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 October 31, 2000, it had 23,080,328 Shares of Beneficial Interest outstanding.

PART I

Item 1. Financial Statement - Second Quarter Fiscal 2001

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 six months ended October 31, 2000, are not necessarily indicative of operating results for the entire year.

*   Includes $276,267 and $630,461 for 3 months and 6 months ended 10/31/00 respectively of “straight-line rents."     “Straight-line rents” were not significant and, therefore, not included in the prior year results.

**  Includes $276,267 and $630,461 for 3 months and 6 months ended 10/31/00 respectively of “straight-line rents.”
      “Straight-line rents” were not significant and, therefore, not included in the prior year results.

OPERATING SEGMENTS

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

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

Results from Operations. We are again pleased to report excellent financial results for IRET’s second quarter of Fiscal 2001, which ended on October 31, 2000.  Continuing the experience of our first quarter, revenues, operating income, and funds from operations reached new highs as a result of strong performances from newly acquired and existing properties.  Highlights include:

*	An increase in revenues of 43% for the Second Quarter and 49% for the first six months of Fiscal 2001 as compared to the prior year.
*	An increase in Funds From Operations of the Operating Partnership of 28% for the Second Quarter and 37% for the six-month period over the prior year.
*	The addition of $27,072,950 of new real estate investments to our portfolio in the Second Quarter bringing the six month acquisition total to $55,986,448.
*	Receipt of an endorsement fee of $869,505 for 5,863 of our apartment units from a telephone provider.  This will be recorded as income over the next 12 years.

Revenues. Revenues for the second quarter were $18,404,260, compared to $12,900,697 received in the comparable period of Fiscal Year 2000, an increase of 43%.  For the first six months of the current fiscal year, revenues reached $35,835,904 compared to the year-earlier figure of $24,102,610, an increase of 49%.

Net Operating Income.Operating income before depreciation for the second quarter increased to $5,749,948 from the year-earlier figure of $4,480,111, an increase of 28%.  For the first six months of Fiscal 2001, operating income was $10,971,288 versus $8,022,425, an increase of 37%.

Net Taxable Income.  Net taxable income for the second quarter was $2,169,193, compared to $3,419,205 in the prior year.  For the six months, net taxable income was $4,308,657 compared to $5,242,462 in the same period for Fiscal 2000.  These decreases in net taxable income result from the fact that IRET has not sold any properties during the current fiscal year and, thus, has not recorded any capital gain income.  In the prior fiscal year, capital gain income of $1,519,918 was recorded in the second quarter of Fiscal 2000 and $1,777,814 was recorded for the first six months of that fiscal year.

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 $5,749,948 from the year-earlier figure of  $4,480,111, an increase of 28%.  For the six-month period, Funds From Operations of the Operating Partnership reached $10,971,288, compared to $8,022,425, an increase of 37%.  Of these increases in FFO, $276,267 of the second quarter increase and $630,461 of the six-month increase was due to the “straight-line rent” accounting rule change 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 second quarter of Fiscal 2001 and are producing income:

		COST
*	274-unit Olympic Village Apartment Community - Billings, MT	$  11,616,500
*	30,000 sq. ft. Stone Container Distribution Warehouse - Waconia, MN	1,666,500
*	84-unit Prairie Wood Meadows Apartment Community - Fargo, ND	2,811,000
*	73-unit Apartment Building and Community Center – Sunset Trail by IRET, Rochester, MN	6,493,150
*	67-unit Cottonwood III Apartment Community - Bismarck, ND	4,485,800
	TOTAL	$  27,072,950

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

		COST
*	Stone Container Addition – Fargo, ND	$    2,000,000
*	Addition to Edgewood Vista Assisted Living Center- Duluth, MN	2,200,000
*	3 Edgewood Vista Care Facilities in Hastings, Fremont and Omaha, NE	1,697,150
*	2 Edgewood Vista Care Facilities in Kalispell, MT and East Grand Forks, MN	991,700
*	73,338 sq. ft. – Dewey Hill Business Center Officer/Showroom – Edina, MN	4,450,000
*	56.2% interest in the Partnership owning the 203,000 sq. ft. six-story Southdale Medical Center office building located between Fairview Southdale Hospital and the Southdale Shopping Center - Edina, MN	17,984,000
*	134-unit Ridge Oaks Apartment Community – Sioux City, IA	4,150,000
*	73-unit Sunset Trail II Apartment Community – Rochester, MN	6,300,000
*	27-unit Meadows III Apartment Community – Jamestown, ND	1,825,000
	TOTAL	$  41,597,850

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 second quarter, compared with the beginning of this fiscal year, are:

Increased Dividend.  IRET paid a regular dividend of 13.5 cents per share on October 1, 2000, to shareholders of record at the close of business on September 15, 2000.  This was an increase from the 13.25 cents per share paid as a dividend on July 1, 2000, and was the 118th consecutive quarterly dividend paid by IRET.  An increased dividend of 14 cents per share will be paid on January 15, 2001, to shareholders of record at the close of business on January 2, 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: December 1, 2000