Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (March 2024)
53 slides from Independence Realty Trust's investor presentation, March 2024
Slide 1: Investor Presentation March 2024
Reveal on Cumberland Fishers, IN INVESTOR PRESENTATION March 2024
Slide 2: Table of Contents
Table of Contents Overview 2 Recent Operating Metrics 3 Company History and Performance 4–6 Current Priorities / Business Plan 7 – 18 Differentiated Portfolio in Attractive Markets 19 – 24 Path to Long-Term Growth 25 Appendix 2024 Guidance 27 ESG Initiatives 28 Market Statistics 29 Value Add Summary
Slide 3: IRT Overview
IRT Overview PORTFOLIO SUMMARY (1) OWN AND OPERATE IN OH Sunbelt Exposure IL 11075% Communities of NOI CO OK TN KY NC VA $6.2B In gross assets SC 32,685 6.4% Units (2) TX AL GA FL IRT’s Operating Communities Communities sold or to be 2023 Portfolio Average sold as part of Portfolio Optimization Stra
Slide 4: Strong Performance Across Key Operating Metrics
Strong Performance Across Key Operating Metrics Same Store Excluding Value Add Same Store Value Add Same Store Total (1) 100% 94.6% 95.0% 94.9% (4) 94.6% Occupancy 95% 94.1% 94.5% 94.5% 94.3% 93.7% 93.3% 93.3% 93.0% 92.5% 92.8% 90.5% 90% 85% Q1 23 Q2 23 Q3 23 Q4 23 Q1 QTD Q1 23 Q2 23 Q3 23 Q4 23 Q1
Slide 5: Company History
Company History Aug. 2013 Sep. 2015 Dec. 2016 Apr. 2018 Dec. 2021 Oct. 2023 Completes IPO; Acquires Trade Completes Commences first Acquires Steadfast Announces Portfolio begins trading on Street Residential internalization of phase of value-add Apartment REIT Optimization and the NYSE (NASDAQ: TSRE
Slide 6: IRT is Delivering Industry Leading Operating Performance
IRT is Delivering Industry Leading Operating Performance Relative to peers in non-gateway and coastal markets, IRT outpaced industry growth over the past few years and momentum is expected to continue due to our attractive location in sunbelt markets, as well as our investments in value add renovati
Slide 7: Track Record of Value Creation
Track Record of Value Creation IRT has a proven track record of outperforming its peers 1-Year 3-Year 5-Year Since IPO (1) 300% 250% 240% 200% 150% 141% 99% 100% 81% 50% 23% 15% 17% 17% 4% 5% 0% -5% -13% -50% RMS Multifamily Index IRT Source: Bloomberg Market data as of February 22, 2024. Note: Repr
Slide 8: Current Priorities / Business Plan
Current Priorities / Business Plan 1 Continue value add renovations at ~2,500 annually 2 Complete on-balance sheet and joint venture developments Complete Portfolio Optimization & Brunswick Point Leland, NC 3 Deleveraging Strategy by exiting lower growth, single asset markets 4 Use free cash flow to
Slide 9: Value Add Program: Improving Our Growth Profile
1 Value Add Program: Improving Our Growth Profile IRT’s historical projects have generated an 17.7% return on investment across approximately 7,771 units, resulting in around $270 million of incremental value creation (1) Sizeable ~17,000 unit value add pipeline providing up to ~$600 million of incr
Slide 10: Value-Add Case Study: Avalon Oaks – Project Overview
1 Value-Add Case Study: Avalon Oaks – Project Overview Columbus, OH community acquired for $23.0mm in February 2018 Before After ▪ Middle market community with 235 units that at the time of acquisition helped to increase our scale in the Columbus market ▪ Attractive Columbus submarket insulated from
Slide 11: Value-Add Case Study: Avalon Oaks – The Economics
1 Value-Add Case Study: Avalon Oaks – The Economics At Acquisition (2/27/2018) 12/31/2023 Change Revenue $19.0 $2.6mm $4.0mm +52% (TTM) NOI $1.4mm $2.6mm +89% (TTM) NOI $6.2 52.6% 66.9% +1,430 bps Margin $48.2 Average Effective $868 $1,376 +59% Monthly Rent Achieved outsized value creation $23.0 ▪ P
Slide 12: Value-Add Case Study: Rocky Creek – Project Overview
1 Value-Add Case Study: Rocky Creek – Project Overview Acquired in July 2019 for $48.0mm this was our 3rd community in Before After Tampa, FL market ▪ Located in West Tampa, this property was built in 1999 and has 264 units ▪ Convenient access to major employment centers including Westshore area to
Slide 13: Value-Add Case Study: Rocky Creek – The Economics
1 Value-Add Case Study: Rocky Creek – The Economics At Acquisition (7/11/2019) 12/31/2023 Change $18.7 Revenue $4.2mm $6.1mm +45% (TTM) $6.7 NOI $2.6mm $3.9mm +52% (TTM) NOI 61.1% 63.4% +230 bps Margin $73.4 Average Effective $1,256 $1,875 +49% Monthly Rent $48.0 Achieved outsized value creation ▪ P
Slide 14: Real Estate Under Development: Expected to Generate Strong NOI
2 Real Estate Under Development: Expected to Generate Strong NOI Destination at Arista Flatirons Apartment Denver, CO Denver, CO 53% Occupied(1) Est. Est. Construction Construction Stabilization Q4 2024 Stabilization Starts Q2 2023 Q4 2023 Starts Delivery period Feb 2024 Q1 2025 Projected Q3 2021 Q4
Slide 15: Joint Venture Communities: Selected Case Studies
2 Joint Venture Communities: Selected Case Studies We invest in communities that allow us to enter and grow in a target market at a superior cost per unit. We identify local developers with the expertise to complete the developments and only invest when the ground is fully approved and the community
Slide 16: Portfolio Optimization and Deleveraging Strategy
3 Portfolio Optimization and Deleveraging Strategy Communities Identified for Sale ▪ Strategy was announced in October 2023 ▪ Disposition of 10 non-core properties (~2,750 units) in 7 markets IL IN CO ▪ 9 communities acquired in 2021 as part of the STAR merger VA $6.2B NC ▪ Aggregate gross sales pro
Slide 17: Deleveraging: Where We Are and Where We Are Going
4 Deleveraging: Where We Are and Where We Are Going Progressing Towards Our Accelerated Target of Low-5’s by Year-End 2025 Through the Following Drivers: • Organic NOI growth from stabilized portfolio consistent with long-term historical growth rates • Higher NOI from ongoing value add renovations c
Slide 18: Maintain a Simple Capital Structure
4 Maintain a Simple Capital Structure Balance Sheet Highlights Total Capitalization (1) • Simple capital structure consisting of secured and unsecured debt • Maintain conservative financial and credit policies and expect to further deliver the balance sheet through organic NOI & EBITDA growth and ex
Slide 19: Continuing Our Efforts in Technology
5 Continuing Our Efforts in Technology Significant Accomplishments Last 12 Months Data Platform: Value Add ERP Platform Next-Gen Automated Leasing & Property Business Intelligence For Month-End Close Design & Engineering Identity Verification Management Property Managers Automation Centralization Pi
Slide 20: Established a Differentiated Portfolio in Attractive Markets
Established a Differentiated Portfolio in Attractive Markets 75% Class B community profile is 1 highly defensive during times of economic stress 2 Benefit from favorable resident demographics Destination at Arista Broomfield, CO 3 Focused on the high growth Sunbelt & Midwest regions 4 Possess a uniq
Slide 21: Defensive Middle Market Communities, Positioned to Perform
Defensive Middle Market Communities, Positioned to Perform 1 Even in Tough Economic Times • Higher income residents move Class B Positioning: A down in a recession • Most opportunity to consistently increase rents • Renters move down to Class B as rent increases outstrip income • Less exposure to ho
Slide 22: IRT's Resident Demographic Trends Are Favorable
2 IRT’s Resident Demographic Trends Are Favorable Resident Market Average Recent residents in IRT’s top 10 markets are in their mid-30s and make Age(1) an average annual income of ~$85,000, resulting in a ~22% rent to income(1) 1 Atlanta, GA 38 2 Dallas, TX 37 3 Denver, CO 37 4 Columbus, OH 38 130 5
Slide 23: Our Portfolio is Focused On the High Growth Sunbelt & Midwest Regions
3 Our Portfolio is Focused On the High Growth Sunbelt & Midwest Regions IRT owns 110 communities and has 2 communities under development across resilient, high growth markets (1) Geographic Distribution PORTFOLIO SUMMARY TOP 10 MARKETS (1) Market Units % Unit % NOI Atlanta 5,180 16% 15% Dallas 4,007
Slide 24: The Impact of New Supply on IRT Will Not Be Significant
4 The Impact of New Supply on IRT Will Not Be Significant Estimated new apartment deliveries from 2024 through 2026 in IRT's markets, as a percentage of existing apartment inventory, are expected to decline over this 3-year period (1) New Deliveries as a % of Existing Inventory 4.8% 3.7% 3.6% ~3.1%
Slide 25: Rent vs. Buy Differential Will Support Rental Demand in 2024
5 Rent vs. Buy Differential Will Support Rental Demand in 2024 • Median home price is approximately $425,000(1) across IRT’s top 10 markets(2) weighted by NOI at the zip code level • With interest rates expected to remain higher for longer, mortgage rates will remain high and support rental demand •
Slide 26: Compelling Investment Opportunity With a Path to Long-Term Growth
Compelling Investment Opportunity With a Path to Long-Term Growth Leading Multifamily REIT, Well-Positioned Strong Long-Term Growth Profile Supported by a in Class B Communities, Focused on the Value Add Pipeline, New Development Initiatives High-Growth U.S. Sunbelt Region and Joint Ventures IRT Has
Slide 27: Appendix & Definitions
Oxmoor Louisville, KY Appendix & Definitions
Slide 28: Full Year 2024 Guidance
Full Year 2024 Guidance Key Operating Assumptions 2024 Full Year EPS and CFFO Guidance (1)(2) Same Store Communities 2024 Outlook (4) Low High Number of communities/units 109 communities/32,507 units Property revenue growth 3.0% to 4.5% Earnings per share $0.40 $0.44 Adjustments: Controllable operat
Slide 29: Focusing on Our ESG Initiatives
Focusing on Our ESG Initiatives We believe that operating multifamily real estate can be conducted with a conscious regard for the environment and wider society Provide a Residence Proud to Call Diversity, Equity and Inclusion Home, with enhanced amenities, a Committee formed to ensure a culture of
Slide 30: Assets Demonstrate Attractive Apartment Industry Dynamics
Assets Demonstrate Attractive Apartment Industry Dynamics Low Homeownership More Insulated from New Supply ◼ Growth in households increases the pool of renters, even more so ◼ The national Class B vacancy rate remains resilient to supply and demand during periods of reduced homeownership shocks with
Slide 31: IRT Value Add Summary
IRT Value Add Summary Project Life to Date as of December 31, 2023 Renovation Costs per Unit (2) Total Rent ROI - Total Units Units % Rent ROI - Total Market Units To Be Premium Interior Exterior Total Interior Properties Complete Leased Increase Costs (3) Renovated (1) Costs (3) Ongoing Memphis, TN
Slide 32: IRT Resident Demographics at a Glance
IRT Resident Demographics at a Glance(1) 47% 53% Residents make up a Residents moving to our communities: diverse job pool Gender Top Industries of Residents: 18% Breakdown are from out-of-state 1. Services 2. Medical Services 3. Professional 27% Male Female 4. Technology of those from out-of-state
Slide 33: Our Markets | Atlanta
Our Markets | Atlanta(1) Job Growth Population Growth Community Map 3.83% 2.11% 1.21% 1.70% 0.80% 0.93% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 4.63% 2.95% 2.91% 202
Slide 34: Our Markets | Dallas
Our Markets | Dallas(1) Job Growth Population Growth Community Map 3.67% 6.07% 2.88% 3.26% 1.61% 1.07% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 5.46% 4.47% 2.84% 2021
Slide 35: Our Markets | Denver
Our Markets | Denver(1) Job Growth Population Growth Community Map 2.99% 1.10% 0.67% 0.33% 0.26% -0.02% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 2.40% 2.70% 1.09% 202
Slide 36: Our Markets | Columbus
Our Markets | Columbus (1) Job Growth Population Growth Community Map 3.61% 0.14% 2.54% -0.74% -2.59% -1.11% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 4.23% 1.88% 1.43
Slide 37: Our Markets | Louisville
Our Markets | Louisville(1) Job Growth Population Growth Community Map 0.29% 2.45% 1.25% 0.04% -1.21% -0.09% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 5.08% 0.00% 0.00
Slide 38: Our Markets | Indianapolis
Our Markets | Indianapolis(1) Job Growth Population Growth Community Map 1.25% 4.39% 0.66% 1.79% 0.46% 0.54% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 2.93% 2.09% 1.28
Slide 39: Our Markets | Raleigh–Durham
Our Markets | Raleigh–Durham(1) Job Growth Population Growth Community Map 4.11% 3.97% 3.27% 3.68% 2.14% 1.09% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 7.49% 3.86% 1.
Slide 40: Our Markets | Oklahoma City
Our Markets | Oklahoma City(1) Job Growth Population Growth Community Map 3.61% 1.99% 1.35% 0.98% 0.45% -1.62% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 2.93% 1.69% 0.
Slide 41: Our Markets | Houston
Our Markets | Houston(1) Job Growth Population Growth Community Map 5.05% 2.95% 2.16% 1.21% 1.26% -1.01% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 5.68% 5.79% 3.77% 20
Slide 42: Our Markets | Tampa
Our Markets | Tampa(1) Job Growth Population Growth Community Map 5.08% 3.22% 2.78% 1.45% 2.09% 0.88% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 3.39% 3.58% 1.76% 2021
Slide 43: Our Markets | Nashville
Our Markets | Nashville(1) Job Growth Population Growth Community Map 2.67% 6.04% 0.98% 1.14% 2.33% 2.45% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 6.35% 5.08% 4.09% 2
Slide 44: Our Markets | Memphis
Our Markets | Memphis(1) Job Growth Population Growth Community Map 2.93% 0.19% -0.10% -1.15% -0.24% 2021 2022 2023 -0.36% 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 1.16% 0.89% 0.71%
Slide 45: Our Markets | Huntsville
Our Markets | Huntsville(1) Job Growth Population Growth Community Map 3.81% 4.40% 3.47% 3.30% 1.92% 1.01% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 10.51% 7.92% 4.54%
Slide 46: Our Markets | Charlotte
Our Markets | Charlotte(1) Job Growth Population Growth Community Map 3.51% 3.54% 3.34% 1.64% 1.53% 1.44% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 7.66% 6.06% 4.08% 2
Slide 47: Our Markets | Orlando
Our Markets | Orlando(1) Job Growth Population Growth Community Map 3.44% 6.01% 1.61% 2.23% 1.12% -0.02% 2021 2022 2023 2021 2022 2023 2023 Job Growth 2023 Population Growth National Average 1.28% National Average 0.43% Gateway Markets 1.37% Gateway Markets 1.02% 2 Supply Growth 2.67% 1.71% 1.19% 20
Slide 48: End Notes
End Notes Slide 2 (1) Portfolio Summary data is as of December 31, 2023 or full year 2023, as applicable, and is pro forma for completion of property sales included in our Portfolio Optimization Strategy. (2) Highlights are for the IRT same store portfolio for the twelve months ended December 31, 20
Slide 49: End Notes (continued)
End Notes (continued) Slide 17 (1) Market data as of December 31, 2023. Slide 21 (1) All resident demographic data is self-reported by residents. Average age, average income, and rent-to-income ratio are for residents that have moved in during the three months ending December 31, 2023. Employment se
Slide 50: Definitions and Non-GAAP Financial Measure Reconciliations
Definitions and Non-GAAP Financial Measure Reconciliations This presentation may contain non-U.S. generally accepted accounting principals (“GAAP”) financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in this do
Slide 51: Definitions and Non-GAAP Financial Measure Reconciliations
Definitions and Non-GAAP Financial Measure Reconciliations Interest Coverage is a ratio computed by dividing Adjusted EBITDA by interest expense Net Debt, a non-GAAP financial measure, equals total consolidated debt less cash and cash equivalents and loan premiums and discounts. The following table
Slide 52: Definitions and Non-GAAP Financial Measure Reconciliations
Definitions and Non-GAAP Financial Measure Reconciliations Independence Realty Trust Inc. Reconciliation of Same-Store Net Operating Income to Net Income (loss) (Dollars in thousands) For the Three-Months Ended (a) December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 R
Slide 53: Forward-Looking Statement
Forward-Looking Statement This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward looking statements include, but are not limited to, ou
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