Independence Realty Trust Announces Fourth Quarter and Full Year 2021 Financial Results|||

Introduces Full Year 2022 Guidance

PHILADELPHIA–(Business concern WIRE)–Independence Realty Trust, Inc. (“IRT”) (NYSE: IRT), a multifamily flat REIT, today announced its fourth quarter and full year 2021 financial results.

Fourth Quarter Highlights

  • Net income available to common shares of $28.6 one thousand thousand for the quarter ended December 31, 2021 compared to $xiii.three million for the quarter concluded December 31, 2020.
  • Earnings per diluted share of $0.23 for the quarter ended Dec 31, 2021 compared to $0.14 for the quarter concluded Dec 31, 2020.
  • Same store net operating income (“NOI”) growth of 15.ane% for the quarter ended Dec 31, 2021 compared to the quarter concluded Dec 31, 2020.
  • Core Funds from Operations (“CFFO”) of $31.0 million for the quarter ended December 31, 2021 compared to $xix.7 million for the quarter ended December 31, 2020. CFFO per share was $0.24 for the fourth quarter of 2021, as compared to $0.21 for the fourth quarter of 2020.
  • Adjusted EBITDA of $42.3 meg for the quarter concluded December 31, 2021 compared to $28.5 meg for the quarter concluded December 31, 2020.
  • Completed our strategic merger with Steadfast Flat REIT, Inc. (“STAR”) on December sixteen, 2021, calculation 68 properties aggregating 21,394 rentable units and two development properties aggregating 621 rentable units.

Full Year Highlights

  • Since the inception of our value add program in January 2018 through December 31, 2021, IRT has completed renovations at 4,672 units, achieving a weighted average render on investment of 20.ii% on interior renovations and 18.0% on total renovation costs.
  • Internet income available to common shares of $44.6 million for the year ended December 31, 2021 compared to $14.8 one thousand thousand for the yr concluded Dec 31, 2020.
  • Earnings per diluted share of $0.41 for the year ended December 31, 2021 compared to $0.16 for the twelvemonth ended December 31, 2020.
  • Aforementioned store cyberspace operating income (“NOI”) growth of 11.4% for the year ended Dec 31, 2021 compared to the year ended December 31, 2020.
  • Core Funds from Operations (“CFFO”) of $92.0 million for the year ended Dec 31, 2021 compared to $68.ix million for the year ended December 31, 2020. CFFO per share was $0.84 for the full year 2021, as compared to $0.73 for the full year 2020.
  • Adjusted EBITDA of $128.nine 1000000 for the year concluded Dec 31, 2021 compared to $105.3 million for the twelvemonth ended December 31, 2020.

2022 Guidance Highlights

  • Introduced 2022 guidance including CFFO per share of $i.02 at the mid-betoken of our guidance range.
  • 2022 same shop NOI growth of 11.0% at the mid-point of our guidance range.

Included later in this printing release are definitions of NOI, CFFO, Adjusted EBITDA and other Non-GAAP financial measures and reconciliations of such measures to their nearly comparable fiscal measures as calculated and presented in accordance with GAAP.

Direction Commentary


2021 was an exceptional twelvemonth for IRT underscored past outsized organic growth across the portfolio, as well as the completion of the STAR merger that cements our position equally a leading multifamily REIT focused on the high growth U.S. Sunbelt region,” said Scott Schaeffer, Chairman and CEO of IRT. “
Nosotros delivered fourth quarter and full twelvemonth same store NOI growth of fifteen.i% and eleven.4%, respectively, supported past improvements in average occupancy rates and rental income. In addition, nosotros continued to accelerate our high return value add program and drive accretive growth through nugget acquisitions and dispositions, every bit well as articulation venture relationships in new multifamily development.”


Looking ahead, we are excited for our next phase of growth, having doubled our property and unit count through our merger with STAR. Our integration efforts remain on-track, with our holding and revenue direction systems now fully implemented across all backdrop. In addition, we expect to achieve at least $28 million in annual synergies and effectively improve our leverage position. These advancements, along with our plans to proceed to drive stiff operating results, well position IRT to realize attractive growth in the multifamily sector for years to come.”

Same Store Property Operating Results

Fourth Quarter 2021 Compared

to Quaternary Quarter 2020(1)

Full Year 2021 Compared to

Full Year 2020(1)

Rental and other belongings revenue

10.2% increase

8.4% increment

Property operating expenses

ane.eight% increase

3.8% increase

Net operating income (“NOI”)

xv.1% increment

eleven.4% increase

Portfolio average occupancy

xc bps increase to 95.7%

230 bps increase to 95.7%

Portfolio average rental rate

nine.7% increase to $one,266

five.9% increase to $i,209

NOI Margin

280 bps increase to 65.vi%

170 bps increase to 62.7%

(1)

Same store portfolio for the three and twelve months ended December 31, 2021 includes 47 backdrop, which represent 12,838 units.

Same Store Holding Operating Results, Excluding Value Add

The same store portfolio results below exclude 18 communities that are both function of the same shop portfolio and were actively undergoing Value Add renovations during the three and twelve months ended Dec 31, 2021.

4th Quarter 2021 Compared

to Fourth Quarter 2020(1)

Full Yr 2021 Compared to

Total Year 2020(1)

Rental and other property revenue

eight.5% increment

6.i% increase

Property operating expenses

v.iii% increment

4.0% increment

Net operating income (“NOI”)

x.4% increase

7.4% increase

Portfolio average occupancy

80 bps increase to 96.vi%

180 bps increase to 96.6%

Portfolio average rental rate

8.4% increase to $1,254

4.v% increase to $one,203

NOI Margin

100 bps increment to 64.vi%

fourscore bps increase to 62.5%

(i)

Aforementioned store portfolio, excluding value add, for the three and twelve months ended December 31, 2021 includes 29 backdrop, which stand for vii,034 units.

IRT and STAR Merger

On December sixteen, 2021, we completed our merger with STAR. Through the STAR Merger, nosotros acquired 68 flat communities that comprise 21,394 units and 2 flat communities that are under evolution and approved for 621 units in the aggregate. We acquired assets totaling $four.eight billion, causeless liabilities totaling $i.9 billion, and issued an aggregate of 99,720,948 shares of mutual stock and 6,429,481 IROP units in our merger with STAR. Leading up to and after the closing of the STAR Merger, we too successfully delevered the combined balance sheet through a combination of our July forward equity enhance of $271 million on 16.1 one thousand thousand shares, the disposition of iii STAR backdrop in November 2021 for a total sales cost of $107 million, and the disposition of six IRT properties between December 2021 and February 2022 for a total sales price of $297 one thousand thousand.

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Aforementioned Store Comparisons and STAR

As discussed in a higher place, nosotros completed our merger with STAR, which more doubled our property and unit counts. We will proceed to follow our previous definition of same store and will formally add STAR to the same store pool on January 1, 2023 in accordance with our current same store definition. Notwithstanding, in 2022 we will begin presenting a Combined Same Store portfolio to assist investors understand the larger aforementioned shop portfolio. We’ve included 2 new appendices this quarter. Appendix A shows the impact of consolidating STAR’s business concern for 2021. To assist in future modeling, we have added Appendix B, which provides the 2021 quarterly property operating results for the 2022 Combined Same Shop portfolio. The following Operating Metrics and 2022 Guidance are presented because these new same store portfolios. See the Definitions department of this release for full definitions of these new same store portfolios.

Operating Metrics

The table below summarizes operating metrics for the noted same shop portfolios for the applicable periods.

4Q 2021

1Q 2022(3)

IRT Aforementioned Shop Portfolio (47 properties / 12,838 units)
(one)

Average Occupancy

95.seven%

95.iv%

Lease Over Charter Effective Rental Rate Growth
(2):

New Leases

22.3%

20.iii%

Renewal Leases

eight.0%

xi.3%

Blended

fifteen.2%

14.three%

Resident retention rate

42.vi%

48.4%

STAR Same Shop Portfolio (62 backdrop / 19,860 units)
(1)

Average Occupancy

96.1%

95.3%

Lease Over Charter Effective Rental Rate Growth
(ii):

New Leases

sixteen.2%

13.7%

Renewal Leases

11.4%

9.3%

Blended

thirteen.vi%

x.9%

Resident retention charge per unit

45.7%

47.seven%

Combined Same Store Portfolio (109 properties / 32,698 units)
(one)

Average Occupancy

95.nine%

95.4%

Lease Over Lease Constructive Rental Rate Growth
(2):

New Leases

18.8%

xvi.iv%

Renewal Leases

ten.two%

x.ii%

Blended

fourteen.ii%

12.4%

Resident retentiveness rate

44.8%

48.0%

(1)

Come across same store definitions.

(2)

Lease-over-lease constructive rent growth represents the change in effective monthly rent, every bit adjusted for concessions, for each unit that had a prior lease and electric current charter that are for a term of 9-xiii months.

(3)

1Q 2022 average occupancy and resident retentivity rates are every bit through February 14, 2022.1Q 2022 new lease and renewal rates are for leases commencing during 1Q 2022 that were signed as of February 14, 2022.

Value Add Program

Nosotros completed renovations on 253 units and 953 units during the quarter ended and yr concluded December 31, 2021, respectively. From inception of our value add program in January 2018 through December 31, 2021, we completed renovations on 4,672 units, achieving a render on investment of eighteen.0% (20.2% on interior renovation costs) and an boilerplate monthly rental increase of 19.vi%.

Dispositions/Belongings Held for Sale:

In connection with our merger with STAR, we completed the following dispositions and used net proceeds from these sales to repay debt of the combined company.

  • Crestmont in Atlanta, GA: sold on Dec 13, 2021 and recognized a gain on disposition of $33.1 million.
  • Creekside Corner in Atlanta, GA: sold on Dec sixteen, 2021 and recognized a gain on disposition of $43.1 million.
  • Riverchase in Indianapolis, IN: sold on Jan xviii, 2022 and expect to recognize a gain on disposition of $xiii.0 one thousand thousand.
  • Haverford Place in Louisville, KY: sold on Feb ii, 2022 and expect to recognize a gain on disposition of $16.8 million.
  • Heritage Park in Oklahoma Metropolis, OK: sold on February 2, 2022 and expect to recognize a gain on disposition of $31.5 million.
  • Raindance in Oklahoma Metropolis, OK: sold on February 2, 2022 and expect to recognize a proceeds on disposition of $33.nine 1000000.

Capital Expenditures

For the 3 months ended December 31, 2021, recurring upper-case letter expenditures for the total portfolio were $ane.8 million, or $112 per unit of measurement. For the year ended Dec 31, 2021, recurring majuscule expenditures for the total portfolio were $6.8 million, or $422 per unit.

Distributions

On Dec two, 2021, our Board of Directors declared 2 prorated quarterly cash dividends based on IRT’s electric current quarterly dividend charge per unit of $0.12 per share of our mutual stock. The first prorated dividend was $0.09913 and was paid on Jan xiv, 2022 to stockholders of record as of the shut of business on December 15, 2021. The second prorated dividend was $0.02087 and was paid on January 21, 2022 to stockholders of record as of the close of business organization on Dec 30, 2021.

2022 EPS and CFFO Guidance

We are introducing 2022 full year guidance. Earnings per diluted share is projected to exist in the range of $0.32 to $0.36. A reconciliation of IRT’due south projected cyberspace income allocable to common shares to its projected CFFO per share is included beneath. Meet the schedules and definitions at the cease of this release for further information regarding how IRT calculates CFFO and for management’south definition and rationale for the usefulness of CFFO.

2022 Full Year EPS and CFFO Guidance
(1)(2)


Low


High

Earnings per share

$0.32

$0.36

Adjustments:

Depreciation and amortization
(3)

1.x

1.10

Proceeds on sale of real estate avails
(4)

(0.42)

(0.42)

Core FFO per share

$1.00

$ane.04

(1)

This guidance, including the underlying assumptions presented in the table below, constitutes forward-looking data. Actual full year 2022 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements” below. Our guidance is based on the fundamental guidance assumptions detailed below.

(2)

Per share guidance is based on 228.0 meg weighted average shares and units outstanding.

(3)

Depreciation and amortization includes $53.3 million ($0.23 per share) of amortization related to STAR in-place lease intangibles that are a result of GAAP purchase accounting. These intangibles are expected to be amortized over less than one twelvemonth.

(4)

Gains on sale of real estate assets include only the four nugget sales that occurred in Jan and Feb 2022.

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2022 Guidance Assumptions

Our key guidance assumptions for 2022 are enumerated below. Annotation, the aforementioned store portfolio assumptions reflect the expected composition of the same store portfolio in 2022 as indicated. See definitions at the end of this release for further data regarding our same store definitions. Run across besides, Appendix B, which includes 2021 belongings operating results for the 2022 Combined Same Store portfolio.

Combined Same Shop Portfolio

2022 Outlook
(ane)

Number of properties/units

115 backdrop / 34,454 units

Property revenue growth

viii.1% to 9.1%

Controllable operating expense growth

2.5% to three.5%

Real estate taxation and insurance expense growth

vi.five% to 8.5%

Full operating expense growth

4.0% to 5.5%

Property NOI growth

x.0% to 12.0%

Full general and administrative & Property management expenses

$48.0 million to $51.0 million

Interest expense
(2)

$100.0 million to $103.0 one thousand thousand

Transaction/Investment Volume
(three)

Acquisition book

None assumed

Disposition volume

$157 million

Uppercase Expenditures

Recurring

$eighteen.v million to $21.5 one thousand thousand

Value add & non-recurring

$42.5 million to $47.v million

Development

$65.0 million to $75.0 million

(1)

This guidance, including the underlying assumptions, constitutes forrard-looking data. Bodily results could vary significantly from the projections presented. Encounter “Forward-Looking Statements” beneath.

(2)

Interest expense includes amortization of deferred financing costs only excludes loan premium accretion, net. As a result of buy accounting, nosotros recorded a $72.i million loan premium, net, related to STAR debt. This loan premium will exist accreted into and reduce GAAP involvement expense over the remaining term of the associated debt. However, loan premium accretion will exist excluded from CFFO.

(three)

Disposition volume guidance represents only the iv asset sales that occurred in January and February 2022. Net proceeds from these 4 avails sales were used to reduce indebtedness. Nosotros go along to evaluate our portfolio for capital recycling opportunities and then actual acquisitions and dispositions could vary significantly from our projections. We undertake no duty to update these assumptions. Meet “Forrad-Looking Statements” below.

Selected Financial Information

See the schedules at the terminate of this earnings release for selected financial data for IRT.

Not-GAAP Fiscal Measures and Definitions

We disclose the following non-GAAP fiscal measures in this earnings release: FFO, CFFO, NOI and Adjusted EBITDA. Included at the terminate of this release are definitions of these non-GAAP financial measures and a reconciliation of our reported cyberspace income to our FFO and CFFO, a reconciliation of our aforementioned shop NOI to our reported cyberspace income, a reconciliation of our Adjusted EBITDA to net income, and direction’southward rationales for the usefulness of each of these and other non-GAAP financial measures used in this release.

Briefing Call

All interested parties can listen to the live conference telephone call webcast at ix:00 AM ET on Thursday, Feb 17, 2022 from the investor relations section of the IRT website at world wide web.irtliving.com or by dialing 1.844.200.6205, access code 873786. For those who are not available to mind to the live phone call, the replay will be available shortly following the alive telephone call from the investor relations section of IRT’s website and telephonically until Thursday, Feb 24, 2022 past dialing ane.866.813.9403, access code 506270.

Supplemental Information

We produce supplemental information that includes details regarding the performance of the portfolio, financial information, not-GAAP financial measures, same store information and other useful information for investors. The supplemental data is available via our website, www.irtliving.com, through the “Investor Relations” section.

About Independence Realty Trust, Inc.

Independence Realty Trust, Inc. (NYSE: IRT) is a real manor investment trust that owns and operates multifamily apartment properties in 119 communities, across non-gateway U.Southward. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Oklahoma Urban center, OK, Raleigh-Durham, NC, Houston, TX , Nashville, TN, and Memphis, TN. IRT’southward investment strategy is focused on gaining scale within primal amenity rich submarkets that offering good school districts, loftier-quality retail and major employment centers. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and upper-case letter appreciation. More than information may be found on the Company’southward website www.irtliving.com.

Forward-Looking Statements

This press release contains certain forwards-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Substitution Act of 1934, every bit amended. Such forwards-looking statements can generally exist identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. These forward-looking statements include, without limitation, our expectations with respect to our operating operation and financial results, including our 2022 earnings guidance, timing and amount of future dividends, timing and terms of property acquisitions, dispositions, joint venture investments, developments and redevelopments and other capital expenditures, timing and terms of capital raising and other financing activity, charter pricing, revenue and expense growth, occupancy levels, supply levels, task growth, interest rates and other economical expectations, and anticipated benefits of our recently completed merger (the “STAR Merger”) with Steadfast Apartment REIT, Inc. (“STAR”), including as to the amount of synergies from the STAR Merger. Such forward-looking statements involve risks, uncertainties, estimates and assumptions and our actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the hereafter expressed or unsaid by such forward-looking statements. These frontward-looking statements are based upon the electric current beliefs and expectations of our management and are inherently bailiwick to significant business organization, economic and competitive uncertainties and contingencies, many of which are hard to predict and not within our control. In improver, these forward-looking statements are subject to assumptions with respect to future concern strategies and decisions that are subject to modify. Risks and uncertainties that might cause our futurity actual results and/or time to come dividends to differ materially from those expressed or implied by frontwards-looking statements include, just are non limited to: (i) risks related to the bear upon of COVID-19 and other potential outbreaks of infectious diseases on our financial condition, results of operations, cash flows and the impact of such risks on the fiscal condition of our residents and their power to pay rent; (2) the nature and elapsing of measures taken by federal, state and local government government to combat the spread of illness; (three) changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could limit our power to charter units or increase rents or that could lead to declines in occupancy and hire levels; (4) doubt and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital; (five) increased costs on account of inflation; (six) inability of tenants to run across their rent and other lease obligations and charge-offs in excess of our allowance for bad debt; (vii) legislative restrictions that may regulate rents or filibuster or limit collections of past due rents; (viii) risks endemic to real manor and the real manor industry by and large; (ix) damage charges; (x) the effects of natural and other disasters; (eleven) delays in completing, and price overruns incurred in connection with, our value add together initiatives and failure to attain projected rent increases and occupancy levels on business relationship of the initiatives; (xii) failure to realize the cost savings, synergies and other benefits expected to result from the STAR Merger; (13) unexpected costs or delays in integration of the IRT and STAR businesses; (xiv) unknown or unexpected liabilities related to the STAR Merger; (xv) unexpected costs of REIT qualification compliance; (xvi) unexpected changes in our intention or ability to repay certain debt prior to maturity; (xvii) inability to sell sure assets within the time frames or at the pricing levels expected; (xviii) costs and disruptions as the result of a cybersecurity incident or other engineering disruption; and (xix) and share price fluctuations. Delight refer to the documents filed past us with the SEC, including specifically the “Risk Factors” sections of our Annual Report on Grade 10-K for the year ended December 31, 2020, our subsequently filed quarterly reports on Course x-Q and our other filings with the SEC, which identify boosted factors that could crusade actual results to differ from those contained in forward-looking statements. We undertake no obligation to update these forwards-looking statements to reverberate events or circumstances afterward the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law. In improver, the proclamation of dividends on our common stock is subject to the discretion of our Board of Directors and depends upon a broad range of factors, including our results of operations, financial condition, uppercase requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, every bit amended, applicative legal requirements and such other factors as our Board of Directors may from time to time deem relevant.

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Schedule I

Independence Realty Trust, Inc.

Selected Financial Data

(Dollars in thousands, except share and per share amounts)

(unaudited)

For the Three Months Ended

December 31,
2021

September 30,
2021

June 30,
2021

March 31,
2021

December 31,
2020

Selected Fiscal Information:

Operating Statistics:

Cyberspace income available to common shares

$

28,615

$

11,502

$

3,386

$

1,086

$

13,261

Earnings (loss) per share — diluted

$

0.23

0.eleven

$

0.03

$

0.01

$

0.14

Rental and other holding revenue

$

76,803

$

60,592

$

57,286

$

54,811

$

53,923

Property operating expenses

$

26,952

$

23,164

$

22,298

$

20,838

$

20,138

Cyberspace operating income

$

49,851

$

37,428

$

34,988

$

33,973

$

33,785

NOI margin

64.9

%

61.8

%

61.1

%

62.0

%

62.7

%

Adjusted EBITDA

$

42,301

$

31,432

$

28,729

$

26,389

$

28,534

CORE FFO per share (c)

$

0.24

$

0.21

$

0.20

$

0.18

$

0.22

Dividends per share

$

0.12

$

0.12

$

0.12

$

0.12

$

0.12

CORE FFO payout ratio

50.0

%

57.i

%

60.0

%

66.7

%

54.v

%

Portfolio Data:

Total gross assets

$

half dozen,785,648

$

2,114,743

$

2,133,021

$

i,970,979

$

one,962,895

Total number of operating properties

123

57

58

56

56

Total units

36,831

16,109

sixteen,261

fifteen,667

15,667

Menstruation end occupancy

92.1

%

96.0

%

95.six

%

95.5

%

95.three

%

Total portfolio average occupancy

92.five

%

96.1

%

95.nine

%

95.4

%

95.0

%

Full portfolio average effective monthly hire, per

unit

$

1,299

$

ane,212

$

one,171

$

1,142

$

1,136

Same store period cease occupancy (a)

95.vi

%

95.8

%

95.4

%

95.two

%

95.ane

%

Same store portfolio boilerplate occupancy (a)

95.7

%

96.0

%

95.ix

%

95.ane

%

94.8

%

Same shop portfolio boilerplate effective monthly rent,

per unit of measurement (a)

$

one,266

$

1,227

$

1,183

$

ane,161

$

ane,154

Capitalization:

Total debt (d)

$

2,705,336

$

996,270

$

one,036,841

$

947,631

$

945,686

Common share toll, period terminate

$

25.83

$

xx.35

$

18.23

$

15.20

$

13.43

Market disinterestedness capitalization

$

five,882,410

$

2,150,162

$

1,926,218

$

1,561,165

$

ane,376,283

Total market capitalization

$

viii,587,746

$

3,146,432

$

2,963,059

$

two,508,796

$

ii,321,969

Total debt/total gross assets

39.9

%

47.1

%

48.6

%

48.1

%

48.2

%

Internet debt to Adjusted EBITDA (pro forma) (b)

7.7x

8.ii

ten

8.5

x

8.2

x

eight.two

x

Interest coverage

three.ix

10

3.6

10

3.four

x

3.i

ten

3.ii

ten

Common shares and OP Units:

Shares outstanding

220,753,735

105,106,714

105,109,649

102,033,733

101,803,762

OP units outstanding

6,981,841

552,360

552,360

674,515

674,517

Common shares and OP units outstanding

227,735,577

105,659,074

105,662,009

102,708,248

102,478,278

Weighted boilerplate common shares and OP units

127,046,225

107,094,044

102,584,809

102,353,380

95,529,788

Contacts

Independence Realty Trust, Inc. Contact

Edelman Financial Communications & Capital Markets

Ted McHugh and Lauren Torres

917-365-7979

IRT@edelman.com

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