Good morning. And welcome to the Investors Real Estate Trust Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode [Operator Instructions]. After today's presentation, there'll be an opportunity to ask questions [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Steven Swett, Investor Relations. Please go ahead.

Thank you, and good morning. IRET's Form 10-Q was filed with the SEC yesterday after the close; additionally, our earnings release and supplemental disclosure package, have been posted on our Web site, at www.iret.com and filed yesterday on Form 8-K. Before we begin our remarks this morning, I want to remind you that during the call, we will be making forward-looking statements about future events based on current expectations and assumptions. These statements are subject to risks and uncertainties due to factors discussed in yesterday's Form 10-Q, during this conference call and in the risk factors section of our Annual Report and other filings with the SEC. Actual results may differ materially and we do not undertake any duty to update any forward-looking statements. Please note that our conference call today will contain references to financial measures such as funds from operations or FFO and net operating income or NOI that are non-GAAP measures. Reconciliations of non-GAAP financial measures are contained in yesterday's press release and definitions of such non-GAAP financial measures can be found in our most recent supplemental operating and financial data, both of which are available in the Investor Relations section of our Web site at www.iret.com. With me today from management are Tim Mihalick, IRET's Chief Executive Officer; Mark Decker Jr., President and Chief Investment Officer; and Ted Holmes, Executive Vice President and Chief Financial Officer. I will now turn the call over to Tim Mihalick. Tim?

Thank you, Steve and good morning everyone. During the fiscal third quarter, we continued to make significant progress on our strategic plan to transform IRET into a leading Midwest focused multifamily REIT. During the quarter and subsequent to quarter end, we completed $210 of asset sales, further simplifying our portfolio and using proceeds to de-lever our balance sheet. In addition, we put in place a new $250 million unsecured revolver which further enhances our financial flexibility. While we are pleased with these accomplishments, we are not satisfied. The performance of our existing portfolio remains a challenge, and our operating results were below our expectations. We are continuing to see stability in our energy impacted markets and face new supply in several areas. Compounding these factors, we suffered near-record snowfall in North Dakota this winter, which impacted both revenue and expenses during the quarter. Ted will more fully review our operating results for the quarter and our updated guidance for the year later in the call. Over the past three years, we have made monumental progress in our effort to transform this Company. We invested, either through acquisition or development, more than $607 million in newer or brand new high quality apartment communities. We've sold more than $756 million of non-core commercial and senior housing properties, and achieved good execution and pricing, utilizing proceeds to fund our new investments and significantly de-lever the Company. Long-term, we believe these efforts to focus our Company on multifamily will have significant benefits, including greater operating efficiency, simplified management and strong earnings and NAV growth. There is still work to be done, but our team is energized as we move forward with our goal to drive long-term growth and create value for our shareholders. Turning to our fiscal 2017 third quarter results. In the quarter, we reported FFO of $0.09 per share. However, net of one-time mortgage prepayment penalties and the write off of unamortized issuance cost later to our redemption of the Series A preferred stock, our FFO would have been $0.12 per share. While we continue our efforts to shift our portfolio towards newer and higher valued apartment communities, our legacy apartment portfolio continues to be impacted by the softness on North Dakota markets. Minot and Williston remained challenged by an oversupply of units. However, our occupancies are up quarter-over-quarter and on the year-to-date basis. And we are hopeful that we will see stabilization of results in these markets in the coming quarters. Our other North Dakota markets, Grand Forks and Bismarck, have also experienced new supply, requiring us to price competitively to maintain our occupancies. Now, I'd like to update you on our most recent accomplishments in executing our strategic plan to transform our portfolio and improve our operations. As previously announced, last quarter, we executed contracts to sell our entire senior housing portfolio. In January, we sold five senior housing properties for approximately $70 million, and subsequent to fiscal of third quarter end, we completed the sale of another 18 senior housing properties for $116 million. To-date, we have sold 31 of our 34 senior housing properties for combined sales price of approximately $229 million, and we expect the remaining sales to close in the coming months, providing another $50 million of sales proceeds to IRET. Also, during the third quarter, we sold one retail property for $4 million. And after quarter-end, we sold one medical office property for $21 million. The sale of the MOB was executed under a tenant purchase auction, and as part of the transaction, the tenant paid up the fee of $3.4 million to cover rent through August 31, 2018 and reimbursement for our loan prepayment penalty. We are extremely pleased with the execution on all of these sales. Additionally, we continue to enhance our portfolio quality through the completion of our development program and continued value-add enhancements to our existing assets. We remain on track with our multi-family development at Monticello Crossings located at Minnesota, which was 82.7% leased or committed at quarter-end. The final phase opened earlier this month and we are pleased we've gotten great traction in lease-up as we opened last August. We believe there is further strength in Minneapolis suburbs that have been less impacted by new supply deliveries. Also, during the fiscal third quarter, we continued with our work to enhance our portfolio's attractiveness to perspective renters and reduce ongoing capital expenditures through our value-add rehab programs. And we modeled 267 units for total investment of $2.7 million. We are seeing tangible results with this program, as 993 units we have remodeled in fiscal year 2017 to-date, have achieved an annual rental rates increase of 11.5%. And we expect that we will continue this program through the next two years. The past year has certainly presented challenges, but IRET is a better Company. We have an enhanced portfolio that we believe can produce better long-term growth, abundant liquidity, and a balance sheet to provide us flexibility we need to further improve and diversify our Company. And we've strengthened our management team and Board significantly. As we move forward, I'm excited to build on this base in the quarters and years to come. I will now turn the call over to Mark.

Thank you, Tim and hello everyone. Let me begin with a discussion of our improved capital structure. As Tim mentioned, we have nearly completed the sale of our senior housing portfolio with only three senior housing properties remaining; all of which are under contractual agreements. During the fiscal third quarter, we sold five senior housing properties and one retail property for a total of $74 million. We used the proceeds to redeem all of the outstanding Series A 8.25 preferred stock for $29 million, and repaid $13.5 million of debt with the weighted average interest cost of 3.5%. Subsequent to quarter end, we sold 18 senior housing properties and one medical office building for $136 million, and utilized proceeds to repay $21 million of outstanding debt at a weighted average interest rate of 5%. In addition, subsequent to quarter end, we applied $91 million to our new line of credit to lower interest costs and decrease availability. The importance of these efforts, which continued the accomplishments of the previous quarters, was demonstrated with our new expanded and unsecured credit facility we announced in January. The new $250 million facility has a four year initial term and one year extension option, and $250 million accordion feature, which provides us with the lower cost and more flexible capital source. Our ability to access this larger and more flexible facility is a big step in allowing us to be opportunistic as we move forward. And we are thankful for the continued support of our bank group. Finally, as detailed in our release, we are sitting today with meaningful liquidity and lower leverage, which at quarter end, stood at 7.1 times net debt to adjusted EBITDA. IRET has never had more firepower and we are confident that with our reinvigorated focus on disciplined in capital allocation, we will successfully grow the quality and size of our cash flows through targeted acquisitions at the best price possible. As we look ahead, we still have work to do to complete our transformation efforts, given that we still have a handful of commercial properties, as well as our MOB's. Net of the sale we completed earlier this month, our MOB portfolio includes 30 properties; all high quality and the majority of which are on campus, which we believe will attract significant investor interest and achieve very attractive pricing. As we consider our options with regard to this portfolio, we intend to be deliberate in our approach, allowing us to best time sales with potential investments in order to recycle capital as efficiently as possible. With regard to acquisitions, we continue to target newer higher quality apartment communities in the larger Midwestern MSA's. Markets remained competitive for the type of assets we are pursuing, so we're looking at situations that offer components to provide a more attractive stabilized return. We have a number of assets under review, leveraging our relationships with developers and private real-estate owners in our markets to find the best available opportunities. And we will update you as we've news to announce. I'll now turn the call over to Ted.

Thank you, Mark and good morning everyone. Beginning with our financial results, for the fiscal quarter ended January 31, 2017, we reported net income available to shareholders of $19.2 million as compared to $36.9 million for the same period of the prior year. The decrease was primarily attributable to the impact of properties sold during the year, and a one-time gain related to debt forgiveness in the third quarter of last year, partially offset by gains of properties sold during the quarter. Funds from operations, or FFO, for the fiscal third quarter was $12.7 million or $0.09 per share and unit as compared to $54.5 million or $0.40 per share and unit for the same period of the prior year. Adjusting for the impact of one-time gains and losses related to the debt repayments, FFO would have been $0.12 per share in the fiscal third quarter of 2017 compared to $0.14 per share in the fiscal third quarter of last year. For the nine-months ended January 31, 2017, net income available to shareholders was $3.4 million as compared to $52.4 million for the same period of the prior year. The decrease was due to the same reasons I just noted. FFO for the nine-month period ending January 31, 2017 was $45 million or $0.33 per share and unit as compared to $84.7 million or $0.61 per share and unit for the same period of the prior year. Adjusting for the impact of one-time gains and losses related to debt repayments, FFO per share would have been $0.35 per share for the nine-month period, ending January 31st compared to $0.44 per share in the prior year to-date period. Moving to our multifamily same-store performance. Our third quarter same-store multifamily revenue decreased by 1.8% year-over-year, driven primarily by 2.3% reduction in occupancy as we felt the continued impact of competing new supply in several of our markets. Average rental rates, across our portfolio were up 0.5%; however, excluding the energy impacted markets of Minot and Williston, average rental rates were up 3.4%, which we attribute to the implementation of our revenue management system. Property operating expenses increased 5.7% quarter-over-quarter, driven by increases in snow renewable cost, which were more than doubled compared to last year’s third quarter period. Net of the impact of this item, property operating expenses would have increased just 1%. As a result, same-store multifamily NOI for the fiscal third quarter decreased 7.4%, which was below our expectation for the quarter. We saw weaker results in our North Dakota markets and top line revenue pressure during our most challenging leasing period of the year. These factors contribute to the change in same-store NOI guidance that I will discuss shortly. With regard to our balance sheet, as of January 31, 2017, we had total debt outstanding of approximately $885 million, including $16 million of construction financing secured by our Monticello Crossings apartment development. During the quarter, we put in place long-term financing for our 71 France community in Edina, Minnesota with a 10 year non-recourse $56 million mortgage loan with a fixed interest rate of 3.47%. Additionally, as Mark mentioned, in January, we entered into a new unsecured $250 million revolving credit facility on a pro forma basis, reflecting the impact of property and financing transactions completed since quarter end. The availability on this line is approximately $140 million. As a result of our deleveraging and financing efforts, our capital position is strong; leverage, as reflected by net debt to trailing 12 months EBITDA at quarter end, was 7.1 times; and our upcoming maturity schedule is manageable with less than $90 million maturing in the next two years. Finally, I'll now take a few moments to discuss our revised guidance. As you'll note in our earnings release filed yesterday, we've reduced and tightened our guidance range to $0.41 to $0.43 per share from our previous guidance of $0.48 to $0.52 per share, which is an $0.08 adjustment at the midpoint. The drivers of this change were, first, a $0.04 reduction from lower than expected multifamily portfolio operating results, partially offset by a reduction in expected G&A. Our new multifamily same-store NOI target of negative 4% to 6% reflects the impacts of continued weakness in the energy impacted markets, the impact of new supply in the other North Dakota markets and higher expenses than budgeted. Second, a $0.04 reduction due to prepayment penalties, and the write off of unamortized fees related to the redemption of our Series A preferred stock, partially offset by lower interest costs. As an additional note, while we had not incorporated the impacted sales in our prior guidance, the reduction in income related to $74 million of sales completed during the quarter and $136 million of sales subsequent to quarter end, was offset by a $3.4 million lease termination fee received on the sale of a medical office building completed in March. Also, as a reminder, our new guidance range reflects our view of current market conditions and does not incorporate the impact of any transactions or capital markets activity, other than the transactions completed as of this date, including potential transactions discussed as part of the Company's strategic initiatives. With that, I will turn the call over to the operator for your questions.

We will now begin the question-and-answer session [Operator Instructions]. The first question comes from Rob Stevenson of Janney. Please go ahead.

Tim -- in your prepared comments, Tim, did you say that those three remaining senior housing was under contract for $50 million, five-o, or for $15 million? It was breaking up during that part of the…

$50 million is the number.

And so when you take a look at that and the remaining commercial assets in the medical office, I mean what's the ballpark range in terms of additional dispositions to get you to a -- in terms of the dollar value, to get you to a pure play apartment REIT at this point?

I’m going to let Mark take that.

So just to make sure, I understand the question. The question is how much more will you sell before you are out of all of your non-apartment assets?

Yes, if I had the $50 million, plus some sort of ballpark range for the medical office plus whatever is left in the commercial and retail stuff. What does that get to me? Is that an incremental $400 million of assets or six, I mean just trying to get a understanding as to what left from a dollar value after you've sold $136 million this quarter already?

So assuming the conclusion of that, we’ll be out of senior housing and then we will have a few office and retail, and then predominantly medical office. And I'm going to give the other half of your answer, which is we’ll have roughly $30 million plus of NOI which I would prefer not to throw a number on for you today. But most of that NOI would be NOI similar to some of the medical office REITs in terms of quality and character.

And then have you guys utilized the buyback program yet?

We did not. We were not in the market last quarter.

Okay, or in since the end of January, I don’t know when your blackout started with earnings and stuff like that. But I guess the question in terms of the stock down here at these levels. Is the buyback program a safety net in case the stock drops further? Or when you guys take a look at the stock price today and the implied cap rate and the value? And what you could deploy into similar apartment assets as the stock attractive to you at this point to be buying a bigger share of reinvesting into your own assets on the apartment side?

So the short answer is, yes. We do look at the stock, and we do look at it relative to other alternatives. We do put a premium on liquidity and having cash and growing. And to answer your question directly, we won't comment on that until the end of the quarter, just because we don’t want to dip our hand on whether we’re in market or not; but we do look at the stock. And as you know, we have $50 million of buying power that we’re three months into, and it is a real alternative that we consider.

And then when you’re looking, I mean at acquisitions these days on the apartment side. I mean have you experienced enough of the pull-back in pricing and/or any increased availability in terms of quality assets that you would want to buy as you look forward to things that the acquisition environments getting a little bit better? Or is it still as challenging as it's been over the last six-nine months?

I would say the biggest challenge so far and we're spending most of our time in Minneapolis. The biggest challenge post election has been really only one large institutional asset one or two assets have actually traded. And there hasn’t been a lot that's on market. So we are pursuing a lot of things on market and off market. We do expect there is more that's actually going to be listed here in the next 60 days. And the brokerage firms will tell you that I think they'll do similar volume this year as last year. But it's certainly going to be back weighted, because almost nothing is launched.

Then one last one for Ted, you talked about [71] net debt to EBITDA at the end of the quarter. What is that pro forma for the $136 million of disposition that you've already completed thus far this quarter?

If I'm understanding your question, you’re asking whether that number will move that ratio will move?

Well, I assume that you used a decent amount of the proceeds to pay down debt. And so that your net debt to EBITDA today should probably be lower than what it was at the quarter end. And just was trying to figure out how much lower and if in fact that's true?

It is lower. We'll report that figure at the end of the quarter. But I would tell you that it's meaningful. I don't know that it's a full percentage point, but it has certainly a drop since quarter end.

[Operator Instructions] I'm seeing no further questions. This concludes the question-and-answer session. I would now like to turn the conference back over to management for any closing remarks.

Thank you. And thank you everyone for taking time out of your morning to get the update on IRET. We continue to move ahead and are excited about the future. And we'll continue to work hard to search out the best investments for IRET and for our shareholders. And for those of you on the East Coast, hopefully, you can dig out of this upcoming snow which is on its way. So, have a good day. Thanks.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines. Have a great day.