Independence Realty Trust, Inc. · NYSE:IRT
Independence Realty Trust — Investor Presentation (September 2019)
32 slides from Independence Realty Trust's investor presentation, Sep 16, 2019
Slide 1: Investor Presentation September 2019
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Slide 2: Table of Contents
Table of Contents IRT Overview Investment Thesis 2 – 4 Markets 5 Assets 6 – 7 Portfolio Composition 8 Value Add Program 9 – 10 Capital Recycling Program 11 Capital Structure 12 – 13 Guidance 14 Conclusion 15 Sustainability Commitment 16 Appendix Historic Portfolio Growth and Transformation 18 Market
Slide 3: IRT Enterprise Snapshot
IRT Enterprise Snapshot 1 $2.04B Total market capitalization of Own and operate : 57 communities 2 15,536 units 2 Average community age: 17 years $1.8B in gross assets PORTFOLIO SUMMARY SAME STORE OPERATIONAL HIGHLIGHTS NOI growth: 6.9% 3 Average effective rent $1,062 Average occupancy: 94.1% As of
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 initiatives Simple, conservative capital struc
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 Strong Population & Employment Growth
Source: CoStar Note: 2019 projections are for year-end 2019, as of CoStar’s 2019 Q2 data release. IRT weighted averages are based on unit count as of Q2 2019, excluding one asset held for sale in Austin and including the Rocky Creek acquisition in Tampa. Gateway markets represent an arithmetic avera
Slide 7: 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 8: Stable Cash Flow Profile
Stable Cash Flow Profile Source: 2019 year-end projections per CoStar 2019 Q2 data release. Gateway Markets represent an arithmetic average of New York, Washington DC, San Francisco and Los Angeles. IRT weighted averages are based on unit count as of Q2 2019, excluding all assets held for sale and i
Slide 9: Portfolio Scale and Management Platform Deliver Operational Excellence
Portfolio Scale and Management Platform Deliver Operational Excellence IRT’s Management Platform: Manage all 57 communities1 Capitalizing on economies of scale through regional managers’ ability to be on-site, which results in cost management efficiencies Algorithmic-based revenue optimization Regio
Slide 10: Value Add Opportunity
Value Add Opportunity After Before At a Glance Value add projects are a core part of IRT’s strategy to maximize its portfolio’s value Opportunity Approximately 6,400 units identified for redevelopment across 20 properties creating outsized NOI growth Investment Estimate a total investment of $73 mil
Slide 11: Value Add Projects and Pipeline Maximize Portfolio Value
Value Add Projects and Pipeline Maximize Portfolio Value Value creation opportunity of $1.71 per share across Phases 1, 2 and 3. $'s in 000's, except units and per share amounts 4.4K UNITS IN REMAINING PROJECT PIPELINE IRT’s Redevelopment Opportunity VALUE OPPORTUNITY 2 Incremental NOI Incremental V
Slide 12: Capital Recycling Program
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 13: Simple Capital Structure
As of market close 3/31/17 & 6/28/19 respectively. Reflects debt maturities as of 6/30/19. Reflects pro forma net debt to adjusted EBITDA for each period presented, which includes adjustments for the timing of acquisitions, the full quarter effect of current value add initiatives, and the projected
Slide 14: How Do We Right Size Leverage?
How Do We Right Size Leverage? These projections constitute forward-looking information. See “Forward-Looking Statements” on slide 31. Projected annual organic total portfolio NOI growth of 3-4%. This additional NOI is expected to be fully realized with 12 months of the completion of all projects. R
Slide 15: 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 31. Per share guidance is based on weighted average shares
Slide 16: 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 17: IRT's Sustainability Commitment
IRT’s Sustainability Commitment We believe that operating multi-family real estate can be conducted with a conscious regard for the environment and wider society.
Slide 18: Appendix & Definitions
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Slide 19: IRT's Historical Growth and Key Milestones
IRT’s Historical Growth and Key Milestones Portfolio Transformation Driving Gross Asset Growth August 2013 IPO -- $34 million One off acquisitions totaling $300m TradeStreet Merger -- $750 million Internalize & raise $250 million in equity to de-lever Announce $228 million portfolio acquisition Laun
Slide 20: 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 21: 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 2019 year-end data from CoStar
Slide 22: 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 2019 year-end data from CoStar 2019 Q2 Data Release New
Slide 23: 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 2019 year-end data from CoStar 2019 Q2 Data Releas
Slide 24: 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 2019 year-end data from CoStar 2019 Q2 Data Releas
Slide 25: 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 2019 year-end data from CoSt
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 6 Favorable average rent growth outpaces national average 6 Job growth driven by an economic shift away from a manufacturing economy toward
Slide 27: 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 2019 year-end data from CoStar 2019 Q2 Data Release New units estimated to come online in 2019 as a percentage of tota
Slide 28: Value Add Redevelopments | Where We Are Today
Value Add Redevelopments | Where We Are Today Value Add Summary Year to Date as of June 30, 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 29: Resident Demographics at a Glance
Resident Demographics at a Glance 1 Data as of 6/30/2019. 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 overextendi
Slide 30: 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 31: Definitions and Non-GAAP Financial Measure Reconciliations
Interest Coverage Interest coverage is a ratio computed by dividing Adjusted EBITDA by 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 thousands).
Slide 32: 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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