Investors Real Estate Trust Series A Cum (IRETP, Financial) filed Quarterly Report for the period ended 2010-07-31.
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The continuation of the current economic downturn and capital market disruptions have and could continue to have a negative impact on us, and adversely affect our future results of operations. In the event of further deterioration in our operating results, or absent the ability to continue to refinance our existing properties and access new borrowings, we may need to consider additional cash preservation alternatives, including scaling back development activities, capital improvements and renovations and reducing the level of distributions to shareholders. Company management and the Board continue to monitor closely the Company's operating results, in particular cash flows from operations, which are an important factor in our ability to sustain our common share distribution at its current rate. For the first quarter of fiscal year 2011, we paid distributions of $13.8 million in cash and $2.8 million in common shares pursuant to our DRIP to common shareholders and unitholders of the Operating Partnership, as compared to net cash provided by operating activities of $8.6 million and funds from operations of $16.8 million. At a meeting subsequent to the end of the first quarter of fiscal year 2011, the Company's Board of Trustees decided to maintain the Company's common share/unit distribution at its current level ($0.1715 per share/unit), but the Company cannot rule out the need in future for a reduction in the current amount of the distribution.
During the first quarter of fiscal year 2011, we negotiated a Settlement and Lease Modification Agreement with the parent company of our tenants in IRET s Fox River senior housing project in Grand Chute, Wisconsin, Stevens Point senior housing project in Stevens Point, Wisconsin, and IRET s Edgewood Vista senior housing projects. The tenants in these projects, affiliates of Sunwest Management, Inc., declared bankruptcy in December 2008. Under the terms of this agreement, IRET received a cash payment of $2.2 million to settle our claims in bankruptcy. The Stevens Point lease was modified to reduce the Annual Rent due under the lease to $1.0 million (or approximately $85,000 per month), compared to $1.4 million (or approximately $113,000 per month) under the lease as originally written. The Stevens Point lease was assigned to an acquiring entity formed by Blackstone Ventures. The Fox River lease is not being assumed or assigned, and we are continuing to evaluate our options in regard to this project; at this time we consider that, subject to market conditions, we will proceed to market the Fox River property.
Revenues for the three months ended July 31, 2010 were $62.0 million compared to $60.8 million in the three months ended July 31, 2009, an increase of $1.2 million or 2.0%. The increase in revenue for the three months ended July 31, 2010 resulted primarily from properties acquired in Fiscal 2010.
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Highlight of Business Operations:
During the first quarter of fiscal year 2011, as discussed below in the Property Acquisitions section of this Management's Discussion and Analysis of Financial Condition and Results of Operations, the Company acquired, on July 15, 2010, two medical office buildings located in, respectively, Billings, Montana and Missoula, Montana, for a total purchase price of approximately $5.2 million, consisting of cash of approximately $957,000 and the assumption of existing debt, with an interest rate of 7.06% and a maturity date of December 31, 2016, in the amount of approximately $4.3 million. The two medical office buildings contain approximately 14,705 square feet and 14,640 square feet, respectively, of leasable space. During the first quarter of fiscal year 2011, the Company completed construction of a single-tenant office/warehouse facility in Fargo, North Dakota. The cost to construct the facility was approximately $3.9 million, including the cost of the land plus imputed construction interest.The continuation of the current economic downturn and capital market disruptions have and could continue to have a negative impact on us, and adversely affect our future results of operations. In the event of further deterioration in our operating results, or absent the ability to continue to refinance our existing properties and access new borrowings, we may need to consider additional cash preservation alternatives, including scaling back development activities, capital improvements and renovations and reducing the level of distributions to shareholders. Company management and the Board continue to monitor closely the Company's operating results, in particular cash flows from operations, which are an important factor in our ability to sustain our common share distribution at its current rate. For the first quarter of fiscal year 2011, we paid distributions of $13.8 million in cash and $2.8 million in common shares pursuant to our DRIP to common shareholders and unitholders of the Operating Partnership, as compared to net cash provided by operating activities of $8.6 million and funds from operations of $16.8 million. At a meeting subsequent to the end of the first quarter of fiscal year 2011, the Company's Board of Trustees decided to maintain the Company's common share/unit distribution at its current level ($0.1715 per share/unit), but the Company cannot rule out the need in future for a reduction in the current amount of the distribution.
During the first quarter of fiscal year 2011, we negotiated a Settlement and Lease Modification Agreement with the parent company of our tenants in IRET s Fox River senior housing project in Grand Chute, Wisconsin, Stevens Point senior housing project in Stevens Point, Wisconsin, and IRET s Edgewood Vista senior housing projects. The tenants in these projects, affiliates of Sunwest Management, Inc., declared bankruptcy in December 2008. Under the terms of this agreement, IRET received a cash payment of $2.2 million to settle our claims in bankruptcy. The Stevens Point lease was modified to reduce the Annual Rent due under the lease to $1.0 million (or approximately $85,000 per month), compared to $1.4 million (or approximately $113,000 per month) under the lease as originally written. The Stevens Point lease was assigned to an acquiring entity formed by Blackstone Ventures. The Fox River lease is not being assumed or assigned, and we are continuing to evaluate our options in regard to this project; at this time we consider that, subject to market conditions, we will proceed to market the Fox River property.
Revenues for the three months ended July 31, 2010 were $62.0 million compared to $60.8 million in the three months ended July 31, 2009, an increase of $1.2 million or 2.0%. The increase in revenue for the three months ended July 31, 2010 resulted primarily from properties acquired in Fiscal 2010.
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