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IRT(IRT) - 2021 Q2 - Quarterly Report
2021-07-26 20:17
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the quarterly period ended June 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36041 INDEPENDENCE REALTY TRUST, INC. (Exact Name of Registrant as Specified in Its Charter) FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (State or Other Jurisdiction of Incorpo ...
IRT(IRT) - 2021 Q1 - Quarterly Report
2021-04-30 20:30
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36041 INDEPENDENCE REALTY TRUST, INC. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorp ...
IRT(IRT) - 2021 Q1 - Earnings Call Presentation
2021-04-29 18:56
dence EARNINGS RELEASE & SUPPLEMENTAL INFORMATION Q1 2021 Talison Row at Daniel Island, South Caro NYSE: IRT WWW.IRTLIVING.COM TABLE OF CONTENTS Company Information 3 Forward-Looking Statements 4 Earnings Release Text 5 Financial & Operating Highlights 11 Balance Sheets 12 Statements of Operations, FFO & CORE FFO Trailing Five Quarters 13 Three Months Ended March 31, 2021 and 2020 14 Adjusted EBITDA Reconciliations and Coverage Ratio Trailing Five Quarters 15 Same-Store Portfolio Net Operating Income Traili ...
IRT(IRT) - 2021 Q1 - Earnings Call Transcript
2021-04-29 18:29
Financial Data and Key Metrics Changes - Net income available to common shareholders was $1.1 million, up from a net loss of $372,000 in Q1 2020 [13] - Core FFO grew to $18 million, up 23.5% from $14.6 million in Q1 2020, with core FFO per share at $0.18, a 12.5% increase from $0.15 per share in Q1 2020 [13] - Same store NOI increased by 5.3%, driven by a 5.6% revenue growth [14] - Average effective monthly rent per unit grew by 2.9% in the quarter [6] - Total portfolio average occupancy improved to 96%, a 330 basis point increase compared to April of the previous year [6] Business Line Data and Key Metrics Changes - Same store average occupancy increased to 95.3%, a 260 basis point increase year-over-year [6] - New lease rates increased by 6.8% and renewals were up 4.8% during Q1, resulting in a combined lease over lease rental rate increase of 5.9% [10] - In the second quarter, new leases increased by 9.6% and renewed leases were up 3.7%, with a blended lease over lease rental rate increase of 4.6% [10] Market Data and Key Metrics Changes - The company is seeing a 6% to 8% inflow from New York, New Jersey, and Pennsylvania markets into its Carolina properties [25] - The Dallas property acquisition is in a strong growth area with three other assets nearby, while the Charlotte property is well-located with minimal future competition [32] Company Strategy and Development Direction - The company is focusing on capital recycling through acquisitions and divestitures, with two new construction communities under contract for approximately $140 million [12] - The value add program has completed renovations on 3,861 units since its inception, achieving a weighted average return on investment of 18.5% [7] - The company is exploring joint venture relationships for new multifamily development in core non-gateway markets, particularly in the Southeast and Sunbelt region [8] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about growth potential due to favorable demand trends, vaccine distribution, and a healthier economic outlook [5] - The company raised its 2021 guidance for NOI growth from 2.5% to a range of 4.1% to 5% [6] - Management expressed caution regarding the ongoing eviction moratorium and its potential impact on rent collections [41] Other Important Information - The company declared a quarterly cash dividend of $0.12 per share, representing a payout ratio of 71% on $0.17 of AFFO during Q1 2021 [16] - Liquidity position as of March 31 was $206 million, including $8.7 million of unrestricted cash [16] Q&A Session Summary Question: Progress on joint ventures and preferred equity investments - The company has entered into three letters of intent for new construction communities, with an appetite to limit investment to $100 million [21][22] Question: In-migration trends and market observations - The company has observed a consistent inflow from Northeastern states into its Carolina properties, with 6% to 8% of new leases coming from these areas [25] Question: Details on preferred equity development joint ventures - The three deals are located outside Richmond, in Austin, Texas, and in Nashville, Tennessee, with developers contributing land and equity [28][30] Question: Ability to push rents and market strength - The company is seeing better pricing on new leases due to strong demand and the value add program, with expectations to continue driving rates while maintaining occupancy [36] Question: Guidance increase and surprises in 2021 - The increase in guidance reflects better-than-expected rental rate growth and lower bad debt expense, with management remaining cautious about the ongoing eviction moratorium [41] Question: Cap rate expectations for acquisitions - The company is targeting acquisitions at a blended stabilized economic cap rate of 4.5% for new construction properties [12][32]
IRT(IRT) - 2020 Q4 - Annual Report
2021-02-18 21:16
Part I [Business](index=4&type=section&id=Item%201.%20Business) The company is a self-managed REIT owning 56 multifamily properties with 15,667 units in non-gateway U.S. markets, focusing on value-add initiatives Portfolio Overview as of December 31, 2020 | Metric | Value | | :--- | :--- | | Number of Properties | 56 | | Number of Units | 15,667 | | Geographic Footprint | Georgia, North Carolina, Tennessee, Kentucky, Ohio, Oklahoma, Indiana, Texas, Florida, South Carolina, Missouri, and Alabama | - The company's investment strategy focuses on **non-gateway cities** with strong apartment demand, aiming to acquire properties with **operational upside**, improve them through **capital expenditures**, and selectively dispose of assets that no longer align with the long-term strategy[20](index=20&type=chunk)[21](index=21&type=chunk) 2020 Key Operational and Transactional Highlights | Activity | Details | | :--- | :--- | | **COVID-19 Response** | Increased weighted average occupancy to 95.0% from 92.5% in 2019. Implemented 276 deferred payment plans for residents, deferring over $0.5 million in rent | | **Value Add Initiative** | Incurred $13.1 million in renovation costs on 3,719 units, achieving a 15.9% return on total renovation costs | | **Acquisitions** | Acquired 2 communities (672 units) for $145.2 million in Dallas, TX, and Huntsville, AL | | **Dispositions** | Disposed of 3 communities (559 units) for $59.7 million, exiting Chattanooga, TN, and Baton Rouge, LA markets | | **Capital Raising** | Entered forward equity sales for 10,350,000 shares and established a $150.0 million ATM Program | [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from the COVID-19 pandemic, market concentration, debt financing, regulatory compliance, and maintaining REIT qualification - The COVID-19 pandemic poses a **material risk**, potentially affecting residents' ability to pay rent, disrupting leasing activities, and straining business continuity. The **CDC's eviction moratorium** further restricts the company's ability to enforce rental obligations[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - The company's portfolio is **concentrated** in the multifamily apartment sector and geographically in the **Southeastern United States**, making it vulnerable to downturns in this specific asset class or regional economic weakness[73](index=73&type=chunk)[74](index=74&type=chunk) - Significant financial risks include reliance on **debt financing**, potential unavailability of capital on favorable terms, and exposure to **rising interest rates** on its variable-rate debt. As of December 31, 2020, **$484.8 million** of its total debt bore interest at variable rates[59](index=59&type=chunk)[132](index=132&type=chunk)[142](index=142&type=chunk) - Failure to maintain **REIT qualification** would subject the company to **corporate income tax**, reducing cash available for distributions. Compliance requires distributing at least **90% of REIT taxable income** annually, which may necessitate borrowing funds or forgoing other attractive investment opportunities[169](index=169&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[217](index=217&type=chunk) [Properties](index=36&type=section&id=Item%202.%20Properties) As of December 31, 2020, the company's portfolio comprised 56 multifamily properties with 15,667 units, primarily in the Southeastern U.S Portfolio Summary as of December 31, 2020 | Metric | Total | | :--- | :--- | | **Property Count** | 56 | | **Units** | 15,667 | | **Gross Cost (in thousands)** | $1,916,770 | | **Net Book Value (in thousands)** | $1,708,152 | | **Period End Occupancy** | 95.3% | | **Average Occupancy (Q4)** | 95.0% | | **Avg. Effective Rent/Unit (Q4)** | $1,136 | [Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, which management expects will not materially impact its financial position or operations - The company is subject to **ordinary course legal proceedings**, which are generally covered by insurance and are **not expected to have a material adverse financial impact**[221](index=221&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[222](index=222&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE under 'IRT', with a quarterly dividend of $0.12 per share, and no issuer equity purchases in 2020 - The company's common stock is listed on the **NYSE** under the symbol "**IRT**"[225](index=225&type=chunk) - The current quarterly dividend rate is **$0.12 per common share**[226](index=226&type=chunk) - In 2020, the company issued **196,974 shares** of common stock to settle exchanges of an equal number of IROP limited partnership units[230](index=230&type=chunk) [Selected Financial Data](index=39&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected financial data shows consistent revenue growth to $211.9 million in 2020, volatile net income, and a reduced cash distribution per share to $0.54 in 2020 Selected Financial Data (2018-2020) | (in thousands, except per share data) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Operating Data** | | | | | Total revenue | $211,906 | $203,223 | $191,232 | | Net income | $14,877 | $46,354 | $26,610 | | Diluted EPS | $0.16 | $0.51 | $0.30 | | **Balance Sheet Data (End of Period)** | | | | | Investments in real estate, net | $1,708,152 | $1,637,930 | $1,548,153 | | Total assets | $1,734,897 | $1,664,106 | $1,659,336 | | Total indebtedness, net | $945,686 | $985,572 | $985,488 | | **Other Data** | | | | | Property portfolio occupancy | 95.3% | 92.5% | 92.5% | | Cash distributions declared per share | $0.5400 | $0.7200 | $0.7200 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2020, total revenue grew 4.2% to $211.9 million, but net income decreased to $14.9 million due to lower gains on asset sales, while CFFO per share increased to $0.80 [Results of Operations](index=41&type=section&id=Results%20of%20Operations) In 2020, total revenue increased 4.2% to $211.9 million, but net income decreased by $31.5 million to $14.9 million due to lower gains on asset sales Consolidated Results Comparison (2020 vs. 2019) | (in thousands) | 2020 | 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $211,906 | $203,223 | $8,683 | 4.3% | | **Property Operating Expenses** | $82,978 | $79,568 | $3,410 | 4.3% | | **Net Operating Income** | $128,189 | $123,052 | $5,137 | 4.2% | | **Gain on sale of real estate** | $7,554 | $35,211 | ($27,657) | -78.5% | | **Net Income** | $14,877 | $46,354 | ($31,477) | -67.9% | Same Store Portfolio Performance (2020 vs. 2019, in thousands) | Metric | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | **Rental & Other Property Revenue** | $189,214 | $182,599 | 3.6% | | **Total Operating Expenses** | $74,201 | $71,005 | 4.5% | | **Net Operating Income (NOI)** | $115,013 | $111,594 | 3.1% | | **Average Occupancy** | 93.6% | 93.4% | 0.2% | [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) The company uses FFO and CFFO as non-GAAP measures, with 2020 FFO at $67.7 million ($0.72 per share) and CFFO at $75.9 million ($0.80 per share) FFO and Core FFO Reconciliation (2018-2020) | (in thousands, except per share) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Net income** | $14,877 | $46,354 | $26,610 | | Real estate depreciation & amortization | $60,352 | $52,482 | $45,067 | | (Gain on sale) of real estate assets, net | ($7,554) | ($42,628) | ($11,561) | | **Funds From Operations (FFO)** | **$67,675** | **$56,208** | **$60,116** | | FFO per share | $0.72 | $0.62 | $0.68 | | **Core Funds From Operations (CFFO)** | **$75,863** | **$68,497** | **$65,083** | | CFFO per share | $0.80 | $0.76 | $0.74 | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is sourced from operations, credit facilities, property sales, and equity issuances, with 2020 net cash from operations at $75.0 million and financing activities at $48.8 million Summary of Cash Flows (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | **Operating Activities** | $74,959 | $75,001 | | **Investing Activities** | ($124,540) | ($106,396) | | **Financing Activities** | $48,763 | $29,783 | - Key financing activities in 2020 included issuing **10,350,000 shares** of common stock under forward sale agreements for approximately **$148.8 million** in proceeds and establishing a new **$150.0 million ATM program**[266](index=266&type=chunk) [Capitalization](index=46&type=section&id=Capitalization) As of December 31, 2020, total debt was $945.7 million with a 2.7% weighted average interest rate and 3.1-year maturity, comprising unsecured facilities and fixed-rate mortgages Debt Summary as of December 31, 2020 | Debt Type | Outstanding Principal (in thousands) | Type | Weighted Avg. Rate | Weighted Avg. Maturity (years) | | :--- | :--- | :--- | :--- | :--- | | Unsecured credit facility | $184,802 | Floating | 1.6% | 2.4 | | Unsecured term loans | $300,000 | Floating | 1.5% | 3.3 | | Mortgages | $465,092 | Fixed | 3.9% | 3.2 | | **Total Debt** | **$949,894** | | **2.7%** | **3.1** | [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk from its $484.8 million variable-rate debt, partially mitigated by derivative instruments, with a 100-basis point rate increase impacting annual interest expense by $0.8 million - The company is exposed to interest rate risk on **$484.8 million** of floating-rate debt as of year-end 2020. This risk is partially managed through interest rate swaps and collars[295](index=295&type=chunk) Interest Rate Sensitivity Analysis (as of Dec 31, 2020) | Scenario | Impact on Annual Interest Expense (in thousands) | | :--- | :--- | | 100 Basis Point Increase | $848 | | 100 Basis Point Decrease | ($848) | [Financial Statements and Supplementary Data](index=51&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2020, with KPMG LLP issuing an unqualified opinion and identifying real estate impairment evaluation as a critical audit matter - The financial statements were audited by **KPMG LLP**, which issued an **unqualified opinion**[304](index=304&type=chunk)[305](index=305&type=chunk) - The auditor identified the evaluation of real estate assets for potential impairment as a **critical audit matter** due to the high degree of subjective and complex judgment required[309](index=309&type=chunk)[310](index=310&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Investments in real estate, net | $1,708,152 | $1,637,930 | | Total Assets | $1,734,897 | $1,664,106 | | Indebtedness, net | $945,686 | $985,572 | | Total Liabilities | $1,022,126 | $1,044,349 | | Total Equity | $712,771 | $619,757 | Consolidated Statement of Operations Highlights (in thousands) | Account | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Total revenue | $211,906 | $203,223 | $191,232 | | Total expenses | $168,095 | $152,854 | $139,410 | | Net income | $14,877 | $46,354 | $26,610 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=79&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[452](index=452&type=chunk) [Controls and Procedures](index=79&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that its disclosure controls and internal control over financial reporting were effective as of December 31, 2020 - Management concluded that both disclosure controls and procedures and internal control over financial reporting were **effective** as of December 31, 2020[454](index=454&type=chunk)[456](index=456&type=chunk) [Other Information](index=79&type=section&id=Item%209B.%20Other%20Information) The company reports no other information under this item - None[459](index=459&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=79&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2021 proxy statement - The information required by this item will be set forth in the definitive proxy statement for the 2021 annual meeting of stockholders and is incorporated by reference[461](index=461&type=chunk) [Executive Compensation](index=79&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2021 proxy statement - The information required by this item will be set forth in the definitive proxy statement for the 2021 annual meeting of stockholders and is incorporated by reference[462](index=462&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=80&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and related stockholder matters is incorporated by reference from the 2021 proxy statement - The information required by this item will be set forth in the definitive proxy statement for the 2021 annual meeting of stockholders and is incorporated by reference[463](index=463&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=80&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2021 proxy statement - The information required by this item will be set forth in the definitive proxy statement for the 2021 annual meeting of stockholders and is incorporated by reference[464](index=464&type=chunk) [Principal Accountant Fees and Services](index=80&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 2021 proxy statement - The information required by this item will be set forth in the definitive proxy statement for the 2021 annual meeting of stockholders and is incorporated by reference[465](index=465&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=80&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the annual report, including consolidated financial statements and material contracts - This section contains the index of all financial statements, schedules, and exhibits filed with the annual report[467](index=467&type=chunk)[470](index=470&type=chunk) [Form 10-K Summary](index=83&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not provide a Form 10-K summary - None[480](index=480&type=chunk)
IRT(IRT) - 2020 Q4 - Earnings Call Transcript
2021-02-11 20:33
Independence Realty Trust, Inc. (NYSE:IRT) Q4 2020 Earnings Conference Call February 11, 2021 9:00 AM ET Company Participants Lauren Torres - IR Scott Schaeffer - Chairman & CEO James Sebra - CFO & Treasurer Farrell Ender - President, IRT Conference Call Participants Neil Malkin - Capital One Securities Austin Wurschmidt - KeyBanc Nick Joseph - Citi Amanda Sweitzer - Baird John Massocca - Ladenburg Thalmann Operator Thank you for standing by, and welcome to the Independence Realty Trust Fourth Quarter and F ...
IRT(IRT) - 2020 Q3 - Quarterly Report
2020-10-29 20:16
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36041 INDEPENDENCE REALTY TRUST, INC. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of In ...
IRT(IRT) - 2020 Q3 - Earnings Call Transcript
2020-10-29 16:01
Independence Realty Trust, Inc. (NYSE:IRT) Q3 2020 Earnings Conference Call October 29, 2020 9:00 AM ET Company Participants Lauren Torres - IR Scott Schaeffer - CEO James Sebra - CFO Farrell Ender - President Conference Call Participants Operator Good morning, ladies and gentlemen, and welcome to the Q3 2020 Independence Realty Trust, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at t ...
Independence Realty Trust (IRT) Investor Presentation - Slideshow
2020-09-01 13:13
Independence Realty Trust INVESTOR PRESENTATION September 2020 Talison Row at Daniel Island, South Carolina IRT Overview 1 Table of Contents | --- | --- | |------------------------------------------------------------|-----------| | Enterprise Snapshot | 2 | | Addressing the Current Environment | 3 – 5 | | Highlighting IRT's Competitive Advantage | 6 – 14 | | Value Add Program / Case Studies | 15 – 20 | | Capital Structure | 21 | | ESG Commitment | 22 | | Conclusion | 23 | | Appendix | | | Market Statistics ...
IRT(IRT) - 2020 Q2 - Quarterly Report
2020-07-30 21:53
[PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements and notes detail financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased by June 30, 2020, driven by real estate investments and derivative liabilities, while equity slightly decreased Total Assets and Liabilities (in thousands) | Metric | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Total Assets | $1,708,912 | $1,664,106 | | Investments in real estate, net | $1,676,424 | $1,637,930 | | Total Liabilities | $1,092,526 | $1,044,349 | | Derivative liabilities | $34,614 | $7,769 | | Total Equity | $616,386 | $619,757 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income significantly decreased for both periods in 2020 due to no asset sale gains and higher depreciation, despite modest revenue growth Consolidated Statements of Operations (Three Months Ended June 30, in thousands) | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Rental and other property revenue | $52,087 | $50,848 | | Total revenue | $52,268 | $50,956 | | Depreciation and amortization expense | $15,231 | $12,721 | | Gain (loss) on sale of assets | $0 | $12,142 | | Net income (loss) | $799 | $14,856 | | Basic EPS | $0.01 | $0.16 | | Diluted EPS | $0.01 | $0.16 | Consolidated Statements of Operations (Six Months Ended June 30, in thousands) | Metric | Six Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2019 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Rental and other property revenue | $103,243 | $100,313 | | Total revenue | $103,618 | $100,496 | | Depreciation and amortization expense | $30,059 | $25,168 |\ | Gain (loss) on sale of assets | $0 | $12,142 | | Net income (loss) | $425 | $17,422 | | Basic EPS | $0.00 | $0.19 | | Diluted EPS | $0.00 | $0.19 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company shifted from comprehensive income in 2019 to a comprehensive loss in 2020, mainly from negative changes in interest rate hedge fair value Comprehensive Income (Loss) (Three Months Ended June 30, in thousands) | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Net income (loss) | $799 | $14,856 | | Change in fair value of interest rate hedges | $(1,973) | $(10,023) | | Total other comprehensive income (loss) | $(3,378) | $(9,556) | | Comprehensive income (loss) | $(2,560) | $5,248 | Comprehensive Income (Loss) (Six Months Ended June 30, in thousands) | Metric | Six Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2019 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- |\ | Net income (loss) | $425 | $17,422 | | Change in fair value of interest rate hedges | $(25,395) | $(14,950) | | Total other comprehensive income (loss) | $(27,218) | $(13,924) | | Comprehensive income (loss) | $(26,583) | $3,464 | [Condensed Consolidated Statements of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Equity statements detail net income, other comprehensive income, stock compensation, common share issuances, and dividends, resulting in a slight total equity decrease Total Equity (in thousands) | Metric | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Equity (Balance) | $616,386 | $619,757 | - Issuance of common shares, net, contributed **$49,764 thousand** to equity during the six months ended June 30, 2020[17](index=17&type=chunk) - Common dividends declared totaled **$17,148 thousand** (Q1) and **$11,329 thousand** (Q2) for the six months ended June 30, 2020[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flows remained stable, investing outflows increased due to real estate, and financing shifted to inflows from credit facilities and stock issuance Cash Flow Summary (Six Months Ended June 30, in thousands) | Metric | Six Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2019 (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $34,339 | $36,100 | | Cash flow used in investing activities | $(67,688) | $(28,152) | | Cash flow provided by (used in) financing activities | $37,077 | $(5,153) | | Acquisition of real estate properties | $(50,618) | $(28,981) | | Proceeds from issuance of common stock | $49,732 | $6,032 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's organization, accounting policies, financial instrument valuations, and COVID-19 pandemic impacts [NOTE 1: Organization](index=8&type=section&id=NOTE%201:%20Organization) Independence Realty Trust, Inc. is a self-managed Maryland REIT focused on acquiring and managing multifamily apartment communities in non-gateway U.S. markets - Independence Realty Trust, Inc. (IRT) is a self-administered and self-managed Maryland real estate investment trust (REIT)[21](index=21&type=chunk) - IRT's primary purpose is to acquire, own, operate, improve, and manage multifamily apartment communities in non-gateway U.S. markets[21](index=21&type=chunk) - As of June 30, 2020, IRT owned and operated **58 properties**, containing **15,805 units**[21](index=21&type=chunk) [NOTE 2: Summary of Significant Accounting Policies](index=8&type=section&id=NOTE%202:%20Summary%20of%20Significant%20Accounting%20Policies) This note details accounting principles, including GAAP, consolidation, estimates, real estate, revenue recognition, derivatives, fair value, and REIT tax status, plus recent pronouncement adoptions - The company offered deferred rent payment plans to residents impacted by COVID-19, resulting in **$413 thousand** in deferred rents receivable and a **$723 thousand** provision for bad debts as of June 30, 2020[38](index=38&type=chunk)[39](index=39&type=chunk) - The company uses derivative financial instruments to hedge interest rate risk, measuring them at fair value and reporting changes in effective portions in other comprehensive income[42](index=42&type=chunk)[43](index=43&type=chunk) - The company has elected to be taxed as a REIT since **2011**, generally exempting it from federal income tax on distributed taxable income[52](index=52&type=chunk)[53](index=53&type=chunk) - Adopted FASB ASC Topic **842** (Leases) on January **1**, **2019**, recognizing a **$308 thousand** right-of-use asset and lease liability for corporate office leases[55](index=55&type=chunk) - Adopted FASB ASC Topic **326** (Financial Instruments – Credit Losses) on January **1**, **2020**, with no material effect on consolidated financial statements[56](index=56&type=chunk) - Elected to apply hedge accounting expedients under FASB ASC Topic **848** (Reference Rate Reform) in Q1 **2020** to preserve derivative presentation consistent with past practices[58](index=58&type=chunk) [NOTE 3: Investments in Real Estate](index=13&type=section&id=NOTE%203:%20Investments%20in%20Real%20Estate) Net investments in real estate increased to **$1,676,424 thousand** by June 30, 2020, including a **$51,204 thousand** property acquisition in McKinney, TX Investments in Real Estate (in thousands) | Metric | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Total investment in real estate, at cost | $1,864,182 | $1,796,365 | | Investments in real estate, net | $1,676,424 | $1,637,930 | - Acquired a **251-unit** property in McKinney, TX, for **$51,204 thousand** in February **2020**[60](index=60&type=chunk) [NOTE 4: Indebtedness](index=14&type=section&id=NOTE%204:%20Indebtedness) Total debt increased to **$1,008,911 thousand** by June 30, 2020, with a lower weighted average interest rate, and the company complied with all covenants Debt Summary (June 30, 2020, in thousands) | Debt Type | Outstanding Principal (June 30, 2020, in thousands) | Carrying Amount (June 30, 2020, in thousands) | Weighted Average Rate (June 30, 2020) | | :---------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------ | | Unsecured credit facility | $212,802 | $210,765 | 1.6% | | Unsecured term loans | $300,000 | $298,588 | 1.5% | | Mortgages | $501,041 | $499,558 | 3.9% | | Total Debt | $1,013,843 | $1,008,911 | 2.7% | Debt Summary (Dec 31, 2019, in thousands) | Debt Type | Outstanding Principal (Dec 31, 2019, in thousands) | Carrying Amount (Dec 31, 2019, in thousands) | Weighted Average Rate (Dec 31, 2019) | | :---------------------- | :------------------------------------------ | :------------------------------------------ | :----------------------------------- | | Unsecured credit facility | $186,302 | $183,966 | 3.2% | | Unsecured term loans | $300,000 | $298,418 | 3.1% | | Mortgages | $504,876 | $503,188 | 3.9% | | Total Debt | $991,178 | $985,572 | 3.5% | - On July **9**, **2020**, the company drew down **$32,117 thousand** on its unsecured credit facility to extinguish property mortgages with a weighted-average rate of **3.9%**, leveraging the credit facility's **1.6%** interest rate[63](index=63&type=chunk) [NOTE 5: Derivative Financial Instruments](index=15&type=section&id=NOTE%205:%20Derivative%20Financial%20Instruments) Derivative liabilities significantly increased to **$34,614 thousand** by June 30, 2020, due to interest rate collars and a new forward interest rate swap Derivative Financial Instruments (in thousands) | Derivative Type | Notional (June 30, 2020, in thousands) | Fair Value of Liabilities (June 30, 2020, in thousands) | Fair Value of Liabilities (Dec 31, 2019, in thousands) | | :---------------------- | :------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------ | | Interest rate swap | $150,000 | $1,421 | $0 | | Interest rate collars | $250,000 | $15,776 | $4,330 | | Forward interest rate swaps | $0 | $17,417 | $3,439 | | Total | $400,000 | $34,614 | $7,769 | - On March **2**, **2020**, the company entered into a forward-starting interest rate swap with a notional value of **$150,000 thousand** and a strike rate of **0.985%**, effective May **17**, **2022**[66](index=66&type=chunk) - Realized losses of **$1,244 thousand** from interest rate swaps and collars were reclassified to earnings within interest expense for the six months ended June **30**, **2020**[68](index=68&type=chunk) [NOTE 6: Stockholders' Equity and Noncontrolling Interests](index=15&type=section&id=NOTE%206:%20Stockholders'%20Equity%20and%20Noncontrolling%20Interests) The company declared common stock dividends and completed a common share offering via forward sale agreements, settling **$50 million** by March **31**, **2020** - Declared common stock dividends of **$0.18** per share on March **16**, **2020**, and **$0.12** per share on June **15**, **2020**[69](index=69&type=chunk) - Entered into forward sale agreements for **10,350,000 shares** of common stock at **$14.688** per share[71](index=71&type=chunk) - Settled **$50,000 thousand** under forward sale agreements by issuing **3,406,000 shares** by March **31**, **2020**[73](index=73&type=chunk) - **6,944,000 shares** remain to be settled under forward sale agreements, expected to provide an additional **$99,790 thousand**[73](index=73&type=chunk) - Holders of IROP units exchanged **82,357 units** for common stock, with **789,134** IROP units remaining outstanding[75](index=75&type=chunk) [NOTE 7: Equity Compensation Plans](index=16&type=section&id=NOTE%207:%20Equity%20Compensation%20Plans) The Long Term Incentive Plan authorizes various equity awards, with **2020** grants totaling over **$5.4 million** in fair value, including recognized stock-based compensation - The Long Term Incentive Plan authorizes the grant of restricted shares, PSUs, RSUs, and other awards, with **4,300,000 shares** of common stock issuable[77](index=77&type=chunk) - In **2020**, awards included **71,604** restricted stock awards (**$993 thousand**), **62,483** restricted stock awards (**$930 thousand**), **67,381** RSUs (**$935 thousand**), **202,145** PSUs (**$2,379 thousand**), **17,804** restricted stock awards (**$144 thousand**), and **39,685** common shares (**$357 thousand**)[79](index=79&type=chunk)[81](index=81&type=chunk) - Stock-based compensation expense of **$1,667 thousand** was immediately recognized for retirement-eligible employees during the three months ended March **31**, **2020**[80](index=80&type=chunk) [NOTE 8: Earnings Per Share](index=17&type=section&id=NOTE%208:%20Earnings%20Per%20Share) Basic and diluted EPS for both periods in **2020** significantly decreased, with certain anti-dilutive items excluded from calculations Earnings Per Share (Three Months Ended June 30) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :-------------------------- | :------------------------------- | :------------------------------- | | Basic EPS | $0.01 | $0.16 | | Diluted EPS | $0.01 | $0.16 | Earnings Per Share (Six Months Ended June 30) | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :-------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.00 | $0.19 | | Diluted EPS | $0.00 | $0.19 | - **7,785,677** (three months) and **7,733,134** (six months) IROP units, unvested shares, and shares deliverable under Forward Sale Agreements were excluded from EPS computation as they were anti-dilutive[82](index=82&type=chunk) [NOTE 9: Other Disclosures](index=17&type=section&id=NOTE%209:%20Other%20Disclosures) This note highlights the COVID-19 pandemic as a significant risk, impacting operations, and notes ongoing legal proceedings not expected to materially affect financials - The COVID-19 pandemic is identified as one of the most significant risks and uncertainties, disrupting businesses and slowing economic activity[83](index=83&type=chunk) - Operational and policy changes were made in response to COVID-19, including complying with mandates, protecting stakeholders, and minimizing financial impact[83](index=83&type=chunk) - The company is subject to various legal proceedings and claims, generally covered by insurance, and their final outcome is not expected to materially adversely affect financial position, results of operations, or cash flows[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, business strategies, COVID-19 impact, results of operations, non-GAAP measures, and liquidity and capital resources [Forward-Looking Statements](index=18&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to significant uncertainties, and readers are cautioned not to rely unduly on them, with no obligation to update - The report contains forward-looking statements to help investors understand future prospects, but these are subject to significant business, economic, and competitive uncertainties and contingencies[86](index=86&type=chunk)[88](index=88&type=chunk) - Actual results may differ materially from anticipated results, and the company undertakes no obligation to update these statements[88](index=88&type=chunk)[89](index=89&type=chunk) [Overview](index=18&type=section&id=Overview) This section introduces Independence Realty Trust as a REIT, outlining its objective to maximize stockholder value through strategic investments, property management, and renovations, addressing COVID-19 impacts [Our Company](index=18&type=section&id=Our%20Company) Independence Realty Trust, Inc. is a self-managed Maryland REIT acquiring and managing multifamily apartment communities in non-gateway U.S. markets - Independence Realty Trust, Inc. is a self-administered and self-managed Maryland REIT[90](index=90&type=chunk) - The company acquires, owns, operates, improves, and manages multifamily apartment communities across non-gateway U.S. markets[90](index=90&type=chunk) - As of June **30**, **2020**, the company owned and operated **58 properties** containing **15,805 units**[90](index=90&type=chunk) [Our Business Objective and Investment Strategies](index=18&type=section&id=Our%20Business%20Objective%20and%20Investment%20Strategies) The company aims to maximize stockholder value through diligent portfolio management, strong operational performance, and consistent capital returns, focusing on strategic acquisitions and renovations - Primary business objective: Maximize stockholder value through diligent portfolio management, strong operational performance, and consistent return of capital[91](index=91&type=chunk) - Investment strategies include gaining scale in amenity-rich submarkets of non-gateway cities, increasing cash flows through prudent property management and strategic renovations, and acquiring properties with strong occupancies or repositioning potential[91](index=91&type=chunk)[92](index=92&type=chunk) [Property Portfolio](index=19&type=section&id=Property%20Portfolio) As of June **30**, **2020**, the company owned **58 multifamily apartment properties** with **15,805 units**, maintaining **93.5%** occupancy and an average effective monthly rent of **$1,108** Property Portfolio Summary (June 30, 2020) | Metric | Value | | :-------------------------- | :---- | | Number of Properties | 58 | | Number of Units | 15,805| | Overall Period End Occupancy| 93.5% | | Average Effective Monthly Rent per Unit | $1,108| - Top markets by **%** of NOI include Atlanta, GA (**14.5%**), Raleigh-Durham, NC (**13.0%**), Louisville, KY (**9.5%**), and Memphis, TN (**9.5%**)[94](index=94&type=chunk) [COVID-19 Pandemic](index=19&type=section&id=COVID-19%20Pandemic) The COVID-19 pandemic impacted business operations, leading to delayed capital recycling and spending, yet occupancy and rent collections remained steady, with deferred payment plans offered - The COVID-19 pandemic has disrupted businesses and slowed economic activity, impacting the company's operations[95](index=95&type=chunk) - Operational and policy changes include delaying capital recycling and spending, and supporting residents impacted by COVID-19[96](index=96&type=chunk) - Despite the pandemic, the company maintained occupancy and experienced steady rent collections, entering into **260 deferred payment plans** for **$0.4 million** in rent during Q2 **2020**[97](index=97&type=chunk) [Capital Recycling](index=20&type=section&id=Capital%20Recycling) The capital recycling program involves disposing of assets in slowing markets and acquiring new properties, though a planned acquisition was allowed to expire due to COVID-19 uncertainties - Capital recycling program involves disposing of assets in markets where growth is slowing or scale is lacking[98](index=98&type=chunk) - Acquired a **251-unit** property in McKinney, TX, for **$51.2 million** in February **2020** as part of the **2019** capital recycling program[98](index=98&type=chunk) - Allowed a non-binding letter of intent for the acquisition of three Class A communities in Atlanta, GA, to expire to provide greater financial flexibility due to COVID-19[99](index=99&type=chunk) [Forward Sale Agreements](index=20&type=section&id=Forward%20Sale%20Agreements) The company entered into forward sale agreements for **10.4 million common shares**, settling **$50 million** by March **31**, **2020**, to enhance financial resources and flexibility - Entered into forward sale agreements for **10.4 million shares** of common stock at **$14.688** per share[100](index=100&type=chunk) - Settled **$50 million** under the agreements by issuing **3.4 million shares** by March **31**, **2020**[101](index=101&type=chunk) - **6.9 million shares** remain to be settled, expected to provide an additional **$99.8 million**[101](index=101&type=chunk) - The agreements provide further financial resources and flexibility, particularly in light of the COVID-19 pandemic[101](index=101&type=chunk) [Value Add](index=20&type=section&id=Value%20Add) Value-add initiatives, focusing on renovations to increase rental rates, are a core growth strategy, but renovations are being paused or delayed in some markets due to COVID-19 - Value-add initiatives, including renovations and upgrades, are a core component of the longer-term growth strategy[102](index=102&type=chunk) - **7,136 units** across **23 properties** have been identified for renovations and upgrades[102](index=102&type=chunk) - As of June **30**, **2020**, **3,252** of the identified units had completed renovations and upgrades[102](index=102&type=chunk) - Renovations are being paused or delayed in certain markets due to the COVID-19 pandemic[102](index=102&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Net income significantly decreased for both periods in **2020** due to no asset sale gains and increased depreciation, despite modest rental revenue growth and rising expenses [Three Months Ended June 30, 2020 compared to the Three Months Ended June 30, 2019](index=21&type=section&id=Three%20Months%20Ended%20June%2030,%202020%20compared%20to%20the%20Three%20Months%20Ended%20June%2030,%202019) Total revenue increased by **2.6%** to **$52.3 million**, but net income plummeted by **94.6%** to **$0.8 million** due to no asset sale gains and higher depreciation Consolidated Financial Performance (Three Months Ended June 30, in thousands) | Metric | 2020 (in thousands) | 2019 (in thousands) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Total Revenue | $52,268 | $50,956 | 2.6% | | Net Income | $799 | $14,856 | -94.6% | | Depreciation and Amortization Expense | $15,231 | $12,721 | 19.7% | | Gain on Sale of Assets | $0 | $12,142 | -100.0% | Same Store Property Data (Three Months Ended June 30) | Metric | 2020 | 2019 | Change | | :-------------------------------- | :--- | :--- | :----- | | Rental and other property revenue | $48,176 (in thousands) | $47,389 (in thousands) | 1.7% | | Average occupancy | 93.0%| 94.2%| -1.2% | | Average effective monthly rent, per unit | $1,098| $1,056| 4.0% | - Interest expense decreased by **6.6%** to **$9.2 million**, primarily due to lower interest rates[104](index=104&type=chunk)[109](index=109&type=chunk) [Six Months Ended June 30, 2020 compared to the Six Months Ended June 30, 2019](index=22&type=section&id=Six%20Months%20Ended%20June%2030,%202020%20compared%20to%20the%20Six%20Months%20Ended%20June%2030,%202019) Total revenue increased by **3.1%** to **$103.6 million**, but net income sharply declined by **97.6%** to **$0.4 million** due to no asset sale gains, higher depreciation, and increased G&A expenses Consolidated Financial Performance (Six Months Ended June 30, in thousands) | Metric | 2020 (in thousands) | 2019 (in thousands) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Total Revenue | $103,618 | $100,496 | 3.1% | | Net Income | $425 | $17,422 | -97.6% | | General and Administrative Expenses | $8,950 | $6,645 | 34.7% | | Depreciation and Amortization Expense | $30,059 | $25,168 | 19.4% | | Gain on Sale of Assets | $0 | $12,142 | -100.0% | Same Store Property Data (Six Months Ended June 30) | Metric | 2020 | 2019 | Change | | :-------------------------------- | :--- | :--- | :----- | | Rental and other property revenue | $96,069 (in thousands) | $93,136 (in thousands) | 3.1% | | Average occupancy | 92.8%| 93.5%| -0.7% | | Average effective monthly rent, per unit | $1,093| $1,047| 4.4% | - General and administrative expenses increased by **$2.4 million**, primarily due to **$1.7 million** in stock-based compensation recognized for retirement-eligible employees[115](index=115&type=chunk) - Interest expense decreased by **4.5%** to **$18.7 million**, primarily due to lower interest rates[117](index=117&type=chunk) [Non-GAAP Financial Measures](index=24&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures, including FFO, CFFO, and Same Store NOI, all showing increases for the periods [Funds From Operations (FFO) and Core Funds From Operations (CFFO)](index=24&type=section&id=Funds%20From%20Operations%20(FFO)%20and%20Core%20Funds%20From%20Operations%20(CFFO)) FFO and CFFO increased for both periods in **2020**, reflecting adjustments for non-cash and non-operating items to provide a clearer view of operating performance FFO and CFFO (Three Months Ended June 30, in thousands) | Metric | 2020 (in thousands) | 2019 (in thousands) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | | FFO | $15,955 | $13,360 | 19.4% | | FFO Per Share | $0.17 | $0.15 | 13.3% | | CFFO | $18,036 | $16,883 | 6.8% | | CFFO Per Share | $0.19 | $0.19 | 0.0% | FFO and CFFO (Six Months Ended June 30, in thousands) | Metric | 2020 (in thousands) | 2019 (in thousands) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | | FFO | $30,306 | $28,244 | 7.3% | | FFO Per Share | $0.32 | $0.31 | 3.2% | | CFFO | $35,608 | $32,857 | 8.4% | | CFFO Per Share | $0.38 | $0.36 | 5.6% | [Same Store Portfolio Net Operating Income](index=25&type=section&id=Same%20Store%20Portfolio%20Net%20Operating%20Income) Same-store NOI increased by **1.2%** for three months and **4.0%** for six months, driven by higher rental revenue and average effective monthly rent per unit Same Store NOI Performance (Three Months Ended June 30, in thousands) | Metric | 2020 (in thousands) | 2019 (in thousands) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Net Operating Income | $28,963 | $28,615 | 1.2% | | Rental and other property revenue | $48,176 | $47,389 | 1.7% | | Average effective monthly rent, per unit | $1,098 | $1,056 | 4.0% | | Average Occupancy | 93.0% | 94.2% | -1.2% | Same Store NOI Performance (Six Months Ended June 30, in thousands) | Metric | 2020 (in thousands) | 2019 (in thousands) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Net Operating Income | $58,418 | $56,154 | 4.0% | | Rental and other property revenue | $96,069 | $93,136 | 3.1% | | Average effective monthly rent, per unit | $1,093 | $1,047 | 4.4% | | Average Occupancy | 92.8% | 93.5% | -0.7% | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash balances, financing, and operating cash flows are sufficient for future liquidity, with primary requirements including investments, debt, maintenance, and distributions - The company believes available cash balances, financing arrangements, and cash flows from operations will be sufficient to fund liquidity requirements for the next twelve months and foreseeable future[129](index=129&type=chunk) - Primary cash requirements include investments for value-add initiatives, debt repayment, property maintenance, operating expenses, and REIT distribution requirements[130](index=130&type=chunk) [Cash Flows](index=27&type=section&id=Cash%20Flows) Operating cash flows slightly decreased, investing outflows significantly increased due to property acquisitions, and financing shifted to net inflows from credit facility draws and stock issuance Cash Flow Summary (Six Months Ended June 30, in thousands) | Metric | 2020 (in thousands) | 2019 (in thousands) | | :------------------------------------------ | :------------------ | :------------------ | | Cash flow from operating activities | $34,339 | $36,100 | | Cash flow from investing activities | $(67,688) | $(28,152) | | Cash flow from financing activities | $37,077 | $(5,153) | - Cash outflows from investing activities in **2020** were primarily due to one property acquisition and capital expenditures[132](index=132&type=chunk) - Cash inflows from financing activities in **2020** were primarily due to **$65.5 million** in draws on the unsecured credit facility and a **$50.0 million** settlement on forward sale agreements[133](index=133&type=chunk) [Contractual Commitments](index=27&type=section&id=Contractual%20Commitments) No material changes to contractual commitments have occurred since the **2019** Annual Report on Form **10-K** filing - No material changes to contractual commitments since the **2019** Annual Report on Form **10-K** filing[134](index=134&type=chunk) [Off-Balance Sheet Arrangements](index=27&type=section&id=Off-Balance%20Sheet%20Arrangements) No material off-balance sheet arrangements were reported during the six months ended June **30**, **2020** - No material off-balance sheet arrangements during the six months ended June **30**, **2020**[135](index=135&type=chunk) [Critical Accounting Estimates and Policies](index=27&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) No material changes to critical accounting policies have occurred since the **2019** Annual Report on Form **10-K** filing - No material changes to critical accounting policies since the **2019** Annual Report on Form **10-K** filing[136](index=136&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in quantitative and qualitative market risks were reported during the six months ended June **30**, **2020** - No material changes in quantitative and qualitative market risks during the six months ended June **30**, **2020**, from the disclosures in the **2019** Annual Report on Form **10-K**[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were evaluated and deemed effective as of June **30**, **2020**, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated and concluded to be effective as of June **30**, **2020**[139](index=139&type=chunk) - No material changes in internal control over financial reporting were identified during the quarter ended June **30**, **2020**[140](index=140&type=chunk) [PART II—OTHER INFORMATION](index=28&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, generally covered by insurance, with no expected material adverse effect on financial position or results - The company is subject to various legal proceedings and claims in the ordinary course of business, generally covered by insurance[141](index=141&type=chunk) - Management believes the final outcome of these matters will not have a material adverse effect on the company's financial position, results of operations, or cash flows[141](index=141&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the **2019** Annual Report on Form **10-K** and Q1 **2020** Quarterly Report - No material changes to risk factors since the **2019** Annual Report on Form **10-K** and the Quarterly Report on Form **10-Q** for Q1 **2020**[142](index=142&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - None[143](index=143&type=chunk) [Item 3. Defaults Upon Senior Securities](index=28&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - None[144](index=144&type=chunk) [Item 4. Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported during the period - None[145](index=145&type=chunk) [Item 5. Other Information](index=28&type=section&id=Item%205.%20Other%20Information) No other information was reported during the period - None[146](index=146&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists exhibits, including certifications (Sections **302** and **906** of Sarbanes-Oxley Act) and iXBRL financial data - Exhibits include certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Sections **302** and **906** of the Sarbanes-Oxley Act of **2002**[149](index=149&type=chunk) - iXBRL (Inline eXtensible Business Reporting Language) materials are filed, including consolidated financial statements and notes[149](index=149&type=chunk) [Signatures](index=30&type=section&id=Signatures) The Quarterly Report on Form **10-Q** is duly signed by the company's Chairman/CEO, CFO/Treasurer, and Chief Accounting Officer - The report is signed by Scott F. Schaeffer (Chairman of the Board and Chief Executive Officer), James J. Sebra (Chief Financial Officer and Treasurer), and Jason R. Delozier (Chief Accounting Officer)[152](index=152&type=chunk)