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Investors Real Estate to buy back up to $50M of shares, nears $300M in financing

Investors Real Estate Trust detailed an up to $50 million share buyback program, a new $300 million financing under negotiations, a financial guidance revision, preferred share redemption and recent property transactions.

The company said its board of trustees approved a program to buy back up to $50 million of its common shares and/or series B preferred shares within a period of one year.

Also, the company is in talks with a group of lenders for a new $300 million unsecured line of credit, which could close in early 2017. It expects the line of credit to have a four-year term and an interest rate that is based on LIBOR plus a variable margin percentage. It will use part of the proceeds initially to repay about $150 million of secured mortgage debt to cut interest expense and give it flexibility to carry out its strategic plans.

On Dec. 2, Investors Real Estate redeemed its series A preferred shares for a total of $29.2 million.

On the property front, the company said it paid $4.9 million to buy the remaining 41.41% minority stake in the joint venture entity that owns the Red 20 multifamily asset and expects to complete the $31.8 million Monticello Crossings multifamily project in Monticello, Minn., during the fourth quarter of fiscal year 2017. It noted that 65.9% of the project's 202 units are leased or committed as of Oct. 31.

Further, Investors Real Estate adjusted its funds from operations guidance for the fiscal year ending April 30, 2017, to a range of 48 cents to 52 cents per share/unit from an earlier range of 48 cents to 54 cents per share/unit.

The S&P Capital IQ consensus FFO-per-share estimate for 2017 is 47 cents.