Dakota Real Estate Investment Trust OFFERING CIRCULAR UNDER REGULATION A 240,000 Class A Voting Shares   105,500 Class B Non-Voting Shares 240,000 Class I Voting Shares Issuable at $17.10 per Share   Under the Distribution Reinvestment Plan

The Dakota Real Estate Investment Trust (the “Trust,” “we” and “our”) is a business trust organized under the laws of North Dakota. Our principal place of business is 3003 32nd Avenue South, Suite 250, Fargo, North Dakota 58103, our telephone number is (701) 239-6879 and our website is www.dakotareit.com. The Trust’s assets consist of a controlling interest in DAKOTA UPREIT LIMITED PARTNERSHIP (the “UPREIT”), a North Dakota limited partnership. The UPREIT invests in and operates real estate. The Trust is the General Partner of the UPREIT.

Pursuant to an Offering Statement (the “Offering Statement”) qualified with the Securities and Exchange Commission (the “SEC”) on the date hereof we are offering (the “Offering”) our Class A Voting Shares (the “Class A Shares”), our Class B Non-Voting Shares (the “Class B Shares”), and our Class I Voting Shares (the “Class I Shares” and collectively with the Class A Shares and Class B Shares, the “Shares”) to existing Shareholders of the Trust who or which elect to participate in our Distribution Reinvestment Plan (the “DRIP”) to apply distributions payable to them for the acquisition of Shares at the rate one share for each $17.10 of distribution payable to the participant. This Offering Circular is provided to participants in the DRIP for use in considering continuation of their participation in and to other shareholders considering becoming participants in the DRIP.

You should not acquire Shares if you cannot afford a complete loss of your investment. Investing in the Shares involves material risks (See “RISK FACTORS” beginning on page 3).

The Offering will terminate at the earlier of issuance of all of the Shares or July 31, 2024.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SEC; HOWEVER, THE SEC HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES COMMISION OF ANY STATE NOR HAS THE ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Offering Circular is July __, 2023

TABLE OF CONTENTS

WHO MAY PARTICIPATE IN THE OFFERING

This Offering Circular does not constitute an offer to issue or a solicitation of an offer to acquire any securities offered hereby in any jurisdiction where, or to any person to whom, it is unlawful to make such an offer.

Required Residence / Domicile to Invest. This Offering is available to existing shareholders of the Trust who are residents of or entities domiciled in a state in which we have qualified the issuance of Shares under the DRIP by registration or pursuant to an exemption from registration in accordance with laws of such state related to the offer and issuance of the Shares. Individuals are residents of the state in which they maintain their principal residence. A corporation, partnership, trust or other entity is domiciled in the state where the principal office of the entity is located.

Participation in the DRIP. To participate in the Offering, investors must be a participant in the DRIP and have their shareholder registration with the Trust reflect that the participant meets the residency / domicile requirements addressed above. If the election is made by a shareholder to participate in the DRIP and the shareholder’s residence or domicile is not within a state we have previously qualified the issuance of Shares under the DRIP pursuant to the securities regulations of that state, we may defer the issuance of the Shares pending such qualification.

The Shares are offered subject to withdrawal or cancellation of the Offering at any time without prior notice. The Trust reserves the right to terminate the Offering of any of the Class A, Class B Shares or the Class I Shares and continue the Offering of the other class or classes of Shares.

IMPORTANT INFORMATION ABOUT THIS OFFERING CIRCULAR

Please carefully read the information in this Offering Circular and any supplements thereto. You should rely only upon the information in this Offering Circular as we have not authorized anyone to provide any different information regarding us or this Offering.

Offering Statement This Offering Circular is part of an offering statement we have filed with the SEC and may amend from time to time (the “Offering Statement”). We contemplate this being a “continuous offering” and thus we anticipate that we may prepare and distribute supplements or amendments and restatements to add or change information contained in the Offering Circular contained in the Offering Statement. Our Offering Statement includes exhibits that provide detailed information or documents discussed in this Offering Circular. You may access such information through the electronic data gathering, analysis and retrieval system found at https://www.sec.gov/edgar.

Cautionary Note Regarding Forward Looking Statements This Offering Circular contains forward-looking statements. All Statements other than statements of historical fact contained in this Offering Circular, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward looking-statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.

Forward-looking statements are subject to risks and uncertainties, certain of which are beyond our control. Actual results could differ materially as a result of the factors described in “Risk Factors” in this Offering Circular.

OFFERING SUMMARY

The following summary is qualified in its entirety by the detailed information appearing elsewhere in this Offering Circular.

SHARES BEING OFFERED

The Trust is offering to shareholders who or which have elected to participate in the Trust’s Distribution Reinvestment Plant (the “DRIP”) to receive Shares in lieu of receipt of payment of distributions on the class of Shares with respect to which they elect to participate. The Shares will be issued at a rate of one Share for each $17.10 of distribution taken in Shares rather than in a cash payment.

Under its Declaration of Trust (the “Declaration of Trust”), the Trust is authorized to issue one or more classes of Shares. The Declaration of Trust recognizes Class A, Class B and Class I Shares. Each Class shares equal rights to participate in distributions while only Class A and Class I Shares come with voting rights. there were approximately 8,431,134 Class A Shares, approximately 2,260,102 Class B Shares and approximately 2,935, 782 Class I Shares issued and outstanding. Such Share amounts include the Shares received by shareholders as of June 30, 2023, who had elected to receive shares in lieu of payment of distributions otherwise paid in July 2023.

TERMS OF THE DISTRIBUTION REINVESTMENT PLAN

The Trust has adopted the DRIP to permit shareholders who or which elect to participate in the plan the opportunity to invest their cash distributions otherwise payable to the shareholder in the purchase of Shares of the same class with respect to which the distribution is payable. Participation is made by completion of an election to participate. For individuals initially subscribing to purchase Shares, the subscription to be tendered includes an election provision. For existing shareholders, the election is made in a Shareholder Change Form reflecting the election to participate. Participants in the DRIP may discontinue their participation by completing and submitting to the Trust of a Shareholder Change Form reflecting the election to discontinue participating.

Issuance of Shares under the DRIP is subject to the Trust having in effect qualification for the issuance under both applicable federal and state laws regulating the offer and issuance of securities with respect to the Shares. If there is not such a qualification in effect when a distribution is payable, the Trust may elect to either: (i) issue payment of the distribution in cash; or (ii) hold the distribution pending qualification of the issuance under applicable law.

The rate of issuance of Shares in lieu of a cash payment of a distribution is currently 95% of the per share offering price for the Shares then being offered by the Trust (exclusive of any commissions or other fees a subscriber may be required to pay) rounded up to the next full cent. As the Trust has established $18.00 as its current offering price for its Shares, the issuance rate currently in effect under the DRIP is $17.10 per share.

THE TRUST

The Trust began business operations in 1997. The Trust is an unincorporated, but registered business trust under North Dakota law. The Trust has an indefinite term of existence consistent with North Dakota law (that is, the Trust is not required to discontinue its existence at a specified future date.) The Trust is the sole general partner of the UPREIT and makes all of the investment decisions of the UPREIT. The Trust will invest in properties that the Board of Trustees considers suitable investments. Properties can and may include commercial properties and multi-family residential properties, such as apartment buildings. The Trust has had no business activities other than the ownership and management of the UPREIT.

The Trust is registered as required by the laws of North Dakota and is structured to comply with the requirements under Internal Revenue Code Section 856 which requires that 75% of the assets of a real estate investment trust must consist of real estate assets and that 75% of its gross income must be derived from real estate. The Trust believes it qualifies as a real estate investment trust but has not received confirmation of its qualification from the Internal Revenue Service. (See “FEDERAL INCOME TAX CONSIDERATIONS”).

ADVISOR

The advisor of the Trust is Dakota REIT Management, LLC (the “Advisor”), which was formed for such purpose in April 2008. The Advisor manages the affairs of the Trust, subject to the review and overall control of the Board of Trustees, who may remove the Advisor without cause. The Advisor is also one of the property managers we engage to manage our properties.

THE UPREIT

The Trust’s assets consist almost entirely of our general partnership interest in Dakota UPREIT Limited Partnership (the “UPREIT”), a North Dakota limited partnership. The UPREIT utilizes its assets to invest either directly in real estate properties or in ownership interests in entities that hold real estate properties and to make loans to developers of real estate the UPREIT may seek to purchase. The Trust is the general partner of the UPREIT. As of December 31, 2022, our interest in the UPREIT represented an approximately 58% ownership interest with the remaining approximately 42% in interests being held by approximately 210 holders of limited partnership interests.

INVESTMENT OBJECTIVES

The Trust’s investment objectives are (i) to preserve, protect and return shareholder capital, (ii) provide cash distributions on a quarterly basis at the discretion of the Board of Trustees, a portion of which (due to depreciation) may not constitute current taxable income, and (iii) provide growth of capital investment through potential appreciation in the value of the Trust’s properties. There is no assurance that such objectives will be attained.

THE PROPERTIES

As of December 31, 2022, the UPREIT held residential apartment projects comprising a total of 3,967 apartment units, 154 residential rental townhome units and 2,724,326 square feet of commercial rental property. In 2022, the UPREIT acquired eight commercial properties containing a total of approximately 442,103 square feet of space and one residential property containing a total of 36 residential units. In 2022, the UPREIT sold two commercial properties containing a total of approximately 76,758 square feet of space. It is anticipated that the UPREIT will continue to seek to acquire properties or interests in properties involving both residential and commercial real estate (See “DESCRIPTION OF PROPERTIES”).

SUMMARY OF RISK FACTORS

Investing in this Offering through participation in the DRIP involves significant risks. A more detailed listing of risk factors you should consider prior to investing in the Shares is set out in the section entitled “RISK FACTORS.”

RISK FACTORS

The acquisition of Shares in the Offering pursuant to an election to participate in the DRIP involves various risks. Existing and prospective participants in the DRIP should carefully consider the following risks, among others, before making a decision to accept Shares in lieu of cash payment of distributions. An investment in the Trust is speculative and involves a high degree of risk and should be considered only by persons who can afford the loss of their entire investment.

RISKS RELATED TO INVESTING IN THE TRUST AND PARTICIPATING IN THIS OFFERING

The UPREIT Has Not Identified Properties to Acquire in the Future

The future real estate investments to be made and properties to be acquired by the UPREIT are yet to be determined. Accordingly, current and prospective participants in the DRIP will have no information to assist in making their investment decision based on the identification or location of, or as to the operating histories of, or other relevant economic and financial data pertaining to, investments in real estate the UPREIT may make in the future, and must rely entirely on the investment judgment of the Advisor and the Board of Trustees.

The Shares Are an Illiquid Investment

There is currently no trading market for the Shares, and we do not anticipate such a market will develop and have no intention to seek to list the Shares upon any stock exchange. Without the benefit of an established public trading market, the Shares should be viewed as relatively illiquid. Consequently, the purchase of Shares should be considered only as a long-term investment. Furthermore, even if a market for the sale of Shares were to develop, no assurance can be given as to the price at which Shares would be sold in such market.

The Trust has no plans to liquidate and, absent the Trustees or the shareholders (the Amended and Restated Declaration of Trust allows for a majority vote of shareholders with voting rights to require liquidation) taking action to liquidate the Trust, the Trust will continue in existence for an indeterminate time. Accordingly, an investor in the Shares pursuant to the DRIP, should not anticipate liquidity from the liquidation of the Trust.

To provide shareholders access to liquidate their holdings in the Trust, we have maintained a share repurchase program. (See - “SECURITIES BEING OFFERD – Share Repurchase Plan” for information related to such arrangements). Such plan has restrictions and limitations, including the level of funding approved for repurchases under the plan.

Determination of Rate of Share Issuance to DRIP Participants

The Shares issued to participants in the DRIP in lieu of payment of dividends is at a rate which is 95% of the offering price then established by the Board of Trustees as the offering price for Shares of the Trust (exclusive of any upfront selling expense which may be assessed to those purchasing Shares through a broker dealer). In establishing such offering price, the Board of Trustees considers the Trust’s operating results, the real estate markets in which the Trust’s properties are located, economic conditions and the capital markets. Such offering price bears no relationship to any established criteria of value, such as book value or earnings per share, or any combination thereof.

The offering price for Shares of the Trust will be in excess of the per share book value of the Trust. The Trust has generally retained ownership of its real estate properties which comprise the vast majority of its assets for long periods of time. As a consequence, the depreciation taken with respect to such real estate over the years reduces the book value of the Trust’s real estate (See Note 6 to our audited Financial Statements for information related to the cumulative depreciation taken against our real estate assets). Further, the Trust has a practice of borrowing against the value of its real estate holdings to provide funds to acquire additional and maintain its existing real estate holdings with such indebtedness serving to further reduce book value while the loan against the encumbered real estate will be based upon the market value of the real estate at the time of the borrowing which is typically less than the depreciated book value of the property.

Shareholders Must Rely on Management to Act on Their Behalf

The Advisor and the Trustees are accountable to the Trust as fiduciaries and must exercise good faith and integrity in handling Trust affairs. The Trustees have the authority to approve or disapprove all investments recommended to the UPREIT by the Advisor. The Trustees will have ultimate control over the management of the Trust and the conduct of Trust affairs, including management of the business of the UPREIT and the acquisition and disposition of the UPREIT’s assets, but the success of the Trust and UPREIT will depend, to a large extent, on the services and performance of the Advisor.

Shareholders have no right or power to take part in the direct management of the Trust or the UPREIT. Holders of Shares with voting rights (Class A and Class I Shares) vote on election of members of the Board of Trustees, amendments to Declaration of Trust, whether the Trust should be liquidated, and whether certain sales of assets of the Trust. Should be made. Holders of Shares with voting rights also have the right to demand a special meeting of shareholders.

Subject to some conditions and limitations, the Declaration of Trust limits the liability of, and provides for the Trust to indemnify, the Trustees, the Advisor and their affiliates, and to provide insurance coverage and pay for all premiums thereon to protect the Board of Trustees while acting for and on behalf of the Trust (See “BOARD OF TRUSTEES, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES – Organizational Structure”).

With the exception of Danel Jung and Matt Pedersen, who devote their full-time and attention to the operation of the Trust, Officers appointed by the Trust and members of the Board of Trustees do not devote their full time to the management of the Trust’s operations. Each has their own businesses and investments, and in some instances, employment which places demands upon their available time.

Rights of Repurchase of Shares

Under the Declaration of Trust, the Trust has certain rights to repurchase Shares from its shareholders. To assure compliance with requirements under the Internal Revenue Code for qualification of the Trust as a real estate investment trust, the Trust may redeem Shares if a majority of the Trust’s Shares are held by five or fewer shareholders. In addition, the Board of Trustees may establish minimum holding levels of ownership of shares from time to time which may result in the Trust declining to permit a requested transfer of Shares or in the repurchase of transferred or retained Shares after the transfer which are below such minimum levels.

RISKS RELATED TO OUR INVESTMENTS

Borrowing Risks

The UPREIT makes extensive use of borrowed funds in connection with its investments, generally seeking to maintain a level of financing equal to 75% of the appraised value of our properties. As of December 31, 2022 the mortgage notes payable were approximately $477 million. Use of borrowed funds permits the UPREIT to acquire additional properties than what might otherwise have been acquired only with available cash; however, should the value of the acquired property decrease, we may owe more on the borrowing than we can realize from the operation or sale of the property.

Certain of the borrowing used to finance acquisition of properties is under long term fixed rate arrangements, but substantial portions of our borrowing involve “balloon payments” where the loan amount is not fully amortized prior to the maturity date or periodic readjustment of the interest rates. If general borrowing conditions result in a rise in interest rate or if lenders perceive lending to us has grown in risk, we may face increased interest rates or other adverse changes to the terms under which we may borrow funds that may impair our operating results. In connection with your consideration of these risks you may wish to know that we have the following loans maturing this year and in the next two calendar years:

Risk That Tenants Will Terminate Their Leases

Tenants may for various reasons be unable to pay the rent due us under their lease. When a tenant of one of our leases for an apartment or townhome fails to pay the tenant typically vacates the property or we may be required to commence legal proceedings to force such a vacation resulting in the unit being available for renting to a new tenant. As we have expanded our holdings in commercial real estate, we have experienced different economic circumstances associated with commercial real estate. These include changes in operations in our tenant’s businesses, including the complete termination and liquidation of our tenant’s business.

The lead times are often longer and we may incur additional expenses (such as brokerage fees and provision of improvement allowances) in leasing our commercial properties which we do not experience with our residential properties. As of December 31, 2022, of our approximately 2,724,326 square feet of commercial real estate, approximately 161,939 square feet (or approximately 5.9% of the total) was not under a lease with a tenant.

Risk That Tenants Will Not Renew Their Leases

Tenants of our residential real estate typically lease their apartment or townhome for an initial term of from six to twelve months with month-to-month terms thereafter. There can be no assurance that our residential tenants will renew their leases with us at the end of the term of their lease. Opportunities for purchase of residential properties by those residing in our apartments and townhome properties and tenants relocating outside of the area due to reduced employment opportunities may affect the choice by our tenants to continue their occupancy. As well, tenants may view newer properties or those with different amenities or lower rents as attractive. In addition to loss of revenues while a residential unit is vacant, a vacancy typically results in additional operating expenses associated with preparing the unit for rental and in the marketing of the unit.

Our commercial properties are typically leased for terms from one to twenty years with options to renew the term. Of the approximately 402 leases currently in effect for the approximately 2,724,326 square feet of commercial real estate, 10 of the leases (for an aggregate of approximately 45,021 square feet) are under month-to-month terms and 65 of the leases (for approximately 675,835 square feet) are scheduled to end by the end of December 2023. The table below identifies the leases, as of December 31, 2022, scheduled to expire the years indicated. This does not include the approximately 161,939 square feet of commercial property available for leasing at the end of 2022 or non-rentable space such as hallways and common areas.

In general, commercial real estate requires additional costs to secure a new tenant or the renewal of a tenant’s lease when compared with residential real estate due to the granting of concessions to the tenant for undertaking or renewal of the lease of the property. Such concessions include abatement of rent for periods of time and contributions to costs of the tenant making improvements or relocating its operations.

Also, certain commercial property may be for specialized uses that are not compatible with the needs of potential replacement tenants. This may cause a delay in locating a subsequent tenant or require substantial contributions to a tenant’s cost of modification of the property to meet their needs.

Our Investment in Real Estate will be Subject to General Risks Associated with Real Estate Investments

The real estate properties and interests in entities holding real estate properties invested in by the UPREIT will be subject to risks typically associated with real estate, including:

The Trust’s Assets are not Diversified and have Limited Liquidity

Through the UPREIT, the Trust invests in real estate. All real estate investments are subject to some degree of risk. Such investments will be subject to risks such as adverse changes in general and local economic conditions or local conditions such as excessive building resulting in an oversupply of existing space or a decrease in employment reducing the demand for space. Such investments will also be subject to other factors affecting real estate values, including (i) possible federal, state or local regulations and controls affecting lending, rents, price of goods, fuel and energy consumption and prices, water, and environmental restrictions affecting new construction, (ii) increasing labor and material costs, (iii) the attractiveness of the property to tenants in the neighborhood, and (iv) state and federal income tax liability. Economic conditions, which the Trust cannot predict or control, may have a negative impact on the value of the UPREIT’s assets.

We currently own properties in the states of Iowa, Nebraska, Minnesota, North Dakota and South Dakota (See “DESCRIPTION OF PROPERTIES”). As of December 31, 2022, most of our holdings were located in North Dakota (21 residential properties with 2,521 units and 19 commercial properties with 1,190,123 square feet of space of the total holdings of 36 residential properties with 4,121 units and 45 commercial properties with approximately 2,724,326 square feet of space). Accordingly, you may view our investment in real property as concentrated within a limited geographic area.

Our real estate investments have primarily been in residential rental properties; however, we have increased our holdings of commercial real estate.

Our real estate investments have primarily been in residential rental properties; however, we have increased our holdings of commercial real estate. This mix of assets provides Dakota REIT a diversified approach providing some stability during changing real estate and economic cycles. Even with the asset mix the Trust will have very little opportunity to vary its portfolio swiftly in response to changing economic, financial and investment conditions.

Significant Increases in Property Taxes Could Adversely Affect the Trust

With respect to some of our commercial real estate, we pass through to the tenant the obligation to pay property taxes assessed upon the property subject to their lease; however, most of our leases (most notably our residential leases) do not provide for such shifting of the risk of increased property taxes to the tenants. Accordingly, significant increases in property taxes payable with respect to our properties could have a material adverse effect on our operating results. Further, as a significant increase in taxes payable with respect to our properties would reduce the operating profitability, the values we may obtain from a sale of properties subject to the increased tax burden would be reduced.

Regulations and Public and Private Use Restrictions on Our Properties May Affect our Operations

Local governmental agencies may impose controls or restrictions on rental charges or otherwise adopt regulations which could have a material adverse effect upon our operations. In addition, costs of compliance with regulations such as those pertaining to environmental matters or accessibility to those with physical disabilities (such as the American with Disabilities Act) may also adversely affect our operations.

In addition to regulations, zoning and other use restrictions of local governmental agencies as well as covenants that may be established by private parties that apply to our properties. These public and private restrictions may include the types of uses that may be made with the property as well as impose operating conditions, such as numbers of required parking spaces that must be maintained based on the size of the property and the appearance (“architectural controls”) of the property.

Such taxes, regulations and controls may impair the operating profitability of our properties and thus the values we obtain from a sale of such properties would be reduced.

Real Estate Investments of the UPREIT Face Competition From Other Real Estate Properties

The results of operation of the Trust will depend upon the availability of suitable real estate investment opportunities for the UPREIT, and on the yields available from time to time on real estate and other investments, which, in turn, depends to a large extent on the type of investment involved, the condition of capital markets, the nature and geographic location of the property, and competition and other factors, none of which can be predicted with certainty. Even though the Advisor and its Affiliates have years of experience of acquiring properties suitable for investment, the UPREIT will be competing for acceptable investments with private investors and other real estate investment programs. Many of these competitors have greater experience and resources than the UPREIT.

Ownership of Real Estate Carries Risk of Uninsured Losses and Environmental Liabilities

The Trust intends to maintain what it believes to be adequate property damage, flood, fire loss and liability insurance. There are, however, certain types of losses (generally of a catastrophic nature), which may be uninsurable or which may be economically unfeasible to insure. Such excluded risks may include war, earthquake, hurricane, terrorism, certain environmental hazards and floods. Should such events occur, (i) the UPREIT and the Trust might suffer a loss of capital invested, (ii) tenants of spaces may suffer losses and may be unable to pay rent for the spaces, and (iii) UPREIT and the Trust may suffer loss of profits which might be anticipated from one or more properties.

Federal law (and the laws of some states in which the UPREIT holds or may acquire properties) imposes liability on a landowner for the presence on the premises of hazardous substances or wastes (as defined by present and future federal and state laws and regulations). This liability is without regard to fault or knowledge of the presence of such substances and may be imposed jointly and severally upon all succeeding landowners. If such hazardous substances are discovered on a property owned by UPREIT, UPREIT could incur liability for the removal of the substances and the cleanup of the property. There can be no assurance that UPREIT would have effective remedies against prior owners of the property. In addition, UPREIT may be liable to tenants and may find it difficult or impossible to sell the property either prior to or following any such cleanup.

We Rely Upon Services of Property Management Companies

We engage various property management companies to manage our real estate properties (See “COMPENSATION PAID TO ADVISOR AND OTHER PROPERTY MANAGERS”). In 2022 and in 2021, we paid $3,118,878 and $2,596,446 in property management fees. Of these fees, $2,350,044 in 2022 and $1,868,144 in 2021 were paid to the Advisor or other property managers affiliated with one or more of the members of the Board of Trustees.

While the Advisor does not act as a property manager for any other property owners, the rest of the property management companies we use do manage properties for other parties which properties may compete for tenants with our properties. While we seek to monitor the effectiveness of our property managers, there can be no assurance that owners of competing properties may receive better services than do we. While we have rights to terminate the agreements, we are also subject to termination of the property management agreements by the managers upon very limited notice.

Increases in Expenses May Reduce Cash Flow and Thus Funds Available for the Making of Distribution Payments and for Additional Acquisitions of Investments

Our income from operations was approximately $7.97 million in 2022 and approximately $6.4 million in 2021. Such income represents income from the rental of our residential and commercial properties less the expenses from our operations and the costs of administration of the Trust. Included in such expenses are non-cash depreciation of the costs of acquiring our properties.

We declared distributions payable to our shareholders in 2022 of $10,130,948 in 2022 and $7,703,233 in 2021. The UPREIT declared distributions payable to its limited partners in 2022 of $7,228,801 and $5,852,226 in 2021. The amount of the distributions paid was substantially less due to the election by shareholders and limited partners to reinvest their distribution to acquire shares or limited partnership units. Shareholders received shares in lieu of approximately 59% and 57% of distributions due them in 2022 and 2021. In 2022 and 2021 Units were issued in lieu of distributions with respect to approximately 23% and 20% of such distribution, respectively.

If our operating expenses or the cost of the administration of the Trust increase without corresponding increases in our income from rental of our properties, our operating net income would decrease and our ability to continue to make distributions the Shareholders of the Trust and limited partners of the UPREIT and our ability to use cash flows from operation to invest in additional properties could be impaired. In addition, reduction in our distributions may reduce the levels of participation by shareholders of the Trust and by limited partners in the UPREIT in the reinvestment plans each maintains (in 2022, $5,879,380 was reinvested in the acquisition of shares of the Trust and $1,633,787 was reinvested in the acquisition of limited partnership units of the UPREIT). Under the terms of the Trust’s and the UPREIT’s Distribution Reinvestment Plans, participants may revoke their election and choose to receive cash payment of their distributions or distributions. Reductions in our operating income may affect a shareholder’s determination to participate in the plan.

Delays in Connection With Construction of Improvements to Our Properties

It has generally been our practice to acquire properties that have been in operation rather than undertaking to build and develop properties. As such, we have limited our exposure to risks associated with uncertainties in the development of real estate properties, such as unanticipated delays in the completion of construction of the improvements due to issues with suppliers of the materials or services used in the construction of the property.

We have, however, invested in properties under development through the making of loans to or acquisition of non-controlling equity interests in a property developer constructing a property. In addition, from time to time, we engage in the renovation or improvement of our properties (See the discussion of improvements and maintenance expenditures in “MANAGEMENT’S DISCUSSION AND ANYALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” – “Capital Expenditures”).

Delays in the completion of improvements to our properties may arise for a variety of reasons over which we will have no control. Such delays may result in additional costs being incurred as well as in loss of income due to such delays.

RISKS RELATED TO ADVISOR AND CONFLICTS OF INTEREST

We are Dependent on the Advisor, Some of the Principals of which have other Business Interests

The Advisor is responsible for the day-to-day management of the operation of the Trust and of the UPREIT. As such, we are dependent upon the services of the Advisor. Jim Knutson and Matthew Pedersen, who are each a member of the Trust’s Board of Trustees are among the owners of the Advisor but have other business interests (See the biographical information for Mr. Knutson and Mr. Pedersen under “BOARD OF TRUSTEES, EXECUTIVE OFFICERS AND SIGNFICANT EMPLOYEES” for information related to those other interests).

Mr. Knutson currently devote less of his time in performing as a manager of the Advisor with Mr. Pedersen (President of the Trust), James Haley (Treasurer of the Trust) and Danel Jung (Executive Vice-President of the Trust) devoting substantially all of their time to the discharge of their duties as managers of the Advisor or as officers of the Trust.

While many of the employees of the Advisor have been with the Advisor for extended periods of time, there can be no assurance that they will continue their employment or that the Advisor would be successful in retaining services of successors should existing staff no longer continue their employment. (See “BOARD OF TRUSTEES, EXECUTIVE OFFICERS AND SIGNFICANT EMPLOYEES – Significant Staff of the Advisor”). Neither the Trust nor the Advisor maintains “key person” life insurance policies on any members of the staff of the Advisor. Accordingly, in the event of the death of a key staff member of the Advisor, we and the Advisor would not receive proceeds of a life insurance policy to assist in covering costs which might be incurred in connection with securing a replacement for the loss of a deceased key staff member.

Conflicts of Interest in General

Various conflicts of interest exist – and will arise in the future – as a result of the transactions between the Trust and: (i) the Advisor; (ii) members of the Board of Trustees; or (iii) affiliates of a Trustee (See “INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS”). These conflicts present the risk to holders of Shares that the transactions between the Trust and such parties have not been negotiated at arm’s-length. As a consequence, agreements between related parties do not carry the indicia of fairness that a transaction negotiated between unrelated parties would have and bear closer scrutiny by investors.

No Assurances that Transactions between the Trust and Affiliated Parties will be as Favorable to the Trust as those not with Affiliated Parties

The UPREIT has engaged in transactions with members of the Board of Trustees or their affiliates (See “COMPENSATION PAID TO ADVISOR AND OTHER PROPERTY MANAGERS – Affiliates of the Trust Participating in Service Providers” and “Interests of Management and Others in Certain Transactions” for information regarding such transactions). The transactions have included: (i) provision of property management services to the Trust; (ii) provision of real estate brokerage services to the Trust; (iii) the acquisition of real estate from such affiliates (iv) the making of loans to finance real estate developments by the affiliates; and (v) the acquisition of equity interests in entities owned or controlled by such affiliates.

While in each instance, the member of the Board of Trustees who is engaging directly or (through an affiliate) indirectly with the UPREIT is required to disclose their interest in the transaction to the Board of Trustees and, under the Declaration of Trust, by a majority vote of the Independent Trustees, it must be determined that:

there can be no assurance that past and future transactions are not as favorable to the Trust as might have been or be obtained in a transaction with a completely independent party rather than with an affiliate of one of our Trustees.

Affiliates Managing Our Properties. Of the eight property managers we currently engage to manage our properties, four are affiliated with certain of our Trustees or Executive Officers. (See “COMPENSATION PAID TO ADVISOR AND OTHER PROPERTY MANAGERS”) Jim Knutson and Matthew Pedersen (who are Trustees and officers of the Trust) and James Haley (our Treasurer) are owners of the Advisor and Danel Jung (our Executive Vice President) holds a profit interest in the Advisor. The Advisor manages certain of our properties directly and since January 1, 2022, manages additional properties located in Aberdeen, South Dakota or Bismarck or Fargo, North Dakota markets which had been managed by Valley Rental Services, Inc. (which is owned by Mr. Gaukler, who was a Trustee until June 2023). Such additional properties are managed by Valley Rental 2, LLC, which has the Advisor as its sole member. Kevin Christianson (who is a Trustee) is the owner of Property Resources Group, Inc. Craig Lloyd (who is a Trustee) is an owner of Lloyd Property Management Company. In 2022 and in 2021 we paid $3,118,878 and $2,596,446, respectively, in management fees to such management companies. Of those fees, the above named management companies affiliated with members of our management were:

Affiliates Compensated for Commercial Leasing. In 2022 and 2021 we paid commissions of $131,807 and $141,032, respectively, to real estate brokers in connection with their having participated in the long-term leasing of space in our commercial properties. Three of such brokers were affiliated with individuals who were then members of our Board of Trustees. They were Horizon Real Estate Group, LLC (an affiliate of George Gaukler, a Trustee until June 2023), Lloyd Companies (an affiliate of Craig Lloyd) and Property Resources Group (an affiliate of Kevin Christianson). The fees paid to such brokers for services in leasing of space in our commercial properties in 2021 and 2022 were:

Properties Acquired from Affiliates. Of the 81 properties we owned as of December 31, 2022, 32 (or approximately 40%) were acquired from a then member of our Board of Trustees or from an entity owned - at least in part - by a then member of our Board of Trustees (See tables listing our properties and the column indicating acquisition from a Trustee under “DESCRIPTION OF PROPERTIES” for information related to which of our properties were acquired from affiliates and see “Acquisitions from Affiliates” in “Interests of Management and Others in Certain Transactions.”

Loans to Affiliates. We have from time to time made and contemplate we may in the future make loans to affiliates of members of our Board of Trustees in connection with real estate development we anticipate we may seek to acquire ownership of. Below are summaries of the two financings which are currently outstanding,

Financings for Development of the The Rowe on 57^th Apartments in Sioux Falls, South Dakota. We have made two loans to the Lloyd Companies (in which Craig Lloyd, a member our Board of Trustees, is an owner, is an owner) for the development of a total of a 252-apartment complex in Sioux Falls, South Dakota:

Financing for Development of the Sterling Prairie Trail North Apartments in Ankeny Iowa. We have extended a line of credit to TSPTN21, LLC (in which Jerry Slusky, a member of our Board of Trustees, is an owner) for the development of a 216-apartment complex in Ankeny, Iowa. In 2021 the line of credit was $9,450,000 and in 2022, we increased the line to $11,000,000. The line of credit remains outstanding.

For additional information related to these loans to affiliates, see “INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS – LOANS TO OR FROM AFFILIATES.”

Investment in Affiliates. We currently own non-controlling interests in five limited liability companies or limited partnerships (See table in the “General Overview” section of “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” for identification of the entities and our ownership interests in them), each of which has or had George Gaukler (who was a Trustee until June 2023) as one of its owners. Each operates apartment buildings located in Williston, North Dakota. We have invested an aggregate of $6.275 million in such entities.

RISKS RELATED TO ECONOMIC CONDITIONS

Economic Conditions May Limit the Ability of the UPREIT to Purchase Properties or of Tenants to Pay Rent

Periods of tight credit and high interest rates may adversely affect the ability of the UPREIT to acquire or sell properties. The inability of the UPREIT to acquire new properties or to sell certain of its existing properties further constrains the Trust’s diversification and growth. During times of economic recession, the ability of tenants to rent spaces from the UPREIT and timely pay rent when due may be adversely affected. This would limit the income available to the UPREIT for distribution to the Trust and, consequently, limit the Trust’s ability to make distributions to our shareholders.

There may be future shortages or increased costs of fuel, natural gas, water, or electric power, or allocations thereof by suppliers or governmental regulatory bodies in the areas where property purchased by the UPREIT is located. In the event any such shortages, price increases or allocations occur, the financial condition of tenants of the UPREIT may be adversely affected. The Trust is unable to predict the extent, if any, to which such shortages, increased prices or allocations would influence the ability of tenants to make rent payments and the Trust to make cash distributions to shareholders.

Risk of Downturn in Real Estate Market

While we are exposed to risks of adverse developments in the economy in general, the real estate market we participate may have its own adverse economic developments. Due to numerous conditions over which we will have no control, the market value of properties we own may decrease. Such decreases will adversely affect our abilities to refinance mortgage indebtedness on such properties (See footnotes to the “DESCRIPTION OF PROPERTIES” for information regarding mortgage indebtedness against our properties) which could provide significant issues for properties we have financed on terms involving “balloon payments” of the unpaid principal balance at a maturity date which occurs prior to complete payment of the debt based upon the payment schedule.

If such downturns in the real estate markets occur, we may find that we are unable to sell properties we determine to sell or, if we are able to sell a property, we may receive an amount which is less than we have invested in acquiring and operating the property. We may even find that the debt we owe at the time of sale, exceeds the amount we can obtain from a purchaser.

Risks of Disruptions in the Financial Markets

The success of our business is significantly related to general economic conditions, but in particular, we are dependent upon the condition of the banking and financial markets. Rising interest rates and the decreasing availability of funding for real estate investments could have a materially adverse effect on our operations and on our abilities to acquire additional properties, refinance mortgage indebtedness and sell properties we hold.

Tenant Bankruptcies

Economic conditions affecting tenants leasing our properties may result in filing of bankruptcy by tenants. In particular, this may have a more significant adverse impact on our operations and financial condition with respect to our commercial real estate where the properties have fewer tenants than are associated with our residential rental real estate. In addition, we may incur legal fees and other costs in seeking to protect our interests in the event of a filing of bankruptcy by a tenant.

RISKS RELATED TO OUR STRUCTURE AND THE OFFERING

There is No Assurance That Shareholders Will Receive Cash Distributions or Benefit from Property Appreciation

While we have had a history of paying quarterly distributions, there is no assurance as to whether cash distributions can continue to be available for distribution to shareholders (See “SECURITIES BEING OFFERED – Distribution” for distribution declared and paid since 2012. There is no assurance that the Trust will operate at a profit or that any properties acquired by the UPREIT will appreciate in value or can ever be sold at a profit. The value and marketability of the UPREIT’s properties will depend upon many factors beyond the control of the Trust or the UPREIT, and there is no assurance that there will be a ready market for the properties owned by the UPREIT since investments in real property are generally non-liquid. Operating expenses of the Trust, including certain compensation to the Advisor will be incurred and must be paid irrespective of the Trust’s profitability.

Even if the Trust operates on a profitable basis, our ability to pay cash distributions may be impaired. In each of 2022 and 2021 we declared for payment in those years aggregate distributions to shareholders of the Trust and to limited partners of the UPREIT of $18,310,501 and $14,349,497 (after reinvestment of declared distributions to acquire shares or limited partnership units, the net distributions/distributions paid were $9,846,582 and $7,987,916) compared to net cash from operating activities of $24,091,608 and $22,057,408, respectively. Shareholders of the Trust and limited partners of the UPREIT participating in reinvestment of their distributions or distributions may terminate such participation with minimal notice and such termination by a substantial number of the participants could require us to use cash rather than our shares or the Trust’s limited partnership units to satisfy the rights to distributions or distributions, as applicable.

Further, if we were not successful in refinancing our mortgage indebtedness when the loans mature, we would need to use net operating cash flow to satisfy the “balloon payments” due at the maturities of our loans. For information regarding the amounts coming due under our mortgage indebtedness see the footnotes to the table of our “DESCRIPTION OF PROPERTIES.” In connection with your consideration of these risks you may wish to know that we have the following loans maturing this year and in the next two calendar years:

Investments in the Trust are Subject to Dilution by Future Sales of Securities by the Trust and Issuance of Units by the UPREIT and from the Reinvestment Plans

Under the terms of the UPREIT Limited Partnership Agreement, the UPREIT is authorized to issue limited partnership interests in the UPREIT in exchange for real estate or interests in real estate. Such exchanges have occurred and are expected to continue to occur during and after the Offering. We intend for the UPREIT to continue to seek contributions of property in exchange for Partnership Interests in the UPREIT. Additionally, the Trust will, continue to seek investors to acquire Shares in exchange for cash investment in the Trust. These additional investments will dilute the percentage ownership interests of current investors of the Trust, including those that reinvest their distributions to acquire additional shares.

Each of the Trust and the UPREIT offer the opportunity for participants in their respective reinvestment option to accept additional equity interest in lieu of cash payment of distributions. In 2022 and 2021 Shares were issued in lieu of distributions with respect to approximately 58% and 57% of such distributions, respectively. In 2022 and 2021 Units were issued in lieu of distributions with respect to approximately 23% and 20% of such distribution, respectively.

No Assurance that we will Continue our Share Repurchase Plan

To provide shareholders with an opportunity for liquidity with respect to our Shares, we have from time to time maintained arrangements permitting shareholders who have held their Shares for at least one year the right to request the repurchase by the Trust of all or a portion of their Shares (See - “SECURITIES BEING OFFERD – Share Repurchase Plan” for information related to such arrangements).

The Board of Trustees reserves the absolute right to terminate, suspend or amend the Share Repurchase Program at any time without shareholder approval, but subject to advance notification to the shareholders, if the Trustees believe such action is in the best interest of the Trust or if they determine the funds otherwise available to fund our Share repurchase are needed for other purposes.

RISKS RELATED TO OUR STATUS AS A REAL ESTATE INVESTMENT TRUST

The Trust Must Limit Ownership of Shares in Order to Remain Qualified as a REIT

In order for the Trust to qualify as a REIT, no more than 50% of the outstanding Shares may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of the Trust’s taxable year. To ensure that the Trust will not fail to qualify as a REIT under this test, the Declaration of Trust authorizes the Trustees to take such actions as may be required to preserve its qualification as a REIT and limits any person to direct or indirect ownership of no more than a limited percentage of the outstanding Shares of the Trust. While these restrictions are designed to prevent any five individuals from owning more than 50% of the Shares, they would also make virtually impossible a change of control of the Trust. The restrictions and provisions may also (i) deter individuals and entities from making tender offers for Shares, which offers may be attractive to shareholders, or (ii) limit the opportunity for shareholders to receive a premium for their Shares in the event an investor is making purchases of Shares in order to acquire a block of Shares.

Compliance with REIT Qualification Requirements may Impair our Operations

The Declaration of Trust directs the Board of Trustees to maintain our qualification under applicable law as a REIT. It is possible that the requirements may limit the investments which may be pursued by the Trust or even require a liquidation of investments the Board of Trustees views as being attractive.

If the Trust Fails to Qualify as a Real Estate Investment Trust, the Trust and Investors May Suffer Adverse Tax Consequences. The Trust and Investors May Also Suffer Adverse Tax Consequences from Other Unanticipated Events

Although management believes that the Trust has been organized and operated to qualify as a REIT under the Code, no assurance can be given that the Trust has in fact operated or will be able to continue to operate in a manner to qualify or remain so qualified. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations, and the determination of various factual matters and circumstances not entirely within the Trust’s control (See – “Requirements for Qualification – General,” “Income Tests,” “Asset Tests” and “Annual Distribution Requirements” under “FEDERAL INCOME TAX CONSIDERATIONS”). For example, in order to qualify as a REIT: the Trust must be owned by at least 100 or more persons; at least 95% of the Trust’s taxable gross income in any year must be derived from qualifying sources; the Trust must make distributions to shareholders aggregating annually at least 90% of its REIT taxable income (excluding net capital gains); and at least 75% of our assets must be “real estate assets,” cash or U.S. government securities. To the extent we fail these requirements, unless certain relief provisions apply, we may have a loss of our status. Such a loss could have a material adverse effect on the Trust and its ability to make distributions to you and to pay amounts due on its debt. Additionally, to the extent UPREIT was determined to be taxable as a corporation, the Trust would not qualify as a REIT, which could have a material adverse effect on the Trust and its ability to make distributions to you and to pay amounts due on its debt. Finally, no assurance can be given that new legislation, new regulations, administrative interpretations or court decisions will not change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification.

If the Trust fails to qualify as a REIT, it will be subject to federal income tax (including any applicable alternative minimum tax) on its taxable income at corporate rates, which would likely have a material adverse effect on the Trust and its ability to make distributions to shareholders and to pay amounts due on its debt. In addition, unless entitled to relief under certain statutory provisions, the Trust would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification is lost. This treatment would reduce funds available for investment or distributions to shareholders because of the additional tax liability to the Trust for the year or years involved. In addition, the Trust would no longer be required to make distributions to shareholders. To the extent that distributions to shareholders would have been made in anticipation of qualifying as a REIT, the Trust might be required to borrow funds or to liquidate certain investments to pay the applicable tax.

For a further discussion of income tax issues, see “FEDERAL INCOME TAX CONSIDERATIONS.”

PLAN OF DISTRIBUTION

This Offering is being made to existing shareholders of the Trust who are residents of, or entities domiciled in, a state in which we have qualified the issuance of Shares under the DRIP in accordance with laws of such state related to the offer and issuance of securities. With respect to shareholders residing in or domiciled in certain states, the number of shares which may be issued could be limited such that the Trust would need to decline to accept requests for reinvestment of distributions that would involve our exceeding such limitations. If: (i) a participant in the DRIP relocates to a state where we have not previously qualified the issuance of Shares under the DRIP; (ii) we receive a request from a shareholder who is a resident is an entity domiciled in a state where we have not previously qualified the issuance of Shares under the DRIP or if issuance of Shares under the DRIP will exceed the limitation, we may defer the payment of the distribution in cash while we pursue the qualification to allow Shares to be issued.

Duration of Offering. This Offering will end on the earlier of: (i) July 31, 2024; (ii) when all Shares and been issued; or (iii) if our Board of Trustees elect to terminate the DRIP.

No Broker/Dealers are Engaged to Solicit Participation in the Plan. The Trust is directly, without the engagement of broker/dealers, offering the Shares in this Offering under the Trust’s DRIP (See “SECURITIES BEING OFFERED – Distribution Reinvestment Plan”).

State of Residence or Domicile for Plan Participation by a Shareholder. This Offering is available only to shareholders of the Trust who are residents of or entities domiciled in a state in which we have qualified the issuance of share under the DRIP in accordance with laws of such state related to the offer and issuance of shares. Individuals are residents of the state in which they maintain their principal residence. A corporation, partnership, trust or other entity is domiciled in the state where the principal office of the entity is located.

Participation in the DRIP. To participate in the Offering, investors must be a participant in the DRIP and have their shareholder registration with the Trust reflect that the participant meets the residency / domicile requirements addressed above.

USE OF PROCEEDS

The Trust will receive no cash proceeds from the issuance of Shares to participants in the DRIP. Such issuance, however, will permit the Trust to retain funds within the UPREIT which would otherwise be applied to payment of cash distributions. Such retained funds can be used by the UPREIT to acquire additional properties, repay indebtedness and for expenditure in operations of the business of the Trust and the UPREIT.

As of the date of this Offering Circular, we have not identified any specific property or properties we will seek to acquire with any additional cash retained as a result of issuance of Shares in lieu of payment of distributions in cash to participants in the DRIP. Acquisitions and investments by the UPREIT will be determined by the Board of Trustees of the Trust and we anticipate that we will continue to use our capital and proceeds from borrowings to invest in real estate (See “DESCRIPTION OF BUSINESS – Investment Policies and Objectives of the Trust”).

DESCRIPTION OF BUSINESS

THE TRUST

The Trust is an unincorporated business trust registered under the laws of North Dakota with the office of the North Dakota Secretary of State and is set up to meet the requirements under Internal Revenue Code Section 856 as a real estate investment trust (a “REIT”). Internal Revenue Code Section 856 requires that 75% of the assets of a REIT, either directly or indirectly, must consist of real estate assets and that 75% of its gross income must be derived from real estate. As a REIT, the Trust is generally not subject to U.S. federal corporate income tax on its net taxable income that is distributed to the shareholders of the Trust.

The Trust began operations in 1997 and in 2000 the Trust formed the UPREIT to acquire income-producing real estate properties and investments in entities holding income-producing real estate. Through the UPREIT, for which the Trust is the General Partner, the Trust seeks to invest in income-producing real estate that will provide cash flow and capital appreciation opportunities. The Trust intends to invest in the upper Midwest region and, as of the date of this Offering Circular, the properties we hold are primarily located in North Dakota, we also have properties in Iowa, Minnesota, Nebraska, and South Dakota. Of those properties, (based on the lease income received in 2021) approximately 57% are residential and 43% are commercial (See “DESCRIPTION OF PROPERTIES”).

The principal governing document for the Trust is its Declaration of Trust. As permitted under North Dakota law, the Trust will continue until terminated as a result of action initiated by the voting shareholders or by the Board of Trustees.

THE UPREIT

The UPREIT is a limited partnership established under the laws of North Dakota. The Trust is the general partner of the UPREIT. As of December 31, 2022, there were approximately 210 holders of limited partnership interests in the UPREIT holding an aggregate of approximately 9,402,496 Partnership Units. In our consolidated financial statements, our general partnership interests are referred to as “Beneficial Interests” while the limited partnership interests are referred to as “Noncontrolling Interests.”

Most of the real estate properties we have invested in are held directly by the UPREIT, but certain properties are held by one of eight entities for which the UPREIT is the sole owner/member. This has been done to satisfy a requirement of mortgage lenders who finance the acquisition or holding of the properties. In addition, the UPREIT holds minority interests in real estate holding entities and has made loans to developers of real estate projects the UPREIT may acquire.

The UPREIT acquires real properties through both purchase and in exchange for issuance of limited partnership interests to owners of the real estate being acquired through such an exchange. By exchanging property for limited partnership interests, rather than selling the property to the UPREIT for cash, the owner may defer the recognition of the taxable gain on the property if the value of the property exceeds the tax basis the owner has in the property.

ADVISOR AND PROPERTY MANAGERS

Neither the Trust nor the UPREIT has employees. The Trust has an advisory contract with Dakota REIT Management, LLC (the “Advisor”) under which the Advisor carries out the daily operations of the Trust including its responsibilities as the general partner of the UPREIT (for information regarding the qualifications of the Advisor, see “BOARD OF TRUSTEES, EXECUTIVE OFFICERS AND SIGNFICANT EMPLOYEES - Significant Staff of the Advisor”). The Advisor is paid fees under the advisory contract.

The Advisor has never controlled or provided services to any other real estate investment trust, a real estate investment limited partnership or other investment program which provides flow-through tax consequences to investors. Thus, the Advisor has never participated in the offering of investments by such an entity which disclosed when the investment entity might be liquidated and thus there can be no disclosure as to whether such liquidation was completed as disclosed.

The UPREIT engages services of the property management companies in connection with the management of the properties owned by the UPREIT or its wholly owned subsidiaries, four of which are affiliated with members of our Board of Trustees (See “COMPENSATION PAID TO ADVISOR AND OTHER PROPERTY MANAGERS”).

INVESTMENT POLICIES AND OBJECTIVES OF THE TRUST

Currently, all of the real estate investments of the Trust are made through the UPREIT. As general partner of the UPREIT, the Trust determines whether any properties are to be acquired or disposed of with such investment decisions being made through action of the Trust’s Board of Trustees. Currently, the Board of Trustees of the Trust intends to invest in properties which are believed to be located in growth markets in the Midwest. The Board of Trustees intends for the UPREIT to invest in multi-family apartments and commercial properties (industrial, grocery anchored retail and office space) located in communities that appear to involve a stable market for particular investments.

In 2021, we made seven acquisitions and five dispositions of properties. In January, we purchased two 36-unit apartment buildings located in Fargo, North Dakota for $7.4 million. In February, we sold two properties, an industrial warehouse located in Hastings, Minnesota for $800,000 which we had acquired in 2014 for $875,000 and a storage facility located in Minot, North Dakota for $1,075,000 which we had acquired in 2011 for $1,510,000. In April, we sold an 84-unit apartment building located in West Fargo, North Dakota for $3,850,000 which we had acquired in 2014 for $3,760,000. In May, we acquired a 79,200 square feet industrial property located in Bismarck, ND and we sold a 28,347 square foot office building located in Bismarck, ND for $1,254,000 which we had acquired in 2010 for $1,465,000. In June, we purchased an 88-unit multifamily apartment building located in Johnston, Iowa for $11,913,000, two apartment buildings consisting of 104 units of a complex located in Sioux Falls, South Dakota for $12,032,495. In August, we purchased a 244-unit apartment complex located in Des Moines, Iowa for $36,000,000 and we sold an industrial warehouse located in Brooklyn Park, Minnesota for $6,500,000 which we had acquired in 2019 for $5,500,000. In September, we purchased a 79,200 square foot mixed used commercial building located in Eagan, Minnesota for $12,100,000. In December, we purchased a 42,797 square foot retail/office building in Fargo, North Dakota for $6,984,000.

In 2022, we made nine acquisitions and two dispositions of properties. In January we sold an office building located in Plymouth, Minnesota for $6,500,000 which we had acquired in 2016 for $5,725,000. In April we purchased a 36 unit apartment building in Sioux Falls, South Dakota for $4,667,503. In June we sold a former Shopko retail building located in Oakes, North Dakota for $100,000 which we had acquired 2010 for $2,716,000 and we purchased an 88,239 square foot industrial/flex complex in Fargo, North Dakota for $12,000,000. In August we purchased seven neighborhood shopping centers in the Omaha, Nebraska metropolitan area consisting of a total of 353,864 square feet for a total of $57,850,000.

For listings of the properties held either directly by the UPREIT or through an entity wholly owned by the UPREIT, see “DESCRIPTION OF PROPERTIES.”

The UPREIT does not currently intend to invest in mortgages loans originated by others, although we have made loans to finance the development of real estate properties we contemplate acquiring. The Declaration of Trust sets forth restrictions on investment in mortgage loans, including limitations on deferral of payment of accrued interest and the making of loans that result in indebtedness against the property exceeding 85% of its appraised value absent substantial justification (such as credit enhancements in the form of a guaranty by a financially strong third party).

The UPREIT has made investments in limited partnerships, limited liability companies and other limited liability entities that own and operate real estate which is of a type the UPREIT would hold.

The investment objectives of the Trust are to provide to its shareholders (i) preservation, protection and eventual return of the shareholder’s investment, (ii) annual cash distributions of cash from operations, a portion of which (due to depreciation) may be a return of capital for tax purposes rather than taxable income, and (iii) realization of long-term appreciation in value of the properties acquired by the Trust. There is no assurance that such objectives will be attained.

When considering properties to be included in the portfolio of the UPREIT, the Board of Trustees of the Trust uses the following criteria for selection:

In making its investment decisions, the Board of Trustees is subject to terms of the Declaration of Trust (See “BOARD OF TRUSTEES, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES – Organizational Structure”) which restricts the Trust from:

The Declaration of Trust also requires the Board of Trustees to approve acquisition at prices the Board of Trustees determines to be the fair market value of the property. Due to requirements of mortgage lenders and to comply with an accounting standard discussed in “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Results of Operations,” independent appraisals of property are obtained. The Declaration of Trust requires the purchase from an affiliate of the Trust to be not greater than the appraised value determined by an independent appraiser. Further, a majority of the independent trustees may require use of the appraised value when the purchase is from any other seller (See “BOARD OF TRUSTEES, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES – Members of the Trust’s Board of Trustees and Executive Officers”).

SUMMARY DESCRIPTION OF THE UPREIT LIMITED PARTNERSHIP AGREEMENT

The Limited Partnership Agreement (the “Partnership Agreement”) is the governing document for the UPREIT. The Trust is the sole general partner of the UPREIT and as of December 31, 2022, the UPREIT had approximately 210 limited partners of the UPREIT. The following is a summary of the material terms of the Partnership Agreement. Any descriptions are qualified in their entirety by reference to the Partnership Agreement. A copy of the Partnership Agreement currently in effect has been filed as an exhibit to the Offering Statement the Trust has filed with the SEC of which this Offering Circular is a part.

MANAGEMENT

As the sole general partner of the UPREIT, the Trust has the full, complete and exclusive discretion to manage and control the business of the UPREIT, and the limited partners have no authority in their capacity as limited partners to transact business for, or participate in the management of the UPREIT. The authority of the Trust as general partner includes the admission of limited partners and the determination of the interests in the UPREIT to be issued in connection with such admission and to issue additional interests to existing partners in exchange for contributions of capital.

CAPITAL CONTRIBUTIONS

The Trust and each limited partner of the UPREIT is required to make a capital contribution in connection with their becoming a partner of the UPREIT. For purposes of determining the relative interests in the UPREIT, such interests are denominated by the Partnership Agreement as “Partnership Units.” While the Partnership Agreement permits the issuance of Partnership Units to be in series or classes with such designations and preferences as the general partner shall determine, all Partnership Interests have been of a single class with respect to the allocation of income or loss and the participation in distributions.

In connection with forming the UPREIT in October 2000, the Trust contributed substantially all of its assets to the UPREIT subject to various debts and obligations and George Gaukler (who served as a Trustee until June 2023), as the initial limited partner, made a nominal cash contribution to the UPREIT. The Partnership Agreement requires the Trust to contribute to the UPREIT the net proceeds from issuance of the Trust’s Shares. When that is done, the relative interests of the Trust as General Partner and that of the limited partners in the UPREIT is determined as if the Trust received one Partnership Unit for each share so issued by the Trust.

Except for the obligation of the Trust to contribute proceeds from its issuance of Shares, the partners have no right or obligation to make any additional capital contributions. The Trust may make loans to the UPREIT to cause the UPREIT to borrow funds from others, including from limited partners.

Many of the properties held by the UPREIT were contributed to the UPREIT in exchange for Partnership Units. For most who are contributing property, the transaction is considered a tax deferred exchange. The Declaration of Trust requires the purchase price to be approved by the Board of Trustees as not being more than the fair market value of the property and if the contributing limited partner is an affiliate of the Trust, for the fair market value to be based on an independent appraisal. The contributor is required to hold the Partnership Units received in exchange for their property for at least one year.

PROFIT AND LOSS ALLOCATIONS AND DISTRIBUTIONS

The net profit or loss of the UPREIT for each year is generally allocated among the partners in accordance with their respective interests. This general allocation is subject to compliance with specific exceptions related to matters recognized under federal income tax regulations related to minimum gain chargeback with respect to nonrecourse debt and to allocation of loss to the general partner when such allocation to a limited partner would create a capital account deficit. There is also provision in the Partnership Agreement for allocation of net profit or loss allocation if a limited partner affects a permitted transfer of their partnership interest during the year.

The Partnership Agreement contemplates that the UPREIT will make regular operating cash distributions on at least a quarterly basis in an amount the general partner deems appropriate. The general partner is, however, required to use its best efforts to effect distributions of sufficient amounts to permit the Trust to pay distributions to its shareholders as is required to maintain the status of the Trust as a REIT. The distributions made are in accordance with the respective percentage interests (i.e. the Partnership Units held) as of the record date the general partner may establish for purposes of determining to whom a distribution is payable.

Upon liquidation of the UPREIT, remaining assets are to be distributed to all partners with positive Capital Accounts in accordance with their respective positive Capital Account balances.

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Limited partners are not to be liable for any debts or obligations of the UPREIT. A limited partner is only obligated to make payments of its capital contribution in accordance with any capital contribution agreement made with the UPREIT, if any, as and when due thereunder.

After owning Partnership Units for one year and subject to certain limitations in the Partnership Agreement, each limited partner has a right (the “Exchange Right”) to request the UPREIT to redeem all or a portion of the Partnership Units held by such limited partner in exchange for payment per unit of the then current offering price for Shares of the Trust. Exercise of the Exchange Right is by delivery of written notice to the UPREIT. If such a notice is given, the Trust may purchase the subject units by issuance of shares to the limited partner. Each limited partner is limited to giving not more than two notices of exercise of Exchange Rights during each calendar year. An Exchange Right may not be exercised with respect to the lesser of 100 Partnership Units or all of the remaining Partnership Units then held by the limited partner.

Issuance of Partnership Units to limited partners is made under claimed exemptions from registration under applicable federal and state regulation of the issuance of securities. As such, they may not be transferred by the limited partner if, in the opinion of legal counsel to the UPREIT that such transfer would require such registration. Further, transfers may not be made if, in the opinion of legal counsel to the UPREIT that such transfer would result in the UPREIT being taxed as a corporation or if the transfer would impair the qualification of the Trust as a REIT.

DISTRIBUTION REINVESTMENT PLAN

The Trust, as general partner of the UPREIT, has established a Distribution Reinvestment Plan (the “Distribution Reinvestment Plan”) for limited partners. To participate, the limited partner must be either an “accredited investor” or a “sophisticated investor” with sufficient knowledge and experience in financial and business matters to adequately assess the merits of participating in the Distribution Reinvestment Plan and reside in a jurisdiction which permits participation in the Distribution Reinvestment Plan without an effective registration under the Securities law and regulations of that jurisdiction. To participate, a limited partner is to complete a written election. A participant may terminate their participation on thirty days prior notice.

Under the Distribution Reinvestment Plan, in lieu of receipt of a cash payment of the distribution otherwise due, a limited partner will be issued additional limited partnership units at a rate based on 95% of the offering price established by the Board of Trustees for the shares of the Trust (exclusive of subscription fees that may be payable with respect to certain classes) rounded up to the next full cent. Fractional units to one hundredth of a thousand (i.e., four decimal points) will be issued. The Distribution Reinvestment Plan may be terminated or modified by the UPREIT on not less than ten days prior notice of termination or modification.

DESCRIPTION OF PROPERTIES

The following table is a listing of the real estate properties owned as of December 31, 2022, directly by the UPREIT or by an entity wholly owned by the UPREIT and two additional buildings we acquired in May 2023. The properties are primarily listed in the order in which they were acquired. The properties are multi-family residential apartment or townhome complexes or commercial real estate properties. The table includes the original purchase price, the mortgage balance at the end of 2022 (unless otherwise noted), the size of commercial properties or the number of units for residential properties, the level of physical occupancy of the property at the end of 2022 (or the occupancy at time of acquisition) and if the property was acquired from a Trustee or an affiliate of a Trustee. Typically, the apartments are leased for initial terms from six to twelve months with month-to-month terms thereafter. The commercial properties are typically leased for terms from one to twenty years with options to renew the term.

Of the 81 properties owned at the end of 2022, 32 (or approximately 40% of the properties then held) were acquired from a member of our Board of Trustees or from an entity owned - at least in part - by a member of our Board of Trustees. For information regarding the acquisitions from affiliates, see “Acquisitions from Affiliates” in “Interests of Management and Others in Certain Transactions.”

In addition to the properties listed in the foregoing tables, the UPREIT also holds non-controlling membership interests or the limited partnership interests in the following limited liability companies or limited partnerships:

COMPENSATION PAID TO ADVISOR AND OTHER PROPERTY MANAGERS

ADVISORY MANAGEMENT AGREEMENT

Neither the Trust nor the UPREIT have employees. Since 2007, the Trust has engaged Dakota REIT Management, LLC (the “Advisor”) to provide the staff to oversee and manage the operations of the Trust, including, the discharge of its responsibilities as general partner of the UPREIT. The services are provided under the terms of an Advisory Management Agreement (the “Management Agreement”), the most current version of which was made in June 2021 and took effect as of July 1, 2021. The term of the Management Agreement has been extended, most recently, to October 25, 2023. Under the Management Agreement, the Advisor is responsible for all operations of the Trust under the direction of the Board of Trustees of the Trust and in compliance with the Declaration of Trust and the UPREIT’s Partnership Agreement. A copy of the Management Agreement has been filed as an exhibit to the Offering Statement the Trust has filed with the SEC of which this Offering Circular is a part.

As compensation for its services under the Management Agreement the Advisor is to be paid:

As required by the Declaration of Trust, the Management Agreement, however, requires the Advisor to refund to the Trust UPREIT unit issuance and mortgage refinance fees to the extent the aggregate fees exceed the lesser of 2% of the Trust’s average “invested assets” or 25% of the Trusts “net income” for the calendar year. The Management Agreement defines “invested assets” as the current market value of the real estate investments and “net income” as revenues less expenses other than depreciation and other non-cash reserves and excludes from the definition gains from sales of UPREIT assets. Provided, however, the independent members of the Board of Trustees of the Trust may waive the refund of fees if they believe the year involved unusual or non-recurring factors resulted in extraordinary expenses for the year.

The table below shows the amounts of such fees paid to the Advisor by the Trust in the years 2022 and 2021:

The Management Agreement has a term of one year but may be extended by the Trust with the approval of a majority of the members of the Board of Trustees of the Trust who are not affiliates of the Advisor. In addition, either the Advisor or the Trust may terminate the Management Agreement with sixty days’ prior written notice; with the determination for termination by the Trust being made by a majority of the members of the Board of Trustees who are not affiliated with the Advisor.

PROPERTY MANAGEMENT AGREEMENTS

The UPREIT currently has agreements for the management or leasing of properties with eight property management companies. The table on the following page identifies those companies, the properties managed and the fees under the agreements as of December 31, 2022. Four of the property management companies are or were affiliated with members of our Board of Trustees or Officers. Matt Pedersen and Jim Knutson (Trustees and officers of the Trust) and James Haley (our Treasurer) are owners of the Advisor (Dakota REIT Management, LLC) and our Executive Vice President, Danel Jung holding of a profits interest in the Advisor. The Advisor is the sole member of Valley Rental 2, LLC, which took on management of properties managed for the UPREIT as of January 1, 2022 which had previously been managed by Valley Rental Services, Inc. (owned by Mr. Gaukler, a Trustee until June 2023). Kevin Christianson (a Trustee) is the owner of Property Resources Group, Inc. Craig Lloyd (a Trustee) is an owner of Lloyd Property Management Company.

In the years 2022 and 2021, we paid $3,118,878 and $2,596,446 in management fees. Of those fees, approximately 54% and 56% were paid to the Advisor, its subsidiary Valley Rental 2, LLC or Valley Rental Services, Inc.; approximately 16% and 10% was paid to an affiliate of Lloyd Property Management; and approximately 7% and 6% was paid to Property Resources Group, Inc. in those years respectively.

AFFILIATES OF THE TRUST PARTICIPATING IN SERVICE PROVIDERS

George Gaukler a shareholder of the Trust, a limited partner of the UPREIT, and was a member of the Trust’s Board of Trustees until he resigned in June 2023, is an owner of:

Jim Knutson is a shareholder of the Trust, a limited partner of the UPREIT, a member of the Board of Trustees and the current Secretary of the Trust. He was an owner of Valley Realty, Inc., Horizon Real Estate Group, LLC and Valley Rental Service, Inc. prior to his sale of his interests in those entities. Mr. Knutson remains an owner of the Advisor but is selling his interests in the Advisor in installments to Matthew Pedersen and James Haley with the final installment being in January 2024.

Kevin Christianson is a shareholder of the Trust and a member of the Trust’s Board of Trustees. Mr. Christianson is a member of Property Resources Group, LLC, a commercial property management company which has managed properties for the UPREIT.

Craig Lloyd is a shareholder of the Trust, a limited partner of the UPREIT and a member of the Trust’s Board of Trustees. Mr. Lloyd is a shareholder or member of entities which are part of the Lloyd Companies which have managed properties for the UPREIT and marketed leasing of commercial space owned by the UPREIT.

Matthew Pedersen is a shareholder of the Trust, a member of the Trust’s Board of Trustees and the current President of the Trust. Mr. Pedersen is an owner of the Advisor. Mr. Pedersen is an owner of an accounting firm that has provided limited accounting services to the Trust or the UPREIT from time to time.

James Haley is a shareholder of the Trust and the current Treasurer of the Trust. Mr. Haley is an owner and the Chief Financial Officer of the Advisor.

Danel Jung is a shareholder of the Trust and the current Executive Vice President of the Trust. Ms. Jung is Chief Operating Officer of the Advisor and holds a profits interest in the Advisor.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and the notes thereto included elsewhere in this Offering Circular. This discussion contains forward-looking statements that are based on management’s current expectations, estimates, and projections about our business and operations. The cautionary statements made in the Offering Circular should be read as applying to all related forward-looking statements whenever they appear in this Offering Circular. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those we discuss under “RISK FACTORS” and elsewhere in this Offering Circular. You should read “RISK FACTORS” and “Cautionary Note Regarding Forward Looking Statements.”

GENERAL OVERVIEW

The Trust is organized under the laws of the state of North Dakota. We are the general partner of and owned approximately 58% and 57% of the UPREIT as of December 31, 2022 and 2021. The UPREIT is the sole member of eight limited liability companies (the “LLC’s”) established to hold interests in various real estate properties in accordance with requirements of the mortgage lenders which financed our investment in such properties. We also hold limited partnership interests ranging from 34% to 50% interests in five limited partnerships. Below is an outline of our structure and the ownership interests as of December 31, 2022:

We seek to operate as a real estate investment trust (a “REIT”) in compliance with the conditions set out in Section 856 of the Internal Revenue Code. Specifically, we seek to operate as an “Umbrella Partnership Real Estate Investment Trust,” which is a REIT that holds substantially all of its investments through a limited partnership entity for which the REIT is the general partner.

The financial statements included in this Offering Circular are consolidated financial statements which include the financial statements of the Trust as well as those of the UPREIT and its wholly owned LLC’s. All significant intercompany transactions and balances have been eliminated in consolidation. For example, if funds were due the Trust by the UPREIT, the balance sheets of each would reflect the amount as a payable by or receivable due the entity, but by consolidation of the financial statements, the amounts effectively cancel out the intercompany debt.

We currently operate residential and commercial properties located in Iowa, Minnesota, Nebraska, North Dakota, and South Dakota. As of the end of 2022, our residential property consisted of 3,967 apartment units and 154 townhomes. and 2,724,326 square feet of commercial real estate.

The table below identifies by state the number of residential properties and the aggregate number of residential units in such properties as well as the number of commercial properties and the aggregate number of square feet of such properties we held at of the end of 2022 and 2021 (including two properties we sold in the first six months of 2022).

RECENT DEVELOPMENTS

In January, April and July 2023, we paid distributions of $0.23 per share to shareholders of the Trust and $0.23 per unit to limited partners of the UPREIT record as of December 31, 2022, and March 31, and June 30, 2023, respectively. Participants in the reinvestment plans of the Trust and the UPREIT, received additional shares or units in lieu of payments due them.

In May 2023, we sold the 144,441 square foot Hampshire Technology Center located in Bloomington, Minnesota for approximately $12,750,000 which we had acquired in 2019 for approximately $11,850,000. In May 2023, we also acquired two additional 36-unit apartment buildings the Rowe on 57^th apartment complex located in Sioux Falls for approximately $10,000,000.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2022, we had approximately $10,345,000 in cash, and approximately $13,746,500 of restricted funds. The restricted funds are primarily from replacement cost reserves maintained in accordance with arrangements with mortgage lenders (approximately $7,535,581) and lender mandated reserves for the making of tenant leasehold improvements for several of our properties (approximately $1,350,244), as well as tenant security deposits (approximately $3,216,500), escrows for real estate taxes and insurance (approximately $1,644,200). In addition, as of December 31, 2022, we had available to us $5,000,000 under unsecured lines of credit and $19,500,000 in lines of credit secured by mortgages upon certain of our properties. As of December 31, 2022, there was no outstanding amount due under such lines of credit.

The Trust uses leverage in the acquisition and holding of its properties by borrowing funds and securing the repayment of borrowed funds with mortgages upon its properties. This includes use of refinancing to “pull equity” from existing properties as well as revolving credit facilities. The list of properties under “DESCRIPTION OF PROPERITES” includes information regarding such mortgage indebtedness, but in general, as of December 31, 2022, we had $477,000,572 owed under 83 loans secured by mortgages with various maturity dates. In 2023, two of the loans involving approximately $3,564,231 of principal are scheduled to mature. In 2024, six of the loans involving approximately $17,847,435 of principal are scheduled to mature. In 2025, eleven of the loans involving approximately $31,500,276 of principal are scheduled to mature.

The Trust, with respect to its outstanding shares, and as general partner of the UPREIT, with respect to the limited partners of the UPREIT, seeks to pay distributions on a quarterly basis. Each of the Trust and the UPREIT maintain a Distribution Reinvestment Plan that permits shareholders or limited partners to direct that the full amount of their distributions be reinvested into shares or limited partnership units, as applicable. In each instance, the number of shares or limited partnership units issued is based on 95% of the selling price for the shares most recently offered or contemplated to be offered by the Trust (exclusive of subscription fees that may be payable with respect to certain classes of Shares) rounded up to the next full cent.

See “SECURITIES BEING OFFERED – Distributions” for information related to the distributions declared for payment to shareholders as well as the elections by shareholders to receive additional shares in lieu of cash payment of distribution. Participation by limited partners in the UPREIT’s distribution reinvestment plan has not been as extensive as is the participation by shareholders in the Trust’s plan. Of the distributions declared for payment in 2022 to limited partners as, approximately 23% were reinvested into additional units. This compares to approximately 59% of the distributions declared for payment to shareholders in 2022 being reinvested to acquire shares.

We anticipate participation by shareholders in the distribution reinvestment plans will continue, but if more shareholders elect to take distributions in cash and fewer UPREIT limited partners invest distributions into limited partnership units, our liquidity could be adversely affected.

RESULTS OF OPERATIONS

The following table summarizes certain information related to our operations for the periods indicated (the information for calendar years 2022, and 2021:

Our revenue from our rental operations of $83,432,141 in 2022 represented an approximately 16.2% increase over our rental revenue for 2021. With our residential rent revenue of $46,702,544 being an approximately 15.3% increase and our commercial rent revenue of $36,729,597 being an approximately 17.4% increase. We attribute the increases to improved economic conditions and to acquisitions of properties.

Interest paid on our mortgage indebtedness is our single largest expense. We paid interest of $17,534,524 in 2021 and $18,740,518 in 2022. The weighted average rate of interest we were paying at the end of 2022 and 2021 were approximately 4.05% and 3.96%, respectively. We have been benefited by historically low rates of interest; however, based on recent actions and announcements by the Federal Reserve, we anticipate future increases in our costs of borrowing. We seek to stager the maturity dates of our mortgage indebtedness to reduce the significance of sudden increases in the interest rates we might be required to pay under refinanced mortgages debt. As well, we have entered into interest rate swap contracts to modify our interest rate risks.

Real estate taxes we pay for our properties is also a significant operating expense. While many of our commercial leases require the tenant to pay as “additional rent” the property taxes charged to us, such is not the case with our residential properties. We estimate that the taxes we paid in 2022 on properties we also held in 2021 was approximately 9.6% higher than what we paid in 2021.

Since most of our properties are located in the upper Midwest region, weather can have a significant effect on the operating expenses for our properties. Hotter summers may increase use of electricity for cooling and colder winters may increase use of utilities to heat as well as amounts and frequency of snowfall may result in larger snow removal expenses. Our utility expenditures of $6,716,179 in 2022 represented an approximately 19.6% increase of those incurred in 2021.

Revenue from our rental operations provides most of our income. We also obtain other income (or loss) from our investment in a non-controlling interest in an entity holding real estate interests, interest paid to us (primarily from loans we make), gain (or loss) from sale of assets and operating guaranty payments (which are financial assurances we receive when we are purchasing newly constructed properties and the seller agrees to pay us if the rent we actually receive is less than an agreed amount specified in the operating guaranty).

We maintain insurance on our properties. In the event of a casualty, the insurance payments in excess of the depreciated value of the property can result in our realizing a “Gain on Involuntary Conversion of Property.” In April 2021, a fire destroyed one of four 24-unit buildings at our Copper Creek apartment complex located in Council Bluffs, Iowa. In 2022, we had damage to the roof of our Donegal Centre and Apartments in Sioux Falls. As a result of these casualties, we received insurance proceeds we applied to repair the damage. In 2021 that resulted in our recognition of $2,805,147 gain related to Copper Creek. In 2022, we recognized $2,049,726 of gain with respect to the Copper Creek and the Donegal properties. Both matters remain open for final determination of the insurance benefits due us such that there may be additional gain to be recognized in 2023.

In 2022, our loss from our Investments in Partnerships was $397,636 compared to a loss of $875,490 in 2021. These reflect the operating results for the five limited partnerships in which we hold non-controlling interests (See the following paragraph for information related to the operating results for these entities) and thus are not included in our consolidated report of income and expenses from rental operations (See the list of “Partial Interests Held by UPREIT” in the diagram under “General Overview” in this section for identification of the five entities and our ownership. The losses reflect an allocation of the aggregate losses from the five entities based upon our interests in them (limited by the amount of our investment in the respective entity).

In 2022, the aggregate losses for the operations by the five entities we hold non-controlling interests in was $1,509,964 compared to $2,425,465 in 2021 (See Footnote 7 to the Consolidated Financial Statements for condensed unaudited financial information related to the five entities). We have anticipated that the Williston apartment markets would improve; however, reduction in oil production in the Williston area has continued to have a material adverse effect on the Williston residential market. With respect to the five entities we hold non-controlling interests in, our risk of loss if the entities continue to experience negative operations is limited to the $6.275 million we originally invested in the entities in the aggregate. As of December 31, 2021, we had recognized a loss of our original investments in Bakken Heights V, LLLP and in Williston Real Estate Partners, LLLP. As of December 31, 2022, our interests in Bakken Heights VIII and X; Dakota Roseland Apartments I, LLLP and Dakota Roseland Apartments IX-XII having been reduced to values of $44,478; $427,516 and $1,070,822.

We seek to manage interest rate risks of significant unanticipated fluctuations in our variable interest rate borrowings through the establishment of “interest rate swap contracts” and we had nine of such contracts in effect in 2022 (with maturities ranging from 3.5 to 9.25 years) and eight in 2021 (with maturities then ranging from 4.5 to 8.75 years). As of December 31, 2022, and December 31, 2021, we had income attributed to the change in fair value of interest rate swaps of $10,162,527 and $4,082,199 respectively. Such income is derived from the changes in the fair value of the interest rate swap contracts. Interest rate swap contracts can be traded in certain financial markets and the fair value of those contracts are established quarterly for financial reporting purposes thus creating an unrecognized gain or a loss. If the interest rate swap contracts are held to maturity there would be no gain or loss recognized on the contract. It has been our practice to hold all interest rate swap contracts to maturity. See Notes 3 and 4 to our audited Consolidated Financial Statements for additional information related to these interest rate swap contracts and their fair value measurement.

The table below describes the six commercial properties and one apartment property we sold in 2021 or 2022:

CAPITAL EXPENDITURES

Our largest capital expenditure is in the acquisition of properties. Please see “DESCRIPTIONS OF PROPERTIES” in this Offering Circular for information regarding our properties and when they were acquired.

The acquisitions involved use of cash, proceeds from mortgage financing and issuance to the prior owner of the property of limited partnership units in the UPREIT. The sources for the funding in 2022 and 2021 are described in the table below (with the dollar and Unit amounts expressed in approximate amounts):

In addition to investing in new properties, we invest funds in the improvement and maintenance of our existing properties and pay assessments imposed upon our properties by local governments for funding of the cost of improvement of infrastructure (such as roads, street lighting and storm and sanitation sewers). The following table identifies capital expenditures for various improvements made and special assessments paid in 2022 and 2021:

Site improvements are typically parking lot improvements and landscaping improvements. Building improvements range widely from modest repairs to more significant matters such as replacement of the roofs or sidings of buildings. Tenant improvement allowances represents amounts we have agreed to reimburse commercial property tenants in connection with preparation of the space they are leasing and even the costs of relocating to the space for tenants moving into our property or costs of upgrades for in connection with an extension of the term of the lease by an existing tenant. This cost is often negotiated as part of the negotiation or the lease or renewal of the lease. Flooring and appliance expenditures relate to our residential properties. We anticipate our expenditures for these may continue to increase as the residential properties we hold age as well as to increase the attractiveness of our residential properties in more competitive markets.

When a municipality or other governmental agency makes infrastructure improvements, it often assesses the cost of the improvements upon the owners of the properties adjacent to the improvements. The costs are often permitted to be paid over periods of time ranging from five to twenty-five years depending on the cost of the improvement. Our practice is to capitalize the amount of the assessment and recognize a corresponding liability to our balance sheet. See the footnotes to the financial statements for more details on our accounting for special assessments. The special assessments payable at the end of 2022 were $22,367 less than those at the end of 2021 due primarily to more excess principal payments above special assessments.

The Board of Trustees may determine to establish reserves, or such reserves may be required to be established in connection with mortgage financing of certain of our properties, to fund future repairs and replacements or the making of improvements to properties.

LAND LEASE COMMITMENTS

In 2022, we acquired two buildings leased by Appareo Systems, LLC for operation of its commercial and industrial software and hardware development business located in Fargo, North Dakota. In connection with the acquisition, we assumed the obligations under two leases of land on which the buildings are constructed. The leases expire at the end of 2044; however, they are each subject to ten year renewal option periods. Base rental payments for the two leases total $120,300 in each of 2023 and 2024; $126,315 in each of 2025, 2026 and 2027; with additional increases thereafter.

The leases are reflected in our balance sheet as “Finance Lease Right-Of-Use Assets” and “Finance Lease Liabilities.” The liability reflected is a present valuation discounting of the future lease obligations. Our operating statements, in addition to the rent payments, reflect an amortization of the asset.

OFF BALANCE SHEET ARRANGEMENTS

At this time we are not aware of any off-balance sheet arrangements that need to be discussed or disclosed.

BOARD OF TRUSTEES, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

ORGANIZATIONAL STRUCTURE

The Dakota Real Estate Investment Trust (“the Trust”) is a business trust organized under the laws of North Dakota. The Trust operates under the terms of a Declaration of Trust, last amended as of November 19, 2020 (the “Declaration of Trust”), and Bylaws, last amended as of April 25, 2017 (the “Bylaws”). The Declaration of Trust provides for the Trust to continue for an indefinite term (as permitted under the laws of North Dakota) unless terminated by a majority vote of the shareholders entitled to vote.

The Trust is the sole general partner of the Dakota UPREIT Limited Partnership (the “UPREIT”). The UPREIT operates in accordance with the terms of a Limited Partnership Agreement with all actions by the UPREIT being taken by the Trust as general partner. Neither the Trust, nor the UPREIT have any employees. Rather, they use staff of Dakota REIT Management, LLC (the “Advisor”) and services of various property management companies to manage the operations of the business and of the properties owned by the UPREIT.

DECLARATION OF TRUST AND BYLAWS

The Declaration of Trust and the Bylaws provide for the management of the affairs of the Trust to be vested in a Board of Trustees. They further provide that the Board of Trustees is to have not less than seven and not more than 17 members with the actual number being as determined from time to time by the Board of Trustees. The Bylaws provide that, to serve as a member of the Board of Trustees, the individual must hold a minimum investment in the Trust of $100,000 or a minimum investment in the UPREIT of $200,000. Members of the Board of Trustees are elected by the voting shareholders of the Trust for one-year terms at the Annual Meeting of Shareholders; however, the Board of Trustees may fill a vacancy created by the death or resignation of a member of the Board of Trustees or to fill a vacancy created by an increase in the number of members of the Board of Trustees.

The Declaration of Trust and the Bylaws require a majority of the members of the Board of Trustees to be “Independent Trustees.” The Declaration of Trust defines the term “Independent Trustee” as one who is not and has not been associated within the two prior years, directly or indirectly, with a Sponsor or the Advisor of the Trust. Such association is deemed to occur if the Trustee:

A “material business or professional relationship” is deemed to exist when the relationship results in 5% or more of the gross revenue of the Trustee coming from such Sponsor, Advisor or their Affiliates or if the annual gross revenue received by the Trustee from such parties is 5% or more of the Trustee’s net worth; however, it may also be found when the revenue is less than such 5% levels.

The definition indicates an indirect relationship for the Trustee includes circumstances in which the Trustee’s spouse, parents, children, siblings, spouse’s parents, children’s spouses and spouse’ siblings have the association with a Sponsor, the Advisor, Affiliates of a Sponsor or the Advisor or the Trust.

The Bylaws permit, but do not require establishment by the Board of Trustees of committees. Currently, the Board of Trustees has established four committees and the chair and members of each are as follows:

The Advisor Committee reviews the performance of the Advisor and the terms of the agreement between the Trust and the Advisor, prior to the Independent Trustees (as required by the Trust’s Declaration of Trust) approving the engagement on an annual basis. The Audit Committee reviews the financial statements of the Trust, financial reporting matters and the Trust’s relationships with the independent auditors engaged to render an opinion on the Trust’s financial statements. The Investment Council reviews and analyzes proposed investment opportunities prior to their submission to the full Board of Trustees for consideration for investment. Members serving on committees (other than those affiliated with the Advisor – Mr. Gaukler, Mr. Knutson and Mr. Pedersen) receive compensation for their service.

The Bylaws provide for the appointment by the Board of Trustees of a Chairperson of the Board, a President, an Executive Vice President, a Secretary, a Treasurer and such additional officers of the Trust as the Board of Trustees designates. The table on the following page identifies the offices held and the individuals holding them.

CONFLICTS OF INTEREST OF MEMBERS OF THE BOARD OF TRUSTEES

The Declaration of Trust does not require Trustees to refrain from engaging in business activities of the types conducted by the Trust or the UPREIT and they will not have an obligation to present to the Trust or the UPREIT any investment opportunities which come to them other than in their capacities as a Trustee, regardless of whether those opportunities are within the UPREIT’s investment policies. The UPREIT holds interests in properties that may compete for tenants with adjacent or nearby properties in which a Trustee holds an interest. Certain of the Trustees, directly or through their affiliates, have organized and served as principals of other entities which may have investment objectives similar to those of the UPREIT. Such Trustees may have legal and financial obligations with respect to these entities, which are similar to their obligations owed to the Trust.

As a result of their current and possible future interests in other business activities, including in investments of the type made by the Trust or the UPREIT, Trustees will have conflicts of interest in allocating their time between their duties to the Trust and other activities in which they are involved. In particular, that may be an issue for Mr. Pedersen as his duties with the Advisor, or as President of the Trust, involves greater demand upon his time than is required of other Trustees not associated with the Advisor. While neither the Advisor or Mr. Pedersen are affiliated with any other public real estate programs, they are not prohibited from participating in any public or private investor programs that invest in similar properties on a leveraged, or mortgaged, basis; and such programs with investment objectives similar to UPREIT.

The Trust and the UPREIT have engaged in transactions with members of the Board of Trustees or their affiliates from time to time. For information regarding such transactions, refer to “COMPENSATION PAID TO ADVISOR AND OTHER PROPERTY MANAGERS” and “INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.”

The Declaration of Trust contains a number of requirements with respect to transactions between the Trust and Trustees or affiliates of Trustees and operations of the Trust in general. These include Independent Trustee review and approval of operating expenses, the terms under which the Advisor is engaged to provide services, the Trust’s investment policies, acquisitions from a Trustee or a Trustee’s affiliate and the level of debt incurred by the Trust among other matters. All transactions between a Trustee or an affiliate of a Trustee have been subject to such required Independent Trustees review and approval.

The lawyers, accountants, and other experts who have been or will be called upon to perform services for the Trust or the UPREIT may also perform services for the Advisor or affiliates of a member of the Board of Trustees. It is important to point out that such professional advisors do not represent the interests of holders of shares in the Trust or limited partnership units issued by the UPREIT.

MEMBERS OF THE TRUST’S BOARD OF TRUSTEES AND EXECUTIVE OFFICERS

The following table sets forth the name, position(s) held, age, the year first elected to the Board of Trustees and if such Trustee is an Independent Trustee for each member of the Board of Trustees as well as its executive officers.

⁽¹⁾ Affiliate of firm that has provided accounting services to the Trust

⁽²⁾ Affiliate of firm providing property management or real estate brokerage services to the Trust

⁽³⁾ Affiliate of the Advisor and property managers providing services to the Trust

⁽⁴⁾ Affiliate of trustee has been extended a line of credit by the Trust

⁽⁵⁾ Ms. Smith was appointed to fill a vacancy created by the resignation of George Gaukler as a Trustee and based on her relation to Mr. Gaukler is deemed indirectly affiliated with the Advisor.

Jerry Banks. Mr. Banks was elected to the Board of Trustees at the annual meeting of shareholders of the Trust held in June 2022. Mr. Banks qualifies as one of the “Independent Trustees” of the Trust. Mr. Banks is the founder of the Jerry Banks Group, based in Omaha, Nebraska which has developed and currently operates apartment, retail, warehouse and office properties in Alabama, Arizona, Iowa, Missouri and Nebraska.

John Barker. Mr. Barker was elected to the Board of Trustees at the annual meeting of shareholders of the Trust held in June 2021. Mr. Barker qualifies as one of the “Independent Trustees” of the Trust. Mr. Barker is the owner and President of Elgethun Capital Management, Inc. (“ECM”) a Registered Investment Advisor operating from its offices in Sioux Falls, South Dakota. ECM primarily provides fee based investment advisory and management services to individuals and institutions. At the end of 2020, ECM had more than $650 million under its management. Mr. Barker joined ECM in 2011 and acquired ownership of the firm in 2012. Before joining ECM, Mr. Barker was a research analyst at the Royal Bank of Scotland in New York, New York and worked in the corporate finance department for Pitney Bowes. Mr. Barker is a member of the Board of The University of South Dakota Foundation, serving on its Investment Committee, and is actively involved in philanthropic and community initiatives in Sioux Falls targeting children, poverty, and mentorship. Mr. Barker received his degree in Finance from the University of South Dakota and holds a Chartered Financial Analyst (CFA®) designation.

Ray Braun. Mr. Braun was one of the initial members of the Board of Trustees in 1997 and served as the Trust’s Treasurer for 24 years. In 2006, Mr. Braun retired from the Ludvigson Braun & Company, an accounting firm located in Valley City North Dakota. Mr. Braun became a Licensed Public Accountant in 1975.

Kevin Christianson. Mr. Christianson first became a member of the Board of Trustees in 1999 and has served as a member of the Trust’s Investment Council since 1999 and was appointed Vice-Chairman in June of 2022. Mr. Christianson has served as President and CEO of Christianson Companies, based in Fargo, North Dakota. Christianson Companies is a development and construction company who also houses a full-service brokerage and property management company known as property Resources Group (PRG), and a full-service in-house design and architecture department known as Design Resources Group (DRG).

Bradley Fay. Mr. Fay has served on the Board of Trustees since the formation of the Trust in 1997 and as Secretary for 24 years. Mr. Fay qualifies as one of the “Independent Trustees of the Trust.” In 1989, Mr. Fay participated in the formation of Dakota Growers Pasta Company, now a subsidiary of Post Holdings. Mr. Fay is a participant in oil and gas development businesses targeting the Bakken and Three Forks reservoirs in western North Dakota.

James Haley. Mr. Haley was appointed as Treasurer of the Trust in June 2023. Mr. Haley joined the Advisor as its Chief Financial Officer in 2007. After receiving his degree in Accounting from Central Missouri State University in 1992 he worked in public accounting and received his certified public accountant designation in 1993. In 1995, Mr. Haley located in Fargo, North Dakota and participated in real estate development and construction. Mr. Haley became one of the owners of the Advisor in 2012.

Andrew Henderson. Mr. Henderson was elected to the Board of Trustees in 2021. Mr. Henderson qualifies as one of the “Independent Trustees of the Trust.” He served as Treasurer for the Trust from June 2022 to June 2023, but continues to chair the Audit Committee. Mr. Henderson received his Bachelor of Accountancy from the University of North Dakota and is licensed as a Minnesota Certified Public Accountant. From 2006 to 2020 he was employed in the Minneapolis KPMG US LLP office providing financial statement audit services and advice regarding internal control over financial statements and securities reporting compliance to clients in the technology, retail, and consumer markets industries.

Danel Jung. Ms. Jung was appointed as Executive Vice-President of the Trust in 2021. Ms. Jung joined the Advisor in 2019 as its Chief Operating Officer. After earning her degree in Computer Science from North Dakota State University in 2002, Ms. Jung joined Microsoft. During her tenure at Microsoft Ms. Jung contributed to several global integrations, defining business strategy and operations, and earned the Microsoft Platinum Award in 2018 for her leadership in defining new offerings & optimizing operations to contribute significantly to Microsoft’s bottom line. Ms. Jung has been granted a profits interest in the Advisor.

Jim Knutson. From 2003 until August 2021, Mr. Knutson was the Executive Vice President of the Trust and was first elected to the Board of Trustees in 2012. Mr. Knutson joined Valley Realty, Inc. in 1973 and was an owner of it until he sold his interest in the corporation in 2018. Valley Realty, Inc. provides property management, finance and construction management services to owners and operators of multi-family and commercial properties. Mr. Knutson is a partner of Dakota REIT Management, LLC (the ‘Advisor”) and served as its Executive Vice President from 2003 to 2020.

Craig Lloyd. Mr. Lloyd joined the Board of Trustees in 2017. He is Chairman of the Lloyd Companies, based in Sioux Falls, South Dakota, a diversified real estate development, marketing and management firm. Mr. Lloyd has coordinated the construction and development of over 6,000 apartment units, over 1.5 million square feet of office and retail space and the development of more than 600 acres of land for mixed use purposes. He is licensed as a real estate broker in Iowa, Minnesota, Nebraska, North Dakota and South Dakota.

Jon Otterstatter. Mr. Otterstatter joined the Board of Trustees in 2018. He was appointed Chairman in June 2021 and serves on the Trust’s Investment Council. Mr. Otterstatter qualifies as one of the “Independent Trustees of the Trust”. He co-founded Preventice Technologies, Inc. and led the company as CEO through the acquisition by Boston Scientific in March of 2021. In addition to the Dakota REIT, Mr. Otterstatter serves on the Board of Directors of Protenus, metroConnections, Cyber Advisors and Sibel Health.

Matthew Pedersen. Mr. Pedersen was elected to the Board of Trustees and has served on the Trust’s Investment Council since 2015. He was appointed as President of the Trust in 2021. Mr. Pedersen became a Certified Public Accountant in 1996 and was employed by Arthur Andersen’s Washington, D.C. office from 1996 to 1998 where he focused on private equity, real estate and securities offerings. In 1998, Mr. Pedersen joined Great Plains Software/Microsoft. In January 2015, he acquired ownership of Ludvigson Braun & Co. (see information under biographical disclosure for Ray Braun). Matt is a partner and managing member of Dakota REIT Management, LLC (the “Advisor”).

Angie Pfannkuch. Ms. Pfannkuch was elected to the Board of Trustees at the June 13, 2023, Annual Meeting of the Trust’s shareholders. Through her Sidekick Development, LLC based in Des Moines, Iowa, Ms. Pfannkuch assists property owners in managing the development of real estate, including site selection, monitoring of construction and compliance with regulations affecting use of land. Ms. Pfannkuch established Sidekick Development in 2020, prior to that she worked for six years for Christensen Development 1, LLC, a provider of development and construction management and other real estate development services in the Des Moines, Iowa metropolitan area. Ms. Pfannkuch has degrees in management from the Upper Iowa University and in sales and marketing from AIB College of Business.

Roy Sheppard. Mr. Sheppard has served as a member of the Board of Trustees since 1998. Mr. Shepard qualifies as one of the “Independent Trustees” of the Trust. He is the managing partner of CSi Computers, a computer and networking sales and service firm located in Jamestown, North Dakota. He also is an owner and President of Cable Services, Inc., a cable television and internet provider also based in Jamestown, North Dakota.

Jerry Slusky. Mr. Slusky was elected to the Board of Trustees in 2015 and, in 2018, he was appointed to the Trust’s Investment Council. Mr. Slusky is licensed to practice law in the states of Nebraska and Iowa. He is currently Of Counsel with the Smith, Slusky, Pauley, Slusky & Rogers, LLP law firm located in Omaha, Nebraska. Mr. Slusky’s 50-year practice focuses on real estate planning and development, zoning, and finance of real estate developments. He has been a commercial real estate developer throughout Midwest for over 30 years and is the founder and CEO of Slusky CRE, LLC.

Tracy Smith. Ms. Smith was appointed to the Board of Trustees in June 2023 to fill the vacancy created by the resignation of George Gaukler as a Trustee of the Trust. Since 2009, Ms. Smith has been employed by Best Buy Co., Inc. and currently is serving as its Vice President & Tax Counsel. Best Buy is a publicly held, omni-channel retailer of consumer goods headquartered in Minnesota. Ms. Smith is the daughter of George Gaukler, a founder of the Trust and a member of its Board of Trustees from 1997 until his resignation in June 2023. Ms. Smith is a graduate of the University of North Dakota, where she obtained an undergraduate business degree, majoring in accounting. She also is a graduate of the University of Minnesota Law School.

Lisa Wheeler. Ms. Wheeler was elected to the Board of Trustees at the annual meeting of shareholders of the Trust held in June 2022. Ms. Wheeler qualifies as one of the “Independent Trustees” of the Trust. Ms. Wheeler has extensive experience in completion of real estate transactions having served as President of The Title Company of Fargo North Dakota from 1990 to 2015. In 1982, Ms. Wheeler obtained her juris doctorate from the University of North Dakota and was been licensed to practice law in the state of North Dakota from 1983 to 2015.

Liability of the Members of the Board of Trustees

Members of the Board of Trustees are to have no liability for any loss suffered by the Trust which arises from the action or inaction of them, if they, in good faith determined that their conduct was in the best interest of the Trust and such conduct did not constitute negligence or misconduct.

Pursuant to the terms of the Declaration of Trust, the Trust is to indemnify the Trustees with respect to suits or proceedings or against whom a claim or liability is asserted by reason that he was or is a Trustee or Affiliate. However, indemnification by the Trust will be provided only if:

Significant Staff of the Advisor

Neither the Trust nor the UPREIT has employees. They rely upon the Advisor and its staff to conduct the operations of the Trust and the UPREIT. Such staff includes Matthew Pedersen, James Haley and Danel Jung, who are executive officer of the Trust (see above for information regarding Mr. Pedersen, Mr. Haley and Ms. Jung. The Advisor currently has 12 full time employees, including the following individuals:

Lisa Bontje. Ms. Bontje is 53 years of age and joined the Advisor as Investor Relations Manager for the Trust and the UPREIT in 2018. As Investment Relations Manager, she facilitates communication with shareholders of the Trust and limited partners of the UPREIT, oversees the making of quarterly distributions to such shareholders and limited partners, maintains the shareholder and limited partner records of ownership and plans investor events. Prior to joining the Advisor, Ms. Bontje, managed grant programs for qualified childcare programs. Ms. Bontje has more than 15 years of experience in ensuring compliance with local, state and federal regulations.

Kate Erdel. Ms. Erdel is 37 years of age and joined the Advisor as Director of Acquisitions in 2022. Ms. Erdel studied business administration at the University of Missouri and began her career in real estate in 2013. Her experience before joining the Advisor included management of properties (including lease negotiations) as well as the acquisition and development of properties. As Director of Acquisitions, Ms. Erdel identifies properties for possible acquisition by the UPREIT, performs financial analysis of the prospective acquisition and makes recommendations to the Investment Council of the Board of Trustees. If it is determined to pursue an acquisition, Ms. Erdel will negotiate with the owner of the property or their representative and oversee the execution of acquisition documents. She also oversees the due diligence process.

Mark Richman. Mr. Richman is 70 years of age and joined the Advisor in 2011 and is its Director of Business Development. After graduating from North Dakota State University in 1976, Mr. Richman began his career in commercial real estate. He holds designations as a Certified Commercial Investment Member certification from the CCIM Institute and a Certified Property Manager from the Institute of Real Estate Management. He uses his network to expand the Trust’s acquisitions, especially in new markets. He participates in the analysis of prospective properties for acquisition and in working with current owners in considering use of tax deferral strategies in the disposition of their holdings.

COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS

TRUSTEE COMPENSATION

Members of our Board of Trustees, other than Jim Knutson and Matthew Pedersen (the “Non-Compensated Trustees”) are compensated based upon their attendance at meetings held in person or by telephone conference of the full Board of Trustees or of a committee established by the Board of Trustees, they are also reimbursed for out-of-pocket expenses. In 2022 and 2021, the aggregate fees paid to members of our Board of Trustees for their attendance at meetings was $73,686 and $66,917, respectively. Members of the Board of Trustees are reimbursed for travel expenses incurred in attending meetings.

The compensation of members of our Board of Trustees (other than the Non-Compensated Trustees) is:

The table below sets forth the compensation (inclusive of expenses reimbursed) for each of the three highest paid persons who are Trustees for the year ended December 31, 2022.

Mr. Otterstatter, Mr. Slusky and Mr. Sheppard all served as members of the Advisor Committee and each received $400 for attending two meetings of the Advisor Committee during 2022. Mr. Otterstatter and Mr. Slusky both served as members of the Investment Council and each received $400 for attending two meetings of the Investment Council during 2022.

COMPENSATION OF EXECUTIVE OFFICERS

The Trust has five executive officers. They are the Chairman of the Board, the President, an Executive Vice President, the Treasurer, and the Secretary. Jon Otterstatter, Matthew Pedersen, Danel Jung, Andrew Henderson and Jim Knutson are, respectively the Chair, President, Executive Vice President Treasurer and Secretary. No compensation has been paid with respect to those positions; however, Mr. Knutson and Mr. Pedersen are owners of and Ms. Jung has a profits interest in the Advisor and thus they may be viewed as receiving indirect compensation through the Advisor for services provided to the Trust. For information regarding the compensation paid to the Advisor by the Trust, see “COMPENSATION PAID TO ADVISOR AND OTHER PROPERTY MANAGERS”.

SECURITY OWNERSHIP OF Management and certain securityholders

The Bylaws of the Trust require those nominated to serve as Trustees hold an investment of not less than, $100,000 in the Trust or not less than $200,000 in the UPREIT. The following table depicts the security ownership of the Trustees and executive officers of the Trust in the Trust and in the Limited Partnership Units in the UPREIT, as of June 30, 2023 rounded to the nearest full share or Unit. It does not include Shares or Units which may have been issued under the reinvestment plans of the Trust and the UPREIT to participants under such plans with respect to shares or units issued after June 30, 2023 (each of Matthew Pedersen, Bradley Fay, Roy Sheppard, Jon Otterstatter, Craig Lloyd, Tracy Smith, James Haley, John Barker, Lisa Wheeler and Angie Pfannkuch are participants in the Trust’s or the UPREIT’s reinvestment plan). No one holds Class A Shares, Class I and UPREIT Units that, if converted, would result in ownership of 10% or more of the voting power in the Trust. The Trust’s address of 3003 32nd Avenue South, Suite 250, Fargo, North Dakota 58103 is the “business address” for each of the Trustees named below.

Under the terms of Section 8.4 of the Limited Partnership Agreement for the UPREIT, commencing after one year of an acquisition of their Partnership Units, limited partners have a right to require the UPREIT to redeem Partnership Units by provision of written notice of request for repurchase. The price per unit is the price per share applicable at the time the notice is given. The Trust, however, has the right to acquire the units requested to be redeemed by the issuing Shares to the limited partner requesting repurchase on the basis of one Share for each unit requested to be redeemed for cash. The election by the Trust to make the exchange must be communicated by the Trust to the limited partner within five days of the Trust’s receipt of the notice. The request for repurchase of units and the exercise of the Trust’s right to acquire such units is subject to the following limitations under the Limited Partnership Agreement:

INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

Some members of the Board of Trustees, directly or through their affiliates, have engaged in transactions with the Trust or the UPREIT. It is likely that the Trust and the UPREIT will continue to engage in transactions with Trustees and their affiliates. In such transactions, there is a conflict between the interests of the Trust and the Trustee who (directly or through an affiliate) is doing business with the Trust or the UPREIT.

These transactions present a risk to investors because the terms have not been negotiated at “arm’s-length” where both parties who have no economic stake in the other. Transactions involving ongoing services also present the risk to investors as termination of the arrangements may be more difficult than may occur with independent service providers.

In order to deal with these conflicts, the Trust’s Declaration of Trust provides that the Independent Trustees must approve all transactions with a Trustee, an officer of the Trust, the Advisor or any “Affiliate” of such persons. The transactions are further required to be on fair and reasonable terms and no less favorable than would be found in a transaction with an independent party. If the Trust, directly or through UPREIT, is acquiring property from a Trustee or an Affiliate of a Trustee, the Trust’s Declaration of Trust requires an independent appraisal of the value of the property. The Trust’s Declaration of Trust defines “Affiliates” of a person or entity to include:

“RENT UP GUARANTIES”

The Board of Trustees has required in connection with purchases of properties purchased from sellers related to a member of the Board of Trustees to provide for payment to the Trust based upon the “renting up” of newly constructed properties. The provision is a guaranty to the Trust of a seven percent return on its investment for the first year of operations or otherwise achieves stability. The return is paid as rent-up income to the property. In 2022 and in 2021, the Trust received $87,440 and $64,467, respectively, in rent-up guaranty fees. Agreements for such payments were with respect to the Hidden Pointe V and VI.

FEES PAID TO THE ADVISOR

Dakota REIT Management, LLC (the “Advisor”) provides managerial and administrative services to the Trust. It is the successor in interest to Dakota REIT Management, Inc. which, until 2008, provided the same services to the Trust. George Gaukler (until June 2023 a Trustee), James Knutson and Matthew Pedersen (both currently officers of the Trust and Trustees) and James Haley (Treasurer of the Trust), collectively own 96% of the membership interests in the Advisor while Danel Jung (the Trust’s Executive Vice President) holds a profits interests in the Advisor.

For a description of the terms of the engagement of the Advisor by the Trust and greater detail as to the fees paid to the Advisor, see “COMPENSATION TO ADVISOR AND OTHER PROPERTY MANAGERS.”

REAL ESTATE COMMISSIONS

Upon the sale or purchase of an investment property by the UPREIT, a real estate commission may be paid to a real estate broker that represented the UPREIT in the transaction. Typically, such commissions range between 1% and 3% of the selling price. Real estate commissions may also be paid with respect to long term leases of commercial properties. Typically, such commissions range from 1% to 5% of the gross rent payable for all or a portion of the term of the long term lease.

The UPREIT has engaged Horizon Real Estate Group, LLC, and Property Resources Group, LLC to assist with respect to acquisitions or sales by the Trust of properties. Horizon Real Estate Group, LLC is an affiliate of Georg Gaukler and has offices in Fargo, North Dakota. Property Resources Group, LLC is an affiliate of Kevin Christianson (a Trustee) and has offices in Fargo, North Dakota. Since 2019, we have paid no such fees to such real estate brokers for assisting in the acquisition or sale of properties.

In 2022 and 2021, we paid commissions of $131,807 and $141,032 to real estate brokers in connection with their having participated in the long-term leasing of space in our commercial properties. Three of such brokers were affiliated with individuals who were then members of our Board of Trustees. They were Horizon Real Estate Group, LLC (an affiliate of George Gaukler, a Trustee until June 2023), Lloyd Companies (an affiliate of Craig Lloyd) and Property Resources Group (an affiliate of Kevin Christianson). The fees paid to such brokers for services in leasing of space in our commercial properties in 2021 and 2022 were:

PROPERTY MANAGEMENT FEES

Of the eight property managers we currently engage to manage our properties, four are affiliated with certain of our Trustees or Executive Officers. Jim Knutson and Matthew Pedersen (who are Trustees and officers of the Trust) and James Haley (our Treasurer) are owners of the Advisor and Danel Jung (our Executive Vice President) holds a profit interest in the Advisor. The Advisor manages certain of our properties directly and since January 1, 2022, manages additional properties located in Aberdeen, South Dakota or Bismarck or Fargo, North Dakota markets which had been managed by Valley Rental Services, Inc. (which is owned by Mr. Gaukler, who was a Trustee until June 2023). Such additional properties are managed by Valley Rental 2, LLC, which has the Advisor as its sole member. Kevin Christianson is the owner of Property Resources Group, Inc. Craig Lloyd is an owner of Lloyd Property Management Company. In 2022 and in 2021 we paid $3,118,878 and $2,596,446, respectively, in management fees to such management companies. Of those fees, the above named management companies affiliated with Trustees were:

ACCOUNTING SERVICES.

The Ludvigson Braun & Co. accounting firm has provided limited accounting services to the Trust. Since 2015, Matthew Pedersen has been an owner of that. Mr. Pedersen is a member of the Board of Trustees and an owner of the Advisor. Fees paid by the Trust or the UPREIT to such firm in 2022 and 2021 were nominal.

CONSULTING SERVICES

Elgethun Capital Management, Inc. (“ECM”), an affiliate of John Barker (a member of the Board of Trustees since June of 2021), and the Trust entered into a Consulting Services Agreement as of February 4, 2020, pursuant to which ECM was to provide to the Trust consulting services to assist the Trust in broadening its shareholder base, particularly with institutional investors. For its services, ECM was paid $100,000 in 2020 and $25,000 in 2021 prior to the termination of the agreement by mutual consent of the parties to the agreement.

CONSTRUCTION AND MAINTENANCE SERVICES

Many of the investment properties held by the UPREIT were built wholly or in part by contractors, subcontractors, and suppliers, which are affiliated with members of the Board of Trustees. These include Valley Realty, Inc., Hi-Line Construction, Inc., JSM Woodworks, LLP, Valley Lumber, Inc., East & West Excavating LLC, Inc., and Landscape Elements ND, LLC each of which is an affiliate of Mr. Gaukler. Kevin Christianson is the principal owner of Property Resources Group, a part of Christianson Companies. Craig Lloyd is the principal owner of Lloyd Property Management a part of Lloyd Companies. These companies may provide repair and maintenance services or materials to properties of the UPREIT.

In 2019, the Trust entered into agreements with Valley Realty, Inc. (an affiliate of George Gaukler, then an officer and Trustee of the Trust) to make improvements to the Summers @ Osgood Apartments owned by the UPREIT which is in Fargo, North Dakota. In 2020, $500,000 of construction fees were paid. In 2021, the project was completed and $614,059 was paid by the UPREIT to Valley Realty, Inc.

ACQUISITIONS FROM AFFILIATES

The UPREIT owns properties that were acquired from Trustees or their affiliates. The table below identifies properties acquired by the UPREIT since 2020 which were acquired directly or indirectly from a seller affiliated with a then member of our Board of Trustees.

Additional information regarding these acquisitions is set forth below.

Hidden Pointe V and VI. In January 2021, the UPREIT acquired from George Gaukler and other individuals or entities not affiliated with the Trust building V and VI of the Hidden Pointe apartment complex (Buildings I-IV were acquired in 2014 and 2016). Each was acquired for a purchase price of $3,700,000 with Building V having an appraised value of $3,755,000 and Building VI having appraised for $3,805,000 at the time of their acquisition.

The Rowe Apartments. Between June and November of 2021, the UPREIT acquired from an affiliate of Craig Lloyd five of the buildings containing 104 apartment units of The Rowe on 57^th Apartment Complex. In April 2022, a sixth building containing 36 additional units was acquired. The purchase prices paid were for the six buildings was approximately $16,700,000. Such properties were appraised at $17,070,000 as a completed and stabilized properties.

We have agreed to acquire three additional buildings, each containing 36 apartments for a total of $15,700,000, of which, $700,000 is allocated to the land upon which the buildings are located. The three buildings were appraised at $16,150,000 as completed and stabilized properties. In May 2023, the first two buildings were acquired. The third building remains in development.

32^nd Center. In December 2021, the UPREIT acquired the 32^nd Center Office building located in Fargo, North Dakota from an affiliate of George Gaukler for $6,984,000. The property appraised for the $6,984,000 purchase price at its acquisition.

SALES OR LEASES TO TRUSTEES OR THEIR AFFILIATES

Since 2020, neither the Trust, nor the UPREIT have sold any properties to a member of the Board of Trustees or an Affiliate of a Trustee.

In December 2021, the Trust acquired the 32^nd Center office building from an affiliate of George Gaukler (then a Trustee of the Trust). At that time, the Advisor and Valley Rental Services, Inc. (both affiliates of Mr. Gaukler) leased a total of 14,592 of the 42,797 square feet of the building. The lease by Valley Rental Services, Inc. was assumed by Valley Rental 2, LLC in connection with its assumption of management of UPREIT properties previously managed by Valley Rental Services, Inc. In 2022, rent of $218,874 was paid to the UPREIT by the Advisor and Valley Rental 2, LLC.

LOANS TO OR FROM AFFILIATES

The Trust may obtain from or make loans to a member of the Board of Trustees or an Affiliate of a Trustee with the approval of the Board of Trustees (which approval must include a majority of the Independent Trustees). The Trust’s Declaration of Trust further requires the terms of the loan to be commercially reasonable and no less favorable to the Trust than loans between unaffiliated lenders and borrowers under the same circumstances. Since 2016 there have been no loans to the Trust or the UPREIT by members of the Board of Trustees or any Affiliate of a Trustee

Loans made by the Trust or by the UPREIT to members of the Board of Trustees or any Affiliate of a Trustee that have been outstanding since 2020 are described below.

The Rowe on 57th. During 2020, the Trust loaned $1,000,000 to a company owned by the Lloyd Companies, of which Craig Lloyd (a member of the Board of Trustees) is an owner for use in construction of 140 units of apartments in The Rowe on 57^th apartment complex. The loan carried interest of 6% with the Trust earning interest of $60,000 in 2021 and $14,822 in 2022 when the loan was paid off.

Later in 2022, the Trust loaned an additional $3,000,000 to another company owned by the Lloyd Companies to be used in construction of an additional three buildings each containing 36 apartment units to be part of the same apartment complex. This second loan also carries an interest rate of 6% resulting in the accrual of $112,932 of interest in 2022, of which $45,370 remained due at the end of 2022, which was paid in January 2023. The borrower has agreed to repay$1,000,000 of the principal balance following the sale of each building. See the discussion in the preceding section regarding our acquisition of two of such buildings in May 2023.

Ankeny, Iowa Apartments. In 2021, the Trust extended a line of credit to a limited liability company partially owned by Jerry Slusky, Trustee of the Trust for the construction of a 216 unit apartment complex in Ankeny, Iowa. As of the end of 2021, $3,599,827 had been advanced on the line and interest of $39,326 had accrued. During 2022, the Trust increased the line of credit to $11,000,000. As of the end of 2022, $9,850,000 had been advanced and $577,817 of interest had accrued on this loan.

The loan has an interest rate of 7% and is due on the earlier of December 2024 or 90 days after written notice by the Trust of its waiver of a conversion option. In connection with the extension of the line of credit, the Trust was given the option to convert the note receivable into not less than a 51% share of the apartment complex upon completion.

RECENT TRANSFERS, PURCHASES OR REPURCHASES OF SHARES OR UPREIT UNITS BY TRUSTEES

In April 2021, Jerry Slusky tendered for repurchase by the UPREIT of an additional 10,753 Partnership Units at a repurchase price of $13.95 per unit.

In 2021, Matthew Pedersen purchased from the Trust 1,290 Class A Shares in November for $15.50 per share and in December Mr. Pedersen purchased 15,152 Class I Shares for $16.50 per share.

In December 2021 and 2022, Kevin Christensen made gifts of 3,636 and 3,556 Shares to members of his family.

In April 2021, John Barker purchased 12,903 Class I Shares from the Trust for $15.50 per share.

In June 2021, Jon Otterstatter purchased 65,257 Class I Shares from the Trust for $15.50 per share.

In December 2021, Craig Lloyd purchased from the Trust 15,152 Class I Shares for $16.50 per share.

In January 2022, Craig Lloyd purchased from the Trust 6,061 Class I Shares for $16.50 per share.

In August 2022, Jerry Slusky made gifts of 10,000 units to members of his family.

In November 2022, Craig Lloyd purchased from the Trust 5,556 Class I Shares for $18.00 per share.

In December 2022, Jerry Banks purchased from the Trust 7,500 Class A Shares for $18.00 per share.

In December 2022, Brad Fay purchased from the Trust 22,222 Class I Shares for $18.00 per share.

In May 2023, Angie Pfannkuch purchased from the Trust 5,556 Class A Shares for $18.00 per share.

The foregoing does not include the issuances of Shares to members of the Board of Trustees who have chosen to participate in the reinvestment programs of the Trust or the UPREIT. Each of John Barker, Bradley Fay, Craig Lloyd, Matthew Pedersen, Roy Sheppard and Lisa Wheeler have made the choices to participate in those plans.

SECURITIES BEING OFFERED

The Offering is made under Regulation A of the SEC and pursuant to registration or exemption from such registration under applicable state law. With respect to certain states, there may be a limitation on the number of Shares which may be acquired by shareholders who reside or are domiciled in those states and the Trust may need to decline to accept requests for reinvestment distributions that would involve our exceeding such limitations. We also may defer the payment of a distribution due a shareholder who wishes to participate in the DRIP while we pursue qualification of such participation under applicable state law.

The rights and interests of such Shares are defined under the terms of a Declaration of Trust, last amended as of in November 2020 (the “Declaration of Trust”) and the Bylaws, last amended in June 2023 (the “Bylaws”). Such rights and interests are summarized below. Any descriptions are qualified in their entirety by reference to the Declaration of Trust and the Bylaws, copies of which have been filed as exhibits to the Offering Statement the Trust has filed with the SEC of which this Offering Circular is a part.

The Shares issued pursuant to the Offering to participants in the DRIP will be issued at the rate of one Share for each $17.10 of distribution directed by the shareholder to be reinvested and will be of the same class of shares to which the participant in the DRIP has elected to receive Shares in lieu of cash payment of a distribution.

CLASSES OF SHARES