Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (March 2022)
49 slides from Independence Realty Trust's investor presentation, Mar 7, 2022
Slide 1: Investor Presentation March 2022
Millenia, Orlando, FL INVESTOR PRESENTATION March 2022 Exhibit 99.1
Slide 2: Table of Contents
Table of Contents Overview 2-3 Recent 4-6 Our Competitive Advantage 7-18 Our Path Forward 19-24 Appendix Market Statistics 26 Market Profiles 27-41 Value Add Summary 42 End Notes 43-44 Definiti Measure 45-47 Forward-Looking Statement 48
Slide 3: IRT Overview
IRT Overview OWN AND OPERATE Sunbelt Exposure 70% of NOI 119 Communities 35,498 Units 95.3% Total Portfolio Average Occupancy (2) PORTFOLIO SUMMARY (1) 4Q21 SAME STORE HIGHLIGHTS NOI growth: 15.1% (5) Avg effective rent $1,266, +9.7% Y-o-Y(6) Average occupancy: 95.7% (6) UPSIDE FROM VALUE ADD ~20,00
Slide 4: Track Record of Value Creation
Source: S&P Global, FactSet. Market data as of 12/31/2021. Note: Represents compound total return, with dividends reinvested. Track Record of Value Creation IRT has a proven track record of outperforming its peers and the broader market 1-Year 3-Year 5-Year Since IPO (1) All notations throughout thi
Slide 5: Highlighting IRT's Recent Developments
Highlighting IRT’s Recent Developments Millenia 700, Orlando, FL
Slide 6: IRT and Steadfast Apartment REIT Complete Strategic Merger
IRT and Steadfast Apartment REIT (STAR) Complete Strategic Merger On December 16, 2021, IRT and STAR merged to form a combined company with an equity market capitalization of approximately $5.6 billion and a total enterprise value of approximately $8.1 billion(1) Creation of a best-in-class platform
Slide 7: Strong Performance Across Key Operating Metrics
Strong Performance Across Key Operating Metrics Combined Same Store Portfolio (115 Properties / 34,454 Units) All notations throughout this presentation appear as “End Notes” on pages 43-44.
Slide 8: Merger with Steadfast Strengthens Our Competitive Advantage
Merger with Steadfast Strengthens Our Competitive Advantage The Landings Of Brentwood, Brentwood, TN
Slide 9: A Compelling Transaction – Joining Together Two High-Quality Portfolios
A Compelling Transaction – Joining Together Two High-Quality Portfolios Own & operate over 35,000 units across 119 properties in attractive, non-gateway markets, increasing our size and economies of scale Benefit from positive trends such as above average population and employment growth, as well as
Slide 10: Expanded Presence Across High Growth U.S. Sunbelt Region
Top 10 Markets Expanded Presence Across High Growth U.S. Sunbelt Region PORTFOLIO SUMMARY Sources: IRT and STAR filings as of 12/31/2021, CoStar, Kinder Institute. Note: STAR excludes three development assets. Sunbelt markets defined as AL, FL, GA, NC, OK, SC, TN and TX. Geographic Distribution Comb
Slide 11: Meaningful and Identifiable Synergies to Drive Growth
Meaningful and Identifiable Synergies to Drive Growth Portfolio Overlap Creates Operating Synergies Immediate Core FFO/Share Accretion Expected with Additional Earnings Enhancement Potential Significant portfolio overlap and economies of scale expected to generate at least $8 million of annual opera
Slide 12: Increased Presence in Markets with Strong Fundamentals
Increased Presence in Markets with Strong Fundamentals Combined company’s markets outperform the national average and gateway markets in two key fundamentals for multifamily asset performance, population and employment growth Outsized Population Growth Employment Change Outpaces National Average ‘21
Slide 13: 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 14: Exploring New Investment Opportunities
Exploring New Investment Opportunities Our Focus: Target assets in core non-gateway markets Prioritize the southeast and broader sunbelt region Create another avenue for accretive capital allocation Why Now: Market for acquisitions is highly competitive Historically low cap rates are currently skewi
Slide 15: Driving Accretive Growth with Multiple Investment Levers
Driving Accretive Growth with Multiple Investment Levers 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 fundamenta
Slide 16: Improved Long-Term Growth Profile through Value Add Program
Improved Long-Term Growth Profile through Value Add Program ~12,000 former STAR units and ~8,000 IRT units identified for value add renovations Expect to implement IRT’s value add platform at former STAR units and drive outsized rental growth IRT’s historical projects have generated a 18.4% return o
Slide 17: Disposing of Assets at Attractive Cap Rates, While Deleveraging
Disposing of Assets at Attractive Cap Rates, While Deleveraging Nashville, TN Kansas City, MO Atlanta, GA Atlanta, GA Indianapolis, IN Louisville, KY Units Total Sale Price $22,000 $27,750 $48,500 $91,000 $31,000 $48,500 $47,500 $30,000 Oklahoma City, OK Oklahoma City, OK 3.8% Property Market Sale P
Slide 18: Accelerating Our Efforts in Technology
Accelerating Our Efforts in Technology Our Focus Our Goals A More Favorable Resident Experience Higher Revenue and Lower Operating Expenses Greater Profitability and Margin Expansion Improved Sustainability and Social Responsibility More Engaged and Productive Staff Automation & Big Data IRT is inve
Slide 19: Focusing on Our ESG Initiatives
Focusing on Our ESG Initiatives We believe that operating multifamily real estate can be conducted with a conscious regard for the environment and wider society. Find out more on the Sustainability page of IRT’s Investor Relations website at http://investors.irtliving.com. Diversity and Inclusion Co
Slide 20: Our Path Forward: 2022 Outlook, Capitalization, and Leverage
Our Path Forward 2022 Outlook, Capitalization, and Leverage Vantage On Hillsborough, Tampa, FL
Slide 21: 2022 Full Year EPS and CFFO Guidance
2022 Full Year EPS and CFFO Guidance (1)(2) CORE FFO ($s in millions) Key Operating Assumptions Guidance Double-digit NOI growth in 2022e, to be supported by average occupancy of 95.7% at the midpoint of our guided range, with an expected increase of 10% in average rental rate Merger synergies and t
Slide 22: IRT is Delivering Industry Leading Returns
Source: Company reports; coastal peer group includes AVB, EQR, ESS, and UDR; non-gateway peer group includes CPT, CSR, MAA, and NXRT. Same store NOI growth and CFFO per share metrics are based on the definitions used by the peer group companies and may not be comparable. IRT is Delivering Industry L
Slide 23: Maintain a Simple Capital Structure
Maintain a Simple Capital Structure $8.6bn Common Equity Debt The combined company maintains a simple capital structure consisting of secured and unsecured debt Maintain conservative financial and credit policies and expect to further delever the balance sheet through non-core asset sales, organic N
Slide 24: Leverage: Where We Are and Where We Are Going
Leverage: Where We Are and Where We Are Going We are focused on continuing to improve the combined company’s leverage profile 7.7x Low-7’s Mid-6’s Deleveraging Post-Merger, through a combination of Our July forward equity raise of $272 million on 16.1 million shares Disposition of 9 properties for t
Slide 25: Compelling Investment Opportunity With a Path to Long-Term Growth
Compelling Investment Opportunity With a Path to Long-Term Growth The Residences on McGinnis Ferry Suwanee, GA Leading Multifamily REIT with Benefits of Increased Size and Scale, Focused on the High-Growth U.S. Sunbelt Region Substantial Post-Merger Synergies and Strengthened Operating Platform to S
Slide 26: Appendix & Definitions
Appendix & Definitions Canyon Resort at Great Hills, Austin, TX
Slide 27: 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 2022 projected spreads in vacancy rates between Class A & B, with Class B at 4.4% and Class A at 6.5% The majority of ne
Slide 28: 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) Footnotes: CoStar 2021 Q4 Data Release New u
Slide 29: Our Markets | Charlotte
16th largest city in the U.S. by population 4 Long-term demand fundamentals are favorable with outsized population growth projected in the key age group of 20-34 5 Job growth driven by an economic shift away from a manufacturing economy toward a service economy Major employers include: Our Markets |
Slide 30: Our Markets | Columbus
14th largest city in the U.S. by population 4 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 31: Our Markets | Dallas-Fort Worth
9th largest city in the U.S. by population 4 The Dallas MSA has had the largest population growth within the past 10 years 5 Dallas accounts for nearly 8% of all financial service jobs in the Southwest region. 6 Major employers include: Our Markets | Dallas-Fort Worth (1) Footnotes: CoStar 2021 Q4 D
Slide 32: Our Markets | Denver
Population growth in the metro area is expected to exceed 5.5% over the next five years4 The MSA had the 10th largest population increases from 2010-20195 Major employers include: Our Markets | Denver (1) Footnotes: CoStar 2021 Q4 Data Release New units estimated to be delivered as a percentage of t
Slide 33: Our Markets | Houston
Job growth is expected to be 2.7% annually through 2025, compared to 1.7% nationally. 4 Houston sits at #2 for the Top ten MSAs by population growth (2010-2019). 5 Major employers include: Our Markets | Houston (1) Footnotes: CoStar 2021 Q4 Data Release New units estimated to be delivered as a perce
Slide 34: 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) Footnotes: CoStar 2021 Q4 Data Release New units estimated to be delivered as a percentage of total supply For 2022 Budgeted NOI Huntsville represents 2.9%
Slide 35: Our Markets | Indianapolis
15th largest city in the U.S. by population Communities located in top school districts Experienced outsized job growth in health care and retail trade industries Major employers include: Our Markets | Indianapolis (1) Footnotes: CoStar 2021 Q4 Data Release New units estimated to be delivered as a p
Slide 36: 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) Footnotes: CoStar 2021 Q4 Data Release New units estimated to be
Slide 37: Our Markets | Memphis
Memphis has all the amenities of a large city with a cost of living more than 20% below the national average. 4 Tennessee is one of the lowest-taxed states per capita in the nation. 4 Major employers include: Our Markets | Memphis (1) Footnotes: CoStar 2021 Q4 Data Release New units estimated to be
Slide 38: Our Markets | Nashville
Metro area job growth expected to outpace the national rate through 2025 4 Oracle plans to expand in the market. Adding 8,500 jobs and will invest $1.2 billion in the new project. Major employers include: Our Markets | Nashville (1) Footnotes: CoStar 2021 Q4 Data Release New units estimated to be de
Slide 39: Our Markets | Oklahoma City
The metro’s population grew 0.5% this year, which was above the 0.2% national average 4 Actively executing the redevelopment of its downtown area 4 Located within 5 min. of major highways and retail Major employers include: Our Markets | Oklahoma City (1) Footnotes: CoStar 2021 Q4 Data Release New u
Slide 40: Our Markets | Orlando
Established tourism hub Centrally located in FL, easily accessible to drive to and from close markets Job growth is expected to be at 3.4% annually through 2025, compared to 1.7% nationally (4) Major employers include: Our Markets | Orlando (1) Footnotes: CoStar 2021 Q4 Data Release New units estima
Slide 41: 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) Footnotes: CoStar 2021 Q4 Data Release New units estimated to be del
Slide 42: 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) Footnotes: CoStar 2021 Q4 Data Release New units estimated to b
Slide 43: IRT Value Add Summary
IRT Value Add Summary Project Life to Date as of December 31, 2021 All notations throughout this presentation appear as “End Notes” on pages 43-44.
Slide 44: End Notes
End Notes Slide 2 For the total portfolio as of December 31, 2021 or for 4Q 2021, as applicable, excluding assets classified as held for sale and new development projects. 4Q 2021 NOI includes pro forma adjustments to show a full quarter of operations for the properties acquired in the STAR Merger.
Slide 45: End Notes (continued)
End Notes (continued) Slide 20 This guidance, including the underlying assumptions, constitutes forward-looking information. Actual full year 2022 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements”. Our guidance is based on the key guidance assumpt
Slide 46: 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 47: 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 48: Definitions and Non-GAAP Financial Measure Reconciliations
Definitions and Non-GAAP Financial Measure Reconciliations
Slide 49: 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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