Exhibit 99.2
NYSE: IRT
WWW.IRTLIVING.COM
TABLE OF CONTENTS
| Trailing Five Quarters | |||||
Debt Maturity, Debt Covenant & Unencumbered Asset Statistics | 24 | ||||
Independence Realty Trust
March 31, 2024
Company Information:
Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT’s investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. 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 capital appreciation. More information may be found on the Company’s website www.irtliving.com.
| Corporate Headquarters | 1835 Market Street, Suite 2601 | ||||
| Philadelphia, PA 19103 | |||||
| 267.270.4800 | |||||
| Trading Symbol | NYSE: “IRT” | ||||
| Investor Relations Contact | Edelman Smithfield | ||||
| Ted McHugh and Lauren Torres | |||||
| 917-365-7979 | |||||
IRT@edelman.com | |||||
3
Forward-Looking Statements
This release 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 include, but are not limited to, our earnings guidance, and the assumptions underlying such guidance, and certain actions that we expect or seek to take in connection with our Portfolio Optimization and Deleveraging Strategy and anticipated enhancements to our financial results and future growth from this strategy. All statements in this release that address financial and operating performance, events or developments that we expect or anticipate will occur or be achieved in the future are forward-looking statements.
Our forward-looking statements are not guarantees of future performance and involve estimates, projections, forecasts and assumptions, including as to matters that are not within our control, and are subject to risks and uncertainties including, without limitation, risks and uncertainties related to changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could lead to declines in occupancy and rent levels, uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital, unexpected changes in our intention or ability to repay certain debt prior to maturity, increased costs on account of inflation, increased competition in the labor market, failure to realize cost savings, efficiencies and other benefits that we expect to result from our Portfolio Optimization and Deleveraging Strategy, inability to sell certain assets, including those assets designated as held for sale, within the time frames or at the pricing levels expected, failure to achieve expected benefits from the redeployment of proceeds from asset sales, delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve rent increases and occupancy levels on account of the value add initiatives, unexpected impairments or impairments in excess of our estimates, increased regulations generally and specifically on the rental housing market, including legislation that may regulate rents and fees or delay or limit our ability to evict non-paying residents, risks endemic to real estate and the real estate industry generally, the impact of potential outbreaks of infectious diseases and measures intended to prevent the spread or address the effects thereof, the effects of natural and other disasters, unknown or unexpected liabilities, including the cost of legal proceedings, costs and disruptions as the result of a cybersecurity incident or other technology disruption, unexpected capital needs, inability to obtain appropriate insurance coverages at reasonable rates, or at all, or losses from catastrophes in excess of our insurance coverages, and share price fluctuations. Please refer to the documents filed by us with the SEC, including specifically the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2023, and our other filings with the SEC, which identify additional factors that could cause actual results to differ from those contained in forward-looking statements.
These forward-looking statements are based upon the beliefs and expectations of our management at the time of this release and our actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.
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Independence Realty Trust Announces First Quarter 2024 Financial Results
PHILADELPHIA – (BUSINESS WIRE) – April 24, 2024 — Independence Realty Trust, Inc. (“IRT”) (NYSE: IRT), a multifamily apartment REIT, today announced its first quarter 2024 financial results.
First Quarter Highlights
•Net income available to common shares of $17.6 million for the quarter ended March 31, 2024 compared to $8.6 million for the quarter ended March 31, 2023.
•Earnings per diluted share of $0.08 for the quarter ended March 31, 2024 compared to $0.04 for the quarter ended March 31, 2023.
•Same-store portfolio net operating income (“NOI”) growth of 2.4% for the quarter ended March 31, 2024 compared to the quarter ended March 31, 2023.
•Disposed of nine properties under our Portfolio Optimization and Deleveraging Strategy for a total gross sales price of $496.8 million and used proceeds from the sales to repay $488.9 million of debt. Repayment of debt included significant paydowns on our revolver which improved our liquidity position to $412 million as of March 31, 2024.
•Core Funds from Operations (“CFFO”) of $61.5 million for the quarter ended March 31, 2024 compared to $62.5 million for the quarter ended March 31, 2023. CFFO per share was $0.27 for the first quarter of 2024, as compared to $0.27 for the first quarter of 2023.
•Adjusted EBITDA of $84.7 million for the quarter ended March 31, 2024 compared to $87.6 million for the quarter ended March 31, 2023.
•Value add program completed renovations at 320 units during the quarter ended March 31, 2024, achieving a weighted average return on investment during the quarter of 18.0%.
Included later in this press release are definitions of NOI, CFFO, Adjusted EBITDA and other Non-GAAP financial measures and reconciliations of such measures to their most comparable financial measures as calculated and presented in accordance with GAAP, as well as, discussion of our same-store methodology.
Management Commentary
“For the first quarter of 2024, we delivered a 3.4% increase in same-store revenue, supported by our focus on driving occupancy. Our same-store average occupancy improved 120 basis points in the quarter on a year-over-year basis to 94.4%, and we continued to see positive momentum in April, with average occupancy rising to 95.0%,” said Scott Schaeffer, Chairman and CEO of IRT. “We also continued to successfully execute our business plan, including the advancement of our Portfolio Optimization and Deleveraging Strategy. As of March 31, 2024, we had sold nine of the ten non-core assets and exited four single-asset markets while further strengthening our balance sheet, which helped us achieve an investment grade rating from Fitch Ratings, as announced last month. We look forward to building on our first quarter successes during the remainder of the year.”
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Same-Store Portfolio(1) Operating Results
First Quarter 2024 Compared to First Quarter 2023 | |||||
| Rental and other property revenue | 3.4% increase | ||||
| Property operating expenses | 5.0% increase | ||||
| NOI | 2.4% increase | ||||
| Portfolio average occupancy | 120 bps increase to 94.4% | ||||
| Portfolio average rental rate | 1.5% increase to $1,551 | ||||
| NOI Margin | 50 bps decrease to 62.7% | ||||
(1)Same-store portfolio includes 108 properties, which represent 32,153 units.
Operating Metrics
The table below summarizes operating metrics for the same-store portfolio for the applicable periods.
| 1Q 2024 | April 2024(3) | ||||||||||
Same-Store Portfolio(1) | |||||||||||
| Average Occupancy | 94.4 | % | 95.0 | % | (4) | ||||||
Lease Over Lease Effective Rental Rate Growth:(2) | |||||||||||
| New Leases | (2.4) | % | (0.5) | % | |||||||
| Renewal Leases | 4.4 | % | 3.0 | % | |||||||
| Blended | 1.2 | % | 1.8 | % | |||||||
| Resident Retention Rate | 54.3 | % | 55.7 | % | |||||||
| Same-Store Portfolio excluding Ongoing Value Add | |||||||||||
| Average Occupancy | 94.6 | % | 95.2 | % | (4) | ||||||
Lease Over Lease Effective Rental Rate Growth:(2) | |||||||||||
| New Leases | (2.8) | % | (1.0) | % | |||||||
| Renewal Leases | 4.5 | % | 3.1 | % | |||||||
| Blended | 1.0 | % | 1.7 | % | |||||||
| Resident Retention Rate | 53.9 | % | 55.2 | % | |||||||
Value Add (22 properties with Ongoing Value Add) | |||||||||||
| Average Occupancy | 93.9 | % | 94.3 | % | (4) | ||||||
Lease Over Lease Effective Rental Rate Growth:(2) | |||||||||||
| New Leases | (1.1) | % | 1.2 | % | |||||||
| Renewal Leases | 4.2 | % | 2.9 | % | |||||||
| Blended | 1.8 | % | 2.3 | % | |||||||
| Resident Retention Rate | 55.7 | % | 57.6 | % | |||||||
(1)Same-store portfolio includes 108 properties, which represent 32,153 units.
(2)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.
(3)April 2024 average occupancy is through April 23, 2024. New, renewal, and blended lease rates, and resident retention are for leases commencing during April 2024 that were signed as of April 23, 2024.
(4)As of April 23, 2024, same-store portfolio occupancy was 95.4%, same-store portfolio excluding ongoing value add occupancy was 95.6%, and value add occupancy was 94.7%.
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Portfolio Optimization and Deleveraging Strategy Update
On October 30, 2023, we announced our Portfolio Optimization and Deleveraging Strategy, which targeted sales of 10 properties located in seven markets in order to exit or reduce our presence in these markets while also deleveraging our balance sheet. As of March 31, 2024, nine of the ten properties had been sold for a total gross sales price of $496.8 million and proceeds from the sales were used to repay $488.9 million of debt.
Value Add Program
We completed renovations on 320 units during the quarter ended March 31, 2024, achieving a return on investment of 18.0%, with an average cost per unit renovated of $18,136, and an average monthly rent increase per unit of $272 over unrenovated comps. See the Value Add Summary page of our supplemental for additional information on our projects’ life to date as of March 31, 2024.
Investment Activity
Properties Held for Sale and Dispositions
During the three months ended March 31, 2024, in connection with our Portfolio Optimization and Deleveraging Strategy, we sold five properties for a combined sales price of $296.1 million and we recognized a net gain of $25.6 million.
As of March 31, 2024, we had two properties classified as held for sale.
•Reserve at Creekside, Chattanooga, Tennessee: This tenth and final property targeted for sale under our Portfolio Optimization and Deleveraging Strategy is under contract and expected to close in the second quarter of 2024.
•Tapestry Park, Birmingham Alabama: During the three months ended March 31, 2024, in connection with our capital recycling program, we identified this asset as held for sale and recognized a loss on impairment of $15.1 million. The property is now under contract and is expected to close during the third quarter of 2024.
While the two properties classified as held for sale are under contract, there can be no assurance that the sales will be consummated at expected pricing levels, within expected time frames, or at all.
Capital Expenditures
For the three months ended March 31, 2024, recurring capital expenditures for the total portfolio were $4.9 million, or $151 per unit, value add and non-recurring expenditures for the total portfolio were $21.9 million and development expenditures for the total portfolio were $11.0 million, respectively.
Dividend Distribution
On March 11, 2024, our Board of Directors declared a quarterly dividend of $0.16 per share of common stock. The first quarter dividend was paid on April 19, 2024 to stockholders of record at the close of business on March 29, 2024.
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2024 EPS, FFO and CFFO Guidance
We are confirming our 2024 FFO per share, CFFO per share, and same-store NOI guidance ranges while updating our 2024 EPS per share, transaction volume, and same-store pool guidance. Earnings per diluted share is now projected to be in the range of $0.34 to $0.38. A reconciliation of IRT's projected net income allocable to common shares to its projected CFFO per share is included below. See the schedules and definitions at the end of this release for further information regarding how IRT calculates CFFO and for management’s definition and rationale for the usefulness of CFFO.
| Previous Guidance | Current Guidance | Change at Midpoint | ||||||||||||||||||||||||||||||
2024 Full Year EPS and CFFO Guidance(1)(2) | Low | High | Low | High | ||||||||||||||||||||||||||||
| Earnings per share | $ | 0.40 | $ | 0.44 | $ | 0.34 | $ | 0.38 | $ | (0.06) | ||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 0.87 | 0.87 | 0.87 | 0.87 | — | |||||||||||||||||||||||||||
Gain on sale of real estate assets(3) | (0.11) | (0.11) | (0.05) | (0.05) | 0.06 | |||||||||||||||||||||||||||
| FFO per share | 1.16 | 1.20 | 1.16 | 1.20 | — | |||||||||||||||||||||||||||
| Loan (premium accretion) discount amortization, net | (0.04) | (0.04) | (0.04) | (0.04) | — | |||||||||||||||||||||||||||
| CFFO per share | $ | 1.12 | $ | 1.16 | $ | 1.12 | $ | 1.16 | $ | — | ||||||||||||||||||||||
(1)This guidance, including the underlying assumptions presented in the table below, constitutes forward-looking information. Actual full year 2024 EPS, FFO, and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements”. Our guidance is based on the key guidance assumptions detailed below.
(2)Per share guidance is based on 230.9 million weighted average shares and units outstanding.
(3)Gain on sale of real estate assets includes the gains on sale (losses on impairment) recognized during the first quarter of 2024 as described in this release.
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2024 Guidance Assumptions
Our key guidance assumptions for 2024 are enumerated below. See the definitions at the end of this release for further information regarding our same-store definitions.
| Same-Store Portfolio | Previous 2024 Outlook(1) | Current 2024 Outlook(1) | Change at Midpoint | ||||||||
| Number of properties/units | 109 properties / 32,507 units | 108 properties / 32,153 units | (1) property / (354) units | ||||||||
| Property revenue growth | 3.0% to 4.5% | 3.0% to 4.5% | — | ||||||||
| Controllable operating expense growth | 4.9% to 5.9% | 4.9% to 5.9% | — | ||||||||
| Real estate tax and insurance expense growth | 6.1% to 7.1% | 6.1% to 7.1% | — | ||||||||
| Total operating expense growth | 5.4% to 6.4% | 5.4% to 6.4% | — | ||||||||
| NOI growth | 1.0% to 4.0% | 1.0% to 4.0% | — | ||||||||
| Corporate Expenses | |||||||||||
| General and administrative & property management expenses | $51.5 million to $54.5 million | $51.5 million to $54.5 million | — | ||||||||
Interest expense(2) | $83.0 million to $85.0 million | $83.0 million to $85.0 million | — | ||||||||
| Transaction/Investment Volume | |||||||||||
| Acquisition volume | None | $0 million to $40 million | $20 million | ||||||||
Disposition volume(3) | $324 million | $392 million to $396 million | $70 million | ||||||||
| Capital Expenditures | |||||||||||
| Recurring | $21.0 million to $23.0 million | $21.0 million to $23.0 million | — | ||||||||
| Value add & non-recurring | $83.0 million to $85.0 million | $83.0 million to $85.0 million | — | ||||||||
| Development | $54.5 million to $55.5 million | $54.5 million to $55.5 million | — | ||||||||
(1)This guidance, including the underlying assumptions, constitutes forward-looking information. Actual results could vary significantly from the projections presented. See “Forward-Looking Statements” .
(2)Interest expense includes amortization of deferred financing costs but excludes loan premium accretion, net. As a result of purchase accounting we recorded loan premiums, net, that are accreted into and reduce GAAP interest expense over the remaining term of the associated debt. However, loan premium accretion is excluded from CFFO.
(3)Includes $296 million related to the sale of five properties sold during the three months ended March 31, 2024 and $96 million to $100 million related to two properties held for sale as of March 31, 2024. We continue to evaluate our portfolio for capital recycling opportunities so actual acquisition and disposition volume could vary significantly from our projections. We undertake no duty to update these assumptions. See “Forward-Looking Statements”.
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Selected Financial Information
See the schedules at the end of this earnings release for selected financial information for IRT.
Non-GAAP Financial Measures and Definitions
We disclose the following non-GAAP financial measures in this earnings release: FFO, CFFO, NOI and Adjusted EBITDA. Included at the end of this release are definitions of these non-GAAP financial measures and a reconciliation of our reported net income to our FFO and CFFO, a reconciliation of our same-store NOI to our reported net income, a reconciliation of our Adjusted EBITDA to net income, and management’s rationales for the usefulness of each of these and other non-GAAP financial measures used in this release.
Conference Call
All interested parties can listen to the live conference call webcast at 9:00 AM ET on Thursday, April 25, 2024 from the investor relations section of the IRT website at www.irtliving.com or by dialing 1.888.440.3307, access code 1963990. For those who are not available to listen to the live call, the replay will be available shortly following the live call from the investor relations section of IRT’s website until the next earnings release. A playback of the conference call can also be accessed telephonically until Thursday, May 2, 2024 by dialing 1.800.770.2030, access code 1963990.
Supplemental Information
We produce supplemental information that includes details regarding the performance of the portfolio, financial information, non-GAAP financial measures, same-store information and other useful information for investors. The supplemental information 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 estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT’s investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. 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 capital appreciation. More information may be found on the Company’s website www.irtliving.com.
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Forward-Looking Statements
This release 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 include, but are not limited to, our earnings guidance, and the assumptions underlying such guidance, and certain actions that we expect or seek to take in connection with our Portfolio Optimization and Deleveraging Strategy and anticipated enhancements to our financial results and future growth from this strategy. All statements in this release that address financial and operating performance, events or developments that we expect or anticipate will occur or be achieved in the future are forward-looking statements.
Our forward-looking statements are not guarantees of future performance and involve estimates, projections, forecasts and assumptions, including as to matters that are not within our control, and are subject to risks and uncertainties including, without limitation, risks and uncertainties related to changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could lead to declines in occupancy and rent levels, uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital, unexpected changes in our intention or ability to repay certain debt prior to maturity, increased costs on account of inflation, increased competition in the labor market, failure to realize cost savings, efficiencies and other benefits that we expect to result from our Portfolio Optimization and Deleveraging Strategy, inability to sell certain assets, including those assets designated as held for sale, within the time frames or at the pricing levels expected, failure to achieve expected benefits from the redeployment of proceeds from asset sales, delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve rent increases and occupancy levels on account of the value add initiatives, unexpected impairments or impairments in excess of our estimates, increased regulations generally and specifically on the rental housing market, including legislation that may regulate rents and fees or delay or limit our ability to evict non-paying residents, risks endemic to real estate and the real estate industry generally, the impact of potential outbreaks of infectious diseases and measures intended to prevent the spread or address the effects thereof, the effects of natural and other disasters, unknown or unexpected liabilities, including the cost of legal proceedings, costs and disruptions as the result of a cybersecurity incident or other technology disruption, unexpected capital needs, inability to obtain appropriate insurance coverages at reasonable rates, or at all, or losses from catastrophes in excess of our insurance coverages, and share price fluctuations. Please refer to the documents filed by us with the SEC, including specifically the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2023, and our other filings with the SEC, which identify additional factors that could cause actual results to differ from those contained in forward-looking statements.
These forward-looking statements are based upon the beliefs and expectations of our management at the time of this release and our actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.
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FINANCIAL & OPERATING HIGHLIGHTS
Dollars in thousands, except per share data
| For the Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | |||||||||||||||||||||||||
| Selected Financial Information: | |||||||||||||||||||||||||||||
| Operating Statistics: | |||||||||||||||||||||||||||||
| Net income (loss) available to common shares | $17,577 | $(40,515) | $3,930 | $10,709 | $8,648 | ||||||||||||||||||||||||
| Earnings (loss) per share -- diluted | $0.08 | $(0.18) | $0.02 | $0.05 | $0.04 | ||||||||||||||||||||||||
| Rental and other property revenue | $160,331 | $166,730 | $168,375 | $163,601 | $161,135 | ||||||||||||||||||||||||
| Property operating expenses | $59,971 | $59,703 | $63,300 | $62,071 | $59,255 | ||||||||||||||||||||||||
| NOI | $100,360 | $107,027 | $105,075 | $101,530 | $101,880 | ||||||||||||||||||||||||
| NOI margin | 62.6% | 64.2% | 62.4% | 62.1% | 63.2% | ||||||||||||||||||||||||
| Adjusted EBITDA | $84,683 | $95,640 | $94,415 | $89,156 | $87,594 | ||||||||||||||||||||||||
| FFO per share | $0.27 | $0.31 | $0.31 | $0.28 | $0.27 | ||||||||||||||||||||||||
| CFFO per share | $0.27 | $0.30 | $0.30 | $0.28 | $0.27 | ||||||||||||||||||||||||
| Dividends per share | $0.16 | $0.16 | $0.16 | $0.16 | $0.14 | ||||||||||||||||||||||||
| CFFO payout ratio | 59.3% | 53.3% | 53.3% | 57.1% | 51.9% | ||||||||||||||||||||||||
| Portfolio Data: | |||||||||||||||||||||||||||||
| Total gross assets | $6,673,589 | $6,960,554 | $7,225,447 | $7,117,404 | $7,045,306 | ||||||||||||||||||||||||
| Total number of operating properties (a) | 111 | 116 | 120 | 119 | 119 | ||||||||||||||||||||||||
| Total units (a) | 32,877 | 34,431 | 35,427 | 35,249 | 35,249 | ||||||||||||||||||||||||
| Portfolio period end occupancy (a) | 95.0% | 94.6% | 94.4% | 94.6% | 94.1% | ||||||||||||||||||||||||
| Portfolio average occupancy (a) | 94.4% | 94.4% | 94.6% | 94.1% | 93.1% | ||||||||||||||||||||||||
| Portfolio average effective monthly rent, per unit (a) | $1,550 | $1,558 | $1,556 | $1,538 | $1,535 | ||||||||||||||||||||||||
| Same-store portfolio period end occupancy (b) | 95.0% | 94.7% | 94.4% | 93.7% | 94.3% | ||||||||||||||||||||||||
| Same-store portfolio average occupancy (b) | 94.4% | 94.5% | 94.5% | 94.2% | 93.2% | ||||||||||||||||||||||||
| Same-store portfolio average effective monthly rent, per unit (b) | $1,551 | $1,555 | $1,548 | $1,547 | $1,528 | ||||||||||||||||||||||||
| Capitalization: | |||||||||||||||||||||||||||||
| Total debt (c) | $2,277,098 | $2,549,409 | $2,715,710 | $2,650,805 | $2,628,632 | ||||||||||||||||||||||||
| Common share price, period end | $16.13 | $15.30 | $14.07 | $18.22 | $16.03 | ||||||||||||||||||||||||
| Market equity capitalization | $3,726,224 | $3,528,996 | $3,245,135 | $4,202,342 | $3,694,970 | ||||||||||||||||||||||||
| Total market capitalization | $6,003,322 | $6,078,405 | $5,960,845 | $6,853,147 | $6,323,602 | ||||||||||||||||||||||||
| Total debt/total gross assets | 34.1% | 36.6% | 37.6% | 37.2% | 37.3% | ||||||||||||||||||||||||
| Net debt to Adjusted EBITDA (d) | 6.7x | 6.7x | 7.0x | 7.2x | 7.3x | ||||||||||||||||||||||||
| Interest coverage | 4.1x | 4.1x | 4.3x | 4.0x | 4.0x | ||||||||||||||||||||||||
| Common shares and OP Units: | |||||||||||||||||||||||||||||
| Shares outstanding | 225,070,396 | 224,706,731 | 224,695,566 | 224,697,889 | 224,556,870 | ||||||||||||||||||||||||
| OP units outstanding | 5,941,643 | 5,946,571 | 5,946,571 | 5,946,571 | 5,946,571 | ||||||||||||||||||||||||
| Common shares and OP units outstanding | 231,012,039 | 230,653,302 | 230,642,137 | 230,644,460 | 230,503,441 | ||||||||||||||||||||||||
| Weighted average common shares and OP units | 230,570,707 | 230,452,570 | 230,444,945 | 230,369,086 | 230,186,297 | ||||||||||||||||||||||||
(a)Excludes our development projects (Destination at Arista and Flatirons Apartments). See the definitions at the end of this release.
(b)Same-store portfolio consists of 108 properties, which represent 32,153 units.
(c)Includes indebtedness associated with real estate held for sale, as applicable.
(d)Reflects net debt to Adjusted EBITDA, which is annualized for each period presented, including adjustments for the timing of acquisitions and dispositions impacting quarterly EBITDA. For the five quarters ended March 31, 2024, net debt to Adjusted EBITDA excluding adjustments for these items was 6.5x, 6.5x, 7.0x, 7.2x, and 7.3x, respectively.
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BALANCE SHEETS
Dollars in thousands, except per share data
| As of | |||||||||||||||||||||||||||||
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | |||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Real estate held for investment, at cost | $ | 6,183,009 | $ | 6,259,212 | $ | 6,754,022 | $ | 6,610,233 | $ | 6,648,907 | |||||||||||||||||||
| Less: accumulated depreciation | (622,713) | (582,760) | (567,200) | (519,680) | (475,001) | ||||||||||||||||||||||||
| Real estate held for investment, net | 5,560,296 | 5,676,452 | 6,186,822 | 6,090,553 | 6,173,906 | ||||||||||||||||||||||||
| Real estate held for sale | 98,603 | 296,334 | 75,392 | 86,576 | — | ||||||||||||||||||||||||
| Real estate under development | 109,338 | 98,365 | 83,547 | 121,733 | 124,983 | ||||||||||||||||||||||||
| Cash and cash equivalents | 21,275 | 22,852 | 17,216 | 14,349 | 12,448 | ||||||||||||||||||||||||
| Restricted cash | 20,625 | 27,880 | 31,772 | 28,163 | 22,385 | ||||||||||||||||||||||||
| Investment in unconsolidated real estate entities | 89,487 | 89,044 | 87,592 | 99,968 | 92,882 | ||||||||||||||||||||||||
| Other assets | 34,379 | 39,245 | 41,926 | 31,799 | 34,360 | ||||||||||||||||||||||||
| Derivative assets | 38,845 | 29,937 | 53,258 | 44,259 | 32,783 | ||||||||||||||||||||||||
| Intangible assets, net | — | 66 | 265 | — | — | ||||||||||||||||||||||||
| Total assets | $ | 5,972,848 | $ | 6,280,175 | $ | 6,577,790 | $ | 6,517,400 | $ | 6,493,747 | |||||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||||||||||
| Indebtedness, net | $ | 2,212,273 | $ | 2,426,788 | $ | 2,675,117 | $ | 2,609,903 | $ | 2,628,632 | |||||||||||||||||||
| Indebtedness associated with real estate held for sale, net | 64,825 | 122,621 | 40,593 | 40,902 | — | ||||||||||||||||||||||||
| Accounts payable and accrued expenses | 83,678 | 109,074 | 138,549 | 115,664 | 105,873 | ||||||||||||||||||||||||
| Accrued interest payable | 7,145 | 7,917 | 8,275 | 7,986 | 7,979 | ||||||||||||||||||||||||
| Dividends payable | 36,896 | 36,858 | 36,858 | 36,856 | 32,232 | ||||||||||||||||||||||||
| Derivative liabilities | — | — | — | — | 2,283 | ||||||||||||||||||||||||
| Other liabilities | 8,928 | 9,723 | 10,642 | 11,172 | 11,813 | ||||||||||||||||||||||||
| Total liabilities | 2,413,745 | 2,712,981 | 2,910,034 | 2,822,483 | 2,788,812 | ||||||||||||||||||||||||
| Equity: | |||||||||||||||||||||||||||||
| Shareholders' Equity: | |||||||||||||||||||||||||||||
| Preferred shares, $0.01 par value per share | — | — | — | — | — | ||||||||||||||||||||||||
| Common shares, $0.01 par value per share | 2,251 | 2,247 | 2,247 | 2,247 | 2,246 | ||||||||||||||||||||||||
| Additional paid in capital | 3,753,833 | 3,751,942 | 3,751,001 | 3,754,839 | 3,753,074 | ||||||||||||||||||||||||
| Accumulated other comprehensive income | 34,501 | 25,513 | 47,910 | 38,823 | 25,101 | ||||||||||||||||||||||||
| Accumulated deficit | (367,015) | (348,405) | (271,982) | (239,972) | (214,775) | ||||||||||||||||||||||||
| Total shareholders' equity | 3,423,570 | 3,431,297 | 3,529,176 | 3,555,937 | 3,565,646 | ||||||||||||||||||||||||
| Noncontrolling Interests | 135,533 | 135,897 | 138,580 | 138,980 | 139,289 | ||||||||||||||||||||||||
| Total equity | 3,559,103 | 3,567,194 | 3,667,756 | 3,694,917 | 3,704,935 | ||||||||||||||||||||||||
| Total liabilities and equity | $ | 5,972,848 | $ | 6,280,175 | $ | 6,577,790 | $ | 6,517,400 | $ | 6,493,747 | |||||||||||||||||||
13
STATEMENTS OF OPERATIONS, FFO & CFFO
TRAILING FIVE QUARTERS (Dollars in thousands, except per share data)
| For the Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | |||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| Rental and other property revenue | $ | 160,331 | $ | 166,730 | $ | 168,375 | $ | 163,601 | $ | 161,135 | |||||||||||||||||||
| Other revenue | 203 | 316 | 232 | 354 | 239 | ||||||||||||||||||||||||
| Total revenue | 160,534 | 167,046 | 168,607 | 163,955 | 161,374 | ||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||
| Property operating expenses | 59,971 | 59,703 | 63,300 | 62,071 | 59,255 | ||||||||||||||||||||||||
| Property management expenses | 7,499 | 6,660 | 7,232 | 6,818 | 6,371 | ||||||||||||||||||||||||
| General and administrative expenses (a) | 8,381 | 5,043 | 3,660 | 5,910 | 8,154 | ||||||||||||||||||||||||
| Depreciation and amortization expense | 53,721 | 55,902 | 55,546 | 53,984 | 53,536 | ||||||||||||||||||||||||
| Casualty losses | 2,301 | 59 | 35 | 680 | 151 | ||||||||||||||||||||||||
| Total expenses | 131,873 | 127,367 | 129,773 | 129,463 | 127,467 | ||||||||||||||||||||||||
| Interest expense | (20,603) | (23,537) | (22,033) | (22,227) | (22,124) | ||||||||||||||||||||||||
| Gain on sale (loss on impairment) of real estate assets, net | 10,530 | (56,263) | (11,268) | — | 985 | ||||||||||||||||||||||||
| Gain (loss) on extinguishment of debt | 203 | (124) | — | — | — | ||||||||||||||||||||||||
| Other (loss) income, net | (1) | (79) | (369) | (72) | 93 | ||||||||||||||||||||||||
| Loss from investments in unconsolidated real estate entities | (829) | (1,330) | (1,178) | (1,205) | (776) | ||||||||||||||||||||||||
| Restructuring costs | — | — | — | — | (3,213) | ||||||||||||||||||||||||
| Net income (loss) | $ | 17,961 | $ | (41,654) | $ | 3,986 | $ | 10,988 | $ | 8,872 | |||||||||||||||||||
| (Income) loss allocated to noncontrolling interests | (384) | 1,139 | (56) | (279) | (224) | ||||||||||||||||||||||||
| Net income (loss) available to common shares | $ | 17,577 | $ | (40,515) | $ | 3,930 | $ | 10,709 | $ | 8,648 | |||||||||||||||||||
| Earnings (loss) per share - basic | $ | 0.08 | $ | (0.18) | $ | 0.02 | $ | 0.05 | $ | 0.04 | |||||||||||||||||||
| Weighted-average shares outstanding - Basic | 224,627,115 | 224,505,999 | 224,498,374 | 224,422,515 | 224,226,873 | ||||||||||||||||||||||||
| Earnings (loss) per share - diluted | $ | 0.08 | $ | (0.18) | $ | 0.02 | $ | 0.05 | $ | 0.04 | |||||||||||||||||||
| Weighted-average shares outstanding - Diluted | 225,226,270 | 224,505,999 | 225,140,555 | 225,073,890 | 225,088,659 | ||||||||||||||||||||||||
| Funds From Operations (FFO): | |||||||||||||||||||||||||||||
| Net income (loss) | $ | 17,961 | $ | (41,654) | $ | 3,986 | $ | 10,988 | $ | 8,872 | |||||||||||||||||||
| Add-Back (Deduct): | |||||||||||||||||||||||||||||
| Real estate depreciation and amortization | 53,390 | 55,510 | 55,217 | 53,701 | 53,287 | ||||||||||||||||||||||||
| Our share of real estate depreciation and amortization from investments in unconsolidated real estate entities | 598 | 636 | 486 | 575 | 418 | ||||||||||||||||||||||||
| (Gain on sale) loss on impairment of real estate assets, net, excluding prepayment gains | (9,609) | 57,492 | 11,268 | — | (314) | ||||||||||||||||||||||||
| FFO | $ | 62,340 | $ | 71,984 | $ | 70,957 | $ | 65,264 | $ | 62,263 | |||||||||||||||||||
| FFO per share | $ | 0.27 | $ | 0.31 | $ | 0.31 | $ | 0.28 | $ | 0.27 | |||||||||||||||||||
| CORE Funds From Operations (CFFO): | |||||||||||||||||||||||||||||
| FFO | $ | 62,340 | $ | 71,984 | $ | 70,957 | $ | 65,264 | $ | 62,263 | |||||||||||||||||||
| Add-Back (Deduct): | |||||||||||||||||||||||||||||
| Other depreciation and amortization | 331 | 391 | 329 | 283 | 249 | ||||||||||||||||||||||||
| Casualty losses | 2,301 | 59 | 35 | 680 | 151 | ||||||||||||||||||||||||
| Loan (premium accretion) discount amortization, net | (2,395) | (2,659) | (2,747) | (2,737) | (2,755) | ||||||||||||||||||||||||
| Prepayment gains on asset dispositions | (921) | (1,229) | — | — | (670) | ||||||||||||||||||||||||
| (Gain) loss on extinguishment of debt | (203) | 124 | — | — | — | ||||||||||||||||||||||||
| Other expense (income), net | 1 | 79 | 429 | 192 | 42 | ||||||||||||||||||||||||
| Restructuring costs | — | — | — | — | 3,213 | ||||||||||||||||||||||||
| CFFO | $ | 61,454 | $ | 68,749 | $ | 69,003 | $ | 63,682 | $ | 62,493 | |||||||||||||||||||
| CFFO per share | $ | 0.27 | $ | 0.30 | $ | 0.30 | $ | 0.28 | $ | 0.27 | |||||||||||||||||||
| Weighted-average shares and units outstanding | 230,570,707 | 230,452,570 | 230,444,945 | 230,369,086 | 230,186,297 | ||||||||||||||||||||||||
(a)Included in the three months ended March 31, 2024 and 2023 is $2.5 million and $2.7 million, respectively, of stock compensation expense recorded with respect to stock awards granted during the respective period to retirement eligible employees.
14
STATEMENTS OF OPERATIONS, FFO & CFFO
(Dollars in thousands, except per share data)
| For the Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Revenue: | |||||||||||
| Rental and other property revenue | $ | 160,331 | $ | 161,135 | |||||||
| Other revenue | 203 | 239 | |||||||||
| Total revenue | 160,534 | 161,374 | |||||||||
| Expenses: | |||||||||||
| Property operating expenses | 59,971 | 59,255 | |||||||||
| Property management expenses | 7,499 | 6,371 | |||||||||
| General and administrative expenses (a) | 8,381 | 8,154 | |||||||||
| Depreciation and amortization expense | 53,721 | 53,536 | |||||||||
| Casualty losses | 2,301 | 151 | |||||||||
| Total expenses | 131,873 | 127,467 | |||||||||
| Interest expense | (20,603) | (22,124) | |||||||||
| Gain on sale (loss on impairment) of real estate assets, net | 10,530 | 985 | |||||||||
| Gain on extinguishment of debt | 203 | — | |||||||||
| Other (loss) income, net | (1) | 93 | |||||||||
| Loss from investments in unconsolidated real estate entities | (829) | (776) | |||||||||
| Restructuring costs | — | (3,213) | |||||||||
| Net income (loss) | 17,961 | 8,872 | |||||||||
| Income allocated to noncontrolling interests | (384) | (224) | |||||||||
| Net income available to common shares | $ | 17,577 | $ | 8,648 | |||||||
| Earnings per share - basic | $ | 0.08 | $ | 0.04 | |||||||
| Weighted-average shares outstanding - Basic | 224,627,115 | 224,226,873 | |||||||||
| Earnings per share - diluted | $ | 0.08 | $ | 0.04 | |||||||
| Weighted-average shares outstanding - Diluted | 225,226,270 | 225,088,659 | |||||||||
| Funds From Operations (FFO): | |||||||||||
| Net income | $ | 17,961 | $ | 8,872 | |||||||
| Add-Back (Deduct): | |||||||||||
| Real estate depreciation and amortization | 53,390 | 53,287 | |||||||||
| Our share of real estate depreciation and amortization from investments in unconsolidated real estate entities | 598 | 418 | |||||||||
| (Gain on sale) loss on impairment of real estate assets, net, excluding prepayment gains | (9,609) | (314) | |||||||||
| FFO | $ | 62,340 | $ | 62,263 | |||||||
| FFO per share | $ | 0.27 | $ | 0.27 | |||||||
| CORE Funds From Operations (CFFO): | |||||||||||
| FFO | $ | 62,340 | $ | 62,263 | |||||||
| Add-Back (Deduct): | |||||||||||
| Other depreciation and amortization | 331 | 249 | |||||||||
| Casualty losses | 2,301 | 151 | |||||||||
| Loan (premium accretion) discount amortization, net | (2,395) | (2,755) | |||||||||
| Prepayment gains on asset dispositions | (921) | (670) | |||||||||
| Gain on extinguishment of debt | (203) | — | |||||||||
| Other expense (income), net | 1 | 42 | |||||||||
| Restructuring costs | — | 3,213 | |||||||||
| CFFO | $ | 61,454 | $ | 62,493 | |||||||
| CFFO per share | $ | 0.27 | $ | 0.27 | |||||||
| Weighted-average shares and units outstanding | 230,570,707 | 230,186,297 | |||||||||
(a)Included in the three months ended March 31, 2024 and 2023 is $2.5 million and $2.7 million, respectively, of stock compensation expense recorded with respect to stock awards granted during the respective period to retirement eligible employees.
15
ADJUSTED EBITDA RECONCILIATION AND COVERAGE RATIO
Dollars in thousands
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | |||||||||||||||||||||||||
| Net income (loss) | $ | 17,961 | $ | (41,654) | $ | 3,986 | $ | 10,988 | $ | 8,872 | |||||||||||||||||||
| Add-Back (Deduct): | |||||||||||||||||||||||||||||
| Interest expense | 20,603 | 23,537 | 22,033 | 22,227 | 22,124 | ||||||||||||||||||||||||
| Depreciation and amortization | 53,721 | 55,902 | 55,546 | 53,984 | 53,536 | ||||||||||||||||||||||||
| Casualty losses | 2,301 | 59 | 35 | 680 | 151 | ||||||||||||||||||||||||
| (Gain on sale) loss on impairment of real estate assets, net | (10,530) | 56,263 | 11,268 | — | (985) | ||||||||||||||||||||||||
| (Gain) loss on extinguishment of debt | (203) | 124 | — | — | — | ||||||||||||||||||||||||
| Loss from investments in unconsolidated real estate entities | 829 | 1,330 | 1,178 | 1,205 | 776 | ||||||||||||||||||||||||
| Other loss (income), net | 1 | 79 | 369 | 72 | (93) | ||||||||||||||||||||||||
| Restructuring costs | — | — | — | — | 3,213 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 84,683 | $ | 95,640 | $ | 94,415 | $ | 89,156 | $ | 87,594 | |||||||||||||||||||
| INTEREST COST: | |||||||||||||||||||||||||||||
| Interest expense | $ | 20,603 | $ | 23,537 | $ | 22,033 | $ | 22,227 | $ | 22,124 | |||||||||||||||||||
| INTEREST COVERAGE: | 4.1x | 4.1x | 4.3x | 4.0x | 4.0x | ||||||||||||||||||||||||
| For the Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Net income (loss) | $ | 17,961 | $ | 8,872 | |||||||
| Add-Back (Deduct): | |||||||||||
| Interest expense | 20,603 | 22,124 | |||||||||
| Depreciation and amortization | 53,721 | 53,536 | |||||||||
| Casualty losses | 2,301 | 151 | |||||||||
| (Gain on sale) loss on impairment of real estate assets, net | (10,530) | (985) | |||||||||
| Gain on extinguishment of debt | (203) | — | |||||||||
| Loss from investments in unconsolidated real estate entities | 829 | 776 | |||||||||
| Other loss (income), net | 1 | (93) | |||||||||
| Restructuring costs | — | 3,213 | |||||||||
| Adjusted EBITDA | $ | 84,683 | $ | 87,594 | |||||||
| INTEREST COST: | |||||||||||
| Interest expense | $ | 20,603 | $ | 22,124 | |||||||
| INTEREST COVERAGE: | 4.1x | 4.0x | |||||||||
16
SAME-STORE PORTFOLIO NET OPERATING INCOME & NOI BRIDGE (a) (b)
TRAILING FIVE QUARTERS
Dollars in thousands, except per unit data
| For the Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | |||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| Rental and other property revenue | $ | 150,618 | $ | 150,903 | $ | 152,138 | $ | 148,645 | $ | 145,701 | |||||||||||||||||||
| Property Operating Expenses: | |||||||||||||||||||||||||||||
| Real estate taxes | 18,970 | 18,463 | 18,503 | 18,576 | 18,479 | ||||||||||||||||||||||||
| Property insurance | 4,150 | 4,255 | 4,075 | 3,600 | 2,966 | ||||||||||||||||||||||||
| Personnel expenses | 12,199 | 11,741 | 12,007 | 11,745 | 11,125 | ||||||||||||||||||||||||
| Utilities | 7,713 | 7,419 | 7,719 | 7,063 | 7,353 | ||||||||||||||||||||||||
| Repairs and maintenance | 4,825 | 3,407 | 5,761 | 5,997 | 5,446 | ||||||||||||||||||||||||
| Contract services | 5,101 | 5,254 | 5,608 | 5,941 | 5,097 | ||||||||||||||||||||||||
| Advertising expenses | 1,596 | 1,616 | 1,915 | 1,592 | 1,302 | ||||||||||||||||||||||||
| Other expenses | 1,693 | 1,584 | 1,598 | 1,756 | 1,796 | ||||||||||||||||||||||||
| Total property operating expenses | 56,247 | 53,739 | 57,186 | 56,270 | 53,564 | ||||||||||||||||||||||||
| Same-store portfolio NOI | $ | 94,371 | $ | 97,164 | $ | 94,952 | $ | 92,375 | $ | 92,137 | |||||||||||||||||||
| Same-store portfolio NOI margin | 62.7 | % | 64.4 | % | 62.4 | % | 62.1 | % | 63.2 | % | |||||||||||||||||||
| Average occupancy | 94.4 | % | 94.5 | % | 94.5 | % | 94.2 | % | 93.2 | % | |||||||||||||||||||
| Average effective monthly rent, per unit | $ | 1,551 | $ | 1,555 | $ | 1,548 | $ | 1,531 | $ | 1,528 | |||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | |||||||||||||||||||||||||
| Rental and other property revenue | |||||||||||||||||||||||||||||
| Same-store portfolio | $ | 150,618 | $ | 150,903 | $ | 152,138 | $ | 148,645 | $ | 145,701 | |||||||||||||||||||
| Non same-store portfolio | 9,713 | 15,827 | 16,237 | 14,956 | 15,434 | ||||||||||||||||||||||||
| Total rental and other property revenue | 160,331 | 166,730 | 168,375 | 163,601 | 161,135 | ||||||||||||||||||||||||
| Property operating expenses | |||||||||||||||||||||||||||||
| Same-store portfolio | 56,247 | 53,739 | 57,186 | 56,270 | 53,564 | ||||||||||||||||||||||||
| Non same-store portfolio | 3,724 | 5,964 | 6,114 | 5,801 | 5,691 | ||||||||||||||||||||||||
| Total property operating expenses | 59,971 | 59,703 | 63,300 | 62,071 | 59,255 | ||||||||||||||||||||||||
| NOI | |||||||||||||||||||||||||||||
| Same-store portfolio | 94,371 | 97,164 | 94,952 | 92,375 | 92,137 | ||||||||||||||||||||||||
| Non same-store portfolio | 5,989 | 9,863 | 10,123 | 9,155 | 9,743 | ||||||||||||||||||||||||
| Total property NOI | $ | 100,360 | $ | 107,027 | $ | 105,075 | $ | 101,530 | $ | 101,880 | |||||||||||||||||||
(a)Same-store portfolio consists of 108 properties, which represent 32,153 units.
(b)See the definitions at the end of this release for a reconciliation from GAAP net income (loss) to NOI.
17
SAME-STORE PORTFOLIO NET OPERATING INCOME (a)
THREE MONTHS ENDED MARCH 31, 2024 AND 2023
Dollars in thousands, except per unit data
| For the Three Months Ended March 31, | |||||||||||||||||
| 2024 | 2023 | % change | |||||||||||||||
| Revenue: | |||||||||||||||||
| Rental and other property revenue | $ | 150,618 | $ | 145,701 | 3.4 | % | |||||||||||
| Property Operating Expenses: | |||||||||||||||||
| Real estate taxes | 18,970 | 18,479 | 2.7 | % | |||||||||||||
| Property insurance | 4,150 | 2,966 | 39.9 | % | |||||||||||||
| Personnel expenses | 12,199 | 11,125 | 9.7 | % | |||||||||||||
| Utilities | 7,713 | 7,353 | 4.9 | % | |||||||||||||
| Repairs and maintenance | 4,825 | 5,446 | (11.4) | % | |||||||||||||
| Contract services | 5,101 | 5,097 | 0.1 | % | |||||||||||||
| Advertising expenses | 1,596 | 1,302 | 22.6 | % | |||||||||||||
| Other expenses | 1,693 | 1,796 | (5.7) | % | |||||||||||||
| Total property operating expenses | 56,247 | 53,564 | 5.0 | % | |||||||||||||
| Same-store portfolio NOI | $ | 94,371 | $ | 92,137 | 2.4 | % | |||||||||||
| Same-store portfolio NOI margin | 62.7 | % | 63.2 | % | (0.5) | % | |||||||||||
| Average occupancy | 94.4 | % | 93.2 | % | 1.2 | % | |||||||||||
| Average effective monthly rent, per unit | $ | 1,551 | $ | 1,528 | 1.5 | % | |||||||||||
(a)Same-store portfolio consists of 108 properties, which represent 32,153 units.
18
SAME-STORE PORTFOLIO NET OPERATING INCOME BY MARKET
THREE MONTHS ENDED MARCH 31, 2024
Dollars in thousands, except rent per unit
| Rental and Other Property Revenue | Property Operating Expenses | Net Operating Income | Average Occupancy | Average Effective Monthly Rent per Unit | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Market | Number of Properties | Units | 2024 | 2023 | % Change | 2024 | 2023 | % Change | 2024 | 2023 | % Change | 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Atlanta, GA | 13 | 5,180 | $ | 23,823 | $ | 23,671 | 0.6 | % | $ | 9,189 | $ | 8,406 | 9.3 | % | $ | 14,635 | $ | 15,269 | (4.2) | % | 93.0 | % | 91.9 | % | 1.1 | % | $ | 1,622 | $ | 1,637 | (0.9) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dallas, TX | 14 | 4,007 | 21,916 | 21,223 | 3.3 | % | 8,517 | 8,823 | (3.5) | % | 13,398 | 12,400 | 8.0 | % | 94.3 | % | 93.1 | % | 1.2 | % | 1,817 | 1,783 | 1.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbus, OH | 10 | 2,510 | 10,906 | 10,228 | 6.6 | % | 4,012 | 3,612 | 11.1 | % | 6,894 | 6,616 | 4.2 | % | 94.8 | % | 94.5 | % | 0.3 | % | 1,430 | 1,356 | 5.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Denver, CO | 6 | 1,397 | 7,439 | 7,489 | (0.7) | % | 2,184 | 2,175 | 0.4 | % | 5,255 | 5,314 | (1.1) | % | 95.6 | % | 94.6 | % | 1.0 | % | 1,713 | 1,709 | 0.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Indianapolis, IN | 7 | 1,979 | 8,498 | 7,908 | 7.5 | % | 3,247 | 2,927 | 10.9 | % | 5,251 | 4,981 | 5.4 | % | 95.2 | % | 92.5 | % | 2.7 | % | 1,378 | 1,334 | 3.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City, OK | 8 | 2,147 | 7,955 | 7,528 | 5.7 | % | 2,726 | 2,560 | 6.5 | % | 5,229 | 4,967 | 5.3 | % | 94.9 | % | 91.7 | % | 3.2 | % | 1,190 | 1,163 | 2.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tampa-St. Petersburg, FL | 5 | 1,452 | 8,198 | 7,959 | 3.0 | % | 3,097 | 3,126 | (0.9) | % | 5,101 | 4,834 | 5.5 | % | 95.5 | % | 94.9 | % | 0.6 | % | 1,832 | 1,801 | 1.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Raleigh - Durham, NC | 6 | 1,690 | 7,871 | 7,755 | 1.5 | % | 2,864 | 2,520 | 13.7 | % | 5,007 | 5,234 | (4.3) | % | 93.9 | % | 93.7 | % | 0.2 | % | 1,548 | 1,530 | 1.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nashville, TN | 5 | 1,508 | 7,449 | 6,985 | 6.6 | % | 2,578 | 2,389 | 7.9 | % | 4,871 | 4,596 | 6.0 | % | 94.3 | % | 90.6 | % | 3.7 | % | 1,634 | 1,591 | 2.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Memphis, TN | 4 | 1,383 | 6,166 | 6,044 | 2.0 | % | 2,135 | 1,982 | 7.7 | % | 4,032 | 4,061 | (0.7) | % | 93.2 | % | 93.7 | % | (0.5) | % | 1,513 | 1,501 | 0.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | 5 | 1,308 | 5,759 | 5,596 | 2.9 | % | 2,704 | 2,844 | (4.9) | % | 3,055 | 2,752 | 11.0 | % | 93.9 | % | 94.5 | % | (0.6) | % | 1,430 | 1,390 | 2.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Louisville, KY | 4 | 1,150 | 4,738 | 4,438 | 6.8 | % | 1,969 | 1,897 | 3.8 | % | 2,769 | 2,541 | 9.0 | % | 95.4 | % | 92.8 | % | 2.6 | % | 1,300 | 1,285 | 1.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lexington, KY | 3 | 886 | 3,797 | 3,610 | 5.2 | % | 1,186 | 1,067 | 11.2 | % | 2,611 | 2,542 | 2.7 | % | 96.8 | % | 94.9 | % | 1.9 | % | 1,329 | 1,272 | 4.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charlotte, NC | 3 | 714 | 3,759 | 3,792 | (0.9) | % | 1,161 | 1,117 | 3.9 | % | 2,598 | 2,675 | (2.9) | % | 94.6 | % | 95.6 | % | (1.0) | % | 1,749 | 1,756 | (0.4) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Huntsville, AL | 3 | 873 | 4,024 | 4,016 | 0.2 | % | 1,480 | 1,341 | 10.4 | % | 2,544 | 2,675 | (4.9) | % | 94.4 | % | 94.5 | % | (0.1) | % | 1,498 | 1,545 | (3.0) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Birmingham, AL | 1 | 720 | 3,084 | 3,017 | 2.2 | % | 1,261 | 1,131 | 11.5 | % | 1,823 | 1,885 | (3.3) | % | 94.4 | % | 93.8 | % | 0.6 | % | 1,419 | 1,407 | 0.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Myrtle Beach, SC - Wilmington, NC | 3 | 628 | 2,687 | 2,611 | 2.9 | % | 865 | 784 | 10.3 | % | 1,822 | 1,827 | (0.3) | % | 94.2 | % | 94.7 | % | (0.5) | % | 1,416 | 1,396 | 1.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cincinnati, OH | 2 | 542 | 2,741 | 2,556 | 7.2 | % | 1,004 | 967 | 3.8 | % | 1,736 | 1,589 | 9.3 | % | 94.1 | % | 92.1 | % | 2.0 | % | 1,583 | 1,553 | 1.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenville, SC | 1 | 702 | 2,602 | 2,440 | 6.6 | % | 986 | 944 | 4.4 | % | 1,616 | 1,497 | 7.9 | % | 94.4 | % | 92.2 | % | 2.2 | % | 1,306 | 1,231 | 6.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charleston, SC | 2 | 518 | 2,711 | 2,534 | 7.0 | % | 1,103 | 1,000 | 10.3 | % | 1,608 | 1,534 | 4.8 | % | 95.4 | % | 93.6 | % | 1.8 | % | 1,695 | 1,603 | 5.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Orlando, FL | 1 | 297 | 1,651 | 1,537 | 7.4 | % | 710 | 668 | 6.3 | % | 942 | 869 | 8.4 | % | 94.2 | % | 94.5 | % | (0.3) | % | 1,805 | 1,787 | 1.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin, TX | 1 | 256 | 1,415 | 1,310 | 8.0 | % | 623 | 611 | 2.0 | % | 791 | 699 | 13.2 | % | 95.0 | % | 89.0 | % | 6.0 | % | 1,804 | 1,788 | 0.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio, TX | 1 | 306 | 1,429 | 1,454 | (1.7) | % | 646 | 673 | (4.0) | % | 783 | 780 | 0.4 | % | 96.8 | % | 95.7 | % | 1.1 | % | 1,475 | 1,483 | (0.5) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total / Weighted Average | 108 | 32,153 | $ | 150,618 | $ | 145,701 | 3.4 | % | $ | 56,247 | $ | 53,564 | 5.0 | % | $ | 94,371 | $ | 92,137 | 2.4 | % | 94.4 | % | 93.2 | % | 1.2 | % | $ | 1,551 | $ | 1,528 | 1.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
19
PROPERTY PORTFOLIO (a)
NET OPERATING INCOME EXPOSURE BY MARKET
Dollars in thousands, except rent per unit
| For the Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Market | Number of Properties | Units | Gross Real Estate Assets | Period End Occupancy | Average Effective Monthly Rent per Unit | NOI | % of NOI | |||||||||||||||||||||||||||||||||||||
| Atlanta, GA | 13 | 5,180 | $ | 1,092,916 | 93.2 | % | $ | 1,622 | $ | 14,633 | 15.2 | % | ||||||||||||||||||||||||||||||||
| Dallas, TX | 14 | 4,007 | 868,839 | 95.1 | % | 1,817 | 13,398 | 13.9 | % | |||||||||||||||||||||||||||||||||||
| Columbus, OH | 10 | 2,510 | 375,141 | 94.8 | % | 1,430 | 6,894 | 7.2 | % | |||||||||||||||||||||||||||||||||||
Denver, CO (a) (b) | 6 | 1,397 | 380,485 | 95.6 | % | 1,713 | 5,255 | 5.3 | % | |||||||||||||||||||||||||||||||||||
| Indianapolis, IN | 7 | 1,979 | 294,166 | 95.7 | % | 1,378 | 5,251 | 5.4 | % | |||||||||||||||||||||||||||||||||||
| Oklahoma City, OK | 8 | 2,147 | 329,997 | 95.1 | % | 1,190 | 5,229 | 5.4 | % | |||||||||||||||||||||||||||||||||||
| Tampa-St. Petersburg, FL | 5 | 1,452 | 313,868 | 95.6 | % | 1,832 | 5,101 | 5.3 | % | |||||||||||||||||||||||||||||||||||
| Raleigh - Durham, NC | 6 | 1,690 | 254,272 | 94.3 | % | 1,548 | 5,007 | 5.2 | % | |||||||||||||||||||||||||||||||||||
| Nashville, TN | 5 | 1,508 | 372,424 | 94.7 | % | 1,634 | 4,871 | 5.1 | % | |||||||||||||||||||||||||||||||||||
| Memphis, TN | 4 | 1,383 | 161,490 | 94.6 | % | 1,513 | 4,032 | 4.2 | % | |||||||||||||||||||||||||||||||||||
| Houston, TX | 5 | 1,308 | 213,672 | 95.8 | % | 1,430 | 3,055 | 3.2 | % | |||||||||||||||||||||||||||||||||||
Huntsville, AL (c) | 4 | 1,051 | 241,263 | 95.8 | % | 1,492 | 3,035 | 3.1 | % | |||||||||||||||||||||||||||||||||||
Birmingham, AL (d) | 2 | 1,074 | 219,181 | 96.1 | % | 1,471 | 2,908 | 3.0 | % | |||||||||||||||||||||||||||||||||||
| Louisville, KY | 4 | 1,150 | 146,443 | 94.6 | % | 1,300 | 2,769 | 2.9 | % | |||||||||||||||||||||||||||||||||||
| Lexington, KY | 3 | 886 | 161,291 | 97.1 | % | 1,329 | 2,611 | 2.7 | % | |||||||||||||||||||||||||||||||||||
| Charlotte, NC | 3 | 714 | 189,681 | 95.8 | % | 1,749 | 2,598 | 2.7 | % | |||||||||||||||||||||||||||||||||||
| Myrtle Beach, SC - Wilmington, NC | 3 | 628 | 68,341 | 96.0 | % | 1,416 | 1,822 | 1.9 | % | |||||||||||||||||||||||||||||||||||
| Cincinnati, OH | 2 | 542 | 123,868 | 96.7 | % | 1,583 | 1,736 | 1.8 | % | |||||||||||||||||||||||||||||||||||
| Greenville, SC | 1 | 702 | 124,937 | 95.2 | % | 1,306 | 1,616 | 1.7 | % | |||||||||||||||||||||||||||||||||||
| Charleston, SC | 2 | 518 | 82,010 | 95.6 | % | 1,695 | 1,608 | 1.7 | % | |||||||||||||||||||||||||||||||||||
| Orlando, FL | 1 | 297 | 50,604 | 94.6 | % | 1,805 | 942 | 1.0 | % | |||||||||||||||||||||||||||||||||||
| Austin, TX | 1 | 256 | 59,407 | 94.9 | % | 1,804 | 791 | 0.8 | % | |||||||||||||||||||||||||||||||||||
| San Antonio, TX | 1 | 306 | 57,430 | 97.7 | % | 1,475 | 783 | 0.8 | % | |||||||||||||||||||||||||||||||||||
Chattanooga, TN (e) | 1 | 192 | 30,298 | 94.8 | % | 1,367 | 436 | 0.5 | % | |||||||||||||||||||||||||||||||||||
| Total / Weighted Average | 111 | 32,877 | $ | 6,212,024 | 95.0 | % | $ | 1,550 | $ | 96,381 | 100.0 | % | ||||||||||||||||||||||||||||||||
(a)Excludes our development projects (Destination at Arista and Flatirons Apartments). See the definitions at the end of this release.
(b)Includes properties in our Fort Collins, CO and Colorado Springs, CO markets.
(c)Includes the Virtuoso joint venture property that was consolidated beginning August 1, 2023 as a result of an amendment to the joint venture agreement.
(d)Includes one property with 354 units that was held for sale as of March 31, 2024.
(e)Represents one property with 192 units included in our Portfolio Optimization and Deleveraging Strategy that was held for sale as of December 31, 2023 and as of March 31, 2024.
20
VALUE ADD SUMMARY BY MARKET
PROJECT LIFE TO DATE AS OF MARCH 31, 2024
| Renovation Costs per Unit (b) | |||||||||||||||||||||||||||||||||||
| Market | Total Properties | Total Units To Be Renovated | Units Complete | Units Leased | Rent Premium (a) | % Rent Increase | Interior | Exterior | Total | ROI - Interior Costs(c) | ROI - Total Costs (c) | ||||||||||||||||||||||||
| Ongoing | |||||||||||||||||||||||||||||||||||
| Atlanta, GA | 4 | 1,892 | 911 | 911 | $ | 281 | 21.2 | % | $ | 16,968 | $ | 1,973 | $ | 18,941 | 19.9 | % | 17.8 | % | |||||||||||||||||
| Dallas, TX | 4 | 1,199 | 574 | 585 | 288 | 20.1 | % | 19,223 | 2,102 | 21,325 | 18.0 | % | 16.2 | % | |||||||||||||||||||||
| Columbus, OH | 4 | 1,098 | 403 | 392 | 280 | 22.5 | % | 14,222 | 1,431 | 15,653 | 23.6 | % | 21.5 | % | |||||||||||||||||||||
| Oklahoma City, OK | 3 | 793 | 464 | 459 | 158 | 18.2 | % | 17,354 | 1,521 | 18,875 | 10.9 | % | 10.0 | % | |||||||||||||||||||||
| Tampa-St. Petersburg, FL | 2 | 612 | 404 | 399 | 380 | 25.9 | % | 16,372 | 1,481 | 17,853 | 27.8 | % | 25.5 | % | |||||||||||||||||||||
| Nashville, TN | 1 | 418 | 252 | 246 | 156 | 11.0 | % | 16,580 | 1,321 | 17,901 | 11.3 | % | 10.5 | % | |||||||||||||||||||||
| Memphis, TN | 1 | 362 | 286 | 287 | 380 | 34.6 | % | 15,662 | 807 | 16,469 | 29.1 | % | 27.7 | % | |||||||||||||||||||||
| Raleigh-Durham, NC | 1 | 318 | 233 | 234 | 216 | 17.0 | % | 16,070 | 1,046 | 17,116 | 16.1 | % | 15.1 | % | |||||||||||||||||||||
| Austin, TX | 1 | 256 | 164 | 164 | 245 | 16.6 | % | 18,077 | 1,486 | 19,563 | 16.3 | % | 15.0 | % | |||||||||||||||||||||
| Indianapolis, IN | 1 | 236 | 188 | 187 | 279 | 25.7 | % | 15,559 | 1,484 | 17,043 | 21.5 | % | 19.6 | % | |||||||||||||||||||||
| Total / Weighted Average | 22 | 7,184 | 3,879 | 3,864 | $ | 271 | 21.4 | % | $16,804 | $ | 1,649 | $ | 18,453 | 19.4 | % | 17.6 | % | ||||||||||||||||||
Future (d) | |||||||||||||||||||||||||||||||||||
| Atlanta, GA (e) | 2 | 676 | 267 | 264 | $ | 171 | 13.9 | % | $ | 16,356 | $ | 1,874 | $ | 18,230 | 12.5 | % | 11.2 | % | |||||||||||||||||
| Lexington, KY | 1 | 436 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Oklahoma City, OK | 1 | 294 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Dallas, TX | 1 | 263 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Denver, CO | 1 | 252 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Total / Weighted Average | 6 | 1,921 | 267 | 264 | $ | 171 | 13.9 | % | $ | 16,356 | $ | 1,874 | $ | 18,230 | 12.5 | % | 11.2 | % | |||||||||||||||||
Completed (f) | |||||||||||||||||||||||||||||||||||
| Columbus, OH | 3 | 763 | 697 | 691 | $ | 208 | 22.9 | % | $ | 10,203 | $ | 666 | $ | 10,869 | 24.5 | % | 23.0 | % | |||||||||||||||||
| Atlanta, GA | 2 | 754 | 691 | 690 | 208 | 20.1 | % | 9,181 | 1,398 | 10,579 | 27.2 | % | 23.6 | % | |||||||||||||||||||||
| Louisville, KY | 2 | 728 | 721 | 778 | 217 | 24.3 | % | 15,489 | 2,173 | 17,662 | 16.8 | % | 14.7 | % | |||||||||||||||||||||
| Memphis, TN | 2 | 691 | 651 | 649 | 189 | 18.7 | % | 11,782 | 974 | 12,756 | 19.3 | % | 17.8 | % | |||||||||||||||||||||
| Tampa-St. Petersburg, FL | 2 | 624 | 572 | 583 | 226 | 19.1 | % | 13,391 | 1,482 | 14,873 | 20.3 | % | 18.3 | % | |||||||||||||||||||||
| Raleigh-Durham, NC | 1 | 328 | 325 | 323 | 195 | 19.0 | % | 14,648 | 2,108 | 16,756 | 15.9 | % | 13.9 | % | |||||||||||||||||||||
| Wilmington, NC | 1 | 288 | 288 | 287 | 77 | 7.6 | % | 8,120 | 56 | 8,176 | 11.4 | % | 11.3 | % | |||||||||||||||||||||
| Total / Weighted Average | 13 | 4,176 | 3,945 | 4,001 | $ | 199 | 20.1 | % | $ | 11,927 | $ | 1,305 | $ | 13,232 | 20.0 | % | 18.0 | % | |||||||||||||||||
| Grand Total/Weighted Average | 41 | 13,281 | 8,091 | 8,129 | $ | 232 | 20.5 | % | $ | 14,413 | $ | 1,550 | $ | 15,963 | 19.3 | % | 17.5 | % | |||||||||||||||||
(a) See the definitions section for a full description of Rent Premium. The weighted average Rent Premium including the impact of concessions was $217.
(b)See the definitions section for a full description of Renovation Costs per Unit.
(c)See the definitions section for a full description of ROI. ROI-Interior costs using rent premium including the impact of concessions was 18.1%. ROI-Total costs using rent premium including the impact of concessions was 16.3%.
(d)As of April 2024, three new value add projects are now underway with one project in each of the following markets: Atlanta, Dallas, and Denver. Projects in Lexington and Oklahoma City are expected to begin in Q2 and Q3 2024.
(e)Renovations at one property in Atlanta, Georgia comprised of 496 units remain paused given current market conditions.
(f)We consider value add projects completed when over 85% of the property’s units to be renovated have been completed. We continue to renovate remaining unrenovated units as leases expire until we complete 100% of the property’s units.
(g)Includes Meadows, Haverford, Crestmont and Creekside that were formerly a part of the value add program but were sold in October 2022 (with respect to Meadows), February 2022 (with respect to Haverford) and December 2021 (with respect to Crestmont and Creekside).
21
INVESTMENT AND DEVELOPMENT ACTIVITY
Dollars in thousands except per unit amounts
2024 DISPOSITIONS | ||||||||||||||
| Property | Location | Units | Disposition date | Sale price | Price per unit | Average rent per unit at disposition | Gain on sale (loss on impairment) , net (a) | |||||||||||||||||||||||||||||||||||||
| Villas of Kingwood | Houston, TX | 330 | 2/13/24 | $ | 53,700 | $ | 163 | $ | 1,454 | $ | 62 | |||||||||||||||||||||||||||||||||
| Belmar Villas | Denver, CO | 318 | 2/13/24 | 74,300 | 234 | 1,606 | 46 | |||||||||||||||||||||||||||||||||||||
| Hearthstone at City Center | Denver, CO | 360 | 3/12/24 | 74,000 | 206 | 1,690 | 88 | |||||||||||||||||||||||||||||||||||||
| Villas at Huffmeister | Houston, TX | 294 | 3/25/24 | 44,250 | 151 | 1,557 | (415) | |||||||||||||||||||||||||||||||||||||
| Westmont Commons | Asheville, NC | 252 | 3/28/24 | 49,875 | 198 | 1,505 | 25,856 | |||||||||||||||||||||||||||||||||||||
| Total | 1,554 | $ | 296,125 | $ | 191 | $ | 1,567 | $ | 25,637 | |||||||||||||||||||||||||||||||||||
(a)During the three months ended December 31, 2023, we recognized an aggregate loss on impairment of $25,821 on the Villas at Kingwood, Belmar Villas, Hearthstone at City Center and Villas at Huffmeister, including $921 of prepayment gains on these dispositions.
ASSETS HELD FOR SALE AS OF MARCH 31, 2024 | ||||||||||||||
| Property | Location | Quarter Identified As Held For Sale | Units | Loss on Impairment | ||||||||||||||||||||||
| Reserve at Creekside (a) | Chattanooga, TN | Q4 2023 | 192 | $— | ||||||||||||||||||||||
| Tapestry Park | Birmingham, AL | Q1 2024 | 354 | (15,107) | ||||||||||||||||||||||
| Total | 546 | $(15,107) | ||||||||||||||||||||||||
(a)During the three months ended December 31, 2023, we recognized a loss on impairment on this property of $7,135.
REAL ESTATE UNDER DEVELOPMENT | ||||||||||||||
| Development | Destination at Arista (a) | Flatirons Apartments | ||||||||||||
| Location | Denver, Colorado | Denver, Colorado | ||||||||||||
| Planned Units | 325 | 296 | ||||||||||||
| Start Date | 3Q 2021 | 4Q 2022 | ||||||||||||
| Projected Initial Occupancy | 2Q 2023 | 4Q 2024 | ||||||||||||
| Projected Completion Date | 4Q 2023 | 4Q 2024 | ||||||||||||
| Projected Stabilization date | 1Q 2025 | 1Q 2026 | ||||||||||||
| Total Estimated Development Costs | $102,800 | $119,900 | ||||||||||||
| % of Development Costs Left to Fund | 0% | 36% | ||||||||||||
| Real Estate Under Development at March 31, 2024 | $32,659 | $76,679 | ||||||||||||
| % of Planned Units Delivered as of March 31, 2024 | 73.5% | 0% | ||||||||||||
Leased % as of April 23, 2024 (b) | 88.7% | N/A | ||||||||||||
Occupancy % as of April 23, 2024 (b) | 70.3% | N/A | ||||||||||||
(a)We will continue to classify this property as a development property since it is in lease-up and has not reached overall occupancy of 90%.
(b)Leased % and occupancy % are calculated using the leased or occupied units, as applicable, divided by the number of delivered units.
22
INVESTMENT AND DEVELOPMENT ACTIVITY - (CONTINUED)
INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES | ||||||||||||||
| Property | Location | Units | Estimated Delivery Date | Total Construction Budget | Total Project Debt | IRT Equity Interest in JV | Remaining Expected IRT Investment | Carrying Value of IRT’s Investment | ||||||||||||||||||||||||||||||||||||||||||
Metropolis at Innsbrook (a) | Richmond, VA | 402 | — | $ | 85,883 | $ | 64,000 | 84.8 | % | $ | — | $ | 17,363 | |||||||||||||||||||||||||||||||||||||
Views of Music City II / The Crockett (b) | Nashville, TN | 408 | — | 66,079 | 43,275 | 50.0 | % | — | 11,734 | |||||||||||||||||||||||||||||||||||||||||
| Lakeline Station | Austin, TX | 378 | Q4 2024 | 109,524 | 76,500 | 90.0 | % | — | 32,670 | |||||||||||||||||||||||||||||||||||||||||
| The Mustang | Dallas, TX | 275 | Q4 2024 | 109,583 | 79,447 | 85.0 | % | — | 27,720 | |||||||||||||||||||||||||||||||||||||||||
| Total | 1,463 | $ | 371,069 | $ | 263,222 | $ | — | $ | 89,487 | |||||||||||||||||||||||||||||||||||||||||
(a)Metropolis at Innsbrook is an operating property consisting of 402 units. We have a call option that gives us the right to buy the property upon the earlier of the date upon which the property achieves 90% occupancy or October 17, 2025. We also have a right to initiate a sale of the property after June 7, 2024.
(b)Views of Music City phase II is an operating property consisting of 209 total units. We have until October 1, 2024 to exercise our right of first offer on the Views of Music City II. The Crockett is an operating property consisting of 199 units. We have exercised our right of first offer on The Crockett, which permits us to acquire the property once we determine the fair market value. If we acquire The Crockett, we may use proceeds from the sale of a multifamily property in Birmingham, Alabama.
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DEBT SUMMARY AS OF MARCH 31, 2024
Dollars in thousands
| Amount | Weighted Average Contractual Rate (d) | Weighted Average Hedged Effective Rate (e) | Type | Weighted Average Maturity (in years) | ||||||||||||||||||||||||||||
| Debt: | ||||||||||||||||||||||||||||||||
Unsecured revolver (a) | $ | 108,978 | 6.6 | % | 4.8 | % | Floating | 1.8 | ||||||||||||||||||||||||
Unsecured term loans (b) | 600,000 | 6.5 | % | 4.4 | % | Floating | 3.3 | |||||||||||||||||||||||||
Secured credit facilities (c) | 585,635 | 4.2 | % | 4.4 | % | Fixed | 4.7 | |||||||||||||||||||||||||
| Mortgages | 952,396 | 3.8 | % | 4.0 | % | Fixed | 4.2 | |||||||||||||||||||||||||
| Total Principal | 2,247,009 | 4.8 | % | 4.2 | % | 3.9 | ||||||||||||||||||||||||||
| Loan premiums (discounts), net | 39,804 | |||||||||||||||||||||||||||||||
| Unamortized deferred financing costs | (9,715) | |||||||||||||||||||||||||||||||
| Total Consolidated Debt | 2,277,098 | |||||||||||||||||||||||||||||||
| Market Equity Capitalization, at period end | 3,726,224 | |||||||||||||||||||||||||||||||
| Total Capitalization | $ | 6,003,322 | ||||||||||||||||||||||||||||||
(a)Unsecured revolver total capacity is $500,000, of which $108,979 was drawn as of March 31, 2024. The maturity date of borrowings under the unsecured revolver is January 31, 2026.
(b)Consists of a (i) $200,000 unsecured term loan with a maturity date of May 18, 2026 and a (ii) $400,000 unsecured term loan with a maturity date of January 28, 2028.
(c)Consists of a (i) $509,386 secured credit facility, two tranches of which, in an aggregate principal amount of $468,918, have a maturity date of August 1, 2028 and the third tranche of which, in the principal amount of $40,468, has a maturity date of March 1, 2030 and a (ii) $76,248 secured credit facility with a maturity date of July 1, 2030.
(d)Represents the weighted average of the contractual interest rates in effect as of the three months ended March 31, 2024, without regard to any interest rate swaps or collars
(e)Represents the weighted average effective interest rates for the three months ended March 31, 2024, including the impact of interest rate swaps and collars, amortization of hedging costs, and deferred financing costs but excluding the impact of loan premium amortization, discount accretion, and interest capitalization.
(f)As of March 31, 2024, we maintained the below hedges that have effectively fixed a portion of our floating rates debt.
| Hedges: | Notional | Start | End | Swap Rate | Floor Rate | Cap Rate | ||||||||||||||||||||||||||||||||
| Collar | $ | 100,000 | 11/17/2017 | 11/17/2024 | — | 1.25 | % | 2.00 | % | |||||||||||||||||||||||||||||
| Swap | $ | 150,000 | 6/17/2021 | 6/17/2026 | 2.18 | % | — | — | ||||||||||||||||||||||||||||||
| Swap | $ | 150,000 | 5/17/2022 | 5/17/2027 | 0.99 | % | — | — | ||||||||||||||||||||||||||||||
| Swap | $ | 200,000 | 3/17/2023 | 3/17/2030 | 3.39 | % | — | — | ||||||||||||||||||||||||||||||
| Collar | $ | 100,000 | 1/17/2024 | 1/17/2028 | — | 1.50 | % | 2.50 | % | |||||||||||||||||||||||||||||
| Forward starting collar | $ | 100,000 | 11/17/2024 | 1/17/2028 | — | 1.50 | % | 2.50 | % | |||||||||||||||||||||||||||||
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DEBT MATURITY, DEBT COVENANT AND UNENCUMBERED ASSET STATS
AS OF MARCH 31, 2024
Dollars in thousands
Debt Covenant Summary (a)
| Requirement | Actual | Compliance | ||||||||||||||||||
| Consolidated leverage ratio | ≤ 60% | 32.0% | Yes | |||||||||||||||||
| Consolidated fixed charge coverage ratio | ≥ 1.5x | 2.49x | Yes | |||||||||||||||||
| Unsecured leverage ratio | ≤ 60% | 22.9% | Yes | |||||||||||||||||
(a)For a complete listing of all debt covenants along with definitions of each covenant calculation see the Fourth Amended, Restated and Consolidated Credit Agreement, which is filed as Exhibit 10.1 of our Form 8-K filed on July 27, 2022.
Encumbered & Unencumbered Statistics
Total Units (b) | % of Total | Gross Assets | % of Total | Q1 2024 NOI (b) | % of Total | |||||||||||||||||||||||||||||||||
| Unencumbered assets | 18,090 | 55.0 | % | $ | 3,561,045 | 53.4 | % | $ | 52,730 | 54.7 | % | |||||||||||||||||||||||||||
| Encumbered assets | 14,787 | 45.0 | % | 3,112,544 | 46.6 | % | 43,651 | 45.3 | % | |||||||||||||||||||||||||||||
| 32,877 | 100.0 | % | $ | 6,673,589 | 100.0 | % | $ | 96,381 | 100.0 | % | ||||||||||||||||||||||||||||
(b)Excludes our development projects (Destination at Arista and Flatirons Apartments). See the definitions at the end of this release.
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DEFINITIONS
Average Effective Monthly Rent per Unit
Average effective rent per unit represents the average of gross rent amounts, divided by the average occupancy (in units) for the period presented. We believe average effective rent is a helpful measurement in evaluating average pricing. This metric, when presented, reflects the average effective rent per month.
Average Occupancy
Average occupancy represents the average occupied units for the reporting period divided by the average of total units available for rent for the reporting period.
Development Property
A development property is a property that is either currently under development or is in lease-up prior to reaching overall occupancy of 90%.
EBITDA and Adjusted EBITDA
Each of EBITDA and Adjusted EBITDA is a non-GAAP financial measure. EBITDA is defined as net income before interest expense including amortization of deferred financing costs, income tax expense, and depreciation and amortization expenses. Adjusted EBITDA is EBITDA before certain other non-cash or non-operating gains or losses related to items such as loss on impairment (gain on sale) of real estate, debt extinguishments and acquisition related debt extinguishment expenses, casualty (gains) losses, merger and integration costs, income (loss) from investments in unconsolidated real estate entities, and restructuring costs. We consider each of EBITDA and Adjusted EBITDA to be an appropriate supplemental measure of performance because it eliminates interest, income taxes, depreciation and amortization, and other non-cash or non-operating gains and losses, which permits investors to view income from operations without these non-cash or non-operating items. Our calculation of Adjusted EBITDA differs from the methodology used for calculating Adjusted EBITDA by certain other REITs and, accordingly, our Adjusted EBITDA may not be comparable to Adjusted EBITDA reported by other REITs.
Funds From Operations (“FFO”) and Core Funds From Operations (“CFFO”)
We believe that FFO and CFFO, each of which is a non-GAAP financial measure, are additional appropriate measures of the operating performance of a REIT and us in particular. We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), as net income or loss allocated to common shares (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, loss on impairment (gain on sale) of real estate and the cumulative effect of changes in accounting principles. While our calculation of FFO is in accordance with NAREIT’s definition, it may differ from the methodology for calculating FFO utilized by other REITs and, accordingly, may not be comparable to FFO computations of such other REITs.
CFFO is a computation made by analysts and investors to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations, including depreciation and amortization of other items not included in FFO, and other non-cash or non-operating gains or losses related to items such as casualty (gains) losses, loan premium accretion and discount amortization, debt extinguishment costs, merger and integration costs, and restructuring costs from the determination of FFO.
Our calculation of CFFO may differ from the methodology used for calculating CFFO by other REITs and, accordingly, our CFFO may not be comparable to CFFO reported by other REITs. Our management utilizes FFO and CFFO as measures of our operating performance, and believe they are also useful to investors, because they facilitate an understanding of our operating performance after adjustment for certain non-cash or non-recurring items that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and our operating performance between periods. Furthermore, although FFO, CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we
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believe that FFO and CFFO may provide us and our investors with an additional useful measure to compare our financial performance to certain other REITs. Neither FFO nor CFFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and CFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Accordingly, FFO and CFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization and capital improvements. Neither FFO nor CFFO should be considered as an alternative to net income or any other GAAP measurement as an indicator of our operating performance or as an alternative to cash flow from operating, investing, and financing activities as a measure of our liquidity.
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 consolidated debt less cash and cash equivalents and loan premiums and discounts. The following table provides a reconciliation of total consolidated debt to net debt (dollars in thousands).
| As of | ||||||||||||||||||||||||||||||||
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | ||||||||||||||||||||||||||||
| Total debt | $ | 2,277,098 | $ | 2,549,409 | $ | 2,715,710 | $ | 2,650,805 | $ | 2,628,632 | ||||||||||||||||||||||
| Less: cash and cash equivalents | (21,275) | (22,852) | (17,216) | (14,349) | (12,448) | |||||||||||||||||||||||||||
| Less: loan discounts and premiums, net | (39,804) | (44,483) | (50,772) | (53,520) | (56,256) | |||||||||||||||||||||||||||
| Total net debt | $ | 2,216,019 | $ | 2,482,074 | $ | 2,647,722 | $ | 2,582,936 | $ | 2,559,928 | ||||||||||||||||||||||
We present net debt and net debt to Adjusted EBITDA because management believes it is a useful measure of our credit position and progress toward reducing leverage. The calculation is limited because we may not always be able to use cash to repay debt on a dollar for dollar basis.
Net Operating Income
We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding interest expense, depreciation and amortization, casualty related costs and gains, property management expenses, general and administrative expenses, net gains on sale of assets, merger and integration costs, and restructuring costs.
Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same-store and non same-store basis because NOI measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of our financial performance.
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A reconciliation from GAAP net income (loss) to NOI is provided below (dollars in thousands):
| For the Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | |||||||||||||||||||||||||
| Net income (loss) | $ | 17,961 | $ | (41,654) | $ | 3,986 | $ | 10,988 | $ | 8,872 | |||||||||||||||||||
| Other revenue | (203) | (316) | (232) | (354) | (239) | ||||||||||||||||||||||||
| Property management expenses | 7,499 | 6,660 | 7,232 | 6,818 | 6,371 | ||||||||||||||||||||||||
| General and administrative expenses | 8,381 | 5,043 | 3,660 | 5,910 | 8,154 | ||||||||||||||||||||||||
| Depreciation and amortization expense | 53,721 | 55,902 | 55,546 | 53,984 | 53,536 | ||||||||||||||||||||||||
| Casualty losses | 2,301 | 59 | 35 | 680 | 151 | ||||||||||||||||||||||||
| Interest expense | 20,603 | 23,537 | 22,033 | 22,227 | 22,124 | ||||||||||||||||||||||||
| (Gain on sale) loss on impairment of real estate assets, net | (10,530) | 56,263 | 11,268 | — | (985) | ||||||||||||||||||||||||
| (Gain) loss on extinguishment of debt | (203) | 124 | — | — | — | ||||||||||||||||||||||||
| Other loss (income), net | 1 | 79 | 369 | 72 | (93) | ||||||||||||||||||||||||
| Loss from investments in unconsolidated real estate entities | 829 | 1,330 | 1,178 | 1,205 | 776 | ||||||||||||||||||||||||
| Restructuring costs | — | — | — | — | 3,213 | ||||||||||||||||||||||||
| NOI | $ | 100,360 | $ | 107,027 | $ | 105,075 | $ | 101,530 | $ | 101,880 | |||||||||||||||||||
| Less: Non same-store portfolio NOI | 5,989 | 9,863 | 10,123 | 9,155 | 9,743 | ||||||||||||||||||||||||
| Same-store portfolio NOI | $ | 94,371 | $ | 97,164 | $ | 94,952 | $ | 92,375 | $ | 92,137 | |||||||||||||||||||
Non Same-Store Properties and Non Same-Store Portfolio
Properties that did not meet the definition of a same-store property as of the beginning of the previous year.
Same-Store Properties and Same-Store Portfolio
We review our same-store portfolio at the beginning of each calendar year. Properties are added into the same-store portfolio if they were owned and not a development property at the beginning of the previous year. Properties that are held for sale or have been sold are excluded from the same-store portfolio.
Rent Premium on Value Add Renovations
The rent premium reflects the per unit per month difference between the rental rate on the renovated unit excluding the impact of upfront concessions, if any, and the market rent for an unrenovated unit as of the date presented, as determined by management consistent with its customary rent-setting and evaluation procedures. We believe excluding the impact of upfront concessions from our rental rates when comparing to the market rental rates for unrenovated units makes the comparison most relevant and the resulting premium provides management with an indicator of the increased rent generated by the unit renovation.
Renovation Costs per Unit
Renovation costs per unit includes all costs to renovate the interior units and make certain exterior renovations, including clubhouses and amenities. Interior costs per unit are based on units leased. Exterior costs per unit are based on total units at the community. Excludes overhead costs to support and manage the value add program as those costs relate to the entire program and cannot be allocated to individual projects.
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Return on Investment (“ROI”) on Value Add Renovations
ROI is calculated using the Rent Premium per unit per month, multiplied by 12, divided by the interior renovation costs per unit or the total renovation costs, as applicable. We use ROI on value add renovation projects to measure the profitability of a renovation project relative to other projects or relative to other uses of our capital.
Total Gross Assets
Total Gross Assets equals total assets plus accumulated depreciation and accumulated amortization, including fully depreciated or amortized real estate and real estate related assets. The following table provides a reconciliation of total assets to total gross assets (dollars in thousands).
| As of | ||||||||||||||||||||||||||||||||
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | ||||||||||||||||||||||||||||
| Total assets | $ | 5,972,848 | $ | 6,280,175 | $ | 6,577,790 | $ | 6,517,400 | $ | 6,493,747 | ||||||||||||||||||||||
Plus: accumulated depreciation (a) | 630,743 | 606,404 | 570,966 | 523,446 | 475,001 | |||||||||||||||||||||||||||
| Plus: accumulated amortization | 69,998 | 73,975 | 76,691 | 76,558 | 76,558 | |||||||||||||||||||||||||||
| Total gross assets | $ | 6,673,589 | $ | 6,960,554 | $ | 7,225,447 | $ | 7,117,404 | $ | 7,045,306 | ||||||||||||||||||||||
(a)Includes accumulated depreciation associated with real estate held for sale, as applicable.
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