Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (March 2017)
27 slides from Independence Realty Trust's investor presentation, Mar 6, 2017
Slide 1: Investor Presentation March 2017
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Slide 2: Forward-looking statements
This presentation may contain 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 can generally be identified by our use of forward-looking
Slide 3: Company Introduction
Internally-managed real estate investment trust that seeks to own well-located apartment properties in geographic submarkets that it believes support strong occupancy and the potential for growth in rental rates 7.8% dividend yield (1) Listed on the NYSE MKT in August 2013 – “IRT” Added to MSCI US R
Slide 4: Corporate History
Total Units Corporate History 2013 2014 2015 2016 Aug 2013 IRT IPOs on NYSE MKT, raising $34mm of proceeds Proceeds used to redeem Series A preferred stock and Series B preferred OP units and to fund property acquisitions Full Year IRT raised $67mm, $77mm and $58mm of proceeds in three follow-on off
Slide 5: Investment Highlights
Recently Internalized with Bolstered Balance Sheet Focused Investment Strategy with Attractive Total Return Opportunity Strong Expected 2017 Operating Growth Investment Highlights Highly Attractive Industry and Market Fundamentals
Slide 6: Focused Investment Strategy with Attractive Total Return Opportunity
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Slide 7: Affordable B/B+ Grade Positioning Highly Defensive
Affordable B/B+ Grade Positioning Highly Defensive A B C Homeownership rates declining Higher income tenants move down in a recession Renters move down to Class B as aggressive rent increases outstrip income growth Capture households moving down in a recession Capture seniors who sell homes to fund
Slide 8: Multifamily Supply vs. Demand
Multifamily Supply vs. Demand IRT’s effective rents, on average, are $503 or 34% below the average new construction asking rents across our markets. Source: Company filings and REIS.
Slide 9: Disciplined Approach to Acquisitions
Sourcing Disciplined Approach to Acquisitions 2 Assets 3 Acquire properties that have significant prospects for increased occupancy and rental revenue growth Mid-rise/garden style (150–500 units) with good amenities Acquire at less than replacement cost in the $15-50 million price range with a 5-15
Slide 10: Economies of Scale in Targeted Markets
Economies of Scale in Targeted Markets Runaway Bay Indianapolis, IN Oxmoor Apartment Homes Louisville, KY Bayview Club Indianapolis, IN Meadows Apartment Homes Louisville, KY Stonebridge at the Ranch Little Rock, AK Pointe at Canyon Ridge Sandy Springs, GA Waterstone Big Creek Alpharetta, GA Miller
Slide 11: Track Record of Recycling Capital to Achieve Strategic Objectives
Track Record of Recycling Capital to Achieve Strategic Objectives Successfully harvested value through recent dispositions Identified opportunities for repositioning or updating through capital expenditures Attracted and retained residents and executed rent increases Asset Location Acquired Sold Ren
Slide 12: Highly Attractive Industry and Market Fundamentals
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Slide 13: Attractive Apartment Industry Dynamics Support Strong Demand
Attractive Apartment Industry Dynamics Support Strong Demand Low Homeownership Limited New Supply Growth in households increases the pool of renters, even more so during periods of declining homeownership The homeownership rate was 63.7% in 3Q 2016 down from 69.2% in 1Q 2004 Homeownership affordabil
Slide 14: Positive Demographic Factors
Positive Demographic Factors Population growth in IRT’s markets is above the national average and is growing faster than new supply, creating increased demand for existing apartment units. Migration Outpacing New Supply Projected Net Migration / Projected Completions Population Growing at a Higher R
Slide 15: Strong Employment Outlook
Strong Employment Outlook Job growth in IRT’s markets is above the national average and is growing faster than new supply, creating increased demand for existing apartment units. Job Growth Outpacing New Supply Employment Growing at a Higher Rate in IRT’s Markets Projected Jobs / Projected Completio
Slide 16: Stable Cash Flow Profile
Stable Cash Flow Profile Annual Change in Effective Rent (IRT Markets vs. the National Average, Gateway Markets and Selected REITs) Source: Company filings, REIS and Wall Street research. Weighted by number of units. Rent growth data for the IRT markets of Asheville NC, Jackson MS and Huntsville AL
Slide 17: Recently Internalized with Bolstered Balance Sheet
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Slide 18: Management Internalization & Stock Offering were Transformative for IRT
Management Internalization & Stock Offering were Transformative for IRT Internalization (1) Eliminated all asset management fees Eliminated advisory agreement termination fee, equal to 4x the average annual base management and incentive fees earned by the advisor during the eight full calendar quart
Slide 19: Bolstered Balance Sheet with Reduced Leverage
Bolstered Balance Sheet with Reduced Leverage Total Debt to Total Gross Assets Debt Maturity Schedule ($s in millions) Source: Company filings. Non-GAAP. Net debt equals total debt less cash and cash equivalents. Adjusted EBITDA represents 4Q 2016 results, annualized, and assumes $2.5 million of cos
Slide 20: Strong Expected 2017 Operating Growth
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Slide 21: 2017 Strategic Focus
2017 Strategic Focus 1. Recycle Class C Properties and Reinvest into Higher Quality Class B Properties 2. Maximize Property Operating Efficiency 3. Review and Reposition Financing Structure for Flexibility and Liquidity While Continuing to Reduce Cost and Leverage 4. Deliver a Tenant-Focused Living
Slide 22: Expected Operating Growth into 2017
Expected Operating Growth into 2017 GAAP net income for 2017 is expected to be between $0.40 and $0.44 per share. GAAP net loss for 2016 was ($0.19) per share. 2017 CORE FFO is expected to grow by 18% to 25% from 2016 as a result of: Same store NOI growth of 3.5% to 4.5% from increased rental rates
Slide 23: Investment Highlights
Recently Internalized with Bolstered Balance Sheet Focused Investment Strategy with Attractive Total Return Opportunity Strong Expected 2017 Operating Growth Investment Highlights Highly Attractive Industry and Market Fundamentals
Slide 24: Appendix
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Slide 25: Property Portfolio
Property Portfolio At IPO (August 16, 2013) Pre TSRE Merger (September 30, 2015, excludes TSRE) At December 31, 2016 Total # of Properties 8 31 46 Total # of Units 2,004 9,055 12,982 Average Base Rent ($) (1) $791 $848 $977 Average Occupancy (%) 93.6% 93.3% 93.8% Average Age (years) 26 20 17 LTM NOI
Slide 26: Definitions
Definitions Average Effective Monthly Rent per Unit Average effective rent per unit represents the average of gross rent amounts, divided by the average occupancy (in units) for the period presented. We believe average effective rent is a helpful measurement in evaluating average pricing. This metri
Slide 27: Definitions: Net Debt and Net Operating Income
Definitions Net Debt Net debt, a non-GAAP measure, equals total debt less cash and cash equivalents. The following table provides a reconciliation of total debt to net debt. IRT presents net debt because management believes it is a useful measure of IRT’s credit position and progress toward reducing
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