Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (November 2018)
30 slides from Independence Realty Trust's investor presentation, Nov 2, 2018
Slide 1: Investor Presentation November 2018
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Slide 2: Table of Contents
Table of Contents IRT Overview Investment Thesis 2 Markets 3 – 5 Assets 6 Portfolio Composition 7 Value Add Program 8 – 10 Capital Recycling Program 11 – 12 Capital Structure 13 – 14 Guidance 15 Conclusion 16 Appendix Market Profiles 18 – 24 Portfolio Transformation 25 Demographic Profile 26 Definit
Slide 3: Positioned to Unlock Long-term Value
Positioned to Unlock Long-term Value Clear investment strategy focused on middle-market communities across non-gateway MSAs Accretive, tenant-first approach to owning and operating high-quality multifamily communities $ Value add community redevelopment and capital recycling initiatives Simple, cons
Slide 4: 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 Operational expertise Economies of scale Markets Our Focus: Targeted submarkets within non-gateway markets exhibiting: Strong apartment demand Limited
Slide 5: Our Markets Demonstrate Positive Demographic Factors
Source: CoStar Note: 2018 are projections as reported by CoStar as of 9.28.18 IRT weighted averages are based on unit count as of Q3 2018, inclusive of Waterford Landing acquisition. Gateway markets represent an arithmetic average of New York, Washington DC, San Francisco and Los Angeles. Huntsville
Slide 6: Our Markets Demonstrate Strong Employment Outlook
Our Markets Demonstrate Strong Employment Outlook 0 34 84 18 86 154 108 134 195 82 89 95 191 191 191 241 229 24 33 75 35 255 175 25 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 Outp
Slide 7: Our Assets Demonstrate Attractive Apartment Industry Dynamics
Our Assets Demonstrate Attractive Apartment Industry Dynamics Low Homeownership Limited New Supply The national Class B vacancy rate remains close to historic lows Class B vacancy continues to decline, notwithstanding an increase in apartment completions across the broader apartment market The major
Slide 8: Portfolio Scale and Management Platform Deliver Operational Excellence
Portfolio Scale and Management Platform Deliver Operational Excellence For all owned communities as of 11.1.2018, plus Lucerne in Brandon, FL For the Q3 2018 including pro forma NOI from recently completed acquisitions IRT’s Management Platform: Manage all 60 communities 1 Capitalizing on economies
Slide 9: Value Add Opportunity
Value Add Opportunity After Before At a Glance Value add projects, which IRT defines as renovations and upgrades at selected communities to drive increased rental rates, are a core part of IRT’s strategy to maximize its portfolio’s value Opportunity Over 4,300 units identified for redevelopment acro
Slide 10: Value Add Schedule | Where We Are Today
Value Add Schedule | Where We Are Today Value Add Summary Year to Date as of September 30, 2018 Includes all costs to renovate the interior units and make certain exterior renovations, including clubhouses and amenities. Interior costs per unit are based on units leased. Exterior costs per unit are
Slide 11: Low risk redevelopment with potential for immediate value creation per unit
Low risk redevelopment with potential for immediate value creation per unit 5 Communities 1,566 Units Est. $23M investment Est. return of 15-20% Est. avg. monthly rent premium of ~$180 Expected to be complete in Q2 of 2019 9 Communities 2,751 Units Est. $27M investment Est. return of 20-25% Est. avg
Slide 12: Capital Recycling Program
Capital recycling program sets the table for driving future organic growth: Upgrading portfolio by investing in core markets with scale, or where scale can be improved Acquired communities where future value add opportunities exist to further drive NOI once onboarded onto IRT’s platform Exiting mark
Slide 13: Acquisitions and Dispositions Property List
Property Name Market State Built / Renovated Units Period End Occupancy1 Avg. Effective Rent/Unit1 Close Date The Chelsea Columbus OH 2013 312 91.4% $1,102 1/4/2018 Avalon Oaks Columbus OH 1999 235 93.6% $924 2/27/2018 Bridgeview Apartments Tampa FL 1986 348 89.1% $1,018 7/11/2018 Collier Park Colum
Slide 14: Simple Capital Structure
Includes the pro forma impact of the five-year, $200 million unsecured term loan IRT entered into in October 2018, which matures in January 2024. The proceeds were used to repay borrowings outstanding under the revolving portion of IRT’s $300 million unsecured credit facility. As of market close 3.3
Slide 15: How Do We Right Size Leverage?
How Do We Right Size Leverage? Pro forma NOI reflects the impact of all acquisitions and dispositions as if they occurred on 1.1.2018, including IRT’s four acquisitions that occurred in Q1 2018. Projected annual organic total portfolio NOI growth of 3-4% The additional NOI is expected to be fully re
Slide 16: 2018 Guidance
2018 Guidance This guidance, including the underlying assumptions, constitutes forward-looking information. Actual full year 2018 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements” below. Our guidance is based on the following key assumptions for o
Slide 17: How IRT Unlocks Long-term Value
How IRT Unlocks Long-term Value Clear investment strategy focused on middle-market communities across non-gateway MSAs Accretive, tenant-first approach to owning and operating high-quality multifamily communities Value add community redevelopment and capital recycling initiatives Simple, conservativ
Slide 18: Appendix & Definitions
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Slide 19: Our Markets | Columbus
Our Markets | Columbus 1 Community Map Job Growth Bennington Pond Apartments Groveport, OH Schirm Farms Canal Winchester, OH Population Growth 14th largest city in the U.S. by population Strong accessibility to major highway I-270 Near thriving employment hubs such as Rickenbacker International airp
Slide 20: Our Markets | Atlanta
Our Markets | Atlanta 1 Community Map Job Growth Pointe at Canyon Ridge Sandy Springs, GA Crestmont Marietta, GA Population Growth Communities located within 5 min. of major highways Communities located in top-5 school districts in each MSA Benefitting from suburban sprawl, well-positioned in MSA’s
Slide 21: Our Markets | Raleigh – Durham
000 Supply Growth 2 Our Markets | Raleigh – Durham 1 Community Map Job Growth Creekstone at RTP Durham, NC Waterstone at Brier Creek Raleigh, NC Population Growth Communities located within 5 min. of major throughways Each community is in a top-5 school district in the market Easy access to local re
Slide 22: Our Markets | Louisville
000 Our Markets | Louisville 1 Community Map Located within 5 min. of major highways Benefitting from the proximity to growing industrial footprint Each community is in a top-5 school district in the market Burgeoning tourism hub Major employers include: Job Growth Prospect Park Apartment Homes Loui
Slide 23: Our Markets | Tampa
000 Our Markets | Tampa 1 Community Map Job Growth Lakes of Northdale Tampa, FL Population Growth The market is on track to add 65,000 jobs between the winter of 2017 and the end of 2018 6 Major employers in the area include: Major companies have committed to a major presence in the market such as:
Slide 24: Our Markets | Charlotte
000 Demand Drivers vs. New Supply Our Markets | Charlotte 1 Community Map Job Growth Fountains Southend Charlotte, NC Population Growth 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 6 Fa
Slide 25: Our Markets | Orlando
000 Our Markets | Orlando 1 Community Map Millenia 700 Orlando, FL Metro area ranked 8th in the U.S. in terms of population growth in 2018 6 New development lags rental market supply 7 Job growth is concentrated in lower-paying jobs, prohibiting some demand at the Class A tier 7 Major employers incl
Slide 26: Dramatic Portfolio Transformation Since IPO
Dramatic Portfolio Transformation Since IPO Source: Company filings and CoStar. For all owned communities as of 11.1.2018, plus Lucerne in Brandon, FL. As of 9.28.2018. Please find a definition of Total Gross Assets in the appendix. Midpoint of full year 2018 guidance as revised in the Q3 2018 earni
Slide 27: Resident Demographics at a Glance
Resident Demographics at a Glance 1 Data as of October 2018 53% 47% Gender Breakdown 74% 26% Marital Status 36 Average Income Of tenants between 39% $71k Average Income to rent 18-29 years old Average Age with Young, growing resident sample benefitting from amenity-rich communities without overexten
Slide 28: 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 29: Definitions and Non-GAAP Financial Measure Reconciliations
Interest Coverage Interest coverage is a ratio computed by dividing our Adjusted EBITDA by our interest expense. 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 (Dollars in thousands). IR
Slide 30: 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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