Centerspace (CSR) 8-K Other Events

EXHIBIT 99.3

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of

Investors Real Estate Trust

Minot, North Dakota

We have audited the accompanying consolidated balance sheets of Investors Real Estate Trust and subsidiaries (the "Company") as of April 30, 2012 and 2011, and the related consolidated statements of operations, equity, and cash flows for each of the three years in the period ended April 30, 2012. Our audits also included the consolidated financial statement schedules listed in the Index at Item 15. We also have audited the Company's internal control over financial reporting as of April 30, 2012, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for these financial statements and financial statement schedules, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the Management's Report on Internal Control Over Financial Reporting (not presented herein). Our responsibility is to express an opinion on these financial statements and financial statement schedules and an opinion on the Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

2012 Annual Report F-1

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Investors Real Estate Trust and subsidiaries as of April 30, 2012 and 2011, and the results of their operations and their cash flows for each of the three years in the period ended April 30, 2012, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 30, 2012, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ DELOITTE & TOUCHE LLP

Minneapolis, Minnesota

July 16, 2012 (December 10, 2012, as to the effects of discontinued operations as disclosed in Note 12)

2012 Annual Report F-2

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

April 30, 2012 and 2011

	(in thousands)
	April 30, 2012			April 30, 2011
ASSETS
Real estate investments
Property owned	$	1,892,009		$	1,770,798
Less accumulated depreciation		(373,490	)		(328,952	)
		1,518,519			1,441,846
Development in progress		27,599			9,693
Unimproved land		10,990			6,550
Mortgage loans receivable, net of allowance of $0 and $3, respectively		0			156
Total real estate investments		1,557,108			1,458,245
Real estate held for sale		2,067			0
Cash and cash equivalents		39,989			41,191
Other investments		634			625
Receivable arising from straight-lining of rents, net of allowance of $1,209 and $996, respectively		23,273			18,933
Accounts receivable, net of allowance of $154 and $317, respectively		7,052			5,646
Real estate deposits		263			329
Prepaid and other assets		3,703			2,351
Intangible assets, net of accumulated amortization of $47,813 and $42,154, respectively		44,588			49,832
Tax, insurance, and other escrow		11,669			15,268
Property and equipment, net of accumulated depreciation of $1,423 and $1,231, respectively		1,454			1,704
Goodwill		1,120			1,127
Deferred charges and leasing costs, net of accumulated amortization of $16,244 and $13,675, respectively		21,447			20,112
TOTAL ASSETS	$	1,714,367		$	1,615,363
LIABILITIES AND EQUITY
LIABILITIES
Accounts payable and accrued expenses	$	47,403		$	37,879
Revolving line of credit		39,000			30,000
Mortgages payable		1,048,689			993,803
Other		14,012			8,404
TOTAL LIABILITIES		1,149,104			1,070,086
COMMITMENTS AND CONTINGENCIES (NOTE 15)
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES		0			987
EQUITY
Investors Real Estate Trust shareholders' equity
Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at April 30, 2012 and April 30, 2011, aggregate liquidation preference of $28,750,000)		27,317			27,317
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 89,473,838 shares issued and outstanding at April 30, 2012, and 80,523,265 shares issued and outstanding at April 30, 2011)		684,049			621,936
Accumulated distributions in excess of net income		(278,377	)		(237,563	)
Total Investors Real Estate Trust shareholders' equity		432,989			411,690
Noncontrolling interests – Operating Partnership (20,332,415 units at April 30, 2012 and 20,067,350 units at April 30, 2011)		118,710			123,627
Noncontrolling interests – consolidated real estate entities		13,564			8,973
Total equity		565,263			544,290
TOTAL LIABILITIES AND EQUITY	$	1,714,367		$	1,615,363

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

2012 Annual Report F-3

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

for the years ended April 30, 2012, 2011, and 2010

	(in thousands, except per share data)
	2012			2011			2010
REVENUE
Real estate rentals	$	197,169		$	190,414		$	184,425
Tenant reimbursement		42,929			44,931			44,913
TOTAL REVENUE		240,098			235,345			229,338
EXPENSES
Depreciation/amortization related to real estate investments		56,795			55,449			54,474
Utilities		17,442			18,020			16,895
Maintenance		26,354			28,955			26,737
Real estate taxes		31,581			30,637			29,986
Insurance		3,502			2,256			3,562
Property management expenses		18,514			21,021			18,104
Administrative expenses		6,694			6,617			5,716
Advisory and trustee services		687			605			502
Other expenses		1,898			1,747			2,513
Amortization related to non-real estate investments		3,216			2,679			2,362
TOTAL EXPENSES		166,683			167,986			160,851
Gain on involuntary conversion		274			0			1,660
Interest expense		(64,722	)		(63,425	)		(65,045	)
Interest income		148			259			539
Other income		638			282			355
Income from continuing operations		9,753			4,475			5,996
(Loss) income from discontinued operations		(47	)		19,876			(1,411	)
NET INCOME		9,706			24,351			4,585
Net income attributable to noncontrolling interests – Operating Partnership		(1,359	)		(4,449	)		(562	)
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities		(135	)		180			(22	)
Net income attributable to Investors Real Estate Trust		8,212			20,082			4,001
Dividends to preferred shareholders		(2,372	)		(2,372	)		(2,372	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	5,840		$	17,710		$	1,629
Earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted	$	.07		$	.02		$	.04
Earnings (loss) per common share from discontinued operations – Investors Real Estate Trust – basic and diluted		.00			.20			(.01	)
NET INCOME PER COMMON SHARE – BASIC & DILUTED	$	.07		$	.22		$	.03
DIVIDENDS PER COMMON SHARE	$	.5615		$	.6860		$	.6845

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

2012 Annual Report F-4

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

for the years ended April 30, 2012, 2011, and 2010

	(in thousands)
	NUMBER OF PREFERRED SHARES		PREFERRED SHARES		NUMBER OF COMMON SHARES			COMMON SHARES			ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET INCOME			NONCONTROLLING INTERESTS			TOTALEQUITY
BALANCE APRIL 30, 2009		1,150	$	27,317		60,304		$	461,648		$	(155,956	)	$	160,398		$	493,407
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests												4,001			524			4,525
Distributions - common shares and units												(47,085	)		(14,261	)		(61,346	)
Distributions - preferred shares												(2,372	)					(2,372	)
Distribution reinvestment and share purchase plan						1,405			11,916									11,916
Shares issued						13,390			107,039									107,039
Partnership units issued															3,897			3,897
Redemption of units for common shares						707			3,755						(3,755	)		0
Adjustments to redeemable noncontrolling interests									(192	)								(192	)
Other						(1	)		(548	)					(1,211	)		(1,759	)
BALANCE APRIL 30, 2010		1,150	$	27,317		75,805		$	583,618		$	(201,412	)	$	145,592		$	555,115
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests												20,082			4,282			24,364
Distributions - common shares and units												(53,861	)		(13,803	)		(67,664	)
Distributions - preferred shares												(2,372	)					(2,372	)
Distribution reinvestment and share purchase plan						1,706			14,548									14,548
Shares issued						2,004			16,676									16,676
Partnership units issued															4,996			4,996
Redemption of units for common shares						1,009			6,905						(6,905	)		0
Adjustments to redeemable noncontrolling interests									370									370
Other						(1	)		(181	)					(1,562	)		(1,743	)
BALANCE APRIL 30, 2011		1,150	$	27,317		80,523		$	621,936		$	(237,563	)	$	132,600		$	544,290
Net income attributable to Investors Real Estate Trust and nonredeemable noncontrolling interests												8,212			1,482			9,694
Distributions - common shares and units												(46,654	)		(11,102	)		(57,756	)
Distributions - preferred shares												(2,372	)					(2,372	)
Distribution reinvestment and share purchase plan						4,796			34,345									34,345
Shares issued						3,398			24,870									24,870
Partnership units issued															8,055			8,055
Redemption of units for common shares						759			3,454						(3,454	)		0
Other						(2	)		(556	)					4,693			4,137
BALANCE APRIL 30, 2012		1,150	$	27,317		89,474		$	684,049		$	(278,377	)	$	132,274		$	565,263

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

2012 Annual Report F-5

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

for the years ended April 30, 2012, 2011, and 2010

	(in thousands)
	2012			2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	9,706		$	24,351		$	4,585
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		61,954			61,344			61,184
Gain on sale of real estate, land and other investments		(349	)		(19,365	)		(68	)
Gain on involuntary conversion		(274	)		0			(1,660	)
Impairment of real estate assets		428			0			1,678
Donation of real estate assets		0			0			450
Bad debt expense		298			733			1,399
Changes in other assets and liabilities:
Increase in receivable arising from straight-lining of rents		(4,831	)		(1,732	)		(1,443	)
Decrease (increase) in accounts receivable		1,542			(914	)		(3,371	)
Increase in prepaid and other assets		(1,361	)		(1,162	)		(138	)
(Increase) decrease in tax, insurance and other escrow		(353	)		1,469			(2,040	)
Increase in deferred charges and leasing costs		(6,145	)		(6,501	)		(4,731	)
Increase in accounts payable, accrued expenses and other liabilities		4,522			551			5,567
Net cash provided by operating activities		65,137			58,774			61,412
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from real estate deposits		2,254			2,766			2,588
Payments for real estate deposits		(2,188	)		(2,579	)		(3,016	)
Principal proceeds on mortgage loans receivable		159			2			2
Increase in other investments		0			(205	)		0
Decrease in lender holdbacks for improvements		5,681			3,276			0
Increase in lender holdbacks for improvements		(1,730	)		(10,712	)		0
Proceeds from sale of discontinued operations		3,142			81,539			103
Proceeds from sale of real estate and other investments		430			74			40
Insurance proceeds received		5,758			347			1,395
Payments for acquisitions and improvements of real estate assets		(141,771	)		(62,824	)		(80,069	)
Net cash (used) provided by investing activities		(128,265	)		11,684			(78,957	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgages payable		117,595			139,947			166,490
Principal payments on mortgages payable		(77,089	)		(213,658	)		(180,482	)
Proceeds from revolving lines of credit and other debt		31,925			56,300			15,500
Principal payments on revolving lines of credit and other debt		(10,060	)		(25,650	)		(15,567	)
Proceeds from sale of common shares, net of issue costs		24,427			16,423			106,889
Proceeds from sale of common shares under distribution  reinvestment and share purchase program		23,511			3,175			1,382
Repurchase of fractional shares and partnership units		(14	)		(10	)		(11	)
Proceeds from noncontrolling partner – consolidated real estate entities		2,854			0			0
Payments for acquisition of noncontrolling interests – consolidated real estate entities		(1,289	)		(425	)		(475	)
Distributions paid to common shareholders, net of reinvestment of $10,177, $10,627 and $9,762, respectively		(36,477	)		(43,234	)		(37,323	)
Distributions paid to preferred shareholders		(2,372	)		(2,372	)		(2,372	)
Distributions paid to noncontrolling interests – Unitholders of the Operating Partnership, net reinvestment of $657, $746 and $772, respectively		(10,445	)		(13,057	)		(13,489	)
Distributions paid to noncontrolling interests – consolidated real estate entities		(613	)		(1,055	)		(1,273	)
Distributions paid to redeemable noncontrolling interests-consolidated real estate entities		(27	)		(442	)		(177	)
Net cash provided (used) by financing activities		61,926			(84,058	)		39,092
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(1,202	)		(13,600	)		21,547
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		41,191			54,791			33,244
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	39,989		$	41,191		$	54,791

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

2012 Annual Report F-6

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

for the years ended April 30, 2012, 2011, and 2010

	(in thousands)
	2012			2011		2010
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Distribution reinvestment plan	$	10,177		$	10,627	$	9,762
Operating partnership distribution reinvestment plan		657			746		772
Operating partnership units converted to shares		3,454			6,905		3,755
Real estate assets acquired through the issuance of operating partnership units		8,055			4,996		3,897
Real estate assets acquired through assumption of indebtedness and accrued costs		7,190			9,895		2,569
Adjustments to accounts payable included within real estate assets		(5,445	)		933		324
Noncontrolling partnership interest		2,227			0		0
Fair value adjustments to redeemable noncontrolling interests		35			370		(192	)
Involuntary conversion of assets due to flood and fire damage		2,783			0		0
Construction debt reclassified to mortgages payable		7,190			0		0
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest on mortgages	$	60,604		$	63,163	$	67,234
Interest other		3,049			1,399		682
	$	63,653		$	64,562	$	67,916

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

2012 Annual Report F-7

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2012, 2011, and 2010

NOTE 1 • ORGANIZATION

Investors Real Estate Trust ("IRET" or the "Company") is a self-advised real estate investment trust engaged in acquiring, owning and leasing multi-family residential and commercial real estate. IRET has elected to be taxed as a Real Estate Investment Trust ("REIT") under Sections 856-860 of the Internal Revenue Code of 1986, as amended. REITs are subject to a number of organizational and operational requirements, including a requirement to distribute 90% of ordinary taxable income to shareholders, and, generally, are not subject to federal income tax on net income, except for taxes on undistributed REIT taxable income. IRET's multi-family residential properties and commercial properties are located mainly in the states of North Dakota and Minnesota, but also in the states of Colorado, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, South Dakota, Wisconsin and Wyoming. As of April 30, 2012, IRET owned 84 multi-family residential properties with approximately 9,161 apartment units and 182 commercial properties, consisting of commercial office, commercial medical, commercial industrial and commercial retail properties, totaling approximately 12.3 million net rentable square feet. IRET conducts a majority of its business activities through its consolidated operating partnership, IRET Properties, a North Dakota Limited Partnership (the "Operating Partnership"), as well as through a number of other subsidiary entities.

All references to IRET or the Company refer to Investors Real Estate Trust and its consolidated subsidiaries.

NOTE 2 • BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of IRET and all subsidiaries in which it maintains a controlling interest. All intercompany balances and transactions are eliminated in consolidation. The Company's fiscal year ends April 30th.

The accompanying consolidated financial statements include the accounts of IRET and its general partnership interest in the Operating Partnership. The Company's interest in the Operating Partnership was 81.5% and 80.1%, respectively, as of April 30, 2012 and 2011, which includes 100% of the general partnership interest. The limited partners have a redemption option that they may exercise. Upon exercise of the redemption option by the limited partners, IRET has the option of redeeming the limited partners' interests ("Units") for IRET common shares of beneficial interest, on a one-for-one basis, or for cash payment to the unitholder. The redemption generally may be exercised by the limited partners at any time after the first anniversary of the date of the acquisition of the Units (provided, however, that not more than two redemptions by a limited partner may occur during each calendar year, and each limited partner may not exercise the redemption for less than 1,000 Units, or, if such limited partner holds less than 1,000 Units, for all of the Units held by such limited partner). Some limited partners have contractually agreed to a holding period of greater than one year.

The consolidated financial statements also reflect the ownership by the Operating Partnership of certain joint venture entities in which the Operating Partnership has a general partner or controlling interest. These entities are consolidated into IRET's other operations with noncontrolling interests reflecting the noncontrolling partners' share of ownership and income and expenses.

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. ASU 2011-04 amended Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, to converge the fair value measurement guidance in U.S. GAAP and International Financial Reporting Standards ("IFRS"), and in some limited cases, changes some principles to achieve convergence between U.S. GAAP and IFRS. ASU 2011-04 results in a consistent definition of

2012 Annual Report F-8

NOTE 2 • continued

fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. The amendments are to be applied prospectively for annual and interim periods beginning after December 15, 2011.  The adoption of this update on February 1, 2012 did not have a material impact on the Company's operating results or financial position, but resulted in additional fair value measurement disclosures (see Note 16).

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 will be effective for annual and interim periods beginning after December 15, 2011. The adoption of this update on February 1, 2012 did not have a material effect on the Company's operating results or financial position. The Company has no items of other comprehensive income for the periods ended April 30, 2012, 2011 and 2010.

In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment. This standard gives entities testing goodwill for impairment the option of performing a qualitative assessment before calculating the fair value of the reporting unit (step I of the goodwill impairment test). If entities determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than its carrying amount, the two-step impairment test would be required. Otherwise, no further testing is required. The ASU does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test goodwill annually for impairment. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. The Company plans to adopt this update for fiscal year 2013, but does not intend to use the methodology allowed by the ASU.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain previously reported amounts have been reclassified to conform to the current financial statement presentation. The Company reports, in discontinued operations, the results of operations and the related gains or losses of a property that has either been disposed of or is classified as held for sale and otherwise meets the classification of a discontinued operation. As a result of discontinued operations, retroactive reclassifications that change prior period numbers have been made. See Note 12 for additional information. During fiscal year 2013, the Company sold two multi-family residential properties in Fargo, North Dakota and Moorhead, Minnesota, respectively, and classified a third multi-family residential property in Fargo, North Dakota, as held for sale. During fiscal year 2012, the Company sold two retail properties. Eight condominium units in Grand Chute, Wisconsin, and a retail property in Kentwood, Michigan, were classified as held for sale at April 30, 2012. During fiscal year 2011, the Company sold four apartment complexes, one industrial property, one retail property and a patio home. The results of operations for these properties are included in income from discontinued operations in the Consolidated Statements of Operations.

REAL ESTATE INVESTMENTS

Real estate investments are recorded at cost less accumulated depreciation and an adjustment for impairment, if any. Acquisitions of real estate are recorded based upon preliminary allocations of the purchase price which are subject to adjustment as additional information is obtained, but in no case more than one year after the date of acquisition. The Company allocates the purchase price based on the relative fair values of the tangible and intangible assets of an acquired property (which includes the land, building, and personal property) which are determined by valuing the

2012 Annual Report F-9

NOTE 2 • continued

property as if it were vacant and to fair value of the intangible assets (which include in-place leases.) The as-if-vacant value is allocated to land, buildings, and personal property based on management's determination of the relative fair values of these assets. The estimated fair value of the property is the amount that would be recoverable upon the disposition of the property. Techniques used to estimate fair value include discounted cash flow analysis and reference to recent sales of comparables. A land value is assigned based on the purchase price if land is acquired separately or based on estimated fair value if acquired in a merger or in a single or portfolio acquisition.

Above-market and below-market in-place lease intangibles for acquired properties are recorded at fair value based on the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management's estimate of market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease.

Other intangible assets acquired include amounts for in-place lease values that are based upon the Company's evaluation of the specific characteristics of the leases. Factors considered in the fair value analysis include an estimate of carrying costs and foregone rental income during hypothetical expected lease-up periods, considering current market conditions, and costs to execute similar leases. The Company also considers information about each property obtained during its pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible and intangible assets acquired.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. The Company uses a 20-40 year estimated life for buildings and improvements and a 5-12 year estimated life for furniture, fixtures and equipment.

Expenditures for ordinary maintenance and repairs are expensed to operations as incurred. Renovations and improvements that improve and/or extend the useful life of the asset are capitalized and depreciated over their estimated useful life, generally five to ten years. Property sales or dispositions are recorded when title transfers and sufficient consideration has been received by the Company and the Company has no significant involvement with the property sold.

The Company periodically evaluates its long-lived assets, including its real estate investments, for impairment indicators. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, expected holding period of each asset and legal and environmental concerns. If indicators exist, the Company compares the expected future undiscounted cash flows for the long-lived asset against the carrying amount of that asset. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recorded for the difference between the estimated fair value and the carrying amount of the asset. If our anticipated holding period for properties, the estimated fair value of properties or other factors change based on market conditions or otherwise, our evaluation of impairment charges may be different and such differences could be material to our consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.

During fiscal year 2012, the Company incurred a loss of approximately $428,000 due to impairment of two properties. The $128,000 impairment of the Company's Kentwood, Michigan, retail property was based on receipt of a market offer to purchase and the Company's intention to dispose of the property (a purchase agreement was signed by the Company in the fourth quarter of fiscal year 2012). A related impairment of $7,000 was recorded to write-off goodwill assigned to the Kentwood property. This property was classified as held for sale at April 30, 2012, and the related impairment charge for fiscal year 2012 is in discontinued operations. Also during fiscal year 2012, the Company recognized a $293,000 impairment loss on eight condominium units in Grand Chute, Wisconsin. The impairment of the condominiums was based on receipt of a market offer to purchase two of the units and the Company's intention to dispose of the units (a purchase agreement was signed by the Company in the fourth quarter of fiscal year 2012). The condominiums were classified as held for sale at April 30, 2012, and the related impairment charge for fiscal year 2012 is reported in discontinued operations. See Note 12 for additional information. No impairment losses were recorded in fiscal year 2011.

2012 Annual Report F-10

NOTE 2 • continued

During fiscal year 2010, the Company incurred a loss of $1.7 million due to impairment of three properties. The Company recorded a charge for impairment of approximately $818,000 on a commercial retail property in Ladysmith, Wisconsin, based upon receipt of a market offer to purchase and the Company's probable intention to dispose of the property. The Company recorded a charge for impairment of approximately $152,000 on its former headquarters building in Minot, North Dakota, based upon receipt and acceptance of a market offer to purchase. These two properties were subsequently sold and the related impairment charges for fiscal year 2010 are reported in discontinued operations. See Note 12 for additional information. The Company also recorded an impairment charge of approximately $708,000 on its retail property located in Kentwood, Michigan, in fiscal year 2010.  This property's tenant vacated the premises but continued to pay rent under a lease agreement that expired on October 29, 2010. Broker representations and market data for this commercial retail property provided the basis for the impairment charge. As noted above, this property was further impaired in the third quarter and classified as held for sale in the fourth quarter of fiscal 2012, and the related impairment charges for fiscal years 2012 and 2010 are reported in discontinued operations. See Note 12 for additional information.

REAL ESTATE HELD FOR SALE

Real estate held for sale is stated at the lower of its carrying amount or estimated fair value less disposal costs. The Company's determination of fair value is based on inputs management believes are consistent with those that market participants would use.  Estimates are significantly impacted by estimates of sales price, selling velocity, and other factors. Due to uncertainties in the estimation process, actual results could differ from such estimates. Depreciation is not recorded on assets classified as held for sale.

U.S. GAAP requires management to make certain significant judgments as to the classification of any of our properties as held for sale on the balance sheet. The Company makes a determination as to the point in time that it is probable that a sale will be consummated. It is not unusual for real estate sales contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract. In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance. As a result, properties under contract may not close within the expected time period, or may not close at all. Due to these uncertainties, it is not likely that the Company can meet the criteria of the current accounting principles governing the classification of properties as held for sale prior to a sale formally closing. Therefore, any properties categorized as held for sale represent only those properties that management has determined are probable to close within the requirements set forth in current accounting principles. Eight condominium units in Grand Chute, Wisconsin, and a retail property in Kentwood, Michigan, were classified as held for sale at April 30, 2012.

The Company reports, in discontinued operations, the results of operations and the related gains or losses of a property that has either been disposed of or is classified as held for sale and otherwise meets the classification of a discontinued operation.

IDENTIFIED INTANGIBLE ASSETS AND LIABILITIES AND GOODWILL

Upon acquisition of real estate, the Company records the intangible assets and liabilities acquired (for example, if the leases in place for the real estate property acquired carry rents above the market rent, the difference is classified as an intangible asset) at their estimated fair value separate and apart from goodwill.  The Company amortizes identified intangible assets and liabilities that are determined to have finite lives based on the period over which the assets and liabilities are expected to affect, directly or indirectly, the future cash flows of the real estate property acquired (generally the life of the lease).  In the twelve months ended April 30, 2012 and 2011, respectively, the Company added approximately $416,000 and $6.5 million of new intangible assets and $0 and $32,000 of new intangible liabilities. The weighted average lives of the intangible assets and intangible liabilities acquired in the twelve months ended April 30, 2012 and 2011 are 10.0 years and 9.5 years, respectively.  Amortization of intangibles related to above or below-market leases is recorded in real estate rentals in the Consolidated Statements of Operations. Amortization of other intangibles is recorded in depreciation/amortization related to real estate investments in the Consolidated Statements of Operations. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.  An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its estimated fair value.

2012 Annual Report F-11

NOTE 2 • continued

The excess of the cost of an acquired business over the net of the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed is recorded as goodwill. The Company's goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill book value as of April 30, 2012 and 2011 was $1.1 million. The annual reviews of goodwill compared the fair value of the business units that have been assigned goodwill to their carrying value (investment cost less accumulated depreciation), with the results for these periods indicating no impairment. During fiscal year 2012 the impairment of a Kentwood, Michigan, retail property indicated that goodwill assigned to the property was also impaired. Accordingly, an approximately $7,000 impairment to goodwill was recognized. In fiscal year 2011 the Company disposed of four multi-family residential properties that had goodwill assigned, and as result, approximately $261,000 of goodwill was derecognized.

PROPERTY AND EQUIPMENT

Property and equipment consists of the equipment contained at IRET's headquarters in Minot, North Dakota, corporate offices in Minneapolis and St. Cloud, Minnesota, and additional property management offices in Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota and South Dakota. The balance sheet reflects these assets at cost, net of accumulated depreciation. As of April 30, 2012 and 2011, property and equipment cost was $2.9 million. Accumulated depreciation was $1.4 million and $1.2 million as of April 30, 2012 and 2011, respectively.

MORTGAGE LOANS RECEIVABLE

Mortgage loans receivable (which include contracts for deed) are stated at the outstanding principal balance, net of an allowance for uncollectibility. Interest income is accrued and reflected in the balance sheet. Non-performing loans are recognized as impaired. The Company evaluates the collectibility of both interest and principal of each of its loans, if circumstances warrant, to determine whether the loan is impaired. A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. An allowance is recorded to reduce impaired loans to their estimated fair value. Interest on impaired loans is recognized on a cash basis.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include all cash and highly liquid investments purchased with maturities of three months or less. Cash and cash equivalents consist of the Company's bank deposits and short-term investment certificates acquired subject to repurchase agreements, and the Company's deposits in a money market mutual fund.

COMPENSATING BALANCES AND OTHER INVESTMENTS; LENDER HOLDBACKS

The Company maintains compensating balances, not restricted as to withdrawal, with several financial institutions in connection with financing received from those institutions and/or to ensure future credit availability. At April 30, 2012, the Company's compensating balances consisted of the following: Dacotah Bank, Minot, North Dakota, deposit of $350,000; United Community Bank, Minot, North Dakota, deposit of $275,000; Commerce Bank, A Minnesota Banking Corporation, deposit of $250,000; First International Bank, Watford City, North Dakota, deposit of $6.1 million; Peoples State Bank of Velva, North Dakota, deposit of $225,000; Equity Bank, Minnetonka, Minnesota, deposit of $300,000; Associated Bank, Green Bay, Wisconsin, deposit of $500,000; Venture Bank, Eagan, Minnesota, deposit of $500,000, and American National Bank, Omaha, Nebraska, deposit of $400,000. The deposits at United Community Bank and Equity Bank and a portion of the deposit at Dacotah Bank are held as certificates of deposit and comprise the $634,000 in other investments on the Consolidated Balance Sheets. The certificates of deposit have remaining terms of less than two years and the Company intends to hold them to maturity.

The Company has a number of mortgage loans under which the lender retains a portion of the loan proceeds for the payment of construction costs or tenant improvements, and additionally has two construction loans (for the Company's Trinity build-to-suit project and Jamestown Theater expansion project) under which the lender held back a portion of the loan proceeds for release against specified construction milestones. The decrease of $5.7 million in lender holdbacks for improvements reflected in the Consolidated Statements of Cash Flows for the fiscal year ended

2012 Annual Report F-12

NOTE 2 • continued

April 30, 2012 is due primarily to the release of loan proceeds to the Company upon completion of these construction milestones and tenant improvement projects, while the increase of $1.7 million represents additional amounts retained by lenders.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

Management evaluates the appropriate amount of the allowance for doubtful accounts by assessing the recoverability of individual real estate mortgage loans and rent receivables, through a comparison of their carrying amount with their estimated realizable value. Management considers tenant financial condition, credit history and current economic conditions in establishing these allowances. Receivable balances are written off when deemed uncollectible. Recoveries of receivables previously written off, if any, are recorded when received. A summary of the changes in the allowance for doubtful accounts for fiscal years ended April 30, 2012, 2011 and 2010 is as follows:

	(in thousands)
	2012			2011			2010
Balance at beginning of year	$	1,316		$	1,172		$	1,131
Provision		298			733			1,399
Write-off		(251	)		(589	)		(1,358	)
Balance at close of year	$	1,363		$	1,316		$	1,172

TAX, INSURANCE, AND OTHER ESCROW

Tax, insurance, and other escrow includes funds deposited with a lender for payment of real estate tax and insurance, and reserves for funds to be used for replacement of structural elements and mechanical equipment of certain projects. The funds are under the control of the lender. Disbursements are made after supplying written documentation to the lender.

REAL ESTATE DEPOSITS

Real estate deposits include funds held by escrow agents to be applied toward the purchase of real estate or the payment of loan costs associated with loan placement or refinancing.

DEFERRED LEASING AND LOAN ACQUISITION COSTS

Costs and commissions incurred in obtaining tenant leases are amortized on the straight-line method over the terms of the related leases. Costs incurred in obtaining long-term financing are amortized to interest expense over the life of the loan using the straight-line method, which approximates the effective interest method.

INCOME TAXES

IRET operates in a manner intended to enable it to continue to qualify as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended.  Under those sections, a REIT which distributes at least 90% of its REIT taxable income as a dividend to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to shareholders. For the fiscal years ended April 30, 2012, 2011 and 2010, the Company distributed in excess of 90% of its taxable income and realized capital gains from property dispositions within the prescribed time limits; accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years.  Even as a REIT, the Company may be subject to certain state and local income and property taxes, and to federal income and excise taxes on undistributed taxable income.  In general, however, if the Company qualifies as a REIT, no provisions for federal income taxes are necessary except for taxes on undistributed REIT taxable income and taxes on the income generated by a taxable REIT subsidiary (TRS). The Company currently has no TRS.

2012 Annual Report F-13

NOTE 2 • continued

IRET conducts its business activity as an Umbrella Partnership Real Estate Investment Trust ("UPREIT") through its Operating Partnership. UPREIT status allows IRET to accept the contribution of real estate in exchange for Units. Generally, such a contribution to a limited partnership allows for the deferral of gain by an owner of appreciated real estate.

Distributions for the calendar year ended December 31, 2011 were characterized, for federal income tax purposes, as 18.04% ordinary income, 37.48% capital gain and 44.48% return of capital.  Distributions for the calendar year ended December 31, 2010 were characterized, for federal income tax purposes, as 28.53% ordinary income and 71.47% return of capital.

REVENUE RECOGNITION

Residential rental properties are leased under operating leases with terms generally of one year or less. Commercial properties are leased under operating leases to tenants for various terms generally exceeding one year. Lease terms often include renewal options. Rental revenue is recognized on the straight-line basis, which averages minimum required rents over the terms of the leases. Rents recognized in advance of collection are reflected as receivable arising from straight-lining of rents, net of allowance for doubtful accounts.  Rent concessions, including free rent, are amortized on a straight-line basis over the terms of the related leases.

Reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as revenue in the period the applicable expenditures are incurred. IRET receives payments for these reimbursements from substantially all of its tenants at multi-tenant commercial properties throughout the year.

A number of the commercial leases provide for a base rent plus a percentage rent based on gross sales in excess of a stipulated amount. These percentage rents are recorded once the required sales level is achieved.

Interest on mortgage loans receivable is recognized in income as it accrues during the period the loan is outstanding. In the case of non-performing loans, income is recognized as discussed above in the Mortgage Loans Receivable section of this Note 2.

NET INCOME PER SHARE

Basic net income per share is computed as net income available to common shareholders divided by the weighted average number of common shares outstanding for the period. The Company has no potentially dilutive financial interests; the potential exchange of Units for common shares will have no effect on net income per share because Unitholders and common shareholders effectively share equally in the net income of the Operating Partnership.

INVOLUNTARY CONVERSION OF ASSETS

As previously reported, Minot, North Dakota, where IRET's corporate headquarters is located, experienced significant flooding in June 2011, resulting in extensive damage to the Arrowhead Shopping Center and to the Chateau Apartments property, which consists of two 32-unit buildings.  Additionally, on February 22, 2012, one of the buildings of the Chateau Apartments property, which had been undergoing restoration work following the flood, was completely destroyed by fire. The Company expects to rebuild the destroyed building but has no firm estimates at this time for costs or expected completion date of such rebuilding. The property is insured and the Company expects the losses to be covered under its insurance policy, subject to a deductible of $200,000 for each event. The Company expensed $400,000 in fiscal year 2012 for the flood and fire deductibles. The remaining 32 units in Chateau Apartments were available for leasing in the first quarter of fiscal year 2013. Arrowhead Shopping Center is currently in various stages of re-leasing.  Costs related to clean-up, redevelopment and loss of rents for Arrowhead Shopping Center and Chateau Apartments from the June 2011 flood are being reimbursed to the Company by its insurance carrier, less the Company's deductible of $200,000 under the policy.  As of April 30, 2012, for the Arrowhead and Chateau flood loss the Company had received or confirmed pending receipt of $5.7 million of insurance proceeds for flood clean-up costs and redevelopment and approximately $666,000 reimbursement for business interruption (loss of rents).  Reimbursement for business interruption is included within real estate rentals in the Consolidated Statements of Operations.

2012 Annual Report F-14

NOTE 2 • continued

In regard to Arrowhead Shopping Center, the total insurance proceeds for redevelopment at April 30, 2012 exceeded the estimated basis in the assets requiring replacement, resulting in the recognition of approximately $274,000 in gain from involuntary conversion in fiscal year 2012. IRET expects final settlement of the Arrowhead insurance claim to occur in the second quarter of fiscal year 2013.The Company is currently unable to estimate whether and to what extent there may be a gain or loss on involuntary conversion due to the Chateau Apartments fire.

NOTE 3 • CREDIT RISK

The Company is potentially exposed to credit risk for cash deposited with FDIC-insured financial institutions in accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

IRET has entered into a cash management arrangement with First Western Bank (the "Bank") with respect to deposit accounts that exceed FDIC Insurance coverage. On a daily basis, account balances are swept into a repurchase account.  The Bank pledges fractional interests in US Government Securities owned by the Bank at an amount equal to the excess over the uncollected balance in the repurchase account. The amounts deposited by IRET pursuant to the repurchase agreement are not insured by FDIC. At April 30, 2012 and 2011, these amounts totaled $15.1 million and $23.5 million, respectively.

NOTE 4 • PROPERTY OWNED

Property, consisting principally of real estate, is stated at cost less accumulated depreciation and totaled $1.5 billion and $1.4 billion as of April 30, 2012, and 2011, respectively.

Construction period interest of approximately $571,000, $152,000, and $19,000 has been capitalized for the years ended April 30, 2012, 2011, and 2010, respectively.

The future minimum lease receipts to be received under non-cancellable leases for commercial properties as of April 30, 2012, assuming that no options to renew or buy out the lease are exercised, are as follows:

Year Ended April 30,	(in thousands)
2013	$	112,174
2014		102,100
2015		90,119
2016		79,637
2017		65,030
Thereafter		206,791
	$	655,851

See Real Estate Investments within Note 2 for information about impairment losses recorded during fiscal years 2012 and 2011.

NOTE 5 • IDENTIFIED INTANGIBLE ASSETS AND LIABILITIES

The Company's identified intangible assets and intangible liabilities at April 30, 2012 and 2011 were as follows:

	(in thousands)
	April 30, 2012			April 30, 2011
Identified intangible assets (included in intangible assets):
Gross carrying amount	$	92,401		$	91,986
Accumulated amortization		(47,813	)		(42,154	)
Net carrying amount	$	44,588		$	49,832
Indentified intangible liabilities (included in other liabilities):
Gross carrying amount	$	1,104		$	1,104
Accumulated amortization		(967	)		(900	)
Net carrying amount	$	137		$	204

2012 Annual Report F-15

NOTE 5 • continued

The effect of amortization of acquired below-market leases and acquired above-market leases on rental income was approximately $(45,000) and $(72,000) for the twelve months ended April 30, 2012 and 2011, respectively. The estimated annual amortization of acquired below-market leases, net of acquired above-market leases for each of the five succeeding fiscal years is as follows:

Year Ended April 30,	(in thousands)
2013	$	32
2014		35
2015		18
2016		14
2017		6

Amortization of all other identified intangible assets (a component of depreciation/amortization related to real estate investments) was $5.5 million and $7.1 million for the twelve months ended April 30, 2012 and 2011, respectively. The estimated annual amortization of all other identified intangible assets for each of the five succeeding fiscal years is as follows:

Year Ended April 30,	(in thousands)
2013	$	4,588
2014		4,182
2015		3,825
2016		3,608
2017		3,139

NOTE 6 • NONCONTROLLING INTERESTS

Interests in the Operating Partnership held by limited partners are represented by Units. The Operating Partnership's income is allocated to holders of Units based upon the ratio of their holdings to the total Units outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to noncontrolling interests in accordance with the terms of the Operating Partnership agreement.

IRET reflects noncontrolling interests in consolidated real estate entities on the balance sheet for the portion of properties consolidated by IRET that are not wholly owned by IRET. The earnings or losses from these properties attributable to the noncontrolling interests are reflected as net income attributable to noncontrolling interests – consolidated real estate entities in the Consolidated Statements of Operations.  The Company's noncontrolling interests – consolidated real estate entities at April 30, 2012 and 2011 were as follows:

	(in thousands)
	April 30, 2012		April 30, 2011
Mendota Properties LLC	$	7,460	$	7,964
IRET-1715 YDR, LLC		958		1,009
IRET-Williston Garden Apartments, LLC		2,295		0
IRET - Jamestown Medical Building, LLC		1,471		0
WRH Holding, LLC		1,380		0
Noncontrolling interests – consolidated real estate entities	$	13,564	$	8,973

2012 Annual Report F-16

NOTE 7 • LINE OF CREDIT

As of April 30, 2012, the Company had one secured line of credit with First International Bank and Trust, Watford City, North Dakota, as lead bank. This line of credit matures on August 12, 2013, and had, as of April 30, 2012, lending commitments of $60.0 million. Participants in this secured credit facility as of April 30, 2012 included, in addition to First International Bank, the following financial institutions:  The Bank of North Dakota; First Western Bank and Trust; Dacotah Bank; United Community Bank of North Dakota; American State Bank & Trust Company and Town & Country Credit Union. As of April 30, 2012, the Company had advanced $39.0 million under the line of credit. The line of credit has a minimum outstanding principal balance requirement of $10.0 million. The interest rate on borrowings under the facility during fiscal year 2012 was the Wall Street Journal Prime Rate +1.0%, with a floor of 5.65% and a cap of 8.65%; interest-only payments are due monthly based on the total amount of advances outstanding. The line of credit may be prepaid at par at any time. The facility includes covenants and restrictions requiring the Company to achieve on a calendar quarter basis a debt service coverage ratio on borrowing base collateral of 1.25x in the aggregate and 1.00x on individual assets in the collateral pool, and the Company is also required to maintain minimum depository account(s) totaling $6.0 million with First International, of which $1.5 million is to be held in a non-interest bearing account. As of April 30, 2012, 23 properties with a total cost of $114.6 million collateralized this line of credit. As of April 30, 2012, the Company believes it is in compliance with the facility covenants. Subsequent to the end of fiscal year 2012, effective June 15, 2012, IRET Properties agreed to an amendment to the line of credit to increase the interest rate spread on borrowings to the Wall Street Journal Prime Rate +1.25% and to lower the floor interest rate to 5.15%. All other terms of the line of credit remain unchanged. This credit facility is summarized in the following table:

	(in thousands)
Financial Institution	Amount Available		Amount Outstanding as of April 30, 2012		Amount Outstanding as of April 30, 2011		Applicable Interest Rate as of April 30, 2012			Maturity  Date	Weighted Average Int. Rate on Borrowings during fiscal year 2012
First International Bank& Trust	$	60,000	$	39,000	$	30,000		5.65	%	8/12/13		5.65	%

NOTE 8 • MORTGAGES PAYABLE

The Company's mortgages payable are collateralized by substantially all of its properties owned. The majority of the Company's mortgages payable are secured by individual properties or groups of properties, and are non-recourse to the Company, other than for standard carve-out obligations such as fraud, waste, failure to insure, environmental conditions and failure to pay real estate taxes.As of April 30, 2012, the management of the Company believes there are no defaults or material compliance issues in regard to any mortgages payable.Interest rates on mortgages payable range from 3.32% to 8.25%, and the mortgages have varying maturity dates from May 1, 2012, through July 1, 2036.

Of the mortgages payable, the balance of fixed rate mortgages totaled $1.0 billion at April 30, 2012 and $992.3 million at April 30, 2011, and the balances of variable rate mortgages totaled $16.2 million and $1.5 million as of April 30, 2012, and 2011, respectively. The Company does not utilize derivative financial instruments to mitigate its exposure to changes in market interest rates. Most of the fixed rate mortgages have substantial pre-payment penalties. As of April 30, 2012, the weighted-average rate of interest on the Company's mortgage debt was 5.78%, compared to 5.92% on April 30, 2011. The aggregate amount of required future principal payments on mortgages payable as of April 30, 2012, is as follows:

Year Ended April 30,	(in thousands)
2013	$	51,162
2014		74,572
2015		106,483
2016		86,464
2017		199,089
Thereafter		530,919
Total payments	$	1,048,689

2012 Annual Report F-17

NOTE 9 • TRANSACTIONS WITH RELATED PARTIES

BANKING SERVICES

The Company has an ongoing banking relationship with First International Bank and Trust, Watford City, North Dakota ("First International").  Stephen L. Stenehjem, a member of the Company's Board of Trustees, is the President and Chief Executive Officer of First International, and the bank is owned by Mr. Stenehjem and members of his family. During fiscal year 2012, the Company had two mortgage loans outstanding with First International, with original principal balances of $3.2 million (Grand Forks MedPark Mall) and $2.4 million (Georgetown Square/Fox River), respectively, bearing interest at 6.25% and 7.25% per annum. Subsequent to the end of fiscal year 2012, on May 1, 2012, the mortgage loan on Georgetown Square/Fox River was repaid. During fiscal year 2012, the Company entered into a construction loan with First International for $13.7 million to finance the development of a residential property in Williston, North Dakota. The balance drawn on the construction loan at April 30, 2012 was $6.3 million. The Company paid interest on these loans of approximately $195,000, $162,000 and $65,000, respectively, in fiscal year 2012, and paid $102,000 in origination fees and closing costs on the construction loan. The Company has a multi-bank line of credit with a capacity of $60.0 million, of which First International is the lead bank and a participant with a $12.0 million commitment. In fiscal year 2012, the Company paid First International a total of approximately $531,000 in interest on First International's portion of the outstanding balance of this credit line, and paid fees of $70,000. In connection with this multi-bank line of credit, the Company maintains compensating balances with First International totaling $6.0 million, of which $1.5 million is held in a non-interest bearing account, and $4.5 million is held in an account that pays the Company interest on the deposited amount of 0.25% per annum.  The Company also maintains a number of checking accounts with First International.  In fiscal year 2012, the Company paid less than $500 in total in various bank service and other fees charged on these checking accounts.

In fiscal year 2011, the Company paid First International $212,000 in interest on First International's portion of the multi-bank line of credit and paid fees of $219,000. In fiscal years 2011 and 2010, the Company paid interest of approximately $72,000 and $238,000, respectively, for borrowing under a $14.0 million line of credit that was subsequently terminated in fiscal year 2011, and paid a $10,000 renewal fee for the line of credit in fiscal year 2010.  In fiscal year 2011, the Company paid interest and fees on outstanding mortgage loans totaling approximately $390,000, and paid interest in fiscal year 2010 on mortgage loans outstanding of approximately $789,000.  In both fiscal years 2011 and 2010, the Company paid under $500 in total in various bank service and other fees charged on checking accounts maintained with First International.

Total payments of interest and fees from the Company to First International Bank were approximately $1.1 million, $893,000 and $1.0 million in fiscal years 2012, 2011 and 2010, respectively.

PROPERTY TRANSACTION

During fiscal year 2012, the Company acquired an apartment property in St. Cloud, Minnesota, for a purchase price of $7.9 million. A limited partnership of which Stephen Stenehjem is the general partner was one of six investors in this property prior to its acquisition by the Company, and the Company's purchase of the property resulted in the issuance to this limited partnership of UPREIT units of the Operating Partnership valued at issuance at approximately $1.0 million.

NOTE 10 • ACQUISITIONS AND DISPOSITIONS

PROPERTY ACQUISITIONS

IRET Properties paid approximately $97.1 million for real estate properties added to its portfolio during fiscal year 2012, compared to $45.6 million in fiscal year 2011. The $97.1 million paid for real estate properties added to the Company's portfolio in fiscal year 2012 consisted of limited partnership units of the Operating Partnership valued at issuance at $8.1 million and $7.2 million in assumed mortgage debt, with the remainder paid in cash. The Company expensed approximately $542,000 of transaction costs related to the acquisitions in fiscal year 2012. Of the $45.6 million paid in fiscal year 2011, approximately $5.0 million was paid in the form of limited partnership units of the Operating Partnership and approximately $9.9 million consisted of the assumption of mortgage debt, with the remainder paid in cash. The Company expensed approximately $179,000 of transaction costs related to the acquisitions in fiscal year 2011. The fiscal year 2012 and 2011 additions are detailed below.

2012 Annual Report F-18

NOTE 10 • continued

Fiscal 2012 (May 1, 2011 to April 30, 2012)

		(in thousands)
Acquisitions and Development Projects Placed in Service	Date Acquired	Land		Building		Intangible Assets		Acquisition Cost
Multi-Family Residential
147 unit - Regency Park Estates - St. Cloud, MN	8/1/11	$	702	$	10,198	$	0	$	10,900
50 unit - Cottage West Twin Homes - Sioux Falls, SD	10/12/11		968		3,762		0		4,730
24 unit - Gables Townhomes - Sioux Falls, SD	10/12/11		349		1,921		0		2,270
36 unit - Evergreen II - Isanti, MN	11/1/11		691		2,784		0		3,475
116 unit - Grand Gateway - St. Cloud MN	2/16/12		814		7,086		0		7,900
84 unit - Ashland - Grand Forks, ND	3/16/12		741		7,569		0		8,310
72 unit - Williston Garden Buildings 1 and 2 - Williston, ND(1)	4/27/12		700		8,978		0		9,678
			4,965		42,298		0		47,263
Commercial Medical
17,273 sq. ft Spring Creek American Falls - American Falls, ID	9/1/11		145		3,870		55		4,070
15,571 sq. ft Spring Creek Soda Springs - Soda Springs, ID	9/1/11		66		2,134		30		2,230
15,559 sq. ft Spring Creek Eagle - Eagle, ID	9/1/11		263		3,775		62		4,100
31,820 sq. ft Spring Creek Meridian - Meridian, ID	9/1/11		424		6,724		102		7,250
26,605 sq. ft Spring Creek Overland - Boise, ID	9/1/11		687		5,941		97		6,725
16,311 sq. ft Spring Creek Boise - Boise, ID	9/1/11		708		4,296		71		5,075
26,605 sq. ft Spring Creek Ustick - Meridian, ID	9/1/11		467		3,833		0		4,300
Meadow Wind Land - Casper, WY	9/1/11		50		0		0		50
24,795 sq. ft Trinity at Plaza 16 - Minot, ND(2)	9/23/11		0		5,685		0		5,685
3,431 sq. ft Edina 6525 Drew Ave S - Edina, MN	10/13/11		388		117		0		505
22,193 sq. ft Meadow Winds Addition - Casper, WY(3)	12/30/11		0		3,952		0		3,952
			3,198		40,327		417		43,942
Commercial Retail
19,037 sq. ft. Jamestown Buffalo Mall - Jamestown, ND(4)	6/15/11		0		879		0		879
Unimproved Land
Industrial-Office Build-to-Suit - Minot, ND	9/7/11		416		0		0		416
Renaissance Heights - Williston, ND	4/11/12		4,600		0		0		4,600
			5,016		0		0		5,016
Total Property Acquisitions		$	13,179	$	83,504	$	417	$	97,100

(1) Development property placed in service April 27, 2012. Buildings 3 and 4 of this project are expected to be placed in service during the first quarter of fiscal year 2013.

(2) Development property placed in service September 23, 2011. Additional costs paid in fiscal year 2011 totaled $3.3 million, for a total project cost at April 30, 2012 of $9.0 million.

(3) Expansion project placed in service December 30, 2011.

(4) Construction project placed in service June 15, 2011. Additional costs paid in fiscal year 2011 totaled $1.4 million, for a total project cost at April 30, 2012 of $2.3 million.

2012 Annual Report F-19

NOTE 10 • continued

Fiscal 2011 (May 1, 2010 to April 30, 2011)

		(in thousands)
Acquisitions and Development Projects Placed in Service	Date Acquired	Land		Building		Intangible Assets		Acquisition Cost
Multi-Family Residential
24 unit - North Pointe 2 - Bismarck, ND	2/3/11	$	159	$	1,713	$	0	$	1,872
44 unit - Sierra Vista - Sioux Falls, SD	2/28/11		241		2,097		0		2,338
			400		3,810		0		4,210
Commercial Office
58,574 sq. ft. Omaha 10802 Farnam Dr - Omaha, NE	12/16/10		2,462		4,374		1,459		8,295
Commercial Medical
14,705 sq. ft. Billings 2300 Grant Road - Billings, MT	7/15/10		649		1,216		657		2,522
14,640 sq. ft. Missoula 3050 Great Northern - Missoula, MT	7/15/10		640		1,331		752		2,723
108,503 sq. ft. Edgewood Vista Minot - Minot, ND	11/10/10		1,046		11,590		2,545		15,181
23,965 sq. ft. Edgewood Vista Spearfish Expansion - Spearfish, SD1	1/10/11		0		2,777		0		2,777
			2,335		16,914		3,954		23,203
Commercial Industrial
42,244 sq. ft. Fargo 1320 45th St N - Fargo, ND2	6/22/10		0		1,634		0		1,634
Commercial Retail
47,709 sq. ft. Minot 1400 31st Ave - Minot, ND	12/10/10		1,026		6,143		1,081		8,250
Total Property Acquisitions		$	6,223	$	32,875	$	6,494	$	45,592

(1) Expansion project placed in service January 10, 2011.

(2) Development property placed in service June 22, 2010. Additional costs incurred in fiscal year 2010 totaled $2.3 million, for a total project cost at April 30, 2011 of $3.9 million.

Acquisitions in fiscal years 2012 and 2011 are immaterial to our real estate portfolio both individually and in the aggregate, and consequently no proforma information is presented. The results of operations from acquired properties are included in the Consolidated Statements of Operations as of their acquisition date. The revenue and net income of our fiscal year 2012 and 2011 acquisitions (excluding development projects placed in service) are detailed below.

	(in thousands)
	April 30, 2012			April 30, 2011
Total revenue		$	4,213		$	1,988
Net income		$	950		$	332

2012 Annual Report F-20

NOTE 10 • continued

PROPERTY DISPOSITIONS

During fiscal year 2012, the Company disposed of two properties for an aggregate sale price of $3.2 million, compared to six properties and one patio home for an aggregate sale price of $83.3 million during fiscal year 2011. The Company's dispositions during fiscal 2012 and 2011 are detailed below.

Fiscal 2012 (May 1, 2011 to April 30, 2012)

	(in thousands)
Dispositions	Sales Price		Book Value and Sales Cost		Gain/(Loss)
Commercial Retail
41,200 sq ft. Livingstone Pamida - Livingston, MT	$	2,175	$	1,586	$	589
12,556 sq ft. East Grand Station – East Grand Forks, MN	$	1,062	$	1,302	$	(240	)
Total Property Dispositions	$	3,237	$	2,888	$	349

Fiscal 2011 (May 1, 2010 to April 30, 2011)

	(in thousands)
Dispositions	Sales Price		Book Valueand Sales Cost		Gain/(Loss)
Multi-Family Residential
504 unit - Dakota Hill at Valley Ranch - Irving, TX	$	36,100	$	30,909	$	5,191
192 unit - Neighborhood Apartments - Colorado Springs, CO		11,200		9,664		1,536
195 unit - Pinecone Apartments - Fort Collins, CO		15,875		10,422		5,453
210 unit - Miramont Apartments - Fort Collins, CO		17,200		10,732		6,468
		80,375		61,727		18,648
Commercial Medical
1,410 sq. ft. Edgewood Vista Patio Home 4330 - Fargo, ND		205		220		(15	)
Commercial Industrial
29,440 sq. ft. Waconia Industrial Building - Waconia, MN		2,300		1,561		739
Commercial Retail
41,000 sq. ft. Ladysmith Pamida - Ladysmith, WI		450		457		(7	)
Total Property Dispositions	$	83,330	$	63,965	$	19,365

2012 Annual Report F-21

NOTE 11 • OPERATING SEGMENTS

IRET reports its results in five reportable segments: multi-family residential, commercial office, commercial medical (including senior housing), commercial industrial and commercial retail properties.  The Company's reportable segments are aggregations of similar properties.

Segment information in this report is presented based on net operating income, which we define as total real estate revenues and gain on involuntary conversion less real estate expenses and real estate taxes (excluding depreciation and amortization related to real estate investments and real estate impairment).  The following tables present real estate revenues and net operating income for the fiscal years ended April 30, 2012, 2011 and 2010 from our five reportable segments, and reconcile net operating income of reportable segments to net income as reported in the consolidated financial statements. Segment assets are also reconciled to Total Assets as reported in the consolidated financial statements.

	(in thousands)
Year Ended April 30, 2012	Multi-Family Residential		Commercial Office		Commercial Medical		Commercial Industrial		Commercial Retail		Total
Real estate revenue	$	72,500	$	74,334	$	65,531	$	14,325	$	13,408	$	240,098
Real estate expenses		33,905		34,816		20,655		3,549		4,468		97,393
Gain on involuntary conversion										274		274
Net operating income	$	38,595	$	39,518	$	44,876	$	10,776	$	9,214		142,979
Depreciation/amortization												(60,011	)
Administrative, advisory and trustee fees												(7,381	)
Other expenses												(1,898	)
Interest expense												(64,722	)
Interest and other income												786
Income from continuing operations												9,753
Loss from discontinued operations												(47	)
Net income											$	9,706

	(in thousands)
Year Ended April 30, 2011	Multi-FamilyResidential		Commercial-Office		Commercial-Medical		Commercial-Industrial		Commercial-Retail		Total
Real estate revenue	$	65,229	$	77,747	$	66,048	$	13,165	$	13,156	$	235,345
Real estate expenses		33,216		36,055		22,451		4,328		4,839		100,889
Net operating income	$	32,013	$	41,692	$	43,597	$	8,837	$	8,317		134,456
Depreciation/amortization												(58,128	)
Administrative, advisory and trustee services												(7,222	)
Other expenses												(1,747	)
Interest expense												(63,425	)
Interest and other income												541
Income from continuing operations												4,475
Income from discontinued operations												19,876
Net income											$	24,351

2012 Annual Report F-22

NOTE 11 • continued

	(in thousands)
Year Ended April 30, 2010	Multi-FamilyResidential		Commercial-Office		Commercial-Medical		Commercial-Industrial		Commercial-Retail		Total
Real estate revenue	$	63,873	$	82,079	$	57,439	$	13,095	$	12,852	$	229,338
Real estate expenses		31,757		36,833		17,829		4,121		4,744		95,284
Gain on involuntary conversion		1,660		0		0		0		0		1,660
Net operating income	$	33,776	$	45,246	$	39,610	$	8,974	$	8,108		135,714
Depreciation/amortization												(56,836	)
Administrative, advisory and trustee services												(6,218	)
Other expenses												(2,513	)
Interest expense												(65,045	)
Interest and other income												894
Income from continuing operations												5,996
Loss from discontinued operations												(1,411	)
Net income											$	4,585

Segment Assets and Accumulated Depreciation

	(in thousands)
As of April 30, 2012	Multi-Family Residential			Commercial Office			Commercial Medical			Commercial Industrial			Commercial Retail			Total
Segment assets
Property owned	$	539,783		$	605,318		$	500,268		$	119,002		$	127,638		$	1,892,009
Less accumulated depreciation		(128,834	)		(121,422	)		(78,744	)		(20,693	)		(23,797	)		(373,490	)
Total property owned	$	410,949		$	483,896		$	421,524		$	98,309		$	103,841		$	1,518,519
Real estate held for sale																	2,067
Cash and cash equivalents																	39,989
Other investments																	634
Receivables and other assets																	114,569
Development in progress																	27,599
Unimproved land																	10,990
Total Assets																$	1,714,367

	(in thousands)
As of April 30, 2011	Multi-Family Residential			Commercial Office			Commercial Medical			Commercial Industrial			Commercial Retail			Total
Segment assets
Property owned	$	484,815		$	595,491		$	447,831		$	117,602		$	125,059		$	1,770,798
Less accumulated depreciation		(117,718	)		(104,650	)		(65,367	)		(17,713	)		(23,504	)		(328,952	)
Total property owned	$	367,097		$	490,841		$	382,464		$	99,889		$	101,555		$	1,441,846
Cash and cash equivalents																	41,191
Other investments																	625
Receivables and other assets																	115,302
Development in progress																	9,693
Unimproved land																	6,550
Mortgage loans receivable, net of allowance																	156
Total Assets																$	1,615,363

2012 Annual Report F-23

NOTE 12 • DISCONTINUED OPERATIONS

The Company reports in discontinued operations the results of operations of a property that has either been disposed of or is classified as held for sale. The Company also reports any gains or losses from the sale of a property in discontinued operations. Eight condominium units in Grand Chute, Wisconsin, and a retail property in Kentwood, Michigan, were classified as held for sale at April 30, 2012. There were no properties classified as held for sale as of April 30, 2011 and 2010. The following information shows the effect on net income and the gains or losses from the sale of properties classified as discontinued operations for the fiscal years ended April 30, 2012, 2011 and 2010. The financial statements have been restated to reflect the property sold or classified as held for sale during the six months ended October 31, 2012. During the second quarter of fiscal year 2013, the Company sold two multi-family residential properties in Fargo, North Dakota and Moorhead, Minnesota, respectively, and classified a third multi-family residential property in Fargo, North Dakota, as held for sale.

	(in thousands)
	2012			2011			2010
REVENUE
Real estate rentals	$	1,832		$	7,887		$	13,289
Tenant reimbursement		62			112			148
TOTAL REVENUE		1,894			7,999			13,437
EXPENSES
Depreciation/amortization related to real estate investments		313			1,542			2,919
Utilities		225			776			1,163
Maintenance		246			993			1,471
Real estate taxes		196			853			1,543
Insurance		52			158			343
Property management expenses		271			1,111			1,737
Other expenses		67			28			0
Amortization related to non-real estate investments		0			4			8
Real estate impairment		428			0			1,678
TOTAL EXPENSES		1,798			5,465			10,862
Interest expense		(508	)		(2,028	)		(4,061	)
Interest income		0			5			7
Other income		16			0			0
(Loss) income from discontinued operations before gain on sale		(396	)		511			(1,479	)
Gain on sale of discontinued operations		349			19,365			68
(LOSS) INCOME FROM DISCONTINUED OPERATIONS	$	(47	)	$	19,876		$	(1,411	)
Segment Data
Multi-Family Residential	$	161		$	19,268		$	535
Commercial Office		0			0			(169	)
Commercial Medical		(455	)		(186	)		(409	)
Commercial Industrial		0			726			(23	)
Commercial Retail		247			68			(1,345	)
Total	$	(47	)	$	19,876		$	(1,411	)

	(in thousands)
	2012			2011			2010
Property Sale Data
Sales price	$	3,237		$	83,330		$	560
Net book value and sales costs		(2,888	)		(63,965	)		(492	)
Gain on sale of discontinued operations	$	349		$	19,365		$	68

2012 Annual Report F-24

NOTE 13 • EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. The Company has no outstanding options, warrants, convertible stock or other contractual obligations requiring issuance of additional common shares that would result in a dilution of earnings. Units can be exchanged for shares on a one-for-one basis after a minimum holding period of one year. The following table presents a reconciliation of the numerator and denominator used to calculate basic and diluted earnings per share reported in the consolidated financial statements for the fiscal years ended April 30, 2012, 2011 and 2010:

	For Years Ended April 30,
	(in thousands, except per share data)
	2012			2011			2010
NUMERATOR
Income from continuing operations – Investors Real Estate Trust	$	8,255		$	4,181		$	5,087
(Loss) income from discontinued operations – Investors Real Estate Trust		(43	)		15,901			(1,086	)
Net income attributable to Investors Real Estate Trust		8,212			20,082			4,001
Dividends to preferred shareholders		(2,372	)		(2,372	)		(2,372	)
Numerator for basic earnings per share – net income available to common shareholders		5,840			17,710			1,629
Noncontrolling interests – Operating Partnership		1,359			4,449			562
Numerator for diluted earnings per share	$	7,199		$	22,159		$	2,191
DENOMINATOR
Denominator for basic earnings per share weighted average shares		83,557			78,628			69,093
Effect of convertible operating partnership units		19,875			20,154			20,825
Denominator for diluted earnings per share		103,432			98,782			89,918
Earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted	$	.07		$	.02		$	.04
Earnings (loss) per common share from discontinued operations – Investors Real Estate Trust – basic and diluted		.00			.20			(.01	)
NET INCOME PER COMMON SHARE – BASIC & DILUTED	$	.07		$	.22		$	.03

NOTE 14 • RETIREMENT PLANS

IRET sponsors a defined contribution profit sharing retirement plan and a defined contribution 401(k) plan.  IRET's defined contribution profit sharing retirement plan is available to employees over the age of 21 who have completed one year of service.  Participation in IRET's defined contribution 401(k) plan is available to employees over the age of 21 who have completed one year of service and who work at least 1,000 hours per calendar year, and employees participating in the 401(k) plan may contribute up to maximum levels established by the IRS.  Employer contributions to the profit sharing and 401(k) plans are at the discretion of the Company's management.  IRET expects to contribute not more than 3.5% of the salary of each employee participating in the profit sharing plan, and currently matches, dollar for dollar, employee contributions to the 401(k) plan in an amount equal to up to 4.0% of the salary of each employee participating in the 401(k) plan, for a total expected contribution of not more than 7.5% of the salary of each of the employees participating in both plans. Contributions by IRET to the profit sharing plan are subject to a vesting schedule; contributions by IRET under the 401(k) plan are fully vested when made.  IRET's contributions to these plans on behalf of employees totaled approximately $871,000, $598,000 and $400,000 in fiscal years 2012, 2011 and 2010, respectively.  The increase in cost from fiscal year 2010 to fiscal year 2012 was due to growth in the number of employees during IRET's transition to internal property management.

2012 Annual Report F-25

NOTE 15 • COMMITMENTS AND CONTINGENCIES

Ground Leases. As of April 30, 2012, the Company is a tenant under operating ground or air rights leases on twelve of its properties. The Company pays a total of approximately $500,000 per year in rent under these ground leases, which have remaining terms ranging from 3 months to 89 years, and expiration dates ranging from July 2012 to October 2100. The Company has renewal options for six of the twelve ground leases, and rights of first offer or first refusal for the remainder.

The expected timing of ground and air rights lease payments as of April 30, 2012 is as follows:

	(in thousands)
Year Ended April 30,	Lease Payments
2013	$	499
2014		500
2015		501
2016		473
2017		445
Thereafter		22,041
Total	$	24,459

Legal Proceedings. IRET is involved in various lawsuits arising in the normal course of business. Management believes that such matters will not have a material effect on the Company's consolidated financial statements.

Environmental Matters. It is generally IRET's policy to obtain a Phase I environmental assessment of each property that the Company seeks to acquire.  Such assessments have not revealed, nor is the Company aware of, any environmental liabilities that IRET believes would have a material adverse effect on IRET's financial position or results of operations. IRET owns properties that contain or potentially contain (based on the age of the property) asbestos or lead, or have underground fuel storage tanks. For certain of these properties, the Company estimated the fair value of the conditional asset retirement obligation and chose not to book a liability, because the amounts involved were immaterial. With respect to certain other properties, the Company has not recorded any related asset retirement obligation, as the fair value of the liability cannot be reasonably estimated, due to insufficient information. IRET believes it does not have sufficient information to estimate the fair value of the asset retirement obligations for these properties because a settlement date or range of potential settlement dates has not been specified by others, and, additionally, there are currently no plans or expectation of plans to sell or to demolish these properties, or to undertake major renovations that would require removal of the asbestos, lead and/or underground storage tanks.  These properties are expected to be maintained by repairs and maintenance activities that would not involve the removal of the asbestos, lead and/or underground storage tanks.  Also, a need for renovations caused by tenant changes, technology changes or other factors has not been identified.

Tenant Improvements.  In entering into leases with tenants, IRET may commit itself to fund improvements or build-outs of the rented space to suit tenant requirements.  These tenant improvements are typically funded at the beginning of the lease term, and IRET is accordingly exposed to some risk of loss if a tenant defaults prior to the expiration of the lease term, and the rental income that was expected to cover the cost of the tenant improvements is not received.  As of April 30, 2012, the Company is committed to fund approximately $7.1 million in tenant improvements, within approximately the next 12 months.

Purchase Options. The Company has granted options to purchase certain IRET properties to tenants in these properties, under lease agreements.  In general, the options grant the tenant the right to purchase the property at the greater of such property's appraised value or an annual compounded increase of a specified percentage of the initial cost of the property to IRET. The property cost and gross rental revenue of these properties are as follows:

2012 Annual Report F-26

NOTE 15 • continued

	(in thousands)
			Gross Rental Revenue
Property	Investment Cost		2012		2011			2010
Billings 2300 Grant Road - Billings, MT	$	2,522	$	291	$	226		$	n/	a
Fargo 1320 45th Street N - Fargo, ND		4,160		400		333			n/	a
Great Plains - Fargo, ND		15,375		1,843		1,876			1,876
Healtheast St John & Woodwinds - Maplewood & Woodbury, MN		21,601		2,152		2,152			2,152
Minnesota National Bank - Duluth, MN		2,272		127		105			164
Missoula 3050 Great Northern - Missoula, MT		2,723		315		243			n/	a
Sartell 2000 23rd Street South - Sartell, MN		12,716		868		1,209			1,173
Spring Creek American Falls- American Falls, ID		4,070		234		n/	a		n/	a
Spring Creek Boise - Boise, ID		5,075		293		n/	a		n/	a
Spring Creek Eagle - Eagle, ID		4,100		237		n/	a		n/	a
Spring Creek Meridian - Meridian, ID		7,250		417		n/	a		n/	a
Spring Creek Overland - Overland, ID		6,725		387		n/	a		n/	a
Spring Creek Soda Springs - Soda Springs, ID		2,262		130		n/	a		n/	a
Spring Creek Ustick - Meridian, ID		4,300		246		n/	a		n/	a
St. Michael Clinic - St. Michael, MN		2,851		248		244			241
Stevens Point - Stevens Point, WI		15,020		1,020		1,104			1,356
Winsted Industrial Building - Winsted, MN		1,049		32		n/	a		n/	a
Total	$	114,071	$	9,240	$	7,492		$	6,962

Restrictions on Taxable Dispositions.  Approximately 108 of the Company's properties, consisting of approximately 6.0 million square feet of our combined commercial segment's properties and 3,921 apartment units, are subject to restrictions on taxable dispositions under agreements entered into with some of the sellers or contributors of the properties.  The real estate investment amount of these properties (net of accumulated depreciation) was approximately $786.5 million at April 30, 2012. The restrictions on taxable dispositions are effective for varying periods.  The terms of these agreements generally prevent us from selling the properties in taxable transactions.  The Company does not believe that the agreements materially affect the conduct of its business or its decisions whether to dispose of restricted properties during the restriction period because the Company generally holds these and its other properties for investment purposes, rather than for sale. Historically, however, where the Company has deemed it to be in its shareholders' best interests to dispose of restricted properties, the Company has done so through transactions structured as tax-deferred transactions under Section 1031 of the Internal Revenue Code.

Redemption Value of UPREIT Units.  The limited partnership units ("UPREIT Units") of the Company's operating partnership, IRET Properties, are redeemable at the option of the holder for cash, or, at our option, for the Company's common shares of beneficial interest on a one-for-one basis, after a minimum one-year holding period.  All UPREIT Units receive the same cash distributions as those paid on common shares.  UPREIT Units are redeemable for an amount of cash per Unit equal to the average of the daily market price of an IRET common share for the ten consecutive trading days immediately preceding the date of valuation of the Unit.  As of April 30, 2012 and 2011, the aggregate redemption value of the then-outstanding UPREIT Units of the operating partnership owned by limited partners was approximately $147.8 million and $188.0 million, respectively.

Joint Venture Buy/Sell Options.  Certain of IRET's joint venture agreements contain buy/sell options in which each party under certain circumstances has the option to acquire the interest of the other party, but do not generally require that the Company buy its partners' interests. During the third quarter of fiscal year 2012, IRET acquired, in an equity transaction for $1.3 million, its joint venture partner's interest in the Company's only joint venture which allowed IRET's unaffiliated partner, at its election, to require that IRET buy its interest at a purchase price to be determined by an appraisal conducted in accordance with the terms of the agreement, or at a negotiated price. The entity will continue to be consolidated in IRET's financial statements. The Company currently has no joint ventures in which its joint venture partner can require the Company to buy the partner's interest.

Development Projects.   The Company has various contracts outstanding with third parties in connection with ongoing development projects.  As of April 30, 2012, contractual commitments for development projects are as follows:

2012 Annual Report F-27

NOTE 15 • continued

Multi-Family Conversion, Minot, North Dakota:  The Company is converting an existing approximately 15,000 square foot commercial office building in Minot, North Dakota to a 20-unit multi-family residential property, for an estimated total cost of $3.0 million and a projected completion date in the fourth quarter of fiscal year 2013. As of April 30, 2012, the Company had incurred approximately $321,000 of these project costs.

Quarry Ridge Apartment Homes, Rochester, Minnesota: In June 2011, the Company commenced construction on an approximately 159-unit apartment project in Rochester, Minnesota, located adjacent to its existing Quarry Ridge Apartment Homes. The Company currently estimates that construction costs (excluding the value of the land) will total approximately $17.3 million, and that the project will be completed in the first quarter of fiscal 2013. As of April 30, 2012, the Company had incurred approximately $14.5 million of the estimated construction costs.

Williston Apartments, Williston, North Dakota:  During the second quarter of fiscal year 2012, the Company formed a joint venture to construct a 144-unit multi-family residential property in Williston, North Dakota.  Construction commenced in August 2011, and 72 units were placed in service during the fourth quarter of fiscal year 2012.  The Company estimates that the remaining 72 units will be placed in service during the first quarter of fiscal year 2013 at a total project cost to the joint venture entity of approximately $19.5 million, including the value of the land. The Company is the majority member of the joint venture, with a 60% interest; the remaining 40% interest is held by the Company's joint venture partner, a Minnesota limited liability company formed by a developer and a construction company based in St. Cloud, Minnesota. The Company's cash contribution to the project is approximately $3.3 million; the Company's joint venture partner contributed project planning and development services and the land for the project, which together were valued at $2.2 million. The remainder of the project cost is being financed with a construction loan from First International Bank & Trust. As of April 30, 2012, the joint venture entity had incurred approximately $14.4 million of the total estimated project costs.

Senior Housing Memory Care and Assisted Living Units, Laramie, Wyoming:  During the second quarter of fiscal year 2012, the Company entered into a contract for the construction of an additional 29 assisted living units at its existing 48-unit Spring Wind senior housing facility in Laramie, Wyoming, and for the conversion of an existing 16 units at the facility to memory care units, for a total, following project completion, of 61 assisted living units and 16 memory care units. The Company estimates that the construction costs for this expansion project will total approximately $3.8 million and that the project will be completed in the first quarter of fiscal year 2013.  As of April 30, 2012, the Company had incurred approximately $1.8 million of these project costs.

Industrial-Office Build-to-Suit, Minot, North Dakota:  During the second quarter of fiscal year 2012, the Company entered into a 10-year, fully net lease with a provider of production enhancement services to the oil and gas industry, to construct and then lease an approximately 28,000 square foot industrial building to be located in Minot, North Dakota on an approximately 9.6-acre parcel of vacant land. Construction began in October 2011, with completion estimated in the summer of 2012.  Total construction costs are currently estimated at $5.8 million (including the cost of the land), subject to tenant requested changes. As of April 30, 2012, the Company had incurred approximately $2.2 million of these estimated construction costs.

Jamestown Medical Office Building, Jamestown, North Dakota:  During the fourth quarter of fiscal year 2012, the Company formed a joint venture to construct a one-story, approximately 45,000 square foot medical office building on an approximately 4.9 acre parcel of land adjacent to the Jamestown Regional Medical Center campus in Jamestown, North Dakota, for a total project cost estimated at $9.2 million. The land on which the project is being built is held by the joint venture entity under a pre-paid ground lease with an initial term of 79 years and two 10-year renewals. The Company is the majority member of the joint venture, with a 51% interest; the remaining interest is held by the Company's joint venture partner, a Minnesota limited liability company formed by the principal in a medical leasing and development firm based in Minneapolis, Minnesota. The Company's cash contribution to the project is expected to be approximately $1.5 million, with the remainder of the project cost being provided by the Company's joint venture partner and from the proceeds of the joint venture entity's $6.2 million construction loan with Wells Fargo bank. As of April 30, 2012, the joint venture entity had incurred approximately $1.6 million of the total estimated project costs. Construction of the medical office building began in the fourth quarter of fiscal year 2012, with completion of the project currently expected in the fourth quarter of fiscal year 2013.

2012 Annual Report F-28

NOTE 16 • FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement  and Disclosures defines and establishes a framework for measuring fair value.  The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels, as follows:

Level 1:  Quoted prices in active markets for identical assets

Level 2:  Significant other observable inputs

Level 3:  Significant unobservable inputs

There were no transfers in and out of Level 1, Level 2 and Level 3 fair value measurements during fiscal years 2012 and 2011. Fair value estimates may be different than the amounts that may ultimately be realized upon sale or disposition of the assets and liabilities.

Fair Value Measurements on a Recurring Basis

The Company had no assets or liabilities recorded at fair value on a recurring basis at April 30, 2012 and 2011.

Fair Value Measurements on a Nonrecurring Basis

Non-financial assets measured at fair value on a nonrecurring basis at April 30, 2012 consisted of real estate held for sale that was written-down to estimated fair value during fiscal year 2012. See Note 2 for additional information on impairment losses recognized during fiscal year 2012. There were no impairment write-downs in fiscal year 2011. The aggregate fair value of these assets by their levels in the fair value hierarchy are as follows:

	(in thousands)
	April 30, 2012
	Total			Level 1			Level 2			Level 3
Real estate held for sale		$	2,067		$	0		$	0		$	2,067

Financial Assets and Liabilities Not Measured at Fair Value

The following methods and assumptions were used to estimate the fair value of each class of financial assets and liabilities. The fair values of our financial instruments approximate their carrying amount in our consolidated financial statements except for debt.

Mortgage Loans Receivable. Fair values are based on the discounted value of future cash flows expected to be received for a loan using current rates at which similar loans would be made to borrowers with similar credit risk and the same remaining maturities. Terms are short term in nature and carrying value approximates the estimated fair value.

Cash and Cash Equivalents. The carrying amount approximates fair value because of the short maturity.

Other Investments. The carrying amount, or cost plus accrued interest, of the certificates of deposit approximates fair value.

Other Debt. The fair value of other debt is estimated based on the discounted cash flows of the loan using current market rates, which are estimated based on recent financing transactions (Level 3).

Lines of Credit.  The carrying amount approximates fair value because the variable rate debt re-prices frequently.

Mortgages Payable. For variable rate loans that re-price frequently, fair values are based on carrying values. The fair value of fixed rate loans is estimated based on the discounted cash flows of the loans using current market rates, which are estimated based on recent financing transactions (Level 3).

2012 Annual Report F-29

NOTE 16 • continued

The estimated fair values of the Company's financial instruments as of April 30, 2012 and 2011 are as follows:

	(in thousands)
	2012				2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
FINANCIAL ASSETS
Mortgage loans receivable	$	0	$	0	$	156	$	156
Cash and cash equivalents		39,989		39,989		41,191		41,191
Other investments		634		634		625		625
FINANCIAL LIABILITIES
Other debt		13,875		13,973		8,200		7,279
Lines of credit		39,000		39,000		30,000		30,000
Mortgages payable		1,048,689		1,087,082		993,803		1,013,713

NOTE 17 • COMMON AND PREFERRED SHARES OF BENEFICIAL INTEREST AND EQUITY

Distribution Reinvestment and Share Purchase Plan.  During fiscal years 2012 and 2011, IRET issued 4.8 million and 1.7 million common shares, respectively, pursuant to its distribution reinvestment and share purchase plan, at a total value at issuance of $34.3 million and $14.5 million, respectively. The shares issued under the distribution reinvestment and share purchase plan during fiscal year 2012 consisted of 1.5 million shares valued at issuance at $10.8 million that were issued for reinvested distributions and approximately 3.3 million shares valued at $23.5 million at issuance that were sold for voluntary cash contributions. The shares issued under the distribution reinvestment and share purchase plan during fiscal year 2011 consisted of 1.3 million shares valued at issuance at $11.4 million that were issued for reinvested distributions and approximately 372,000 shares valued at $3.1 million at issuance that were sold for voluntary cash contributions. IRET's distribution reinvestment plan is available to common shareholders of IRET and all limited partners of IRET Properties. Under the distribution reinvestment plan, shareholders or limited partners may elect to have all or a portion of their distributions used to purchase additional IRET common shares, and may elect to make voluntary cash contributions for the purchase of IRET common shares, at a discount (currently 5%) from the market price.

Conversion of Units to Common Shares.  During fiscal years 2012 and 2011, respectively, approximately 759,000 and 1.0 million Units were converted to common shares, with a total value of $3.5 million and $6.9 million included in equity.

Issuance of Common Shares.  The Company has an effective shelf registration statement under which it has registered common and preferred shares of beneficial interest with an aggregate public offering price of up to $150.0 million. On January 20, 2012, the Company entered into a continuous equity offering program under this shelf registration statement with BMO Capital Markets Corp. ("BMO") as sales agent, pursuant to which the Company may from time to time offer and sell its common shares of beneficial interest having an aggregate gross sales price of up to $100.0 million. Sales of common shares, if any, under the program will depend upon market conditions and other factors to be determined by IRET.  During fiscal year 2012, IRET issued 3.3 million common shares under this program for total proceeds (before offering expenses but after underwriting discounts and commissions) of $24.0 million.  During fiscal year 2011, IRET sold 1.8 million common shares under its previous continuous equity offering program with Robert W. Baird & Co., Incorporated as sales agent, for net proceeds of approximately $15.0 million, before offering expenses but after underwriting discounts and commissions.  The shelf registration statement under which the Company had reserved shares for issuance under this previous continuous equity offering program expired at the end of its three-year life during the second quarter of fiscal year 2012.

Series A Cumulative Redeemable Preferred Shares of Beneficial Interest.  During fiscal year 2004, the Company issued 1,150,000 shares of 8.25% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest for total proceeds of $27.3 million, net of selling costs. Holders of the Company's Series A Cumulative Redeemable Preferred Shares of Beneficial Interest are entitled to receive dividends at an annual rate of 8.25% of the liquidation preference of $25 per share, or $2.0625 per share per annum. These dividends are cumulative and payable quarterly in arrears. The shares are not convertible into or exchangeable for any other property or any other securities of the Company at the election of the holders. However, the Company, at its option, may redeem the shares at a redemption price of $25.00 per share, plus any accrued and unpaid distributions through the date of redemption. The shares have no maturity date and will remain outstanding indefinitely unless redeemed by the Company.

2012 Annual Report F-30

NOTE 18 • QUARTERLY RESULTS OF CONSOLIDATED OPERATIONS (unaudited)

	(in thousands, except per share data)
QUARTER ENDED	July 31, 2011			October 31, 2011			January 31, 2012			April 30, 2012
Revenues – as previously reported	$	59,557		$	60,629		$	60,981		$	60,621
Reclassified to discontinued operations(1)		(393	)		(429	)		(435	)		(433	)
Revenues – as revised for discontinued operations	$	59,164		$	60,200		$	60,546		$	60,188
Net income attributable to Investors Real Estate Trust	$	1,421		$	1,285		$	2,127		$	3,379
Net income available to common shareholders	$	828		$	692		$	1,534		$	2,786
Net income per common share - basic & diluted	$	.01		$	.01		$	.02		$	.03

	(in thousands, except per share data)
QUARTER ENDED	July 31, 2010			October 31, 2010			January 31, 2011			April 30, 2011
Revenues – as previously reported	$	59,042		$	58,765		$	60,121		$	59,026
Reclassified to discontinued operations(1)		(401	)		(398	)		(403	)		(407	)
Revenues – as revised for discontinued operations	$	58,641		$	58,367		$	59,718		$	58,619
Net income attributable to Investors Real Estate Trust	$	1,986		$	5,819		$	11,833		$	444
Net income (loss) available to common shareholders	$	1,393		$	5,226		$	11,240		$	(149	)
Net income (loss) per common share - basic & diluted	$	.02		$	.07		$	.14		$	(.01	)

(1)Revenue that has been reclassified to discontinued operations. See Note 12 for additional information.

The above financial information is unaudited. In the opinion of management, all adjustments (which are of a normal recurring nature) have been included for a fair presentation.

NOTE 19 • REDEEMABLE NONCONTROLLING INTERESTS

Redeemable noncontrolling interests on our Consolidated Balance Sheets represent the noncontrolling interest in a joint venture of the Company in which the Company's unaffiliated partner, at its election, could require the Company to buy its interest at a purchase price to be determined by an appraisal conducted in accordance with the terms of the agreement, or at a negotiated price. Redeemable noncontrolling interests are presented at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to common shares of beneficial interest on our Consolidated Balance Sheets. The Company acquired this interest from its joint venture partner in the third quarter of fiscal year 2012, and following this acquisition, currently has no redeemable noncontrolling interests in consolidated real estate entities. As of April 30, 2012, 2011 and 2010, the estimated redemption value of the redeemable noncontrolling interests was $0, $987,000 and $1.8 million, respectively.  Below is a table reflecting the activity of the redeemable noncontrolling interests.

	(in thousands)
	2012			2011			2010
Balance at beginning of fiscal year	$	987		$	1,812		$	1,737
Net income (loss)		12			(13	)		60
Net distributions		(27	)		(442	)		(177	)
Mark-to-market adjustments		35			(370	)		192
Acquisition of joint venture partner's interest		(1,007	)		0			0
Balance at close of fiscal year	$	0		$	987		$	1,812

2012 Annual Report F-31

NOTE 20 • SUBSEQUENT EVENTS

Common and Preferred Share Distributions. On July 2, 2012, the Company paid a distribution of 51.56 cents per share on the Company's Series A Cumulative Redeemable Preferred Shares to preferred shareholders of record on June 15, 2012. On July 2, 2012, the Company paid a distribution of 13.00 cents per share on the Company's common shares and units, to common shareholders and Unitholders of record on June 15, 2012.

Completed Acquisitions and Dispositions.  Subsequent to the end of fiscal year 2012, on May 8, 2012, the Company closed on its acquisition of a 308-unit multi-family residential property in Topeka, Kansas, for a purchase price totaling $17.7 million, of which approximately $12.5 million consisted of the assumption of existing debt, with the remainder paid in cash. On June 4, 2012, the Company closed on its acquisition of two multi-family residential properties in Lincoln, Nebraska. The 232-unit Colony apartment property was acquired for a purchase price of $17.5 million, of which approximately $14.2 million was paid in cash and the remainder in limited partnership units of the Operating Partnership valued at issuance at approximately $3.3 million. The 208-unit Lakeside Village apartment property was acquired for a purchase price of $17.3 million, of which approximately $13.8 million was paid in cash and the remainder in limited partnership units of the Operating Partnership valued at issuance at approximately $3.5 million. The Company placed mortgage debt of $14.0 million and $13.8 million, respectively, on these two properties on June 4, 2012. The purchase price accounting is incomplete for the acquisitions that closed subsequent to the end of fiscal year 2012.

On June 20, 2012, the Company sold an approximately 16,000 square foot retail property in Kentwood, Michigan, for a sale price of $625,000. On June 21, 2012, the Company sold two condominium units in Grand Chute, Wisconsin, for a sale price of approximately $330,000.

On June 15, 2012 the Company filed a registration statement with the Securities and Exchange Commission to register shares for issuance under the Company's DRIP. This registration statement replaces the previous DRIP registration statement, and all shares remaining unsold under the previous DRIP registration statement were transferred to the new registration statement.  On June 29, 2012, the Company filed a registration statement with the Securities and Exchange Commission to enable the Company to offer and sell, from time to time, in one or more offerings, common and preferred shares of beneficial interest with an aggregate public offering price of up to $150.0 million. This shelf registration statement is in addition to the Company's currently-effective registration statement under which the Company registered, in May 2010, common and preferred shares with an aggregate public offering price of up to $150.0 million, of which $100.0 million has been reserved for issuance under the continuous equity offering program with BMO as sales agent.

2012 Annual Report F-32

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

			Initial Cost to Company						Gross amount at which carried at close of period
Description	Encumbrances(a)		Land		Buildings & Improvements		Costs capitalized subsequent to acquisition		Land		Buildings & Improvements		Total		Accumulated Depreciation			Date of Construction or Acquisition		Life on which depreciation in latest income statement is computed
Multi-Family Residential
11th Street 3 Plex - Minot, ND	$	93	$	11	$	53	$	10	$	16	$	58	$	74	$	(6	)		2008	40 years
4th Street 4 Plex - Minot, ND		107		15		74		13		22		80		102		(8	)		2008	40 years
Apartments on Main - Minot, ND		709		158		1,123		20		178		1,123		1,301		(128	)		1987	24-40 years
Arbors - S Sioux City, NE		4,074		350		6,625		1,143		603		7,515		8,118		(1,256	)		2006	40 years
Ashland - Grand Forks, ND		5,800		741		7,569		0		741		7,569		8,310		(37	)		2012	40 years
Boulder Court - Eagan, MN		3,459		1,067		5,498		2,507		1,282		7,790		9,072		(1,738	)		2003	40 years
Brookfield Village - Topeka, KS		5,463		509		6,698		1,181		611		7,777		8,388		(1,728	)		2003	40 years
Brooklyn Heights - Minot, ND		848		145		1,450		732		204		2,123		2,327		(765	)		1997	12-40 years
Campus Center - St. Cloud, MN		1,350		395		2,244		137		398		2,378		2,776		(319	)		2007	40 years
Campus Heights - St. Cloud, MN		0		110		628		47		112		673		785		(92	)		2007	40 years
Campus Knoll - St. Cloud, MN		900		266		1,512		76		271		1,583		1,854		(216	)		2007	40 years
Campus Plaza - St. Cloud, MN(1)		0		54		311		39		59		345		404		(47	)		2007	40 years
Campus Side - St. Cloud, MN(1)		0		107		615		76		114		684		798		(93	)		2007	40 years
Campus View - St. Cloud, MN(1)		0		107		615		66		109		679		788		(91	)		2007	40 years
Candlelight - Fargo, ND		1,274		80		758		1,051		223		1,666		1,889		(772	)		1992	24-40 years
Canyon Lake - Rapid City, SD		2,989		305		3,958		799		343		4,719		5,062		(1,199	)		2001	40 years
Castlerock - Billings, MT		6,864		736		4,864		1,623		900		6,323		7,223		(2,127	)		1998	40 years
Chateau - Minot, ND		0		122		1,499		469		122		1,968		2,090		(219	)		1998	12-40 years
Cimarron Hills - Omaha, NE		4,947		706		9,588		4,263		1,244		13,313		14,557		(3,786	)		2001	40 years
Colonial Villa - Burnsville, MN		6,918		2,401		11,515		3,404		2,772		14,548		17,320		(3,417	)		2003	40 years
Colton Heights - Minot, ND		477		80		672		358		114		996		1,110		(660	)		1984	40 years
Cornerstone - St. Cloud, MN(1)		0		54		311		42		55		352		407		(48	)		2007	40 years
Cottage West Twin Homes - Sioux Falls, SD		3,758		968		3,762		33		976		3,787		4,763		(52	)		2011	40 years
Cottonwood - Bismarck, ND		16,197		1,056		17,372		2,657		1,312		19,773		21,085		(5,253	)		1997	40 years
Country Meadows - Billings, MT		6,894		491		7,809		1,067		534		8,833		9,367		(2,970	)		1995	33-40 years
Crestview - Bismarck, ND		4,059		235		4,290		1,260		480		5,305		5,785		(2,411	)		1994	24-40 years
Crown - Rochester, MN		2,737		261		3,289		128		266		3,412		3,678		(176	)		2010	40 years
Crown Colony - Topeka, KS		8,473		620		9,956		1,896		782		11,690		12,472		(3,598	)		1999	40 years
East Park - Sioux Falls, SD		1,497		115		2,405		681		156		3,045		3,201		(843	)		2002	40 years
Evergreen - Isanti, MN		2,078		380		2,720		72		380		2,792		3,172		(253	)		2008	40 years
Evergreen II - Isanti, MN		2,185		691		2,784		2		691		2,786		3,477		(39	)		2011	40 years
Fairmont - Minot, ND		367		28		337		43		53		355		408		(36	)		2008	40 years

2012 Annual Report F-33

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

			Initial Cost to Company						Gross amount at which carried at close of period
Description	Encumbrances(a)		Land		Buildings & Improvements		Costs capitalized subsequent to acquisition		Land		Buildings & Improvements		Total		Accumulated Depreciation			Date of Construction or Acquisition		Life on which depreciation in latest income statement is computed
Multi-Family Residential - continued
Forest Park - Grand Forks, ND	$	7,934	$	810	$	5,579	$	6,174	$	1,339	$	11,224	$	12,563	$	(4,118	)		1993	24-40 years
Gables Townhomes - Sioux Falls, SD		1,521		349		1,921		23		364		1,929		2,293		(27	)		2011	40 years
Grand Gateway - St. Cloud, MN		5,691		814		7,086		14		814		7,100		7,914		(47	)		2012	40 years
Greenfield - Omaha, NE		3,650		578		4,122		512		757		4,455		5,212		(504	)		2007	40 years
Heritage Manor - Rochester, MN		4,337		403		6,968		2,144		479		9,036		9,515		(2,989	)		1998	40 years
Indian Hills - Sioux City, IA(1)		0		294		2,921		2,987		375		5,827		6,202		(751	)		2007	40 years
Kirkwood Manor - Bismarck, ND		3,408		449		2,725		1,343		544		3,973		4,517		(1,429	)		1997	12-40 years
Lancaster - St. Cloud, MN		875		289		2,899		868		439		3,617		4,056		(1,213	)		2000	40 years
Landmark - Grand Forks, ND		1,759		184		1,514		845		274		2,269		2,543		(818	)		1997	40 years
Legacy - Grand Forks, ND		16,540		1,362		21,727		5,447		2,041		26,495		28,536		(7,839	)		1995-2005	24-40 years
Mariposa - Topeka, KS		3,067		399		5,110		334		420		5,423		5,843		(1,033	)		2004	40 years
Monticello Village - Monticello, MN		2,958		490		3,756		399		616		4,029		4,645		(892	)		2004	40 years
North Pointe - Bismarck, ND		3,522		303		3,957		243		324		4,179		4,503		(1,089	)		1995-2011	24-40 years
Northern Valley - Rochester, MN		0		110		610		49		119		650		769		(34	)		2010	40 years
Oakmont Estates - Sioux Falls, SD		2,573		423		4,838		409		511		5,159		5,670		(1,334	)		2002	40 years
Oakwood Estates - Sioux Falls, SD		4,184		543		2,784		4,012		764		6,575		7,339		(2,709	)		1993	40 years
Olympic Village - Billings, MT		11,131		1,164		10,441		2,277		1,573		12,309		13,882		(3,695	)		2000	40 years
Olympik Village - Rochester, MN		4,715		1,034		6,109		1,351		1,138		7,356		8,494		(1,370	)		2005	40 years
Oxbow Park - Sioux Falls, SD		4,086		404		3,152		2,395		557		5,394		5,951		(2,304	)		1994	24-40 years
Park Meadows - Waite Park, MN		8,694		1,143		9,099		4,181		1,506		12,917		14,423		(5,118	)		1997	40 years
Pebble Springs - Bismarck, ND		809		7		748		101		42		814		856		(276	)		1999	40 years
Pinehurst - Billings, MT		313		72		687		160		77		842		919		(222	)		2002	40 years
Pines - Minot, ND		136		35		215		149		49		350		399		(113	)		2002	40 years
Plaza - Minot, ND		5,720		793		0		15,028		900		14,921		15,821		(1,246	)		2009	40 years
Pointe West - Rapid City, SD		2,780		240		3,538		1,118		353		4,543		4,896		(1,983	)		1994	24-40 years
Prairie Winds - Sioux Falls, SD		1,488		144		1,816		433		225		2,168		2,393		(1,059	)		1993	24-40 years
Prairiewood Meadows - Fargo, ND		2,456		280		2,531		953		340		3,424		3,764		(1,038	)		2000	40 years
Quarry Ridge - Rochester, MN		11,876		1,312		13,362		581		1,345		13,910		15,255		(1,980	)		2006	40 years
Regency Park Estates - St. Cloud, MN		7,097		702		10,198		140		703		10,337		11,040		(185	)		2011	40 years
Ridge Oaks - Sioux City, IA		3,516		178		4,073		1,936		257		5,930		6,187		(1,755	)		2001	40 years
Rimrock West - Billings, MT		3,443		330		3,489		1,356		417		4,758		5,175		(1,348	)		1999	40 years
Rocky Meadows - Billings, MT		5,338		656		5,726		871		767		6,486		7,253		(2,575	)		1995	40 years
Rum River - Isanti, MN		3,741		843		4,823		74		848		4,892		5,740		(619	)		2007	40 years

2012 Annual Report F-34

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

			Initial Cost to Company							Gross amount at which carried at close of period
Description	Encumbrances(a)		Land		Buildings & Improvements		Costs capitalized subsequent to acquisition			Land		Buildings & Improvements		Total		Accumulated Depreciation			Date of Construction or Acquisition		Life on which depreciation in latest income statement is computed
Multi-Family Residential - continued
Sherwood - Topeka, KS	$	12,716	$	1,145	$	14,684	$	2,500		$	1,503	$	16,826	$	18,329	$	(5,260	)		1999	40 years
Sierra Vista - Sioux Falls, SD		1,477		241		2,097		56			251		2,143		2,394		(66	)		2011	40 years
South Pointe - Minot, ND		9,109		550		9,548		2,139			1,261		10,976		12,237		(4,442	)		1995	24-40 years
Southview - Minot, ND		1,105		185		469		295			236		713		949		(292	)		1994	24-40 years
Southwind - Grand Forks, ND		5,818		400		5,034		2,373			714		7,093		7,807		(2,757	)		1995	24-40 years
Summit Park - Minot, ND		1,176		161		1,898		1,022			266		2,815		3,081		(983	)		1995	24-40 years
Sunset Trail - Rochester, MN		8,373		336		12,814		2,214			522		14,842		15,364		(4,154	)		1999	40 years
Sycamore Village - Sioux Falls, SD		842		101		1,317		457			151		1,724		1,875		(495	)		2002	40 years
Temple - Minot, ND		83		0		0		226			0		226		226		(36	)		2006	40 years
Terrace Heights - Minot, ND		196		29		312		83			40		384		424		(153	)		2006	40 years
Terrace On The Green - Moorhead, MN		2,210		24		1,490		1,792			132		3,174		3,306		(2,200	)		1970	33-40 years
The Meadows - Jamestown, ND(1)		0		590		4,519		1,063			646		5,526		6,172		(1,663	)		1998	40 years
Thomasbrook - Lincoln, NE		6,159		600		10,306		2,753			1,084		12,575		13,659		(3,596	)		1999	40 years
University Park Place - St. Cloud, MN(1)		0		78		450		54			78		504		582		(66	)		2007	40 years
Valley Park - Grand Forks, ND		4,004		294		4,137		2,481			509		6,403		6,912		(2,055	)		1999	40 years
Village Green - Rochester, MN		1,324		234		2,296		581			349		2,762		3,111		(630	)		2003	40 years
West Stonehill - Waite Park, MN		8,935		939		10,167		4,227			1,295		14,038		15,333		(5,911	)		1995	40 years
Westridge - Minot, ND		1,768		68		1,887		55			72		1,938		2,010		(196	)		2008	40 years
Westwood Park - Bismarck, ND		2,041		116		1,909		1,596			258		3,363		3,621		(1,100	)		1998	40 years
Williston Garden - Williston, ND		0		700		8,978		0			700		8,978		9,678		(113	)		2012	40 years
Winchester - Rochester, MN		3,242		748		5,622		1,437			1,000		6,807		7,807		(1,601	)		2003	40 years
Woodridge - Rochester, MN		6,700		370		6,028		1,777			485		7,690		8,175		(2,970	)		1997	40 years
Total Multi-Family Residential	$	311,153	$	38,410	$	387,390	$	113,983		$	48,952	$	490,831	$	539,783	$	(128,834	)
Commercial Office
1st Avenue Building - Minot, ND	$	0	$	30	$	80	$	(39	)	$	33	$	38	$	71	$	270			1981	33-40 years
2030 Cliff Road - Eagan, MN		995		146		835		90			158		913		1,071		(246	)		2007	40 years
610 Business Center IV - Brooklyn Park, MN		7,125		975		5,542		2,886			980		8,423		9,403		(1,363	)		2001	19-40 years
7800 West Brown Deer Road - Milwaukee, WI		10,887		1,455		8,756		2,261			1,475		10,997		12,472		(2,853	)		2003	40 years
American Corporate Center - Mendota Heights, MN		9,016		893		16,768		3,879			893		20,647		21,540		(7,061	)		2002	40 years
Ameritrade - Omaha, NE		3,195		327		7,957		65			327		8,022		8,349		(2,613	)		1999	40 years
Benton Business Park - Sauk Rapids, MN		626		188		1,261		79			188		1,340		1,528		(326	)		2003	40 years
Bismarck 715 East Broadway - Bismarck, ND		2,398		389		0		2,389			422		2,356		2,778		(202	)		2008	40 years

2012 Annual Report F-35

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

			Initial Cost to Company						Gross amount at which carried at close of period
Description	Encumbrances(a)		Land		Buildings & Improvements		Costs capitalized subsequent to acquisition		Land		Buildings & Improvements		Total		Accumulated Depreciation			Date of Construction or Acquisition		Life on which depreciation in latest income statement is computed
Commercial Office - continued
Bloomington Business Plaza - Bloomington, MN	$	0	$	1,300	$	6,106	$	1,562	$	1,311	$	7,657	$	8,968	$	(2,210	)		2001	40 years
Brenwood - Minnetonka, MN		5,250		1,688		12,138		3,675		1,697		15,804		17,501		(4,695	)		2002	40 years
Brook Valley I - La Vista, NE		1,344		347		1,671		81		347		1,752		2,099		(304	)		2005	40 years
Burnsville Bluffs II - Burnsville, MN		1,756		300		2,154		961		359		3,056		3,415		(1,124	)		2001	40 years
Cold Spring Center - St. Cloud, MN		5,822		588		7,808		1,002		592		8,806		9,398		(2,698	)		2001	40 years
Corporate Center West - Omaha, NE		17,315		3,880		17,509		941		4,167		18,163		22,330		(2,507	)		2006	40 years
Crosstown Centre - Eden Prairie, MN		13,687		2,884		14,569		1,620		2,900		16,173		19,073		(3,069	)		2004	40 years
Dewey Hill Business Center - Edina, MN		0		985		3,507		907		995		4,404		5,399		(1,522	)		2000	40 years
Farnam Executive Center - Omaha, NE		12,160		2,188		11,404		0		2,188		11,404		13,592		(1,604	)		2006	40 years
Flagship - Eden Prairie, MN		21,565		1,899		21,638		939		2,013		22,463		24,476		(3,462	)		2006	40 years
Gateway Corporate Center - Woodbury, MN		8,700		1,637		7,763		438		1,651		8,187		9,838		(1,165	)		2006	40 years
Golden Hills Office Center - Golden Valley, MN		18,251		3,018		18,544		3,249		3,018		21,793		24,811		(6,388	)		2003	40 years
Great Plains - Fargo, ND		1,947		126		15,240		10		126		15,250		15,376		(4,845	)		1997	40 years
Highlands Ranch I - Highlands Ranch, CO		8,436		2,268		8,362		427		2,268		8,789		11,057		(1,268	)		2006	40 years
Highlands Ranch II - Highlands Ranch, CO		8,180		1,437		9,549		1,397		1,437		10,946		12,383		(2,298	)		2004	40 years
Interlachen Corporate Center - Edina, MN		9,082		1,650		14,983		1,991		1,668		16,956		18,624		(4,324	)		2001	40 years
Intertech Building - Fenton, MO		4,527		2,130		3,968		505		2,147		4,456		6,603		(492	)		2007	40 years
Mendota Office Center I - Mendota Heights, MN		3,883		835		6,169		367		835		6,536		7,371		(1,889	)		2002	40 years
Mendota Office Center II - Mendota Heights, MN		5,737		1,121		10,085		1,474		1,121		11,559		12,680		(3,777	)		2002	40 years
Mendota Office Center III - Mendota Heights, MN		3,942		970		5,734		258		970		5,992		6,962		(1,684	)		2002	40 years
Mendota Office Center IV - Mendota Heights, MN		4,687		1,070		7,635		578		1,070		8,213		9,283		(2,396	)		2002	40 years
Minnesota National Bank - Duluth, MN		850		287		1,454		171		288		1,624		1,912		(293	)		2004	40 years
Minot 2505 16th Street SW - Minot, ND(1)		0		298		1,724		296		298		2,020		2,318		(113	)		2009	40 years
Miracle Hills One - Omaha, NE		8,895		1,974		10,117		1,284		2,120		11,255		13,375		(2,039	)		2006	40 years
Nicollett VII - Burnsville, MN		0		429		6,931		430		436		7,354		7,790		(1,981	)		2001	40 years
Northgate I - Maple Grove, MN		5,339		1,062		6,358		832		1,077		7,175		8,252		(1,429	)		2004	40 years
Northgate II - Maple Grove, MN		960		359		1,944		144		403		2,044		2,447		(675	)		1999	40 years
Northpark Corporate Center - Arden Hills, MN		12,706		2,034		14,584		1,315		2,034		15,899		17,933		(2,589	)		2006	40 years
Omaha 10802 Farnam Dr - Omaha, NE		5,405		2,462		4,374		0		2,462		4,374		6,836		(150	)		2010	40 years
Pacific Hills - Omaha, NE		16,770		4,220		11,988		1,775		4,478		13,505		17,983		(2,129	)		2006	40 years
Pillsbury Business Center - Bloomington, MN		0		284		1,556		170		299		1,711		2,010		(492	)		2001	40 years
Plaza 16 - Minot, ND		7,591		389		5,444		3,749		591		8,991		9,582		(925	)		2009	40 years
Plaza VII - Boise, ID		1,052		300		3,058		442		351		3,449		3,800		(925	)		2003	40 years
Plymouth 5095 Nathan Lane - Plymouth, MN		1,245		604		1,253		82		636		1,303		1,939		(156	)		2007	40 years

2012 Annual Report F-36

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

			Initial Cost to Company						Gross amount at which carried at close of period
Description	Encumbrances(a)		Land		Buildings & Improvements		Costs capitalized subsequent to acquisition		Land		Buildings & Improvements		Total		Accumulated Depreciation			Date of Construction or Acquisition		Life on which depreciation in latest income statement is computed
Commercial Office - continued
Plymouth I - Plymouth, MN	$	1,197	$	530	$	1,133	$	42	$	530	$	1,175	$	1,705	$	(241	)		2004	40 years
Plymouth II - Plymouth, MN		1,197		367		1,264		41		367		1,305		1,672		(269	)		2004	40 years
Plymouth III - Plymouth, MN		1,473		507		1,495		359		507		1,854		2,361		(417	)		2004	40 years
Plymouth IV & V - Plymouth, MN		7,026		1,336		12,693		1,676		1,338		14,367		15,705		(4,294	)		2001	40 years
Prairie Oak Business Center - Eden Prairie, MN		3,387		531		4,069		1,640		563		5,677		6,240		(1,696	)		2003	40 years
Rapid City 900 Concourse Drive - Rapid City, SD		1,609		285		6,600		503		321		7,067		7,388		(2,040	)		2000	40 years
Riverport - Maryland Heights, MO		19,690		1,891		18,982		696		1,917		19,652		21,569		(2,692	)		2006	40 years
Southeast Tech Center - Eagan, MN		1,727		560		5,496		419		569		5,906		6,475		(1,964	)		1999	40 years
Spring Valley IV - Omaha, NE		800		178		916		60		186		968		1,154		(188	)		2005	40 years
Spring Valley V - Omaha, NE		880		212		1,123		251		240		1,346		1,586		(249	)		2005	40 years
Spring Valley X - Omaha, NE		816		180		1,024		54		189		1,069		1,258		(184	)		2005	40 years
Spring Valley XI - Omaha, NE		800		143		1,094		36		151		1,122		1,273		(189	)		2005	40 years
Superior Office Building - Duluth, MN		1,279		336		2,200		83		336		2,283		2,619		(443	)		2004	40 years
TCA Building - Eagan, MN		7,536		627		8,571		807		684		9,321		10,005		(2,324	)		2003	40 years
Three Paramount Plaza - Bloomington, MN(1)		0		1,261		6,149		1,883		1,298		7,995		9,293		(2,339	)		2002	40 years
Thresher Square - Minneapolis, MN		0		1,094		10,026		1,706		1,104		11,722		12,826		(3,281	)		2002	40 years
Timberlands - Leawood, KS		13,155		2,375		12,218		749		2,495		12,847		15,342		(2,179	)		2006	40 years
UHC Office - International Falls, MN		1,084		119		2,366		80		119		2,446		2,565		(515	)		2004	40 years
US Bank Financial Center - Bloomington, MN		13,728		3,117		13,350		610		3,119		13,958		17,077		(2,532	)		2005	40 years
Viromed - Eden Prairie, MN		626		666		4,197		1		666		4,198		4,864		(1,386	)		1999	40 years
Wells Fargo Center - St Cloud, MN		6,400		869		8,373		1,430		869		9,803		10,672		(1,795	)		2005	40 years
West River Business Park - Waite Park, MN		626		235		1,195		50		235		1,245		1,480		(291	)		2003	40 years
Westgate - Boise, ID		4,254		1,000		10,618		1,911		1,000		12,529		13,529		(3,100	)		2003	40 years
Whitewater Plaza - Minnetonka, MN		3,900		530		4,860		784		577		5,597		6,174		(1,552	)		2002	40 years
Wirth Corporate Center - Golden Valley, MN		3,539		970		7,659		932		971		8,590		9,561		(2,404	)		2002	40 years
Woodlands Plaza IV - Maryland Heights, MO		4,360		771		4,609		917		837		5,460		6,297		(847	)		2006	40 years
Total Commercial Office	$	352,415	$	72,116	$	470,800	$	62,402	$	74,017		531,301	$	605,318	$	(121,422	)
Commercial Medical
2800 Medical Building - Minneapolis, MN	$	5,586	$	204	$	7,135	$	2,184	$	229	$	9,294	$	9,523	$	(1,962	)		2005	40 years
2828 Chicago Avenue - Minneapolis, MN		8,529		726		11,319		5,627		729		16,943		17,672		(2,141	)		2007	40 years
Airport Medical - Bloomington, MN		1,372		0		4,678		0		0		4,678		4,678		(1,380	)		2002	40 years
Barry Pointe Office Park - Kansas City, MO		1,466		384		2,366		104		392		2,462		2,854		(328	)		2007	40 years

2012 Annual Report F-37

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

			Initial Cost to Company							Gross amount at which carried at close of period
Description	Encumbrances(a)		Land		Buildings & Improvements		Costs capitalized subsequent to acquisition			Land		Buildings & Improvements		Total		Accumulated Depreciation			Date of Construction or Acquisition		Life on which depreciation in latest income statement is computed
Commercial Medical - continued
Billings 2300 Grant Road - Billings, MT	$	1,820	$	649	$	1,216	$	0		$	649	$	1,216	$	1,865	$	(54	)		2010	40 years
Burnsville 303 Nicollet Medical (Ridgeview) - Burnsville, MN		8,610		1,071		6,842		1,394			1,071		8,236		9,307		(790	)		2008	40 years
Burnsville 305 Nicollet Medical (Ridgeview South) - Burnsville, MN		5,390		189		5,127		678			189		5,805		5,994		(586	)		2008	40 years
Casper 1930 E 12th Street (Park Place) - Casper, WY(1)		0		439		5,780		162			439		5,942		6,381		(367	)		2009	40 years
Casper 3955 E 12th Street (Meadow Wind) - Casper, WY(1)		0		388		8,858		1,004			388		9,862		10,250		(433	)		2009	40 years
Cheyenne 4010 N College Drive (Aspen Wind) - Cheyenne, WY(1)		0		628		10,272		260			629		10,531		11,160		(625	)		2009	40 years
Cheyenne 4606 N College Drive (Sierra Hills) - Cheyenne, WY(1)		0		695		7,455		39			695		7,494		8,189		(448	)		2009	40 years
Denfeld Clinic - Duluth, MN		1,760		501		2,597		1			501		2,598		3,099		(523	)		2004	40 years
Eagan 1440 Duckwood Medical - Eagan, MN		1,854		521		1,547		519			521		2,066		2,587		(353	)		2008	40 years
Edgewood Vista - Belgrade, MT		0		35		779		0			35		779		814		(80	)		2008	40 years
Edgewood Vista - Billings, MT		1,967		115		1,782		(15	)		115		1,767		1,882		(186	)		2008	40 years
Edgewood Vista - Bismarck, ND		5,492		511		9,193		36			511		9,229		9,740		(1,526	)		2005	40 years
Edgewood Vista - Brainerd, MN		5,427		587		8,999		34			587		9,033		9,620		(1,494	)		2005	40 years
Edgewood Vista - Columbus, NE(1)		0		43		824		0			43		824		867		(85	)		2008	40 years
Edgewood Vista - East Grand Forks, MN		2,997		290		1,383		(31	)		290		1,352		1,642		(143	)		2000	40 years
Edgewood Vista - Fargo, ND		13,310		775		20,870		0			775		20,870		21,645		(2,152	)		2008	40 years
Edgewood Vista - Fremont, NE		609		56		490		42			56		532		588		(141	)		2008	40 years
Edgewood Vista - Grand Island, NE(1)		0		33		773		1			33		774		807		(80	)		2000	40 years
Edgewood Vista - Hastings, NE		628		49		517		40			49		557		606		(153	)		2008	40 years
Edgewood Vista - Hermantown I, MN		16,836		288		9,871		1,501			288		11,372		11,660		(3,020	)		2000	40 years
Edgewood Vista - Hermantown II, MN		6,290		719		10,517		33			719		10,550		11,269		(1,745	)		2005	40 years
Edgewood Vista - Kalispell, MT		629		70		502		72			70		574		644		(149	)		2001	40 years
Edgewood Vista - Minot, ND		9,674		1,045		11,590		0			1,045		11,590		12,635		(423	)		2010	40 years
Edgewood Vista - Missoula, MT		894		109		854		36			109		890		999		(335	)		1996	40 years
Edgewood Vista - Norfolk, NE(1)		0		42		722		0			42		722		764		(74	)		2008	40 years
Edgewood Vista - Omaha, NE		398		89		547		40			89		587		676		(156	)		2001	40 years
Edgewood Vista - Sioux Falls, SD		1,127		314		1,001		(26	)		314		975		1,289		(103	)		2008	40 years
Edgewood Vista - Spearfish, SD		3,419		315		8,584		43			317		8,625		8,942		(1,054	)		2005	40 years
Edgewood Vista - Virginia, MN		14,322		246		11,823		77			246		11,900		12,146		(2,758	)		2002	40 years
Edina 6363 France Medical - Edina, MN(1)		0		0		12,675		1,527			0		14,202		14,202		(1,848	)		2008	40 years
Edina 6405 France Medical  - Edina, MN		9,073		0		12,201		0			0		12,201		12,201		(1,664	)		2008	40 years

2012 Annual Report F-38

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

			Initial Cost to Company						Gross amount at which carried at close of period
Description	Encumbrances(a)		Land		Buildings & Improvements		Costs capitalized subsequent to acquisition		Land		Buildings & Improvements		Total		Accumulated Depreciation			Date of Construction or Acquisition		Life on which depreciation in latest income statement is computed
Commercial Medical - continued
Edina 6517 Drew Avenue - Edina, MN	$	1,164	$	353	$	660	$	529	$	372	$	1,170	$	1,542	$	(401	)		2002	40 years
Edina 6525 Drew Avenue - Edina, MN		0		388		117		0		388		117		505		(2	)		2011	40 years
Edina 6525 France SMC II - Edina, MN		10,339		755		8,054		5,945		1,003		13,751		14,754		(4,603	)		2003	40 years
Edina 6545 France SMC I - Edina MN		31,325		3,480		30,743		11,244		3,480		41,987		45,467		(12,697	)		2001	40 years
Fresenius - Duluth, MN		780		50		1,520		2		50		1,522		1,572		(306	)		2004	40 years
Garden View - St. Paul, MN		1,815		0		7,408		411		0		7,819		7,819		(2,006	)		2002	40 years
Gateway Clinic - Sandstone, MN		1,019		66		1,699		1		66		1,700		1,766		(342	)		2004	40 years
Healtheast St John & Woodwinds - Maplewood & Woodbury, MN		11,538		3,239		18,362		0		3,239		18,362		21,601		(5,489	)		2000	40 years
High Pointe Health Campus - Lake Elmo, MN		5,400		1,305		10,528		1,629		1,329		12,133		13,462		(2,448	)		2004	40 years
Laramie 1072 N 22nd Street (Spring Wind) - Laramie, WY(1)		0		406		6,634		17		406		6,651		7,057		(396	)		2009	40 years
Mariner Clinic - Superior, WI		2,229		0		3,781		83		20		3,844		3,864		(768	)		2004	40 years
Minneapolis 701 25th Avenue Medical - Minneapolis, MN		6,442		0		7,873		809		0		8,682		8,682		(827	)		2008	40 years
Missoula 3050 Great Northern - Missoula, MT		1,920		640		1,331		0		640		1,331		1,971		(60	)		2010	40 years
Nebraska Orthopedic Hospital - Omaha, NE		12,385		0		20,272		1,615		0		21,887		21,887		(4,176	)		2004	40 years
Park Dental - Brooklyn Center, MN		787		185		2,767		0		185		2,767		2,952		(666	)		2002	40 years
Pavilion I - Duluth, MN		5,873		1,245		8,898		31		1,245		8,929		10,174		(1,767	)		2004	40 years
Pavilion II - Duluth, MN		10,808		2,715		14,673		1,937		2,715		16,610		19,325		(4,215	)		2004	40 years
Ritchie Medical Plaza - St Paul, MN		6,686		1,615		7,851		1,252		1,647		9,071		10,718		(1,608	)		2005	40 years
Sartell 2000 23rd Street South - Sartell, MN		3,997		0		11,781		935		0		12,716		12,716		(3,133	)		2002	40 years
Spring Creek-American Falls - American Falls, ID		2,438		145		3,870		0		145		3,870		4,015		(68	)		2011	40 years
Spring Creek-Soda Springs - Soda Springs, ID		878		66		2,134		33		66		2,167		2,233		(38	)		2011	40 years
Spring Creek-Eagle - Eagle, ID		2,243		263		3,775		0		263		3,775		4,038		(66	)		2011	40 years
Spring Creek-Meridian - Meridian, ID		3,706		424		6,724		0		424		6,724		7,148		(117	)		2011	40 years
Spring Creek-Overland - Overland, ID		3,448		687		5,941		0		687		5,941		6,628		(107	)		2011	40 years
Spring Creek-Boise - Boise, ID		3,054		708		4,296		0		708		4,296		5,004		(80	)		2011	40 years
Spring Creek-Ustick - Meridian, ID		0		467		3,833		0		467		3,833		4,300		(63	)		2011	40 years
St Michael Clinic - St Michael, MN		1,951		328		2,259		264		328		2,523		2,851		(321	)		2007	40 years
Stevens Point - Stevens Point, WI		9,797		442		3,888		10,495		442		14,383		14,825		(1,977	)		2006	40 years
Trinity at Plaza 16 - Minot, ND		5,111		568		8,270		697		568		8,967		9,535		(137	)		2011	40 years
Wells Clinic - Hibbing, MN		1,554		162		2,497		1		162		2,498		2,660		(501	)		2004	40 years
Total Commercial Medical	$	278,166	$	32,828	$	414,128	$	53,312	$	33,210		467,058	$	500,268	$	(78,744	)

2012 Annual Report F-39

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

			Initial Cost to Company						Gross amount at which carried at close of period
Description	Encumbrances(a)		Land		Buildings & Improvements		Costs capitalized subsequent to acquisition		Land		Buildings & Improvements		Total		Accumulated Depreciation			Date of Construction or Acquisition		Life on which depreciation in latest income statement is computed
Commercial Industrial
API Building - Duluth, MN	$	868	$	115	$	1,605	$	3	$	115	$	1,608	$	1,723	$	(323	)		2004	40 years
Bloomington 2000 W 94th Street - Bloomington, MN		3,789		2,133		4,097		1,107		2,150		5,187		7,337		(748	)		2006	40 years
Bodycote Industrial Building - Eden Prairie, MN		1,118		198		1,154		800		198		1,954		2,152		(809	)		1992	40 years
Brooklyn Park 7401 Boone Avenue - Brooklyn Park, MN		6,172		1,368		11,643		2,121		1,368		13,764		15,132		(3,367	)		2007	40 years
Cedar Lake Business Center - St. Louis Park, MN		2,334		895		2,810		66		895		2,876		3,771		(363	)		2009	40 years
Clive 2075 NW 94th Street - Clive, IA		2,214		408		2,611		48		408		2,659		3,067		(180	)		2002	40 years
Dixon Avenue Industrial Park - Des Moines, IA		7,028		1,439		10,758		1,611		1,439		12,369		13,808		(3,177	)		2008	40 years
Eagan 2785 & 2795 Highway 55 - Eagan, MN		0		3,058		2,570		0		3,058		2,570		5,628		(272	)		1999	40 years
Fargo 1320 45th Street N - Fargo, ND(1)		0		395		3,518		246		395		3,764		4,159		(176	)		2010	40 years
Lexington Commerce Center - Eagan, MN		2,399		453		4,352		1,842		480		6,167		6,647		(2,200	)		2004	40 years
Lighthouse - Duluth, MN		911		90		1,788		7		90		1,795		1,885		(363	)		2002	40 years
Metal Improvement Company - New Brighton, MN		1,494		240		2,189		78		240		2,267		2,507		(587	)		2009	40 years
Minnetonka 13600 County Road 62 - Minnetonka, MN		2,496		809		434		2,459		809		2,893		3,702		(235	)		2006	40 years
Roseville 2929 Long Lake Road - Roseville, MN		5,572		1,966		7,272		1,722		2,000		8,960		10,960		(1,235	)		1995	40 years
Stone Container - Fargo, ND		1,896		440		6,597		104		440		6,701		7,141		(2,440	)		2001	40 years
Stone Container - Roseville, MN		4,500		810		7,440		202		830		7,622		8,452		(1,952	)		2007	40 years
Urbandale 3900 106th Street - Urbandale, IA		10,800		3,680		10,089		493		3,721		10,541		14,262		(1,414	)		2000	40 years
Winsted Industrial Building - Winsted, MN		394		100		901		48		100		949		1,049		(320	)		2001	40 years
Woodbury 1865 Woodlane - Woodbury, MN		2,746		1,108		2,628		1,884		1,123		4,497		5,620		(532	)		2007	40 years
Total Commercial Industrial	$	56,731	$	19,705	$	84,456	$	14,841	$	19,859		99,143	$	119,002	$	(20,693	)
Commercial Retail
17 South Main - Minot, ND	$	83	$	15	$	75	$	197	$	17	$	270	$	287	$	(194	)		2000	40 years
Anoka Strip Center - Anoka, MN		0		123		602		25		134		616		750		(143	)		2003	40 years
Burnsville 1 Strip Center - Burnsville, MN		393		208		773		207		208		980		1,188		(229	)		2003	40 years
Burnsville 2 Strip Center - Burnsville, MN		312		291		469		214		294		680		974		(172	)		2003	40 years
Champlin South Pond - Champlin, MN		1,604		842		2,703		58		866		2,737		3,603		(576	)		2004	40 years
Chan West Village - Chanhassen, MN		13,396		5,035		14,665		1,895		5,606		15,989		21,595		(3,846	)		2003	40 years
Dakota West Plaza - Minot , ND		372		92		493		30		106		509		615		(80	)		2006	40 years
Duluth Denfeld Retail - Duluth, MN		2,435		276		4,699		122		297		4,800		5,097		(976	)		2004	40 years
Duluth NAPA - Duluth, MN		737		130		1,800		4	��	131		1,803		1,934		(362	)		2004	40 years
Eagan Community - Eagan, MN		1,342		702		1,588		877		703		2,464		3,167		(564	)		2003	40 years
Fargo Express Community - Fargo, ND		991		374		1,420		695		386		2,103		2,489		(354	)		2003-2005	40 years
Forest Lake Auto - Forest Lake, MN(1)		0		50		446		13		50		459		509		(109	)		2003	40 years

2012 Annual Report F-40

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

			Initial Cost to Company						Gross amount at which carried at close of period
Description	Encumbrances(a)		Land		Buildings & Improvements		Costs capitalized subsequent to acquisition		Land		Buildings & Improvements		Total		Accumulated Depreciation			Date of Construction or Acquisition		Life on which depreciation in latest income statement is computed
Commercial Retail - continued
Forest Lake Westlake Center - Forest Lake, MN	$	4,291	$	2,446	$	5,304	$	487	$	2,480	$	5,757	$	8,237	$	(1,336	)		2003	40 years
Grand Forks Carmike - Grand Forks, ND		1,650		184		2,360		2		184		2,362		2,546		(1,033	)		1994	40 years
Grand Forks Medpark Mall - Grand Forks, ND		3,045		681		4,808		251		722		5,018		5,740		(1,547	)		2000	40 years
Jamestown Buffalo Mall - Jamestown, ND		2,710		566		4,962		3,112		950		7,690		8,640		(1,237	)		2003	40 years
Jamestown Business Center - Jamestown, ND		530		297		1,023		1,334		333		2,321		2,654		(730	)		2003	40 years
Kalispell Retail Center - Kalispell, MT		1,352		250		2,250		973		253		3,220		3,473		(682	)		2003	40 years
Lakeville Strip Center - Lakeville, MN		986		46		1,142		852		94		1,946		2,040		(553	)		2003	40 years
Minot 1400 31st Ave - Minot, ND(1)		0		1,026		6,143		4,256		1,026		10,399		11,425		(440	)		2010	40 years
Minot Arrowhead - Minot, ND		0		100		1,690		4,311		103		5,998		6,101		(1,135	)		1973	15 1/2-40 years
Minot Plaza - Minot, ND		812		50		453		147		80	��	570		650		(275	)		1993	40 years
Monticello C Store - Monticello, MN(1)		0		65		770		37		97		775		872		(185	)		2003	40 years
Omaha Barnes & Noble - Omaha, NE		2,559		600		3,099		0		600		3,099		3,699		(1,278	)		1995	40 years
Pine City C-Store - Pine City, MN		298		83		357		12		83		369		452		(85	)		2003	40 years
Pine City Evergreen Square - Pine City, MN		1,831		154		2,646		582		385		2,997		3,382		(792	)		2003	40 years
Rochester Maplewood Square - Rochester, MN(1)		0		3,275		8,610		1,399		3,652		9,632		13,284		(2,924	)		1999	40 years
St. Cloud Westgate - St. Cloud, MN		3,197		950		5,535		1,614		973		7,126		8,099		(1,237	)		2004	40 years
Weston Retail - Weston, WI		0		79		1,575		27		80		1,601		1,681		(369	)		2003	40 years
Weston Walgreens - Weston, WI		3,124		66		1,718		671		67		2,388		2,455		(354	)		2006	40 years
Total Commercial Retail	$	48,050	$	19,056	$	84,178	$	24,404	$	20,960		106,678	$	127,638	$	(23,797	)
Subtotal	$	1,046,515	$	182,115	$	1,440,952	$	268,942	$	196,998	$	1,695,011	$	1,892,009	$	(373,490	)

2012 Annual Report F-41

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands)

			Initial Cost to Company						Gross amount at which carried at close of period
Description	Encumbrances(a)		Land		Buildings & Improvements		Costs capitalized subsequent to acquisition		Land		Buildings & Improvements		Total		Accumulated Depreciation			Date of Construction or Acquisition		Life on which depreciation in latest income statement is computed
Unimproved Land
Bismarck 2130 S 12th St - Bismarck, ND	$	0	$	576	$	0	$	13	$	589	$	0	$	589	$	0			2008
Bismarck 700 E Main - Bismarck, ND		0		314		0		557		871		0		871		0			2008
Eagan Unimproved Land - Eagan, MN		0		423		0		0		423		0		423		0			2006
Georgetown Square - Grand Chute, WI		2,174		1,860		0		0		1,860		0		1,860		0			2006
Kalispell Unimproved Land - Kalispell, MT		0		1,400		0		24		1,411		13		1,424		0			2003
Monticello Unimproved Land - Monticello, MN		0		115		0		2		117		0		117		0			2006
Renaissance Heights - Williston, ND		0		4,600		0		0		4,600		0		4,600		0			2012
River Falls Unimproved Land - River Falls, WI		0		176		0		4		179		1		180		0			2003
Urbandale Unimproved Land - Urbandale, IA		0		5		0		109		114		0		114		0			2009
Weston Unimproved Land - Weston, WI		0		812		0		0		812		0		812		0			2006
Total Unimproved Land	$	2,174	$	10,281	$	0	$	709	$	10,976	$	14	$	10,990	$	0
Development in Progress
1st Avenue Building - Minot, ND	$	0	$	0	$	0	$	321	$	0	$	321	$	321	$	0			1981
Chateau 2nd Floor Renovation - Minot, ND		0		0		0		1,407		0		1,407		1,407		0			1998
Jamestown Medical Office Building - Jamestown, ND		0		0		3		1,608		0		1,611		1,611		0			2012
Laramie 1072 Expansion - Laramie, WY		0		0		0		1,810		0		1,810		1,810		0			2009
Minot Arrowhead Outlot - Minot, ND		0		0		75		0		0		75		75		0			2011
Minot IPS - Minot, ND		0		416		63		1,771		416		1,834		2,250		0			2012
Quarry Ridge 2 - Rochester, MN		0		942		12,037		2,457		942		14,494		15,436		0			2011
Williston Garden - Williston, ND		0		700		154		3,835		700		3,989		4,689		0			2011
Total Development in Progress	$	0	$	2,058	$	12,332	$	13,209	$	2,058	$	25,541	$	27,599	$	0
Total	$	1,048,689	$	194,454	$	1,453,284	$	282,860	$	210,032	$	1,720,566	$	1,930,598	$	(373,490	)

(a) Amounts in this column are the mortgages payable balances as of April 30, 2012. These amounts do not include amounts owing under the Company's multi-bank line of credit or under the Company's construction loans.

(1) As of April 30, 2012, this property was included in the collateral pool securing the Company's $60.0 million multi-bank line of credit. The Company may add and remove eligible properties from the collateral pool if certain minimum collateral requirements are satisfied. Advances under the facility may not exceed 60% of the value of properties provided as security.

2012 Annual Report F-42

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES

April 30, 2012

Schedule III

REAL ESTATE AND ACCUMULATED DEPRECIATION

Reconciliations of total real estate carrying value for the three years ended April 30, 2012, 2011, and 2010 are as follows:

	(in thousands)
	2012			2011			2010
Balance at beginning of year	$	1,770,798		$	1,800,519		$	1,729,585
Additions during year
Multi-Family Residential		47,433			4,210			4,270
Commercial Office		0			6,836			2,096
Commercial Medical		47,408			19,249			38,125
Commercial Industrial		0			3,914			3,066
Commercial Retail		2,316			7,169			0
Improvements and Other		35,176			23,183			29,343
		1,903,131			1,865,080			1,806,485
Deductions during year
Cost of real estate sold		(3,498	)		(86,994	)		(1,217	)
Impairment charge		(127	)		0			(1,678	)
Other(A)		(7,497	)		(7,288	)		(3,071	)
Balance at close of year(B)	$	1,892,009		$	1,770,798		$	1,800,519

Reconciliations of accumulated depreciation/amortization for the three years ended April 30, 2012, 2011, and 2010, are as follows:

	(in thousands)
	2012			2011			2010
Balance at beginning of year	$	328,952		$	308,626		$	262,871
Additions during year
Provisions for depreciation		51,093			49,375			48,152
Deductions during year
Accumulated depreciation on real estate sold		(758	)		(25,366	)		(737	)
Other(C)		(5,797	)		(3,683	)		(1,660	)
Balance at close of year	$	373,490		$	328,952		$	308,626

(A) Consists of miscellaneous disposed assets and assets moved to Development in Progress.

(B) The net basis of the Company's real estate investments for Federal Income Tax purposes was approximately $1.4 billion, $1.2 billion and $1.3 billion at April 30, 2012, 2011 and 2010, respectively.

(C) Consists of miscellaneous disposed assets.

2012 Annual Report F-43