IRT(US:IRT)2023-02-16 19:24Financial Data and Key Metrics Changes - For Q4 2022, net income available to common shareholders was $33.6 million, up from $28.6 million in Q4 2021 [25] - For the full year 2022, net income available to common shareholders was $117.2 million, up from $44.6 million in 2021 [25] - Same-store NOI growth in Q4 was 13%, driven by a revenue growth of 9.8% [26] - Average rental rate increased by 12% in 2022, supporting a double-digit increase in revenue [16] - Leverage reduced from 7.7 times EBITDA a year ago to 6.9 times at year-end 2022 [16][52] Business Line Data and Key Metrics Changes - The value-add program completed renovations on 656 units in Q4 and 1,451 units for the full year, achieving an ROI of over 24% [7][22] - Average occupancy for non-value-add communities was 94.6% in Q4, below the target of 95% [20] - The company plans to renovate between 2,500 to 3,000 units in 2023 [7][22] Market Data and Key Metrics Changes - Strong migration trends into southern markets, with states like Florida, Texas, and North Carolina representing over 60% of NOI [10] - Job growth in these markets averaged 5% since March 2020, contributing to the company's performance [10] Company Strategy and Development Direction - The company is focused on enhancing shareholder value and investing in its portfolio, particularly in attractive markets with solid renter demand [32] - A $2 million investment in EV charging stations is planned, with the first phase involving 192 charging stations at 32 communities [24] - The company anticipates a mild recession in 2023 but remains confident in its growth potential due to its portfolio's positioning [17] Management's Comments on Operating Environment and Future Outlook - Management expects to build upon a solid foundation with a 6.5% NOI growth forecast for 2023 [17] - The company acknowledges the need to improve occupancy rates and is focused on enhancing leasing and sales processes [42] - Management is optimistic about the growth opportunities in resilient markets despite macroeconomic uncertainties [8][17] Other Important Information - Same-store operating expenses increased by 4.6% in Q4, primarily due to higher real estate taxes and utility expenses [52] - The company has no debt maturities in 2023 and only $70 million in 2024, maintaining sufficient liquidity [27] Q&A Session Summary Question: Concerns about operations team and occupancy - Management acknowledged changes in the operations team to improve occupancy and adapt to market conditions [36] Question: Impact of pricing and revenue management - Management noted that the pricing team was slow to react to market changes, affecting occupancy and revenue [38] Question: Guidance on occupancy and market rent growth - Management provided an average occupancy assumption of 94.5% for the year, with expectations for seasonal gains [39] Question: Changes in resident demographics and pricing sensitivity - Management indicated that the value-add program attracts a different demographic willing to pay higher rents for improved properties [82] Question: Disposition of properties and pricing dynamics - Management confirmed the sale of properties at a lower price than initially expected due to market conditions [93][100] Question: Expectations for retention ratio - Management targets a retention ratio of approximately 53% for the year [109]