Good morning, and welcome to the Fourth Quarter and Fiscal Full Year 2016 Investors Real Estate Trust Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Steven Swett. Please go ahead.

Thank you, and good morning. IRET's Form 10-K was filed with the SEC yesterday after the close. Additionally, our earnings release and supplemental disclosure package have been posted on our website 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, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results may materially differ because of factors discussed in yesterday's Form 10-K and the comments made during this conference call and in the risk factors sections of our annual and quarterly reports and other filings with the SEC. Investors Real Estate Trust does 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 on our website at www.iret.com. With me today from management are Tim Mihalick, IRET's President and Chief Executive Officer; and Ted Holmes, Executive Vice President and Chief Financial Officer. I will now turn the call over to Tim.

Thank you, Steve, and good morning, everyone. Welcome to our Fiscal Fourth Quarter and Full Year Earnings Conference Call. This morning, I'll begin with an overview of our operating and fiscal results for the quarter and full year. I will then update you on our strategic repositioning efforts, including our announcement earlier this month to move towards a pure-play multifamily REIT. After that, Ted Holmes, our CFO, will provide a more detailed review of our quarterly and full year results, an update on our transaction activity, summarize our balance sheet and capital allocations strategy and, finally, provide an overview of our guidance for 2017. We will then open the call for your questions. Our fourth quarter and full year results demonstrate the value of our ongoing effort to reposition our portfolio into a more focused growth-oriented and scalable platform, which we believe is the best path for long-term value creation for our shareholders. While our overall core results are down from the prior quarter and year, our cash flows are stronger and more predictable and, we believe, provide us a better base from which to grow results in the future. Yesterday, we reported FFO of $19.2 million or $0.14 per share and unit for the quarter ended April 30, 2016. We continue to show top line growth, as our total revenue was $48.5 million, which was an increase of $3.4 million or 7.5% compared to the same period 1 year ago. For the full fiscal year ended April 30, 2016, we reported FFO of $103.9 million or $0.76 per share and unit. Additionally, total revenue for the year was $188.3 million, which was an increase of $9 million or 5% compared to the prior year. Within our multifamily same-store portfolio, as anticipated, our same-store NOI decreased by $550,000 or 3.8%…

Thank you, Tim, and good morning, everyone. Today, I'll begin with our results for the quarter and year, then I will provide an update on our recent transaction activity, balance sheet and liquidity position. I will close with an overview of our guidance for fiscal year 2017, which we are providing for the first time. Then we will be happy to take your questions. Yesterday, we reported FFO of $19.2 million or $0.14 per share and unit for the fourth quarter ending April 30, 2016 as compared to $22 million or $0.17 per share and unit for the same period of the prior year. I would note that our fiscal fourth quarter 2016 FFO included a $3.4 million gain related to a bargain purchase adjustment, and net of this gain, our FFO was $0.12 per share. The decrease in FFO per share was primarily due to a decrease in property NOI due to the dispositions completed in the last 15 months, partially offset by the acquisitions made and developments completed. For the full fiscal year ended April 30, 2016, we reported FFO of $103.9 million or $0.76 per share and unit as compared to $86.6 million or $0.64 per share and unit for the prior year. Our fiscal year FFO increased primarily due to a $36.5 million gain recognized as a result of a transfer of mortgage debt to a loan servicer in the third quarter ending January 31, 2016, and the bargain purchase gain mentioned previously. Excluding these items, FFO for the fiscal year ending April 30, 2016, would have been $0.55 per share and unit. Our total revenue increased by $3.4 million or 7.5% for the 3 months ended April 30, 2016, compared to the same period of the prior year. Total revenues for the company increased by…

Thanks, Ted. Our entire team is focused on executing our strategic repositioning plan as we work to dispose of non-core assets and redeploy the proceeds towards accretive acquisitions and our value-add program. Ultimately, our goal is to become a pure-play multifamily REIT, offering us significant opportunities to expand our platform to drive improved efficiencies and operating margins and market-leading results. While some of these transactions may impact our near-term results, we are confident that we are creating a stronger and more stable income stream with significantly enhanced growth potential that can create meaningful long-term shareholder value. With that, I'd like to open the call up for questions. Operator?

[Operator Instructions] Our first question comes from Drew Babin of Robert W. Baird & Company.

I was hoping you could clarify the 2% to 4% same property NOI growth guidance. That includes the energy markets as well, correct?

Correct. And I'll let Ted touch on that for you, Drew.

That's correct, Drew.

Okay. And then would it be possible to break down what you expect to see in the energy markets as well some other markets in the Dakotas that are seeing some supply in terms of -- occupancy seems to have bottomed in North Dakota at the expense of rent growth. What dynamics do you expect kind of over the next 4 quarters there and what could that look like?

Drew, this is Ted. I do think we've seen a bottoming out in many of the markets from an occupancy standpoint, including, we think, Minot, Bismarck, Grand Forks. We're still trying to find a pulse on Williston itself, so there may be still some deteriorations there. But we think stabilization in that market may be anywhere from 70% to 75%, given our same-store property there. We do think that the balance of our markets will begin to see rent increases as now we've kind of bottomed out at where we think occupancy needs to go and rents can grow from here in, really, the balance of our markets, including, for that matter, Minot and Bismarck and Williston. Now from a comparative period standpoint, we may be still comparing ourselves on a quarterly basis to some very strong periods a year ago going forward for a little bit. But certainly, we're going to be going in the right direction going forward.

Okay. And then secondly, the assets held for sale, can you talk at all about the just projected timing of that? And I assume that what's already held for sale is likely in guidance for the year. If not, please correct me. But for modeling purposes, could those dispositions be assumed to be kind of spread out evenly throughout the year?

Yes, I'll let Ted touch on that again and update if that includes guidance.

Drew, the held for sale assets from a timing perspective, as we noted in our filings, we had a tenant exercise an option on 8 of the properties, senior housing properties that they have an option on. There's no guarantee that, that closes, but they have exercised and given notice of an option. And that is most likely a second quarter '17 event, but, again, no guarantees. The balance of the held for sale assets, really no gauge yet on timing. We've got a lot of work to do there to get those to a process that we can execute on the sale of those assets. So I really don't have a timing on those, but for potentially the one industrial asset. That one, we would expect if not the first quarter of '17, but the second quarter of '17, okay? And the assets mentioned in held for sale are in our guidance numbers. They're reflected in the range that we've given. So as those sales occur, we will need to be providing an update to you and others about where we think FFO will go. There's no guarantee these sales go through, so we left them in our guidance suggestion for now.

Okay. And then lastly, you talked about longer-term leverage targets and trying to get the investment grade rating down the road. Might we see a temporary increase in leverage just over the next few quarters in order to kind of keep cash flow relatively stable during the transition? Or do you -- would you expect the leverage ratio to kind of just trend down smoothly?

Drew, I think we'll see a flat leverage ratio over the next couple of quarters. And again, our goal, ultimately, is to bring that leverage target down. So I don't think you'll see an increase.

Drew, this is Ted. Just to point out that the goal of going to investment grade and unsecured, that's going to take some time, that takes deleveraging. And we've indicated that as a result of these strategic plan initiatives, our primary goal is to replace income and continue to evaluate our capital allocation strategy, but deleveraging is certainly part of what management wants to accomplish, but that's going to take more time than fiscal '17.

Our next question comes from Jim Lykins of D.A. Davidson.

First, with a follow up on that last guidance question. The assets held for sale that you said are in guidance, can you be a little more specific and tell us what the FFO impact would be?

Well, again, I think as those sales occur, if they occur -- when they occur. Not if, when they occur, we will be providing that update. I think it's a little premature. From a timing perspective, the FFO effect will not only be affected by the perfection of the sales, but the timing of the sales. So I think it's a little premature. The income today is in guidance. So we'll be making those adjustments when those sales occur. But the sales themselves are not in the guidance reflection. Does that make sense?

Yes, I got you now. The 2 development projects that just came online in North Dakota, I don't believe that the Grand Forks property is really impacted by the Bakken, but what about Jamestown? Can you talk about the impact from the Bakken and also how leasing is progressing since the end of the quarter at both properties?

Jim, this is Tim. The Jamestown property really is not Bakken impacted. We don't -- that's a little farther east in the state, so there's really not a big impact there. Leasing is continuing as we expected, not as strong as we had hoped, but we think long-term initiatives and some of the things we're implementing will bring that leasing up a little stronger. The other property -- go ahead. I was going to say, the same as on the other properties, as we look at it, we're seeing leasing, to some degree, moving forward in the other North Dakota property.

Okay. And one last question. The dividend is in the middle of your guidance range for the year. Could you just talk about the commitment to maintaining the current dividend level?

Jim, again, as we've talked about in the past, and I've said this on occasion, that the dividend is a decision that's made by the Board on a quarterly basis. So at this point, we will continue to present the information to the Board and let them make that decision quarterly.

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

On the development pipeline, do you think once you finish these 2 apartment communities, you're going to step back from development for a while? Is that a good way we should look at it?

I would think so, Carol. I think our first choice going forward will be to search out acquisitions and hopefully find those and step back from development. As I mentioned in my remarks, we see construction on the macro level slow down. We think that will be a pullback for us also.

Okay. And then on the medical office and the industrial assets that you all wanted to sell, have you put those out to the market yet? Or where are you at on that?

We have not. We've not broadly marketed any of that but we will begin to undertake that and give some thoughts going forward.

This concludes our question-and-answer session. I'd like to turn the conference back over to management for any closing remarks.

Thank you, and thank you again for all of you spending some time with us this morning to get an update on where IRET is at. We're certainly excited about the future of the company as we complete and move forward with this transition, and believe that, again, we can become the premier REIT in the Upper Midwestern part of the United States. With that, have a happy Fourth of July, and thanks for taking your time.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.