Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (March 2020)
32 slides from Independence Realty Trust's investor presentation, Mar 2, 2020
Slide 1: Investor Presentation March 2020
INVESTOR PRESENTATION March 2020 Talison Row at Daniel Island, South Carolina Exhibit 99.1
Slide 2: Table of Contents
Table of Contents IRT Overview Investment Thesis 2 – 4 Portfolio Composition 5 Value Add Program 6 – 7 Capital Recycling Program 8 – 9 Capital Structure 10 – 11 Guidance 12 Sustainability Commitment 13 Conclusion 14 Appendix Historic Portfolio Growth and Transformation 16 Market Profiles 17 – 26 Val
Slide 3: IRT Enterprise Snapshot
IRT Enterprise Snapshot 1 OWN AND OPERATE Average community age 19 years 58 Communities 2 15,805 Units 2 $1.8B In gross assets PORTFOLIO SUMMARY $2.28B Total market capitalization of SAME STORE HIGHLIGHTS NOI growth: 9.6% 3 Average effective rent $1,082 4 Average occupancy: 92.6% 4 VALUE ADD SUMMARY
Slide 4: 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 initiatives Simple capital structure
Slide 5: 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 6: Portfolio Scale and Platform Deliver Operational Excellence
Portfolio Scale and Platform Deliver Operational Excellence IRT’s Management Platform: Manage all 58 communities1 Capitalizing on economies of scale through regional managers’ ability to be on-site, which results in cost management efficiencies Algorithmic-based revenue optimization Regional managem
Slide 7: Value Add Opportunity
Value Add Opportunity After Before At a Glance Value add projects are a core part of IRT’s strategy to maximize its portfolio’s value Opportunity Approximately 7,136 units identified for redevelopment across 23 properties creating outsized NOI growth Investment Estimate a total investment of approxi
Slide 8: Value Add Projects and Pipeline Maximize Portfolio Value
Phase 1 Value Add Projects and Pipeline Maximize Portfolio Value Value creation opportunity of $1.84 per share across Phases 1, 2 and 3. $'s in 000's, except units and per share amounts 4.4K UNITS REMAINING IN PROJECT PIPELINE IRT’s Redevelopment Opportunity VALUE OPPORTUNITY 2 Incremental NOI Incre
Slide 9: 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 Acquiring communities where future value add opportunities exist to further drive NOI once onboarded onto IRT’s platform Exiting mar
Slide 10: Recent Developments
Recent Developments Properties Under LOI Executed non-binding LOI to acquire three Class A assets in Atlanta, Georgia Purchase price: ~$300.0 million / 1,202 units Assets are approximately 95% occupied The Adley Craig Ranch: Dallas, Texas Equity Offering to Fuel Robust Acquisition Pipeline 2020 Acqu
Slide 11: Simple Capital Structure
Total Market Capitalization calculated based on share price as of market close on 3/31/2017 and 12/31/19, respectively. Reflects debt maturities as of 12/31/19. Reflects pro forma net debt to adjusted EBITDA for each period presented, which includes adjustments for the timing of acquisitions, the fu
Slide 12: How Do We Right Size Leverage?
How Do We Right Size Leverage? Calculated as FY 2018 NOI of $114 million compared to projected future annual NOI of $137 - $141 million. These projections constitute forward-looking information. See “Forward-Looking Statements” on slide 31. Projected annual organic total portfolio NOI growth of 3-4%
Slide 13: 2020 Guidance
2020 Guidance This guidance, including the underlying assumptions, constitutes forward-looking information. Actual full year 2020 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements” on slide 31. Per share guidance is based on weighted average shares
Slide 14: Sustainability Commitment
Sustainability Commitment We believe that operating multi-family 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.
Slide 15: Path to Continued Growth
Path to Continued Growth Operational efficiencies and enhanced resident experience through: Smart home technology pilot High-speed internet rollout Innovative technology strategy Value add community redevelopment initiatives: Approximately 7,136 units identified for redevelopment across 23 propertie
Slide 16: Appendix & Definitions
Ws-— Independence N Realty Trust Appendix & Definitions
Slide 17: IRT's Historical Growth and Key Milestones
IRT’s Historical Growth and Key Milestones Portfolio Transformation Driving Gross Asset Growth August 2013 IPO -- $34 million One off acquisitions totaling $300m TradeStreet Merger -- $750 million Internalize & raise $250 million in equity to de-lever Announce $228 million portfolio acquisition Laun
Slide 18: Markets Demonstrate Strong Population & Employment Growth
Source: CoStar 2019 Q4 data release. IRT weighted averages are based on unit count as of 2/13/2020. Gateway markets represent an arithmetic mean of New York, Washington DC, San Francisco and Los Angeles. Markets Demonstrate Strong Population & Employment Growth 0 34 84 18 86 154 108 134 195 82 89 95
Slide 19: Assets Demonstrate Attractive Apartment Industry Dynamics
Assets Demonstrate Attractive Apartment Industry Dynamics Low Homeownership Limited New Supply The national Class B vacancy rate remains at historic lows Class B vacancy continues to decline, notwithstanding an increase in apartment completions across the broader apartment market The majority of new
Slide 20: 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 21: Our Markets | Atlanta
Communities located within 5 min. of major highways Communities located in top school districts Benefitting from suburban sprawl, well-positioned in MSA with growing ancillary job markets Major company presence in Atlanta include: Our Markets | Atlanta 1 Source: CoStar 2019 year-end data from CoStar
Slide 22: 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 2019 year-end data from CoStar 2019 Q4 Data Release New
Slide 23: Our Markets | Louisville
Located within 5 min. of major highways Benefitting 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 2019 year-end data from CoStar 2019 Q4 Data Releas
Slide 24: 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 2019 year-end data from CoStar 2019 Q4 Data Releas
Slide 25: 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 2019 year-end data from CoSt
Slide 26: 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 6 Favorable average rent growth outpaces national average 6 Job growth driven by an economic shift away from a manufacturing economy toward
Slide 27: Our Markets | Orlando
Metro area ranked 8th in the U.S. in terms of population growth in 2018 6 New development lags rental market supply 7 Major employers include: Our Markets | Orlando 1 Source: CoStar 2019 year-end data from CoStar 2019 Q4 Data Release New units estimated to come as a percentage of total supply Projec
Slide 28: Value Add Progress-to-date by Property
Renovation Costs per Unit (b) Property Market 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) Phase 1 Jamestown Louisville, KY 356 234 227 $277 33.3% $16,304 $5,161 $21,465 20.4% 15.5% The
Slide 29: Resident Demographics at a Glance
Resident Demographics at a Glance 1 Data as of 12/31/2019. 47% 53% Gender Breakdown 76% 24% Marital Status 38 Average Income Of tenants between 41% $70k Average Rent to Income 18-29 years old Average Age with Young, growing resident population benefitting from amenity-rich communities without overex
Slide 30: 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 31: Definitions and Non-GAAP Financial Measure Reconciliations
Interest Coverage Interest coverage is a ratio computed by dividing Adjusted EBITDA by interest expense. Net Debt 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 net debt (Dollars in thousands).
Slide 32: Forward-Looking Statements
Forward-Looking Statements 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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