Item 2. PROPERTIES

The Company owns the facilities that its headquarters and R&D Systems subsidiary occupy in Minneapolis, Minnesota. The Minneapolis facilities are utilized by both the Company’s hematology and biotechnology segments.

The R&D Systems main complex includes approximately 500,000 square feet of administrative, research and manufacturing space in several adjoining buildings. The Company owns two additional properties adjacent to its main complex. The Company has renovated the first property and is currently leasing or plans to lease approximately 60% of the 176,000 square foot building as retail and office space and use the remainder as office, warehouse and storage space. The Company has recently begun renovation of the second property and plans to lease approximately 40% of the 179,000 square foot building as office space and use the remainder for manufacturing and shipping operations.

The Company owns approximately 649 acres of farmland, including buildings, in southeast Minnesota. A portion of the land and buildings are being leased to third parties as cropland and for a dairy operation. The remaining property is used by the Company to house goats and sheep for polyclonal antibody production for its biotechnology segment.

Rental income from the above properties was $693,000, $549,000 and $413,000 in fiscal 2012, 2011 and 2010, respectively.

The Company owns the 17,000 square foot facility that its R&D Europe subsidiary occupies in Abingdon, England. This facility is utilized by the Company’s biotechnology segment.

The Company leases the following facilities, all of which are utilized by the Company’s biotechnology segment:

The Company plans to build a new facility for its Tocris operations in Bristol, UK. Purchase of the land and construction of the 23,000 square foot facility is expected to begin in fiscal 2013 and be completed in fiscal 2014. The Company believes the owned and leased properties discussed above are adequate to meet its occupancy needs in the foreseeable future.