Centerspace - 10-Q quarterly report FY

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Applicant is a North Dakota Real Estate Investment Trust. As of January 31, 2001, it had 23,340,448 Shares of Beneficial Interest outstanding.

The accompanying condensed consolidated financial statements of Investors Real Estate Trust, and its subsidiaries (collectively, the “Company”), included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the footnotes thereto contained in the Annual Report on Form 10-K405 for the year ended April 30, 2000, of Investors Real Estate Trust, as filed with the SEC.  The Condensed Consolidated Balance Sheet at April 30, 2000, contained herein, was derived from audited financial statements, but does not include all disclosures included in the Form 10-K405 and applicable under generally accepted accounting principles.  Certain information and footnote disclosures normally included in interim financial statements prepared in accordance with generally accepted accounting principles have been omitted.

In the opinion of the company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (of a normal recurring nature) necessary for a fair presentation of the financial statements.  The results of operations for the nine months ended January 31, 2001, are not necessarily indicative of operating results for the entire year.

OPERATING SEGMENTS

The following information summarizes the Trust's segment reporting for Residential and Commercial properties along with reconciliations to the consolidated financial statements:

QUARTER ENDING January 31, 2001

QUARTER ENDING January 31, 2000

Year to date as of January 31, 2001

Year to date as of January 31, 2000

QUARTER ENDING January 31, 2001

YEAR ENDING APRIL 30, 2000

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.

Results from Operations. IRET experienced strong financial results for its third quarter of Fiscal 2001, which ended on January 31, 2001.  Continuing the experience of the first two quarters, revenues, operating income, and funds from operations reached new highs on good results from newly acquired and existing properties.  Highlights include:

Revenues.Revenues for the third quarter were $19,004,737, compared to $14,054,660 received in the comparable period of Fiscal Year 2000, an increase of 35%.  For the first nine months of the current fiscal year, revenues reached $54,840,641 compared to the year-earlier figure of $38,157,270, an increase of 44%.

Net Operating Income.Operating income before depreciation for the third quarter increased to $5,823,417 from the year-earlier figure of $4,622,120, an increase of 26%.  For the first nine months of Fiscal 2001, operating income before depreciation was $16,714,844 versus $12,632,884, an increase of 32%.

Net Income.  Net income (after depreciation, but before capital gain income) for the third quarter was $2,719,679, compared to $2,390,868 in the prior year – an increase of 14%.  For the first nine months of the current year, net income was $7,912,760, compared to the year earlier figure of $6,671,076, a 19% increase.  This year’s third quarter results were affected by higher natural gas and snow removal costs.

Capital Gains.  IRET has not made any significant sales of properties during the first three quarters of the current fiscal year with only $25,124 of capital gains income this year, compared with $1,777,814 of capital gains recorded to this point in the prior fiscal year.  Two apartment communities (one in Bismarck and one in Fargo) are under sales contract and are expected to close either in the fourth quarter or in the first quarter of Fiscal 2002.

Funds From Operations.  Funds From Operations of the Operating Partnership (net income computed for generally accepted accounting practices, less capital gain and extraordinary items, plus real estate depreciation) increased to $5,823,417 from the year-earlier figure of  $4,622,120, an increase of 26%.  For the nine-month period, Funds From Operations of the Operating Partnership reached $16,714,844, compared to $12,632,884, an increase of 32%.  Of these increases in FFO, $251,252 of the third quarter increase and $881,713 of the nine-month increase was due to the “straight-line rent” accounting rule which requires us to record as income future revenues (“straight-line rent”) from long term commercial property leases with periodic rent increases. Funds From Operations is the generally accepted measure of performance for real estate investment trusts.

Property Acquisitions.  The following properties were acquired by IRET during the third quarter of Fiscal 2001 and are producing income:

Pending Acquisitions.  The following properties are under construction or under purchase contract:

Financial Condition.  IRET continues to maintain a strong balance sheet, which will allow the acquisition of additional real estate properties.  The relevant balance sheet figures at the end of the third quarter, compared with the beginning of this fiscal year, are:

Increased Dividend.  IRET paid a regular dividend of 14 cents per share on January 15, 2001, to shareholders of record at the close of business on January 2, 2001.  This was an increase from the 13.5 cents per share paid as a dividend on October 1, 2000, and was the 119th consecutive quarterly dividend paid by IRET.  An increased dividend of 14.25 cents per share will be paid on April 2, 2001, to shareholders of record at the close of business on March 16, 2001.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None

Item 2. Changes in Securities.

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. Submission of Matters to a Vote of Security Holders.

None

Item 5. Other Information – SALE OF SHARES OF BENEFICIAL INTEREST

IRET files this Report of Sales of Securities and Use of Proceeds therefrom in accordance with Rule 463 (17 CFR 230.463).

The use of proceeds shown above does not represent a material change in the use of proceeds described in the prospectus.

Item 6. Exhibits and Reports on Form 8-K.

None

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INVESTORS REAL ESTATE TRUST
(Registrant)
 
 

By:/S/ Thomas A. Wentz, Sr.          
     Thomas A. Wentz, Sr., President

Date: March 14, 2001