Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (January 2022)
45 slides from Independence Realty Trust's investor presentation, Jan 10, 2022
Slide 1: Investor Presentation January 2022
Los Robles, San Antonio, TX INVESTOR PRESENTATION January 2022 Exhibit 99.1
Slide 2: Table of Contents
Table of Contents IRT ise Snapshot 2 Recent 3-5 Our Competitive Advantage 6-17 Our Path Forward 18-21 Appendix Market Statistics 23 Market Profiles 24-38 Value Add Summary 39 Demographic Profile 40 Definiti Measure 41-43 Forward-Looking Statement 44
Slide 3: IRT Enterprise Snapshot
IRT Enterprise Snapshot OWN AND OPERATE Average Community Age (2) 16 years 119 Communities 35,498 Units 95.6% Total Portfolio Occupancy (3) PORTFOLIO SUMMARY (1) SAME STORE HIGHLIGHTS NOI growth: 14.7% (5) Average effective rent $1,288 (6) Average occupancy: 96.4% (6) VALUE ADD SUMMARY ~12,000 forme
Slide 4: Highlighting IRT's Recent Developments
Highlighting IRT’s Recent Developments Walnut Hill, Memphis, TN
Slide 5: IRT and STAR 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 6: Strong Performance Across Key Industry Metrics
Lease-over-lease effective rent growth represents the change in effective monthly rent, as adjusted for concessions, for each unit that had a prior lease and current lease that are for a term of 9-13 months. Strong Performance Across Key Industry Metrics IRT - Real Estate Metrics STAR - Real Estate
Slide 7: Merger with Steadfast Strengthens Our Competitive Advantage
Merger with Steadfast Strengthens Our Competitive Advantage Vantage on Hillsborough, Tampa, FL
Slide 8: A Compelling Transaction
A Compelling Transaction Dividends are subject to the discretion of IRT’s Board of Directors, and will depend on IRT’s financial condition, results of operations, capital requirements, and other factors deemed relevant by IRT’s Board. Each former share of STAR common stock was converted into 0.905 s
Slide 9: Expanded Presence Across High Growth U.S. Sunbelt Region
Top 10 Markets Expanded Presence Across High Growth U.S. Sunbelt Region PORTFOLIO SUMMARY Sources: IRT and STAR filings as of 9/30/2021, CoStar, Kinder Institute. Note: STAR excludes three development assets. Sunbelt markets defined as AL, FL, GA, NC, OK, SC, TN and TX. Portfolio Summary as of Decem
Slide 10: Increased Presence in Markets with Strong Fundamentals
Sources: IRT and STAR filings as of 9/30/2021, CoStar. Gateway markets represent an arithmetic mean of New York, Washington DC, San Francisco and Los Angeles. Pro Forma IRT weighted averages are based on combined company’s unit count as of 9/30/2021 and excludes STAR’s three development assets. Outs
Slide 11: Well-Positioned in Affordable, Highly Defensive Middle Market Communities
Well-Positioned in Affordable, Highly Defensive Middle Market Communities A B C Higher income residents move down in a recession Renters move down to Class B as rent increases outstrip income growth Capture households moving down in a recession Capture seniors who sell homes to fund retirement Captu
Slide 12: Meaningful and Identifiable Synergies to Drive Growth
Meaningful and Identifiable Synergies to Drive Growth Portfolio Overlap Creates Operating Synergies Immediate Core FFO/Share Accretion Expected with Additional Earnings Enhancement Potential Significant portfolio overlap and economies of scale expected to generate approximately $8 million of annual
Slide 13: Improved Long-Term Growth Profile through Value Add Program
Calculated as incremental NOI, divided by a 4.5% cap rate, net of capital investment. Incremental NOI of $9.8 million calculated as total costs-to-date of $56.5 million multiplied by ROI of 17.6%. Value add pipeline data is as of September 30, 2021. These projections constitute forward-looking infor
Slide 14: Exploring New Investment Opportunities
Exploring New Investment Opportunities Our Focus: Target assets in core non-gateway markets Prioritize the southeast and broader sunbelt region Create another avenue for accretive capital allocation Why Now: Market for acquisitions is highly competitive Historically low cap rates are currently skewi
Slide 15: Driving Accretive Growth with Multiple Investment Levers
Driving Accretive Growth with Multiple Investment Levers Value Add Renovations Acquisitions Preferred Equity Investments and Joint Ventures Renovate existing properties/units where there is the potential for outsized rent growth Expand presence in markets where we see attractive long-term fundamenta
Slide 16: Accelerating Our Efforts in Technology
Accelerating Our Efforts in Technology Our Focus Our Goals A More Favorable Resident Experience Higher Revenue and Lower Operating Expenses Greater Profitability and Margin Expansion Improved Sustainability and Social Responsibility More Engaged and Productive Staff Automation & Big Data IRT is inve
Slide 17: 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. Find out more on the Sustainability page of IRT’s Investor Relations website at http://investors.irtliving.com. Diversity and Inclusion Co
Slide 18: Sustained Value Creation for Stockholders
Source: S&P Global, FactSet. Market data as of 11/2/2021. Note: Represents compound total return, with dividends reinvested. IPO date of 8/13/2013. 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
Slide 19: Our Path Forward: Capitalization, Leverage and Outlook
Our Path Forward: Capitalization, Leverage and Outlook Talison Row, Charleston, SC
Slide 20: Maintain a Simple Capital Structure
Maintain a Simple Capital Structure $8.1bn Common Equity Debt 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-core asset sales, organic N
Slide 21: 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 8.1x Mid 7’s Mid 6’s Non-Core Dispositions Approximately $404 million from 9 identified non-c
Slide 22: Strength of Combined Company and Path to Long-Term Growth
Strength of Combined Company and Path to Long-Term Growth Defined Investment Strategy Focus on non-gateway MSAs with strong apartment demand, limited new construction and positive economic indicators / demographic trends Value Add Redevelopment Initiatives Identified value add opportunities in combi
Slide 23: Appendix & Definitions
Appendix & Definitions Millenia, Orlando, FL
Slide 24: Assets Demonstrate Attractive Apartment Industry Dynamics
Assets Demonstrate Attractive Apartment Industry Dynamics Low Homeownership Limited New Supply The national Class B vacancy rate remains resilient to supply and demand shocks with 2021 vacancy rates for Class B at 4.00% vs. Class A at 6.20% The majority of new supply remains concentrated in gateway
Slide 25: Our Markets | Atlanta
Communities located within 5 min. of major highways Communities located in top school districts Benefiting from suburban sprawl, well-positioned in MSA with growing ancillary job markets Major company presence in Atlanta include: Our Markets | Atlanta (1) Source: CoStar 2021 Q3 Data Release New unit
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 (4) Job growth driven by an economic shift away from a manufacturing economy toward a service economy Major employers include: Our Markets |
Slide 27: 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 28: Our Markets | Dallas-Fort Worth
9th largest city in the U.S. by population The Dallas MSA has had the largest population growth within the past 10 years 4 Dallas accounts for nearly 8% of all financial service jobs in the Southwest region. 5 Major employers include: Our Markets | Dallas-Fort Worth (1) Source: CoStar 2021 Q3 Data R
Slide 29: Our Markets | Denver
Population growth in the metro area is expected to exceed 5.5% over the next five years4 The MSA had the 10th largest population increases from 2010-20195 Major employers include: Our Markets | Denver (1) Source: CoStar 2021 Q3 Data Release New units estimated to come as a percentage of total supply
Slide 30: Our Markets | Houston
Job growth is expected to be +2.7% annually through 2025, compared to 1.7% nationally. 4 Houston sits at #2 for the Top ten MSAs by population growth (2010-2019). 5 Major employers include: Our Markets | Houston (1) Source: CoStar 2021 Q3 Data Release New units estimated to come as a percentage of t
Slide 31: Our Markets | Huntsville
Metro area ranked 1st in 2020 projected rent growth of the top 100 metros by population 1 Major employers include: Our Markets | Huntsville (1) Source: CoStar 2021 Q3 Data Release New units estimated to come as a percentage of total supply NOI allocations calculated using 2022 Budgeted NOI’s and inc
Slide 32: Our Markets | Indianapolis
15th largest city in the U.S. by population 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 2021 Q3 Data Release New units estimated to come as a percentage o
Slide 33: Our Markets | Louisville
Located within 5 min. of major highways Benefiting 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 2021 Q3 Data Release New units estimated to come
Slide 34: Our Markets | Memphis
Memphis has all the amenities of a large city with a cost of living more than 20% below the national average. 4 Tennessee is one of the lowest-taxed states per capita in the nation. 5 Major employers include: Our Markets | Memphis (1) Source: CoStar 2021 Q3 Data Release New units estimated to come a
Slide 35: Our Markets | Nashville
Metro area job growth expected to outpace the national rate through 20254 Population growth for the year ending Q3 2021 was 1.0% compared to 0.2% nationally5 Major employers include: Our Markets | Nashville (1) Source: CoStar 2021 Q3 Data Release New units estimated to come as a percentage of total
Slide 36: Our Markets | Oklahoma City
The metro’s population grew +0.5% this year, which was above the 0.2% national average 4 Actively executing the redevelopment of its downtown area 4 Located within 5 min. of major highways and retail Major employers include: Our Markets | Oklahoma City (1) Source: CoStar 2021 Q3 Data Release New uni
Slide 37: Our Markets | Orlando
Established tourism hub New development lags rental market supply (4) Major employers include: Our Markets | Orlando (1) Source: CoStar 2021 Q3 Data Release New units estimated to come as a percentage of total supply NOI allocations calculated using 2022 Budgeted NOI’s and include the combined IRT/S
Slide 38: 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 2021 Q3 Data Release New units estimated to come as a
Slide 39: 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 2021 Q3 Data Release New units estimated to come
Slide 40: IRT Value Add Summary
IRT Value Add Summary Project Life to Date as of September 30, 2021 The rent premium reflects the per unit per month 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 consistent with its customar
Slide 41: IRT Resident Demographics at a Glance
IRT Resident Demographics at a Glance (1) Data as of September 30, 2021 46% 54% Gender Breakdown 76% 24% Marital Status 37 Average Income of residents between 40% $69k Average Rent to Income 18-29 years old Average Age with Young, growing resident population benefiting from amenity-rich communities
Slide 42: 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 43: Definitions and Non-GAAP Financial Measure Reconciliations
Definitions and Non-GAAP Financial Measure Reconciliations Net Operating Income We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful supplemental measure of its operating performance. We define NOI as total property revenues less total property operating expenses,
Slide 44: Definitions and Non-GAAP Financial Measure Reconciliations
Definitions and Non-GAAP Financial Measure Reconciliations
Slide 45: 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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