Hello and welcome to the Investors Real Estate Trust first quarter fiscal 2010 earnings conference call. (Operator Instructions) Please note this event is being recorded. Now I’d like to turn the call over to Mr. Tim Mihalick. Please go ahead sir.

Good morning, and welcome to Investors Real Estate Trust’s first quarter fiscal 2010 earnings conference call. IRET’s earnings release and supplemental disclosure package were posted to our website and also furnished on Form 8-K on Wednesday, September 9. In the earnings release and supplemental disclosure package, Investors Real Estate Trust has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with the requirements set forth in Regulation G. If you have not received a copy, these documents are available on IRET’s website at www.iret.com in the Investor Relations section. Additionally, a webcast and transcript of this call will be archived on the IRET website for one year. At this time management would like to inform you that certain statements made during this call which are not historical may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Investors Real Estate Trust believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, Investors Real Estate Trust can give no assurance that the expectations will be achieved. Factors and risks that could cause actual results to differ materially from those expressed or implied by forward-looking statements are detailed in Wednesday’s earnings release and from time to time in Investors Real Estate Trust’s filings with the SEC. Investors Real Estate Trust does not undertake a duty to update any forward-looking statements. With me today from management are Thomas Wentz Sr., President and Chief Executive Officer; Diane Bryantt, Senior Vice President and Chief Financial Officer; and Tom Wentz Jr., Senior Vice President of Asset Management and Finance. At this time I would like to turn the call over to Tom Wentz Sr. for his opening remarks.

Thank you, Tim. We are pleased to report the financial results for the first quarter of our 2010 fiscal year which ended on July 31. Our fiscal year 2010 which began on May 1 of this year will be IRET’s 40th year in business. In addition to summarizing our first quarter financial results we will discuss our balance sheet including cash on hand, credit lines and maturing mortgages; our real estate portfolio including current occupancy levels, leasing activity, acquisition and disposition plans; and our impairment testing procedures and policies. We will also discuss our dividend policy, our acquisition and disposition pipeline, our plans and goals for fiscal 2010 and future years, and of course we will welcome your questions and do our very best to answer them. Diane Bryantt will review IRET’s first quarter financial results in more detail, but I will mention a few highlights. Real estate revenues for the quarter increased to $60.8 million from $58.8 million in the prior year, an increase of 3.4%. Real estate operating expenses increased 2.6% from $23.8 million to $24.4 million, resulting in a small increase in net operating income generated by our real estate portfolio. This small increase in net operating income was offset by a 3% increase in interest expense as well as increased corporate administrative expenses. Thus funds from operations for the quarter at $0.20 per share in unit was unchanged from the first quarter of our prior fiscal year. Total FFO for the quarter did increase to $16.5 million from the year earlier amount of $16.1 million, but shares and units outstanding during the quarter were also higher than a year ago, leaving the per share FFO figures unchanged. Turning now to IRET’s balance sheet, at quarter end on July 31, 2009, cash on hand totaled $43.9 million…

Thank you, Tom. This morning I will give a brief overview of our first quarter results and provide some details regarding mortgage debt activity and refinancing plans. Results for the first quarter of fiscal year 2010 showed a 3.4% increase in revenue, even though we had a decrease in occupancy levels in all property segments in comparison to the first quarter of the prior year. The increase in revenue was primarily due to stabilization of our prior year acquisition and to a lesser extent rental income increases on stabilized properties and lease termination fees compared to the same period in the prior fiscal year. Our expenses increased 4%, most notably in real estate taxes, interest expense and depreciation amortization expense. While our asset management team is working hard to maintain and renew tenants, management is also continuing its focused efforts to offset the trend of reduced revenue stream by decreasing expenses. As stated before, one major area we are focusing on to enhance our bottom line is our previously discussed internal property management initiative. We are well underway within our commercial segments in bringing property management in-house and the process has started in our multi-family residential segment. Our goals are to reduce expenses by centralizing and therefore maximizing our purchasing power, better controlling disbursements and better insuring the application of efficient and consistent operations at all our properties. Of much concern and focus for our company is the management of our maturing debt. During the quarter we closed on two multi-family refinanced loans, with approximately $213,000 of cash out, with interest rates ranging from 6.41 to 6.53%. Subsequent to the quarter end, we have also closed on three additional multi-family loans for approximately cash out of $8.2 million, with interest rate ranges of 5.69 to 5.97%. These multi-family loans were…

Thank you, Diane. Overall a very routine and quiet quarter for IRET’s property operations, as confirmed by the supplemental information provided in the 8-K filed earlier this week. I will confine my comments to the overall status of the credit markets as applicable to IRET and then a summary overview of IRET’s property operations by segment and market. It is certainly the same story line on the debt side in that the vast majority of lenders are not reliably active in IRET’s markets, with the exception of the three agency lenders Freddie Mac, Fannie Mae and FHA or HUD, on the apartment side or senior side only. Bank lending has remained an option for IRET and one we will ultimately be required to implement if the traditional longer term lenders such as the life companies and the Wall Street CMBS market remain out of the debt markets for another 18 to 24 months. The issue with banks becoming the main source of leverage for IRET will require a modification of IRET’s leverage strategy, as bank lending is traditionally shorter fixed terms, shorter amortization periods of 20 to 25 years and at least for now in contrast to lending practices earlier this decade, much lower leverage of 60 to 65% of appraised value using actual operating history rather than pro forming numbers and with higher levels of recourse. Current lending terms will limit IRET’s ability to pull cash from its commercial portfolio at the time of refinance to the extent bank debt is used. Each of these requirements do not match up well with IRET’s strategy of long-term fixed debt, longer amortizations to maximize cash flow as well as the positive impacts of inflation and rent growth over the term of the loan, and of course the protection afforded by non-recourse…

Thank you. (Operator Instructions) Your first question comes from Carol Kemple - Hilliard Lyons.

In your 10-Q you talk about a recent acquisition of a warehouse property. What attracted you all to that acquisition?

That was an UPREIT transaction that was accretive and required no cash to acquire.

Okay.

And that’s part of our continuing focus on deploying our cash carefully, so we are aggressively seeking UPREIT transactions that are accretive. And that was one of those.

And what caused the rise in administrative expense during the quarter?

Well, I think as we’ve indicated before, we are anticipating growth and we have been incurring some software and personnel costs in anticipation of that growth. And we are internalizing property management and so the expenses as we gear up to do that have caused administrative expenses to increase. But as we go forward we will be harvesting the revenues that formerly we’ve been paying to third party vendors.

Your next question comes from Christopher Lucas - Robert W. Baird & Co., Inc. Christopher Lucas - Robert W. Baird & Co., Inc.: Tom, you’ve made some mention of recourse on loans. Can you describe the level of recourse on the mortgage loans?

This is Tom Jr. I guess to answer that question, Chris, what we’re seeing on the bank financing side to the extent we’re exploring that as an option is a request for full recourse or a substantial portion of the loan, bringing the loan to value non-recourse portion down to maybe 50% or less. And that seems to really be a standard request out in the bank lending world. To the extent life companies are active in the market and are quoting IRET commercial projects, there has been some request for limited recourse but again it’s generally to cover the loan amount above a certain percentage level, 60 or 65%. Christopher Lucas - Robert W. Baird & Co., Inc.: So in exchange for higher proceeds you would be providing some recourse?

Well I think the answer to that on the bank side in exchange for any proceeds you’re going to be providing recourse. On the life company I think for higher leverage it’s clear if it’s available, the life companies are going to expect some level of recourse, whether it’s 10 or 15% of the loan amount. But at least at this point the bank lenders that IRET has been working with, it’s pretty much a universal request for total or near total recourse. Christopher Lucas - Robert W. Baird & Co., Inc.: What’s the appetite and mind set been of the banks over the last six months? How has that changed?

Well I think on the financing side what we’ve seen is certainly a number of mid to smaller banks relatively active in the market, primarily in Minnesota. So I would say there certainly is capital for projects in the $10 million or below range and I think there’s a reasonable amount of competition from that standpoint. The larger lenders, either the super regionals or the major banks clearly are not active in the commercial real estate space, in our markets and for our product types and for the type of debt we’re looking for. Christopher Lucas - Robert W. Baird & Co., Inc.: And then just on the acquisitions front, if you could just sort of talk a little bit about you know maybe where you think cap rates have moved and how much further you’re hoping to see them move.

Well I think they’ve moved for commercial property. Apartments of course where financing is still available, cap rates have obviously moved there as well but not to the same degree. Commercial properties certainly are in the eights and a really compelling acquisition I think still the first number is going to be an eight. And distressed properties, obviously there are nines and tens and depending on the degree of disarray in the particular property. I think that’s one thing we as I alluded to earlier, we read about all of the maturing debt and all of the compelling acquisition opportunities that are going to be available and I believe that’s probably correct. But I would say that at this point, the current owners are not as yet willing to really sell at a fire sale price. So there’s much more product available at much more reasonable pricing and certainly nine caps may soon be the rule for commercial property. They’re probably not quite at that level yet for the seller who has the luxury of waiting.

Your next question comes from James Bellessa - D. A. Davidson & Co. James Bellessa - D. A. Davidson & Co.: You indicated that you may have several possible transactions in the pipeline and you also mentioned more follow on offerings of possibility. Do you pre-fund your acquisitions and transactions or do you?

Yes. I guess a cardinal rule of this company for its entire history is that we have the equity capital necessary to make an acquisition before we seriously negotiate to do so and that remains unchanged. What’s different in this situation, while we still have sufficient equity capital we are mindful of the maturing commercial mortgages that are two years or three years out. And we continue to be very careful, but also lacking is reliable debt for commercial property. So we will continue to be careful until we have both the equity piece and the debt piece lined up. And while we are negotiating on lots of properties, we want to be sure that both our equity capital and real estate long-term debt is available. So I think we’re going to see some acquisitions, although we didn’t have any in this past quarter, but it will continue to be limited until the credit debt markets return to somewhere closer to normal. James Bellessa - D. A. Davidson & Co.: You indicated or Diane went through some recently closed loans. Were those since the end of the quarter?

Well, not all of them. The large one, we did the Mendota Heights office park refinancing, that was after the quarter. James Bellessa - D. A. Davidson & Co.: The $28 million loan?

Correct. Yes. James Bellessa - D. A. Davidson & Co.: When I read the subsequent events I don’t see it listed as something itemized there. Is it not required to be outlined in that subsequent event portion of your 10-Q?

I’m not sure. I think we described it. I thought we had described it. I’ll have to check.

It’s not in the subsequent events as its normal course of business but it is detailed in the 8-K and the debt maturing schedule I believe on Page 12 where you’ll see the Mendota is listed there. But there is a footnote with it saying that it was refinanced and closed on August 3.

Your next question comes from [John Huss – Schroders]. [John Huss – Schroders]: I have a quick question on the future potential acquisitions of properties. Do you see those as more UPREIT structure or cash or a mixture? And then if it was a semi-distress situation, is that one that’s [inaudible] of an UPREIT?

Since 1997 when we converted to the UPREIT structure we have pursued UPREIT acquisitions quite aggressively and have done a lot and we continue to negotiate on several at this point. That is obviously attractive to us because little if any cash is required to complete that acquisition. As far as acquisition of distressed properties, we have always focused very carefully on being able to pay our dividends. And so we overly our nearly 40 year history have not done any speculative construction nor have we acquired properties that are vacant or under severe stress on the theory that some day, some how you will return that asset to an income producing property. That doesn’t fit our model of paying consistent dividends. So we’ve focused on acquiring properties that generate the income necessary to pay our dividends. So a simple analysis that each property that we acquire should immediately be able to fund its portion of the dividend on the equity capital that we’ve used to acquire that asset. You miss some great opportunities doing that, but on the other hand as our record shows you also miss the devastation of having a lot of assets that are not producing income. So I don’t think we’re going to be active in acquiring vacant properties.

Thank you. At this time we have no further questions. I would like to ask management if they have any closing remarks.

This is Tom Sr. I just want to thank everyone for participating in our earnings call. This will be my last as the Chief Executive Officer and I intend to certainly continue with this company. I’ve enjoyed the nearly 40 year ride that we have enjoyed and I think I can safely say that we intend to implement the very same business plan that we’ve used consistently throughout this period of time. We’re going to stay the course with the conservative approach that we have had and focus on our shareholders and on continuing to deliver a dividend and to pay that dividend in cash. And having focused on this obligation for nearly 40 years has served all of us well and I’m expecting that we will continue to do that for many years to come. Thank you all for participating.

This concludes today’s conference. Thank you for attending and you may now disconnect.