Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (November 2021)
44 slides from Independence Realty Trust's investor presentation, November 2021
Slide 1: Investor Presentation November 2021
INVESTOR PRESENTATION November 2021 Thornhill, Raleigh, NC
Slide 2: Table of Contents
Table of Contents IRT Enterprise Snapshot 2 Recent Developments 3–5 IRT to Merge with Steadfast 6 – 11 Our Competitive Advantage 12 – 21 2021 Pro Forma Capitalization, Leverage and Outlook 22 – 25 Appendix Market Statistics 27 Market Profiles 28 – 37 Value Add Summary 38 Demographic Profile 39 Defin
Slide 3: IRT Enterprise Snapshot
IRT Enterprise Snapshot PORTFOLIO SUMMARY (1) OWN AND OPERATE Average Community Age (2) 57 16 years Communities 16,109 96.4% IRT Properties Properties Held for Sale Joint Venture Property Units Total Portfolio Occupancy (3) IRT Corporate Offices SAME STORE HIGHLIGHTS VALUE ADD SUMMARY • NOI growth:
Slide 4: IRT's Recent Developments
Highlighting IRT’s Recent Developments Stonebridge Crossing, Cordova, TN 3
Slide 5: IRT Business Update Across Key Industry Metrics
IRT Business Update Across Key Industry Metrics Real Estate / Liquidity Metrics Maintaining High Average Occupancy Rent Collection Remains Steady (1) 100% 99.7% 99.5% 99.6% 97% 96.7% 98.7% 97% 96.3% 96.9% 96.1% 96% 95.8% 95% 95.5% 95.4% 96% 95.1% 94.9% 95% 90% 95% 94.0% 94% 94% 85% 93% 93% 80% Same
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 mar
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 Independence Realty Trust, Inc. (“IRT”) to merge with Steadfast Apartment REIT, Inc. (“STAR”) in all-stock transaction STAR’s stockholders to receive 0.905 shares / OP units of IRT stock for each STAR share / OP unit Transaction will result in the issuance of approximately
Slide 9: Transaction Rationale and Expected Benefits
Transaction Rationale and Expected Benefits Creation of an ~$8bn(1) multifamily REIT focused on high-growth markets predominantly in the Sunbelt region Merger joins together two high-quality portfolios with complementary geographic footprints in the highly desirable Sunbelt region The combined
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 STAR PORTFOLIO SUMMARY 70 Communities 96.7% SS Avg. Occupancy $1,344 63% Avg. Effective Monthly Rent NOI from Sunbelt Markets (2) per Unit (1) 21,841 21.9% Units
Slide 11: Complementary Portfolios with Benefits of Size and Scale
Complementary Portfolios with Benefits of Size and Scale Combination creates premier Sunbelt-focused multifamily platform with enhanced scale and portfolio quality Pro Forma Equity Value ($bn) (1) $2.5 $2.6 $5.1 Enterprise Value ($bn) (1) $3.6 $4.6 $8.2 Number of Communities (2) 57 70 127 Number of
Slide 12: Meaningful and Identifiable Synergies to Drive Growth
Meaningful and Identifiable Synergies to Drive Growth STAR’s high-quality portfolio coupled with significant corporate and operating synergies are expected to create immediate earnings accretion; additional levers exist to further enhance earnings over the long-term Additional Earnings Value Add Gro
Slide 13: Our Competitive Advantage
Our Competitive Advantage Steadfast Property: Eastside Heights, Nashville, TN 12
Slide 14: Expanded Presence Across High-Growth Markets
Expanded Presence Across High-Growth Markets Combined company includes 130 communities across resilient, high-growth markets PORTFOLIOGeographic SUMMARYDistribution Top 10 Markets OWN AND OPERATE Steadfast Apartment REIT % % Market Units Independence Realty Trust Unit NOI Atlanta 5,852 15% 17% 130 D
Slide 15: 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 Outpaces National Av
Slide 16: 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 17: Robust Embedded Value Add Growth Opportunities
Robust Embedded Value Add Growth Opportunities Combined ~20,000 unit value add pipeline for the pro forma combined company ~12,000 STAR units and ~8,000 IRT units preliminarily identified for improvement renovations Expect to implement IRT’s value add platform at existing STAR units and drive ou
Slide 18: Exploring New Investment Opportunities
Exploring New Investment Opportunities IRT is exploring new preferred equity investments and joint venture relationships, focused on new multifamily development & offering increased optionality for capital investment Our Focus: Why Now: What To Expect: • Target assets in core • Market for acquisitio
Slide 19: Multiple Investment Levers to Drive Accretive Growth
Multiple Investment Levers to Drive Accretive Growth Preferred Equity Value Add Acquisitions Investments and Renovations Joint Ventures Renovate existing Expand presence in Invest in multifamily development by Investment properties/units where markets where we see providing capital to third- Overvie
Slide 20: 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 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. Provide a Residence Proud to Call Home, Diversity and Inclusion Committee regardless of the environment formed to ensure a culture of outs
Slide 22: Sustained Value Creation for Stockholders
Sustained Value Creation for Stockholders IRT has a proven track record of outperforming its peers and the broader market 1-Year 3-Year 5-Year Since IPO (1) 450% 398% 400% 350% 310% 300% 250% 222% 200% 188% 186% 150% 142% 120% 96% 90% 100% 79% 67% 69% 67% 50% 51% 50% 42% -- 1 2 3 4 RMS Dow Jones U.S
Slide 23: 2021 Pro Forma Capitalization, Leverage and Outlook
2021 Pro Forma Capitalization, Leverage and Outlook The Pointe at Canyon Ridge, Sandy Springs, GA 22
Slide 24: Pro Forma Capitalization
Pro Forma Capitalization Balance Sheet Highlights Total Capitalization (1) 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 no
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 A Non-Core Dispositions Approximately $375-385 million from 9 identified non-core assets be
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 Complementary Portfolios with Benefits of Size and Scale • Focus on non-gateway MSAs with strong apartment demand, limited new construction and positive economic indicators / demographic trends Value Add Redevelopm
Slide 27: Appendix & Definitions
Millenia, Orlando, FL Appendix & Definitions
Slide 28: 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 2021 vacanc
Slide 29: Our Markets | Atlanta
Our Markets | Atlanta (1) Community Map Job Growth Population Growth 1.25% 5.09% 0.96% 0.86% 2.06% 2020 2019 2021 2019 2020 2021 -5.95% 2021 Job Growth: 2021 Population Growth: National Average 4.62% National Average 0.20% Gateway Markets 5.79% Gateway Markets 0.19% 2 Supply Growth 3.21% 2.19% 1.76%
Slide 30: Our Markets | Columbus
Our Markets | Columbus(1) Community Map Job Growth Population Growth 0.91% 0.87% 3.35% 1.11% 0.58% 2020 2019 2021 -4.23% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.62% National Average 0.20% Gateway Markets 5.79% Gateway Markets 0.19% 2 Supply Growth 3.02% 2.83% 2.66%
Slide 31: Our Markets | Raleigh – Durham
(1) Our Markets | Raleigh – Durham Community Map Job Growth Population Growth 1.82% 1.69% 5.51% 1.21% 2.56% 2020 2019 2021 2019 2020 2021 -4.02% 2021 Job Growth: 2021 Population Growth: National Average 4.62% National Average 0.20% Gateway Markets 5.79% Gateway Markets 0.19% 2 Supply Growth 4.41% 3.
Slide 32: Our Markets | Louisville
(1) Our Markets | Louisville Community Map Job Growth Population Growth 3.31% 0.36% 0.62% 2020 0.27% 0.26% 2019 2021 -5.24% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.62% National Average 0.20% Gateway Markets 5.79% Gateway Markets 0.19% 2 Supply Growth 3.81% 3.07% 2.
Slide 33: Our Markets | Tampa
(1) Our Markets | Tampa Community Map Job Growth Population Growth 4.37% 2.41% 1.07% 1.11% 0.78% 2020 2019 2021 -3.07% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.62% National Average 0.20% Gateway Markets 5.79% Gateway Markets 0.19% 2 Supply Growth 4.20% 3.94% 2.61% 2
Slide 34: Our Markets | Indianapolis
(1) Our Markets | Indianapolis Community Map Job Growth Population Growth 2.96% 1.59% 1.04% 2020 0.90% 2019 2021 0.40% -3.98% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.62% National Average 0.20% Gateway Markets 5.79% Gateway Markets 0.19% 2 Supply Growth 1.35% 1.47%
Slide 35: Our Markets | Charlotte
(1) Our Markets | Charlotte Community Map Job Growth Population Growth 4.21% 1.65% 1.55% 2.48% 1.25% 2020 2019 2021 2019 2020 2021 -4.31% 2021 Job Growth: 2021 Population Growth: National Average 4.62% National Average 0.20% Gateway Markets 5.79% Gateway Markets 0.19% 2 Supply Growth 5.90% 4.97% 4.1
Slide 36: Our Markets | Orlando
(1) Our Markets | Orlando Community Map Job Growth Population Growth 1.35% 5.73% 2.56% 1.28% 2020 1.17% 2019 2021 -11.60% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.62% National Average 0.20% Gateway Markets 5.79% Gateway Markets 0.19% 2 Supply Growth 4.74% 4.64% 4.54
Slide 37: Our Markets | Huntsville
(1) Our Markets | Huntsville Community Map Job Growth Population Growth 4.26% 2.32% 1.96% 2.97% 1.06% 2020 2019 2021 2019 2020 2021 -1.60% 2021 Job Growth: 2021 Population Growth: National Average 4.62% National Average 0.20% Gateway Markets 5.79% Gateway Markets 0.19% 2 Supply Growth 7.31% 2.57% 2.
Slide 38: Our Markets | Dallas-Fort Worth
(1) Our Markets | Dallas-Fort Worth Community Map Job Growth Population Growth 1.49% 1.48% 5.44% 2.66% 1.25% 2020 2019 2021 2019 2020 2021 -4.01% 2021 Job Growth: 2021 Population Growth: National Average 4.62% National Average 0.20% Gateway Markets 5.79% Gateway Markets 0.19% 2 Supply Growth 3.53% 3
Slide 39: IRT Value Add Summary
IRT Value Add Summary Project Life to Date as of September 30, 2021 Renovation Costs per Unit (b) Total Rent Percentage Units To Be Units Units Premium % Rent ROI - Interior ROI - Total Property Market Complete Renovated Complete Leased (a) Increase Interior Exterior Total Costs(c) Costs (d) Ongoing
Slide 40: IRT Resident Demographics at a Glance
(1) IRT Resident Demographics at a Glance Residents make up a diverse, 46% 54% expansive job pool Top Industries of Residents Include: Gender Breakdown 1. Professional 2. Medical 3. Administrative 4. Services Male Female 5. Sales 6. Hospitality Average Age Average Income 76% 24% 37 $69k Marital with
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 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 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
Slide 44: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with its announced merger transaction with STAR, IRT filed with the SEC a registration statement on Form S-4 to register the shares of IRT Common Stock to be issued in connection with the proposed merger transaction. The registration statemen
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