Real Estate Acquisition Philosophy and Current Criteria

Fundamental in approach, opportunistic by design, conservative with assumptions, focused on location, diverse in product, and accommodative to sellers

Founded in 1970, Investors Real Estate Trust (IRET) is among the oldest active REITs in the country. Today, IRET owns and manages a diversified portfolio of apartments, commercial and medical office buildings, senior housing facilities, retail centers, and industrial properties located predominantly in the Upper Midwest.

On average, IRET seeks to acquire $100 - $200 million of conforming real estate assets each year to build its $1.6 billion portfolio of properties.

IRET continuously evaluates property investments that will complement and augment our existing real estate portfolio. While the majority of property acquisitions are stabilized, well leased assets, we are opportunistic in our search and welcome the chance to evaluate the potential upside in underperforming and/or undercapitalized situations.

General Acquisition Criteria

Minimum Investment	$3 Million
Quality	Class B+ or better
Leasing	60% - 100%
Debt	IRET typically purchases on an all cash basis, but we will also underwrite assets with assumable in-place debt.
Yield	At stabilization, assuming a 70% LTV at prevailing market interest rates, a property must generate a cash yield of at least 200 basis points over the cost of debt. In addition, the investment must be expected to deliver an unleveraged IRR in excess of the stabilized cap rate at acquisition.
Tax Deferral	If preferred, IRET will structure a transaction whereby property owners may contribute their real estate to our portfolio in exchange for operating partnership units (UPREIT), or other like-kind exchanges, to assist a seller in managing their tax obligations.
Opportunities	Information packages should be submitted to the contact below and contain at least the following: Pricing expectations Description of the property Detailed rent roll Three year's revenue and expense information Site plan and/or survey Market information History of capital expenditures Photographs of property Maps Ownership structure Tax information
Contact	Mr. Timothy Mihalick President & CEO Investors Real Estate Trust 3015 16th Street SW, Suite 100 PO Box 1988 Minot, ND 58702-1988 Direct: (701) 837-7101 E-mail: tmihalic@iret.com
Disclaimer	The above information is provided by IRET as general criteria for screening purposes only. IRET may deviate from the above criteria and amend the information at any time without notice.