Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (March 2022)
49 slides from Independence Realty Trust's investor presentation, March 2022
Slide 1: Investor Presentation March 2022
INVESTOR PRESENTATION March 2022 Millenia, Orlando, FL
Slide 2: Table of Contents
Table of Contents Overview 2–3 Recent Developments 4–6 Our Competitive Advantage 7 – 18 Our Path Forward 19 – 24 Appendix Market Statistics 26 Market Profiles 27 – 41 Value Add Summary 42 End Notes 43 – 44 Definitions and Non-GAAP Financial Measure Reconciliations 45 – 47 Forward-Looking Statement 4
Slide 3: IRT Overview
IRT Overview PORTFOLIO SUMMARY (1) OWN AND OPERATE Average community age (2) 22 years IN OH PA IL Sunbelt Exposure 119 70% CO KY VA TN NC OK $6.2B of NOI In gross assets SC Communities AL GA 95.3% TX 35,498 Units Total Portfolio FL Average Occupancy (2) Independence Realty Trust (IRT) Communities IR
Slide 4: 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% 450% 440% 400% 350% 300% 284% 250% 232% 222% 211% 200% 150% 133% 135% 97% 100% 95% 100% 83% 62% 66% 67% 43% 50% 29% 0% RMS Multifamily Index S&P 500
Slide 5: Highlighting IRT's Recent Developments
Highlighting IRT’s Recent Developments Millenia 700, Orlando, FL 4
Slide 6: IRT and Steadfast Apartment REIT Complete Strategic Merger
IRT and Steadfast Apartment REIT (STAR) Complete Strategic Merger 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 platform
Slide 7: Strong Performance Across Key Operating Metrics
Strong Performance Across Key Operating Metrics Combined Same Store Portfolio (115 Properties / 34,454 Units) Occupancy Rates 100% 98% 96.8% 96.4% 96.3% 96.1% 96.5% 96.0% 96% 95.5% 95.5% 95.3% 94.8% 94.9% 94.7% 95.2% 93.9% 94.3% 94% 92% 90% 88% 86% 84% 82% 80% Same Store Excluding Value Add Same Sto
Slide 8: Merger with Steadfast Strengthens Our Competitive Advantage
Merger with Steadfast Strengthens Our Competitive Advantage The Landings Of Brentwood, Brentwood, TN 7
Slide 9: 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 119 properties in attractive, above av
Slide 10: Expanded Presence Across High Growth U.S. Sunbelt Region
Expanded Presence Across High Growth U.S. Sunbelt Region Combined company includes 119 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 11: Meaningful and Identifiable Synergies to Drive Growth
Meaningful and 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 Earnings Value Add Growth Opport
Slide 12: 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 Outpaces National Average ‘21
Slide 13: 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 14: Exploring New Investment Opportunities
Exploring New Investment Opportunities IRT is exploring 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 acquisitions i
Slide 15: Driving Accretive Growth with Multiple Investment Levers
Driving Accretive Growth with Multiple Investment Levers 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- Ove
Slide 16: 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 $800 million of incremental shareholder value ~12,000 former STAR units and ~8,000 IRT units identified for value add renovations Expect to implement IRT’s value add platform at fo
Slide 17: Disposing of Assets at Attractive Cap Rates, While Deleveraging
Disposing of Assets at Attractive Cap Rates, While Deleveraging Units Sold properties in connection with the merger to reduce leverage Property Market Units Sale Price ($,000’s) Completed the disposition of all nine Heritage Place Nashville, TN 105 $22,000 assets previously identified for sale for
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. Provide a Residence Proud to Call Home, Diversity and Inclusion Committee regardless of the environment formed to ensure a culture of outs
Slide 20: Our Path Forward: 2022 Outlook, Capitalization, and Leverage
Our Path Forward 2022 Outlook, Capitalization, and Leverage Vantage On Hillsborough, Tampa, FL 19
Slide 21: Guidance
Guidance Double-digit NOI growth in 2022e, to be supported by average occupancy of 95.7% at the midpoint of our guided range, with an expected increase of 10% in average rental rate Merger synergies and technological efficiencies will help offset inflationary pressures on operating expenses Ro
Slide 22: IRT is Delivering Industry Leading Returns
IRT is Delivering Industry Leading Returns Relative to peers in non-gateway and gateway markets, IRT outpaced industry growth over the past few years and momentum is expected to continue into 2022 due to our attractive location in sunbelt markets, as well as our investments in value add renovations
Slide 23: 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 24: 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 25: 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 26: Appendix & Definitions
Canyon Resort at Great Hills, Austin, TX Appendix & Definitions
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: Our Markets | Atlanta
Our Markets | Atlanta (1) Community Map Job Growth Population Growth 4.89% 1.21% 2.30% 0.91% 0.96% 2020 2019 2021 2019 2020 2021 -5.07% 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 3.17% 2.49% 1.74%
Slide 29: Our Markets | Charlotte
(1) Our Markets | Charlotte Community Map Job Growth Population Growth 3.48% 2.55% 1.66% 1.45% 1.29% 2020 2019 2021 -3.08% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 5.72% 5.39% 3.6
Slide 30: Our Markets | Columbus
Our Markets | Columbus(1) Community Map Job Growth Population Growth 0.86% 0.86% 2.61% 1.69% 0.63% 2020 2019 2021 -3.49% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 3.41% 3.07% 2.36%
Slide 31: Our Markets | Dallas-Fort Worth
(1) Our Markets | Dallas-Fort Worth Community Map Job Growth Population Growth 1.51% 4.14% 3.20% 1.40% 1.29% 2020 2019 2021 -2.66% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 3.55% 3
Slide 32: Our Markets | Denver
(1) Our Markets | Denver Community Map Job Growth Population Growth 0.91% 5.61% 0.72% 0.79% 2.80% 2020 2019 2021 -5.49% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 3.98% 3.65% 3.02%
Slide 33: Our Markets | Houston
(1) Our Markets | Houston Community Map Job Growth Population Growth 5.05% 1.45% 2.10% 2020 1.24% 1.23% 2019 2021 -6.31% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 3.65% 2.56% 1.87%
Slide 34: Our Markets | Huntsville
(1) Our Markets | Huntsville Community Map Job Growth Population Growth 2.74% 3.05% 2.08% 1.98% 1.07% 2020 2019 2021 -0.73% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 7.01% 4.77% 1.
Slide 35: Our Markets | Indianapolis
(1) Our Markets | Indianapolis Community Map Job Growth Population Growth 2.52% 1.93% 1.03% 2020 0.75% 0.45% 2019 2021 -3.03% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 1.89% 1.46%
Slide 36: Our Markets | Louisville
(1) Our Markets | Louisville Community Map Job Growth Population Growth 3.40% 0.37% 0.86% 0.29% 2020 0.24% 2019 2021 -4.73% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 3.48% 3.18% 2.
Slide 37: Our Markets | Memphis
(1) Our Markets | Memphis Community Map Job Growth Population Growth 3.62% 0.11% 0.51% 0.08% 2020 2019 2021 0.01% -2.67% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 1.65% 1.07% 0.30%
Slide 38: Our Markets | Nashville
(1) Our Markets | Nashville Community Map Job Growth Population Growth 1.55% 4.88% 1.35% 2.68% 0.92% 2020 2019 2021 -3.57% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 5.02% 4.52% 3.4
Slide 39: Our Markets | Oklahoma City
(1) Our Markets | Oklahoma City Community Map Job Growth Population Growth 3.50% 1.95% 1.11% 2020 0.86% 2019 2021 0.41% -5.39% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 1.58% 0.90%
Slide 40: Our Markets | Orlando
(1) Our Markets | Orlando Community Map Job Growth Population Growth 8.42% 1.37% 2.34% 2020 1.22% 1.23% 2019 2021 -11.65% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 4.79% 4.52% 4.30
Slide 41: Our Markets | Raleigh – Durham
(1) Our Markets | Raleigh – Durham Community Map Job Growth Population Growth 1.82% 4.39% 1.54% 2.64% 1.24% 2020 2019 2021 -2.80% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 4.56% 3.
Slide 42: Our Markets | Tampa
(1) Our Markets | Tampa Community Map Job Growth Population Growth 5.14% 1.11% 1.00% 2.70% 0.85% 2020 2019 2021 -2.73% 2019 2020 2021 2021 Job Growth: 2021 Population Growth: National Average 4.34% National Average 0.24% Gateway Markets 6.10% Gateway Markets 0.05% 2 Supply Growth 3.42% 3.61% 2.19% 2
Slide 43: IRT Value Add Summary
IRT Value Add Summary Project Life to Date as of December 31, 2021 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
Slide 44: End Notes
End Notes Slide 2 (1) For the total portfolio as of December 31, 2021 or for 4Q 2021, as applicable, excluding assets classified as held for sale and new development projects. 4Q 2021 NOI includes pro forma adjustments to show a full quarter of operations for the properties acquired in the STAR Merg
Slide 45: End Notes (continued)
End Notes (continued) Slide 20 (1) This guidance, including the underlying assumptions, constitutes forward-looking information. Actual full year 2022 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements”. Our guidance is based on the key guidance ass
Slide 46: 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 47: 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 48: 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) Decem ber 31, Septem ber 30, June 30, March 31, Decem ber 31, 2021 2021 2021 2021 202
Slide 49: 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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