MINOT, N.D., Aug. 7, 2019 /PRNewswire/ --IRET (NYSE: IRET)
announced today its second quarter 2019 financial and operating
results. Net Income (Loss), Funds from Operations ("FFO" and
Core FFO per share for the three and six months ended June 30,
2019, are detailed below.
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
Per
Share
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net Income
(Loss)
|
|
$
|
0.11
|
|
|
$
|
(1.83)
|
|
|
$
|
(0.43)
|
|
|
$
|
(1.42)
|
|
FFO
|
|
$
|
1.45
|
|
|
$
|
0.87
|
|
|
$
|
2.22
|
|
|
$
|
1.55
|
|
Core FFO
|
|
$
|
1.00
|
|
|
$
|
0.91
|
|
|
$
|
1.77
|
|
|
$
|
1.62
|
|
|
|
Year-Over-Year Comparison
|
|
Sequential Comparison
|
|
YTD
Comparison
|
Same-Store
Results
|
|
2Q19 vs.
2Q18
|
|
2Q19 vs.
1Q19
|
|
CY19 vs.
CY18
|
Revenues
|
|
3.1
|
%
|
|
1.0
|
%
|
|
3.6
|
%
|
Expenses
|
|
3.8
|
%
|
|
(4.7)
|
%
|
|
3.7
|
%
|
NOI
|
|
2.6
|
%
|
|
5.7
|
%
|
|
3.6
|
%
|
|
|
Three months
ended
|
Same-Store
Results
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
Weighted Average
Occupancy
|
|
94.3
|
%
|
|
95.6
|
%
|
|
94.2
|
%
|
|
|
|
|
|
|
|
|
|
|
Second Quarter 2019 Highlights
- We reported Net Income of $0.11
per share for the second quarter of 2019, compared to Net Loss of
$(1.83) per share for the same
quarter in 2018;
- Core FFO grew by 9.9%, increasing to $1.00 per share for the second quarter of 2019,
compared to $0.91 per share for the
same quarter in 2018;
- Same-store revenue increased year-over-year by 3.1% driven by
3.0% growth in rental revenue, while same-store operating expenses
grew 3.8% year-over-year, primarily due to $324,000 of favorable insurance settlements in
2018. The combination of 3.1% 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 2.6%,
our seventh consecutive quarter of year-over-year NOI growth;
- We revised our full-year guidance to:
-
- decrease the midpoint of full-year Net Loss per share guidance
from $(1.66) to $(1.22);
- increase the midpoint of full-year same-store revenue from
3.25% to 3.50% by increasing the lower end of the range from 2.50%
to 3.00% (as the overall range changed from 2.50%-4.00% to
3.00%-4.00%);
- reaffirm the midpoint of full-year same-store expense guidance
of 3.25%, but narrowing the range from 2.50%-4.00% to
2.75%-3.75%;
- increase the midpoint of full-year same-store NOI guidance from
3.25% to 3.50% by narrowing the range from 2.00%-4.50% to
3.00%-4.00%; and
- raise the midpoint of full-year Core FFO per share guidance by
$0.05 to $3.67 per share by increasing the lower end of
the range from $3.52 to $3.62 (as the overall range changed from
$3.52-$3.72 to $3.62-$3.72);
- We successfully prevailed in a multi-year litigation claim
relating to a construction defect claim, for which we recorded a
gain on litigation settlement of $6.3
million; and
- We repurchased approximately 116,000 common shares for an
aggregate total cost of $6.9 million,
representing an average price of $59.12 per common share, and approximately
133,000 operating units for an aggregate total cost of $8.0 million, representing an average price of
$60.01 per Unit.
"Our Core FFO growth per share of 9.9% and same-store revenue
growth of 3.1% are built on strong performance across our markets
and operational enhancements that continue to create value," said
Mark O. Decker, Jr., IRET's
President and CEO.
Acquisitions and Dispositions
During the second quarter, we sold a multi-tenant property that
currently houses our Minot
corporate office for $6.5 million and
purchased an office building in Minot for $2.1
million, which will become our new Minot corporate office. We also sold one
parcel of unimproved land for $725,000.
Balance Sheet
At the end of the second quarter, we had $89.5 million of total liquidity on our balance
sheet, including $72.1 million
available under our corporate revolver.
2019 Financial Overview
We are raising our earnings guidance for calendar year 2019
based on actual results through June 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
|
$(1.27) to
$(1.17)
|
|
$(1.22)
|
|
$(1.66)
|
|
$0.44
|
Core FFO per
share
|
$3.62 to
$3.72
|
|
$3.67
|
|
$3.62
|
|
$0.05
|
|
|
|
|
|
|
|
|
Same-Store
Growth
|
|
|
|
|
|
|
|
Revenue
|
3.00% to
4.00%
|
|
3.50%
|
|
3.25%
|
|
0.25%
|
Expenses
|
2.75% to
3.75%
|
|
3.25%
|
|
3.25%
|
|
—
|
NOI
|
3.00% to
4.00%
|
|
3.50%
|
|
3.25%
|
|
0.25%
|
Recent Developments
Subsequent to quarter-end, we sold a 21-unit multifamily
community in Billings, Montana for
approximately $1.7 million and a
vacant parcel of land in Weston,
Wisconsin for approximately $600,000.
Between July 1, 2019 and
July 31, 2019, we repurchased
approximately 39,000 common shares at an average price of
$59.57 per share, including
commissions. Between January 1, 2019
and July 31, 2019, we have
repurchased approximately 329,000 shares at an average price of
$54.69, including commissions, and
approximately 135,000 operating units at an average price of
$60.00. Since authorization of the
share repurchase program in December
2016, we have repurchased approximately 627,000 common
shares at an average price of $55.20. As of July
31, 2019, the remaining authorization under our share
repurchase program is approximately $15.4
million. In all, we have reduced our share count by
5.2%.
On August 6, 2019, we closed a
$59.9 million mortgage loan.
This mortgage loan is secured by four multifamily communities and
is priced at a fixed rate of 3.88% for the full twelve-year term of
the loan. Proceeds from this loan will be used to pay down
balances under our line of credit.
Upcoming Events
On October 1, 2019, we will be
holding a 2019 shareholder event at the Minot Country Club
(Elevation restaurant) in Minot,
North Dakota. This gathering will include food, a presentation
from management, and an opportunity for shareholders to ask
questions of management. Further details on this event will
be provided to all shareholders of record and will be posted on the
Company's website at www.iretapartments.com when it becomes
available.
Quarterly Distributions
Effective June 5, 2019, IRET's
Board of Trustees declared a regular quarterly distribution of
$0.70 per share/unit payable on
July 1, 2019, to common shareholders
and unitholders of record on June 17,
2019. IRET has paid cash dividends to common shareholders and
unitholders every quarter since its initial dividend payment in
1971.
Effective June 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 July 1, 2019, to holders
of record on June 17, 2019.
Series C preferred share distributions are cumulative and payable
quarterly in arrears at an annual rate of $1.65625 per share.
Earnings Call
Live webcast and
replay: http://ir.iretapartments.com
|
|
|
|
Live Conference
Call
|
|
Conference Call
Replay
|
Thursday, August 8,
2019, at 10:00 AM ET
|
|
Replay available
until August 22, 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
|
10133436
|
Supplemental Information
Supplemental Operating and Financial Data for the quarter ended
June 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 June 30, 2019, we owned
interests in 88 apartment communities consisting of
13,975 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.
Contact Information
Jonathan Bishop
Vice President – Finance
Phone: 701-837-7104
E-mail: IR@iret.com
Common Share Data
(NYSE: IRET)
|
|
|
|
2nd
Quarter
|
|
1st
Quarter
|
|
4th
Quarter
|
|
3rd
Quarter
|
|
2nd
Quarter
|
|
|
Calendar Year
2019
|
|
Calendar Year
2019
|
|
Calendar Year
2018
|
|
Calendar Year
2018
|
|
Calendar Year
2018
|
High closing
price
|
|
$
|
61.28
|
|
|
$
|
61.50
|
|
|
$
|
59.10
|
|
|
$
|
59.80
|
|
|
$
|
59.40
|
|
Low closing
price
|
|
$
|
57.19
|
|
|
$
|
49.92
|
|
|
$
|
47.00
|
|
|
$
|
53.30
|
|
|
$
|
51.30
|
|
Average closing
price
|
|
$
|
59.54
|
|
|
$
|
58.11
|
|
|
$
|
53.40
|
|
|
$
|
54.99
|
|
|
$
|
54.50
|
|
Closing price at end
of quarter
|
|
$
|
58.67
|
|
|
$
|
59.91
|
|
|
$
|
49.07
|
|
|
$
|
59.80
|
|
|
$
|
55.30
|
|
Common share
distributions – annualized
|
|
$
|
2.80
|
|
|
$
|
2.80
|
|
|
$
|
2.80
|
|
|
$
|
2.80
|
|
|
$
|
2.80
|
|
Closing dividend
yield – annualized
|
|
4.8
|
%
|
|
4.7
|
%
|
|
5.7
|
%
|
|
4.7
|
%
|
|
5.1
|
%
|
Closing common shares
outstanding (thousands)
|
|
11,656
|
|
|
11,768
|
|
|
11,942
|
|
|
11,961
|
|
|
11,939
|
|
Closing limited
partnership units outstanding (thousands)
|
|
1,224
|
|
|
1,365
|
|
|
1,368
|
|
|
1,379
|
|
|
1,401
|
|
Closing market value
of outstanding common shares, plus imputed closing market value of
outstanding limited partnership units (thousands)
|
|
$
|
755,670
|
|
|
$
|
786,798
|
|
|
$
|
653,122
|
|
|
$
|
797,732
|
|
|
$
|
737,702
|
|
IRET
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
|
(in
thousands)
|
|
|
|
Three Months Ended
|
|
|
Six Months
Ended
|
|
|
6/30/2019
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
|
6/30/2019
|
|
6/30/2018
|
REVENUE
|
|
$
|
46,934
|
|
|
$
|
45,608
|
|
|
$
|
45,730
|
|
|
$
|
45,406
|
|
|
$
|
46,197
|
|
|
|
$
|
92,542
|
|
|
$
|
89,232
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses, excluding real estate taxes
|
|
13,942
|
|
|
14,804
|
|
|
13,292
|
|
|
14,438
|
|
|
13,934
|
|
|
|
28,746
|
|
|
28,180
|
|
Real estate
taxes
|
|
5,574
|
|
|
5,232
|
|
|
5,098
|
|
|
5,049
|
|
|
5,003
|
|
|
|
10,806
|
|
|
10,024
|
|
Property management
expense
|
|
1,445
|
|
|
1,554
|
|
|
1,447
|
|
|
1,269
|
|
|
1,444
|
|
|
|
2,999
|
|
|
2,821
|
|
Casualty
loss
|
|
92
|
|
|
641
|
|
|
540
|
|
|
225
|
|
|
—
|
|
|
|
733
|
|
|
50
|
|
Depreciation/amortization
|
|
18,437
|
|
|
18,111
|
|
|
18,812
|
|
|
19,164
|
|
|
19,132
|
|
|
|
36,548
|
|
|
39,648
|
|
Impairment of real
estate investments
|
|
—
|
|
|
—
|
|
|
1,221
|
|
|
—
|
|
|
17,809
|
|
|
|
—
|
|
|
17,809
|
|
General and
administrative expenses
|
|
3,549
|
|
|
3,806
|
|
|
3,769
|
|
|
3,147
|
|
|
4,348
|
|
|
|
7,355
|
|
|
7,967
|
|
TOTAL
EXPENSES
|
|
$
|
43,039
|
|
|
$
|
44,148
|
|
|
$
|
44,179
|
|
|
$
|
43,292
|
|
|
$
|
61,670
|
|
|
|
$
|
87,187
|
|
|
$
|
106,499
|
|
Operating income
(loss)
|
|
3,895
|
|
|
1,460
|
|
|
1,551
|
|
|
2,114
|
|
|
(15,473)
|
|
|
|
5,355
|
|
|
(17,267)
|
|
Interest
expense
|
|
(7,590)
|
|
|
(7,896)
|
|
|
(7,682)
|
|
|
(8,193)
|
|
|
(8,562)
|
|
|
|
(15,486)
|
|
|
(16,858)
|
|
Loss on
extinguishment of debt
|
|
(407)
|
|
|
(2)
|
|
|
(5)
|
|
|
(540)
|
|
|
(12)
|
|
|
|
(409)
|
|
|
(133)
|
|
Interest and other
income
|
|
468
|
|
|
424
|
|
|
483
|
|
|
395
|
|
|
460
|
|
|
|
892
|
|
|
1,149
|
|
Income (loss) before
gain (loss) on sale of real estate and other investments, gain
(loss) on litigation settlement, and income (loss) from
discontinued operations
|
|
(3,634)
|
|
|
(6,014)
|
|
|
(5,653)
|
|
|
(6,224)
|
|
|
(23,587)
|
|
|
|
(9,648)
|
|
|
(33,109)
|
|
Gain (loss) on sale
of real estate and other investments
|
|
615
|
|
|
54
|
|
|
612
|
|
|
9,095
|
|
|
—
|
|
|
|
669
|
|
|
2,304
|
|
Gain (loss) on
litigation settlement
|
|
6,286
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
6,286
|
|
|
—
|
|
Income (loss) from
continuing operations
|
|
3,267
|
|
|
(5,960)
|
|
|
(5,041)
|
|
|
2,871
|
|
|
(23,587)
|
|
|
|
(2,693)
|
|
|
(30,805)
|
|
Income (loss) from
discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
570
|
|
|
238
|
|
|
|
—
|
|
|
14,120
|
|
Net income
(loss)
|
|
$
|
3,267
|
|
|
$
|
(5,960)
|
|
|
$
|
(5,041)
|
|
|
$
|
3,441
|
|
|
$
|
(23,349)
|
|
|
|
$
|
(2,693)
|
|
|
$
|
(16,685)
|
|
Dividends to
preferred unitholders
|
|
(160)
|
|
|
(57)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(217)
|
|
|
—
|
|
Net (income) loss
attributable to noncontrolling interest – Operating
Partnership
|
|
(148)
|
|
|
743
|
|
|
665
|
|
|
(112)
|
|
|
2,580
|
|
|
|
595
|
|
|
2,000
|
|
Net (income) loss
attributable to noncontrolling interests – consolidated real estate
entities
|
|
154
|
|
|
576
|
|
|
270
|
|
|
(676)
|
|
|
595
|
|
|
|
730
|
|
|
1,115
|
|
Net income (loss)
attributable to controlling interests
|
|
3,113
|
|
|
(4,698)
|
|
|
(4,106)
|
|
|
2,653
|
|
|
(20,174)
|
|
|
|
(1,585)
|
|
|
(13,570)
|
|
Dividends to
preferred shareholders
|
|
(1,706)
|
|
|
(1,705)
|
|
|
(1,705)
|
|
|
(1,705)
|
|
|
(1,706)
|
|
|
|
(3,411)
|
|
|
(3,411)
|
|
NET INCOME (LOSS)
AVAILABLE TO COMMON SHAREHOLDERS
|
|
$
|
1,407
|
|
|
$
|
(6,403)
|
|
|
$
|
(5,811)
|
|
|
$
|
948
|
|
|
$
|
(21,880)
|
|
|
|
$
|
(4,996)
|
|
|
$
|
(16,981)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share from continuing operations – basic &
diluted
|
|
$
|
0.11
|
|
|
$
|
(0.54)
|
|
|
$
|
(0.49)
|
|
|
$
|
0.04
|
|
|
$
|
(1.85)
|
|
|
|
$
|
(0.43)
|
|
|
$
|
(2.48)
|
|
Earnings (loss) per
common share from discontinued operations – basic &
diluted
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.04
|
|
|
0.02
|
|
|
|
—
|
|
|
1.06
|
|
Net earnings (loss)
per common share – basic & diluted
|
|
$
|
0.11
|
|
|
$
|
(0.54)
|
|
|
$
|
(0.49)
|
|
|
$
|
0.08
|
|
|
$
|
(1.83)
|
|
|
|
$
|
(0.43)
|
|
|
$
|
(1.42)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses, excluding real estate taxes
|
|
29.7
|
%
|
|
32.5
|
%
|
|
29.1
|
%
|
|
31.8
|
%
|
|
30.2
|
%
|
|
|
31.1
|
%
|
|
31.6
|
%
|
General and
administrative expenses
|
|
7.6
|
%
|
|
8.3
|
%
|
|
8.2
|
%
|
|
6.9
|
%
|
|
9.4
|
%
|
|
|
7.9
|
%
|
|
8.9
|
%
|
Interest
|
|
16.2
|
%
|
|
17.3
|
%
|
|
16.8
|
%
|
|
18.0
|
%
|
|
18.5
|
%
|
|
|
16.7
|
%
|
|
18.9
|
%
|
Income (loss) from
discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
%
|
|
0.5
|
%
|
|
|
—
|
|
|
15.8
|
%
|
Net income
(loss)
|
|
7.0
|
%
|
|
(13.1)
|
%
|
|
(11.0)
|
%
|
|
7.6
|
%
|
|
(50.5)
|
%
|
|
|
(2.9)
|
%
|
|
(18.7)
|
%
|
IRET
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
(in
thousands)
|
|
|
|
6/30/2019
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Real estate
investments
|
|
|
|
|
|
|
|
|
|
|
Property
owned
|
|
$
|
1,663,539
|
|
|
$
|
1,673,158
|
|
|
$
|
1,627,636
|
|
|
$
|
1,638,909
|
|
|
$
|
1,637,991
|
|
Less accumulated
depreciation
|
|
(380,321)
|
|
|
(371,672)
|
|
|
(353,871)
|
|
|
(339,515)
|
|
|
(321,468)
|
|
|
|
1,283,218
|
|
|
1,301,486
|
|
|
1,273,765
|
|
|
1,299,394
|
|
|
1,316,523
|
|
Unimproved
land
|
|
1,746
|
|
|
2,252
|
|
|
5,301
|
|
|
6,522
|
|
|
10,726
|
|
Mortgage loans
receivable
|
|
10,140
|
|
|
10,260
|
|
|
10,410
|
|
|
10,530
|
|
|
10,955
|
|
Total real estate
investments
|
|
1,295,104
|
|
|
1,313,998
|
|
|
1,289,476
|
|
|
1,316,446
|
|
|
1,338,204
|
|
Assets held for sale
and assets of discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,840
|
|
Cash and cash
equivalents
|
|
17,406
|
|
|
23,329
|
|
|
13,792
|
|
|
36,910
|
|
|
20,451
|
|
Restricted
cash
|
|
4,672
|
|
|
4,819
|
|
|
5,464
|
|
|
4,669
|
|
|
4,454
|
|
Other
assets
|
|
30,626
|
|
|
29,166
|
|
|
27,265
|
|
|
28,472
|
|
|
27,882
|
|
TOTAL
ASSETS
|
|
$
|
1,347,808
|
|
|
$
|
1,371,312
|
|
|
$
|
1,335,997
|
|
|
$
|
1,386,497
|
|
|
$
|
1,424,831
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY, AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
Liabilities held for
sale and liabilities of discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
29,624
|
|
Accounts payable and
accrued expenses
|
|
$
|
44,766
|
|
|
$
|
40,697
|
|
|
$
|
40,892
|
|
|
$
|
38,203
|
|
|
36,288
|
|
Revolving line of
credit
|
|
177,939
|
|
|
118,677
|
|
|
57,500
|
|
|
71,000
|
|
|
145,500
|
|
Term loans payable,
net of loan costs
|
|
144,082
|
|
|
144,036
|
|
|
143,991
|
|
|
143,937
|
|
|
69,531
|
|
Mortgages payable,
net of loan costs
|
|
370,461
|
|
|
430,950
|
|
|
444,197
|
|
|
463,052
|
|
|
465,244
|
|
TOTAL
LIABILITIES
|
|
$
|
737,248
|
|
|
$
|
734,360
|
|
|
$
|
686,580
|
|
|
$
|
716,192
|
|
|
$
|
746,187
|
|
|
|
|
|
|
|
|
|
|
|
|
REDEEMABLE
NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE
ENTITIES
|
|
—
|
|
|
—
|
|
|
5,968
|
|
|
6,130
|
|
|
6,261
|
|
SERIES D PREFERRED
UNITS
|
|
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
|
|
888,541
|
|
|
895,381
|
|
|
899,234
|
|
|
900,368
|
|
|
899,480
|
|
Accumulated
distributions in excess of net income
|
|
(450,433)
|
|
|
(443,661)
|
|
|
(429,048)
|
|
|
(414,900)
|
|
|
(407,482)
|
|
Accumulated other
comprehensive income
|
|
(7,598)
|
|
|
(3,139)
|
|
|
(856)
|
|
|
2,760
|
|
|
1,748
|
|
Total shareholders'
equity
|
|
$
|
529,966
|
|
|
$
|
548,037
|
|
|
$
|
568,786
|
|
|
$
|
587,684
|
|
|
$
|
593,202
|
|
Noncontrolling
interests – Operating Partnership
|
|
57,902
|
|
|
66,060
|
|
|
67,916
|
|
|
69,578
|
|
|
71,066
|
|
Noncontrolling
interests – consolidated real estate entities
|
|
6,132
|
|
|
6,295
|
|
|
6,747
|
|
|
6,913
|
|
|
8,115
|
|
Total
equity
|
|
$
|
594,000
|
|
|
$
|
620,392
|
|
|
$
|
643,449
|
|
|
$
|
664,175
|
|
|
$
|
672,383
|
|
TOTAL LIABILITIES,
MEZZANINE EQUITY, AND EQUITY
|
|
$
|
1,347,808
|
|
|
$
|
1,371,312
|
|
|
$
|
1,335,997
|
|
|
$
|
1,386,497
|
|
|
$
|
1,424,831
|
|
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
June 30,
|
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
3,895
|
|
|
$
|
(15,473)
|
|
|
$
|
19,368
|
|
|
(125.2)
|
%
|
|
|
$
|
5,355
|
|
|
$
|
(17,267)
|
|
|
$
|
22,622
|
|
|
(131.0)
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property management
expenses
|
1,445
|
|
|
1,444
|
|
|
1
|
|
|
0.1
|
%
|
|
|
2,999
|
|
|
2,821
|
|
|
178
|
|
|
6.3
|
%
|
Casualty
loss
|
92
|
|
|
—
|
|
|
92
|
|
|
100.0
|
%
|
|
|
733
|
|
|
50
|
|
|
683
|
|
|
1,366.0
|
%
|
Depreciation and
amortization
|
18,437
|
|
|
19,132
|
|
|
(695)
|
|
|
(3.6)
|
%
|
|
|
36,548
|
|
|
39,648
|
|
|
(3,100)
|
|
|
(7.8)
|
%
|
Impairment
|
—
|
|
|
17,809
|
|
|
(17,809)
|
|
|
(100.0)
|
%
|
|
|
—
|
|
|
17,809
|
|
|
(17,809)
|
|
|
(100.0)
|
%
|
General and
administrative expenses
|
3,549
|
|
|
4,348
|
|
|
(799)
|
|
|
(18.4)
|
%
|
|
|
7,355
|
|
|
7,967
|
|
|
(612)
|
|
|
(7.7)
|
%
|
Net operating
income
|
$
|
27,418
|
|
|
$
|
27,260
|
|
|
$
|
158
|
|
|
0.6
|
%
|
|
|
$
|
52,990
|
|
|
$
|
51,028
|
|
|
$
|
1,962
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store
|
$
|
40,024
|
|
|
$
|
38,804
|
|
|
$
|
1,220
|
|
|
3.1
|
%
|
|
|
$
|
79,637
|
|
|
$
|
76,852
|
|
|
$
|
2,785
|
|
|
3.6
|
%
|
Non-same-store
|
5,921
|
|
|
4,345
|
|
|
1,576
|
|
|
36.3
|
%
|
|
|
11,122
|
|
|
6,351
|
|
|
4,771
|
|
|
75.1
|
%
|
Other properties and
dispositions
|
989
|
|
|
3,048
|
|
|
(2,059)
|
|
|
(67.6)
|
%
|
|
|
1,783
|
|
|
6,029
|
|
|
(4,246)
|
|
|
(70.4)
|
%
|
Total
|
46,934
|
|
|
46,197
|
|
|
737
|
|
|
1.6
|
%
|
|
|
92,542
|
|
|
89,232
|
|
|
3,310
|
|
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses, including real estate taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store
|
16,974
|
|
|
16,345
|
|
|
629
|
|
|
3.8
|
%
|
|
|
34,781
|
|
|
33,536
|
|
|
1,245
|
|
|
3.7
|
%
|
Non-same-store
|
2,137
|
|
|
1,481
|
|
|
656
|
|
|
44.3
|
%
|
|
|
4,018
|
|
|
2,418
|
|
|
1,600
|
|
|
66.2
|
%
|
Other properties and
dispositions
|
405
|
|
|
1,111
|
|
|
(706)
|
|
|
(63.5)
|
%
|
|
|
753
|
|
|
2,250
|
|
|
(1,497)
|
|
|
(66.5)
|
%
|
Total
|
19,516
|
|
|
18,937
|
|
|
579
|
|
|
3.1
|
%
|
|
|
39,552
|
|
|
38,204
|
|
|
1,348
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store
|
23,050
|
|
|
22,459
|
|
|
591
|
|
|
2.6
|
%
|
|
|
44,856
|
|
|
43,316
|
|
|
1,540
|
|
|
3.6
|
%
|
Non-same-store
|
3,784
|
|
|
2,864
|
|
|
920
|
|
|
32.1
|
%
|
|
|
7,104
|
|
|
3,933
|
|
|
3,171
|
|
|
80.6
|
%
|
Other properties and
dispositions
|
584
|
|
|
1,937
|
|
|
(1,353)
|
|
|
(69.9)
|
%
|
|
|
1,030
|
|
|
3,779
|
|
|
(2,749)
|
|
|
(72.7)
|
%
|
Total
|
$
|
27,418
|
|
|
$
|
27,260
|
|
|
$
|
158
|
|
|
0.6
|
%
|
|
|
$
|
52,990
|
|
|
$
|
51,028
|
|
|
$
|
1,962
|
|
|
3.8
|
%
|
Same-Store Expense Comparison
|
(in thousands, except percentages)
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Controllable
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
$
|
4,712
|
|
|
$
|
4,949
|
|
|
$
|
(237)
|
|
|
(4.8)
|
%
|
|
|
$
|
9,236
|
|
|
$
|
9,803
|
|
|
$
|
(567)
|
|
|
(5.8)
|
%
|
Repairs and
maintenance
|
3,176
|
|
|
3,196
|
|
|
(20)
|
|
|
(0.6)
|
%
|
|
|
6,596
|
|
|
6,033
|
|
|
563
|
|
|
9.3
|
%
|
Utilities
|
2,520
|
|
|
2,532
|
|
|
(12)
|
|
|
(0.5)
|
%
|
|
|
5,952
|
|
|
5,854
|
|
|
98
|
|
|
1.7
|
%
|
Administrative and
marketing
|
937
|
|
|
910
|
|
|
27
|
|
|
3.0
|
%
|
|
|
1,901
|
|
|
1,712
|
|
|
189
|
|
|
11.0
|
%
|
Total
|
$
|
11,345
|
|
|
$
|
11,587
|
|
|
$
|
(242)
|
|
|
(2.1)
|
%
|
|
|
$
|
23,685
|
|
|
$
|
23,402
|
|
|
$
|
283
|
|
|
1.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controllable
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
taxes
|
$
|
4,611
|
|
|
$
|
4,400
|
|
|
$
|
211
|
|
|
4.8
|
%
|
|
|
$
|
9,103
|
|
|
$
|
8,805
|
|
|
$
|
298
|
|
|
3.4
|
%
|
Insurance
|
1,018
|
|
|
358
|
|
|
660
|
|
|
184.4
|
%
|
|
|
1,993
|
|
|
1,329
|
|
|
664
|
|
|
50.0
|
%
|
Total
|
5,629
|
|
|
4,758
|
|
|
871
|
|
|
18.3
|
%
|
|
|
11,096
|
|
|
10,134
|
|
|
962
|
|
|
9.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
16,974
|
|
|
$
|
16,345
|
|
|
$
|
629
|
|
|
3.8
|
%
|
|
|
$
|
34,781
|
|
|
$
|
33,536
|
|
|
$
|
1,245
|
|
|
3.7
|
%
|
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 FFO definition adopted by Nareit,
we have made certain interpretations in applying the definition. We
believe that all such interpretations not specifically provided for
in the Nareit definition are consistent with the 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 the 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 that should not be considered a
substitute for operating results determined in accordance with
GAAP.
|
|
(in thousands, except per share
amounts)
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
6/30/2019
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
|
6/30/2019
|
|
6/30/2018
|
Funds From
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to common shareholders
|
|
$
|
1,407
|
|
|
$
|
(6,403)
|
|
|
$
|
(5,811)
|
|
|
$
|
948
|
|
|
$
|
(21,880)
|
|
|
|
$
|
(4,996)
|
|
|
$
|
(16,981)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests – Operating Partnership
|
|
148
|
|
|
(743)
|
|
|
(665)
|
|
|
112
|
|
|
(2,580)
|
|
|
|
(595)
|
|
|
(2,000)
|
|
Depreciation and
amortization
|
|
18,437
|
|
|
18,111
|
|
|
18,812
|
|
|
19,164
|
|
|
19,132
|
|
|
|
36,548
|
|
|
39,650
|
|
Less depreciation –
non real estate
|
|
(79)
|
|
|
(85)
|
|
|
(76)
|
|
|
(76)
|
|
|
(76)
|
|
|
|
(164)
|
|
|
(155)
|
|
Less depreciation –
partially owned entities
|
|
(474)
|
|
|
(678)
|
|
|
(680)
|
|
|
(673)
|
|
|
(719)
|
|
|
|
(1,152)
|
|
|
(1,442)
|
|
Impairment of real
estate
|
|
—
|
|
|
—
|
|
|
1,221
|
|
|
—
|
|
|
17,809
|
|
|
|
—
|
|
|
17,809
|
|
Gain on sale of real
estate
|
|
(615)
|
|
|
(54)
|
|
|
(612)
|
|
|
(8,499)
|
|
|
(98)
|
|
|
|
(669)
|
|
|
(16,134)
|
|
FFO applicable to
common shares and Units
|
|
$
|
18,824
|
|
|
$
|
10,148
|
|
|
$
|
12,189
|
|
|
$
|
10,976
|
|
|
$
|
11,588
|
|
|
|
$
|
28,972
|
|
|
$
|
20,747
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share and
unit – basic and diluted
|
|
$
|
1.45
|
|
|
$
|
0.77
|
|
|
$
|
0.92
|
|
|
$
|
0.82
|
|
|
$
|
0.87
|
|
|
|
$
|
2.22
|
|
|
$
|
1.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Core
FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casualty loss write
off
|
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
Loss on
extinguishment of debt
|
|
407
|
|
|
2
|
|
|
5
|
|
|
540
|
|
|
12
|
|
|
|
409
|
|
|
133
|
|
Gain on litigation
settlement
|
|
(6,286)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(6,286)
|
|
|
—
|
|
Severance and
transition costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
586
|
|
|
|
—
|
|
|
811
|
|
Core FFO
applicable to common shares and Units
|
|
$
|
12,945
|
|
|
$
|
10,150
|
|
|
$
|
12,237
|
|
|
$
|
11,516
|
|
|
$
|
12,186
|
|
|
|
$
|
23,095
|
|
|
$
|
21,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO per share
and unit – basic and diluted
|
|
$
|
1.00
|
|
|
$
|
0.77
|
|
|
$
|
0.92
|
|
|
$
|
0.86
|
|
|
$
|
0.91
|
|
|
|
$
|
1.77
|
|
|
$
|
1.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares and units
|
|
12,955
|
|
|
13,130
|
|
|
13,317
|
|
|
13,318
|
|
|
13,335
|
|
|
|
13,052
|
|
|
13,366
|
|
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, 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
|
|
|
Six Months Ended
|
|
|
6/30/2019
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
|
6/30/2019
|
|
6/30/2018
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to common shareholders
|
|
$
|
3,113
|
|
|
$
|
(4,698)
|
|
|
$
|
(4,106)
|
|
|
$
|
2,653
|
|
|
$
|
(20,174)
|
|
|
|
$
|
(1,585)
|
|
|
$
|
(13,570)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends to
preferred unitholders
|
|
160
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
217
|
|
|
—
|
|
Noncontrolling
interests – Operating Partnership
|
|
148
|
|
|
(743)
|
|
|
(665)
|
|
|
112
|
|
|
(2,580)
|
|
|
|
(595)
|
|
|
(2,000)
|
|
Income (loss) before
noncontrolling interests – Operating Partnership
|
|
$
|
3,421
|
|
|
$
|
(5,384)
|
|
|
$
|
(4,771)
|
|
|
$
|
2,765
|
|
|
$
|
(22,754)
|
|
|
|
$
|
(1,963)
|
|
|
$
|
(15,570)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
7,343
|
|
|
7,558
|
|
|
7,336
|
|
|
7,828
|
|
|
8,148
|
|
|
|
14,901
|
|
|
16,029
|
|
Loss on
extinguishment of debt
|
|
407
|
|
|
2
|
|
|
4
|
|
|
541
|
|
|
11
|
|
|
|
409
|
|
|
132
|
|
Depreciation/amortization related to real estate
investments
|
|
17,963
|
|
|
17,433
|
|
|
18,133
|
|
|
18,491
|
|
|
18,413
|
|
|
|
35,396
|
|
|
38,208
|
|
Impairment of real
estate investments
|
|
—
|
|
|
—
|
|
|
1,221
|
|
|
—
|
|
|
17,809
|
|
|
|
—
|
|
|
17,809
|
|
Interest
income
|
|
(402)
|
|
|
(407)
|
|
|
(465)
|
|
|
(366)
|
|
|
(429)
|
|
|
|
(809)
|
|
|
(1,102)
|
|
Gain (loss) on sale
of real estate and other investments
|
|
(615)
|
|
|
(54)
|
|
|
(611)
|
|
|
(8,499)
|
|
|
(98)
|
|
|
|
(669)
|
|
|
(16,134)
|
|
Gain on litigation
settlement
|
|
(6,286)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(6,286)
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
21,831
|
|
|
$
|
19,148
|
|
|
$
|
20,847
|
|
|
$
|
20,760
|
|
|
$
|
21,100
|
|
|
|
$
|
40,979
|
|
|
$
|
39,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA/Interest expense
|
|
2.88
|
x
|
|
2.43
|
x
|
|
2.71
|
x
|
|
2.53
|
x
|
|
2.46
|
x
|
|
|
2.65
|
x
|
|
2.34
|
x
|
Adjusted
EBITDA/Interest expense plus preferred distributions
|
|
2.31
|
x
|
|
1.98
|
x
|
|
2.22
|
x
|
|
2.10
|
x
|
|
2.05
|
x
|
|
|
2.14
|
x
|
|
1.94
|
x
|
IRET
|
DEBT
ANALYSIS
|
(in
thousands)
|
|
Debt Maturity
Schedule
|
Annual
Expirations
|
|
|
|
Future Maturities of Debt
|
|
|
Secured
Fixed Debt
|
|
Unsecured
Fixed Debt(1)
|
|
Secured
Variable
Debt(2)
|
|
Unsecured
Variable Debt
|
|
Total Debt
|
|
% of
Total Debt
|
|
Weighted Average
Interest Rate(3)
|
2019
(remainder)
|
|
$
|
6,926
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,926
|
|
|
1.0
|
%
|
|
5.59
|
%
|
2020
|
|
35,122
|
|
|
—
|
|
|
—
|
|
|
4,589
|
|
|
39,711
|
|
|
5.7
|
%
|
|
5.26
|
%
|
2021
|
|
95,394
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95,394
|
|
|
13.7
|
%
|
|
5.17
|
%
|
2022
|
|
38,343
|
|
|
50,000
|
|
|
15,000
|
|
|
108,350
|
|
|
211,693
|
|
|
30.5
|
%
|
|
3.91
|
%
|
2023
|
|
48,808
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,808
|
|
|
7.0
|
%
|
|
4.02
|
%
|
Thereafter
|
|
147,358
|
|
|
145,000
|
|
|
—
|
|
|
—
|
|
|
292,358
|
|
|
42.1
|
%
|
|
3.90
|
%
|
Total debt
|
|
$
|
371,951
|
|
|
$
|
195,000
|
|
|
$
|
15,000
|
|
|
$
|
112,939
|
|
|
$
|
694,890
|
|
|
100.0
|
%
|
|
4.18
|
%
|
|
|
(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)
|
Our primary 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.
|
(3)
|
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.
|
|
|
6/30/2019
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
Debt Balances
Outstanding(1)
|
|
|
|
|
|
|
|
|
|
|
Secured fixed
rate
|
|
$
|
371,951
|
|
|
$
|
432,588
|
|
|
$
|
445,974
|
|
|
$
|
464,964
|
|
|
$
|
473,546
|
|
Secured variable rate
mortgage
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,620
|
|
Unsecured fixed rate
line of credit(2)
|
|
50,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Secured line of
credit(3)
|
|
15,000
|
|
|
15,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Unsecured variable
rate line of credit
|
|
112,939
|
|
|
103,677
|
|
|
57,500
|
|
|
71,000
|
|
|
145,500
|
|
Unsecured term
loans
|
|
145,000
|
|
|
145,000
|
|
|
145,000
|
|
|
145,000
|
|
|
70,000
|
|
Debt
total
|
|
$
|
694,890
|
|
|
$
|
696,265
|
|
|
$
|
648,474
|
|
|
$
|
680,964
|
|
|
$
|
711,666
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Debt
Weighted Average Interest Rate
|
|
4.37
|
%
|
|
4.54
|
%
|
|
4.58
|
%
|
|
4.65
|
%
|
|
4.67
|
%
|
Primary Line of
Credit Rate - Fixed (rate with swap)
|
|
3.42
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Primary Line of
Credit Rate - Variable
|
|
3.99
|
%
|
|
3.89
|
%
|
|
3.72
|
%
|
|
3.67
|
%
|
|
3.76
|
%
|
Operating Line of
Credit Rate
|
|
4.39
|
%
|
|
4.40
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
Term Loan Rate (rate
with swap)
|
|
4.14
|
%
|
|
3.99
|
%
|
|
4.01
|
%
|
|
3.97
|
%
|
|
4.11
|
%
|
|
|
(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.
|
IRET
|
CAPITAL
ANALYSIS
|
(in thousands,
except per share and unit amounts)
|
|
|
|
Three Months Ended
|
|
|
6/30/2019
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
Equity
Capitalization
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
|
11,656
|
|
|
11,768
|
|
|
11,942
|
|
|
11,961
|
|
|
11,939
|
|
Operating partnership
units outstanding
|
|
1,224
|
|
|
1,365
|
|
|
1,368
|
|
|
1,379
|
|
|
1,401
|
|
Total common shares
and units outstanding
|
|
12,880
|
|
|
13,133
|
|
|
13,310
|
|
|
13,340
|
|
|
13,340
|
|
Market price per
common share (closing price at end of period)
|
|
$
|
58.67
|
|
|
$
|
59.91
|
|
|
$
|
49.07
|
|
|
$
|
59.80
|
|
|
$
|
55.30
|
|
Equity
capitalization-common shares and units
|
|
$
|
755,670
|
|
|
$
|
786,798
|
|
|
$
|
653,122
|
|
|
$
|
797,732
|
|
|
$
|
737,702
|
|
Recorded book value
of preferred shares
|
|
$
|
99,456
|
|
|
$
|
99,456
|
|
|
$
|
99,456
|
|
|
$
|
99,456
|
|
|
$
|
99,456
|
|
Total equity
capitalization
|
|
$
|
855,126
|
|
|
$
|
886,254
|
|
|
$
|
752,578
|
|
|
$
|
897,188
|
|
|
$
|
837,158
|
|
|
|
|
|
|
|
|
|
|
|
|
Series D Preferred
Units
|
|
$
|
16,560
|
|
|
$
|
16,560
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Capitalization
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
$
|
694,889
|
|
|
$
|
696,265
|
|
|
$
|
648,474
|
|
|
$
|
680,964
|
|
|
$
|
711,666
|
|
Total
capitalization
|
|
$
|
1,566,575
|
|
|
$
|
1,599,079
|
|
|
$
|
1,401,052
|
|
|
$
|
1,578,152
|
|
|
$
|
1,548,824
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt to total
capitalization(1)
|
|
0.44:1
|
|
|
0.44:1
|
|
|
0.46:1
|
|
|
0.43:1
|
|
|
0.46:1
|
|
|
|
(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
|
|
|
Six Months
Ended
|
|
|
6/30/2019
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
|
6/30/2019
|
|
6/30/2018
|
Debt service coverage
ratio(1)
|
|
2.24
|
x
|
|
1.86
|
x
|
|
2.07
|
x
|
|
1.96
|
x
|
|
1.83
|
x
|
|
|
2.04
|
x
|
|
1.58
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares and
Units outstanding at record date
|
|
12,914
|
|
|
13,135
|
|
|
13,276
|
|
|
13,340
|
|
|
13,340
|
|
|
|
12,914
|
|
|
13,340
|
|
Total common
distribution declared
|
|
$
|
9,039
|
|
|
$
|
9,195
|
|
|
$
|
9,293
|
|
|
$
|
9,339
|
|
|
$
|
9,345
|
|
|
|
$
|
18,234
|
|
|
$
|
18,740
|
|
Common distribution
per share and Unit
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
|
|
$
|
1.40
|
|
|
$
|
1.40
|
|
Payout ratio (FFO per
share and Unit basis)(2)
|
|
48.3
|
%
|
|
90.9
|
%
|
|
76.1
|
%
|
|
85.4
|
%
|
|
80.5
|
%
|
|
|
63.1
|
%
|
|
90.3
|
%
|
Payout ratio (Core
FFO per share and Unit basis)(3)
|
|
70.0
|
%
|
|
90.9
|
%
|
|
76.1
|
%
|
|
81.4
|
%
|
|
76.9
|
%
|
|
|
79.1
|
%
|
|
86.4
|
%
|
|
|
(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.
|
IRET
|
SAME-STORE SECOND
QUARTER COMPARISONS
|
(in thousands,
except property data amounts and percentages)
|
|
|
|
Apartment
Homes
Included
|
|
Revenues
|
|
Expenses
|
|
NOI
|
Regions
|
|
|
CY19Q2
|
|
CY18Q2
|
|
%
Change
|
|
CY19Q2
|
|
CY18Q2
|
|
%
Change
|
|
CY19Q2
|
|
CY18Q2
|
|
%
Change
|
Minneapolis,
MN
|
|
1,796
|
|
|
$
|
7,835
|
|
|
$
|
7,287
|
|
|
7.5
|
%
|
|
$
|
3,171
|
|
|
$
|
2,958
|
|
|
7.2
|
%
|
|
$
|
4,664
|
|
|
$
|
4,329
|
|
|
7.7
|
%
|
Rochester,
MN
|
|
1,711
|
|
|
6,291
|
|
|
6,086
|
|
|
3.4
|
%
|
|
2,450
|
|
|
2,292
|
|
|
6.9
|
%
|
|
3,841
|
|
|
3,794
|
|
|
1.2
|
%
|
Omaha, NE
|
|
1,370
|
|
|
3,705
|
|
|
3,700
|
|
|
0.1
|
%
|
|
1,635
|
|
|
1,606
|
|
|
1.8
|
%
|
|
2,070
|
|
|
2,094
|
|
|
(1.1)
|
%
|
Grand Forks,
ND
|
|
1,555
|
|
|
4,218
|
|
|
4,227
|
|
|
(0.2)
|
%
|
|
1,909
|
|
|
1,912
|
|
|
(0.2)
|
%
|
|
2,309
|
|
|
2,315
|
|
|
(0.3)
|
%
|
Bismarck,
ND
|
|
1,259
|
|
|
3,595
|
|
|
3,607
|
|
|
(0.3)
|
%
|
|
1,491
|
|
|
1,596
|
|
|
(6.6)
|
%
|
|
2,104
|
|
|
2,011
|
|
|
4.6
|
%
|
St. Cloud,
MN
|
|
1,190
|
|
|
3,584
|
|
|
3,389
|
|
|
5.8
|
%
|
|
1,524
|
|
|
1,651
|
|
|
(7.7)
|
%
|
|
2,060
|
|
|
1,738
|
|
|
18.5
|
%
|
Topeka, KS
|
|
1,042
|
|
|
2,558
|
|
|
2,514
|
|
|
1.8
|
%
|
|
1,206
|
|
|
1,065
|
|
|
13.2
|
%
|
|
1,352
|
|
|
1,449
|
|
|
(6.7)
|
%
|
Sioux Falls,
SD
|
|
969
|
|
|
2,544
|
|
|
2,470
|
|
|
3.0
|
%
|
|
1,222
|
|
|
1,050
|
|
|
16.4
|
%
|
|
1,322
|
|
|
1,420
|
|
|
(6.9)
|
%
|
Billings,
MT
|
|
770
|
|
|
2,178
|
|
|
2,080
|
|
|
4.7
|
%
|
|
773
|
|
|
581
|
|
|
33.0
|
%
|
|
1,405
|
|
|
1,499
|
|
|
(6.3)
|
%
|
Minot, ND
|
|
712
|
|
|
2,145
|
|
|
2,100
|
|
|
2.1
|
%
|
|
1,036
|
|
|
1,031
|
|
|
0.5
|
%
|
|
1,109
|
|
|
1,069
|
|
|
3.7
|
%
|
Rapid City,
SD
|
|
474
|
|
|
1,371
|
|
|
1,344
|
|
|
2.0
|
%
|
|
557
|
|
|
603
|
|
|
(7.6)
|
%
|
|
814
|
|
|
741
|
|
|
9.9
|
%
|
Same-Store
Total
|
|
12,848
|
|
|
$
|
40,024
|
|
|
$
|
38,804
|
|
|
3.1
|
%
|
|
$
|
16,974
|
|
|
$
|
16,345
|
|
|
3.8
|
%
|
|
$
|
23,050
|
|
|
$
|
22,459
|
|
|
2.6
|
%
|
|
|
Apartment
Homes
Included
|
|
Weighted Average
Occupancy (1)
|
|
Weighted Average
Monthly
Rental Rate (2)
|
|
Weighted Average
Monthly
Revenue per Occupied Home (3)
|
Regions
|
|
|
CY19Q2
|
|
CY18Q2
|
|
Growth
|
|
CY19Q2
|
|
CY18Q2
|
|
%
Change
|
|
CY19Q2
|
|
CY18Q2
|
|
%
Change
|
Minneapolis,
MN
|
|
1,796
|
|
|
93.4
|
%
|
|
91.7
|
%
|
|
1.7
|
%
|
|
$
|
1,439
|
|
|
$
|
1,391
|
|
|
3.5
|
%
|
|
$
|
1,557
|
|
|
$
|
1,474
|
|
|
5.8
|
%
|
Rochester,
MN
|
|
1,711
|
|
|
95.4
|
%
|
|
94.7
|
%
|
|
0.7
|
%
|
|
1,233
|
|
|
1,211
|
|
|
1.8
|
%
|
|
1,285
|
|
|
1,252
|
|
|
2.7
|
%
|
Omaha, NE
|
|
1,370
|
|
|
93.3
|
%
|
|
95.5
|
%
|
|
(2.2)
|
%
|
|
884
|
|
|
869
|
|
|
1.7
|
%
|
|
966
|
|
|
942
|
|
|
2.3
|
%
|
Grand Forks,
ND
|
|
1,555
|
|
|
93.5
|
%
|
|
94.0
|
%
|
|
(0.5)
|
%
|
|
912
|
|
|
916
|
|
|
(0.4)
|
%
|
|
967
|
|
|
964
|
|
|
0.3
|
%
|
Bismarck,
ND
|
|
1,259
|
|
|
92.8
|
%
|
|
94.7
|
%
|
|
(1.9)
|
%
|
|
953
|
|
|
954
|
|
|
(0.1)
|
%
|
|
1,026
|
|
|
1,008
|
|
|
1.6
|
%
|
St. Cloud,
MN
|
|
1,190
|
|
|
95.4
|
%
|
|
95.3
|
%
|
|
0.1
|
%
|
|
951
|
|
|
918
|
|
|
3.6
|
%
|
|
1,053
|
|
|
996
|
|
|
5.7
|
%
|
Topeka, KS
|
|
1,042
|
|
|
95.6
|
%
|
|
95.5
|
%
|
|
0.1
|
%
|
|
818
|
|
|
804
|
|
|
1.7
|
%
|
|
856
|
|
|
842
|
|
|
1.7
|
%
|
Sioux Falls,
SD
|
|
969
|
|
|
94.4
|
%
|
|
94.2
|
%
|
|
0.2
|
%
|
|
858
|
|
|
832
|
|
|
3.1
|
%
|
|
927
|
|
|
902
|
|
|
2.8
|
%
|
Billings,
MT
|
|
770
|
|
|
95.6
|
%
|
|
93.0
|
%
|
|
2.6
|
%
|
|
921
|
|
|
908
|
|
|
1.4
|
%
|
|
986
|
|
|
968
|
|
|
2.1
|
%
|
Minot, ND
|
|
712
|
|
|
95.0
|
%
|
|
95.8
|
%
|
|
(0.8)
|
%
|
|
1,000
|
|
|
998
|
|
|
0.2
|
%
|
|
1,057
|
|
|
1,026
|
|
|
2.9
|
%
|
Rapid City,
SD
|
|
474
|
|
|
95.0
|
%
|
|
95.9
|
%
|
|
(0.9)
|
%
|
|
945
|
|
|
916
|
|
|
3.2
|
%
|
|
1,015
|
|
|
986
|
|
|
2.9
|
%
|
Same-Store
Total
|
|
12,848
|
|
|
94.3
|
%
|
|
94.2
|
%
|
|
0.1
|
%
|
|
$
|
1,028
|
|
|
$
|
1,009
|
|
|
1.9
|
%
|
|
$
|
1,101
|
|
|
$
|
1,069
|
|
|
3.0
|
%
|
|
|
(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.
|
IRET
|
SAME-STORE SEQUENTIAL
QUARTER COMPARISONS
|
(in thousands,
except property data amounts and percentages)
|
|
|
|
Apartment
Homes
Included
|
|
Revenues
|
|
Expenses
|
|
NOI
|
Regions
|
|
|
CY19Q2
|
|
CY19Q1
|
|
%
Change
|
|
CY19Q2
|
|
CY19Q1
|
|
%
Change
|
|
CY19Q2
|
|
CY19Q1
|
|
%
Change
|
Minneapolis,
MN
|
|
1,796
|
|
|
$
|
7,835
|
|
|
$
|
7,689
|
|
|
1.9
|
%
|
|
$
|
3,172
|
|
|
$
|
3,148
|
|
|
0.8
|
%
|
|
$
|
4,664
|
|
|
$
|
4,541
|
|
|
2.7
|
%
|
Rochester,
MN
|
|
1,711
|
|
|
6,291
|
|
|
6,225
|
|
|
1.1
|
%
|
|
2,450
|
|
|
2,454
|
|
|
(0.2)
|
%
|
|
3,841
|
|
|
3,771
|
|
|
1.9
|
%
|
Omaha, NE
|
|
1,370
|
|
|
3,705
|
|
|
3,754
|
|
|
(1.3)
|
%
|
|
1,635
|
|
|
1,774
|
|
|
(7.8)
|
%
|
|
2,070
|
|
|
1,980
|
|
|
4.5
|
%
|
Grand Forks,
ND
|
|
1,555
|
|
|
4,218
|
|
|
4,141
|
|
|
1.9
|
%
|
|
1,909
|
|
|
2,166
|
|
|
(11.9)
|
%
|
|
2,309
|
|
|
1,975
|
|
|
16.9
|
%
|
Bismarck,
ND
|
|
1,259
|
|
|
3,595
|
|
|
3,602
|
|
|
(0.2)
|
%
|
|
1,491
|
|
|
1,717
|
|
|
(13.2)
|
%
|
|
2,104
|
|
|
1,885
|
|
|
11.6
|
%
|
St. Cloud,
MN
|
|
1,190
|
|
|
3,584
|
|
|
3,474
|
|
|
3.2
|
%
|
|
1,525
|
|
|
1,808
|
|
|
(15.7)
|
%
|
|
2,060
|
|
|
1,666
|
|
|
23.6
|
%
|
Topeka, KS
|
|
1,042
|
|
|
2,558
|
|
|
2,556
|
|
|
0.1
|
%
|
|
1,206
|
|
|
1,105
|
|
|
9.1
|
%
|
|
1,352
|
|
|
1,451
|
|
|
(6.8)
|
%
|
Sioux Falls,
SD
|
|
969
|
|
|
2,544
|
|
|
2,529
|
|
|
0.6
|
%
|
|
1,222
|
|
|
1,193
|
|
|
2.4
|
%
|
|
1,322
|
|
|
1,336
|
|
|
(1.0)
|
%
|
Billings,
MT
|
|
770
|
|
|
2,178
|
|
|
2,156
|
|
|
1.0
|
%
|
|
773
|
|
|
858
|
|
|
(9.9)
|
%
|
|
1,405
|
|
|
1,298
|
|
|
8.2
|
%
|
Minot, ND
|
|
712
|
|
|
2,145
|
|
|
2,118
|
|
|
1.3
|
%
|
|
1,036
|
|
|
1,007
|
|
|
2.9
|
%
|
|
1,109
|
|
|
1,111
|
|
|
(0.2)
|
%
|
Rapid City,
SD
|
|
474
|
|
|
1,371
|
|
|
1,367
|
|
|
0.3
|
%
|
|
557
|
|
|
576
|
|
|
(3.3)
|
%
|
|
814
|
|
|
791
|
|
|
2.9
|
%
|
Same-Store
Total
|
|
12,848
|
|
|
$
|
40,024
|
|
|
$
|
39,611
|
|
|
1.0
|
%
|
|
$
|
16,976
|
|
|
$
|
17,806
|
|
|
(4.7)
|
%
|
|
$
|
23,050
|
|
|
$
|
21,805
|
|
|
5.7
|
%
|
|
|
Apartment
Homes
Included
|
|
Weighted Average
Occupancy
|
|
Weighted Average
Monthly
Rental Rate
|
|
Weighted Average
Monthly
Revenue per Occupied Home
|
Regions
|
|
|
CY19Q2
|
|
CY19Q1
|
|
Growth
|
|
CY19Q2
|
|
CY19Q1
|
|
%
Change
|
|
CY19Q2
|
|
CY19Q1
|
|
%
Change
|
Minneapolis,
MN
|
|
1,796
|
|
|
93.4
|
%
|
|
94.8
|
%
|
|
(1.4)
|
%
|
|
$
|
1,439
|
|
|
$
|
1,408
|
|
|
2.2
|
%
|
|
$
|
1,557
|
|
|
$
|
1,505
|
|
|
3.3
|
%
|
Rochester,
MN
|
|
1,711
|
|
|
95.4
|
%
|
|
96.5
|
%
|
|
(1.1)
|
%
|
|
1,233
|
|
|
1,207
|
|
|
2.2
|
%
|
|
1,285
|
|
|
1,257
|
|
|
2.2
|
%
|
Omaha, NE
|
|
1,370
|
|
|
93.3
|
%
|
|
95.3
|
%
|
|
(2.0)
|
%
|
|
884
|
|
|
875
|
|
|
1.0
|
%
|
|
966
|
|
|
959
|
|
|
0.7
|
%
|
Grand Forks,
ND
|
|
1,555
|
|
|
93.5
|
%
|
|
93.8
|
%
|
|
(0.3)
|
%
|
|
912
|
|
|
903
|
|
|
1.0
|
%
|
|
967
|
|
|
946
|
|
|
2.2
|
%
|
Bismarck,
ND
|
|
1,259
|
|
|
92.8
|
%
|
|
96.4
|
%
|
|
(3.6)
|
%
|
|
953
|
|
|
942
|
|
|
1.2
|
%
|
|
1,026
|
|
|
990
|
|
|
3.4
|
%
|
St. Cloud,
MN
|
|
1,190
|
|
|
95.4
|
%
|
|
95.7
|
%
|
|
(0.3)
|
%
|
|
951
|
|
|
939
|
|
|
1.3
|
%
|
|
1,053
|
|
|
1,016
|
|
|
3.5
|
%
|
Topeka, KS
|
|
1,042
|
|
|
95.6
|
%
|
|
96.7
|
%
|
|
(1.1)
|
%
|
|
818
|
|
|
810
|
|
|
1.0
|
%
|
|
856
|
|
|
846
|
|
|
1.2
|
%
|
Sioux Falls,
SD
|
|
969
|
|
|
94.4
|
%
|
|
95.3
|
%
|
|
(0.9)
|
%
|
|
858
|
|
|
850
|
|
|
0.9
|
%
|
|
927
|
|
|
913
|
|
|
1.5
|
%
|
Billings,
MT
|
|
770
|
|
|
95.6
|
%
|
|
96.2
|
%
|
|
(0.6)
|
%
|
|
921
|
|
|
902
|
|
|
2.1
|
%
|
|
986
|
|
|
971
|
|
|
1.6
|
%
|
Minot, ND
|
|
712
|
|
|
95.0
|
%
|
|
95.8
|
%
|
|
(0.8)
|
%
|
|
1,000
|
|
|
993
|
|
|
0.7
|
%
|
|
1,057
|
|
|
1,035
|
|
|
2.1
|
%
|
Rapid City,
SD
|
|
474
|
|
|
95.0
|
%
|
|
96.9
|
%
|
|
(1.9)
|
%
|
|
945
|
|
|
931
|
|
|
1.5
|
%
|
|
1,015
|
|
|
991
|
|
|
2.2
|
%
|
Same-Store
Total
|
|
12,848
|
|
|
94.3
|
%
|
|
95.6
|
%
|
|
(1.3)
|
%
|
|
$
|
1,028
|
|
|
$
|
1,013
|
|
|
1.5
|
%
|
|
$
|
1,101
|
|
|
$
|
1,075
|
|
|
2.3
|
%
|
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
|
|
|
$
|
15,525
|
|
|
$
|
14,472
|
|
|
7.3
|
%
|
|
$
|
6,321
|
|
|
$
|
5,921
|
|
|
6.8
|
%
|
|
$
|
9,204
|
|
|
$
|
8,551
|
|
|
7.6
|
%
|
Rochester,
MN
|
|
1,711
|
|
|
12,516
|
|
|
12,124
|
|
|
3.2
|
%
|
|
4,904
|
|
|
4,841
|
|
|
1.3
|
%
|
|
7,612
|
|
|
7,283
|
|
|
4.5
|
%
|
Omaha, NE
|
|
1,370
|
|
|
7,459
|
|
|
7,332
|
|
|
1.7
|
%
|
|
3,409
|
|
|
3,232
|
|
|
5.5
|
%
|
|
4,050
|
|
|
4,100
|
|
|
(1.2)
|
%
|
Grand Forks,
ND
|
|
1,555
|
|
|
8,359
|
|
|
8,417
|
|
|
(0.7)
|
%
|
|
4,075
|
|
|
3,953
|
|
|
3.1
|
%
|
|
4,284
|
|
|
4,464
|
|
|
(4.0)
|
%
|
Bismarck,
ND
|
|
1,259
|
|
|
7,197
|
|
|
7,089
|
|
|
1.5
|
%
|
|
3,207
|
|
|
3,164
|
|
|
1.4
|
%
|
|
3,990
|
|
|
3,925
|
|
|
1.7
|
%
|
St. Cloud,
MN
|
|
1,190
|
|
|
7,059
|
|
|
6,700
|
|
|
5.4
|
%
|
|
3,333
|
|
|
3,266
|
|
|
2.1
|
%
|
|
3,726
|
|
|
3,434
|
|
|
8.5
|
%
|
Topeka, KS
|
|
1,042
|
|
|
5,114
|
|
|
4,932
|
|
|
3.7
|
%
|
|
2,311
|
|
|
2,057
|
|
|
12.3
|
%
|
|
2,803
|
|
|
2,875
|
|
|
(2.5)
|
%
|
Sioux Falls,
SD
|
|
969
|
|
|
5,073
|
|
|
4,912
|
|
|
3.3
|
%
|
|
2,415
|
|
|
2,324
|
|
|
3.9
|
%
|
|
2,658
|
|
|
2,588
|
|
|
2.7
|
%
|
Billings,
MT
|
|
770
|
|
|
4,334
|
|
|
4,057
|
|
|
6.8
|
%
|
|
1,630
|
|
|
1,407
|
|
|
15.8
|
%
|
|
2,704
|
|
|
2,650
|
|
|
2.0
|
%
|
Minot, ND
|
|
712
|
|
|
4,263
|
|
|
4,161
|
|
|
2.5
|
%
|
|
2,043
|
|
|
2,218
|
|
|
(7.9)
|
%
|
|
2,220
|
|
|
1,943
|
|
|
14.3
|
%
|
Rapid City,
SD
|
|
474
|
|
|
2,738
|
|
|
2,656
|
|
|
3.1
|
%
|
|
1,133
|
|
|
1,153
|
|
|
(1.7)
|
%
|
|
1,605
|
|
|
1,503
|
|
|
6.8
|
%
|
Same-Store
Total
|
|
12,848
|
|
|
$
|
79,637
|
|
|
$
|
76,852
|
|
|
3.6
|
%
|
|
$
|
34,781
|
|
|
$
|
33,536
|
|
|
3.7
|
%
|
|
$
|
44,856
|
|
|
$
|
43,316
|
|
|
3.6
|
%
|
|
|
Apartment
Homes
Included
|
|
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
|
|
1,796
|
|
|
94.1
|
%
|
|
92.1
|
%
|
|
2.0
|
%
|
|
$
|
1,424
|
|
|
$
|
1,379
|
|
|
3.3
|
%
|
|
$
|
1,531
|
|
|
$
|
1,459
|
|
|
5.3
|
%
|
Rochester,
MN
|
|
1,711
|
|
|
95.9
|
%
|
|
94.6
|
%
|
|
1.3
|
%
|
|
1,220
|
|
|
1,214
|
|
|
0.5
|
%
|
|
1,271
|
|
|
1,248
|
|
|
1.9
|
%
|
Omaha, NE
|
|
1,370
|
|
|
94.3
|
%
|
|
95.5
|
%
|
|
(1.2)
|
%
|
|
879
|
|
|
863
|
|
|
1.9
|
%
|
|
963
|
|
|
934
|
|
|
2.9
|
%
|
Grand Forks,
ND
|
|
1,555
|
|
|
93.7
|
%
|
|
94.5
|
%
|
|
(0.8)
|
%
|
|
907
|
|
|
912
|
|
|
(0.5)
|
%
|
|
957
|
|
|
955
|
|
|
0.1
|
%
|
Bismarck,
ND
|
|
1,259
|
|
|
94.6
|
%
|
|
94.0
|
%
|
|
0.6
|
%
|
|
947
|
|
|
957
|
|
|
(1.0)
|
%
|
|
1,007
|
|
|
999
|
|
|
0.9
|
%
|
St. Cloud,
MN
|
|
1,190
|
|
|
95.6
|
%
|
|
95.1
|
%
|
|
0.5
|
%
|
|
945
|
|
|
911
|
|
|
3.7
|
%
|
|
1,035
|
|
|
987
|
|
|
4.9
|
%
|
Topeka, KS
|
|
1,042
|
|
|
96.1
|
%
|
|
95.0
|
%
|
|
1.1
|
%
|
|
814
|
|
|
801
|
|
|
1.6
|
%
|
|
851
|
|
|
831
|
|
|
2.6
|
%
|
Sioux Falls,
SD
|
|
969
|
|
|
94.8
|
%
|
|
94.9
|
%
|
|
(0.1)
|
%
|
|
854
|
|
|
824
|
|
|
3.6
|
%
|
|
920
|
|
|
890
|
|
|
3.4
|
%
|
Billings,
MT
|
|
770
|
|
|
95.9
|
%
|
|
91.7
|
%
|
|
4.2
|
%
|
|
912
|
|
|
907
|
|
|
0.6
|
%
|
|
978
|
|
|
958
|
|
|
2.6
|
%
|
Minot, ND
|
|
712
|
|
|
95.4
|
%
|
|
95.9
|
%
|
|
(0.5)
|
%
|
|
997
|
|
|
997
|
|
|
—
|
%
|
|
1,046
|
|
|
1,016
|
|
|
3.0
|
%
|
Rapid City,
SD
|
|
474
|
|
|
95.9
|
%
|
|
96.2
|
%
|
|
(0.3)
|
%
|
|
938
|
|
|
908
|
|
|
3.3
|
%
|
|
1,003
|
|
|
971
|
|
|
3.4
|
%
|
Same-Store
Total
|
|
12,848
|
|
|
94.9
|
%
|
|
94.2
|
%
|
|
0.7
|
%
|
|
$
|
1,020
|
|
|
$
|
1,005
|
|
|
1.5
|
%
|
|
$
|
1,088
|
|
|
$
|
1,059
|
|
|
2.9
|
%
|
IRET
|
PORTFOLIO
SUMMARY(1)
|
|
|
|
Three Months
Ended
|
|
|
6/30/2019
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
Number of Apartment
Homes
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
12,848
|
|
|
12,848
|
|
|
12,847
|
|
|
12,847
|
|
|
12,848
|
|
Non-Same-Store
|
|
1,127
|
|
|
1,127
|
|
|
855
|
|
|
855
|
|
|
855
|
|
All
Communities
|
|
13,975
|
|
|
13,975
|
|
|
13,702
|
|
|
13,702
|
|
|
13,703
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Scheduled
Rent(2) per Apartment Home
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
$
|
1,028
|
|
|
$
|
1,013
|
|
|
$
|
1,018
|
|
|
$
|
1,027
|
|
|
$
|
1,009
|
|
Non-Same-Store
|
|
1,692
|
|
|
1,772
|
|
|
1,797
|
|
|
1,796
|
|
|
1,797
|
|
All
Communities
|
|
$
|
1,081
|
|
|
$
|
1,064
|
|
|
$
|
1,066
|
|
|
$
|
1,075
|
|
|
$
|
1,058
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Revenue per
Occupied Apartment Home(3)
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
$
|
1,101
|
|
|
$
|
1,075
|
|
|
$
|
1,082
|
|
|
$
|
1,092
|
|
|
$
|
1,069
|
|
Non-Same-Store
|
|
1,848
|
|
|
1,943
|
|
|
1,939
|
|
|
1,956
|
|
|
1,941
|
|
All
Communities
|
|
$
|
1,161
|
|
|
$
|
1,134
|
|
|
$
|
1,136
|
|
|
$
|
1,146
|
|
|
$
|
1,123
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Occupancy(4)
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
94.3
|
%
|
|
95.6
|
%
|
|
94.4
|
%
|
|
92.0
|
%
|
|
94.2
|
%
|
Non-Same-Store
|
|
94.8
|
%
|
|
94.9
|
%
|
|
92.7
|
%
|
|
93.4
|
%
|
|
87.3
|
%
|
All
Communities
|
|
94.4
|
%
|
|
95.5
|
%
|
|
94.2
|
%
|
|
92.2
|
%
|
|
93.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses as
a % of Scheduled Rent
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
42.8
|
%
|
|
45.6
|
%
|
|
42.4
|
%
|
|
42.9
|
%
|
|
42.0
|
%
|
Non-Same-Store
|
|
37.4
|
%
|
|
37.6
|
%
|
|
30.5
|
%
|
|
36.8
|
%
|
|
32.1
|
%
|
All
Communities
|
|
42.2
|
%
|
|
44.7
|
%
|
|
41.1
|
%
|
|
42.3
|
%
|
|
41.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
|
|
|
|
|
|
|
|
|
|
Total Capital
Expenditures per Apartment Home – Same-Store
|
|
$
|
192
|
|
|
$
|
80
|
|
|
$
|
254
|
|
|
$
|
274
|
|
|
$
|
201
|
|
|
|
(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 units.
|
(3)
|
Total revenues
divided by the weighted average occupied units 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.
|
IRET
|
SAME-STORE CAPITAL
EXPENDITURES
|
($ in thousands,
except per home amounts)
|
|
|
|
Three Months
Ended
|
|
|
6/30/2019
|
|
6/30/2018
|
Total Same-Store
Apartment Homes
|
|
12,848
|
|
|
12,848
|
|
|
|
|
|
|
Turnover
|
|
$
|
1,141
|
|
|
$
|
1,183
|
|
Furniture &
Equipment
|
|
119
|
|
|
104
|
|
Building –
Interior
|
|
80
|
|
|
139
|
|
Building –
Exterior
|
|
498
|
|
|
770
|
|
Landscaping &
Grounds
|
|
624
|
|
|
387
|
|
Capital
Expenditures
|
|
$
|
2,462
|
|
|
$
|
2,583
|
|
Capital Expenditures
per Apartment Home
|
|
$
|
192
|
|
|
$
|
201
|
|
|
|
|
Six Months
Ended
|
|
|
6/30/2019
|
|
6/30/2018
|
Total Same-Store
Apartment Homes
|
|
12,848
|
|
|
12,846
|
|
|
|
|
|
|
Turnover
|
|
$
|
1,752
|
|
|
$
|
1,884
|
|
Furniture &
Equipment
|
|
179
|
|
|
148
|
|
Building -
Interior
|
|
158
|
|
|
206
|
|
Building -
Exterior
|
|
715
|
|
|
1,369
|
|
Landscaping &
Grounds
|
|
688
|
|
|
420
|
|
Capital
Expenditures
|
|
$
|
3,492
|
|
|
$
|
4,027
|
|
Capital Expenditures
per Apartment Home
|
|
$
|
272
|
|
|
$
|
313
|
|
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 of the six
months ended June 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.
|
Six Months
Ended
|
|
Range for 12
Months Ended December 31, 2019
|
|
June 30,
2019
|
|
Full Year
Revised
Guidance
|
|
Prior
Guidance
|
|
Change from
Prior
Midpoint
|
|
Actual
Results
|
|
Amount
|
|
Amount
|
|
Amount
|
Net income (loss)
available to common shareholders
|
$(4,996)
|
|
$(15,100) to
$(13,800)
|
|
$(24,491) to
$(19,224)
|
|
$7,445
|
Net income (loss) per
share(1)
|
$(0.43)
|
|
$(1.27) to
$(1.17)
|
|
$(1.86) to
$(1.46)
|
|
$0.44
|
|
|
|
|
|
|
|
|
Same-Store
Growth
|
|
|
|
|
|
|
|
Revenue
|
3.60%
|
|
3.00% to
4.00%
|
|
2.50% to
4.00%
|
|
0.25%
|
Expenses
|
3.70%
|
|
2.75% to
3.75%
|
|
2.50% to
4.00%
|
|
—
|
NOI
|
3.60%
|
|
3.00% to
4.00%
|
|
2.00% to
4.50%
|
|
0.25%
|
|
|
|
|
|
|
|
|
Core FFO
|
$23,095
|
|
$46,800 to
$48,100
|
|
$46,348 to
48,981
|
|
$(201)
|
Core FFO per
Share
|
$1.77
|
|
$3.62 to
$3.72
|
|
$3.52 to
$3.72
|
|
$0.05
|
Weighted Average
Shares and Units
|
13,052
|
|
12,933
|
|
13,167
|
|
(234)
|
|
|
(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
|
|
Six Months
Ended
|
|
12 Months
Ended
|
|
June 30,
2019
|
|
December 31,
2019
|
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
Net income (loss)
available to common shareholders
|
$
|
(4,996)
|
|
|
$
|
(0.43)
|
|
|
$
|
(14,412)
|
|
|
$
|
(1.22)
|
|
Noncontrolling
interests - Operating Partnership
|
(595)
|
|
|
|
|
(1,339)
|
|
|
|
Depreciation and
amortization
|
36,548
|
|
|
|
|
72,543
|
|
|
|
Less depreciation-non
real estate
|
(164)
|
|
|
|
|
(286)
|
|
|
|
Less
depreciation-partially owned entities
|
(1,152)
|
|
|
|
|
(2,494)
|
|
|
|
Gain on sale of real
estate attributable to controlling interests
|
(669)
|
|
|
|
|
(669)
|
|
|
|
FFO applicable to
common shares and Units
|
$
|
28,972
|
|
|
$
|
2.22
|
|
|
$
|
53,343
|
|
|
$
|
4.12
|
|
|
|
|
|
|
|
|
|
Adjustments to Core
FFO:
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt
|
409
|
|
|
|
|
409
|
|
|
|
Gain on litigation
settlement
|
(6,286)
|
|
|
|
|
(6,286)
|
|
|
|
Core FFO applicable
to common shares and Units
|
$
|
23,095
|
|
|
$
|
1.77
|
|
|
$
|
47,466
|
|
|
$
|
3.67
|
|
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SOURCE IRET