INVESTORS REAL ESTATE TRUST (NYSE:IRET) Files An 8-K Material Modification to Rights of Security Holders

INVESTORS REAL ESTATE TRUST (NYSE:IRET) Files An 8-K Material Modification to Rights of Security Holders
Item 3.03. Material Modifications to Rights of Security Holders.

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On September28, 2017,Investors Real Estate Trust (the “Company”) adopted Articles Supplementary (the “Articles Supplementary”) to the Company’s Articles of Amendment and Third Restated Declaration of Trust, as amended and supplemented, classifying and designating 8,000,000 of the Company’s authorized shares of beneficial interest, no par value per share, as 6.625% SeriesC Cumulative Redeemable Preferred Shares (Liquidation Preference $25.00 Per Share), no par value per share (“SeriesC Preferred Shares”). A summary of the material terms of the SeriesC Preferred Shares is set forth under the caption “Description of the SeriesC Preferred Shares” in the Company’s prospectus supplement, dated September26, 2017 and filed with the Securities and Exchange Commission (the “SEC”) on September26, 2017 (the “Prospectus Supplement”). The summary of the SeriesC Preferred Shares in the Prospectus Supplement and the following description of the SeriesC Preferred Shares are qualified in their entirety by reference to the Articles Supplementary, which are hereby incorporated by reference into this Item 3.03 and which were filed as Exhibit3.2 to the Company’s Registration Statement on Form8-A, filed with the SEC on September28, 2017.

The Company adopted the Articles Supplementary in connection with its previously announced underwritten public offering of SeriesC Preferred Shares, as further described below.

The SeriesC Preferred Shares rank senior to the Company’s common shares of beneficial interest, no par value per share (“Common Shares”), with respect to distribution rights and rights upon the voluntary or involuntary liquidation, dissolution or winding up of the Company. The SeriesC Preferred Shares rank on a parity with the Company’s 7.95% SeriesB Cumulative Redeemable Preferred Shares of Beneficial Interest, no par value per share (the “SeriesB Preferred Shares”), with respect to distribution rights and rights upon the voluntary or involuntary liquidation, dissolution or winding up of the Company.

In addition to other preferential rights, each holder of SeriesC Preferred Shares is entitled to receive a liquidation preference, which is equal to $25.00 per SeriesC Preferred Share, plus any accrued and unpaid distributions to, but not including, the date of the payment, before the holders of Common Shares, in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company. Furthermore, the Company is restricted from declaring or paying any distributions, or setting aside any funds for the payment of distributions, on the Common Shares or SeriesB Preferred Shares or, subject to certain exceptions, redeeming or otherwise acquiring Common Shares or SeriesB Preferred Shares, as applicable, unless full cumulative distributions on the SeriesC Preferred Shares have been declared and either paid or set aside for payment in full for all past distribution periods.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information about the Articles Supplementary set forth under Item 3.03 of this Current Report on Form8-K is hereby incorporated by reference into this Item 5.03.

IRET,Inc. (the “General Partner”), as the general partner of IRET Properties, A North Dakota Limited Partnership (the “Operating Partnership”), has amended the Agreement of Limited Partnership of the Operating Partnership (the “Partnership Agreement”) to provide for the issuance of up to 8,000,000 6.625% SeriesC Cumulative Redeemable Preferred Units (liquidation preference $25.00 per unit) (the “SeriesC Preferred Units”). Such amendment is filed as Exhibit3.2 to this Current Report on Form8-K and incorporated by reference herein. The Company expects to contribute the net proceeds from the sale of the SeriesC Preferred Shares in the Preferred Shares Offering (as defined below) to the Operating Partnership in exchange for a like number of SeriesC Preferred Units. The SeriesC Preferred Units have economic terms that mirror the terms of the SeriesC Preferred Shares. The issuance of the SeriesC Preferred Units will be exempt from registration to Section4(a)(2)of the Securities Act of 1933, as amended.

The SeriesC Preferred Units will rank, as to distributions and upon liquidation, senior to the Partnership Units and on a parity with the Operating Partnership’s 7.95% SeriesB Cumulative Redeemable Preferred Units and other parity units the Operating Partnership may issue in the future.

This description of the material terms of the amendment to the Partnership Agreement is qualified in its entirety by reference to the amendment to the Partnership Agreement, which is filed as Exhibit3.2 to this Current Report on Form8-K and is hereby incorporated by reference into this Item 5.03.

Item 7.01. Regulation FD Disclosure.

On September26, 2017, the Company issued a press release announcing the pricing of an underwritten public offering of SeriesC Preferred Shares. A copy of that press release is furnished as Exhibit99.1 to this Current Report on Form8-K and is hereby incorporated by reference into this Item 7.01.

Item 8.01. Other Events.

On September26, 2017, the Company and the Operating Partnership entered into an underwriting agreement (the “Underwriting Agreement”) with the several underwriters named on Schedule I therein (the “Underwriters”), for whom BMO Capital Markets Corp. and Raymond James& Associates,Inc. are acting as representatives, to which the Company agreed to offer and sell 4,000,000 SeriesC Preferred Shares (or up to 4,600,000 SeriesC Preferred Shares if the Underwriters exercise their option to purchase up to an additional 600,000 SeriesC Preferred Shares) at a public offering price of $25.00 per share (the “Preferred Shares Offering”). In the Underwriting Agreement, the Company and the Operating Partnership made certain customary representations, warranties and covenants and agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The closing of the Preferred Shares Offering occurred on October2, 2017.

The Company estimates that the net proceeds from the Preferred Shares Offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, will be approximately $96.7 million (or approximately $111.2 million if the Underwriters exercise in full their option to purchase additional SeriesC Preferred Shares).

The SeriesC Preferred Shares have been registered on the Company’s shelf registration statement on FormS-3 (File No.333-220378), which became effective upon filing with the SEC on September7, 2017.

This description of the material terms of the Underwriting Agreement is qualified in its entirety by reference to the Underwriting Agreement, which is filed as Exhibit1.1 to this Current Report on Form8-K and is hereby incorporated by reference into this Item 8.01. For a more detailed description of the Underwriting Agreement, see the disclosure under the caption “Underwriting” contained in the Prospectus Supplement, which disclosure is hereby incorporated by reference into this Item 8.01.

In connection with the filing of the Underwriting Agreement, the Company is filing as Exhibit5.1 to this Current Report on Form8-K the opinion of its counsel, Stinson Leonard Street LLP, with respect to matters of North Dakota law.

Item 9.01. Financial Statements and Exhibits

(d)Exhibits.

Exhibit No.

Description

1.1

Underwriting Agreement, dated September26, 2017, by and among Investors Real Estate Trust,IRET Properties, A North Dakota Limited Partnership and the several Underwriters listed on ScheduleI attached thereto, for whom BMO Capital Markets Corp. and Raymond James& Associates,Inc. are acting as representatives.

3.1

Articles Supplementary to the Company’s Articles of Amendment and Third Restated Declaration of Trust designating the Company’s 6.625% SeriesC Cumulative Redeemable Preferred Shares, no par value per share (incorporated by reference to Exhibit3.2 of the Company’s Registration Statement on Form8-A filed with the SEC on September28, 2017).

3.2

Third Amendment to the Agreement of Limited Partnership of IRET Properties, A North Dakota Limited Partnership.

5.1

Opinion of Stinson Leonard Street LLP, dated October2, 2017, regarding the legality of the 6.625% SeriesC Cumulative Redeemable Preferred Shares.

23.1

Consent of Stinson Leonard Street LLP (included in Exhibit5.1 hereto).

99.1

Press release dated September26, 2017.


INVESTORS REAL ESTATE TRUST Exhibit
EX-1.1 2 a17-22400_4ex1d1.htm EX-1.1 Exhibit 1.1   Execution Version   INVESTORS REAL ESTATE TRUST   UNDERWRITING AGREEMENT   4,…
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About INVESTORS REAL ESTATE TRUST (NYSE:IRET)

Investors Real Estate Trust is a self-advised equity real estate investment trust (REIT). The Company’s business consists of owning and operating income-producing real estate properties. Its segments include Multifamily, Healthcare and All Other. Its investments consist of multifamily and healthcare properties located primarily in the upper Midwest states of Minnesota and North Dakota. It conducts its business operations through its operating partnership, IRET Properties, which is principally engaged in acquiring, owning, operating and leasing real estate. It invests in multifamily properties and commercial properties that are leased to single or multiple tenants, usually for approximately five years or longer. As of April 30, 2016, the Company held for investment 99 multifamily properties containing 12,950 apartment units and 47 commercial properties, consisting of healthcare, industrial, office and retail, containing approximately 2.9 million square feet of leasable space.

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