Hello and welcome to the Investors Real Estate Trust second quarter fiscal year 2009 earnings call. (Operator Instructions) Now I would like to turn the conference over to Mr. Tim Mihalick.

Good morning and welcome to Investors Real Estate Trust second quarter fiscal 2009 earnings conference call. The earnings press release was distributed over the wire on Wednesday, December 10, 2008, and the release and supplemental disclosure package has been furnished on Form 8-K. In the press 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 did not receive a copy, these documents are available on IRET’s website at www.iret.com in the Investor Relations section. Additionally, an archive of today’s webcast will be available on our website for the next two weeks. 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 Estates 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 obtained. 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 press 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 us today from management are Tom 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.

Welcome everyone to IRET’s earnings conference call for our second quarter of our year fiscal 2009, which closed on October 31, 2008. We will explain our second quarter financial results in detail, outline our plans and goals for the remaining two quarters of fiscal 2009, and do our best to answer any questions that you may have. I will begin with a brief overview of our current capital and liquidity position, our second quarter financial results, our expected future dividend policy, and our portfolio strategy. IRET continues to have a strong balance sheet. On October 31, 2008, cash on hand totaled nearly $41.0 million and in addition we had $17.0 million of undrawn, unsecured credit lines. IRET continues to have little refinance or interest rate risk. Of IRET’s $1.066 billion of mortgage indebtedness, only 1% is variable rate, less than 1% matures in the remainder of fiscal 2009, and 12% in fiscal 2010. Most of these mortgages that will need to be refinanced are secured by apartments. As of October 31, 2008, the weighted average interest rate on our indebtedness was 6.36%. With our January 2009 distribution, IRET will continue its practice of regular increases and distributions to our share and unit holders. Cash distributions to shareholders have increased in each of the 38 years of IRET’s existence. We will do our very best to continue this practice. Turning to financial results, funds from operations for the second quarter were $0.21 per share and unit, an increase of $0.01 from our last quarter and a decrease of $0.01 from the second quarter of the prior year. As our FFO number demonstrates, IRET has not, as yet, experienced a meaningful and direct impact from the national economic meltdown. Our home state of North Dakota, as well as the surrounding Upper Great…

I will give a brief overview of our second quarter results and offer some comments and then I will discuss other financial highlights of the three months ended October 31, 2008. For the three and six months ended October 31, 2008, IRET’s revenues increased by approximately 10% compared to the same period last year. Primarily, the increased revenue was from new acquisitions, however, we did see increased revenue in our stabilized properties of $413,000 and $583,000 compared to the same periods last year. However, where we have seen a negative effect on our net operating income, or NOI, due to an increase in operating expenses for utilities, maintenance and property management in all of our properties. Utilities and maintenance have increased due to general increases in costs in the various categories. For our commercial properties, these price increases are generally covered by payment of additional rents by the tenants, but these are carried by the company in the case of vacant space and we have seen increases in vacancy in most of our commercial segments. As discussed in our 10-Q, the increase in property management expense was primarily due to an increase in our allowance for uncollectable rents as a result of the write-off of rents receivable of approximately $417,000 for our Stevens Point and Fox River properties located in Wisconsin. During the second quarter IRET acquisition one apartment building, one commercial office building, and placed two commercial medical development projects into service, for a combined total of $23.8 million addition of income-producing properties. We also closed on two multi-family loans, one a refinance and one a new loan, for total cash out of $11.0 million. Interest rates on these two multi-family loans were 6.26% and 6.38% fixed for 10 years. Cash remains strong at $40.9 million as of October…

In the departure from my normal order, I will start with an overview of financings and credit markets as currently this appears to be of the most interest to investors. I will then cover leasing and operation trends, and finally each IRET real estate segment and then finish a brief discussion of pending development and recent acquisition activity. Turning to financing and credit markets, as a new addition to the 8-K supplemental data provided by IRET, we have provided a property-by-property breakdown of IRET’s maturing debt in an attempt to provide the detail necessary to confirm that, absent a complete collapse of the financial system, we do not face any material or problematic refinancing risks. Even though IRET’s leverage has been, by design, higher than our peer group, our debt strategy has been basically the same since 1970 and very conservative. Except for our credit facilities which are unsecured, we secure our debt with individual or limited groups of assets which are not cross-defaulted or cross-collateralized with other assets. We fix our debt for longer terms of 10 years on average and generally amortize principal as opposed to interest only. The vast majority of our debt is non-recourse except for standard industry carve-outs which present no material risk to IRET. Absent a complete and full shutdown of the debt market, or an economic collapse greater than predicted, I don’t see any liquidity or refinancing risk to IRET in the near term for the following reasons. First, IRET did not abandon its core group of lenders over the past decade for the more competitive CMBS or Wall Street lending market. The majority of our lenders are operating and lending. We have provided a steady source of reliable and profitable business for these lenders and they, likewise, to us. Additionally, we have…

The following questions have been submitted in advance by Carol Kemple – Hilliard Lyons and we will address those. Carol Kemple - Hilliard Lyons [read by Tim Mihalick]: It looks like property management expense, as a percent of real estate revenues, went up. Is there a specific reason why?

As we stated earlier, included in the category of property management expense is where the management of debt to uncollectable rent along with accounting is held and as we talked about, Stevens Point and Fox River did have $417,000 combined write-offs during the quarter. Carol Kemple - Hilliard Lyons [read by Tim Mihalick]: I know on previous calls you discussed moving toward internal property management. When should we start seeing a benefit on the income statement from that initiative?

Currently IRET is living in two worlds. We have external property management and internal property management, both of those are tracked on financial statements that are presented to the public together. Internally we do track the property management separately to evaluate the performance and at this point the reasons that we are pursuing property management are being concerned by our internal monitoring and tracking. And until we are fully internally property managed, it is going to be difficult to present the individual results, or the results for that segment, on the public. But it is doing what we anticipated and we continue to move forward with it. Carol Kemple - Hilliard Lyons [read by Tim Mihalick]: What is you outlook for acquisitions and disposition?

I believe we address that earlier. Carol Kemple - Hilliard Lyons [read by Tim Mihalick]: Do you expect to slow down or cease development projects in the current environment and to what degree?

Again, that question was answered in the earlier delivery. Carol Kemple - Hilliard Lyons [read by Tim Mihalick]: Have you renewed your two lines of credit yet that are due this month? How are rates looking? Did you notice any changes or challenges in the financing process that you had not seen before?

And again, we addressed those questions earlier.

(Operator Instruction) Your next question comes from David Scott - Investor Real Estate Trust, Trustee and Shareholder.

I would like to say that you guys have done a great job as far as being proactive on your debt and I think that is great. One of the questions I had was when you look at our stock performance relative to our peers over the past twelve months, it appears that we have outperformed all these other REITs. And my question is, what do you think that is a function of?

I think the answer to your question is both. IRET has been very careful to manage the various parts of our capital structure and we continue to stay focused in the upper Midwest as our preferred geographic location. I think, as we touched on earlier, we monitor our debt placements on a property-by-property basis thereby allowing IRET to have some flexibility to react to the debt maturity. And asset-wise we continue to monitor performance daily and as we spoke earlier, we have not seen the volatility that has been seen outside of our area but that certainly doesn’t mean that we are immune to that down road.

Your next question comes from James Bellessa - D.A. Davidson.

During Tom Jr.’s presentation he identified a potential commercial strategy and he said here and now and then something else. A here-and-now strategy, what else did you describe in that, as in can you elaborate what that strategy is.

Basically on the commercial leasing side what we normally have done is we have evaluated each particular leasing transaction versus what we view the long-term market to be. And in certain downturns tenants will expect or demand economic terms on their leases that just don’t make sense long term but are being driven by the current economic environment. And in past market downturns we made a conscious decision to reject those deals, having full faith and confidence in the market and our buildings. Currently what we are doing is we are taking a step back from that long-held strategy and we are saying is this is as bad as warned, does it make sense to take what is available now, even though we don’t necessarily view it as the right thing to do long term, what if? And so we are taking a hard look at each deal and what I am saying is that we may shift our strategy to, in essence, match the market, become more aggressive in an attempt to secure any available commercial tenants that are looking for space and to renew any tenants that are in our buildings. So really, it is a more aggressive leasing strategy from a capital standpoint.

Tom, Sr., you have been in the business a very long time. Is this as bad as warned?

Not yet, it is not. Certainly our company has been through more severe downturns in the 80s and the 90s that took down Trammell Crow and other long-standing real estate companies and we had no difficulty in that period, and I would say at this point we are still not seeing any problems. But I would say that I don’t know that I have seen such doom and gloom presented from the media and a meltdown that seems to apply to every segment of our economy. So as we have been saying in all of these calls, we have been very cautious over 38 years, which have served us well. If anything we are even more cautious now. I think we are in a very good position to ride out a severe storm but we certainly aren’t going to go out looking for additional risks to assume in these times because this certainly is discouraging to read and hear of all the job losses that seem to be coming.

Your next question comes from Paul [Lazoky] - Private Investor. Paul [Lazoky] - Private Investor: Would you comment on the general market as it relates to resales? Give us some color on what is happening in the resale market of properties in terms of valuations.

I certainly think you are seeing a change in cap rates. Obviously the cost of debt, if it is available, is roughly 1% higher than it was just a few months ago. So we are seeing some changes in prices of product that is coming to market. But in our opinion, not yet enough. I don’t think we are intending to sit and wait for further deterioration in prices, I think that’s probably inevitable until the stimulus packages and the economy itself turns around.

Your next question is a follow-up from Your next question is a follow-up from James Bellessa - D.A. Davidson.

Have you ever considered, or would you be considering, in this downturn of the market, to combining with some other REITs that you could build forces now in a down market so that when the up market comes you could be benefitting shareholders?

I think we would always consider that. We are certainly not involved in any negotiations at this point. I guess the concern I would have is that we are unwilling to take on any significant maturing debt issues that another entity might have, which is what is getting all of them in trouble. So I think that would be a very sensitive issue for us, in connection with any acquisition. But the answer is yes, we continue to look at all aspects of adding to our portfolio. Also, as we have indicated, we do want to compact our geographic footprint to facilitate internal property management, so those efforts are ongoing. At this point we have not made any commitments to any particular transactions, but we obviously would be open to an acquisition or merger if it would be of benefit to our shareholders.

We show no further questions at this time.

Thank you all for attending our earnings call. As I think you learned today our goal when we started this company in 1970 was to be a stable income-producing investment, avoiding high risk and potentially high return or high loss situations. In this environment you have my assurance and that of all of the company officers that we will continue to be good stewards of your investment dollars and do our very best to continue our track record. And I think we are well positioned to do that. Again, we caution that these seem to be unprecedented times but we will do our very best to continue to provide a stable dividend, an increasing dividend, to all of our shareholders.

This concludes today’s conference call.