Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (March 2021)
44 slides from Independence Realty Trust's investor presentation, Mar 8, 2021
Slide 1: Investor Presentation March 2021
INVESTOR PRESENTATION March 2021 Exhibit 99.1
Slide 2: Table of Contents
Table of Contents IRT Overview Enterprise Snapshot 2 Addressing the Current Environment 3 – 5 Highlighting IRT’s Competitive Advantage 6 – 13 Investing for Growth 14 – 15 Value Add Program / Case Studies 16 – 21 Accelerating Our Efforts in Technology 22 Capital Structure 23 Guidance 24 ESG Commitmen
Slide 3: IRT Enterprise Snapshot
IRT Enterprise Snapshot (1) OWN AND OPERATE Average community age (2) 18 years 56 Communities 15,667 Units $2.0B In gross assets PORTFOLIO SUMMARY SAME STORE HIGHLIGHTS 2020 NOI growth: 3.1% (3) Average effective rent $1,117 (4) Average occupancy: 94.9% (5) VALUE ADD SUMMARY 23 communities identifie
Slide 4: Addressing the Current Environment
Addressing the Current Environment Thornhill Apartments, Raleigh, NC
Slide 5: IRT's Response to the Current Environment
IRT’s Response to the Current Environment Low infection rates and zero spread across employees Closely following CDC guidelines Practicing social distancing, repetitive deep cleaning of commonly used surfaces Created an online reservation system for many of our amenities, and identified opportunitie
Slide 6: Business Update Across Key Industry Metrics
Real Estate / Liquidity Metrics (1) All collection metrics are through March 8, 2021 and are based on IRT’s internal data for the full portfolio, which management uses to monitor property performance on a daily or weekly basis. (2) Deferred payment plans allow residents to defer between 25% and 75%
Slide 7: Highlighting IRT's Competitive Advantage
Highlighting IRT’s Competitive Advantage Waterstone at Big Creek, Alpharetta, GA
Slide 8: Resilient Portfolio and Business Model Positioned for Long-Term Value Creation
Resilient Portfolio and Business Model Positioned for Long-Term Value Creation Clear investment strategy focused on middle-market communities which offer affordable high-quality product with attractive amenities Strong portfolio of assets in non-gateway markets which offer resilient real estate fund
Slide 9: Clear Investment and Ownership Strategy
Clear Investment and Ownership Strategy Assets Our Focus: Well-located middle-market communities, likely to benefit from: Robust management platform, including revenue management Operational expertise Economies of scale Markets Our Focus: Targeted submarkets within non-gateway markets exhibiting: St
Slide 10: Well-Positioned in Affordable, Highly Defensive Middle Market Communities
Well-Positioned in Affordable, Highly Defensive Middle Market Communities A B C Higher income residents move down in a recession Renters move down to Class B as rent increases outstrip income growth Capture households moving down in a recession Capture seniors who sell homes to fund retirement Captu
Slide 11: Portfolio Scale and Platform Deliver Operational Excellence
. rent per unit across Portfolio Scale and Platform Deliver Operational Excellence IRT’s Management Platform: Manage all 56 communities, including 450+ employees Capitalizing on economies of scale through regional managers’ ability to be on-site, which results in cost management efficiencies Algorit
Slide 12: Our Markets Have Been Resilient Through The Pandemic
Our Markets Have Been Resilient Through The Pandemic Source: US Census Bureau Favorable Migration Trends from the Northeast and West to the Southeast are Benefiting IRT The sunbelt has accounted for 75% of US population growth over the past 10 years and is expected to add another 19 million resident
Slide 13: IRT Continues to Benefit From Its Strong Presence in the Sunbelt
IRT Continues to Benefit From Its Strong Presence in the Sunbelt The sunbelt region has exhibited strong fundamentals with favorable migration and population growth trends, as people seek a better cost of living, tax policy, and growing economic opportunities 54% of IRT’s properties are located in t
Slide 14: Stable Cash Flow Profile
Stable Cash Flow Profile Source: Costar Q4 2020 Data Release Gateway Markets represent an arithmetic average of New York, Washington DC, San Francisco and Los Angeles. IRT weighted averages are based on unit count as of 12/31/2020. Annual Change in Effective Rent (IRT Markets vs. the National Averag
Slide 15: Exploring New Investment Opportunities
Exploring New Investment Opportunities IRT is exploring new preferred equity investments and joint venture relationships, focused on new multifamily development & offering increased optionality for capital investment Our Focus: Target assets in core non-gateway markets Prioritize the southeast and b
Slide 16: Multiple Investment Levers to Drive Accretive Growth
Multiple Investment Levers to Drive Accretive Growth Value Add Renovations Acquisitions Preferred Equity Investments and Joint Ventures Renovate existing properties/units where there is the potential for outsized rent growth Expand presence in markets where we see attractive long-term fundamentals I
Slide 17: Flexible Approach to Our Value Add Opportunity
Flexible Approach to Our Value Add Opportunity After Before At a Glance Our value add program provides flexibility to adjust timing and investment, in order to best navigate near-term market conditions. Opportunity Approximately 7,076 units identified for redevelopment across 23 properties creating
Slide 18: Value Add Case Study: The Village at Auburn – Project Overview
Value Add Case Study: The Village at Auburn – Project Overview Before After Acquired asset in Durham, NC for $43m in June 2017 Middle market asset with 328 units that fit perfectly with long-term investment criteria Attractive Durham submarket, combination of universities and corporations, supported
Slide 19: Value Add Case Study: The Village at Auburn – The Economics
Value Add Case Study: The Village at Auburn – The Economics ($ in millions, except monthly data) At Acquisition 12/31/20 Change Revenue (TTM) $4.0 $5.0 +26% NOI (TTM) $2.4 $3.4 +42% NOI Margin 59.7% 65.6% +590bps Average Effective Rental Rate $1,007/ month $1,286/month +28% Cap Rate 5.2% 4.5% -70bps
Slide 20: Value Add Case Study: Pointe at Canyon Ridge – Project Overview
Value Add Case Study: Pointe at Canyon Ridge – Project Overview Before After Acquired asset in Sandy Springs, GA for $49m in September 2015, as part of the Trade Street portfolio acquisition Located just outside of Atlanta, this property was built in 1986, has 494 units and significant ROI potential
Slide 21: Value Add Case Study: Pointe at Canyon Ridge – The Economics
Value Add Case Study: Pointe at Canyon Ridge – The Economics Achieved outsized value creation Post renovation asset value of $94.9 million, representing an increase of 95% from acquisition Incremental value creation of $46.3 million, after renovation investment Enhanced resident profile, resulting i
Slide 22: Value Add Projects and Pipeline Maximize Portfolio Value
Value Add Projects and Pipeline Maximize Portfolio Value Total Value Creation $2.63 per share $'s in 000's, except units and per share amounts IRT’s Redevelopment Opportunity (1) Information as of 12/31/20. (2) These projections constitute forward-looking information. See “Forward-Looking Statements
Slide 23: Accelerating Our Efforts in Technology
Accelerating Our Efforts in Technology Our Focus Our Goals A More Favorable Resident Experience Higher Revenue and Lower Operating Expenses Greater Profitability and Margin Expansion Improved Sustainability and Social Responsibility More Engaged and Productive Staff Automation & Big Data IRT is inve
Slide 24: Simple Capital Structure
Total Market Capitalization calculated based on share price as of market close on 3/31/2017 and 12/31/2020, respectively. Reflects debt maturities as of 12/31/2020. Reflects pro forma net debt to Adjusted EBITDA for each period presented, which includes adjustments for the timing of acquisitions, th
Slide 25: Guidance
Guidance 2021 Full Year EPS and CFFO Guidance (1)(2)* Low High Earnings per share $0.04 $0.08 Adjustments: Depreciation and amortization 0.67 0.67 Stock compensation expense 0.06 0.06 Amortization of deferred financing costs 0.01 0.01 CORE FFO per share allocated to common shareholders $0.78 $0.82 C
Slide 26: ESG Commitment
ESG Commitment We believe that operating multifamily real estate can be conducted with a conscious regard for the environment and wider society. Find out more on the Sustainability page of IRT’s Investor Relations website at http://investors.irtliving.com. Diversity and Inclusion Committee formed to
Slide 27: Path to Continued Long-Term Growth
Path to Continued Long-Term Growth Operational efficiencies and enhanced resident experience through: Improved online marketing and leasing Increased usage of mobile and IoT technologies Automation of workflows and big data Value add community redevelopment initiatives: Redevelopment ongoing at 5,21
Slide 28: Appendix & Definitions
Ws-— Independence N Realty Trust Appendix & Definitions
Slide 29: Markets Demonstrate Strong Population & Employment Growth
Source: Costar 2020 Q4 data release. Gateway markets represent an arithmetic mean of New York, Washington DC, San Francisco and Los Angeles. IRT weighted averages are based on unit count as of 12/31/20. Markets Demonstrate Strong Population & Employment Growth Population & Employment Growth in IRT’s
Slide 30: Assets Demonstrate Attractive Apartment Industry Dynamics
Assets Demonstrate Attractive Apartment Industry Dynamics Low Homeownership Limited New Supply The national Class B vacancy rate remains resilient to supply and demand shocks with 2021 projected to be the largest spread in vacancy rates between Class A & B, with Class B at 6.4% and Class A at 11.8%
Slide 31: Our Markets | Atlanta
Communities located within 5 min. of major highways Communities located in top school districts Benefiting from suburban sprawl, well-positioned in MSA with growing ancillary job markets Major company presence in Atlanta include: Our Markets | Atlanta (1) Source: CoStar 2020 Q4 Data Release New unit
Slide 32: Our Markets | Columbus
14th largest city in the U.S. by population Strong accessibility to major highway I-270 Near thriving employment hubs such as Rickenbacker International airport Class B communities insulated from new Class A construction Major employers, and companies with headquarter-presence include: Our Markets |
Slide 33: Our Markets | Raleigh – Durham
Communities located within 5 min. of major throughways Easy access to local retail centers Concentration around Research Triangle Park Many companies have a strong presence in the area, including: Our Markets | Raleigh – Durham (1) Source: CoStar 2020 Q4 Data Release New units estimated to come as a
Slide 34: Our Markets | Louisville
Located within 5 min. of major highways Benefiting from the proximity to growing industrial footprint Each community is in a top school district in the market Burgeoning tourism hub Major employers include: Our Markets | Louisville (1) Source: CoStar 2020 Q4 Data Release New units estimated to come
Slide 35: Our Markets | Tampa
$3 billion Water Street mixed-use investment backed by Jeff Vinik and Bill Gates is underway downtown Major employers in the area include: Major companies have committed to a major presence in the market such as: Our Markets | Tampa (1) Source: CoStar 2020 Q4 Data Release New units estimated to come
Slide 36: Our Markets | Indianapolis
15th largest city in the U.S. by population Located within 5 min. of major highways Communities located in top school districts Experienced outsized job growth in health care and retail trade industries Major employers include: Our Markets | Indianapolis (1) Source: CoStar 2020 Q4 Data Release New u
Slide 37: Our Markets | Charlotte
17th largest city in the U.S. by population Long-term demand fundamentals are favorable with outsized population growth projected in the key age group of 20-34 (4) Favorable average rent growth outpaces national average (4) Job growth driven by an economic shift away from a manufacturing economy tow
Slide 38: Our Markets | Orlando
Metro area ranked 8th in the U.S. in terms of population growth in 2018 (4) New development lags rental market supply (5) Major employers include: Our Markets | Orlando (1) Source: CoStar 2020 Q4 Data Release New units estimated to come as a percentage of total supply For Budgeted 2021, including th
Slide 39: Our Markets | Huntsville
Metro area ranked 1st in 2020 projected rent growth of the top 100 metros by population 1 Major employers include: Our Markets | Huntsville (1) Source: CoStar 2020 Q4 Data Release New units estimated to come as a percentage of total supply For Budgeted 2021, including the acquisitions in Dallas, TX
Slide 40: Value Add Summary
Value Add Summary Project Life to Date as of December 31, 2020 Renovation Costs per Unit (b) Property Market Percentage Complete Total Units To Be Renovated Units Complete Units Leased Rent Premium (a) % Rent Increase Interior Exterior Total ROI - Interior Costs(c) ROI - Total Costs (d) Ongoing Cres
Slide 41: Resident Demographics at a Glance
Resident Demographics at a Glance (1) Data as of 12/312020. 45% 55% Gender Breakdown 77% 23% Marital Status 38 Average Income of residents between 40% $69k Average Rent to Income 18-29 years old Average Age with Young, growing resident population benefiting from amenity-rich communities without over
Slide 42: 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 43: Definitions and Non-GAAP Financial Measure Reconciliations: Net Operating Income
Definitions and Non-GAAP Financial Measure Reconciliations Net Operating Income We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful supplemental measure of its operating performance. We define NOI as total property revenues less total property operating expenses,
Slide 44: 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 can generally be identified by our
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