Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Applicant is a North Dakota Real Estate Investment Trust. As of October 31, 1999, it had 21,139,971 Shares of Beneficial Interest outstanding.

Item 1. Financial Statement - Second Quarter Fiscal 2000

The accompanying condensed consolidated financial statements of Investors Real Estate Trust and its subsidiaries (collectively, the "Company") included herein, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments necessary (of a normal recurring nature only) to present fairly the financial position of the Company as of October, 31, 1999, and results of operations and cash flows for the stated periods have been included. The Condensed Consolidated Balance Sheet at April 30, 1999, contained herein, was derived from audited financial statements, but does not include all disclosures included in the 1999 Annual Report and applicable under generally accepted accounting principles. Certain information and footnote disclosures normally included in interim financial statements prepared in accordance with generally accepted accounting principles have been omitted. The results of operations for the six months ended October 31, 1999, are not necessarily indicative of operating results for the entire year.
 
 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operation. We are pleased to report that IRET's financial results for the second quarter of Fiscal 2000 exceeded expectations. The addition of new properties to our real estate portfolio, continued strong occupancy rates, rent increases and capital gains from real estate sales resulted in record levels of Funds from Operations and Net Income.

Funds from Operations. Funds from Operations for the second quarter of Fiscal 2000 increased to $3,956,967, from the year earlier figure of $2,954,143, an increase of $1,002,824 or 34%. On a per share basis, Funds from Operations for the second quarter were $.20 compared to the $.17 per share earned in the same period of Fiscal 1999, an increase of 18%. For the first six months of Fiscal 2000, Funds from Operations increased to $7,307,012 from the year earlier figure of $5,557,372, an increase of $1,749,730 (31%). Per share results were $.3678 per share, versus the year earlier amount of $.3311 per share, an increase of 10%. This increase in Funds from Operations resulted primarily from increased rental income ($23,451,669 versus $18,428,714) caused by the addition of new rental properties to our portfolio, continued strong occupancy rates and increased rents.

Net Taxable Income. For the second quarter, net taxable income was $3,419,205 compared to $2,814,387 in the prior year, an improvement of $604,818. For the six month period, net taxable income was $5,242,461, compared to $4,374,393 in the prior year.

Operations. We continue to be very pleased with the performance of our investment portfolio. Occupancy rates continue to be at high levels in most of the communities in which we operate. The new properties that we are acquiring are performing very well and we are experiencing good acceptance of the new apartment communities coming on line in Grand Forks, Jamestown and Billings. We are building another 27-unit building in Jamestown, North Dakota and have started construction on our 219-unit Trail Ridge Apartment Community in Rochester, Minnesota.

Sale of Properties. Capital gain income for the second quarter was $1,519,919, compared to $1,341,899 for the prior year. Properties sold during the second quarter were:

Acquisitions. We were also successful during the second quarter in acquiring a number of attractive properties to add to our investment portfolio. The following properties were purchased or completed and added to our portfolio during the second quarter and are producing income:

Pending Acquisitions. The following apartment complexes are currently under construction by IRET:

     IRET has entered into purchase agreements for the following properties:

Financial Condition. IRET continues to maintain a very strong balance sheet. On October 31, 1999, cash and marketable securities totaled $15,556,806, compared to the $7,412,236 on hand at the beginning of the current fiscal year. Total assets were $371,451,854, compared to $291,493,311 at the beginning of the fiscal year. During the six month period, liabilities have increased to $243,065,715, from the beginning figure of $191,229,475. Shareholder's equity increased to $101,465,751 from $85,783,294 on April 30, 1999.

Increased Dividend. IRET paid a regular dividend of 12.6 cents per share on October 1, 1999, to shareholders of record at the close of business on September 15, 1999. This was an increase from the 12.4 cents per share dividend paid on July 1, 1999, and was the 114th consecutive quarterly dividend paid by IRET.
 
 

Item 1. Legal Proceedings.

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Form 8-K filed September 7, 1999, to report sales of Shares of Beneficial Interest and use of proceeds under Registration then in effect.

INVESTORS REAL ESTATE TRUST
(Registrant)
 
 

By: /S/ Thomas A. Wentz, Sr.
    Thomas A. Wentz, Sr.
    Vice-President

Date: December 9, 1999