1,223 |  |  | 1,224 |  |  | 1,365 |  |  | 1,368 |  |  | 1,379 |
Total common shares and units outstanding |  | 12,848 |  |  | 12,880 |  |  | 13,133 |  |  | 13,310 |  |  | 13,340 |
Market price per common share (closing price at end of period) |  | $ | 74.67 |  |  | $ | 58.67 |  |  | $ | 59.91 |  |  | $ | 49.07 |  |  | $ | 59.80 |
Equity capitalization-common shares and units |  | $ | 959,360 |  |  | $ | 755,670 |  |  | $ | 786,798 |  |  | $ | 653,122 |  |  | $ | 797,732 |
Recorded book value of preferred shares |  | $ | 99,456 |  |  | $ | 99,456 |  |  | $ | 99,456 |  |  | $ | 99,456 |  |  | $ | 99,456 |
Total equity capitalization |  | $ | 1,058,816 |  |  | $ | 855,126 |  |  | $ | 886,254 |  |  | $ | 752,578 |  |  | $ | 897,188 |
Series D Preferred Units |  | $ | 16,560 |  |  | $ | 16,560 |  |  | 16,560 |  |  | — |  |  | — |
Debt Capitalization |  |  |  |  |  |  |  |  |  |
Total debt |  | $ | 735,874 |  |  | $ | 694,889 |  |  | $ | 696,265 |  |  | $ | 648,474 |  |  | $ | 680,964 |
Total capitalization |  | $ | 1,811,250 |  |  | $ | 1,566,575 |  |  | $ | 1,599,079 |  |  | $ | 1,401,052 |  |  | $ | 1,578,152 |
Total debt to total capitalization(1) |  | 40.6% |  |  | 44.4% |  |  | 43.5% |  |  | 46.3% |  |  | 43.2% |

(1) | 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 common shares, operating partnership units, Series C preferred shares, and Series D preferred units outstanding at the end of the period.

|  | Three Months Ended |  |  | Nine Months Ended
|  | 9/30/2019 |  | 6/30/2019 |  | 3/31/2019 |  | 12/31/2018 |  | 9/30/2018 |  |  | 9/30/2019 |  | 9/30/2018
Debt service coverage ratio(1) |  | 2.26 | x |  | 2.24 | x |  | 1.86 | x |  | 2.07 | x |  | 1.96 | x |  |  | 2.11 | x |  | 1.69 | x
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization |  | 1.90 | x |  | 1.88 | x |  | 1.58 | x |  | 1.77 | x |  | 1.69 | x |  |  | 1.78 | x |  | 1.59 | x
Distribution Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common shares and Units outstanding at record date |  | 12,848 |  |  | 12,914 |  |  | 13,135 |  |  | 13,276 |  |  | 13,340 |  |  |  | 12,848 |  |  | 13,340 |
Total common distribution declared |  | $ | 8,994 |  |  | $ | 9,039 |  |  | $ | 9,195 |  |  | $ | 9,293 |  |  | $ | 9,339 |  |  |  | $ | 27,228 |  |  | $ | 28,079 |
Common distribution per share and Unit |  | $ | 0.70 |  |  | $ | 0.70 |  |  | $ | 0.70 |  |  | $ | 0.70 |  |  | $ | 0.70 |  |  |  | $ | 2.10 |  |  | $ | 2.10 |
Payout ratio (FFO per share and Unit basis)(2) |  | 75.3 | % |  | 48.3 | % |  | 90.9 | % |  | 76.1 | % |  | 85.4 | % |  |  | 66.7 | % |  | 88.2 | %
Payout ratio (Core FFO per share and Unit basis)(3) |  | 70.7 | % |  | 70.0 | % |  | 90.9 | % |  | 76.1 | % |  | 81.4 | % |  |  | 76.1 | % |  | 84.3 | %

(1) | Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization

(2) | 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. This term is a non-GAAP measure and should not be considered a substitute for operating results determined in accordance with GAAP.

(3) | Payout ratio (Core 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 Core FFO per share and unit. This term is a non-GAAP measure and should not be considered a substitute for operating results determined in accordance with GAAP.

| S-9 |

IRET
SAME-STORE THIRD QUARTER COMPARISONS
(in thousands, except property data amounts and percentages)

|  | Apartment Homes Included |  | Revenues |  | Expenses |  | NOI
Regions |  |  | CY19Q3 |  | CY18Q3 |  | % Change |  | CY19Q3 |  | CY18Q3 |  | % Change |  | CY19Q3 |  | CY18Q3 |  | % Change
Minneapolis, MN |  | 1,796 |  |  | $ | 7,774 |  |  | $ | 7,414 |  |  | 4.9 | % |  | $ | 3,360 |  |  | $ | 3,063 |  |  | 9.7 | % |  | $ | 4,414 |  |  | $ | 4,351 |  |  | 1.4 | %
Rochester, MN |  | 1,711 |  |  | 6,446 |  |  | 6,031 |  |  | 6.9 | % |  | 2,386 |  |  | 2,477 |  |  | (3.7 | )% |  | 4,060 |  |  | 3,554 |  |  | 14.2 | %
Omaha, NE |  | 1,370 |  |  | 3,738 |  |  | 3,697 |  |  | 1.1 | % |  | 1,740 |  |  | 1,686 |  |  | 3.2 | % |  | 1,998 |  |  | 2,011 |  |  | (0.6 | )%
Grand Forks, ND |  | 1,555 |  |  | 4,287 |  |  | 4,149 |  |  | 3.3 | % |  | 1,882 |  |  | 1,890 |  |  | (0.4 | )% |  | 2,405 |  |  | 2,259 |  |  | 6.5 | %
Bismarck, ND |  | 1,259 |  |  | 3,654 |  |  | 3,572 |  |  | 2.3 | % |  | 1,503 |  |  | 1,471 |  |  | 2.2 | % |  | 2,151 |  |  | 2,101 |  |  | 2.4 | %
St. Cloud, MN |  | 1,190 |  |  | 3,517 |  |  | 3,389 |  |  | 3.8 | % |  | 1,557 |  |  | 1,570 |  |  | (0.8 | )% |  | 1,960 |  |  | 1,819 |  |  | 7.8 | %
Sioux Falls, SD |  | 969 |  |  | 2,532 |  |  | 2,505 |  |  | 1.1 | % |  | 1,228 |  |  | 1,227 |  |  | 0.1 | % |  | 1,304 |  |  | 1,278 |  |  | 2.0 | %
Billings, MT |  | 749 |  |  | 2,144 |  |  | 2,040 |  |  | 5.1 | % |  | 882 |  |  | 880 |  |  | 0.2 | % |  | 1,262 |  |  | 1,160 |  |  | 8.8 | %
Minot, ND |  | 712 |  |  | 2,117 |  |  | 2,051 |  |  | 3.2 | % |  | 1,035 |  |  | 960 |  |  | 7.8 | % |  | 1,082 |  |  | 1,091 |  |  | (0.8 | )%
Rapid City, SD |  | 474 |  |  | 1,424 |  |  | 1,350 |  |  | 5.5 | % |  | 574 |  |  | 571 |  |  | 0.5 | % |  | 850 |  |  | 779 |  |  | 9.1 | %
Same-Store Total |  | 11,785 |  |  | $ | 37,633 |  |  | $ | 36,198 |  |  | 4.0 | % |  | $ | 16,147 |  |  | $ | 15,795 |  |  | 2.2 | % |  | $ | 21,486 |  |  | $ | 20,403 |  |  | 5.3 | %

|  | % of NOI Contribution |  | Weighted Average Occupancy (1) |  | Weighted Average Monthly Rental Rate (2) |  | Weighted Average Monthly Revenue per Occupied Home (3)
Regions |  |  | CY19Q3 |  | CY18Q3 |  | Growth |  | CY19Q3 |  | CY18Q3 |  | % Change |  | CY19Q3 |  | CY18Q3 |  | % Change
Minneapolis, MN |  | 20.5 | % |  | 90.8 | % |  | 90.3 | % |  | 0.5 | % |  | $ | 1,478 |  |  | $ | 1,428 |  |  | 3.5 | % |  | $ | 1,590 |  |  | $ | 1,523 |  |  | 4.3 | %
Rochester, MN |  | 18.9 | % |  | 94.6 | % |  | 91.3 | % |  | 3.3 | % |  | 1,257 |  |  | 1,229 |  |  | 2.3 | % |  | 1,327 |  |  | 1,287 |  |  | 3.6 | %
Omaha, NE |  | 9.3 | % |  | 93.0 | % |  | 93.4 | % |  | (0.4 | )% |  | 900 |  |  | 879 |  |  | 2.4 | % |  | 977 |  |  | 963 |  |  | 1.5 | %
Grand Forks, ND |  | 11.2 | % |  | 94.1 | % |  | 91.3 | % |  | 2.8 | % |  | 908 |  |  | 922 |  |  | (1.5 | )% |  | 977 |  |  | 975 |  |  | 0.5 | %
Bismarck, ND |  | 10.0 | % |  | 93.9 | % |  | 94.1 | % |  | (0.2 | )% |  | 957 |  |  | 961 |  |  | (0.4 | )% |  | 1,031 |  |  | 1,005 |  |  | 2.5 | %
St. Cloud, MN |  | 9.1 | % |  | 93.8 | % |  | 92.4 | % |  | 1.4 | % |  | 959 |  |  | 950 |  |  | 0.9 | % |  | 1,050 |  |  | 1,027 |  |  | 2.4 | %
Sioux Falls, SD |  | 6.1 | % |  | 92.2 | % |  | 92.3 | % |  | (0.1 | )% |  | 867 |  |  | 851 |  |  | 1.9 | % |  | 945 |  |  | 934 |  |  | 1.2 | %
Billings, MT |  | 5.9 | % |  | 95.0 | % |  | 92.5 | % |  | 2.5 | % |  | 941 |  |  | 923 |  |  | 2.0 | % |  | 1,004 |  |  | 981 |  |  | 2.6 | %
Minot, ND |  | 5.0 | % |  | 93.9 | % |  | 91.6 | % |  | 2.3 | % |  | 999 |  |  | 1,014 |  |  | (1.5 | )% |  | 1,055 |  |  | 1,048 |  |  | 0.9 | %
Rapid City, SD |  | 4.0 | % |  | 96.1 | % |  | 93.5 | % |  | 2.6 | % |  | 963 |  |  | 939 |  |  | 2.6 | % |  | 1,042 |  |  | 1,016 |  |  | 2.9 | %
Same-Store Total |  | 100.0 | % |  | 93.3 | % |  | 91.9 | % |  | 1.4 | % |  | $ | 1,062 |  |  | $ | 1,046 |  |  | 1.5 | % |  | $ | 1,141 |  |  | $ | 1,114 |  |  | 2.6 | %

(1) | Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rent.

(2) | Weighted average monthly rental rate is scheduled rental revenue divided by the total number of apartment homes. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes.

(3) | Weighted average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment units for the period.

| S-10 |

IRET
SAME-STORE SEQUENTIAL QUARTER COMPARISONS
(in thousands, except property data amounts and percentages)

|  | Apartment Homes Included |  | Revenues |  | Expenses |  | NOI
Regions |  |  | CY19Q3 |  | CY19Q2 |  | % Change |  | CY19Q3 |  | CY19Q2 |  | % Change |  | CY19Q3 |  | CY19Q2 |  | % Change
Minneapolis, MN |  | 1,796 |  |  | $ | 7,774 |  |  | $ | 7,836 |  |  | (0.8 | )% |  | $ | 3,360 |  |  | $ | 3,172 |  |  | 5.9 | % |  | $ | 4,414 |  |  | $ | 4,664 |  |  | (5.4 | )%
Rochester, MN |  | 1,711 |  |  | 6,446 |  |  | 6,291 |  |  | 2.5 | % |  | 2,386 |  |  | 2,450 |  |  | (2.6 | )% |  | 4,060 |  |  | 3,841 |  |  | 5.7 | %
Omaha, NE |  | 1,370 |  |  | 3,738 |  |  | 3,705 |  |  | 0.9 | % |  | 1,740 |  |  | 1,635 |  |  | 6.4 | % |  | 1,998 |  |  | 2,070 |  |  | (3.5 | )%
Grand Forks, ND |  | 1,555 |  |  | 4,287 |  |  | 4,218 |  |  | 1.6 | % |  | 1,882 |  |  | 1,909 |  |  | (1.4 | )% |  | 2,405 |  |  | 2,309 |  |  | 4.2 | %
Bismarck, ND |  | 1,259 |  |  | 3,654 |  |  | 3,595 |  |  | 1.6 | % |  | 1,503 |  |  | 1,491 |  |  | 0.8 | % |  | 2,151 |  |  | 2,104 |  |  | 2.2 | %
St. Cloud, MN |  | 1,190 |  |  | 3,517 |  |  | 3,585 |  |  | (1.9 | )% |  | 1,557 |  |  | 1,525 |  |  | 2.1 | % |  | 1,960 |  |  | 2,060 |  |  | (4.9 | )%
Sioux Falls, SD |  | 969 |  |  | 2,532 |  |  | 2,544 |  |  | (0.5 | )% |  | 1,228 |  |  | 1,222 |  |  | 0.5 | % |  | 1,304 |  |  | 1,322 |  |  | (1.4 | )%
Billings, MT |  | 749 |  |  | 2,144 |  |  | 2,125 |  |  | 0.9 | % |  | 882 |  |  | 752 |  |  | 17.3 | % |  | 1,262 |  |  | 1,373 |  |  | (8.1 | )%
Minot, ND |  | 712 |  |  | 2,117 |  |  | 2,145 |  |  | (1.3 | )% |  | 1,035 |  |  | 1,036 |  |  | (0.1 | )% |  | 1,082 |  |  | 1,109 |  |  | (2.4 | )%
Rapid City, SD |  | 474 |  |  | 1,424 |  |  | 1,371 |  |  | 3.9 | % |  | 574 |  |  | 557 |  |  | 3.1 | % |  | 850 |  |  | 814 |  |  | 4.4 | %
Same-Store Total |  | 11,785 |  |  | $ | 37,633 |  |  | $ | 37,415 |  |  | 0.6 | % |  | $ | 16,147 |  |  | $ | 15,749 |  |  | 2.5 | % |  | $ | 21,486 |  |  | $ | 21,666 |  |  | (0.8 | )%

|  | % of NOI Contribution |  | Weighted Average Occupancy |  | Weighted Average Monthly Rental Rate |  | Weighted Average Monthly Revenue per Occupied Home
Regions |  |  | CY19Q3 |  | CY19Q2 |  | Growth |  | CY19Q3 |  | CY19Q2 |  | % Change |  | CY19Q3 |  | CY19Q2 |  | % Change
Minneapolis, MN |  | 20.5 | % |  | 90.8 | % |  | 93.4 | % |  | (2.6 | )% |  | $ | 1,478 |  |  | $ | 1,439 |  |  | 2.7 | % |  | $ | 1,590 |  |  | $ | 1,557 |  |  | 1.8 | %
Rochester, MN |  | 18.9 | % |  | 94.6 | % |  | 95.4 | % |  | (0.8 | )% |  | 1,257 |  |  | 1,233 |  |  | 1.9 | % |  | 1,327 |  |  | 1,285 |  |  | 3.3 | %
Omaha, NE |  | 9.3 | % |  | 93.0 | % |  | 93.3 | % |  | (0.3 | )% |  | 900 |  |  | 884 |  |  | 1.8 | % |  | 977 |  |  | 966 |  |  | 1.2 | %
Grand Forks, ND |  | 11.2 | % |  | 94.1 | % |  | 93.5 | % |  | 0.6 | % |  | 908 |  |  | 912 |  |  | (0.4 | )% |  | 977 |  |  | 967 |  |  | 1.0 | %
Bismarck, ND |  | 10.0 | % |  | 93.9 | % |  | 92.8 | % |  | 1.1 | % |  | 957 |  |  | 953 |  |  | 0.4 | % |  | 1,031 |  |  | 1,026 |  |  | 0.5 | %
St. Cloud, MN |  | 9.1 | % |  | 93.8 | % |  | 95.4 | % |  | (1.6 | )% |  | 959 |  |  | 951 |  |  | 0.8 | % |  | 1,050 |  |  | 1,053 |  |  | (0.3 | )%
Sioux Falls, SD |  | 6.1 | % |  | 92.2 | % |  | 94.4 | % |  | (2.2 | )% |  | 867 |  |  | 858 |  |  | 1.0 | % |  | 945 |  |  | 927 |  |  | 1.7 | %
Billings, MT |  | 5.9 | % |  | 95.0 | % |  | 95.6 | % |  | (0.6 | )% |  | 941 |  |  | 924 |  |  | 1.8 | % |  | 1,004 |  |  | 989 |  |  | 1.5 | %
Minot, ND |  | 5.0 | % |  | 93.9 | % |  | 95.0 | % |  | (1.1 | )% |  | 999 |  |  | 1,000 |  |  | (0.1 | )% |  | 1,055 |  |  | 1,057 |  |  | (0.2 | )%
Rapid City, SD |  | 4.0 | % |  | 96.1 | % |  | 95.0 | % |  | 1.1 | % |  | 963 |  |  | 945 |  |  | 1.9 | % |  | 1,042 |  |  | 1,015 |  |  | 2.8 | %
Same-Store Total |  | 100.0 | % |  | 93.3 | % |  | 94.2 | % |  | (0.9 | )% |  | $ | 1,062 |  |  | $ | 1,047 |  |  | 1.4 | % |  | $ | 1,141 |  |  | $ | 1,123 |  |  | 1.5 | %

| S-11 |

IRET
SAME-STORE YEAR-TO-DATE COMPARISONS
(in thousands, except property data amounts and percentages)

|  | Apartment Homes Included |  | Revenues |  | Expenses |  | NOI
Regions |  |  | CY19 |  | CY18 |  | % Change |  | CY19 |  | CY18 |  | % Change |  | CY19 |  | CY18 |  | % Change
Minneapolis, MN |  | 1,796 |  |  | $ | 23,298 |  |  | $ | 21,884 |  |  | 6.5 | % |  | $ | 9,680 |  |  | $ | 8,983 |  |  | 7.8 | % |  | $ | 13,618 |  |  | $ | 12,901 |  |  | 5.6 | %
Rochester, MN |  | 1,711 |  |  | 18,962 |  |  | 18,155 |  |  | 4.4 | % |  | 7,290 |  |  | 7,318 |  |  | (0.4 | )% |  | 11,672 |  |  | 10,837 |  |  | 7.7 | %
Omaha, NE |  | 1,370 |  |  | 11,197 |  |  | 11,029 |  |  | 1.5 | % |  | 5,149 |  |  | 4,918 |  |  | 4.7 | % |  | 6,048 |  |  | 6,111 |  |  | (1.0 | )%
Grand Forks, ND |  | 1,555 |  |  | 12,646 |  |  | 12,566 |  |  | 0.6 | % |  | 5,957 |  |  | 5,843 |  |  | 2.0 | % |  | 6,689 |  |  | 6,723 |  |  | (0.5 | )%
Bismarck, ND |  | 1,259 |  |  | 10,852 |  |  | 10,662 |  |  | 1.8 | % |  | 4,710 |  |  | 4,635 |  |  | 1.6 | % |  | 6,142 |  |  | 6,027 |  |  | 1.9 | %
St. Cloud, MN |  | 1,190 |  |  | 10,577 |  |  | 10,090 |  |  | 4.8 | % |  | 4,890 |  |  | 4,836 |  |  | 1.1 | % |  | 5,687 |  |  | 5,254 |  |  | 8.2 | %
Sioux Falls, SD |  | 969 |  |  | 7,605 |  |  | 7,417 |  |  | 2.5 | % |  | 3,643 |  |  | 3,551 |  |  | 2.6 | % |  | 3,962 |  |  | 3,866 |  |  | 2.5 | %
Billings, MT |  | 749 |  |  | 6,373 |  |  | 6,010 |  |  | 6.0 | % |  | 2,457 |  |  | 2,241 |  |  | 9.6 | % |  | 3,916 |  |  | 3,769 |  |  | 3.9 | %
Minot, ND |  | 712 |  |  | 6,380 |  |  | 6,212 |  |  | 2.7 | % |  | 3,078 |  |  | 3,178 |  |  | (3.1 | )% |  | 3,302 |  |  | 3,034 |  |  | 8.8 | %
Rapid City, SD |  | 474 |  |  | 4,162 |  |  | 4,006 |  |  | 3.9 | % |  | 1,707 |  |  | 1,724 |  |  | (1.0 | )% |  | 2,455 |  |  | 2,282 |  |  | 7.6 | %
Same-Store Total |  | 11,785 |  |  | $ | 112,052 |  |  | $ | 108,031 |  |  | 3.7 | % |  | $ | 48,561 |  |  | $ | 47,227 |  |  | 2.8 | % |  | $ | 63,491 |  |  | $ | 60,804 |  |  | 4.4 | %

|  | % of NOI Contribution |  | Weighted Average Occupancy |  | Weighted Average Monthly Rental Rate |  | Weighted Average Monthly Revenue per Occupied Home
Regions |  |  | CY19 |  | CY18 |  | Growth |  | CY19 |  | CY18 |  | % Change |  | CY19 |  | CY18 |  | % Change
Minneapolis, MN |  | 21.4 | % |  | 93.0 | % |  | 91.5 | % |  | 1.5 | % |  | $ | 1,442 |  |  | $ | 1,396 |  |  | 3.3 | % |  | $ | 1,550 |  |  | $ | 1,480 |  |  | 5.0 | %
Rochester, MN |  | 18.4 | % |  | 95.5 | % |  | 93.5 | % |  | 2.0 | % |  | 1,232 |  |  | 1,219 |  |  | 1.1 | % |  | 1,289 |  |  | 1,261 |  |  | 2.4 | %
Omaha, NE |  | 9.5 | % |  | 93.9 | % |  | 94.8 | % |  | (0.9 | )% |  | 886 |  |  | 868 |  |  | 2.1 | % |  | 968 |  |  | 944 |  |  | 2.4 | %
Grand Forks, ND |  | 10.5 | % |  | 93.8 | % |  | 93.4 | % |  | 0.4 | % |  | 908 |  |  | 915 |  |  | (0.8 | )% |  | 963 |  |  | 961 |  |  | 0.2 | %
Bismarck, ND |  | 9.7 | % |  | 94.3 | % |  | 94.0 | % |  | 0.3 | % |  | 951 |  |  | 958 |  |  | (0.7 | )% |  | 1,015 |  |  | 1,001 |  |  | 1.5 | %
St. Cloud, MN |  | 9.0 | % |  | 95.0 | % |  | 94.2 | % |  | 0.8 | % |  | 950 |  |  | 924 |  |  | 2.8 | % |  | 1,040 |  |  | 1,000 |  |  | 4.0 | %
Sioux Falls, SD |  | 6.2 | % |  | 93.9 | % |  | 94.0 | % |  | (0.1 | )% |  | 858 |  |  | 833 |  |  | 3.0 | % |  | 928 |  |  | 904 |  |  | 2.6 | %
Billings, MT |  | 6.2 | % |  | 95.7 | % |  | 92.2 | % |  | 3.5 | % |  | 923 |  |  | 913 |  |  | 1.1 | % |  | 988 |  |  | 967 |  |  | 2.5 | %
Minot, ND |  | 5.2 | % |  | 94.9 | % |  | 94.4 | % |  | 0.5 | % |  | 997 |  |  | 1,003 |  |  | (0.6 | )% |  | 1,049 |  |  | 1,027 |  |  | 2.2 | %
Rapid City, SD |  | 3.9 | % |  | 96.0 | % |  | 95.3 | % |  | 0.7 | % |  | 946 |  |  | 919 |  |  | 2.9 | % |  | 1,016 |  |  | 986 |  |  | 3.2 | %
Same-Store Total |  | 100.0 | % |  | 94.3 | % |  | 93.4 | % |  | 0.9 | % |  | $ | 1,046 |  |  | $ | 1,031 |  |  | 1.5 | % |  | $ | 1,120 |  |  | $ | 1,091 |  |  | 2.8 | %

| S-12 |

IRET
PORTFOLIO SUMMARY(1)

|  | Three Months Ended
|  | 9/30/2019 |  | 6/30/2019 |  | 3/31/2019 |  | 12/31/2018 |  | 9/30/2018
Number of Apartment Homes |  |  |  |  |  |  |  |  |  |
Same-Store |  | 11,785 |  |  | 12,848 |  |  | 12,848 |  |  | 12,847 |  |  | 12,847 |
Non-Same-Store |  | 1,551 |  |  | 1,127 |  |  | 1,127 |  |  | 855 |  |  | 855 |
All Communities |  | 13,336 |  |  | 13,975 |  |  | 13,975 |  |  | 13,702 |  |  | 13,702 |
Average Scheduled Rent(2) per Apartment Home |  |  |  |  |  |  |  |  |  |
Same-Store |  | $ | 1,062 |  |  | $ | 1,028 |  |  | $ | 1,013 |  |  | $ | 1,018 |  |  | $ | 1,027 |
Non-Same-Store |  | 1,742 |  |  | 1,692 |  |  | 1,772 |  |  | 1,797 |  |  | 1,796 |
All Communities |  | $ | 1,123 |  |  | $ | 1,081 |  |  | $ | 1,064 |  |  | $ | 1,066 |  |  | $ | 1,075 |
Average Revenue per Occupied Apartment Home(3) |  |  |  |  |  |  |  |  |  |
Same-Store |  | $ | 1,141 |  |  | $ | 1,101 |  |  | $ | 1,075 |  |  | $ | 1,082 |  |  | $ | 1,092 |
Non-Same-Store |  | 1,887 |  |  | 1,848 |  |  | 1,943 |  |  | 1,939 |  |  | 1,956 |
All Communities |  | $ | 1,210 |  |  | $ | 1,161 |  |  | $ | 1,134 |  |  | $ | 1,136 |  |  | $ | 1,146 |
Weighted Average Occupancy(4) |  |  |  |  |  |  |  |  |  |
Same-Store |  | 93.3 | % |  | 94.3 | % |  | 95.6 | % |  | 94.4 | % |  | 91.9 | %
Non-Same-Store |  | 94.2 | % |  | 94.8 | % |  | 94.9 | % |  | 92.7 | % |  | 93.4 | %
All Communities |  | 93.4 | % |  | 94.4 | % |  | 95.5 | % |  | 94.2 | % |  | 92.2 | %
Operating Expenses as a % of Scheduled Rent |  |  |  |  |  |  |  |  |  |
Same-Store |  | 43.0 | % |  | 42.8 | % |  | 45.6 | % |  | 42.4 | % |  | 42.9 | %
Non-Same-Store |  | 38.1 | % |  | 37.4 | % |  | 37.6 | % |  | 30.5 | % |  | 36.8 | %
All Communities |  | 42.3 | % |  | 42.2 | % |  | 44.7 | % |  | 41.1 | % |  | 42.3 | %
Capital Expenditures |  |  |  |  |  |  |  |  |  |
Total Capital Expenditures per Apartment Home – Same-Store |  | $ | 178 |  |  | $ | 192 |  |  | $ | 80 |  |  | $ | 254 |  |  | $ | 274 |

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

(2) | Scheduled rent represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes. Average scheduled rent is scheduled rent divided by the total number of apartment homes.

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

(4) | Weighted average occupancy is the percentage resulting from dividing actual rental revenue by scheduled rent. We believe that weighted average occupancy is a meaningful measure of occupancy because it considers the value of each vacant unit at its estimated market rate. Weighted average occupancy may not completely reflect short-term trends in physical occupancy and our calculation of weighted average occupancy may not be comparable to that disclosed by other REITs.

| S-13 |

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

|  | Three Months Ended
|  | 9/30/2019 |  | 9/30/2018
Total Same-Store Apartment Homes |  | 11,785 |  |  | 11,785 |
Turnover |  | $ | 1,034 |  |  | $ | 1,331 |
Furniture & Equipment |  | 38 |  |  | 79 |
Building – Interior |  | 28 |  |  | 130 |
Building – Exterior |  | 553 |  |  | 1,055 |
Landscaping & Grounds |  | 446 |  |  | 525 |
Capital Expenditures |  | $ | 2,099 |  |  | $ | 3,120 |
Capital Expenditures per Apartment Home |  | $ | 178 |  |  | $ | 265 |

|  | Nine Months Ended
|  | 9/30/2019 |  | 9/30/2018
Total Same-Store Apartment Homes |  | 11,785 |  |  | 11,785 |
Turnover |  | $ | 2,641 |  |  | $ | 3,078 |
Furniture & Equipment |  | 205 |  |  | 207 |
Building - Interior |  | 182 |  |  | 333 |
Building - Exterior |  | 1,196 |  |  | 2,324 |
Landscaping & Grounds |  | 1,001 |  |  | 856 |
Capital Expenditures |  | $ | 5,225 |  |  | $ | 6,798 |
Capital Expenditures per Apartment Home |  | $ | 443 |  |  | $ | 577 |

| S-14 |

IRET
2019 Calendar Year Financial Outlook
(in thousands, except per share amounts)
The table below provides revised 2019 calendar year guidance for Net income (loss) available to shareholders, EPS, same-store performance, Core FFO, and Core FFO per share. Our 2019 calendar year revised guidance, along with our actual results for the nine months ended September 30, 2019, is described in the table below. Please note that FFO, Core FFO, and NOI are non-GAAP measures. Refer to Non-GAAP Financial Measures and Reconciliations in this release for additional information on the use and presentation of these non-GAAP measures and for reconciliation to the most directly comparable GAAP measures.

|  |  | Range for 12 Months Ended December 31, 2019
| Nine Months Ended September 30, 2019 |  | Full Year Revised Guidance |  | Prior Guidance |  | Change from Prior Midpoint
| Actual Results |  | Amount |  | Amount |  | Amount
Net income (loss) available to common shareholders | $24,895 |  | $32,100 to $33,400 |  | $(15,100) to $(13,800) |  | $47,127
Net income (loss) per share - diluted(1) | $2.11 |  | $2.72 to $2.82 |  | $(1.27) to $(1.17) |  | $3.99
Same-store growth |  |  |  |  |  |  |
Revenue | 3.72% |  | 3.25% to 3.75% |  | 3.00% to 4.00% |  | —
Expenses | 2.82% |  | 3.00% to 3.50% |  | 2.75% to 3.75% |  | —
NOI | 4.42% |  | 3.50% to 4.00% |  | 3.00% to 4.00% |  | 0.25%
Core FFO | $36,041 |  | $48,400 to $49,700 |  | $46,800 to $48,100 |  | $1,560
Core FFO per share and Unit - diluted | $2.76 |  | $3.68 to $3.78 |  | $3.62 to $3.72 |  | $0.06
Weighted average shares and Units | 13,174 |  | 13,144 |  | 12,933 |  | 211

(1) | Earnings per share excludes net income attributable to noncontrolling interests.

Reconciliation of Net Income Available to Common Shareholders to Funds From Operations and Core Funds From Operations
The following table presents reconciliations of Net income (loss) available to common shareholders to FFO and Core FFO. FFO and Core FFO are non-GAAP measures. FFO and Core FFO should not be considered as alternatives to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP, and is not necessarily indicative of sufficient cash flow to fund all of our needs or our ability to service indebtedness or make distributions. The outlook and projections provided below are based on current expectations and are forward-looking.

|  |  | Revised Midpoint of Outlook for
| Nine Months Ended |  | 12 Months Ended
| September 30, 2019 |  | December 31, 2019
| Amount |  | Per Share - Diluted |  | Amount |  | Per Share - Diluted
Net income (loss) available to common shareholders | $ | 24,895 |  |  | $ | 2.11 |  |  | $ | 32,715 |  |  | $ | 2.77 |
Noncontrolling interests - Operating Partnership | 2,550 |  |  |  |  | 3,749 |  |  |
Depreciation and amortization | 55,299 |  |  |  |  | 74,522 |  |  |
Less depreciation-non real estate | (235 | ) |  |  |  | (296 | ) |  |
Less depreciation-partially owned entities | (1,604 | ) |  |  |  | (2,053 | ) |  |
Gain on sale of real estate | (39,774 | ) |  |  |  | (54,775 | ) |  |
FFO applicable to common shares and Units | $ | 41,131 |  |  | $ | 3.15 |  |  | $ | 53,862 |  |  | $ | 4.10 |
Adjustments to Core FFO: |  |  |  |  |  |  |
Loss on extinguishment of debt | 1,496 |  |  |  |  | 1,749 |  |  |
Gain on litigation settlement | (6,586 | ) |  |  |  | (6,586 | ) |  |
Core FFO applicable to common shares and Units | $ | 36,041 |  |  | $ | 2.76 |  |  | $ | 49,025 |  |  | $ | 3.73 |

| S-15 |