Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (June 2022)
53 slides from Independence Realty Trust's investor presentation, June 2022
Slide 1: Investor Presentation June 2022
INVESTOR PRESENTATION June 2022 The Village at Auburn Durham, NC
Slide 2: Table of Contents
Table of Contents Overview 2 Recent Developments 3–7 Our Competitive Advantage 8 – 14 Our Strategic Investment Opportunities 15 – 22 Our Path Forward 23 – 26 Appendix Track Record of Value Creation 28 Market Statistics 29 Value Add Summary 30 Market Profiles 31 – 45 Demographic Profile 46 End Notes
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) 70% of NOI OK $6.2B In gross assets TN AL GA NC SC TX 35,594 Units (2) 95.4% FL Combined Same Store Average Occupancy Independence Realty Trust (IRT) Commun
Slide 4: Highlighting IRT's Recent Developments
Highlighting IRT’s Recent Developments Legacy at Jones Farm 3 Huntsville, AL
Slide 5: IRT and Steadfast Apartment REIT (STAR) Merger Integration Complete
IRT and Steadfast Apartment REIT (STAR) Merger Integration Complete 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 platf
Slide 6: Strong Performance Across Key Operating Metrics
Strong Performance Across Key Operating Metrics Combined Same Store Portfolio (113 Properties / 33,804 Units) Occupancy Rates 100% 98% 96.4% 96.8% 96.3% 96.2% 96.5% 96.0% 96% 95.5% 95.5% 95.6% 95.3% 95.4% 95.5% 95.0% 95.0% 94.6% 94.7% 94.2% 94.9% 94% 92% 90% 88% 86% 84% 82% 80% Same Store Excluding
Slide 7: IRT is Delivering Industry Leading Operating Performance
IRT is Delivering Industry Leading Operating Performance Relative to peers in non-gateway and gateway 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 8: Full Year 2022 Guidance
Full Year 2022 Guidance ➢ Double-digit NOI growth in 2022e, to be supported by average occupancy of 95.6% at the midpoint of our guided range, with an expected increase of 10.5% in average rental rate ➢ Merger synergies and technological efficiencies will help offset inflationary pressures on operat
Slide 9: Merger with Steadfast Strengthens Our Competitive Advantage
Merger with Steadfast Strengthens Our Competitive Advantage Reflections on Sweetwater NW, Lawrenceville, GA 8
Slide 10: A Compelling Transaction – Joining Together Two High-Quality Portfolios
A Compelling Transaction – Joining Together Two High-Quality Portfolios Complementary Expanded Presence Portfolios with Benefits Across High Growth of Size and Scale U.S. Sunbelt Region Own & operate over 35,000 units Benefit from positive trends such as across 120 properties in attractive, above av
Slide 11: A Compelling Transaction – Meaningful & Identifiable Synergies to Drive Growth
A Compelling Transaction – Meaningful & Identifiable Synergies to Drive Growth Our high-quality combined portfolio coupled with significant corporate and operating synergies create immediate earnings accretion; additional levers exist to further enhance earnings over the long-term Additional Earning
Slide 12: Expanded Presence Across High Growth U.S. Sunbelt Region
Expanded Presence Across High Growth U.S. Sunbelt Region Combined company includes 120 communities across resilient, high growth markets (1) PORTFOLIOGeographic SUMMARYDistribution Top 10 Markets OWN AND OPERATE Independence Realty Trust % % Market Units Properties Unit NOI Atlanta 5,180 15% 16% 130
Slide 13: 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 vs. 2019 National Average 21’
Slide 14: 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 15: Stable Cash Flow Profile
Stable Cash Flow Profile Supply Supplyand andDemand Demandfundamentals fundamentalsininIRT’s IRT’smarkets marketshave haveresulted resultedin inaamore morestable stablerent rentprofile profilethrough through multiple economic cycles, as compared to gateway markets and Class A properties. multiple ec
Slide 16: Our Strategic Investment Opportunities
Our Strategic Investment Opportunities The Views of Music City Nashville, TN 15
Slide 17: 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 properties/units where markets where we see providing c
Slide 18: 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 $800 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 19: Continue to Invest in Our Long-Standing Value Add Program
Continue to Invest in Our Long-Standing Value Add Program—— Historically generated unlevered ROI of approximately 20% Value Add Expectations for Full Year 2022 Units to Be Legacy STAR Total Renovated* IRT Units • Expect to Renovate ~1,950 Units 1Q22 141 2 143 5 • 12 communities undergoing renovation
Slide 20: Engaging in Attractive Investment Opportunities with Our 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 units in Views of Music September 2021 City I & II /
Slide 21: 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 22: 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 23: 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 24: Our Path Forward: Capitalization and Leverage
Our Path Forward Capitalization and Leverage Bristol Village Aurora, CO 23
Slide 25: 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 non
Slide 26: 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 A 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 total gross sale
Slide 27: Compelling Investment Opportunity With a Path to Long-Term Growth
Compelling Investment Opportunity With a Path to Long-Term Growth 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 Support Sector Leading NOI and Core FFO Per Sh
Slide 28: Appendix & Definitions
Canyon Resort at Great Hills, Austin, TX Appendix & Definitions
Slide 29: 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) 500% 455% 450% 400% 350% 300% 269% 250% 217% 199% 200% 177% 150% 125% 110% 100% 78% 86% 68% 51% 58% 50% 36% 37% 26% 16% 0% RMS Multifamily Index S&P 500 I
Slide 30: 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 31: IRT Value Add Summary
IRT Value Add Summary Project Life to Date as of March 31, 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 Sto
Slide 32: Our Markets | Atlanta
Our Markets | Atlanta (1) Community Map Job Growth Population Growth 2.68% 2020 0.38% 2.03% 2021 2022 0.99% 0.91% -5.08% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 4.93% 3.16% 2.30%
Slide 33: Our Markets | Charlotte
(1) Our Markets | Charlotte Community Map Job Growth Population Growth 3.03% 3.11% 0.89% 2020 1.59% 1.12% 2021 2022 -2.25% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 10.87% 5.53% 5.
Slide 34: Our Markets | Columbus
Our Markets | Columbus(1) Community Map Job Growth Population Growth 3.45% 1.55% 2020 2021 0.87% 0.64% 2022 -1.31% -4.05% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 6.67% 3.33% 1.52
Slide 35: Our Markets | Dallas
(1) Our Markets | Dallas Community Map Job Growth Population Growth 2.91% 2.30% 2.91% 2020 1.47% 1.16% 2021 2022 -3.26% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 7.18% 3.54% 2.50%
Slide 36: Our Markets | Denver
(1) Our Markets | Denver Community Map Job Growth Population Growth 2.92% 1.30% 2020 2021 0.74% 0.66% -0.59% 2022 -5.52% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 6.90% 4.07% 3.05%
Slide 37: Our Markets | Houston
(1) Our Markets | Houston Community Map Job Growth Population Growth 4.19% 2.90% 2020 2021 1.31% 1.41% 2022 -1.40% -5.91% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 6.47% 3.68% 2.05
Slide 38: Our Markets | Huntsville
(1) Our Markets | Huntsville Community Map Job Growth Population Growth 2.16% 3.31% 2.08% 2.02% 1.02% 2020 2021 2022 -0.53% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 12.62% 13.04%
Slide 39: Our Markets | Indianapolis
(1) Our Markets | Indianapolis Community Map Job Growth Population Growth 2.12% 1.46% 2020 0.46% 0.81% 0.33% 2021 2022 2020 2021 2022 -3.49% 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 3.50% 1.89%
Slide 40: Our Markets | Louisville
(1) Our Markets | Louisville Community Map Job Growth Population Growth 2.93% 0.72% 2020 2021 0.30% 0.20% 2022 -1.48% 2020 2021 2022 -4.37% 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 5.80% 3.20% 1
Slide 41: Our Markets | Memphis
(1) Our Markets | Memphis Community Map Job Growth Population Growth 2.73% 0.51% 2020 2021 0.11% 0.08% -0.47% 2022 -2.95% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 1.94% 1.22% 0.30
Slide 42: Our Markets | Nashville
(1) Our Markets | Nashville Community Map Job Growth Population Growth 2.97% 2.73% 2.44% 1.46% 2020 0.87% 2021 2022 -2.77% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 10.15% 8.12% 5.
Slide 43: Our Markets | Oklahoma City
(1) Our Markets | Oklahoma City Community Map Job Growth Population Growth 3.35% 1.92% 2020 2021 1.05% 2022 0.20% -2.12% 2020 2021 2022 -4.53% 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 2.45% 1.28
Slide 44: Our Markets | Orlando
(1) Our Markets | Orlando Community Map Job Growth Population Growth 6.07% 2.57% 2020 2021 1.25% 1.08% -1.28% 2022 -9.41% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 9.83% 4.77% 4.77
Slide 45: Our Markets | Raleigh – Durham
(1) Our Markets | Raleigh – Durham Community Map Job Growth Population Growth 2.76% 2.73% 3.12% 2020 1.67% 1.09% 2021 2022 -1.85% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 6.05% 4.
Slide 46: Our Markets | Tampa
(1) Our Markets | Tampa Community Map Job Growth Population Growth 2.09% 1.64% 1.96% 2020 1.03% 0.76% 2021 2022 -3.00% 2020 2021 2022 2022 Job Growth: 2022 Population Growth: National Average 3.18% National Average 0.29% Gateway Markets 5.78% Gateway Markets 0.27% 2 Supply Growth 6.93% 5.11% 3.09% 2
Slide 47: 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: 21% Residents make are from out-of-state Breakdown up a diverse job 1. Medical Services 2. Services 3. Professional 26% pool of t
Slide 48: End Notes
End Notes Slide 2 (1) For the total portfolio as of March 31, 2022 or for 1Q 2022, as applicable. (2) Communities and units as of June 1, 2022. (3) IRT also has a corporate office in Irvine, CA. (4) As of market close on March 31, 2022. (5) Represents year-over-year change, comparing first quarter 2
Slide 49: End Notes (continued)
End Notes (continued) Slide 12 (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 1, 2022 and excludes two development assets. Slide 14
Slide 50: 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 51: 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 52: 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) March 31, Decem ber 31, Septem ber 30, June 30, March 31, 2022 2021 2021 2021 2021 Re
Slide 53: 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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