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Investors Real Estate Trust (NYSE:IRET)
Q Earnings Conference Call
ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

[Audio gap]To be in listen-only mode. Should you need assistance, please signal conference specialist by pressing the * key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press *, then 1 on your touchtone phone.

To withdraw the question please press *, then 2. Please note today's event is being recorded.

I will now turn the conference over to Matthew Volpano. Please go ahead

Matthew Volpano -- Senior Vice President, Capital Markets

Thank you and good morning. IRET's Form 10-Q was filed with the Securities and Exchange Commission yesterday after the market closed. Additionally, our earnings release and supplemental disclosure package have been posted on our website at IRETApartments.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 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. Reconciliation of non-GAAP 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' section of our website at IRETApartments.com.

With me today are Mark Decker Jr., president and chief executive officer, and John Kirchmann, executive vice president and chief financial officer. Andrew Martin, executive vice president of operations, and Anne Olson, executive vice president and general counsel, are also joining us and will be available to answer questions.

I will now turn the call over to Mark.

Mark Decker Jr. -- President and Chief Executive Officer

Thank you, Matt, and good morning, everyone. For those of you who saw our press release recently, my update this morning maybe a bit of old news but for those who did not, let me recap. On November 30, 2017, we announced several key transactions that we closed during and after our fiscal second quarter and provided an update on the sale of our medical office portfolio which in recent months has been a hot topic both internally and externally for our organization. We signed an agreement to sell our medical office portfolio for $417.5 million.

This portfolio includes IRET's entire remaining healthcare segments 28 properties as well as one building we categorized as other commercial that is occupied by a healthcare tenant. In total, these properties contain approximately 1.3 million square feet. Our standard practice is to announce transactions after they close when we can talk in greater detail about the facts and circumstances. In this case, however, the size of the transaction required us to file an 8K at the time we signed the purchase and sale agreement.

The material terms of the agreement are in the 8K filing and the agreement is still subject to standard contingencies. The buyer can terminate the purchase if the contingencies are not met to its satisfaction. As a result, we will not comment at this time beyond what's in the 8-K filing.

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In addition to providing the medical office update, we also announced the sale of 22 other commercial and non-core multifamily properties during and after the quarter for an aggregate sale price of almost $99 million. Since the release two weeks ago, we sold another to non-core multifamily properties, bringing the total sales over $105 million. Included in these transactions are 15 multifamily properties totaling 391 apartment homes in Minot, North Dakota, and Rochester, Minnesota. The sale of these smaller assets will increase our operating efficiency and overall margin and you'll see us continue to opportunistically sell multifamily properties whose location, rent, margins, age or size no longer fit our strategy to efficiently operate a high-quality well-located portfolio of apartment homes.

With all this sales activity, we've naturally been focused on reinvesting the proceeds and we were excited to announce in the same press release that we entered the Denver market by acquiring Dylan Apartments. Completed in 2016, the property has 274 apartment homes located in the River North Art District, often referred to locally as RiNo. The community is located close to Union Station and downtown, and RiNo, one of Denver's fastest-growing submarkets, featuring a vibrant art asthetic, co-working and innovative office space, and popular breweries and restaurants. With average rents above $1,800 per unit, Dylan's location, margin, size, and age improve in all respects our apartment portfolio and demonstrate one of the types of properties we are targeting as we grow and shape the IRET portfolio going forward.

With the addition of Dylan and including a previously announced acquisitions of Oxbo and Park Place in the Twin Cities market, we've invested over $244 million, adding nearly a thousand apartment homes to our portfolio in the first seven months of our fiscal year and front-loading a portion of the redeployment required by our disposition activities. The final items noted in our November 30, 2017, press release all relate to balance sheet enhancements we made recently and John will discuss in more detail. They include refinancing our preferred equity at a lower rate, expanding their commitments to our unsecured revolving line of credit and obtaining an unsecured term loan that gives us the continued ability to actively manage our balance sheet as we reshape the portfolio and capital structure of IRET.

Before turning the call over to John for his remarks, I want to give a quick update on a few of our markets and properties. We stated on last quarter's earnings call our intent to enter and grow in Denver and we continue to be interested in the opportunities that market provides. Denver has shown strong growth trend since the economic crisis as many people look to escape the higher cost of living and high taxes of coastal cities while still getting the same amenities and opportunities offered by those locations. Despite a very low unemployment rate, Denver is one of the fastest growing employment hubs in the country.

Denver's recreation, infrastructure, and culture combine to attract employers and high-quality talents alike. We're excited to get a toehold in Denver with the Dylan acquisition and continue to be amazed by all the improvements and amenities that Denver's delivering to the RiNo neighborhood including a complete reconstruction of the submarket's main thoroughfare Brighton Boulevard as well as a recently approved bond offering to renovate and revitalize the adjacent riverfront area. The leaseup of Dylan took place while the area was experiencing heavy construction which has since tapered and immediately surrounding infrastructure is much improved. With the addition of Oxbo and Park Place as well as the final delivery of Monticello Crossings earlier this year, we continue to grow IRET's presence in the Twin Cities market.

Today, we own almost 2,000 in the Minneapolis-Saint Paul MSA comprising approximately 19% of our total multifamily and aligned with the second quarter, up from approximately 13% over the same time last year. Similar to Denver in many ways except for the mountains, the Twin Cities has a diverse employer and economic base that continues to attract a highly educated pool of renters who are attracted to the area for its career opportunities, quality of life and cultural and entertainment offerings. The market vacancy rate remains very tight and only 2.5%, essentially unchanged in the prior year, which is being fueled by low unemployment and robust job creation. We are seeing the impact of these factors in our own portfolio with 9% quarter-over-quarter rent growth in our Minneapolis same-store properties.

Turning to Rochester, our next largest market, built around and supported by the Mayo Clinic. The city has always been a vibrant community that provides strong and stable rent growth for a market of its size. As the Mayo Clinic continues to promote its commitment to and desire to grow in this market, several developers have attempted to capitalize on the Mayo Clinic's plans and delivered roughly 1000 units per year since 2016 with a similar amount expected over the next 12 months, which is a lot for a market of roughly 15,000 units. We believe our properties offer some of the most desirable amenities in convenient locations in the city and our same-store quarter-over-quarter revenue growth of 4.4% and physical occupancy of 95.4% at the end of the second quarter are a testament to that belief.

We're watching rent growth moderate and expect revenue to flatten as we work to hold occupancy with your projects delivering over the next 12 to 18 months.

Finally, North Dakota's economy continues to hold steady with an unemployment rate of roughly 2.5%, and the oil activity in the western part of the state has picked up over the last year, it is still well below peak. North Dakota now comprises less than 26% of our same-store multifamily NOI compared to over 28% one year ago. Given the disruption in the agriculture and energy markets, Grand Forks, Minot, and Williston had had no meaningful new supply in the last year and we expect nothing material over the coming 12 months supporting our positive absorption and steady occupancy as of late. Bismarck added new supply later than the other markets and had deliveries that extended into this fiscal year contributing to our lower occupancy there relative to the other markets in the state.

As we complete our transition to multifamily, we will continue to focus on occupancy, rents, and margins as we work to improve the whole portfolio.

In closing, as we discussed on last quarter's call, we remain focused on two primary goals for the remainder of the fiscal year, improving our portfolio operations with a primary focus on occupancy and acquiring and disposing of assets to improve our overall portfolio composition as well as increase our multifamily NOI while reducing our commercial exposure. We strive to do what we say we're going to do and our activities and results this quarter show that we are progressing toward those objectives.

I'll now turn the call over to John Kirchmann.

John Kirchmann -- Executive Vice President and Chief Financial Officer

Thank you, Mark. It is exciting to be part of the transformation of IRET that Mark described and I'm happy to provide additional color in our reported financials, progress with operating initiatives and our balance sheet activities. Last night we reported core FFO for the second quarter of fiscal 2018 of $13.7 million or $0.10 per share. For the first half of fiscal 2018, core FFO totaled $27.4 million dollars or $0.20 per share, a $0.04 decrease from the prior year.

The decrease was primarily due to a reduction in NOI from the sale of commercial and non-core multifamily assets and our previously announced CAPEX policy changes offset by lower interest expense as a result of a reduction in the average balance of the outstanding debt.

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Moving to our same-store results, multifamily same-store revenues for the first half of the fiscal year 2018 increased 3.8% to $64.2 million, driven by increases in occupancy and continued rent growth. Our weighted average occupancy in our same-store multifamily portfolio increased 150 basis points to 93% while rental rate increased 2.3%. We expect year-over-year revenue growth to continue at similar levels for the remainder of fiscal 2018. Same-store expenses increased 15% compared to the prior year, resulting in a 4.5% decrease in our multifamily same-store NOI.

These results are in line with our expectations as we take steps to improve the portfolio and create long-term operating efficiencies. The primary drivers of the same-store expense increases were the capital expenditure policy changes, increased turnover and labor cost related to increases in occupancy and the reduction in development activities in the comparative periods. Additionally, we experienced an increase in real estate taxes primarily attributable to stabilizing developments and higher levy rates in select markets as well as lower insurance cost in last year's comparative period due to the reversal of accruals. While we expect expense growth will continue to trend high for the remainder of the fiscal year, we anticipate future years' expense growth to be in line with market norms.

General and administrative expenses for the quarter were $3.1 million, 11.5% less than the same period a year ago. We expect our G&A run rate for the remainder of the year to be approximately $3.5 million per quarter. Adjusting for transition cost of $650,000 year to date, G&A decreased by $554,000 or 7.9%. Our G&A is around 6.8% of total revenues and we will continue to actively manage these costs as we grow our business.

Finally, we continued to improve our balance sheet during the quarter. Currently, we have $80 million of total liquidity including $72 million available in our corporate revolver, which means we have sufficient capital for multifamily investments in our targeted markets. Further enhancing our financial flexibility, we extended our unsecured syndicated revolving credit facility with commitments now totaling $300 million which is an increase of $50 million from prior commitments. We also obtained a $70 million unsecured term loan that matures in 2023 and executed a swap agreement to synthetically fix the interest rate for the full duration of the loan.

In addition, we issued over 4.1 million shares of 6%, %5, and 8% Series C preferred shares per gross proceeds of $103 million and redeemed all 4.6 million shares at 7.95% Series B preferred for an aggregate cost including the crew dividends of $115.8 million, which will reduce our annualized preferred dividends by approximately $2.3 million. As a result of these balance sheet transactions, we increased our liquidity and extended and staggered our debt maturities, albeit with temporarily higher debt levels while creating sufficient capital to proceed with prudent multifamily acquisitions. We continue to work toward increasing our unencumbered NOI and achieving debt metrics in line with investment grade benchmarks and using the proceeds from our non-core asset sales to, in part, reduce leverage. Our operating efficiency initiatives continue to be on track with our goal to increase our weighted average occupancy to approximately 95%.

We believe that this level of occupancy will allow us to operate more efficiently and improve our operating margins.

Additional actions during the quarter that we expect will continue to drive margin growth include restructuring our operations department on a cost-neutral basis to create dedicated in-house operational experts to ensure consistency across markets and scalability as we grow our portfolio. Reviewing and adjusting amenity programs to maximize revenue in our markets, optimizing our exploration profile to better manage seasonality and turnover expenses and completing an asset review of our portfolio and prioritizing redevelopment initiatives and capital maintenance projects. We continue to be focused on building the balance sheet and operating platform that will generate consistent cash flows to support well-covered and growing dividend. We believe these capital market activities and operating initiatives will prove this out as we move forward.

With that, I will turn the call over to the operator for questions.

Questions and Answers:

Operator

We will now begin the question-and-answer session. To ask a question, you may press *, then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw the question, please press *, then 2.

Again, to ask a question, please press *, then 1.

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Our first question comes from Rob Stevenson from Janney. Please go ahead.

Rob Stevenson -- Janney -- Analyst

Good morning, guys. Mark, once the transactions that you guys announced have closed, I guess, whatever the date winds up being affected, so January 31 or whatever, so that when you're sitting here in your fiscal fourth quarter, what's the NOI expected to be from non-apartment assets once everything closes including the healthcare assets?

Mark Decker Jr. -- President and Chief Executive Officer

Yeah, greater than 95% of it will come from multifamily.

Rob Stevenson -- Janney -- Analyst

OK. And then that remaining 4 and change percent or so basically just as opportunistically or is there any sort of visibility in selling that as well? Are there still assets where you need to do something to it before it's ready for sale?

Mark Decker Jr. -- President and Chief Executive Officer

Yeah, the remaining commercial is split between, I'll call it, legacy commercial and commercial that is in our multifamily assets that we have some assets with street retail. Obviously, we will keep that. Our plan is to keep that. The legacy assets column will be opportunistically sold.

I don't think there's anything in particular that needs to happen with any of the assets other than we just want to be as anti-dilutive as possible going forward.

Rob Stevenson -- Janney -- Analyst

OK. And then, I mean, not knowing what you guys were working on in the acquisition pipeline today but once everything from a disposition standpoint closes sometime, let's say, effective the end of, what is the balance sheet position at that point in time? I mean, how much between cash from the sales, once you pay off all the debt and everything me, what does the liquidity look like in terms of firepower to be able to make acquisitions? How meaningful does that expand, once you net everything out from a disposition standpoint?

Mark Decker Jr. -- President and Chief Executive Officer

Yeah. So, we pre-funded in our mind or funded a good bit of the rollover between Park Place and Dylan, which were up both structured Reverse 1031. We do have some more to deploy, as you suggest, and that's probably $150 to $200 million of to-be-acquired assets and then at that point, we would have, in our mind, a good balance sheet with a lot of liquidity. I mean, I don't want to get into the specifics of how much but we'd be substantially less levered than we are today and have a lot of firepower on the line.

John Kirchmann -- Executive Vice President and Chief Financial Officer

Yeah, we have plenty of liquidity to do what we plan to do with those asset acquisitions.

Rob Stevenson -- Janney -- Analyst

OK. And, I guess, lastly, from me, given that liquidity of the acquisition prove more challenging than expected, given where the stock price is how attractive of an opportunity is the current stock price to buy back shares?

Mark Decker Jr. -- President and Chief Executive Officer

As you're aware, we've been a buyer throughout the last 12 months and we did get authorization to continue to buy back. So, it's certainly a tool in our toolbox, so to speak. We've also redeemed a paramount of OP units, as you've probably seen. So, absolutely an option on the table.

It wouldn't help us with a 1031 role. So, that would be a consideration.

Rob Stevenson -- Janney -- Analyst

Ok. All right, thanks, guys.

Mark Decker Jr. -- President and Chief Executive Officer

Thank you.

Operator

All right, the next question is going to be from Drew Babin with Robert W. Baird. Please go ahead.

Drew Babin -- Robert W. Baird -- Analyst

Hey, good morning.

Matthew Volpano -- Senior Vice President, Capital Markets

Morning.

Drew Babin -- Robert W. Baird -- Analyst

Question on the post-quarter-end transactions. You had two industrial sales and the Rochester apartment sales. I was wondering if you could provide a cap rate on this.

Matthew Volpano -- Senior Vice President, Capital Markets

Drew, this is Matt. Kind of all of the various and sundry that we reference in there, about $105 million is at a blended roughly 69.

Drew Babin -- Robert W. Baird -- Analyst

OK.

Matthew Volpano -- Senior Vice President, Capital Markets

One of the data points that we found interesting and think everyone else will find interesting, given the lack of trading in these markets, the Copperfield or the Minot assets, which were our smallest and least-efficient assets sold around $38,000 a door. The Rochester assets, which we would classify as below the median of our portfolio, two different assets, one at a pretty high per-door price, one at a lower per-door but blending to $104 a door, we felt it was interesting relative to where we think the whole enterprise is selling on a per-key basis. So, we would view the assets as the bottom half of the portfolio for sure.

Drew Babin -- Robert W. Baird -- Analyst

That's helpful. And then on the Dylan deal, I was wondering if you could provide kind of a cap rate there not that it's closed and relative cap rates in that market.

Matthew Volpano -- Senior Vice President, Capital Markets

Yeah, the way we look at that, I mean, we look at cap rates perhaps a little differently. We look at non-trended rents and fuel taxes. So, in our mind, there was a high force. I think if you were talking to the brokerage community in Denver, they would say 4.75 to 5, closer to 5 on sort of stabilized and aligned.

The asset is almost stabilized. So, the high 80s when we purchased it but we still have a little bit of stabilization to do yet.

Drew Babin -- Robert W. Baird -- Analyst

OK. And one last one. It's a little more conceptual. I mean, it's, I guess, a rephrasing of Rob's question.

With the MOB sale and the redeployment into apartment assets, it looks like there'll be kind of a temporary period of time where quote AFFO and I know you don't disclose the way we calculate it, might fall below where the dividend is. Is your priority coming out of that to get quarter FFO or AFFO kind of back up to where it was before really aggressively bringing down leverage or do you plan on kind of doing both at the same time where it might take a little longer?

Matthew Volpano -- Senior Vice President, Capital Markets

Our plan would be, as you said, to core FFO and FFO back where they were and we would do that without over levering the company. So, I think we'd like to come out of all this with a strong balance sheet and solid cash flows.

John Kirchmann -- Executive Vice President and Chief Financial Officer

Yeah, there are a lot of transactions this quarter or this year and we may not cover the dividend completely. However, we're going to have a lot of liquidity or we anticipate having a lot of liquidity and we anticipate that being really just a temporary blip for this year and really related to all the different transactions we have going on.

Drew Babin -- Robert W. Baird -- Analyst

Sure, sure and, I guess, to clarify kind of more of the leverage ratio question and liquidity question. Obviously, liquidity will be there which is kind of prioritization. Yeah, that answered my question. Thank you.

Operator

Next question comes from Jim Lykins with D. A. Davison. Please go ahead.

Jim Lykins -- D. A. Davison -- Analyst

Hey, good morning, guys. So, with the medical office buildings, once you get this sold, I wonder if you can just be a little bit more granular on how much of that could go to paying down debt and just how you're thinking about paying down leverage?

Mark Decker Jr. -- President and Chief Executive Officer

Yeah. So, that portfolio, I mean, rough numbers, $100 million of leverage on it. So, it's a reasonably leveraged portfolio. We believe we'll have roughly $100 million of discretionary dollars after that closes and then the balance we would want to roll for 1031 purposes.

So, with the balance of the money, we would likely deploy that against debt. So, in other words, roughly $300 million total of purchases and roughly $100 million of de-leveraging.

Jim Lykins -- D. A. Davison -- Analyst

OK. And can you talk a little bit about what you're seeing right now with supply in both Minneapolis and Denver and maybe some high-level comments about just the overall economy in these markets but I wonder if you have any more color to add on what you're seeing right now with job growth and also population growth in those two markets?

Mark Decker Jr. -- President and Chief Executive Officer

Yeah. I mean, we don't have great forward-looking information obviously. The job-growth statistics in both markets has been very strong and Minneapolis is actually in an unusual position of leading job growth this year, year to date among the leaders which are great news and unusual. Denver continues to see a lot of job growth.

The supply growth in Denver is obviously more significant than Minneapolis. So, these are both just for level-setting purposes kind of 3 and 3.5-million-person markets with roughly 330,000 apartments in each. Denver has added around 15,000 to 18,000 units. Minneapolis is kind of in the 4 to 6, depending on the year we're looking, depending on whose numbers you look at, somewhere in the 5,000 units next year, which is, in our view, not overheated.

I mean, the supply tends to come and if you look at where it's coming relative to our assets that are here, it's in pockets where we do our own assets because those are some of the more desirable locations and I think you've seen across the country that the supply has been coming more in the urban core and in close-in suburbs would fit the description of Arcata, 71 France, Red 20. Less apply in the suburbs although we're seeing some more of that, I'd say, thematically here and elsewhere.

Jim Lykins -- D. A. Davison -- Analyst

OK, that's helpful.

Mark Decker Jr. -- President and Chief Executive Officer

Does that answer your question, Jim?

Jim Lykins -- D. A. Davison -- Analyst

Yeah, that's a great color. And also, how are you thinking about your footprint right now? I believe the focus is Denver, Minneapolis, Chicago, the three markets that you're going to be targeting. Any other city that might be a part of that mix and also how you're thinking about potentially what the timeline might look like for any other dispositions with those remaining legacy assets?

Mark Decker Jr. -- President and Chief Executive Officer

Yeah, on the markets, I mean, we're really focused in Minneapolis and Denver right now. We'd love to have more than 2,000 units in both of those markets. I think with the capital at our disposal, I don't know if we'll get all the way there but I think we can add some scale and hopefully efficiencies to the Denver market. We keep our eyes on Chicago.

We wouldn't want to go there with one asset in Denver. We'd like to build more in Denver and when we look at those three markets and we do keep tabs on all of them, we don't see substantially better returns to be had in Chicago versus Denver or Minneapolis and we do see more risk because we're not there now. So, we'd be stretching ourselves, I think, more than we'd like at this time. Again, we'll keep watching it but I think you should expect to see us in Minneapolis and Denver, potentially Omaha, which is a market we're already in but beyond that, which is not a new market, we wouldn't be focused on any new markets today unless something really opportunistic came along which we honestly don't foresee.

Jim Lykins -- D. A. Davison -- Analyst

OK, and any potential our markets you may be looking at exiting with the remainder of the legacy assets?

Mark Decker Jr. -- President and Chief Executive Officer

I think the Rochester sales are a great example of an opportunistic sale. We had a group we had done business with in the past who had a 1031 need and we were able to help them meet that need and got a pricing that felt good for them and good for us and got our portfolio a little more efficient there. I think, going forward, that's how you'll see us look to exit assets and likely either fund new acquisitions or potentially fund some value-add activity across the portfolio which we believe we can do on an accretive or neutral basis.

Jim Lykins -- D. A. Davison -- Analyst

OK, thanks, Mark.

Mark Decker Jr. -- President and Chief Executive Officer

Thank you.

Operator

Next question comes from Carol Kemple with Hilliard Lyons. Please go ahead.

Carol Kemple -- Hilliard Lyons -- Analyst

Good morning. I just had a couple of questions for earnings models. Going forward, once the medical office buildings are sold, what do you think G&A will be on a run rate.

John Kirchmann -- Executive Vice President and Chief Financial Officer

Hi, Carol. This is John. The guidance I gave in the script is what we expect. So, we've been prepping for that transaction to happen and have already up made plans.

Part of the reason G&A was low this quarter is we've been operating light in anticipation of absorbing the little bit of G&A that is associated with the medical office portfolio. So, essentially, really no change in our run rate.

Carol Kemple -- Hilliard Lyons -- Analyst

OK. So, no change from the 3,500?

John Kirchmann -- Executive Vice President and Chief Financial Officer

$3.5 million, yeah, yeah.

Carol Kemple -- Hilliard Lyons -- Analyst

OK. And then, looking at your real estate expenses as a percentage of real estate revenue, I can go back and do the math and see how much multifamily has been historically to figure that going forward. Do you think there are additional synergies and how many basis points do you think we could see if there are additional synergies once you're just focusing on multifamily?

John Kirchmann -- Executive Vice President and Chief Financial Officer

Well, I think there are a couple things. So, yes, we do think there are some synergies. We also think there are just opportunities, and Andy and his ops team are putting that together to drive improvement in our margin and that's really going to be a focus of ours going forward. So, as far as how much, I'm not prepared to comment on that now but it is absolutely going to be a focus of ours and that is what we think is what's going to drive the opportunity and it's going to come from not just expense management which of we are very committed to but also from the top line.

We just completed a review of our portfolio and we will be putting together our asset-management plans and looking in the near future to relaunch the value-add activities that we do, and we think that'll be a big driver also.

Carol Kemple -- Hilliard Lyons -- Analyst

OK. And then just one final question on the dividend. It sounds like you all may come up shy of it based on AFFO but it looks like you have liquidity. So, should I assume there'll be no change to the dividend in the near future either way?

Mark Decker Jr. -- President and Chief Executive Officer

Yeah, I mean, Carol, obviously that's a board-level discussion and decision but we remain committed to the dividend.

Carol Kemple -- Hilliard Lyons -- Analyst

OK, thank you very much.

Mark Decker Jr. -- President and Chief Executive Officer

Thank you, Carol.

Operator

This will conclude our question-and-answer session. I'll now turn the call back to IRET's CEO, Mark Decker Jr.

Mark Decker Jr. -- President and Chief Executive Officer

Well, thanks, everyone. We really appreciate you joining us today and your interest in the company. We're optimistic about our progress and look forward to reporting more as we move into the second half of the year.

Happy holidays, everybody and we look forward to seeing you in 2018.

Operator

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

Duration: 34 minutes

Call Participants:

Matthew Volpano -- Senior Vice President, Capital Markets

Mark Decker Jr. -- President and Chief Executive Officer

John Kirchmann -- Executive Vice President and Chief Financial Officer

Rob Stevenson -- Janney -- Analyst

Drew Babin -- Robert W. Baird -- Analyst

Jim Lykins -- D. A. Davison -- Analyst

Carol Kemple -- Hilliard Lyons -- Analyst

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