Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (September 2021)
43 slides from Independence Realty Trust's investor presentation, Sep 13, 2021
Slide 1: Investor Presentation September 2021
Legacy at Jones Farm, Huntsville, AL INVESTOR PRESENTATION September 2021 Exhibit 99.1
Slide 2: Table of Contents
Table of Contents IRT ise Snapshot 2 Recent 3-5 IRT to Merge with Steadfast 6-11 Our Competitive Advantage 12-21 2021 Pro Forma ion, Leverage and Outlook 22-25 Appendix Market Statistics 27 Market Profiles 28-37 Value Add Summary 38 Demographic Profile 39 Definit Measure 40-41 Forward-Looking Statem
Slide 3: IRT Enterprise Snapshot
IRT Enterprise Snapshot OWN AND OPERATE Average community age (2) 16 years 57 Communities 16,109 Units $2.0B In gross assets PORTFOLIO SUMMARY (1) SAME STORE HIGHLIGHTS NOI growth: 9.6% (3) Average effective rent $1,146 (4) Average occupancy: 96.1% (4) VALUE ADD SUMMARY 23 communities identified for
Slide 4: Highlighting IRT's Recent Developments
Highlighting IRT’s Recent Developments Cyan Craig Ranch, McKinney, TX
Slide 5: IRT Business Update Across Key Industry Metrics
(1) All collection metrics are through September 13, 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) 3Q 2021 represents new leases and renewals that were signed as of September 13, 2021. (3) Liqui
Slide 6: IRT's Recent Developments and Performance
IRT’s Recent Developments and Performance Executing transactions which support our ongoing strategy to drive growth Announced proposed merger with Steadfast Apartment REIT on July 26, 2021, to create a top 3 publicly traded multifamily REIT focused on the sunbelt with a combined company equity marke
Slide 7: Independence Realty Trust to Merge with Steadfast REIT
Independence Realty Trust to Merge with Steadfast REIT Creates Leading Sunbelt-Focused Multifamily Platform
Slide 8: Transaction Overview
Transaction Overview Based on IRT’s closing stock price of $20.00 as of 7/23/2021 and a 0.905x exchange ratio. Pro forma ownership includes the 16.1M shares of IRT sold on a forward basis pursuant to an offering that closed on July 30, 2021. IRT expects to physically settle the associated forward sa
Slide 9: Transaction Rationale and Expected Benefits
Transaction Rationale and Expected Benefits Creation of a ~$7bn multifamily REIT focused on high-growth markets predominantly in the sunbelt region The property and unit count is pro forma as of June 30, 2021 and does not factor in any planned asset dispositions.
Slide 10: Steadfast Apartment REIT Snapshot
Steadfast Apartment REIT Snapshot STAR owns a portfolio of high-quality multifamily assets in attractive markets with strong fundamentals 70 Communities 21,841 Units $1,275 Avg. Effective Monthly Rent per Unit (1) $4.1B Enterprise Value (4) STAR PORTFOLIO SUMMARY 96.2% SS Avg. Occupancy 12.4% Spread
Slide 11: Complementary Portfolios with Benefits of Size and Scale
Complementary Portfolios with Benefits of Size and Scale Source: IRT and STAR filings as of 6/30/2021 and FactSet. Portfolio information as of 6/30/2021. Market data as of 7/23/2021. STAR equity and enterprise value based on IRT’s closing stock price of $20.00 as of 7/23/2021 and a 0.905x exchange r
Slide 12: Meaningful and Identifiable Synergies to Drive Growth
Meaningful and Identifiable Synergies to Drive Growth Portfolio Overlap Creates Operating Synergies ~11% Immediate Core FFO/Share Accretion Expected with Additional Earnings Enhancement Potential Significant portfolio overlap and economies of scale expected to generate approximately $8 million of an
Slide 13: Our Competitive Advantage
Our Competitive Advantage Steadfast Property: Residences on McGinnis Ferry, Suwanee, GA
Slide 14: Expanding Our Presence Across High-Growth Markets
Top 10 Markets Expanding Our Presence Across High-Growth Markets PORTFOLIO SUMMARY Sources: IRT and STAR filings as of 6/30/2021, CoStar, Kinder Institute. Note: STAR excludes three development assets. Sunbelt markets defined as AL, FL, GA, NC, OK, SC, TN and TX. The property and unit count is pro f
Slide 15: Increasing Our Presence in Markets with Strong Fundamentals
Sources: IRT and STAR filings as of 6/30/2021, CoStar. Gateway markets represent an arithmetic mean of New York, Washington DC, San Francisco and Los Angeles. Pro Forma IRT weighted averages are based on unit count as of 6/30/2021 and excludes STAR’s three development assets. Outsized Population Gro
Slide 16: 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 17: Robust Embedded Value Add Growth Opportunities
Calculated as incremental NOI, divided by a 4.5% cap rate, net of capital investment. Incremental NOI of $8.9 million calculated as total costs-to-date of $52.3 million multiplied by ROI of 17.1%. These projections constitute forward-looking information. See “Forward-Looking Statements” on slide 42.
Slide 18: 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 19: 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 20: 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 21: 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 22: Resulting in Sustained Value Creation for Stockholders
Source: S&P Global, FactSet. Market data as of 7/23/2021. Note: Represents compound total return, with dividends reinvested. IPO date of 8/13/2013. Resulting in Sustained Value Creation for Stockholders IRT has a proven track record of outperforming its peers and the broader market 1-Year 3-Year 5-Y
Slide 23: 2021 Pro Forma Capitalization, Leverage and Outlook
2021 Pro Forma Capitalization, Leverage and Outlook The Village at Auburn, Durham, NC
Slide 24: Pro Forma Capitalization
Pro Forma Capitalization $7.3bn Common Equity Debt The combined company will maintain a simple capital structure consisting of secured and unsecured debt Plan to maintain conservative financial and credit policies and expect to further delever the balance sheet through non-core asset sales, organic
Slide 25: Roadmap to Right Sizing Leverage
Roadmap to Right Sizing Leverage We are focused on right sizing the balance sheet and continuing to improve the combined company’s leverage profile through achievable action items in the near to medium-term 9.7x Interim-term target leverage Low 8’s Mid 7’s Non-Core Dispositions Approximately $340 mi
Slide 26: Strength of Combined Company and Path to Long-Term Growth
Strength of Combined Company and Path to Long-Term Growth Defined Investment Strategy Focus on non-gateway MSAs with strong apartment demand, limited new construction and positive economic indicators / demographic trends Value Add Redevelopment Initiatives Identified value add opportunities in combi
Slide 27: Appendix & Definitions
| i Independence a Realty Trust Appendix & Definitions
Slide 28: 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 4.49% and Class A at 7.44%
Slide 29: 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 2021 Q2 Data Release New unit
Slide 30: 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 31: 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 2021 Q2 Data Release New units estimated to come as a
Slide 32: 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 2021 Q2 Data Release New units estimated to come
Slide 33: 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 2021 Q2 Data Release New units estimated to come
Slide 34: 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) Source: CoStar 2021 Q2 Data Release New units estimated to come as a percentage o
Slide 35: 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) Job growth driven by an economic shift away from a manufacturing economy toward a service economy Major employers include: Our Markets |
Slide 36: Our Markets | Orlando
Metro area ranked 8th in the U.S. in terms of population growth in 2018 (4) Established tourism hub New development lags rental market supply (5) Major employers include: Our Markets | Orlando (1) Source: CoStar 2021 Q2 Data Release New units estimated to come as a percentage of total supply For Pro
Slide 37: 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 2021 Q2 Data Release New units estimated to come as a percentage of total supply For Projected 2021 NOI Orlando represents 4.9% of IRT’s NOI,
Slide 38: Our Markets | Dallas-Fort Worth
9th largest city in the U.S. by population The Dallas MSA has had the largest population growth within the past 10 years 4 Dallas accounts for nearly 8% of all financial service jobs in the Southwest region. 5 Major employers include: Our Markets | Dallas-Fort Worth (1) Source: CoStar 2021 Q2 Data R
Slide 39: IRT Value Add Summary
IRT Value Add Summary Project Life to Date as of June 30, 2021 The rent premium reflects the per unit per month difference between the rental rate on the renovated unit and the market rent for an unrenovated unit as of the date presented, as determined by management consistent with its customary ren
Slide 40: IRT Resident Demographics at a Glance
IRT Resident Demographics at a Glance (1) Data as of June 30, 2021 46% 54% Gender Breakdown 76% 24% Marital Status 37 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 witho
Slide 41: 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 IRT’s a
Slide 42: Definitions and Non-GAAP Financial Measure Reconciliations
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 43: 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
Independence Realty Trust — Investor Presentation (September 2021) on 6ix