Good morning, everyone, and welcome to the Fourth Quarter Fiscal 2012 Earnings Conference Call. [Operator Instructions] Please also note that today's event is being recorded. I would now like to turn the conference call over to Ms. Anderson. Ms. Anderson, Please go ahead.

Good morning, and welcome to Investors Real Estate Trust's Fourth Quarter and Year End Fiscal 2012 Earnings Conference Call. IRET's earnings release and supplemental disclosure package for the 3 and 12 months, ended April 30, 2012, are posted to our website and also furnished on Form 8-K on June 29. In the earnings release and supplemental disclosure package, Investors Real Estate Trust have 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 iret.com in the Investors 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 its 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 Friday's earnings release and from time to time in the Investors Real Estate Trust 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 Tim Mihalick, President and Chief Executive Officer; Diane Bryantt, Executive Vice President and Chief Financial Officer; and Tom Wentz, Jr., Executive Vice President and Chief Operating Officer. At this time, I would like to turn the call over to Tim Mihalick for his opening remarks.

Thank you, Lindsey, and good morning, everyone. It's my pleasure to have the opportunity to speak to you again about IRET. IRET recently completed its 42nd year in existence and I am happy with the results. We made progress over the last year, but I believe more importantly, we have set the tone to allow IRET to expand on its history. As I look back over my last -- my transcripts of the last 2 earnings call, I noticed that the team continues to be focused on the strategic plan we have put into operation. In-line with that plan, we have closed on a number of acquisitions within our core markets. Most notably, the Villa West Apartments, a 308-unit complex located in Topeka, Kansas; Colony in Lakeside Village Apartments, 440 units located in Lincoln, Nebraska; and the acquisition of 40 acres of land in Williston, North Dakota, which will allow the construction of up to 850 units in the housing short city in the Bakken Oil Shale Formation. Additionally, as the City of Minot continues its recovery from the devastating flood of 2011, IRET was able to put 32 units of a 64-unit complex of the flooded Chateau Apartments back into operation. Additionally, we brought back online the flooded Arrowhead Shopping Center. Also, to stay consistent with our strategic focus, I would note that we have exited the State of Michigan, subsequent to the end of our fiscal year, the sale of our property in Kentwood, Michigan. As we move forward into fiscal year 2013 and beyond, we recognize the need to continue to reduce the age of our portfolio, through dispositions of older properties and recycling those proceeds with the acquisition of newer property properties and development projects. We realize that as we make our portfolio "younger", these properties…

Thank you, Tim. And good morning, everyone. Today, I will give a brief summary of highlights and results of operations in the fourth quarter and year-to-date as reported in the 8-K earnings press release, which was issued on Friday, June 29. In the fourth quarter, revenues increased to $61 million, a 2.7% increase over the prior quarter and basically unchanged from the third quarter of fiscal 2012. This quarter-over-quarter increase in revenue is primarily due to acquisitions of property. Occupancy percentage in our stabilized segment increased in 3 of our 5 segments, with multifamily showing continued increases and Commercial Office and medical with lower comparative results. Tom Wentz, Jr. will discuss later more of what we see in the marketplace as far as leasing trends and expectations for this segment. Also in the fourth quarter, we received proceeds from the insurance claim on our flooded properties for loss of rents and replacement of assets. The Arrowhead Shopping Center loss of rent was $347,000 and Chateau, $319,000, for a total loss of rents reimbursement for the fiscal year of approximately $700,000. The gain due to involuntary conversion realized as of April 30 on the Arrowhead Shopping Center was $274,000. At this time, we are finalizing the final settlement on Arrowhead and anticipate final settlement of this recovery effort to be no later than the second quarter of fiscal '13. At this time, we know there will be additional gain on Arrowhead, but unable to estimate. Regarding Chateau, 32 units of the Chateau Apartments that were flooded were opened for occupancy on May 15. It was fully-leased at that date. However, the second 32-unit was completely destroyed by fire on February 22. Given the additional complications due to the fire, we again are unable to estimate at this time the potential involuntary…

Thank you, Diane. Consistent with my past presentations, this morning, I will provide an overview of the fourth quarter that ended April 30, 2012, as well as provide a review of the recently completed fiscal year, covering the trailing 12 months of operations. I will briefly cover the credit markets as they pertain to IRET, and then wrap up with an overview of IRET's segment operations, as well as pending acquisitions, dispositions and development. Our fourth quarter results continue to trend of overall improved operations. At the start of the year, we outlined a number of areas of focus in an attempt to mitigate what we expected to be generally challenging economic conditions with no meaningful improvement in the Commercial Office segment. Our primary focus has been on finalizing our internal management initiative to improve occupancy, grow rents and decrease expenses. With the exception of Commercial Office occupancy, we made significant progress in these areas. Second, we shifted our capital to strategically grow the strongest segments of our portfolio, multifamily and medical, as well as the strongest markets in our portfolio, the Bakken energy region of North Dakota and certain multifamily markets. Our review of our acquisitions confirms again solid progress in this area as well. We added quality multifamily and medical assets, highlighted by both commercial and multifamily development in the heart of the Bakken energy field. Third, since the Commercial Office market has remained tangled in a very challenging environment for what is now approaching almost 6 years and our move to internal management is substantially behind us, going forward, we plan to commit additional staffing to focus on this segment with the goal of improving performance, as well as carefully evaluating all operational and strategic options as it pertains to our commercial portfolio. Over the past 12…

[Operator Instructions] Our first question comes from Mike Salinsky from RBC Capital Markets.

You've been pretty active on the multifamily front there in the Bakken, any plans on the industrial or office front there?

Mike, this is Tom. Yes, we're certainly looking at those opportunities. As you're probably aware, we leased our former corporate headquarters to Hess oil and we're currently engaged in industrial build-to-suit for a subsidiary of Superior Energy, which is an NYSE company. But I guess to answer your question, yes, we're looking at all available development opportunities that would be energy-related, including industrial and Commercial Office.

Okay, that's helpful. Second question, just given we're a couple of months now into peak-leasing season on the multifamily side and the result were as of the end of April, can you give us just an update what you're seeing on the multifamily side in May and June?

Well, really no change to the trend. I guess, I haven't looked at the detailed numbers yet, but we're not seeing any material deviation, really, from the trends we've seen over the last year. I think, as I mentioned during my comments, at approximately 95% effectively leased. At that point, really, our focus was on growing rents with our existing customers and controlling expenses. There's really not much more upside and occupancy on a portfolio basis and so that's really where our focus is -- are going to be.

But as you have been pushing rent, you haven't seen any material drop-off in occupancy?

No, our apartment portfolio continues to function very well, and I guess we don't expect to see any change in the trends that we've identified that we've reported over the last 12 months.

Okay, that's helpful. Third question, if you can, in the prepared comments there, there was a mention about reallocating some resources to the commercial side to kind of focus in on some opportunities. Where do you see the opportunities on the commercial side given the resource -- your decision to kind of reallocate some resources towards that? And should we expect any kind of repositioning similar to what we see on the multifamily side over the last 18 months?

Mike, this is Tim speaking. As we continue take a look at our Commercial Office and the suburban office. We take a look at both the Twin Cities and the Omaha markets. And as we look at both of those, I think the push is going to be to lease-up and to find occupancy increases there to potentially position those assets for either refinance or to move into potential sales. I think those will be where we see opportunity on the commercial side in both of those markets.

Okay. Then finally, in terms of the development, their funding, how would you -- for the Williston project, would that be funded with recycling proceeds, additional debt, ATM issuance or what?

Yes, I think a combination of all of those. I think we obviously see opportunities in front of us. And as Tom touched on, when you take a look at the returns in the Bakken play, those are opportunities that we want to take advantage of. And so we will use all sources of equity as we look to move forward.

[Operator Instructions] Our next question comes from Carol Kemple.

On the property management expense, what would be a good run rate going forward? I know it dropped a lot. I know there was a $700,000 benefit you all mentioned. What -- where would you expect it to be next year?

Well, in multifamily expense, that's difficult to predict. I mean, if you look in some of the detail, obviously, there's pressure on real estate taxes in a number of our jurisdictions and markets just because of the states and local municipal government pressures. But I think we still have a little bit of room there due to our internal management. This past year, we brought in the last significant piece of our portfolio in Topeka, Kansas. And so I'm optimistic that we have a little bit more room there even though we're coming out of a year where we had some favorable trends, but I think where we're at can be improved slightly. Again, apartments from an expense standpoint can kind of get away from you if we have spikes in vacancy or other unforeseen pressures that require a little bit more money on maintenance and turn. But I think we're pretty comfortable that we've got a little bit more room to go there.

Carol, it's Tim. And if you take a look at that fourth quarter, what exhibited there as a run rate would be a good indicator as you look to move forward.

Okay. And then it was about a year ago that you all made the change to your dividend policy, I think? Where are you all at now with what you're thinking on the dividend going forward?

As we continue to look at that, that's something we'll analyze on a quarterly basis. I think as we talked a year ago, we set the dividend with the expectation to continue with that $0.13. That's something the board will decide on, but we certainly want to see an increase in earnings as we move forward as we make those decisions.

[Operator Instructions] Our next question comes from James Bellessa from D.A. Davidson.

Two questions. Maybe because I got on just a little before -- after you started. Where do you find the presentation slides that you referred to?

It should have came up on the call, right, as I understand it?

On the webcast.

On the webcast.

Okay. And that will be posted on a replay or something like that...

Yes, they will be.

Okay. And then the settlement claim that you received or claim against the bankruptcy estate of a former tenant, how much was that?

A little bit over $700,000.

Now from an outsider's point of view, that was an unpredictable event, is that correct?

That would be correct. It was a claim back in 2009. Yes, nothing was on the books as expectations for payment.

Okay. Do you have any other events like this possible in the coming quarters?

Well, this is Tom. Jim, that's difficult to predict. I mean, at any given time, I mean, we've got credit events with the tenants. I mean, we've always aggressively pursued those and filed the proofs of claim to the fullest extent, but that's just something that's really speculative to look at. I mean, I guess, the only guidance would really be to go look at bad debt over the years and try and come up with some guestimate, but very difficult to estimate. And I would say there's nothing really material out there that's pending.

Okay. And what was the explanation of why these proceeds reduced property management expenses?

Jim, that would be because of recovery of bad debt written-off or of rents written-off. So bad debt expense is a function within property management expenses overall. That's where those entries to the allowances are made, so that's the category it would fall into.

[Operator Instructions] And ladies and gentlemen, at this time, I'm showing no additional questions. I'd like to turn the conference call back over to management for any closing remarks.

Thank you. This is Tim Mihalick again. I just again want to offer my thanks for your attention this morning. With the realization that we in IRET expect to continue to grow in our core markets, obviously, the tenant we've identified, we'll work hard to improve earnings for the benefit of our shareholders. We certainly look forward to those of you that we've been out and seeing on the road, and hope to see more of you as we have the opportunity to get out and tell the IRET story as we move forward. Thanks again for your interest.

Ladies and gentlemen, we thank you for joining today's conference call. It has now concluded. You may now disconnect your telephone lines.