EX-99.1 2 iret09302020exhibit991.htm EX-99.1
Exhibit 99.1

Earnings Release
IRET Reports Third Quarter 2020 Financial and Operating Results
MINNEAPOLIS, MN, November 2, 2020 – IRET (NYSE: IRET) announced today its financial and operating results for the quarter ended September 30, 2020. The tables below show Net Income, Funds from Operations (“FFO”), and Core FFO, all on a per share basis, for the three and nine months ended September 30, 2020; 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, 2020, June 30, 2020, and September 30, 2019.

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Per Share |  | 2020 |  | 2019 |  | 2020 |  | 2019
Net Income - diluted |  | $ | 1.38 |  |  | $ | 2.54 |  |  | $ | 0.33 |  |  | $ | 2.11 |
FFO - diluted |  | $ | 0.90 |  |  | $ | 0.93 |  |  | $ | 2.49 |  |  | $ | 3.15 |
Core FFO - diluted |  | $ | 0.94 |  |  | $ | 0.99 |  |  | $ | 2.76 |  |  | $ | 2.76 |

|  | Year-Over-Year Comparison |  | Sequential Comparison |  | YTD Comparison
Same-Store Results |  | Q3 2020 vs. Q3 2019 |  | Q3 2020 vs. Q2 2020 |  | 2020 vs. 2019
Revenues |  | 1.1 | % |  | 0.6 | % |  | 2.1 | %
Expenses |  | 4.6 | % |  | 5.7 | % |  | 3.6 | %
NOI |  | (1.3) | % |  | (3.0) | % |  | 1.0 | %

|  | Three months ended
Same-Store Results |  | September 30, 2020 |  | June 30, 2020 |  | September 30, 2019
Weighted Average Occupancy |  | 94.4 | % |  | 94.6 | % |  | 93.5 | %

Highlights
•Net Income was $1.38 per diluted share for the third quarter of 2020, compared to Net Income of $2.54 per diluted share for the same period of 2019;
•Core FFO increased 3.3% to $0.94 per diluted share for the three months ended September 30, 2020, compared to $0.91 for the three months ended June, 30, 2020. Core FFO for the nine months ended September, 30, 2020 remains unchanged compared to the same period of 2019;
•Total collections were 98.8% of expected residential revenue for the third quarter of 2020, compared to 99.6% for the same period of 2019 and 99.1% for second quarter 2020;
•Physical occupancy for same-store communities was 95.3% for the three months ended September 30, 2020, compared to 94.3% for the same period of 2019 and 94.8% for second quarter 2020;
•Same-store controllable expenses (which exclude taxes and insurance) decreased 2.0% for the nine months ended September 30, 2020 as compared to the same period of 2019, contributing to NOI growth of 1.0%;
•Same-store new lease rates remained flat for the third quarter of 2020, compared to a decline of (1.2%) in Q2 2020;
•Continued to strengthen our balance sheet by issuing 144,822 common shares under our 2019 ATM program for net proceeds of $10.2 million; and
•Continued to grow our portfolio in our core market of Denver through the acquisition of Parkhouse Apartment Homes, a 465-home apartment community in Thornton, Colorado.
NOI, FFO, Core FFO, and same-store controllable expenses are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to "Non-GAAP Financial Measures and Reconciliations" below.

| 1 |

Acquisitions and Dispositions
During the quarter, we acquired Parkhouse Apartment Homes, a 465-home apartment community in Thornton, Colorado for a total purchase price of $144.8 million. During the quarter we disposed of four apartment communities in Grand Forks, North Dakota and a commercial property for an aggregate sale price of $43.0 million.
Balance Sheet
At the end of the third quarter, we had $131.8 million of total liquidity on our balance sheet, consisting of $115.0 million available under our line of credit and cash and cash equivalents of $16.8 million. At the end of the second quarter, we had $239.7 million of total liquidity on our balance sheet, consisting of $187.0 million available on our line of credit and cash and cash equivalents of $52.7 million. The decline in total liquidity since the end of the second quarter is primarily a result of funding our acquisition of Parkhouse Apartment Homes.
As of September 30, 2020, we had 45 unencumbered apartment communities, representing 64.6% of third quarter multifamily NOI, of which 4 apartment communities, representing 5.4% of third quarter NOI, are not pledged under the Unencumbered Asset Pool ("UAP").
2020 Financial Outlook
On March 27, 2020 we issued a press release indicating that in light of the impact of COVID-19 on our business and results of operations, we were withdrawing our 2020 Financial Outlook. Given the ongoing impact of COVID-19, we are not providing an updated 2020 Financial Outlook at this time.
COVID-19 Developments
The COVID-19 pandemic, including the associated economic disruptions, has continued to impact our business and operations since March 2020.
IRET's first priority amid the COVID-19 pandemic has been the health and well-being of our residents, team members, and the communities we serve. In response, IRET has enhanced cleaning protocols at our communities and offices, implemented physical distancing in communities common spaces, and instituted remote work guidelines for our team members, all in accordance with state and local guidelines. We are utilizing technology to allow our property teams to interact remotely with prospective residents through virtual leasing. We have provided rent deferrals to residents and rent abatement to commercial tenants who were financially impacted by the COVID-19 pandemic. To support our team members working on-site, IRET has provided additional COVID-19 paid time off and enhanced flextime arrangements.
A discussion of the ongoing and potential effects of the COVID-19 pandemic on our financial condition, results of operations, and cash flows can be found in the Management's Discussion and Analysis of Financial Conditions and Results of Operations presented in our Quarterly Report on Form 10-Q for the quarter ended September, 30, 2020.
For a more detailed description of the risks and uncertainties affecting our business, see the risk factors presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as updated under Item 1A of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, and in our subsequent current and periodic reports filed with the Securities and Exchange Commission at www.sec.gov.
Upcoming Events
IRET is scheduled to participate in the upcoming National Association of Real Estate Investment Trusts ("Nareit") REITworld 2020 Annual Conference, which will be held virtually November 17-19.
Quarterly Distributions
Effective September 4, 2020, IRET’s Board of Trustees declared a regular quarterly distribution of $0.70 per share/unit, which was paid on October 9, 2020, to common shareholders and unitholders of record on September 30, 2020. IRET has paid cash dividends to common shareholders and unitholders every quarter since its initial dividend payment in 1971.
Effective September 4, 2020, 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-PC), which was paid on September 30, 2020, to holders of record at the close of business on September 15, 2020. 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
Tuesday, November 3, 2020, at 10:00 AM ET |  | Replay available until November 17, 2020
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 | 10147829

Supplemental Information
Supplemental Operating and Financial Data for the quarter ended September 30, 2020 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.
About IRET
IRET is a real estate company focused on the ownership, management, acquisition, redevelopment, and development of apartment communities. As of September 30, 2020, we owned interests in 67 apartment communities consisting of 11,910 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 PC," 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 Annual Report on Form 10-K for the year ended December 31, 2019, in our subsequent quarterly reports on Form 10-Q, including the COVID-19 risk factors set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, 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
Emily Miller
Investor Relations
Phone: 701-837-7104
E-mail: IR@iret.com

| 3 |

Supplemental Financial and Operating Data
Table of Contents
September 30, 2020

| 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
Same-Store Controllable Expenses | S-5
Funds From Operations | S-6
Adjusted EBITDA | S-8
Debt and Capital Analysis |
Debt Analysis | S-9
Capital Analysis | S-10
COVID-19 Update | S-11
Portfolio Analysis |
Same-Store Comparison | S-12
Portfolio Summary | S-15
Capital Expenditures | S-16

Common Share Data (NYSE: IRET)

|  | 3rd Quarter |  | 2nd Quarter |  | 1st Quarter |  | 4th Quarter |  | 3rd Quarter
|  | 2020 |  | 2020 |  | 2020 |  | 2019 |  | 2019
High closing price |  | $ | 73.53 |  |  | $ | 76.82 |  |  | $ | 84.68 |  |  | $ | 78.91 |  |  | $ | 74.67 |
Low closing price |  | $ | 61.87 |  |  | $ | 44.36 |  |  | $ | 52.55 |  |  | $ | 71.74 |  |  | $ | 59.22 |
Average closing price |  | $ | 70.15 |  |  | $ | 63.91 |  |  | $ | 71.62 |  |  | $ | 74.67 |  |  | $ | 66.83 |
Closing price at end of quarter |  | $ | 65.17 |  |  | $ | 70.49 |  |  | $ | 55.00 |  |  | $ | 72.50 |  |  | $ | 74.67 |
Common share distributions – annualized |  | $ | 2.80 |  |  | $ | 2.80 |  |  | $ | 2.80 |  |  | $ | 2.80 |  |  | $ | 2.80 |
Closing dividend yield – annualized |  | 4.3 | % |  | 4.0 | % |  | 5.1 | % |  | 3.9 | % |  | 3.8 | %
Closing common shares outstanding (thousands) |  | 12,976 |  |  | 12,827 |  |  | 12,164 |  |  | 12,099 |  |  | 11,625 |
Closing limited partnership units outstanding (thousands) |  | 1,018 |  |  | 1,022 |  |  | 1,044 |  |  | 1,058 |  |  | 1,223 |
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands) |  | $ | 911,989 |  |  | $ | 976,216 |  |  | $ | 726,440 |  |  | $ | 953,883 |  |  | $ | 959,360 |

| S-1 |

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

|  | Three Months Ended |  |  | Nine Months Ended
|  | 9/30/2020 |  | 6/30/2020 |  | 3/31/2020 |  | 12/31/2019 |  | 9/30/2019 |  |  | 9/30/2020 |  | 9/30/2019
REVENUE |  | $ | 44,138 |  |  | $ | 43,910 |  |  | $ | 44,406 |  |  | $ | 45,777 |  |  | $ | 47,436 |  |  |  | $ | 132,454 |  |  | $ | 139,978 |
EXPENSES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property operating expenses, excluding real estate taxes |  | 13,129 |  |  | 12,360 |  |  | 13,468 |  |  | 14,018 |  |  | 14,485 |  |  |  | 38,957 |  |  | 43,231 |
Real estate taxes |  | 5,402 |  |  | 5,410 |  |  | 5,465 |  |  | 4,835 |  |  | 5,425 |  |  |  | 16,277 |  |  | 16,231 |
Property management expense |  | 1,442 |  |  | 1,345 |  |  | 1,554 |  |  | 1,634 |  |  | 1,553 |  |  |  | 4,341 |  |  | 4,552 |
Casualty loss |  | 91 |  |  | 913 |  |  | 327 |  |  | 205 |  |  | 178 |  |  |  | 1,331 |  |  | 911 |
Depreciation/amortization |  | 18,995 |  |  | 18,156 |  |  | 18,160 |  |  | 18,972 |  |  | 18,751 |  |  |  | 55,311 |  |  | 55,299 |
General and administrative expenses |  | 3,077 |  |  | 3,202 |  |  | 3,428 |  |  | 3,647 |  |  | 3,448 |  |  |  | 9,707 |  |  | 10,803 |
TOTAL EXPENSES |  | $ | 42,136 |  |  | $ | 41,386 |  |  | $ | 42,402 |  |  | $ | 43,311 |  |  | $ | 43,840 |  |  |  | $ | 125,924 |  |  | $ | 131,027 |
Operating income |  | 2,002 |  |  | 2,524 |  |  | 2,004 |  |  | 2,466 |  |  | 3,596 |  |  |  | 6,530 |  |  | 8,951 |
Interest expense |  | (6,771) |  |  | (6,940) |  |  | (6,911) |  |  | (7,357) |  |  | (7,694) |  |  |  | (20,622) |  |  | (23,180) |
Loss on extinguishment of debt |  | (4) |  |  | (17) |  |  | — |  |  | (864) |  |  | (1,087) |  |  |  | (21) |  |  | (1,496) |
Interest and other income (loss) |  | 281 |  |  | 538 |  |  | (2,777) |  |  | 702 |  |  | 498 |  |  |  | (1,958) |  |  | 1,390 |
Income (loss) before gain (loss) on sale of real estate and other investments, and gain (loss) on litigation settlement |  | (4,492) |  |  | (3,895) |  |  | (7,684) |  |  | (5,053) |  |  | (4,687) |  |  |  | (16,071) |  |  | (14,335) |
Gain (loss) on sale of real estate and other investments |  | 25,676 |  |  | (190) |  |  | — |  |  | 57,850 |  |  | 39,105 |  |  |  | 25,486 |  |  | 39,774 |
Gain (loss) on litigation settlement |  | — |  |  | — |  |  | — |  |  | — |  |  | 300 |  |  |  | — |  |  | 6,586 |
Net income (loss) |  | $ | 21,184 |  |  | $ | (4,085) |  |  | $ | (7,684) |  |  | $ | 52,797 |  |  | $ | 34,718 |  |  |  | $ | 9,415 |  |  | $ | 32,025 |
Dividends to preferred unitholders |  | (160) |  |  | (160) |  |  | (160) |  |  | (160) |  |  | (160) |  |  |  | (480) |  |  | (377) |
Net (income) loss attributable to noncontrolling interest – Operating Partnership |  | (1,387) |  |  | 447 |  |  | 692 |  |  | (4,202) |  |  | (3,145) |  |  |  | (248) |  |  | (2,550) |
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities |  | (8) |  |  | (5) |  |  | 145 |  |  | 223 |  |  | 183 |  |  |  | 132 |  |  | 913 |
Net income (loss) attributable to controlling interests |  | 19,629 |  |  | (3,803) |  |  | (7,007) |  |  | 48,658 |  |  | 31,596 |  |  |  | 8,819 |  |  | 30,011 |
Dividends to preferred shareholders |  | (1,607) |  |  | (1,609) |  |  | (1,705) |  |  | (1,705) |  |  | (1,705) |  |  |  | (4,921) |  |  | (5,116) |
Discount (premium) on redemption of preferred shares |  | (1) |  |  | 25 |  |  | 273 |  |  | — |  |  | — |  |  |  | 297 |  |  | — |
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |  | $ | 18,021 |  |  | $ | (5,387) |  |  | $ | (8,439) |  |  | $ | 46,953 |  |  | $ | 29,891 |  |  |  | $ | 4,195 |  |  | $ | 24,895 |
Per Share Data - Basic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net earnings (loss) per common share – basic |  | $ | 1.40 |  |  | $ | (0.44) |  |  | $ | (0.69) |  |  | $ | 3.95 |  |  | $ | 2.57 |  |  |  | $ | 0.33 |  |  | $ | 2.11 |
Per Share Data - Diluted |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net earnings (loss) per common share – diluted |  | $ | 1.38 |  |  | $ | (0.44) |  |  | $ | (0.67) |  |  | $ | 3.89 |  |  | $ | 2.54 |  |  |  | $ | 0.33 |  |  | $ | 2.11 |

| S-2 |

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

|  | 9/30/2020 |  | 6/30/2020 |  | 3/31/2020 |  | 12/31/2019 |  | 9/30/2019
ASSETS |  |  |  |  |  |  |  |  |  |
Real estate investments |  |  |  |  |  |  |  |  |  |
Property owned |  | $ | 1,805,390 |  |  | $ | 1,694,033 |  |  | $ | 1,687,436 |  |  | $ | 1,643,078 |  |  | $ | 1,720,352 |
Less accumulated depreciation |  | (380,392) |  |  | (383,917) |  |  | (366,307) |  |  | (349,122) |  |  | (370,492) |
|  | 1,424,998 |  |  | 1,310,116 |  |  | 1,321,129 |  |  | 1,293,956 |  |  | 1,349,860 |
Unimproved land |  | — |  |  | — |  |  | 1,376 |  |  | 1,376 |  |  | 1,376 |
Mortgage loans receivable |  | 17,986 |  |  | 10,961 |  |  | 16,775 |  |  | 16,140 |  |  | 10,140 |
Total real estate investments |  | 1,442,984 |  |  | 1,321,077 |  |  | 1,339,280 |  |  | 1,311,472 |  |  | 1,361,376 |
Cash and cash equivalents |  | 16,804 |  |  | 52,714 |  |  | 26,338 |  |  | 26,579 |  |  | 8,500 |
Restricted cash |  | 2,199 |  |  | 2,535 |  |  | 2,344 |  |  | 19,538 |  |  | 3,339 |
Other assets |  | 16,947 |  |  | 16,484 |  |  | 21,124 |  |  | 34,829 |  |  | 30,589 |
TOTAL ASSETS |  | $ | 1,478,934 |  |  | $ | 1,392,810 |  |  | $ | 1,389,086 |  |  | $ | 1,392,418 |  |  | $ | 1,403,804 |
LIABILITIES, MEZZANINE EQUITY, AND EQUITY |  |  |  |  |  |  |  |  |  |
LIABILITIES |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 58,596 |  |  | $ | 54,883 |  |  | $ | 52,337 |  |  | $ | 47,155 |  |  | $ | 40,546 |
Revolving line of credit |  | 135,000 |  |  | 63,000 |  |  | 83,000 |  |  | 50,079 |  |  | 103,143 |
Notes payable, net of loan costs |  | 269,202 |  |  | 269,155 |  |  | 269,106 |  |  | 269,058 |  |  | 269,006 |
Mortgages payable, net of loan costs |  | 313,065 |  |  | 323,705 |  |  | 328,367 |  |  | 329,664 |  |  | 360,886 |
TOTAL LIABILITIES |  | $ | 775,863 |  |  | $ | 710,743 |  |  | $ | 732,810 |  |  | $ | 695,956 |  |  | $ | 773,581 |
SERIES D PREFERRED UNITS |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |
EQUITY |  |  |  |  |  |  |  |  |  |
Series C Preferred Shares of Beneficial Interest |  | 93,530 |  |  | 93,579 |  |  | 96,046 |  |  | 99,456 |  |  | 99,456 |
Common Shares of Beneficial Interest |  | 968,436 |  |  | 958,292 |  |  | 912,653 |  |  | 917,400 |  |  | 886,598 |
Accumulated distributions in excess of net income |  | (412,577) |  |  | (421,515) |  |  | (407,150) |  |  | (390,196) |  |  | (428,680) |
Accumulated other comprehensive income (loss) |  | (17,256) |  |  | (18,139) |  |  | (17,360) |  |  | (7,607) |  |  | (9,793) |
Total shareholders’ equity |  | $ | 632,133 |  |  | $ | 612,217 |  |  | $ | 584,189 |  |  | $ | 619,053 |  |  | $ | 547,581 |
Noncontrolling interests – Operating Partnership |  | 53,669 |  |  | 52,558 |  |  | 54,777 |  |  | 55,284 |  |  | 60,169 |
Noncontrolling interests – consolidated real estate entities |  | 709 |  |  | 732 |  |  | 750 |  |  | 5,565 |  |  | 5,913 |
Total equity |  | $ | 686,511 |  |  | $ | 665,507 |  |  | $ | 639,716 |  |  | $ | 679,902 |  |  | $ | 613,663 |
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY |  | $ | 1,478,934 |  |  | $ | 1,392,810 |  |  | $ | 1,389,086 |  |  | $ | 1,392,418 |  |  | $ | 1,403,804 |

| 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 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 |  |  | Sequential |  | Year-Over-Year
| 9/30/2020 |  | 6/30/2020 |  | 9/30/2019 |  |  | $ Change |  | % Change |  | $ Change |  | % Change
Operating income | $ | 2,002 |  |  | $ | 2,524 |  |  | $ | 3,596 |  |  |  | $ | (522) |  |  | (20.7) | % |  | $ | (1,594) |  |  | (44.3) | %
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property management expenses | 1,442 |  |  | 1,345 |  |  | 1,553 |  |  |  | 97 |  |  | 7.2 | % |  | (111) |  |  | (7.1) | %
Casualty loss | 91 |  |  | 913 |  |  | 178 |  |  |  | (822) |  |  | (90.0) | % |  | (87) |  |  | (48.9) | %
Depreciation and amortization | 18,995 |  |  | 18,156 |  |  | 18,751 |  |  |  | 839 |  |  | 4.6 | % |  | 244 |  |  | 1.3 | %
General and administrative expenses | 3,077 |  |  | 3,202 |  |  | 3,448 |  |  |  | (125) |  |  | (3.9) | % |  | (371) |  |  | (10.8) | %
Net operating income | $ | 25,607 |  |  | $ | 26,140 |  |  | $ | 27,526 |  |  |  | $ | (533) |  |  | (2.0) | % |  | $ | (1,919) |  |  | (7.0) | %
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same-store | $ | 38,043 |  |  | $ | 37,831 |  |  | $ | 37,627 |  |  |  | $ | 212 |  |  | 0.6 | % |  | $ | 416 |  |  | 1.1 | %
Non-same-store | 4,420 |  |  | 4,157 |  |  | 1,344 |  |  |  | 263 |  |  | 6.3 | % |  | 3,076 |  |  | 228.9 | %
Other properties and dispositions | 1,675 |  |  | 1,922 |  |  | 8,465 |  |  |  | (247) |  |  | (12.9) | % |  | (6,790) |  |  | (80.2) | %
Total | 44,138 |  |  | 43,910 |  |  | 47,436 |  |  |  | 228 |  |  | 0.5 | % |  | (3,298) |  |  | (7.0) | %
Property operating expenses, including real estate taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same-store | 16,198 |  |  | 15,319 |  |  | 15,493 |  |  |  | 879 |  |  | 5.7 | % |  | 705 |  |  | 4.6 | %
Non-same-store | 1,712 |  |  | 1,514 |  |  | 550 |  |  |  | 198 |  |  | 13.1 | % |  | 1,162 |  |  | 211.3 | %
Other properties and dispositions | 621 |  |  | 937 |  |  | 3,867 |  |  |  | (316) |  |  | (33.7) | % |  | (3,246) |  |  | (83.9) | %
Total | 18,531 |  |  | 17,770 |  |  | 19,910 |  |  |  | 761 |  |  | 4.3 | % |  | (1,379) |  |  | (6.9) | %
Net operating income |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same-store | 21,845 |  |  | 22,512 |  |  | 22,134 |  |  |  | (667) |  |  | (3.0) | % |  | (289) |  |  | (1.3) | %
Non-same-store | 2,708 |  |  | 2,643 |  |  | 794 |  |  |  | 65 |  |  | 2.5 | % |  | 1,914 |  |  | 241.1 | %
Other properties and dispositions | 1,054 |  |  | 985 |  |  | 4,598 |  |  |  | 69 |  |  | 7.0 | % |  | (3,544) |  |  | (77.1) | %
Total | $ | 25,607 |  |  | $ | 26,140 |  |  | $ | 27,526 |  |  |  | $ | (533) |  |  | (2.0) | % |  | $ | (1,919) |  |  | (7.0) | %

| S-4 |

| Nine Months Ended September 30,
| 2020 |  | 2019 |  | $ Change |  | % Change
Operating income | $ | 6,530 |  |  | $ | 8,951 |  |  | $ | (2,421) |  |  | (27.0) | %
Adjustments: |  |  |  |  |  |  |
Property management expenses | 4,341 |  |  | 4,552 |  |  | (211) |  |  | (4.6) | %
Casualty loss | 1,331 |  |  | 911 |  |  | 420 |  |  | 46.1 | %
Depreciation and amortization | 55,311 |  |  | 55,299 |  |  | 12 |  |  | — |
General and administrative expenses | 9,707 |  |  | 10,803 |  |  | (1,096) |  |  | (10.1) | %
Net operating income | $ | 77,220 |  |  | $ | 80,516 |  |  | $ | (3,296) |  |  | (4.1) | %
Revenue |  |  |  |  |  |  |
Same-store | $ | 114,208 |  |  | $ | 111,897 |  |  | $ | 2,311 |  |  | 2.1 | %
Non-same-store | 12,088 |  |  | 2,829 |  |  | 9,259 |  |  | 327.3 | %
Other properties and dispositions | 6,158 |  |  | 25,252 |  |  | (19,094) |  |  | (75.6) | %
Total | 132,454 |  |  | 139,978 |  |  | (7,524) |  |  | (5.4) | %
Property operating expenses, including real estate taxes |  |  |  |  |  |  |
Same-store | 47,857 |  |  | 46,190 |  |  | 1,667 |  |  | 3.6 | %
Non-same-store | 4,546 |  |  | 1,197 |  |  | 3,349 |  |  | 279.8 | %
Other properties and dispositions | 2,831 |  |  | 12,075 |  |  | (9,244) |  |  | (76.6) | %
Total | 55,234 |  |  | 59,462 |  |  | (4,228) |  |  | (7.1) | %
Net operating income |  |  |  |  |  |  |
Same-store | 66,351 |  |  | 65,707 |  |  | 644 |  |  | 1.0 | %
Non-same-store | 7,542 |  |  | 1,632 |  |  | 5,910 |  |  | 362.1 | %
Other properties and dispositions | 3,327 |  |  | 13,177 |  |  | (9,850) |  |  | (74.8) | %
Total | $ | 77,220 |  |  | $ | 80,516 |  |  | $ | (3,296) |  |  | (4.1) | %

Reconciliation of Same-Store Controllable Expenses to Total Property Operating Expenses, Including Real Estate Taxes
Same-store controllable expenses exclude real estate taxes and insurance, in order to provide a measure of expenses that are within management's control, and is used for the purposes of budgeting, business planning, and performance evaluation. This is a non-GAAP measure and should not be considered an alternative to total expenses or total property operating expenses.

| (in thousands, except percentages)
| Three Months Ended September 30, |  |  | Nine Months Ended September 30,
| 2020 |  | 2019 |  | $ Change |  | % Change |  |  | 2020 |  | 2019 |  | $ Change |  | % Change
Controllable expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
On-site compensation(1) | $ | 4,290 |  |  | $ | 3,978 |  |  | $ | 312 |  |  | 7.8 | % |  |  | $ | 12,705 |  |  | $ | 11,779 |  |  | $ | 926 |  |  | 7.9 | %
Repairs and maintenance | 2,764 |  |  | 2,805 |  |  | (41) |  |  | (1.5) | % |  |  | 7,431 |  |  | 8,413 |  |  | (982) |  |  | (11.7) | %
Utilities | 2,532 |  |  | 2,508 |  |  | 24 |  |  | 1.0 | % |  |  | 7,517 |  |  | 7,884 |  |  | (367) |  |  | (4.7) | %
Administrative and marketing | 820 |  |  | 882 |  |  | (62) |  |  | (7.0) | % |  |  | 2,501 |  |  | 2,702 |  |  | (201) |  |  | (7.4) | %
Total | $ | 10,406 |  |  | $ | 10,173 |  |  | $ | 233 |  |  | 2.3 | % |  |  | $ | 30,154 |  |  | $ | 30,778 |  |  | $ | (624) |  |  | (2.0) | %
Non-controllable expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate taxes | $ | 4,632 |  |  | $ | 4,265 |  |  | $ | 367 |  |  | 8.6 | % |  |  | $ | 14,028 |  |  | $ | 12,738 |  |  | $ | 1,290 |  |  | 10.1 | %
Insurance | 1,160 |  |  | 1,055 |  |  | 105 |  |  | 10.0 | % |  |  | 3,675 |  |  | 2,674 |  |  | 1,001 |  |  | 37.4 | %
Total | $ | 5,792 |  |  | $ | 5,320 |  |  | $ | 472 |  |  | 8.9 | % |  |  | $ | 17,703 |  |  | $ | 15,412 |  |  | $ | 2,291 |  |  | 14.9 | %
Property operating expenses, including real estate taxes - non-same-store | $ | 1,712 |  |  | $ | 550 |  |  | $ | 1,162 |  |  | 211.3 | % |  |  | $ | 4,546 |  |  | $ | 1,197 |  |  | $ | 3,349 |  |  | 279.8 | %
Property operating expenses, including real estate taxes - other properties and dispositions | 621 |  |  | 3,867 |  |  | (3,246) |  |  | (83.9) | % |  |  | 2,831 |  |  | 12,075 |  |  | (9,244) |  |  | (76.6) | %
Total property operating expenses, including real estate taxes | $ | 18,531 |  |  | $ | 19,910 |  |  | $ | (1,379) |  |  | (6.9) | % |  |  | $ | 55,234 |  |  | $ | 59,462 |  |  | $ | (4,228) |  |  | (7.1) | %

(1)On-site compensation for administration, leasing, and maintenance personnel.

| S-5 |

Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations
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 does not assume that the value of real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation.
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.
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.
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.
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-6 |

|  | (in thousands, except per share amounts)
|  | Three Months Ended |  |  | Nine Months Ended
|  | 9/30/2020 |  | 6/30/2020 |  | 3/31/2020 |  | 12/31/2019 |  | 9/30/2019 |  |  | 9/30/2020 |  | 9/30/2019
Funds From Operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) available to common shareholders |  | $ | 18,021 |  |  | $ | (5,387) |  |  | $ | (8,439) |  |  | $ | 46,953 |  |  | $ | 29,891 |  |  |  | $ | 4,195 |  |  | $ | 24,895 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncontrolling interests – Operating Partnership |  | 1,387 |  |  | (447) |  |  | (692) |  |  | 4,202 |  |  | 3,145 |  |  |  | 248 |  |  | 2,550 |
Depreciation and amortization |  | 18,995 |  |  | 18,156 |  |  | 18,160 |  |  | 18,972 |  |  | 18,751 |  |  |  | 55,311 |  |  | 55,299 |
Less depreciation – non real estate |  | (85) |  |  | (88) |  |  | (93) |  |  | (88) |  |  | (71) |  |  |  | (266) |  |  | (235) |
Less depreciation – partially owned entities |  | (31) |  |  | (33) |  |  | (282) |  |  | (454) |  |  | (452) |  |  |  | (346) |  |  | (1,604) |
(Gain) loss on sale of real estate |  | (25,676) |  |  | 190 |  |  | — |  |  | (57,850) |  |  | (39,105) |  |  |  | (25,486) |  |  | (39,774) |
FFO applicable to common shares and Units |  | $ | 12,611 |  |  | $ | 12,391 |  |  | $ | 8,654 |  |  | $ | 11,735 |  |  | $ | 12,159 |  |  |  | $ | 33,656 |  |  | $ | 41,131 |
Adjustments to Core FFO: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Casualty loss (recovery) |  | 545 |  |  | — |  |  | — |  |  | — |  | — |  |  |  | 545 |  |  | — |
Loss on extinguishment of debt |  | 4 |  |  | 17 |  |  | — |  |  | 864 |  |  | 1,087 |  |  |  | 21 |  |  | 1,496 |
Gain on litigation settlement |  | — |  |  | — |  |  | — |  |  | — |  |  | (300) |  |  |  | — |  |  | (6,586) |
(Gain) loss on marketable securities |  | — |  |  | (175) |  |  | 3,553 |  |  | (113) |  |  | — |  |  |  | 3,378 |  |  | — |
(Discount) premium on redemption of preferred shares |  | 1 |  |  | (25) |  |  | (273) |  |  | — |  | — |  |  |  | (297) |  |  | — |
Core FFO applicable to common shares and Units |  | $ | 13,161 |  |  | $ | 12,208 |  |  | $ | 11,934 |  |  | $ | 12,486 |  |  | $ | 12,946 |  |  |  | $ | 37,303 |  |  | $ | 36,041 |
Funds from operations applicable to common shares and Units |  | $ | 12,611 |  |  | $ | 12,391 |  |  | $ | 8,654 |  |  | $ | 11,735 |  |  | $ | 12,159 |  |  |  | $ | 33,656 |  |  | $ | 41,131 |
Dividends to preferred unitholders |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  |  | 480 |  |  | 377 |
Funds from operations applicable to common shares and Units - diluted |  | $ | 12,771 |  |  | $ | 12,551 |  |  | $ | 8,814 |  |  | $ | 11,895 |  |  | $ | 12,319 |  |  |  | $ | 34,136 |  |  | $ | 41,508 |
Core funds from operations applicable to common shares and Units |  | $ | 13,161 |  |  | $ | 12,208 |  |  | $ | 11,934 |  |  | $ | 12,486 |  |  | $ | 12,946 |  |  |  | $ | 37,303 |  |  | $ | 36,041 |
Dividends to preferred unitholders |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  |  | 480 |  |  | 377 |
Core funds from operations applicable to common shares and Units - diluted |  | $ | 13,321 |  |  | $ | 12,368 |  |  | $ | 12,094 |  |  | $ | 12,646 |  |  | $ | 13,106 |  |  |  | $ | 37,783 |  |  | $ | 36,418 |
Per Share Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earnings (loss) per share and Unit - diluted |  | $ | 1.38 |  |  | $ | (0.44) |  |  | $ | (0.67) |  |  | $ | 3.89 |  |  | $ | 2.54 |  |  |  | $ | 0.33 |  |  | $ | 2.11 |
FFO per share and Unit - diluted |  | $ | 0.90 |  |  | $ | 0.93 |  |  | $ | 0.66 |  |  | $ | 0.90 |  |  | $ | 0.93 |  |  |  | $ | 2.49 |  |  | $ | 3.15 |
Core FFO per share and Unit - diluted |  | $ | 0.94 |  |  | $ | 0.91 |  |  | $ | 0.90 |  |  | $ | 0.96 |  |  | $ | 0.99 |  |  |  | $ | 2.76 |  |  | $ | 2.76 |
Weighted average shares and Units - diluted |  | 14,143 |  |  | 13,558 |  |  | 13,401 |  |  | 13,188 |  |  | 13,087 |  |  |  | 13,704 |  |  | 13,174 |

| S-7 |

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.

|  | (in thousands)
|  | Three Months Ended |  |  | Nine Months Ended
|  | 9/30/2020 |  | 6/30/2020 |  | 3/31/2020 |  | 12/31/2019 |  | 9/30/2019 |  |  | 9/30/2020 |  | 9/30/2019
Adjusted EBITDA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) available to common shareholders |  | $ | 19,629 |  |  | $ | (3,803) |  |  | $ | (7,007) |  |  | $ | 48,658 |  |  | $ | 31,596 |  |  |  | $ | 8,819 |  |  | $ | 30,011 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends to preferred unitholders |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  | 160 |  |  |  | 480 |  |  | 377 |
Noncontrolling interests – Operating Partnership |  | 1,387 |  |  | (447) |  |  | (692) |  |  | 4,202 |  |  | 3,145 |  |  |  | 248 |  |  | 2,550 |
Income (loss) before noncontrolling interests – Operating Partnership |  | $ | 21,176 |  |  | $ | (4,090) |  |  | $ | (7,539) |  |  | $ | 53,020 |  |  | $ | 34,901 |  |  |  | $ | 9,547 |  |  | $ | 32,938 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  | 6,756 |  |  | 6,926 |  |  | 6,764 |  |  | 7,112 |  |  | 7,448 |  |  |  | 20,446 |  |  | 22,349 |
Loss on extinguishment of debt |  | 4 |  |  | 17 |  |  | — |  |  | 864 |  |  | 1,087 |  |  |  | 21 |  |  | 1,496 |
Depreciation/amortization related to real estate investments |  | 18,964 |  |  | 18,123 |  |  | 17,878 |  |  | 18,518 |  |  | 18,299 |  |  |  | 54,965 |  |  | 53,695 |
Casualty loss (recovery) |  | 545 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 545 |  |  | — |
Interest income |  | (256) |  |  | (331) |  |  | (597) |  |  | (415) |  |  | (402) |  |  |  | (1,184) |  |  | (1,211) |
(Gain) loss on sale of real estate and other investments |  | (25,676) |  |  | 190 |  |  | — |  |  | (57,850) |  |  | (39,105) |  |  |  | (25,486) |  |  | (39,774) |
Gain on litigation settlement |  | — |  |  | — |  |  | — |  |  | — |  |  | (300) |  |  |  | — |  |  | (6,586) |
(Gain) loss on marketable securities |  | — |  |  | (175) |  |  | 3,553 |  |  | (113) |  |  | — |  |  |  | 3,378 |  |  | — |
Adjusted EBITDA |  | $ | 21,513 |  |  | $ | 20,660 |  |  | $ | 20,059 |  |  | $ | 21,136 |  |  | $ | 21,928 |  |  |  | $ | 62,232 |  |  | $ | 62,907 |

| S-8 |

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)
2020 (remainder) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
2021 |  | $ | 35,281 |  |  | $ | — |  |  | $ | — |  |  | $ | 35,281 |  |  | 4.9 | % |  | 5.36 | %
2022 |  | 33,754 |  |  | 50,000 |  |  | 85,000 |  |  | 168,754 |  |  | 23.5 | % |  | 2.71 | %
2023 |  | 43,996 |  |  | — |  |  | — |  |  | 43,996 |  |  | 6.1 | % |  | 4.02 | %
2024 |  | — |  |  | 70,000 |  |  | — |  |  | 70,000 |  |  | 9.8 | % |  | 3.67 | %
Thereafter |  | 201,480 |  |  | 200,000 |  |  | — |  |  | 401,480 |  |  | 55.7 | % |  | 3.90 | %
Total debt |  | $ | 314,511 |  |  | $ | 320,000 |  |  | $ | 85,000 |  |  | $ | 719,511 |  |  | 100.0 | % |  | 3.68 | %

(1)Term loans have variable interest rates that are fixed with interest rate swaps and $50.0 million of our variable interest, 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.

|  | 9/30/2020 |  | 6/30/2020 |  | 3/31/2020 |  | 12/31/2019 |  | 9/30/2019
Debt Balances Outstanding |  |  |  |  |  |  |  |  |  |
Secured fixed rate |  | $ | 314,511 |  |  | $ | 325,230 |  |  | $ | 329,988 |  |  | $ | 331,376 |  |  | $ | 362,731 |
Unsecured fixed rate line of credit(1) |  | 50,000 |  |  | 50,000 |  |  | 50,000 |  |  | 50,000 |  |  | 50,000 |
Unsecured variable rate line of credit |  | 85,000 |  |  | 13,000 |  |  | 33,000 |  |  | 79 |  |  | 53,143 |
Unsecured term loans |  | 145,000 |  |  | 145,000 |  |  | 145,000 |  |  | 145,000 |  |  | 145,000 |
Unsecured senior notes |  | 125,000 |  |  | 125,000 |  |  | 125,000 |  |  | 125,000 |  |  | 125,000 |
Debt total |  | $ | 719,511 |  |  | $ | 658,230 |  |  | $ | 682,988 |  |  | $ | 651,455 |  |  | $ | 735,874 |
Mortgage debt weighted average interest rate |  | 3.99 | % |  | 4.01 | % |  | 4.01 | % |  | 4.02 | % |  | 4.15 | %
Lines of credit rate (rate with swap) |  | 3.35 | % |  | 2.97 | % |  | 3.18 | % |  | 3.52 | % |  | 3.73 | %
Term loan rate (rate with swap) |  | 4.18 | % |  | 4.12 | % |  | 4.13 | % |  | 4.19 | % |  | 4.14 | %
Senior notes rate |  | 3.78 | % |  | 3.78 | % |  | 3.78 | % |  | 3.78 | % |  | 3.78 | %

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

| S-9 |

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

|  | Three Months Ended
|  | 9/30/2020 |  | 6/30/2020 |  | 3/31/2020 |  | 12/31/2019 |  | 9/30/2019
Equity Capitalization |  |  |  |  |  |  |  |  |  |
Common shares outstanding |  | 12,976 |  |  | 12,827 |  |  | 12,164 |  |  | 12,099 |  |  | 11,625 |
Operating partnership units outstanding |  | 1,018 |  |  | 1,022 |  |  | 1,044 |  |  | 1,058 |  |  | 1,223 |
Total common shares and units outstanding |  | 13,994 |  |  | 13,849 |  |  | 13,208 |  |  | 13,157 |  |  | 12,848 |
Market price per common share (closing price at end of period) |  | $ | 65.17 |  |  | $ | 70.49 |  |  | $ | 55.00 |  |  | $ | 72.50 |  |  | $ | 74.67 |
Equity capitalization-common shares and units |  | $ | 911,989 |  |  | $ | 976,216 |  |  | $ | 726,440 |  |  | $ | 953,883 |  |  | $ | 959,360 |
Recorded book value of preferred shares |  | $ | 93,530 |  |  | $ | 93,579 |  |  | $ | 96,046 |  |  | $ | 99,456 |  |  | $ | 99,456 |
Total equity capitalization |  | $ | 1,005,519 |  |  | $ | 1,069,795 |  |  | $ | 822,486 |  |  | $ | 1,053,339 |  |  | $ | 1,058,816 |
Series D Preferred Units |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |  |  | $ | 16,560 |
Debt Capitalization |  |  |  |  |  |  |  |  |  |
Total debt |  | $ | 719,511 |  |  | $ | 658,230 |  |  | $ | 682,988 |  |  | $ | 651,455 |  |  | $ | 735,874 |
Total capitalization |  | $ | 1,741,590 |  |  | $ | 1,744,585 |  |  | $ | 1,522,034 |  |  | $ | 1,721,354 |  |  | $ | 1,811,250 |
Total debt to total capitalization(1) |  | 41.3 | % |  | 37.7 | % |  | 44.9 | % |  | 37.8 | % |  | 40.6 | %

(1)Total debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet, market value of common shares and operating partnership units, and book value of Series C preferred shares and Series D preferred units outstanding at the end of the period.

|  | Three Months Ended |  |  | Nine Months Ended
|  | 9/30/2020 |  | 6/30/2020 |  | 3/31/2020 |  | 12/31/2019 |  | 9/30/2019 |  |  | 9/30/2020 |  | 9/30/2019
Debt service coverage ratio(1) |  | 2.65 | x |  | 2.48 | x |  | 2.42 | x |  | 2.39 | x |  | 2.26 | x |  |  | 2.52 | x |  | 2.11 | x
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization |  | 2.21 | x |  | 2.05 | x |  | 1.97 | x |  | 1.98 | x |  | 1.90 | x |  |  | 2.08 | x |  | 1.78 | x
Net debt/Adjusted EBITDA(2) |  | 8.17 | x |  | 7.33 | x |  | 8.18 | x |  | 7.19 | x |  | 8.29 | x |  |  | 8.47 | x |  | 8.67 | x
Net debt and preferred equity/Adjusted EBITDA(2) |  | 9.45 | x |  | 8.66 | x |  | 9.59 | x |  | 8.56 | x |  | 9.62 | x |  |  | 9.80 | x |  | 10.06 | x
Distribution Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common shares and Units outstanding at record date |  | 13,994 |  |  | 13,849 |  |  | 13,208 |  |  | 13,157 |  |  | 12,848 |  |  |  | 13,994 |  |  | 12,848 |
Total common distribution declared |  | $ | 9,796 |  |  | $ | 9,694 |  |  | $ | 9,245 |  |  | $ | 9,210 |  |  | $ | 8,994 |  |  |  | $ | 28,735 |  |  | $ | 27,228 |
Common distribution per share and Unit |  | $ | 0.70 |  |  | $ | 0.70 |  |  | $ | 0.70 |  |  | $ | 0.70 |  |  | $ | 0.70 |  |  |  | $ | 2.10 |  |  | $ | 2.10 |
Payout ratio (Core FFO per diluted share and unit basis)(3) |  | 74.5 | % |  | 76.9 | % |  | 77.8 | % |  | 72.9 | % |  | 70.7 | % |  |  | 76.1 | % |  | 76.1 | %

(1)Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization. This term is a non-GAAP measure and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.
(2)Net debt is the total debt balance less cash and cash equivalents and net tax deferred exchange proceeds (included within restricted cash). Adjusted EBITDA is annualized for periods less than one year. Net debt and adjusted EBITDA are non-GAAP measures and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section.
(3)Payout ratio (Core FFO per diluted 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 diluted 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-10 |

IRET
COVID-19 UPDATE
(in thousands, except property data amounts and percentages)
Collections by State

|  |  | Three Months Ended September 30, 2020
State | Number of Communities | Number of Homes | % of Total Revenue | Bad Debt(1) as % of Expected Residential Revenue
Minnesota | 32 |  | 5,438 |  | 50.5 | % | 1.9 | %
Colorado | 4 |  | 1,457 |  | 13.0 | % | 1.1 | %
Nebraska | 6 |  | 1,370 |  | 9.1 | % | 0.1 | %
North Dakota | 15 |  | 2,422 |  | 18.5 | % | — |
South Dakota | 5 |  | 474 |  | 3.5 | % | 0.3 | %
Montana | 5 |  | 749 |  | 5.4 | % | 1.1 | %
Total | 67 |  | 11,910 |  | 100.0 | % | 1.2 | %

(1)Bad debt is reported as a reduction of revenue.
Operating Statistics

|  | Three Months Ended
|  | September 30, 2020 | June 30, 2020 | September 30, 2019
Bad debt as a % of expected residential revenue |  | 1.2 | % | 0.9 | % | 0.4 | %
Percent of rent deferrals to total residential revenue |  | 0.1 | % | 0.5% | N/A
Same-Store Communities |  |  |  |
New lease rates |  | 0.0 | % | (1.2) | % | (1.4) | %
Renewal rates |  | 0.6 | % | 3.3 | % | 5.2 | %
Weighted average occupancy |  | 94.4 | % | 94.6 | % | 93.5 | %
Physical occupancy, at end of period |  | 95.3 | % | 94.8 | % | 94.3 | %

Liquidity and Near-Term Funding Obligations

Liquidity Profile | September 30, 2020 | June 30, 2020
Unsecured credit facility - committed | $ | 250,000 |  | $ | 250,000 |
Balance outstanding | 135,000 |  | 63,000 |
Amount available on line of credit | $ | 115,000 |  | $ | 187,000 |
Cash and cash equivalents | 16,804 |  | 52,714 |
Total liquidity | $ | 131,804 |  | $ | 239,714 |
Near-Term Funding Obligations |  |
Unfunded construction loan and mezzanine loan commitments - 2020 and 2021 | $ | 27,248 |  | $ | 34,272 |
2020 and 2021 Debt maturities | 35,281 |  | 44,962 |
Total | $ | 62,529 |  | $ | 79,234 |
Ratio of liquidity to near-term funding obligations | 2.1 |  | 3.0 |

| S-11 |

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

|  | Apartment Homes Included |  | Revenues |  | Expenses |  | NOI
Regions |  |  | Q3 2020 |  | Q3 2019 |  | % Change |  | Q3 2020 |  | Q3 2019 |  | % Change |  | Q3 2020 |  | Q3 2019 |  | % Change
Minneapolis, MN |  | 1,987 |  |  | $ | 8,892 |  |  | $ | 8,857 |  |  | 0.4 | % |  | $ | 3,858 |  |  | $ | 3,920 |  |  | (1.6) | % |  | $ | 5,034 |  |  | $ | 4,937 |  |  | 2.0 | %
Rochester, MN |  | 1,711 |  |  | 6,351 |  |  | 6,446 |  |  | (1.5) | % |  | 3,074 |  |  | 2,386 |  |  | 28.8 | % |  | 3,277 |  |  | 4,060 |  |  | (19.3) | %
Denver, CO |  | 664 |  |  | 3,724 |  |  | 3,855 |  |  | (3.4) | % |  | 1,298 |  |  | 1,197 |  |  | 8.4 | % |  | 2,426 |  |  | 2,658 |  |  | (8.7) | %
Grand Forks, ND |  | 865 |  |  | 2,887 |  |  | 2,822 |  |  | 2.3 | % |  | 1,072 |  |  | 1,133 |  |  | (5.4) | % |  | 1,815 |  |  | 1,689 |  |  | 7.5 | %
Omaha, NE |  | 1,370 |  |  | 3,884 |  |  | 3,738 |  |  | 3.9 | % |  | 1,790 |  |  | 1,740 |  |  | 2.9 | % |  | 2,094 |  |  | 1,998 |  |  | 4.8 | %
St. Cloud, MN |  | 1,190 |  |  | 3,548 |  |  | 3,517 |  |  | 0.9 | % |  | 1,603 |  |  | 1,557 |  |  | 3.0 | % |  | 1,945 |  |  | 1,960 |  |  | (0.8) | %
Bismarck, ND |  | 845 |  |  | 2,796 |  |  | 2,707 |  |  | 3.3 | % |  | 1,071 |  |  | 1,069 |  |  | 0.2 | % |  | 1,725 |  |  | 1,638 |  |  | 5.3 | %
Billings, MT |  | 749 |  |  | 2,305 |  |  | 2,144 |  |  | 7.5 | % |  | 800 |  |  | 882 |  |  | (9.3) | % |  | 1,505 |  |  | 1,262 |  |  | 19.3 | %
Minot, ND |  | 712 |  |  | 2,170 |  |  | 2,117 |  |  | 2.5 | % |  | 1,003 |  |  | 1,035 |  |  | (3.1) | % |  | 1,167 |  |  | 1,082 |  |  | 7.9 | %
Rapid City, SD |  | 474 |  |  | 1,486 |  |  | 1,424 |  |  | 4.4 | % |  | 629 |  |  | 574 |  |  | 9.6 | % |  | 857 |  |  | 850 |  |  | 0.8 | %
Same-Store Total |  | 10,567 |  |  | $ | 38,043 |  |  | $ | 37,627 |  |  | 1.1 | % |  | $ | 16,198 |  |  | $ | 15,493 |  |  | 4.6 | % |  | $ | 21,845 |  |  | $ | 22,134 |  |  | (1.3) | %

|  | % of NOI Contribution |  | Weighted Average Occupancy (1) |  | Average Monthly Rental Rate (2) |  | Average Monthly Revenue per Occupied Home (3)
Regions |  |  | Q3 2020 |  | Q3 2019 |  | Growth |  | Q3 2020 |  | Q3 2019 |  | % Change |  | Q3 2020 |  | Q3 2019 |  | % Change
Minneapolis, MN |  | 23.1 | % |  | 93.4 | % |  | 90.9 | % |  | 2.5 | % |  | $ | 1,496 |  |  | $ | 1,509 |  |  | (0.9) | % |  | $ | 1,596 |  |  | $ | 1,635 |  |  | (2.4) | %
Rochester, MN |  | 15.0 | % |  | 94.1 | % |  | 94.6 | % |  | (0.5) | % |  | 1,249 |  |  | 1,257 |  |  | (0.6) | % |  | 1,315 |  |  | 1,327 |  |  | (0.9) | %
Denver, CO |  | 11.1 | % |  | 92.8 | % |  | 94.2 | % |  | (1.4) | % |  | 1,801 |  |  | 1,855 |  |  | (2.9) | % |  | 2,014 |  |  | 2,055 |  |  | (2.0) | %
Grand Forks, ND |  | 8.3 | % |  | 95.5 | % |  | 95.9 | % |  | (0.4) | % |  | 1,089 |  |  | 1,073 |  |  | 1.5 | % |  | 1,165 |  |  | 1,134 |  |  | 2.7 | %
Omaha, NE |  | 9.6 | % |  | 93.8 | % |  | 93.0 | % |  | 0.8 | % |  | 913 |  |  | 900 |  |  | 1.4 | % |  | 1,008 |  |  | 977 |  |  | 3.2 | %
St. Cloud, MN |  | 8.9 | % |  | 94.4 | % |  | 93.8 | % |  | 0.6 | % |  | 965 |  |  | 959 |  |  | 0.6 | % |  | 1,053 |  |  | 1,050 |  |  | 0.3 | %
Bismarck, ND |  | 7.9 | % |  | 96.1 | % |  | 93.8 | % |  | 2.3 | % |  | 1,062 |  |  | 1,055 |  |  | 0.7 | % |  | 1,148 |  |  | 1,138 |  |  | 0.9 | %
Billings, MT |  | 6.9 | % |  | 97.4 | % |  | 95.0 | % |  | 2.4 | % |  | 960 |  |  | 941 |  |  | 2.0 | % |  | 1,053 |  |  | 1,004 |  |  | 4.9 | %
Minot, ND |  | 5.3 | % |  | 94.9 | % |  | 93.9 | % |  | 1.0 | % |  | 1,002 |  |  | 999 |  |  | 0.3 | % |  | 1,070 |  |  | 1,055 |  |  | 1.4 | %
Rapid City, SD |  | 3.9 | % |  | 96.5 | % |  | 96.1 | % |  | 0.4 | % |  | 986 |  |  | 963 |  |  | 2.4 | % |  | 1,082 |  |  | 1,042 |  |  | 3.8 | %
Same-Store Total |  | 100.0 | % |  | 94.4 | % |  | 93.5 | % |  | 0.9 | % |  | $ | 1,178 |  |  | $ | 1,178 |  |  | — |  |  | $ | 1,271 |  |  | $ | 1,269 |  |  | 0.2 | %

(1)Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rent. 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.
(2)Average monthly rental rate is scheduled rent divided by the total number of apartment homes.
(3)Average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment homes for the period.

| S-12 |

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

|  | Apartment Homes Included |  | Revenues |  | Expenses |  | NOI
Regions |  |  | Q3 2020 |  | Q2 2020 |  | % Change |  | Q3 2020 |  | Q2 2020 |  | % Change |  | Q3 2020 |  | Q2 2020 |  | % Change
Minneapolis, MN |  | 1,987 |  |  | $ | 8,892 |  |  | $ | 9,068 |  |  | (1.9) | % |  | $ | 3,858 |  |  | $ | 3,485 |  |  | 10.8 | % |  | $ | 5,034 |  |  | $ | 5,583 |  |  | (9.9) | %
Rochester, MN |  | 1,711 |  |  | 6,351 |  |  | 6,370 |  |  | (0.3) | % |  | 3,074 |  |  | 2,802 |  |  | 9.7 | % |  | 3,277 |  |  | 3,568 |  |  | (8.2) | %
Denver, CO |  | 664 |  |  | 3,724 |  |  | 3,701 |  |  | 0.6 | % |  | 1,298 |  |  | 1,095 |  |  | 18.5 | % |  | 2,426 |  |  | 2,606 |  |  | (6.9) | %
Grand Forks, ND |  | 865 |  |  | 2,887 |  |  | 2,840 |  |  | 1.7 | % |  | 1,072 |  |  | 1,136 |  |  | (5.6) | % |  | 1,815 |  |  | 1,704 |  |  | 6.5 | %
Omaha, NE |  | 1,370 |  |  | 3,884 |  |  | 3,838 |  |  | 1.2 | % |  | 1,790 |  |  | 1,783 |  |  | 0.4 | % |  | 2,094 |  |  | 2,055 |  |  | 1.9 | %
St. Cloud, MN |  | 1,190 |  |  | 3,548 |  |  | 3,546 |  |  | 0.1 | % |  | 1,603 |  |  | 1,524 |  |  | 5.2 | % |  | 1,945 |  |  | 2,022 |  |  | (3.8) | %
Bismarck, ND |  | 845 |  |  | 2,796 |  |  | 2,766 |  |  | 1.1 | % |  | 1,071 |  |  | 1,053 |  |  | 1.7 | % |  | 1,725 |  |  | 1,713 |  |  | 0.7 | %
Billings, MT |  | 749 |  |  | 2,305 |  |  | 2,139 |  |  | 7.8 | % |  | 800 |  |  | 838 |  |  | (4.5) | % |  | 1,505 |  |  | 1,301 |  |  | 15.7 | %
Minot, ND |  | 712 |  |  | 2,170 |  |  | 2,161 |  |  | 0.4 | % |  | 1,003 |  |  | 969 |  |  | 3.5 | % |  | 1,167 |  |  | 1,192 |  |  | (2.1) | %
Rapid City, SD |  | 474 |  |  | 1,486 |  |  | 1,402 |  |  | 6.0 | % |  | 629 |  |  | 634 |  |  | (0.8) | % |  | 857 |  |  | 768 |  |  | 11.6 | %
Same-Store Total |  | 10,567 |  |  | $ | 38,043 |  |  | $ | 37,831 |  |  | 0.6 | % |  | $ | 16,198 |  |  | $ | 15,319 |  |  | 5.7 | % |  | $ | 21,845 |  |  | $ | 22,512 |  |  | (3.0) | %

|  | % of NOI Contribution |  | Weighted Average Occupancy |  | Average Monthly Rental Rate |  | Average Monthly Revenue per Occupied Home
Regions |  |  | Q3 2020 |  | Q2 2020 |  | Growth |  | Q3 2020 |  | Q2 2020 |  | % Change |  | Q3 2020 |  | Q2 2020 |  | % Change
Minneapolis, MN |  | 23.1 | % |  | 93.4 | % |  | 94.0 | % |  | (0.6) | % |  | $ | 1,496 |  |  | $ | 1,494 |  |  | 0.1 | % |  | $ | 1,596 |  |  | $ | 1,619 |  |  | (1.3) | %
Rochester, MN |  | 15.0 | % |  | 94.1 | % |  | 95.3 | % |  | (1.2) | % |  | 1,249 |  |  | 1,248 |  |  | 0.1 | % |  | 1,315 |  |  | 1,303 |  |  | 0.9 | %
Denver, CO |  | 11.1 | % |  | 92.8 | % |  | 92.9 | % |  | (0.1) | % |  | 1,801 |  |  | 1,827 |  |  | (1.4) | % |  | 2,014 |  |  | 2,001 |  |  | 0.7 | %
Grand Forks, ND |  | 8.3 | % |  | 95.5 | % |  | 94.8 | % |  | 0.7 | % |  | 1,089 |  |  | 1,079 |  |  | 0.9 | % |  | 1,165 |  |  | 1,154 |  |  | 1.0 | %
Omaha, NE |  | 9.6 | % |  | 93.8 | % |  | 94.9 | % |  | (1.1) | % |  | 913 |  |  | 904 |  |  | 1.0 | % |  | 1,008 |  |  | 984 |  |  | 2.3 | %
St. Cloud, MN |  | 8.9 | % |  | 94.4 | % |  | 93.7 | % |  | 0.7 | % |  | 965 |  |  | 955 |  |  | 1.0 | % |  | 1,053 |  |  | 1,060 |  |  | (0.6) | %
Bismarck, ND |  | 7.9 | % |  | 96.1 | % |  | 96.2 | % |  | (0.1) | % |  | 1,062 |  |  | 1,053 |  |  | 0.9 | % |  | 1,148 |  |  | 1,134 |  |  | 1.2 | %
Billings, MT |  | 6.9 | % |  | 97.4 | % |  | 94.4 | % |  | 3.0 | % |  | 960 |  |  | 944 |  |  | 1.7 | % |  | 1,053 |  |  | 1,008 |  |  | 4.8 | %
Minot, ND |  | 5.3 | % |  | 94.9 | % |  | 97.0 | % |  | (2.1) | % |  | 1,002 |  |  | 992 |  |  | 1.0 | % |  | 1,070 |  |  | 1,043 |  |  | 2.5 | %
Rapid City, SD |  | 3.9 | % |  | 96.5 | % |  | 94.3 | % |  | 2.2 | % |  | 986 |  |  | 966 |  |  | 2.1 | % |  | 1,082 |  |  | 1,046 |  |  | 3.8 | %
Same-Store Total |  | 100.0 | % |  | 94.4 | % |  | 94.6 | % |  | (0.2) | % |  | $ | 1,178 |  |  | $ | 1,172 |  |  | 0.5 | % |  | $ | 1,271 |  |  | $ | 1,262 |  |  | 0.8 | %

| S-13 |

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

|  | Apartment Homes Included |  | Revenues |  | Expenses |  | NOI
Regions |  |  | 2020 |  | 2019 |  | % Change |  | 2020 |  | 2019 |  | % Change |  | 2020 |  | 2019 |  | % Change
Minneapolis, MN |  | 1,987 |  |  | $ | 27,072 |  |  | $ | 26,541 |  |  | 2.0 | % |  | $ | 11,254 |  |  | $ | 11,194 |  |  | 0.5 | % |  | $ | 15,818 |  |  | $ | 15,347 |  |  | 3.1 | %
Rochester, MN |  | 1,711 |  |  | 19,260 |  |  | 18,962 |  |  | 1.6 | % |  | 8,699 |  |  | 7,290 |  |  | 19.3 | % |  | 10,561 |  |  | 11,672 |  |  | (9.5) | %
Denver, CO |  | 664 |  |  | 11,352 |  |  | 11,333 |  |  | 0.2 | % |  | 3,652 |  |  | 3,615 |  |  | 1.0 | % |  | 7,700 |  |  | 7,718 |  |  | (0.2) | %
Grand Forks, ND |  | 865 |  |  | 8,578 |  |  | 8,330 |  |  | 3.0 | % |  | 3,515 |  |  | 3,578 |  |  | (1.8) | % |  | 5,063 |  |  | 4,752 |  |  | 6.5 | %
Omaha, NE |  | 1,370 |  |  | 11,536 |  |  | 11,197 |  |  | 3.0 | % |  | 5,199 |  |  | 5,149 |  |  | 1.0 | % |  | 6,337 |  |  | 6,048 |  |  | 4.8 | %
St. Cloud, MN |  | 1,190 |  |  | 10,705 |  |  | 10,577 |  |  | 1.2 | % |  | 4,883 |  |  | 4,890 |  |  | (0.1) | % |  | 5,822 |  |  | 5,687 |  |  | 2.4 | %
Bismarck, ND |  | 845 |  |  | 8,297 |  |  | 8,042 |  |  | 3.2 | % |  | 3,293 |  |  | 3,232 |  |  | 1.9 | % |  | 5,004 |  |  | 4,810 |  |  | 4.0 | %
Billings, MT |  | 749 |  |  | 6,622 |  |  | 6,373 |  |  | 3.9 | % |  | 2,464 |  |  | 2,457 |  |  | 0.3 | % |  | 4,158 |  |  | 3,916 |  |  | 6.2 | %
Minot, ND |  | 712 |  |  | 6,457 |  |  | 6,380 |  |  | 1.2 | % |  | 2,983 |  |  | 3,078 |  |  | (3.1) | % |  | 3,474 |  |  | 3,302 |  |  | 5.2 | %
Rapid City, SD |  | 474 |  |  | 4,329 |  |  | 4,162 |  |  | 4.0 | % |  | 1,915 |  |  | 1,707 |  |  | 12.2 | % |  | 2,414 |  |  | 2,455 |  |  | (1.7) | %
Same-Store Total |  | 10,567 |  |  | $ | 114,208 |  |  | $ | 111,897 |  |  | 2.1 | % |  | $ | 47,857 |  |  | $ | 46,190 |  |  | 3.6 | % |  | $ | 66,351 |  |  | $ | 65,707 |  |  | 1.0 | %

|  | % of NOI Contribution |  | Weighted Average Occupancy |  | Average Monthly Rental Rate |  | Average Monthly Revenue per Occupied Home
Regions |  |  | 2020 |  | 2019 |  | Growth |  | 2020 |  | 2019 |  | % Change |  | 2020 |  | 2019 |  | % Change
Minneapolis, MN |  | 23.9 | % |  | 93.9 | % |  | 93.0 | % |  | 0.9 | % |  | $ | 1,492 |  |  | $ | 1,475 |  |  | 1.2 | % |  | $ | 1,613 |  |  | $ | 1,596 |  |  | 1.1 | %
Rochester, MN |  | 15.9 | % |  | 95.5 | % |  | 95.5 | % |  | — |  |  | 1,245 |  |  | 1,232 |  |  | 1.1 | % |  | 1,310 |  |  | 1,289 |  |  | 1.6 | %
Denver, CO |  | 11.6 | % |  | 93.6 | % |  | 94.3 | % |  | (0.7) | % |  | 1,824 |  |  | 1,830 |  |  | (0.3) | % |  | 2,029 |  |  | 2,010 |  |  | 0.9 | %
Grand Forks, ND |  | 7.6 | % |  | 95.6 | % |  | 95.4 | % |  | 0.2 | % |  | 1,078 |  |  | 1,072 |  |  | 0.6 | % |  | 1,152 |  |  | 1,121 |  |  | 2.8 | %
Omaha, NE |  | 9.6 | % |  | 94.3 | % |  | 93.9 | % |  | 0.4 | % |  | 903 |  |  | 886 |  |  | 1.9 | % |  | 992 |  |  | 968 |  |  | 2.6 | %
St. Cloud, MN |  | 8.8 | % |  | 94.3 | % |  | 95.0 | % |  | (0.7) | % |  | 955 |  |  | 950 |  |  | 0.5 | % |  | 1,060 |  |  | 1,040 |  |  | 1.9 | %
Bismarck, ND |  | 7.5 | % |  | 96.2 | % |  | 94.8 | % |  | 1.4 | % |  | 1,053 |  |  | 1,043 |  |  | 1.0 | % |  | 1,133 |  |  | 1,115 |  |  | 1.8 | %
Billings, MT |  | 6.3 | % |  | 95.9 | % |  | 95.7 | % |  | 0.2 | % |  | 946 |  |  | 923 |  |  | 2.5 | % |  | 1,025 |  |  | 988 |  |  | 3.7 | %
Minot, ND |  | 5.2 | % |  | 95.7 | % |  | 94.9 | % |  | 0.8 | % |  | 995 |  |  | 997 |  |  | (0.2) | % |  | 1,053 |  |  | 1,049 |  |  | 0.4 | %
Rapid City, SD |  | 3.6 | % |  | 95.9 | % |  | 96.0 | % |  | (0.1) | % |  | 968 |  |  | 946 |  |  | 2.3 | % |  | 1,058 |  |  | 1,016 |  |  | 4.1 | %
Same-Store Total |  | 100.0 | % |  | 94.8 | % |  | 94.5 | % |  | 0.3 | % |  | $ | 1,171 |  |  | $ | 1,160 |  |  | 0.9 | % |  | $ | 1,267 |  |  | $ | 1,245 |  |  | 1.8 | %

| S-14 |

IRET
PORTFOLIO SUMMARY(1)

|  | Three Months Ended
|  | 9/30/2020 |  | 6/30/2020 |  | 3/31/2020 |  | 12/31/2019 |  | 9/30/2019
Number of Apartment Homes at Period End |  |  |  |  |  |  |  |  |  |
Same-Store |  | 10,567 |  |  | 11,257 |  |  | 11,257 |  |  | 10,402 |  |  | 11,785 |
Non-Same-Store |  | 1,343 |  |  | 878 |  |  | 878 |  |  | 1,551 |  |  | 1,551 |
All Communities |  | 11,910 |  |  | 12,135 |  |  | 12,135 |  |  | 11,953 |  |  | 13,336 |
Average Monthly Rental Rate(2) |  |  |  |  |  |  |  |  |  |
Same-Store |  | $ | 1,178 |  |  | $ | 1,142 |  |  | $ | 1,135 |  |  | $ | 1,085 |  |  | $ | 1,062 |
Non-Same-Store |  | 1,597 |  |  | 1,594 |  |  | 1,572 |  |  | 1,722 |  |  | 1,742 |
All Communities |  | $ | 1,210 |  |  | $ | 1,175 |  |  | $ | 1,163 |  |  | $ | 1,168 |  |  | $ | 1,123 |
Average Monthly Revenue per Occupied Apartment Home(3) |  |  |  |  |  |  |  |  |  |
Same-Store |  | $ | 1,271 |  |  | $ | 1,232 |  |  | $ | 1,237 |  |  | $ | 1,169 |  |  | $ | 1,141 |
Non-Same-Store |  | 1,729 |  |  | 1,681 |  |  | 1,658 |  |  | 1,869 |  |  | 1,887 |
All Communities |  | $ | 1,307 |  |  | $ | 1,264 |  |  | $ | 1,263 |  |  | $ | 1,260 |  |  | $ | 1,210 |
Weighted Average Occupancy(4) |  |  |  |  |  |  |  |  |  |
Same-Store |  | 94.4 | % |  | 94.6 | % |  | 95.4 | % |  | 94.0 | % |  | 93.3 | %
Non-Same-Store |  | 93.9 | % |  | 93.9 | % |  | 93.3 | % |  | 93.0 | % |  | 94.2 | %
All Communities |  | 94.3 | % |  | 94.5 | % |  | 95.2 | % |  | 93.8 | % |  | 93.4 | %
Operating Expenses as a % of Scheduled Rent |  |  |  |  |  |  |  |  |  |
Same-Store |  | 43.4 | % |  | 41.5 | % |  | 45.0 | % |  | 43.5 | % |  | 43.0 | %
Non-Same-Store |  | 39.7 | % |  | 36.1 | % |  | 37.0 | % |  | 33.8 | % |  | 38.1 | %
All Communities |  | 43.0 | % |  | 41.0 | % |  | 44.3 | % |  | 41.6 | % |  | 42.3 | %
Capital Expenditures |  |  |  |  |  |  |  |  |  |
Total Capital Expenditures per Apartment Home – Same-Store |  | $ | 293 |  |  | $ | 262 |  |  | $ | 151 |  |  | $ | 427 |  |  | $ | 178 |

(1)Previously reported amounts are not revised for changes in the composition of the same-store properties pool.
(2)Average monthly rental rate is scheduled rent 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)Average monthly revenue per occupied home is defined as total rental 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-15 |

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

|  | Three Months Ended |  |  | Nine Months Ended
|  | 9/30/2020 |  | 9/30/2019 |  |  | 9/30/2020 |  | 9/30/2019
Total Same-Store Apartment Homes |  | 10,567 |  |  | 10,567 |  |  |  | 10,567 |  |  | 10,567 |
Turnover |  | $ | 1,079 |  |  | $ | 855 |  |  |  | $ | 2,553 |  |  | $ | 2,155 |
Furniture & Equipment |  | 8 |  |  | 83 |  |  |  | 243 |  |  | 219 |
Building – Interior |  | 62 |  |  | 6 |  |  |  | 275 |  |  | 180 |
Building – Exterior |  | 1,157 |  |  | 545 |  |  |  | 2,975 |  |  | 1,130 |
Landscaping & Grounds |  | 790 |  |  | 313 |  |  |  | 1,165 |  |  | 833 |
Capital Expenditures - Same-Store |  | $ | 3,096 |  |  | $ | 1,802 |  |  |  | $ | 7,211 |  |  | $ | 4,517 |
Capital Expenditures per Apartment Home - Same-Store |  | $ | 293 |  |  | $ | 171 |  |  |  | $ | 682 |  |  | $ | 427 |
Value Add |  | $ | 3,139 |  |  | $ | 1,673 |  |  |  | $ | 7,305 |  |  | $ | 2,379 |
Total Capital Spend - Same-Store |  | $ | 6,235 |  |  | $ | 3,475 |  |  |  | $ | 14,516 |  |  | $ | 6,896 |
Total Capital Spend per Apartment Home - Same-Store |  | $ | 590 |  |  | $ | 329 |  |  |  | $ | 1,374 |  |  | $ | 653 |
All Properties - Weighted Average Apartment Homes |  | 11,600 |  |  | 13,058 |  |  |  | 11,456 |  |  | 13,058 |
Capital Expenditures |  | $ | 3,007 |  |  | $ | 2,462 |  |  |  | $ | 8,191 |  |  | $ | 6,189 |
Capital Expenditures per Apartment Home |  | $ | 259 |  |  | $ | 189 |  |  |  | $ | 715 |  |  | $ | 474 |
Value Add |  | 4,209 |  |  | 1,878 |  |  |  | 10,405 |  |  | 2,997 |
Acquisition Capital |  | 730 |  |  | 1,645 |  |  |  | 1,265 |  |  | 1,899 |
Total Capital Spend |  | 7,946 |  |  | 5,985 |  |  |  | 19,861 |  |  | 11,085 |
Total Capital Spend per Apartment Home |  | $ | 685 |  |  | $ | 458 |  |  |  | $ | 1,734 |  |  | $ | 849 |

| S-16 |