Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (May 2019)
31 slides from Independence Realty Trust's investor presentation, May 21, 2019
Slide 1: Investor Presentation Spring 2019
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Slide 2: Table of Contents
Table of Contents IRT Overview Investment Thesis 2 – 4 Markets 5 – 6 Assets 7 – 8 Portfolio Composition 9 Value Add Program 10 – 11 Capital Recycling Program 12 Capital Structure 13 – 14 Guidance 15 Conclusion 16 Appendix Market Profiles 18 – 25 Value Add Progress-to-date 26 Demographic Profile 27 D
Slide 3: IRT Enterprise Snapshot
IRT Enterprise Snapshot $1.97bn Total market capitalization of1 Own and operate 1: 58 communities 15,880 units Average community age: 16 years 1 $1.8B in gross assets 1 PORTFOLIO SUMMARY SAME STORE OPERATIONAL HIGHLIGHTS NOI growth: 5.1% 1 Average effective rent $1,044 2 Period end occupancy: 94.5%
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 and capital recycling initiatives Simple, cons
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: Our Markets Demonstrate Positive Demographic Factors
Source: CoStar Note: 2019 projections are as of CoStar’s 2019 Q1 data release. IRT weighted averages are based on unit count as of Q1 2019, excluding all assets held for sale. Gateway markets represent an arithmetic average of New York, Washington DC, San Francisco and Los Angeles. Our Markets Demon
Slide 7: Our Markets Demonstrate Strong Employment Outlook
Our Markets Demonstrate Strong Employment Outlook 0 34 84 18 86 154 108 134 195 82 89 95 191 191 191 241 229 24 33 75 35 255 175 25 Job growth in IRT’s markets is above the national average and is growing faster than new supply, creating increased demand for existing apartment units. Job Growth Outp
Slide 8: Our Assets Demonstrate Attractive Apartment Industry Dynamics
Our 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
Slide 9: Stable Cash Flow Profile
Stable Cash Flow Profile Source: CoStar 2018 Q4 data release. Gateway Markets represent an arithmetic average of Boston, New York, San Francisco, Miami, and Washington, DC. IRT weighted averages are based on unit count as of Q4 2018, excluding all assets held for sale. Annual Change in Effective Ren
Slide 10: Portfolio Scale and Management Platform Deliver Operational Excellence
Portfolio Scale and Management Platform Deliver Operational Excellence IRT’s Management Platform: Manage all 58 communities 1 Capitalizing on economies of scale through regional managers’ ability to be on-site, which results in cost management efficiencies Algorithmic-based revenue optimization Regi
Slide 11: Value Add Opportunity
Value Add Opportunity After Before At a Glance Value add projects, which IRT defines as renovations and upgrades at selected communities to drive increased rental rates, are a core part of IRT’s strategy to maximize its portfolio’s value Opportunity Approximately 4,300 units identified for redevelop
Slide 12: Value Add Projects and Pipeline Maximize Portfolio Value
PROJECTED-TO-COMPLETE 2 Phase 1 Phase 2 Total 664 2,043 2,707 $9,694 $18,996 $28,690 $1,410 $4,400 $5,810 $15,478 $59,583 $75,061 TOTAL 2 Phase 1 Phase 2 Total 1,546 2,751 4,297 $22,571 $25,579 $48,150 $3,112 $5,671 $8,783 $32,998 $75,693 $108,691 Value Add Projects and Pipeline Maximize Portfolio V
Slide 13: Executing on Capital Recycling Initiatives
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 Acquired communities where future value add opportunities exist to further drive NOI once onboarded onto IRT’s platform Exiting mark
Slide 14: Simple Capital Structure
As of market close 3/31/17 & 3/31/19 respectively. Reflects debt maturities as of 3/31/19, adjusted for the pro forma impact of the 5/9/19 refinance of our unsecured credit facility, which extended the maturity dates of revolving borrowings and term loan borrowings from May 2021 and May 2022, respec
Slide 15: How Do We Right Size Leverage?
How Do We Right Size Leverage? These projections constitute forward-looking information. See “Forward-Looking Statements” on slide 30. Projected annual organic total portfolio NOI growth of 3-4%. The additional NOI is expected to be fully realized within twelve months of completion of Phase 2 of the
Slide 16: 2019 Guidance
2019 Guidance This guidance, including the underlying assumptions, constitutes forward-looking information. Actual full year 2019 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements” on slide 30. Per share guidance is based on weighted average shares
Slide 17: How IRT Unlocks Long-term Value
How IRT Unlocks 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 and capital recycling initiatives Simple, conservativ
Slide 18: Appendix & Definitions
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Slide 19: 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 4th lowest homeownership rate in the U.S. Major employers, and companies with h
Slide 20: 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 Data from CoStar 2019 Q1 Data
Slide 21: 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 Data from CoStar 2019 Q1 Data Release New units estimat
Slide 22: 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 Data from CoStar 2019 Q1 Data Release New units es
Slide 23: 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 Data from CoStar 2019 Q1 Data Release New units es
Slide 24: 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 Data from CoStar 2019 Q1 Dat
Slide 25: 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 26: 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 Data from CoStar 2019 Q1 Data Release New units estimated to come online in 2019 as a percentage of total supply Proje
Slide 27: Value Add Redevelopments | Where We Are Today
Value Add Redevelopments | Where We Are Today Value Add Summary Year to Date as of Mach 31, 2019 The rent change per unit per month reflects the difference between the rental rate on the renovated unit and the market rent for an unrenovated unit as of the date presented, as determined by management
Slide 28: Resident Demographics at a Glance
Resident Demographics at a Glance 1 Data as of March 2019. 47% 53% Gender Breakdown 75% 25% Marital Status 36 Average Income Of tenants between 40% $74k Average Income to rent 18-29 years old Average Age with Young, growing resident sample benefitting from amenity-rich communities without overextend
Slide 29: 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 30: Definitions and Non-GAAP Financial Measure Reconciliations
Interest Coverage Interest coverage is a ratio computed by dividing our Adjusted EBITDA by our 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 thou
Slide 31: 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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