Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (September 2022)
51 slides from Independence Realty Trust's investor presentation, September 2022
Slide 1: Investor Presentation September 2022
INVESTOR PRESENTATION September 2022 Cyan Mallard Creek, Charlotte, NC
Slide 2: Table of Contents
Table of Contents Overview and Performance 2–3 Recent Operating Metrics and 2022 Guidance 4–6 Our Competitive Advantage 7 – 11 Our Strategic Investment Opportunities 12 – 19 Capitalization and Leverage 20 – 22 Our Path to Long-Term Growth 23 Appendix Track Record of Value Creation 25 Market Statisti
Slide 3: IRT Overview
IRT Overview PORTFOLIO SUMMARY (1) OWN AND OPERATE Average community age (2) 22 years IN OH PA IL Sunbelt Exposure 120 CO KY VA Communities (2) 69% of NOI OK $6.2B In gross assets TN AL GA NC SC TX 35,594 Units (2) 12.6% FL Same Store Blended Lease Over Lease Rent Growth YTD Independence Realty Trus
Slide 4: IRT is Delivering Industry Leading Operating Performance
IRT is Delivering Industry Leading Operating Performance Relative to peers in non-gateway and coastal markets, IRT outpaced industry growth over the past few years and momentum is expected to continue due to our attractive location in sunbelt markets, as well as our investments in value add renovati
Slide 5: Recent Operating Metrics and 2022 Guidance
Recent Operating Metrics and 2022 Guidance Reserve at Creekside 4 Chattanooga, TN
Slide 6: Strong Performance Across Key Operating Metrics
Strong Performance Across Key Operating Metrics Same Store Excluding Value Add Same Store Value Add Same Store Total (2) 100% 96.7% 96.5% 96.3% 96.0% 95.5% 95.8% 95.5% 95.4% 95.5% 94.9% 94.4% 95% 94.8% 94.2% 94.4% Occupancy 92.2% 90% 85% 80% Q3 21 Q4 21 Q1 22 Q2 22 3Q22 to Q3 21 Q4 21 Q1 22 Q2 22 3Q
Slide 7: Full Year 2022 Guidance
Full Year 2022 Guidance ➢ Double-digit NOI growth in 2022e, to be supported by an increase in average rent growth ➢ Merger synergies and technological efficiencies will help offset inflationary pressures on operating expenses ➢ Robust investment pipeline for value add renovations and ground up devel
Slide 8: Our Competitive Advantage
Our Competitive Advantage PeakView by Horseshoe Lake 7 Loveland, CO
Slide 9: Our Portfolio is Focused On the High Growth Sunbelt Region
Our Portfolio is Focused On the High Growth Sunbelt Region Combined company includes 120 communities across resilient, high growth markets (1) PORTFOLIO SUMMARY Geographic Geographic Distribution Distribution Top 10 Markets Independence Realty Trust % % % NOI Market Units Communities Unit NOI Growth
Slide 10: IRT's Markets Have Strong Fundamentals
IRT's Markets Have Strong Fundamentals IRT’s markets outperform the national average and gateway markets in two key demand drivers of multifamily asset performance: population and employment growth Outsized Population Growth Employment Change vs. 2019 National Average 20’ vs. 19’ 21’ vs. 19’ 22’E vs
Slide 11: Well-Positioned in Affordable, Highly Defensive Middle Market Communities
Well-Positioned in Affordable, Highly Defensive Middle Market Communities Class B Positioning: ◼ Higher income ◼ Most opportunity to consistently increase rents A residents move down in a recession ◼ Less exposure to homeownership ◼ Renters move down ◼ Less likely to be impacted from new constructio
Slide 12: Attractive Portfolio Has Led to a Stable Cash Flow Profile
Attractive Portfolio Has Led to a Stable Cash Flow Profile Supply and Demand fundamentals in IRT’s markets have resulted in a more stable rent profile through multiple economic cycles, as compared to Gateway Markets and Class A communities Annual Change in Effective Rent (IRT Markets vs. the Nationa
Slide 13: Our Strategic Investment Opportunities
Our Strategic Investment Opportunities The Views of Music City 12 Nashville, TN
Slide 14: Driving Accretive Growth with Multiple Investment Levers
Driving Accretive Growth with Multiple Investment Levers Preferred Equity Value Add Acquisitions / Capital Investments and Renovations Recycling Joint Ventures Renovate existing Expand presence in Invest in multifamily development by Investment communities/units where markets where we see providing
Slide 15: Improved Long-Term Growth Profile through Value Add Program
Improved Long-Term Growth Profile through Value Add Program Sizeable ~20,000 unit value add pipeline providing over $900 million of incremental shareholder value ~12,000 former STAR units and ~8,000 IRT units identified for value add renovations Expect to implement IRT’s value add platform at fo
Slide 16: Continue to Invest in Our Long-Standing Value Add Program
Continue to Invest in Our Long-Standing Value Add Program—— Year to date 2022, value add renovations have generated a 33.5% ROI Units to Be Renovated* Total Units 1Q22 143 2Q22 195 3Q22e 525 FY22E 4Q22e 675 FY22e 1,538 *3Q22-4Q22 & FY22 units to be renovated are estimates Pipeline of ~20,000 value a
Slide 17: Joint Venture Development Program
Engaging in Attractive Investment Opportunities with Our Joint Venture Development Program Focused on joint ventures in new multifamily development in core non-gateway markets • Invested in a joint venture developing three communities totaling 504 homes in September 2021 Views of Music • Exercised o
Slide 18: Accelerating Our Efforts in Technology
Accelerating Our Efforts in Technology Our Focus Marketing & Leasing Operations, Maintenance Automation & Big Data & Resident Experience IRT is investing in technology which will IRT is focused on further enhancing its leasing IRT is proactively using technology to create create additional efficienc
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 Preparing our first Sustainability Report and expect to publish it later this year Provide a Residence Proud to Call Home, Diversity and In
Slide 20: Examples of IRT's ESG Initiatives
Examples of IRT’s ESG Initiatives IRTree Program Shelters to Shutters IRT has partnered with One Tree Planted to A national organization that partners with real plant one tree for every new resident that estate management companies, like IRT to joins the IRT family. The reforestation transition indi
Slide 21: Capitalization and Leverage
Capitalization and Leverage Millenia 700 Orlando, FL 20
Slide 22: Maintain a Simple Capital Structure
Maintain a Simple Capital Structure Balance Sheet Highlights Total Capitalization (1) 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 org
Slide 23: 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 Progressing Towards Our Mid-Term Target of Mid-6’s through the Following Drivers: Organic NOI growth from stabilized portfolio consistent with long-term historical growth r
Slide 24: Compelling Investment Opportunity With a Path to Long-Term Growth
Compelling Investment Opportunity With a Path to Long-Term Growth Leading Multifamily REIT, Well-Positioned in Class B Communities, Focused on the High-Growth U.S. Sunbelt Region with a Stable Cash Flow Profile Strong Long-Term Growth Profile Supported by a 20,000 Unit Value Add Pipeline, New Develo
Slide 25: Appendix & Definitions
Canyon Resort at Great Hills, Austin, TX Appendix & Definitions
Slide 26: Track Record of Value Creation
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) 350% 312% 300% 250% 200% 177% 170% 150% 141% 94% 100% 75% 57% 42% 47% 50% 31% 10% 13% 0% -10%-12%-11% -3% -50% RMS Multifamily Index S&P 500 IRT Source: S
Slide 27: Assets Demonstrate Attractive Apartment Industry Dynamics
Assets Demonstrate Attractive Apartment Industry Dynamics Low Homeownership Limited New Supply ◼ Growth in households increases the pool of renters, even more so during ◼ The national Class B vacancy rate remains resilient to supply and demand periods of reduced homeownership shocks with 2022 projec
Slide 28: Merger of IRT and Steadfast Apartment REIT
A Compelling Transaction: Merger of IRT and Steadfast Apartment REIT Joining Together Two High-Quality Portfolios On December 16, 2021, IRT and STAR merged, creating a best-in-class platform with further value add redevelopment opportunities and notable economies of scale in markets where we expect
Slide 29: IRT Value Add Summary
IRT Value Add Summary Project Life to Date as of June 30, 2022 Renovation Costs per Unit (2) Total Rent Percentage Units To Be Units Units Premium % Rent ROI - Interior ROI - Total Property Market Complete Renovated Complete Leased (1) Increase Interior Exterior Total Costs(3) Costs (4) Ongoing The
Slide 30: Our Markets | Atlanta
Our Markets | Atlanta (1) Community Map Job Growth Population Growth 3.60% 1.64% 2020 0.39% 1.13% 0.88% 2021 2022 -5.08% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 5.00% 3.17% 2.62%
Slide 31: Our Markets | Charlotte
(1) Our Markets | Charlotte Community Map Job Growth Population Growth 2.69% 4.00% 1.47% 1.31% 0.89% 2020 2021 2022 -2.25% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 10.81 % 5.53% 4
Slide 32: Our Markets | Columbus
Our Markets | Columbus(1) Community Map Job Growth Population Growth 3.27% 1.11% 0.91% 2020 2021 0.54% 2022 -1.31% -4.05% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 6.32% 3.15% 2.14
Slide 33: Our Markets | Dallas
(1) Our Markets | Dallas Community Map Job Growth Population Growth 2.91% 2.73% 2.75% 1.43% 2020 1.18% 2021 2022 -3.26% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 7.21% 3.55% 2.64%
Slide 34: Our Markets | Denver
(1) Our Markets | Denver Community Map Job Growth Population Growth 3.36% 2020 2021 0.85% 0.96% 0.62% -0.59% 2022 -5.52% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 6.86% 4.07% 3.05%
Slide 35: Our Markets | Houston
(1) Our Markets | Houston Community Map Job Growth Population Growth 3.77% 2.20% 2020 2021 1.45% 1.10% -1.40% 2022 -5.91% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 6.52% 3.64% 2.31
Slide 36: Our Markets | Huntsville
(1) Our Markets | Huntsville Community Map Job Growth Population Growth 2.47% 3.71% 2.16% 2.11% 1.01% 2020 2021 2022 -0.53% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 11.85 12.30 %
Slide 37: Our Markets | Indianapolis
(1) Our Markets | Indianapolis Community Map Job Growth Population Growth 2.80% 1.34% 0.46% 0.77% 2020 0.31% 2021 2022 2020 2021 2022 -3.49% 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 3.67% 2.06%
Slide 38: Our Markets | Louisville
(1) Our Markets | Louisville Community Map Job Growth Population Growth 2.28% 0.29% 2020 2021 0.18% 0.13% 2022 -1.48% -4.37% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 6.25% 3.20% 0
Slide 39: Our Markets | Memphis
(1) Our Markets | Memphis Community Map Job Growth Population Growth 3.00% 0.14% 2020 2021 2020 2021 -0.47% 2022 -0.01% 2022 -0.03% -2.95% 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 1.93% 0.91% 0.
Slide 40: Our Markets | Nashville
(1) Our Markets | Nashville Community Map Job Growth Population Growth 3.63% 2.44% 2.23% 2020 1.32% 1.07% 2021 2022 -2.77% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 10.19 % 7.64% 5
Slide 41: Our Markets | Oklahoma City
(1) Our Markets | Oklahoma City Community Map Job Growth Population Growth 3.57% 1.80% 1.00% 2020 2021 2022 0.28% -2.12% 2020 2021 2022 -4.53% 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 2.35% 1.08
Slide 42: Our Markets | Orlando
(1) Our Markets | Orlando Community Map Job Growth Population Growth 5.36% 1.65% 1.47% 2020 2021 0.98% -1.27% 2022 -9.40% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 9.70% 4.73% 4.46
Slide 43: Our Markets | Raleigh – Durham
(1) Our Markets | Raleigh – Durham Community Map Job Growth Population Growth 3.44% 2.76% 3.05% 2020 1.63% 1.04% 2021 2022 -1.85% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 6.06% 4.
Slide 44: Our Markets | Tampa
(1) Our Markets | Tampa Community Map Job Growth Population Growth 2.09% 2.19% 2.17% 2020 1.13% 0.66% 2021 2022 -3.00% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.05% National Average 0.29% Gateway Markets 5.40% Gateway Markets 0.95% 2 Supply Growth 7.16% 4.71% 3.27% 2
Slide 45: IRT Resident Demographics at a Glance
(1) IRT Resident Demographics at a Glance Residents make up Residents migrating to our communities: 47% 53% a diverse job pool Gender Top Industries of Residents Include: 23% Residents make are from out-of-state Breakdown up a diverse job 1. Medical Services 2. Professional 3. Services 27% pool of t
Slide 46: End Notes
End Notes Slide 2 (1) For the total portfolio as of June 30, 2022 or for 2Q 2022, as applicable. (2) Communities and units as of June 30, 2022. (3) IRT also has a corporate office in Irvine, CA. (4) As of market close on June 30, 2022. (5) Represents year-over-year change, comparing six months ended
Slide 47: End Notes (continued)
End Notes (continued) Slide 11 (1) Gateway markets represent an arithmetic mean of New York, Washington DC, San Francisco, and Los Angeles. (2) Proforma IRT weighted averages are based on the 120 properties / 35,594 units owned by IRT as of June 30, 2022 and excludes two development assets. Slide 14
Slide 48: 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 49: Definitions and Non-GAAP Financial Measure Reconciliations
Definitions and Non-GAAP Financial Measure Reconciliations Interest Coverage is a ratio computed by dividing Adjusted EBITDA by interest expense Net Debt, a non-GAAP financial measure, equals total debt less cash and cash equivalents. The following table provides a reconciliation of total debt to ne
Slide 50: Definitions and Non-GAAP Financial Measure Reconciliations
Definitions and Non-GAAP Financial Measure Reconciliations Independence Realty Trust Inc. Reconciliation of Same-Store Net Operating Income to Net Income (loss) (Dollars in thousands) For the Three-Months Ended (a) June 30, March 31, December 31, September 30, June 30, 2022 2022 2021 2021 2021 Recon
Slide 51: 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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