Independence Realty Trust, Inc 8-K, filed Apr 28, 2021
Independence Realty Trust, Inc. (IRT)
About this 8-K
Independence Realty Trust, Inc filed this 8-K on April 28, 2021.
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
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of incorporation) |
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Identification No.) |
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N/A
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 2.02 |
Results of Operations and Financial Condition. |
On April 28, 2021, Independence Realty Trust, Inc. (“IRT”) issued a press release regarding its earnings for the three months ended March 31, 2021. Additionally, IRT is furnishing certain supplemental information with this Current Report. Copies of such press release and such supplemental information are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report and are incorporated by reference herein. The information in this Current Report, including Exhibit 99.1 and Exhibit 99.2 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
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Item 7.01 |
Regulation FD Disclosure. |
The information provided in Item 2.02 above is incorporated by reference into this Item 7.01.
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Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
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99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Independence Realty Trust, Inc. |
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April 28, 2021 |
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By: |
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/s/ James J. Sebra |
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Name: |
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James J. Sebra |
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Title: |
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Chief Financial Officer and Treasurer |
Exhibit 99.1
Independence Realty Trust Announces First Quarter 2021 Financial Results
PHILADELPHIA – (BUSINESS WIRE) – April 28, 2021 — Independence Realty Trust, Inc. (“IRT”) (NYSE: IRT), a multifamily apartment REIT, today announced its first quarter 2021 financial results.
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Net income available to common shares of $1.1 million for the quarter ended March 31, 2021 compared to a net loss of $0.4 million for the quarter ended March 31, 2020. |
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Earnings per diluted share of $0.01 for the quarter ended March 31, 2021 compared to $0.00 for the quarter ended March 31, 2020. |
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Same store net operating income (“NOI”) growth of 5.3% for the quarter ended March 31, 2021 compared to the quarter ended March 31, 2020. |
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Core Funds from Operations (“CFFO”) of $18.0 million for the quarter ended March 31, 2021 compared to $14.6 million for the quarter ended March 31, 2020. CFFO per share was $0.18 for the first quarter of 2021, as compared to $0.16 for the first quarter of 2020. To note, this reflects the adoption of our new definition of CFFO, where we no longer exclude stock compensation expense or amortization of deferred financing costs from our computation. |
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Adjusted EBITDA of $26.4 million for the quarter ended March 31, 2021 compared to $24.1 million for the quarter ended March 31, 2020. |
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Collected 98.4% of rents billed during the quarter ended March 31, 2021 and 99.2% of rents billed during the quarter ended December 31, 2020. |
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.
Management Commentary
“We are pleased to report a strong start to the year as vaccine distribution is supporting accelerated re-openings across all of our markets. For the first quarter of 2021, same store NOI increased by 5.3%, led by our continual focus on driving occupancy and rental rates. Our same store occupancy increased 40 basis points since the fourth quarter of 2020, and a sizeable 260 basis points on a year-over-year basis. Rental rates continued to move higher, growing 5.9% over the expiring leases during the first quarter and 4.6% during the second quarter to date. We are excited with the start of this year and remain confident in our growth strategy. As a result, we are raising our 2021 guidance given an improving outlook and the growth potential of our attractive market presence,” said Scott Schaeffer, Chairman and CEO of IRT.
Same Store Property Operating Results
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First Quarter 2021 Compared to First Quarter 2020(1) |
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Rental and other property revenue |
5.6% increase |
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Property operating expenses |
6.2% increase |
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Net operating income (“NOI”) |
5.3% increase |
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Portfolio average occupancy |
260 bps increase to 95.3% |
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Portfolio average rental rate |
2.9% increase to $1,129 |
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NOI Margin |
20 bps decrease to 61.5% |
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(1) |
Same store portfolio for the three and twelve months ended March 31, 2021 includes 54 properties, which represent 14,995 units. |
Same Store Property Operating Results, Excluding Value Add
The same store portfolio results below exclude 18 communities that are both part of the same store portfolio and were actively undergoing Value Add renovations during the three months ended March 31, 2021.
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First Quarter 2021 Compared to First Quarter 2020(1) |
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Rental and other property revenue |
3.1% increase |
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Property operating expenses |
4.2% increase |
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Net operating income (“NOI”) |
2.5% increase |
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Portfolio average occupancy |
170 bps increase to 95.8% |
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Portfolio average rental rate |
1.7% increase to $1,099 |
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NOI Margin |
40 bps decrease to 61.5% |
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(1) |
Same store portfolio, excluding value add, for the three and twelve months ended March 31, 2021 includes 36 properties, which represent 9,439 units. |
COVID-19 Metrics (1)(2)
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Rent collections |
1Q 2021 |
1Q 2020 |
4Q 2020 |
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Rent collected for the period presented, as a percentage of rent billed |
98.4% |
99.1% |
99.1% |
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Deferred payment plans: (3) |
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Number of deferred payment plans |
2 |
- |
13 |
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Amount of monthly rent deferred for period presented |
$4 |
- |
$61 |
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Amount of monthly rent deferred for the period presented, as a percentage of rent billed |
0.0% |
0.0% |
0.1% |
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Combined rent collected and rent subject to deferred payment plans, as a percentage of rent billed |
98.4% |
99.1% |
99.2% |
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(1) |
Dollar amounts in thousands. All metrics presented are as of April 27, 2021 for our total portfolio in the period presented. |
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(2) |
All metrics are based on our internal data, which management uses to monitor property performance on a daily or weekly basis. |
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(3) |
Deferred payment plans allow residents to defer a portion of their monthly rent for one or more months or to repay over time past-due rent which was unpaid due to a COVID-related financial hardship. Residents must provide evidence of hardship and commit to a full 12-month lease term, which allows deferred payments to be repaid over a longer remaining lease term. As of March 31, 2021, there were 104 active deferred payment plans with an aggregate of $44,896 of deferred rent outstanding. |
As a result of the COVID-19 pandemic, our bad debt continues to exceed historical levels. During the first quarter, our net bad debt was $433,000 or 80 basis points of revenue. The table below presents additional details on the components of bad debt:
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Components of Bad Debt (1) |
1Q 2021 |
1Q 2020 |
4Q 2020 |
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Amount |
Percentage |
Amount |
Percentage |
Amount |
Percentage |
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Charge-offs, net |
$386 |
0.7% |
$337 |
0.7% |
$289 |
0.5% |
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Provision for bad debt |
$47 |
0.1% |
- |
- |
$124 |
0.3% |
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Net bad debt |
$433 |
0.8% |
$337 |
0.7% |
$413 |
0.8% |
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(1) |
Dollar amounts are in thousands and percentages are as a percentage of total rental and other property income. Bad debt is recorded as a reduction to rental and other property revenue in our consolidated statements of operations. |
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Operating statistics |
April 2021 |
April 2020 |
1Q 2021 |
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Rent collected for the period presented, as a percentage of rent billed |
96.6% |
99.0% |
98.4% |
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Amount of monthly rent deferred for the period presented, as a percentage of rent billed |
0.0% |
0.6% |
0.0% |
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Combined rent collected and rent subject to deferred payment plans, as a percentage of rent billed |
96.6% |
99.6% |
98.4% |
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Total portfolio average occupancy |
96.0% |
92.7% |
95.3% |
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Total portfolio average effective monthly rent per unit |
$1,154 |
$1,106 |
$1,142 |
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Resident retention rate |
49.7% |
54.8% |
46.4% |
Lease-Over-Lease Effective Rent Growth (1)
The table below depicts lease-over-lease effective rent growth for all new and renewal leases entered into during the respective periods for the 54-property same store portfolio.
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Lease Type |
1Q 2021 |
2Q 2021 (2) |
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New Leases |
6.8% |
9.6% |
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Renewal Leases |
4.8% |
3.7% |
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Total |
5.9% |
4.6% |
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(1) |
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. |
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(2) |
For new leases and renewals commencing during 2Q 2021 that were signed as of April 27, 2021. |
Value Add Program
We completed renovations on 142 units during the quarter ended March 31, 2021. From inception of our value add program in January 2018 through March 31, 2021, we completed renovations on 3,861 units, achieving a return on investment of 16.1% (18.5% on interior renovation costs) and an average monthly rental increase of 18.5%.
At-the-Market Offering
On November 13, 2020 we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock having an aggregate offering price of up to $150 million (the “ATM Program”) in negotiated transactions or transactions that are deemed to be “at the market” offerings. Under the ATM Program, we may also enter into one or more forward sale transactions for the sale of shares of our common stock on a forward basis. In the three months ended March 31, 2021, we entered into a forward sale transaction under the ATM Program for the forward sale of 2,000,000 shares of our common stock. We expect to physically settle the forward sale transaction by the maturity date (December 15, 2021) of the forward sale transaction. Assuming the forward sale transaction is physically settled in full utilizing the current forward sale price of $14.50 per share, net of sales commissions, we expect to receive net proceeds of approximately $29.0 million, subject to adjustment in accordance with the forward sale transaction.
Financial Flexibility
As of March 31, 2021, we had a total liquidity position of approximately $205.6 million, which includes unrestricted cash, additional capacity under our unsecured line of credit, and approximately $41.2 million of proceeds that we will receive upon settlement of forward sale agreements covering 2,900,000 shares of common stock.
Capital Expenditures
For the three months ended March 31, 2021, recurring capital expenditures for the total portfolio were $1.1 million, or $73 per unit.
Distributions
On March 15, 2021, our Board of Directors declared a quarterly cash dividend of $0.12 per share of our common stock, which was paid on April 23, 2021 to stockholders of record at the close of business on April 2, 2021.
2021 EPS and CFFO Guidance
Given portfolio performance during the quarter ended March 31, 2021, IRT is updating its 2021 full year guidance. EPS per diluted share is projected to be in a range of $0.5 to $0.8. CFFO per diluted share, a non-GAAP financial measure, is projected to be in the range of $0.72 to $0.75 using our new definition of CFFO. Our previous guidance has been adjusted to conform to the current CFFO definition, which now includes the effect of stock compensation expense and amortization of deferred financing costs. A reconciliation of IRT's projected net income allocable to common shares to its projected CFFO per share is included below. Also included below are the primary assumptions underlying these estimates. See the schedules and definitions at the end of this release for further information regarding how IRT calculates CFFO and for management’s rationale for the usefulness of CFFO.
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Previous Guidance |
Current Guidance |
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2021 Full Year EPS and CFFO Guidance (1)(2) |
Low |
High |
Low |
High |
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Earnings per share |
$0.04 |
$0.08 |
$0.05 |
$0.08 |
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Adjustments: |
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Depreciation and amortization |
0.67 |
0.67 |
0.67 |
0.67 |
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CORE FFO per share allocated to common shareholders |
$0.71 |
$0.75 |
$0.72 |
$0.75 |
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(1) |
This guidance, including the underlying assumptions presented in the table below, constitutes forward-looking information. Actual full year 2021 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements” below. Our guidance is based on the key guidance assumptions detailed below. |
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(2) |
Per share guidance is based on 102.6 million weighted average shares and units outstanding. |
2021 Guidance Assumptions
Our key guidance assumptions for 2021 are enumerated below:
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Same Store Communities |
Previous 2021 Outlook |
Current 2021 Outlook |
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Number of properties/units |
54 properties / 14,955 units |
54 properties / 14,955 units |
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Property revenue growth |
2.75% to 4.25% |
3.75% to 5.0% |
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Controllable property operating expense growth |
2.0% to 3.0% |
3.0% to 4.0% |
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Real estate tax and insurance expense increase |
7.0% to 9.0% |
7.0% to 8.0% |
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Total operating expense growth |
4.0% to 5.25% |
4.25% to 5.5% |
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Same store property NOI growth |
1.5% to 3.5% |
3.25% to 5.0% |
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Corporate Expenses |
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General and administrative expenses |
$15.5 to $17.0 million (1) |
$16.5 to $18.0 million |
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Property management expenses |
$8.5 to $9.2 million (1) |
$8.25 to $8.75 million |
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Interest expense |
$34.0 to $35.5 million (1) |
$34.0 to $35.5 million |
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Transaction/Investment Volume |
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Acquisition volume |
None assumed |
$100 million to $200 million |
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Disposition volume |
None assumed |
$0 million to $100 million |
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Capital Expenditures |
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Recurring |
$7.0 to $8.0 million |
$7.0 to $7.5 million |
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Value add & non-recurring |
$28.5 to $32.5 million |
$28.5 to $32.5 million |
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(1) |
During the three months ended March 31, 2021, we updated our definition of CFFO to include the effects of stock compensation expense and the amortization of deferred financing costs. As a result, we have updated our previous 2021 outlook to conform to the new definition. We previously highlighted the impact that this definition change would have on these line items. Please refer to footnotes 2 and 3 on page 10 of our Q4 and Full Year 2020 Supplemental dated February 10, 2021. In addition, please see the updated definition of CFFO within the definitions section of this release. |
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 29, 2021 from the investor relations section of the IRT website at www.irtliving.com or by dialing 1.833.789.1330. 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 and telephonically until Thursday, May 6, 2021 by dialing 1.800.585.8367, access code 1235436.
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 apartment properties across non-gateway U.S. markets, including Atlanta, Dallas, Louisville, Memphis, Raleigh and Tampa. IRT’s investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation. More information may be found on IRT’s website at www.irtliving.com.
Forward-Looking Statements
This press 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 can generally be identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. These forward-looking statements include, without limitation, our expectations with respect to capital allocations, including as to the timing and amount of future dividends. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally not within our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Risks and uncertainties that might cause our actual results and/or future dividends to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks related to the impact of COVID-19 and other potential future outbreaks of infectious diseases on our financial condition, results of operations, cash flows and performance and those of our residents as well as on the economy and real estate and financial markets; changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could limit our ability to lease units or increase rents or 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; inability of tenants to meet their rent and other lease obligations and charge-offs in excess of our allowance for bad debt; legislative restrictions that may delay or limit collections of past due rents; risks endemic to real estate and the real estate industry generally; the effects of natural and other disasters; delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve projected rent increases and occupancy levels on account of the initiatives; unexpected costs of REIT qualification compliance; costs and disruptions as the result of a cybersecurity incident or other technology disruption; and share price fluctuations. Please refer to the documents filed by us with the SEC, including specifically the “Risk Factors” sections of our Form 10-K for the year ended December 31, 2020, 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. 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. In addition, the declaration of dividends on our common stock is subject to the discretion of our Board of Directors and depends upon a broad range of factors, including our results of operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, applicable legal requirements and such other factors as our Board of Directors may from time to time deem relevant. For these reasons, as well as others, there can be no assurance that dividends in the future will be equal or similar to the amount of the quarterly dividend described in this press release.
Independence Realty Trust, Inc. Contact
Edelman Financial Communications & Capital Markets
Ted McHugh and Lauren Torres
917-365-7979
IRT@edelman.com
Schedule I
Independence Realty Trust, Inc.
Selected Financial Information
(Dollars in thousands, except share and per share amounts)
(unaudited)
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For the Three Months Ended |
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March 31, 2021 |
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December 31, 2020 |
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September 30, 2020 |
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June 30, 2020 |
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March 31, 2020 |
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Selected Financial Information: |
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Operating Statistics: |
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Net income available to common shares |
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$ |
1,086 |
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$ |
13,261 |
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$ |
1,090 |
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$ |
789 |
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$ |
(372 |
) |
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Earnings (loss) per share -- diluted |
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$ |
0.01 |
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0.14 |
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$ |
0.01 |
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$ |
0.01 |
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$0.00 |
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Rental and other property revenue |
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$ |
54,811 |
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$ |
53,923 |
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$ |
54,001 |
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$ |
52,087 |
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$ |
51,156 |
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Property operating expenses |
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$ |
20,838 |
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$ |
20,138 |
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$ |
22,129 |
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$ |
20,974 |
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$ |
19,737 |
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Net operating income |
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$ |
33,973 |
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$ |
33,785 |
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$ |
31,872 |
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$ |
31,113 |
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$ |
31,419 |
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NOI margin |
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62.0 |
% |
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62.7 |
% |
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59.0 |
% |
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59.7 |
% |
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61.4 |
% |
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Adjusted EBITDA |
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$ |
26,389 |
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$ |
28,534 |
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$ |
27,081 |
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$ |
25,643 |
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$ |
24,081 |
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CORE FFO per share (c) |
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$ |
0.18 |
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$ |
0.22 |
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$ |
0.20 |
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$ |
0.19 |
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$ |
0.19 |
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Dividends per share |
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$ |
0.12 |
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$ |
0.12 |
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$ |
0.12 |
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$ |
0.12 |
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$ |
0.18 |
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CORE FFO payout ratio |
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66.7 |
% |
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54.5 |
% |
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60.0 |
% |
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63.2 |
% |
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94.7 |
% |
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Portfolio Data: |
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Total gross assets |
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$ |
1,970,979 |
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$ |
1,962,895 |
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$ |
1,914,900 |
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$ |
1,916,424 |
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$ |
1,949,494 |
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Total number of properties |
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56 |
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56 |
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58 |
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58 |
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58 |
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Total units |
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15,667 |
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15,667 |
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15,805 |
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15,805 |
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15,805 |
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Period end occupancy |
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95.5 |
% |
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95.3 |
% |
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94.4 |
% |
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93.5 |
% |
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92.7 |
% |
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|
Total portfolio average occupancy |
|
|
95.4 |
% |
|
|
95.0 |
% |
|
|
94.1 |
% |
|
|
92.9 |
% |
|
|
92.5 |
% |
|
|
Total portfolio average effective monthly rent, per unit |
|
$ |
1,142 |
|
|
$ |
1,136 |
|
|
$ |
1,118 |
|
|
$ |
1,108 |
|
|
$ |
1,100 |
|
|
|
Same store period end occupancy (a) |
|
|
95.5 |
% |
|
|
95.3 |
% |
|
|
94.3 |
% |
|
|
93.6 |
% |
|
|
93.0 |
% |
|
|
Same store portfolio average occupancy (a) |
|
|
95.3 |
% |
|
|
94.9 |
% |
|
|
94.0 |
% |
|
|
93.1 |
% |
|
|
92.7 |
% |
|
|
Same store portfolio average effective monthly rent, per unit (a) |
|
$ |
1,129 |
|
|
$ |
1,121 |
|
|
$ |
1,111 |
|
|
$ |
1,107 |
|
|
$ |
1,097 |
|
|
|
Capitalization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt |
|
$ |
947,631 |
|
|
$ |
945,686 |
|
|
$ |
1,004,237 |
|
|
$ |
1,008,911 |
|
|
$ |
1,049,541 |
|
|
|
Common share price, period end |
|
$ |
15.20 |
|
|
$ |
13.43 |
|
|
$ |
11.59 |
|
|
$ |
11.45 |
|
|
$ |
8.94 |
|
|
|
Market equity capitalization |
|
$ |
1,561,165 |
|
|
$ |
1,376,283 |
|
|
$ |
1,107,144 |
|
|
$ |
1,093,822 |
|
|
$ |
853,600 |
|
|
|
Total market capitalization |
|
$ |
2,508,796 |
|
|
$ |
2,321,969 |
|
|
$ |
2,111,381 |
|
|
$ |
2,102,733 |
|
|
$ |
1,903,141 |
|
|
|
Total debt/total gross assets |
|
|
48.1 |
% |
|
|
48.2 |
% |
|
|
52.4 |
% |
|
|
52.6 |
% |
|
|
53.8 |
% |
|
|
Net debt to Adjusted EBITDA (pro forma) (b) |
|
|
8.2 |
x |
|
|
8.2 |
x |
|
9.1x |
|
|
9.2x |
|
|
|
9.0 |
x |
|
||
|
Interest coverage |
|
|
3.1 |
x |
|
|
3.2 |
x |
|
|
3.0 |
x |
|
|
2.8 |
x |
|
|
2.5 |
x |
|
|
Common shares and OP Units: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding |
|
|
102,033,733 |
|
|
|
101,803,762 |
|
|
|
94,823,806 |
|
|
|
94,741,146 |
|
|
|
94,691,806 |
|
|
|
OP units outstanding |
|
|
674,515 |
|
|
|
674,517 |
|
|
|
701,986 |
|
|
|
789,134 |
|
|
|
789,134 |
|
|
|
Common shares and OP units outstanding |
|
|
102,708,248 |
|
|
|
102,478,278 |
|
|
|
95,525,792 |
|
|
|
95,530,279 |
|
|
|
95,480,939 |
|
|
|
Weighted average common shares and units |
|
|
102,353,380 |
|
|
|
95,529,788 |
|
|
|
95,227,176 |
|
|
|
95,224,855 |
|
|
|
91,737,113 |
|
|
|
|
(a) |
Same store portfolio consists of 54 properties, which represent 14,995 units. |
|
|
(c) |
Reflects adjustment to prior periods to conform to our current definition of CFFO. See our definition of CFFO for additional discussion. |
Schedule II
Independence Realty Trust, Inc.
Reconciliation of Net Income (loss) to
Funds From Operations and
Core Funds From Operations
(Dollars in thousands, except share and per share amounts)
(unaudited)
|
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
|
2021 |
|
|
2020 |
|
||
|
Funds From Operations (FFO): |
|
|
|
|
|
|
|
|
|
Net Income (loss) |
|
$ |
1,093 |
|
|
$ |
(374 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Real estate depreciation and amortization |
|
|
16,472 |
|
|
|
14,725 |
|
|
Funds From Operations |
|
$ |
17,565 |
|
|
$ |
14,351 |
|
|
FFO per share |
|
$ |
0.17 |
|
|
$ |
0.16 |
|
|
Core Funds From Operations (CFFO): |
|
|
|
|
|
|
|
|
|
Funds From Operations |
|
$ |
17,565 |
|
|
$ |
14,351 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Other depreciation and amortization |
|
|
80 |
|
|
|
103 |
|
|
Abandoned deal costs |
|
|
— |
|
|
|
130 |
|
|
Casualty losses |
|
|
359 |
|
|
|
— |
|
|
Debt extinguishment costs included in net gains (losses) on sale of assets |
|
|
— |
|
|
|
— |
|
|
Core Funds From Operations |
|
$ |
18,004 |
|
|
$ |
14,584 |
|
|
CFFO per share |
|
$ |
0.18 |
|
|
$ |
0.16 |
|
|
Weighted-average shares and units outstanding |
|
|
102,353,380 |
|
|
|
91,737,113 |
|
Schedule III
Independence Realty Trust, Inc.
Reconciliation of Same-Store Net Operating Income to Net Income (loss)
(Dollars in thousands)
(unaudited)
|
|
|
For the Three-Months Ended (a) |
|
|||||||||||||||||
|
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|||||
|
Reconciliation of same-store net operating income to net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store net operating income |
|
$ |
31,923 |
|
|
$ |
32,027 |
|
|
$ |
29,997 |
|
|
$ |
29,723 |
|
|
$ |
30,330 |
|
|
Non same-store net operating income |
|
|
2,050 |
|
|
|
1,758 |
|
|
|
1,875 |
|
|
|
1,390 |
|
|
|
1,089 |
|
|
Other revenue |
|
|
301 |
|
|
|
165 |
|
|
|
199 |
|
|
|
181 |
|
|
|
194 |
|
|
Property management expenses |
|
|
(1,943 |
) |
|
|
(2,183 |
) |
|
|
(2,078 |
) |
|
|
(2,077 |
) |
|
|
(2,156 |
) |
|
General and administrative expenses |
|
|
(5,942 |
) |
|
|
(3,233 |
) |
|
|
(2,912 |
) |
|
|
(3,574 |
) |
|
|
(5,376 |
) |
|
Depreciation and amortization expense |
|
|
(16,552 |
) |
|
|
(15,396 |
) |
|
|
(15,232 |
) |
|
|
(15,231 |
) |
|
|
(14,828 |
) |
|
Interest expense |
|
|
(8,385 |
) |
|
|
(8,872 |
) |
|
|
(8,917 |
) |
|
|
(9,202 |
) |
|
|
(9,497 |
) |
|
Abandoned deal costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(130 |
) |
|
Casualty losses |
|
|
(359 |
) |
|
|
(300 |
) |
|
|
— |
|
|
|
(411 |
) |
|
|
— |
|
|
Gain on sale (loss on impairment) of real estate assets, net |
|
|
— |
|
|
|
9,394 |
|
|
|
(1,840 |
) |
|
|
— |
|
|
|
— |
|
|
Net income (loss) |
|
$ |
1,093 |
|
|
$ |
13,360 |
|
|
$ |
1,092 |
|
|
$ |
799 |
|
|
$ |
(374 |
) |
(a)Same store portfolio includes 54 properties, which represent 14,995 units.
Schedule IV
Independence Realty Trust, Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA
And Interest Coverage Ratio
(Dollars in thousands)
(unaudited)
|
|
|
Three Months Ended |
|
|
|||||||||||||||||
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
||||||
|
Net income (loss) |
|
$ |
1,093 |
|
|
$ |
13,360 |
|
|
$ |
1,092 |
|
|
$ |
799 |
|
|
$ |
(374 |
) |
|
|
Add-Back (Deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
16,552 |
|
|
|
15,396 |
|
|
|
15,232 |
|
|
|
15,231 |
|
|
|
14,828 |
|
|
|
Interest expense |
|
|
8,385 |
|
|
|
8,872 |
|
|
|
8,917 |
|
|
|
9,202 |
|
|
|
9,497 |
|
|
|
Net loss on impairment (gain on sale) of real estate assets |
|
|
— |
|
|
|
(9,394 |
) |
|
|
1,840 |
|
|
|
— |
|
|
|
— |
|
|
|
Abandoned deal costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
130 |
|
|
|
Casualty losses |
|
|
359 |
|
|
|
300 |
|
|
|
— |
|
|
|
411 |
|
|
|
— |
|
|
|
Adjusted EBITDA |
|
$ |
26,389 |
|
|
$ |
28,534 |
|
|
$ |
27,081 |
|
|
$ |
25,643 |
|
|
$ |
24,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST COST: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
$ |
8,385 |
|
|
$ |
8,872 |
|
|
$ |
8,917 |
|
|
$ |
9,202 |
|
|
$ |
9,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST COVERAGE: |
|
|
3.1 |
x |
|
|
3.2 |
x |
|
|
3.0 |
x |
|
|
2.8 |
x |
|
|
2.5 |
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule V
Independence Realty Trust, Inc.
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.
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 asset sales, debt extinguishments and acquisition related debt extinguishment expenses, casualty losses, and abandoned deal 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 Core FFO (“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, gains or losses on sales 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.
We updated our definition of CFFO during Q1 2021 to the definition described below. All prior periods have been adjusted to conform to the current CFFO definition.
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 losses, abandoned deal costs and debt extinguishment 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 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 debt less cash and cash equivalents. The following table provides a reconciliation of total debt to net debt (Dollars in thousands).
We present net debt 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.
|
|
As of |
|
|||||||||||||||||
|
March 31, 2021 |
|
|
December 30, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
||||||
|
Total debt |
$ |
947,631 |
|
|
$ |
945,686 |
|
|
$ |
1,004,237 |
|
|
$ |
1,008,911 |
|
|
$ |
1,049,541 |
|
|
Less: cash and cash equivalents |
|
(8,653 |
) |
|
|
(8,751 |
) |
|
|
(9,891 |
) |
|
|
(11,652 |
) |
|
|
(57,436 |
) |
|
Total net debt |
$ |
938,978 |
|
|
$ |
936,935 |
|
|
$ |
994,346 |
|
|
$ |
997,259 |
|
|
$ |
992,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store Portfolio 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 depreciation and amortization, casualty related costs, property management expenses, general administrative expenses, interest expense, and net gains on sale of assets.
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.
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 at the beginning of the previous year. Properties that are held-for-sale or have been sold are excluded from the same store portfolio.
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 |
|
|||||||||||||||||
|
|
March 31, 2021 |
|
|
December 30, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|||||
|
Total assets |
$ |
1,728,016 |
|
|
$ |
1,734,897 |
|
|
$ |
1,700,428 |
|
|
$ |
1,708,912 |
|
|
$ |
1,757,138 |
|
|
Plus: accumulated depreciation |
|
223,187 |
|
|
|
208,618 |
|
|
|
194,645 |
|
|
|
187,758 |
|
|
|
172,789 |
|
|
Plus: accumulated amortization |
|
19,776 |
|
|
|
19,380 |
|
|
|
19,827 |
|
|
|
19,754 |
|
|
|
19,567 |
|
|
Total gross assets |
$ |
1,970,979 |
|
|
$ |
1,962,895 |
|
|
$ |
1,914,900 |
|
|
$ |
1,916,424 |
|
|
$ |
1,949,494 |
|
Exhibit 99.2
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 |
|
|
|
Trailing Five Quarters |
|
16 |
|
Three Months Ended March 31, 2021 and 2020 |
|
17 |
|
|
|
|
|
Net Operating Income Bridge |
|
18 |
|
|
|
|
|
Same-Store Portfolio Net Operating Income by Market |
|
19 |
|
|
|
|
|
Total Portfolio NOI Exposure by Market |
|
20 |
|
|
|
|
|
Value Add Summary |
|
21 |
|
|
|
|
|
Debt Summary |
|
22 |
|
|
|
|
|
Debt Covenant & Unencumbered Asset Statistics |
|
23 |
|
|
|
|
|
Definitions |
|
24 |
2
Independence Realty Trust
March 31, 2021
Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily apartment properties across non-gateway U.S. markets, including Atlanta, Dallas, Louisville, Memphis, Raleigh and Tampa. IRT’s investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation. More information may be found on the Company’s website at www.irtliving.com.
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Corporate Headquarters |
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1835 Market Street, Suite 2601 |
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Philadelphia, PA 19103 |
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267.270.4800 |
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Trading Symbol |
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NYSE: “IRT” |
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Investor Relations Contact |
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Edelman Financial Communications & Capital Markets |
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Ted McHugh and Lauren Torres |
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917-365-7979 |
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IRT@edelman.com
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3
This press 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 can generally be identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. These forward-looking statements include, without limitation, our expectations with respect to capital allocations, including as to the timing and amount of future dividends. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally not within our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Risks and uncertainties that might cause our actual results and/or future dividends to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks related to the impact of COVID-19 and other potential future outbreaks of infectious diseases on our financial condition, results of operations, cash flows and performance and those of our residents as well as on the economy and real estate and financial markets; changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could limit our ability to lease units or increase rents or 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; inability of tenants to meet their rent and other lease obligations and charge-offs in excess of our allowance for bad debt; legislative restrictions that may delay or limit collections of past due rents; risks endemic to real estate and the real estate industry generally; the effects of natural and other disasters; delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve projected rent increases and occupancy levels on account of the initiatives; unexpected costs of REIT qualification compliance; costs and disruptions as the result of a cybersecurity incident or other technology disruption; and share price fluctuations. Please refer to the documents filed by us with the SEC, including specifically the “Risk Factors” sections of our Form 10-K for the year ended December 31, 2020, 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. 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. In addition, the declaration of dividends on our common stock is subject to the discretion of our Board of Directors and depends upon a broad range of factors, including our results of operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, applicable legal requirements and such other factors as our Board of Directors may from time to time deem relevant. For these reasons, as well as others, there can be no assurance that dividends in the future will be equal or similar to the amount of the quarterly dividend described in this press release.
4
Independence Realty Trust Announces First Quarter 2021 Financial Results
PHILADELPHIA – (BUSINESS WIRE) – April 28, 2021 — Independence Realty Trust, Inc. (“IRT”) (NYSE: IRT), a multifamily apartment REIT, today announced its first quarter 2021 financial results.
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Net income available to common shares of $1.1 million for the quarter ended March 31, 2021 compared to a net loss of $0.4 million for the quarter ended March 31, 2020. |
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Earnings per diluted share of $0.01 for the quarter ended March 31, 2021 compared to $0.00 for the quarter ended March 31, 2020. |
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Same store net operating income (“NOI”) growth of 5.3% for the quarter ended March 31, 2021 compared to the quarter ended March 31, 2020. |
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Core Funds from Operations (“CFFO”) of $18.0 million for the quarter ended March 31, 2021 compared to $14.6 million for the quarter ended March 31, 2020. CFFO per share was $0.18 for the first quarter of 2021, as compared to $0.16 for the first quarter of 2020. To note, this reflects the adoption of our new definition of CFFO, where we no longer exclude stock compensation expense or amortization of deferred financing costs from our computation. |
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Adjusted EBITDA of $26.4 million for the quarter ended March 31, 2021 compared to $24.1 million for the quarter ended March 31, 2020. |
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Collected 98.4% of rents billed during the quarter ended March 31, 2021 and 99.2% of rents billed during the quarter ended December 31, 2020. |
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.
Management Commentary
“We are pleased to report a strong start to the year as vaccine distribution is supporting accelerated re-openings across all of our markets. For the first quarter of 2021, same store NOI increased by 5.3%, led by our continual focus on driving occupancy and rental rates. Our same store occupancy increased 40 basis points since the fourth quarter of 2020, and a sizeable 260 basis points on a year-over-year basis. Rental rates continued to move higher, growing 5.9% over the expiring leases during the first quarter and 4.6% during the second quarter to date. We are excited with the start of this year and remain confident in our growth strategy. As a result, we are raising our 2021 guidance given an improving outlook and the growth potential of our attractive market presence,” said Scott Schaeffer, Chairman and CEO of IRT.
Same Store Property Operating Results
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First Quarter 2021 Compared to First Quarter 2020(1) |
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Rental and other property revenue |
5.6% increase |
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Property operating expenses |
6.2% increase |
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Net operating income (“NOI”) |
5.3% increase |
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Portfolio average occupancy |
260 bps increase to 95.3% |
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Portfolio average rental rate |
2.9% increase to $1,129 |
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NOI Margin |
20 bps decrease to 61.5% |
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(1) |
Same store portfolio for the three and twelve months ended March 31, 2021 includes 54 properties, which represent 14,995 units. |
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Same Store Property Operating Results, Excluding Value Add
The same store portfolio results below exclude 18 communities that are both part of the same store portfolio and were actively undergoing Value Add renovations during the three months ended March 31, 2021.
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First Quarter 2021 Compared to First Quarter 2020(1) |
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Rental and other property revenue |
3.1% increase |
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Property operating expenses |
4.2% increase |
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Net operating income (“NOI”) |
2.5% increase |
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Portfolio average occupancy |
170 bps increase to 95.8% |
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Portfolio average rental rate |
1.7% increase to $1,099 |
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NOI Margin |
40 bps decrease to 61.5% |
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(1) |
Same store portfolio, excluding value add, for the three and twelve months ended March 31, 2021 includes 36 properties, which represent 9,439 units. |
COVID-19 Metrics (1)(2)
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Rent collections |
1Q 2021 |
1Q 2020 |
4Q 2020 |
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Rent collected for the period presented, as a percentage of rent billed |
98.4% |
99.1% |
99.1% |
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Deferred payment plans: (3) |
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Number of deferred payment plans |
2 |
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13 |
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Amount of monthly rent deferred for period presented |
$4 |
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$61 |
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Amount of monthly rent deferred for the period presented, as a percentage of rent billed |
0.0% |
0.0% |
0.1% |
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Combined rent collected and rent subject to deferred payment plans, as a percentage of rent billed |
98.4% |
99.1% |
99.2% |
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(1) |
Dollar amounts in thousands. All metrics presented are as of April 27, 2021 for our total portfolio in the period presented. |
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(2) |
All metrics are based on our internal data, which management uses to monitor property performance on a daily or weekly basis. |
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(3) |
Deferred payment plans allow residents to defer a portion of their monthly rent for one or more months or to repay over time past-due rent which was unpaid due to a COVID-related financial hardship. Residents must provide evidence of hardship and commit to a full 12-month lease term, which allows deferred payments to be repaid over a longer remaining lease term. As of March 31, 2021, there were 104 active deferred payment plans with an aggregate of $44,896 of deferred rent outstanding. |
As a result of the COVID-19 pandemic, our bad debt continues to exceed historical levels. During the first quarter, our net bad debt was $433,000 or 80 basis points of revenue. The table below presents additional details on the components of bad debt:
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Components of Bad Debt (1) |
1Q 2021 |
1Q 2020 |
4Q 2020 |
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Percentage |
Amount |
Percentage |
Amount |
Percentage |
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Charge-offs, net |
$386 |
0.7% |
$337 |
0.7% |
$289 |
0.5% |
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Provision for bad debt |
$47 |
0.1% |
- |
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$124 |
0.3% |
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Net bad debt |
$433 |
0.8% |
$337 |
0.7% |
$413 |
0.8% |
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(1) |
Dollar amounts are in thousands and percentages are as a percentage of total rental and other property income. Bad debt is recorded as a reduction to rental and other property revenue in our consolidated statements of operations. |
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Operating statistics |
April 2021 |
April 2020 |
1Q 2021 |
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Rent collected for the period presented, as a percentage of rent billed |
96.6% |
99.0% |
98.4% |
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Amount of monthly rent deferred for the period presented, as a percentage of rent billed |
0.0% |
0.6% |
0.0% |
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Combined rent collected and rent subject to deferred payment plans, as a percentage of rent billed |
96.6% |
99.6% |
98.4% |
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Total portfolio average occupancy |
96.0% |
92.7% |
95.3% |
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Total portfolio average effective monthly rent per unit |
$1,154 |
$1,106 |
$1,142 |
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Resident retention rate |
49.7% |
54.8% |
46.4% |
Lease-Over-Lease Effective Rent Growth (1)
The table below depicts lease-over-lease effective rent growth for all new and renewal leases entered into during the respective periods for the 54-property same store portfolio.
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Lease Type |
1Q 2021 |
2Q 2021 (2) |
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New Leases |
6.8% |
9.6% |
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Renewal Leases |
4.8% |
3.7% |
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Total |
5.9% |
4.6% |
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(1) |
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. |
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(2) |
For new leases and renewals commencing during 2Q 2021 that were signed as of April 27, 2021. |
Value Add Program
We completed renovations on 142 units during the quarter ended March 31, 2021. From inception of our value add program in January 2018 through March 31, 2021, we completed renovations on 3,861 units, achieving a return on investment of 16.1% (18.5% on interior renovation costs) and an average monthly rental increase of 18.5%.
At-the-Market Offering
On November 13, 2020 we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock having an aggregate offering price of up to $150 million (the “ATM Program”) in negotiated transactions or transactions that are deemed to be “at the market” offerings. Under the ATM Program, we may also enter into one or more forward sale transactions for the sale of shares of our common stock on a forward basis. In the three months ended March 31, 2021, we entered into a forward sale transaction under the ATM Program for the forward sale of 2,000,000 shares of our common stock. We expect to physically settle the forward sale transaction by the maturity date (December 15, 2021) of the forward sale transaction. Assuming the forward sale transaction is physically settled in full utilizing the current forward sale price of $14.50 per share, net of sales commissions, we expect to receive net proceeds of approximately $29.0 million, subject to adjustment in accordance with the forward sale transaction.
Financial Flexibility
As of March 31, 2021, we had a total liquidity position of approximately $205.6 million, which includes unrestricted cash, additional capacity under our unsecured line of credit, and approximately $41.2 million of proceeds that we will receive upon settlement of forward sale agreements covering 2,900,000 shares of common stock.
Capital Expenditures
For the three months ended March 31, 2021, recurring capital expenditures for the total portfolio were $1.1 million, or $73 per unit.
Distributions
On March 15, 2021, our Board of Directors declared a quarterly cash dividend of $0.12 per share of our common stock, which was paid on April 23, 2021 to stockholders of record at the close of business on April 2, 2021.
7
2021 EPS and CFFO Guidance
Given portfolio performance during the quarter ended March 31, 2021, IRT is updating its 2021 full year guidance. EPS per diluted share is projected to be in a range of $0.5 to $0.8. CFFO per diluted share, a non-GAAP financial measure, is projected to be in the range of $0.72 to $0.75 using our new definition of CFFO. Our previous guidance has been adjusted to conform to the current CFFO definition, which now includes the effect of stock compensation expense and amortization of deferred financing costs. A reconciliation of IRT's projected net income allocable to common shares to its projected CFFO per share is included below. Also included below are the primary assumptions underlying these estimates. See the schedules and definitions at the end of this release for further information regarding how IRT calculates CFFO and for management’s rationale for the usefulness of CFFO.
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Previous Guidance |
Current Guidance |
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2021 Full Year EPS and CFFO Guidance (1)(2) |
Low |
High |
Low |
High |
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Earnings per share |
$0.04 |
$0.08 |
$0.05 |
$0.08 |
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Adjustments: |
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Depreciation and amortization |
0.67 |
0.67 |
0.67 |
0.67 |
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CORE FFO per share allocated to common shareholders |
$0.71 |
$0.75 |
$0.72 |
$0.75 |
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(1) |
This guidance, including the underlying assumptions presented in the table below, constitutes forward-looking information. Actual full year 2021 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements” below. Our guidance is based on the key guidance assumptions detailed below. |
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(2) |
Per share guidance is based on 102.6 million weighted average shares and units outstanding. |
2021 Guidance Assumptions
Our key guidance assumptions for 2021 are enumerated below:
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Same Store Communities |
Previous 2021 Outlook |
Current 2021 Outlook |
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Number of properties/units |
54 properties / 14,955 units |
54 properties / 14,955 units |
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Property revenue growth |
2.75% to 4.25% |
3.75% to 5.0% |
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Controllable property operating expense growth |
2.0% to 3.0% |
3.0% to 4.0% |
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Real estate tax and insurance expense increase |
7.0% to 9.0% |
7.0% to 8.0% |
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Total operating expense growth |
4.0% to 5.25% |
4.25% to 5.5% |
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Same store property NOI growth |
1.5% to 3.5% |
3.25% to 5.0% |
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Corporate Expenses |
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General and administrative expenses |
$15.5 to $17.0 million (1) |
$16.5 to $18.0 million |
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Property management expenses |
$8.5 to $9.2 million (1) |
$8.25 to $8.75 million |
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Interest expense |
$34.0 to $35.5 million (1) |
$34.0 to $35.5 million |
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Transaction/Investment Volume |
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Acquisition volume |
None assumed |
$100 million to $200 million |
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Disposition volume |
None assumed |
$0 million to $100 million |
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Capital Expenditures |
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Recurring |
$7.0 to $8.0 million |
$7.0 to $7.5 million |
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Value add & non-recurring |
$28.5 to $32.5 million |
$28.5 to $32.5 million |
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(1) |
During the three months ended March 31, 2021, we updated our definition of CFFO to include the effects of stock compensation expense and the amortization of deferred financing costs. As a result, we have updated our previous 2021 outlook to conform to the new definition. We previously highlighted the impact that this definition change would have on these line items. Please refer to footnotes 2 and 3 on page 10 of our Q4 and Full Year 2020 Supplemental dated February 10, 2021. In addition, please see the updated definition of CFFO within the definitions section of this release. |
8
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 29, 2021 from the investor relations section of the IRT website at www.irtliving.com or by dialing 1.833.789.1330. 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 and telephonically until Thursday, May 6, 2021 by dialing 1.800.585.8367, access code 1235436.
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 apartment properties across non-gateway U.S. markets, including Atlanta, Dallas, Louisville, Memphis, Raleigh and Tampa. IRT’s investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation. More information may be found on IRT’s website at www.irtliving.com.
9
Forward-Looking Statements
This press 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 can generally be identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. These forward-looking statements include, without limitation, our expectations with respect to capital allocations, including as to the timing and amount of future dividends. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally not within our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Risks and uncertainties that might cause our actual results and/or future dividends to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks related to the impact of COVID-19 and other potential future outbreaks of infectious diseases on our financial condition, results of operations, cash flows and performance and those of our residents as well as on the economy and real estate and financial markets; changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could limit our ability to lease units or increase rents or 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; inability of tenants to meet their rent and other lease obligations and charge-offs in excess of our allowance for bad debt; legislative restrictions that may delay or limit collections of past due rents; risks endemic to real estate and the real estate industry generally; the effects of natural and other disasters; delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve projected rent increases and occupancy levels on account of the initiatives; unexpected costs of REIT qualification compliance; costs and disruptions as the result of a cybersecurity incident or other technology disruption; and share price fluctuations. Please refer to the documents filed by us with the SEC, including specifically the “Risk Factors” sections of our Form 10-K for the year ended December 31, 2020, 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. 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. In addition, the declaration of dividends on our common stock is subject to the discretion of our Board of Directors and depends upon a broad range of factors, including our results of operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, applicable legal requirements and such other factors as our Board of Directors may from time to time deem relevant. For these reasons, as well as others, there can be no assurance that dividends in the future will be equal or similar to the amount of the quarterly dividend described in this press release.
Independence Realty Trust, Inc. Contact
Edelman Financial Communications & Capital Markets
Ted McHugh and Lauren Torres
917-365-7979
IRT@edelman.com
10
FINANCIAL & OPERATING HIGHLIGHTS
Dollars in thousands, except per share data
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For the Three Months Ended |
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March 31, 2021 |
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December 31, 2020 |
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September 30, 2020 |
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June 30, 2020 |
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March 31, 2020 |
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Selected Financial Information: |
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Operating Statistics: |
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Net income available to common shares |
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$1,086 |
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$13,261 |
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$1,090 |
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$789 |
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$(372) |
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Earnings (loss) per share -- diluted |
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$0.01 |
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0.14 |
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$0.01 |
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$0.01 |
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$0.00 |
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Rental and other property revenue |
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$54,811 |
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$53,923 |
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$54,001 |
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$52,087 |
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$51,156 |
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Property operating expenses |
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$20,838 |
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$20,138 |
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$22,129 |
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$20,974 |
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$19,737 |
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Net operating income |
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$33,973 |
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$33,785 |
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$31,872 |
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$31,113 |
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$31,419 |
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NOI margin |
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62.0% |
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62.7% |
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59.0% |
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59.7% |
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61.4% |
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Adjusted EBITDA |
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$26,389 |
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$28,534 |
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$27,081 |
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$25,643 |
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$24,081 |
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CORE FFO per share (c) |
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$0.18 |
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$0.22 |
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$0.20 |
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$0.19 |
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$0.19 |
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Dividends per share |
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$0.12 |
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$0.12 |
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$0.12 |
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$0.12 |
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$0.18 |
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CORE FFO payout ratio |
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66.7% |
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54.5% |
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60.0% |
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63.2% |
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94.7% |
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Portfolio Data: |
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Total gross assets |
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$1,970,979 |
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$1,962,895 |
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$1,914,900 |
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$1,916,424 |
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$1,949,494 |
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Total number of properties |
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56 |
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56 |
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58 |
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58 |
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58 |
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Total units |
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15,667 |
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15,667 |
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15,805 |
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15,805 |
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15,805 |
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Period end occupancy |
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95.5% |
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95.3% |
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94.4% |
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93.5% |
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92.7% |
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Total portfolio average occupancy |
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95.4% |
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95.0% |
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94.1% |
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92.9% |
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92.5% |
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Total portfolio average effective monthly rent, per unit |
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$1,142 |
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$1,136 |
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$1,118 |
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$1,108 |
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$1,100 |
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Same store period end occupancy (a) |
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95.5% |
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95.3% |
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94.3% |
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93.6% |
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93.0% |
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Same store portfolio average occupancy (a) |
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95.3% |
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94.9% |
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94.0% |
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93.1% |
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92.7% |
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Same store portfolio average effective monthly rent, per unit (a) |
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$1,129 |
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$1,121 |
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$1,111 |
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$1,107 |
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$1,097 |
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Capitalization: |
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Total debt |
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$947,631 |
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$945,686 |
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$1,004,237 |
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$1,008,911 |
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$1,049,541 |
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Common share price, period end |
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$15.20 |
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$13.43 |
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$11.59 |
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$11.45 |
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$8.94 |
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Market equity capitalization |
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$1,561,165 |
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$1,376,283 |
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$1,107,144 |
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$1,093,822 |
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$853,600 |
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Total market capitalization |
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$2,508,796 |
|
$2,321,969 |
|
$2,111,381 |
|
$2,102,733 |
|
$1,903,141 |
|
|
Total debt/total gross assets |
|
48.1% |
|
48.2% |
|
52.4% |
|
52.6% |
|
53.8% |
|
|
Net debt to Adjusted EBITDA (pro forma) (b) |
|
8.2x |
|
8.2x |
|
9.1x |
|
9.2x |
|
9.0x |
|
|
Interest coverage |
|
3.1x |
|
3.2x |
|
3.0x |
|
2.8x |
|
2.5x |
|
|
Common shares and OP Units: |
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding |
|
102,033,733 |
|
101,803,762 |
|
94,823,806 |
|
94,741,146 |
|
94,691,806 |
|
|
OP units outstanding |
|
674,515 |
|
674,517 |
|
701,986 |
|
789,134 |
|
789,134 |
|
|
Common shares and OP units outstanding |
|
102,708,248 |
|
102,478,278 |
|
95,525,792 |
|
95,530,279 |
|
95,480,939 |
|
|
Weighted average common shares and units |
|
102,353,380 |
|
95,529,788 |
|
95,227,176 |
|
95,224,855 |
|
91,737,113 |
|
|
|
(a) |
Same store portfolio consists of 54 properties, which represent 14,995 units. |
|
|
(c) |
Reflects adjustment to prior periods to conform to our current definition of CFFO. See our definition of CFFO for additional discussion. |
11
Dollars in thousands, except per share data
|
|
|
As of |
||||||||
|
|
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
Investments in real estate at cost |
|
$1,922,071 |
|
$1,916,770 |
|
$1,815,754 |
|
$1,864,182 |
|
$1,856,760 |
|
Less: accumulated depreciation |
|
(223,187) |
|
(208,618) |
|
(194,644) |
|
(187,758) |
|
(172,789) |
|
Investments in real estate, net |
|
1,698,884 |
|
1,708,152 |
|
1,621,110 |
|
1,676,424 |
|
1,683,971 |
|
Real estate held for sale |
|
— |
|
— |
|
49,264 |
|
— |
|
— |
|
Cash and cash equivalents |
|
8,653 |
|
8,751 |
|
9,891 |
|
11,652 |
|
57,436 |
|
Restricted cash |
|
4,449 |
|
4,864 |
|
7,218 |
|
6,509 |
|
4,740 |
|
Other assets |
|
12,824 |
|
12,338 |
|
12,945 |
|
14,253 |
|
10,731 |
|
Derivative assets |
|
2,810 |
|
— |
|
— |
|
— |
|
— |
|
Intangible assets, net |
|
396 |
|
792 |
|
— |
|
74 |
|
260 |
|
Total assets |
|
$1,728,016 |
|
$1,734,897 |
|
$1,700,428 |
|
$1,708,912 |
|
$1,757,138 |
|
Liabilities and Equity: |
|
|
|
|
|
|
|
|
|
|
|
Indebtedness, net |
|
$947,631 |
|
$945,686 |
|
$1,004,237 |
|
$1,008,911 |
|
$1,049,541 |
|
Accounts payable and accrued expenses |
|
24,535 |
|
25,416 |
|
34,319 |
|
28,748 |
|
21,250 |
|
Accrued interest payable |
|
1,888 |
|
1,976 |
|
1,888 |
|
1,970 |
|
2,099 |
|
Dividends payable |
|
12,293 |
|
12,257 |
|
11,449 |
|
11,423 |
|
17,128 |
|
Derivative liabilities |
|
19,540 |
|
29,842 |
|
33,453 |
|
34,614 |
|
30,937 |
|
Other liabilities |
|
6,991 |
|
6,949 |
|
6,736 |
|
6,860 |
|
7,012 |
|
Total liabilities |
|
1,012,878 |
|
1,022,126 |
|
1,092,082 |
|
1,092,526 |
|
1,127,967 |
|
Equity: |
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
Preferred shares, $0.01 par value per share |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Common shares, $0.01 par value per share |
|
1,018 |
|
1,018 |
|
948 |
|
947 |
|
947 |
|
Additional paid in capital |
|
920,042 |
|
919,615 |
|
820,105 |
|
818,719 |
|
817,501 |
|
Accumulated other comprehensive income (loss) |
|
(20,497) |
|
(33,822) |
|
(37,688) |
|
(39,099) |
|
(35,750) |
|
Retained earnings (deficit) |
|
(190,151) |
|
(178,751) |
|
(179,834) |
|
(169,585) |
|
(159,045) |
|
Total shareholders' equity |
|
710,412 |
|
708,060 |
|
603,531 |
|
610,982 |
|
623,653 |
|
Noncontrolling Interests |
|
4,726 |
|
4,711 |
|
4,815 |
|
5,404 |
|
5,518 |
|
Total equity |
|
715,138 |
|
712,771 |
|
608,346 |
|
616,386 |
|
629,171 |
|
Total liabilities and equity |
|
$1,728,016 |
|
$1,734,897 |
|
$1,700,428 |
|
$1,708,912 |
|
$1,757,138 |
12
STATEMENTS OF OPERATIONS, FFO & CORE FFO
TRAILING FIVE QUARTERS
Dollars in thousands, except per share data
|
|
|
For the Three-Months Ended |
||||||||
|
|
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Rental and other property revenue |
|
$54,811 |
|
$53,923 |
|
$54,001 |
|
$52,087 |
|
$51,156 |
|
Other revenue |
|
301 |
|
165 |
|
199 |
|
181 |
|
194 |
|
Total revenue |
|
55,112 |
|
54,088 |
|
54,200 |
|
52,268 |
|
51,350 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses |
|
20,838 |
|
20,138 |
|
22,129 |
|
20,974 |
|
19,737 |
|
Property management expenses |
|
1,943 |
|
2,183 |
|
2,078 |
|
2,077 |
|
2,156 |
|
General and administrative expenses (a) |
|
5,942 |
|
3,233 |
|
2,912 |
|
3,574 |
|
5,376 |
|
Depreciation and amortization expense |
|
16,552 |
|
15,396 |
|
15,232 |
|
15,231 |
|
14,828 |
|
Abandoned deal costs |
|
— |
|
— |
|
— |
|
— |
|
130 |
|
Casualty losses |
|
359 |
|
300 |
|
— |
|
411 |
|
— |
|
Total expenses |
|
45,634 |
|
41,250 |
|
42,351 |
|
42,267 |
|
42,227 |
|
Interest expense |
|
(8,385) |
|
(8,872) |
|
(8,917) |
|
(9,202) |
|
(9,497) |
|
Gain on sale (loss on impairment) of real estate assets, net |
|
— |
|
9,394 |
|
(1,840) |
|
— |
|
— |
|
Net income (loss) |
|
1,093 |
|
13,360 |
|
1,092 |
|
799 |
|
(374) |
|
(Income) loss allocated to noncontrolling interests |
|
(7) |
|
(99) |
|
(2) |
|
(10) |
|
2 |
|
Net income (loss) available to common shares |
|
$1,086 |
|
$13,261 |
|
$1,090 |
|
$789 |
|
$(372) |
|
EPS - basic |
|
$0.01 |
|
$0.14 |
|
$0.01 |
|
$0.01 |
|
$- |
|
Weighted-average shares outstanding - Basic |
|
101,678,865 |
|
94,846,369 |
|
94,456,987 |
|
94,435,722 |
|
90,895,488 |
|
EPS - diluted |
|
$0.01 |
|
$0.14 |
|
$0.01 |
|
$0.01 |
|
$- |
|
Weighted-average shares outstanding - Diluted |
|
102,763,106 |
|
95,876,357 |
|
95,222,623 |
|
95,070,734 |
|
90,895,488 |
|
Funds From Operations (FFO): |
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) |
|
$1,093 |
|
$13,360 |
|
$1,092 |
|
$799 |
|
$(374) |
|
Add-Back (Deduct): |
|
|
|
|
|
|
|
|
|
|
|
Real estate depreciation and amortization |
|
16,472 |
|
15,316 |
|
15,155 |
|
15,156 |
|
14,725 |
|
Loss on impairment (gain on sale) of real estate assets, net, excluding debt extinguishment costs |
|
— |
|
(9,394) |
|
1,840 |
|
— |
|
— |
|
FFO |
|
$17,565 |
|
$19,282 |
|
$18,087 |
|
$15,955 |
|
$14,351 |
|
FFO per share |
|
$0.17 |
|
$0.20 |
|
$0.19 |
|
$0.17 |
|
$0.16 |
|
CORE Funds From Operations (CFFO): (b) |
|
|
|
|
|
|
|
|
|
|
|
FFO |
|
$17,565 |
|
$19,282 |
|
$18,087 |
|
$15,955 |
|
$14,351 |
|
Add-Back (Deduct): |
|
|
|
|
|
|
|
|
|
|
|
Other depreciation and amortization |
|
80 |
|
80 |
|
77 |
|
75 |
|
103 |
|
Abandoned deal costs |
|
— |
|
— |
|
— |
|
— |
|
130 |
|
Casualty losses |
|
359 |
|
300 |
|
— |
|
411 |
|
— |
|
CFFO |
|
$18,004 |
|
$19,662 |
|
$18,164 |
|
$16,441 |
|
$14,584 |
|
CFFO per share |
|
$0.18 |
|
$0.21 |
|
$0.19 |
|
$0.17 |
|
$0.16 |
|
Weighted-average shares and units outstanding |
|
102,353,380 |
|
95,529,788 |
|
95,227,176 |
|
95,224,855 |
|
91,737,113 |
|
|
(a) |
Included in the three-months ended March 31, 2021 and 2020 is $2.1 million and $1.7 million, respectively, of stock compensation expense recorded with respect to stock awards granted during the period to retirement eligible employees. |
|
|
(b) |
Reflects adjustment to prior periods to conform to our current definition of CFFO. See our definition of CFFO for additional discussion. |
13
STATEMENTS OF OPERATIONS, FFO & CORE FFO
THREE MONTHS ENDED MARCH 31, 2021 and 2020
Dollars in thousands, except per share data
|
|
|
For the Three Months Ended March 31, |
||
|
|
|
2021 |
|
2020 |
|
Revenue: |
|
|
|
|
|
Rental and other property revenue |
|
$54,811 |
|
$51,156 |
|
Other revenue |
|
301 |
|
194 |
|
Total revenue |
|
55,112 |
|
51,350 |
|
Expenses: |
|
|
|
|
|
Property operating expenses |
|
20,838 |
|
19,737 |
|
Property management expenses |
|
1,943 |
|
2,156 |
|
General and administrative expenses (a) |
|
5,942 |
|
5,376 |
|
Depreciation and amortization expense |
|
16,552 |
|
14,828 |
|
Abandoned deal costs |
|
— |
|
130 |
|
Casualty losses |
|
359 |
|
— |
|
Total expenses |
|
45,634 |
|
42,227 |
|
Interest expense |
|
(8,385) |
|
(9,497) |
|
Net income (loss) |
|
1,093 |
|
(374) |
|
(Income) loss allocated to noncontrolling interests |
|
(7) |
|
2 |
|
Net income (loss) available to common shares |
|
$1,086 |
|
$(372) |
|
EPS - basic |
|
$0.01 |
|
$0.00 |
|
Weighted-average shares outstanding - Basic |
|
101,678,865 |
|
90,895,488 |
|
EPS - diluted |
|
$0.01 |
|
$0.00 |
|
Weighted-average shares outstanding - Diluted |
|
102,763,106 |
|
90,895,488 |
|
|
|
|
|
|
|
Funds From Operations (FFO): |
|
|
|
|
|
Net Income (loss) |
|
$1,093 |
|
$(374) |
|
Adjustments: |
|
|
|
|
|
Real estate depreciation and amortization |
|
16,472 |
|
14,725 |
|
Funds From Operations |
|
$17,565 |
|
$14,351 |
|
FFO per share |
|
$0.17 |
|
$0.16 |
|
Core Funds From Operations (CFFO): (b) |
|
|
|
|
|
Funds From Operations |
|
$17,565 |
|
$14,351 |
|
Adjustments: |
|
|
|
|
|
Other depreciation and amortization |
|
80 |
|
103 |
|
Abandoned deal costs |
|
— |
|
130 |
|
Casualty losses |
|
359 |
|
— |
|
Debt extinguishment costs included in net gains (losses) on sale of assets |
|
— |
|
— |
|
Core Funds From Operations |
|
$18,004 |
|
$14,584 |
|
CFFO per share |
|
$0.18 |
|
$0.16 |
|
Weighted-average shares and units outstanding |
|
102,353,380 |
|
91,737,113 |
|
|
(a) |
Included in the three-months ended March 31, 2021 and 2020 is $2.1 million and $1.7 million, respectively, of stock compensation expense recorded with respect to stock awards granted during the period to retirement eligible employees. |
|
|
(b) |
Reflects adjustment to prior periods to conform to our current definition of CFFO. See our definition of CFFO for additional discussion. |
14
ADJUSTED EBITDA RECONCILIATION AND COVERAGE RATIO
Dollars in thousands
|
|
|
Three Months Ended |
|
||||||||
|
ADJUSTED EBITDA: |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
|
Net income (loss) |
|
$1,093 |
|
$13,360 |
|
$1,092 |
|
$799 |
|
$(374) |
|
|
Add-Back (Deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
16,552 |
|
15,396 |
|
15,232 |
|
15,231 |
|
14,828 |
|
|
Interest expense |
|
8,385 |
|
8,872 |
|
8,917 |
|
9,202 |
|
9,497 |
|
|
Net loss on impairment (gain on sale) of real estate assets |
|
— |
|
(9,394) |
|
1,840 |
|
— |
|
— |
|
|
Abandoned deal costs |
|
— |
|
— |
|
— |
|
— |
|
130 |
|
|
Casualty losses |
|
359 |
|
300 |
|
— |
|
411 |
|
— |
|
|
Adjusted EBITDA |
|
$26,389 |
|
$28,534 |
|
$27,081 |
|
$25,643 |
|
$24,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST COST: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
$8,385 |
|
$8,872 |
|
$8,917 |
|
$9,202 |
|
$9,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST COVERAGE: |
|
3.1x |
|
3.2x |
|
3.0x |
|
2.8x |
|
2.5x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
SAME STORE PORTFOLIO NET OPERATING INCOME
TRAILING FIVE QUARTERS
Dollars in thousands, except per unit data
|
|
|
For the Three-Months Ended (a) |
||||||||
|
|
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Rental and other property revenue |
|
$51,878 |
|
$51,364 |
|
$50,843 |
|
$49,426 |
|
$49,121 |
|
Property Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes |
|
6,457 |
|
6,118 |
|
6,403 |
|
6,539 |
|
6,018 |
|
Property insurance |
|
1,188 |
|
1,195 |
|
1,169 |
|
1,101 |
|
916 |
|
Personnel expenses |
|
4,593 |
|
4,677 |
|
5,039 |
|
4,738 |
|
4,464 |
|
Utilities |
|
2,920 |
|
2,730 |
|
2,931 |
|
2,581 |
|
2,793 |
|
Repairs and maintenance |
|
1,653 |
|
1,552 |
|
2,123 |
|
1,697 |
|
1,547 |
|
Contract services |
|
2,029 |
|
2,026 |
|
2,050 |
|
2,071 |
|
1,849 |
|
Advertising expenses |
|
525 |
|
476 |
|
587 |
|
489 |
|
532 |
|
Other expenses |
|
590 |
|
563 |
|
544 |
|
487 |
|
672 |
|
Total property operating expenses |
|
19,955 |
|
19,337 |
|
20,846 |
|
19,703 |
|
18,791 |
|
Same-store net operating income (a) |
|
$31,923 |
|
$32,027 |
|
$29,997 |
|
$29,723 |
|
$30,330 |
|
Same-store NOI margin |
|
61.5% |
|
62.4% |
|
59.0% |
|
60.1% |
|
61.7% |
|
Average occupancy |
|
95.3% |
|
94.9% |
|
94.0% |
|
93.1% |
|
92.7% |
|
Average effective monthly rent, per unit |
|
$1,129 |
|
$1,121 |
|
$1,111 |
|
$1,107 |
|
$1,097 |
|
Reconciliation of same-store net operating income to net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
Same-store net operating income |
|
$31,923 |
|
$32,027 |
|
$29,997 |
|
$29,723 |
|
$30,330 |
|
Non same-store net operating income |
|
2,050 |
|
1,758 |
|
1,875 |
|
1,390 |
|
1,089 |
|
Other revenue |
|
301 |
|
165 |
|
199 |
|
181 |
|
194 |
|
Property management expenses |
|
(1,943) |
|
(2,183) |
|
(2,078) |
|
(2,077) |
|
(2,156) |
|
General and administrative expenses |
|
(5,942) |
|
(3,233) |
|
(2,912) |
|
(3,574) |
|
(5,376) |
|
Depreciation and amortization expense |
|
(16,552) |
|
(15,396) |
|
(15,232) |
|
(15,231) |
|
(14,828) |
|
Abandoned deal costs |
|
— |
|
— |
|
— |
|
— |
|
(130) |
|
Casualty losses |
|
(359) |
|
(300) |
|
— |
|
(411) |
|
— |
|
Interest expense |
|
(8,385) |
|
(8,872) |
|
(8,917) |
|
(9,202) |
|
(9,497) |
|
Gain on sale (loss on impairment) of real estate assets, net |
|
— |
|
9,394 |
|
(1,840) |
|
— |
|
— |
|
Net income (loss) |
|
$1,093 |
|
$13,360 |
|
$1,092 |
|
$799 |
|
$(374) |
16
SAME STORE PORTFOLIO NET OPERATING INCOME
THREE MONTHS ENDED MARCH 31, 2021 and 2020
Dollars in thousands, except per unit data
|
|
|
For the Three Months Ended March 31, |
||||
|
|
|
2021 |
|
2020 |
|
% change |
|
Revenue: |
|
|
|
|
|
|
|
Rental and other property revenue |
|
$51,878 |
|
$49,121 |
|
5.6% |
|
Property Operating Expenses: |
|
|
|
|
|
|
|
Real estate taxes |
|
6,457 |
|
6,018 |
|
7.3% |
|
Property insurance |
|
1,188 |
|
916 |
|
29.7% |
|
Personnel expenses |
|
4,593 |
|
4,464 |
|
2.9% |
|
Utilities |
|
2,920 |
|
2,793 |
|
4.5% |
|
Repairs and maintenance |
|
1,653 |
|
1,547 |
|
6.9% |
|
Contract services |
|
2,029 |
|
1,849 |
|
9.7% |
|
Advertising expenses |
|
525 |
|
532 |
|
-1.3% |
|
Other expenses |
|
590 |
|
672 |
|
-12.2% |
|
Total property operating expenses |
|
19,955 |
|
18,791 |
|
6.2% |
|
Same-store net operating income (a) |
|
$31,923 |
|
$30,330 |
|
5.3% |
|
Same-store NOI margin |
|
61.5% |
|
61.7% |
|
-0.2% |
|
Average occupancy |
|
95.3% |
|
92.7% |
|
2.6% |
|
Average effective monthly rent, per unit |
|
$1,129 |
|
$1,097 |
|
2.9% |
|
Reconciliation of same-store net operating income to net income (loss) |
|
|
|
|
|
|
|
Same-store portfolio net operating income |
|
$31,923 |
|
$30,330 |
|
|
|
Non same-store net operating income |
|
2,050 |
|
1,089 |
|
|
|
Other revenue |
|
301 |
|
194 |
|
|
|
Property management expenses |
|
(1,943) |
|
(2,156) |
|
|
|
General and administrative expenses |
|
(5,942) |
|
(5,376) |
|
|
|
Depreciation and amortization expense |
|
(16,552) |
|
(14,828) |
|
|
|
Abandoned deal costs |
|
— |
|
(130) |
|
|
|
Casualty losses |
|
(359) |
|
— |
|
|
|
Interest expense |
|
(8,385) |
|
(9,497) |
|
|
|
Net income (loss) |
|
$1,093 |
|
$(374) |
|
|
|
(a) |
Same store portfolio consists of 54 properties, which represent 14,995 units. |
17
NET OPERATING INCOME (NOI) BRIDGE
TRAILING FIVE QUARTERS
Dollars in thousands
|
|
|
For the Three-Months Ended |
||||||||
|
|
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Rental and other property revenue |
|
|
|
|
|
|
|
|
|
|
|
Same store (a) |
|
$51,878 |
|
$51,364 |
|
$50,843 |
|
$49,426 |
|
$49,121 |
|
Non same-store |
|
2,933 |
|
2,559 |
|
3,158 |
|
2,661 |
|
2,035 |
|
Total rental and other property revenue |
|
54,811 |
|
53,923 |
|
54,001 |
|
52,087 |
|
51,156 |
|
Property operating expenses |
|
|
|
|
|
|
|
|
|
|
|
Same store (a) |
|
19,955 |
|
19,337 |
|
20,846 |
|
19,703 |
|
18,791 |
|
Non same-store |
|
883 |
|
801 |
|
1,283 |
|
1,271 |
|
946 |
|
Total property operating expenses |
|
20,838 |
|
20,138 |
|
22,129 |
|
20,974 |
|
19,737 |
|
Net operating income |
|
|
|
|
|
|
|
|
|
|
|
Same-store (a) |
|
31,923 |
|
32,027 |
|
29,997 |
|
29,723 |
|
30,330 |
|
Non same-store |
|
2,050 |
|
1,758 |
|
1,875 |
|
1,390 |
|
1,089 |
|
Total property net operating income |
|
$33,973 |
|
$33,785 |
|
$31,872 |
|
$31,113 |
|
$31,419 |
|
Reconciliation of NOI to net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
Total property net operating income |
|
$33,973 |
|
$33,785 |
|
$31,872 |
|
$31,113 |
|
$31,419 |
|
Other revenue |
|
301 |
|
165 |
|
199 |
|
181 |
|
194 |
|
Property management expenses |
|
(1,943) |
|
(2,183) |
|
(2,078) |
|
(2,077) |
|
(2,156) |
|
General and administrative expenses |
|
(5,942) |
|
(3,233) |
|
(2,912) |
|
(3,574) |
|
(5,376) |
|
Depreciation and amortization expense |
|
(16,552) |
|
(15,396) |
|
(15,232) |
|
(15,231) |
|
(14,828) |
|
Abandoned deal costs |
|
— |
|
— |
|
— |
|
— |
|
(130) |
|
Casualty losses |
|
(359) |
|
(300) |
|
— |
|
(411) |
|
— |
|
Interest expense |
|
(8,385) |
|
(8,872) |
|
(8,917) |
|
(9,202) |
|
(9,497) |
|
Gain on sale (loss on impairment) of real estate assets, net |
|
— |
|
9,394 |
|
(1,840) |
|
— |
|
— |
|
Net income (loss) |
|
$1,093 |
|
$13,360 |
|
$1,092 |
|
$799 |
|
$(374) |
|
(a) |
Same store portfolio consists of 54 properties, which represent 14,995 units. |
18
SAME-STORE PORTFOLIO NET OPERATING INCOME BY MARKET
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 |
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
|
Atlanta, GA |
|
6 |
|
2,020 |
|
$7,755 |
|
$7,165 |
|
8.2% |
|
$2,672 |
|
$2,445 |
|
9.3% |
|
$5,083 |
|
$4,720 |
|
7.7% |
|
97.2% |
|
93.9% |
|
3.3% |
|
$1,243 |
|
$1,194 |
|
4.1% |
|
Raleigh - Durham, NC |
|
6 |
|
1,690 |
|
6,322 |
|
6,043 |
|
4.6% |
|
2,106 |
|
2,201 |
|
-4.3% |
|
4,216 |
|
3,842 |
|
9.7% |
|
95.6% |
|
92.9% |
|
2.7% |
|
1,207 |
|
1,181 |
|
2.2% |
|
Memphis, TN |
|
4 |
|
1,383 |
|
5,110 |
|
4,475 |
|
14.2% |
|
1,795 |
|
1,775 |
|
1.1% |
|
3,315 |
|
2,700 |
|
22.8% |
|
96.7% |
|
88.5% |
|
8.3% |
|
1,207 |
|
1,151 |
|
4.8% |
|
Louisville, KY |
|
6 |
|
1,710 |
|
5,396 |
|
5,145 |
|
4.9% |
|
2,253 |
|
2,090 |
|
7.8% |
|
3,143 |
|
3,055 |
|
2.9% |
|
92.5% |
|
89.5% |
|
3.0% |
|
1,020 |
|
1,009 |
|
1.1% |
|
Columbus, OH |
|
6 |
|
1,547 |
|
4,946 |
|
4,708 |
|
5.1% |
|
2,134 |
|
2,004 |
|
6.5% |
|
2,812 |
|
2,704 |
|
4.0% |
|
93.3% |
|
93.0% |
|
0.3% |
|
1,082 |
|
1,032 |
|
4.9% |
|
Tampa-St. Petersburg, FL |
|
4 |
|
1,104 |
|
4,302 |
|
3,942 |
|
9.1% |
|
1,810 |
|
1,571 |
|
15.2% |
|
2,492 |
|
2,371 |
|
5.1% |
|
93.6% |
|
88.5% |
|
5.1% |
|
1,308 |
|
1,252 |
|
4.4% |
|
Oklahoma City, OK |
|
5 |
|
1,658 |
|
3,610 |
|
3,491 |
|
3.4% |
|
1,512 |
|
1,383 |
|
9.3% |
|
2,098 |
|
2,108 |
|
-0.5% |
|
96.6% |
|
95.8% |
|
0.7% |
|
703 |
|
681 |
|
3.2% |
|
Indianapolis, IN |
|
4 |
|
916 |
|
3,048 |
|
2,873 |
|
6.1% |
|
1,259 |
|
1,133 |
|
11.1% |
|
1,789 |
|
1,740 |
|
2.8% |
|
96.5% |
|
94.1% |
|
2.3% |
|
1,070 |
|
1,030 |
|
4.0% |
|
Dallas, TX |
|
3 |
|
734 |
|
2,715 |
|
2,677 |
|
1.4% |
|
1,240 |
|
1,114 |
|
11.3% |
|
1,475 |
|
1,563 |
|
-5.6% |
|
94.9% |
|
95.9% |
|
-1.0% |
|
1,227 |
|
1,202 |
|
2.1% |
|
Myrtle Beach, SC - Wilmington, NC |
|
3 |
|
628 |
|
1,998 |
|
1,864 |
|
7.2% |
|
654 |
|
626 |
|
4.5% |
|
1,344 |
|
1,238 |
|
8.6% |
|
94.7% |
|
89.9% |
|
4.8% |
|
1,058 |
|
1,037 |
|
2.0% |
|
Charleston, SC |
|
2 |
|
518 |
|
2,134 |
|
2,133 |
|
0.0% |
|
924 |
|
916 |
|
0.9% |
|
1,210 |
|
1,217 |
|
-0.6% |
|
95.7% |
|
94.6% |
|
1.1% |
|
1,320 |
|
1,316 |
|
0.3% |
|
Orlando, FL |
|
1 |
|
297 |
|
1,302 |
|
1,356 |
|
-4.0% |
|
546 |
|
490 |
|
11.4% |
|
756 |
|
866 |
|
-12.7% |
|
96.1% |
|
96.1% |
|
0.0% |
|
1,441 |
|
1,496 |
|
-3.6% |
|
Charlotte, NC |
|
1 |
|
208 |
|
1,024 |
|
1,068 |
|
-4.1% |
|
316 |
|
327 |
|
-3.4% |
|
708 |
|
741 |
|
-4.5% |
|
95.9% |
|
98.1% |
|
-2.2% |
|
1,519 |
|
1,564 |
|
-2.9% |
|
Asheville, NC |
|
1 |
|
252 |
|
888 |
|
883 |
|
0.6% |
|
262 |
|
262 |
|
0.0% |
|
626 |
|
621 |
|
0.8% |
|
97.0% |
|
96.0% |
|
1.0% |
|
1,148 |
|
1,157 |
|
-0.8% |
|
St. Louis, MO |
|
1 |
|
152 |
|
705 |
|
710 |
|
-0.7% |
|
263 |
|
248 |
|
6.0% |
|
442 |
|
462 |
|
-4.3% |
|
93.6% |
|
97.6% |
|
-4.0% |
|
1,467 |
|
1,466 |
|
0.0% |
|
Huntsville, AL |
|
1 |
|
178 |
|
623 |
|
588 |
|
6.0% |
|
209 |
|
205 |
|
2.0% |
|
414 |
|
383 |
|
8.1% |
|
98.4% |
|
97.8% |
|
0.6% |
|
1,074 |
|
1,010 |
|
6.3% |
|
Total/Weighted Average |
|
54 |
|
14,995 |
|
$51,878 |
|
$49,121 |
|
5.6% |
|
$19,955 |
|
$18,790 |
|
6.2% |
|
$31,923 |
|
$30,331 |
|
5.3% |
|
95.3% |
|
92.7% |
|
2.6% |
|
$1,129 |
|
$1,097 |
|
2.9% |
TOTAL PORTFOLIO NOI EXPOSURE BY MARKET
Dollars in thousands, except rent per unit
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2021 |
||||
|
Market |
|
Number of Properties |
|
Units |
|
Gross Real Estate Assets |
|
Period End Occupancy |
|
Average Effective Monthly Rent per Unit |
|
Net Operating Income |
|
% of NOI |
|
Atlanta, GA |
|
6 |
|
2,020 |
|
$262,107 |
|
96.2% |
|
$1,243 |
|
$5,083 |
|
14.9% |
|
Raleigh - Durham, NC |
|
6 |
|
1,690 |
|
246,802 |
|
95.9% |
|
1,207 |
|
4,215 |
|
12.4% |
|
Memphis, TN |
|
4 |
|
1,383 |
|
149,703 |
|
97.3% |
|
1,207 |
|
3,315 |
|
9.7% |
|
Louisville, KY |
|
6 |
|
1,710 |
|
202,289 |
|
92.7% |
|
1,020 |
|
3,144 |
|
9.2% |
|
Columbus, OH |
|
6 |
|
1,547 |
|
157,729 |
|
95.0% |
|
1,082 |
|
2,812 |
|
8.3% |
|
Tampa-St. Petersburg, FL |
|
4 |
|
1,104 |
|
182,026 |
|
92.9% |
|
1,308 |
|
2,492 |
|
7.3% |
|
Dallas, TX |
|
4 |
|
985 |
|
140,505 |
|
95.3% |
|
1,316 |
|
2,143 |
|
6.3% |
|
Oklahoma City, OK |
|
5 |
|
1,658 |
|
79,516 |
|
96.9% |
|
703 |
|
2,098 |
|
6.2% |
|
Huntsville, AL |
|
2 |
|
599 |
|
33,657 |
|
98.0% |
|
1,275 |
|
1,855 |
|
5.5% |
|
Indianapolis, IN |
|
4 |
|
916 |
|
110,057 |
|
97.2% |
|
1,070 |
|
1,788 |
|
5.3% |
|
Myrtle Beach, SC - Wilmington, NC |
|
3 |
|
628 |
|
91,977 |
|
94.6% |
|
1,058 |
|
1,343 |
|
3.9% |
|
Charleston, SC |
|
2 |
|
518 |
|
64,953 |
|
95.0% |
|
1,320 |
|
1,210 |
|
3.6% |
|
Orlando, FL |
|
1 |
|
297 |
|
80,246 |
|
95.6% |
|
1,438 |
|
756 |
|
2.2% |
|
Charlotte, NC |
|
1 |
|
208 |
|
49,194 |
|
95.7% |
|
1,519 |
|
708 |
|
2.1% |
|
Asheville, NC |
|
1 |
|
252 |
|
42,325 |
|
96.8% |
|
1,148 |
|
625 |
|
1.8% |
|
St. Louis, MO |
|
1 |
|
152 |
|
28,985 |
|
97.4% |
|
1,467 |
|
443 |
|
1.3% |
|
Total/Weighted Average |
|
56 |
|
15,667 |
|
$1,922,071 |
|
95.5% |
|
$1,142 |
|
$34,030 |
|
100.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
PROJECT LIFE TO DATE AS OF MARCH 31, 2021
|
|
|
|
|
|
|
|
|
|
Renovation Costs per Unit (b) |
|
|
||
|
Property |
Market |
Percentage Complete |
|
Total Units To Be Renovated |
Units Complete |
Units Leased |
Rent Premium (a) |
% Rent Increase |
Interior |
Exterior |
Total |
ROI - Interior Costs(c) |
ROI - Total Costs (d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ongoing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crestmont |
Atlanta, GA |
97.1% |
|
208 |
202 |
203 |
$154 |
16.5% |
$12,406 |
$7,742 |
$20,147 |
14.9% |
9.2% |
|
The Village at Auburn |
Raleigh-Durham, NC |
92.1% |
|
328 |
302 |
290 |
178 |
17.0% |
14,510 |
2,108 |
16,618 |
14.7% |
12.9% |
|
Jamestown |
Louisville, KY |
87.5% |
|
296 |
259 |
266 |
279 |
33.6% |
15,846 |
5,161 |
21,203 |
21.1% |
15.8% |
|
Pointe at Canyon Ridge |
Atlanta, GA |
85.0% |
|
494 |
420 |
407 |
174 |
18.1% |
9,211 |
1,773 |
10,984 |
22.7% |
19.0% |
|
Haverford |
Louisville, KY |
85.0% |
|
160 |
136 |
135 |
93 |
11.0% |
5,548 |
798 |
6,346 |
20.2% |
17.6% |
|
Oxmoor |
Louisville, KY |
84.5% |
|
432 |
365 |
343 |
186 |
20.7% |
16,270 |
127 |
16,471 |
13.7% |
13.6% |
|
Schirm Farms |
Columbus, OH |
81.1% |
|
264 |
214 |
209 |
92 |
10.7% |
7,836 |
613 |
8,448 |
14.1% |
13.1% |
|
Arbors River Oaks |
Memphis, TN |
77.0% |
|
191 |
147 |
144 |
248 |
21.3% |
11,058 |
561 |
11,619 |
27.0% |
25.7% |
|
Creekside Corners |
Atlanta, GA |
75.7% |
|
444 |
336 |
322 |
182 |
19.2% |
9,071 |
1,314 |
10,385 |
24.1% |
21.0% |
|
Stonebridge Crossing |
Memphis, TN |
75.2% |
|
500 |
376 |
361 |
143 |
16.9% |
10,431 |
1,131 |
11,562 |
16.5% |
14.9% |
|
Brunswick Point |
Myrtle Beach, SC - Wilmington, NC |
72.6% |
|
288 |
209 |
214 |
67 |
6.7% |
6,960 |
56 |
7,016 |
11.5% |
11.4% |
|
The Commons at Canal Winchester |
Columbus, OH |
70.1% |
|
264 |
185 |
167 |
214 |
24.5% |
10,769 |
402 |
11,171 |
23.9% |
23.0% |
|
Vantage at Hillsborough |
Tampa-St. Petersburg, FL |
63.8% |
|
348 |
222 |
204 |
178 |
16.9% |
13,985 |
2,155 |
16,140 |
15.3% |
13.2% |
|
Lucerne |
Tampa-St. Petersburg, FL |
56.2% |
|
276 |
155 |
144 |
215 |
19.0% |
14,453 |
634 |
15,240 |
17.9% |
17.0% |
|
Waterford Landing |
Atlanta, GA |
49.2% |
|
260 |
128 |
130 |
169 |
15.7% |
9,109 |
685 |
9,794 |
22.3% |
20.7% |
|
Avalon Oaks |
Columbus, OH |
46.0% |
|
235 |
108 |
108 |
273 |
31.3% |
11,801 |
1,021 |
12,823 |
27.8% |
25.6% |
|
North Park |
Atlanta, GA |
40.2% |
|
224 |
90 |
97 |
170 |
16.3% |
8,776 |
268 |
9,044 |
23.3% |
22.6% |
|
Rocky Creek |
Tampa-St. Petersburg, FL |
2.7% |
|
264 |
7 |
6 |
305 |
24.9% |
11,833 |
960 |
12,794 |
30.9% |
28.6% |
|
Total/Weighted Average |
|
|
|
5,476 |
3,861 |
3,750 |
$175 |
18.5% |
$11,325 |
$1,681 |
$13,006 |
18.5% |
16.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thornhill (e) |
Raleigh-Durham, NC |
0.0% |
|
318 |
0 |
0 |
- |
0.0% |
- |
- |
- |
0.0% |
0.0% |
|
Walnut Hill (e) |
Memphis, TN |
0.0% |
|
362 |
0 |
0 |
- |
0.0% |
- |
- |
- |
0.0% |
0.0% |
|
Meadows (e) |
Louisville, KY |
0.0% |
|
400 |
0 |
0 |
- |
0.0% |
- |
- |
- |
0.0% |
0.0% |
|
Lenoxplace (f) |
Raleigh-Durham, NC |
0.0% |
|
268 |
0 |
0 |
- |
0.0% |
- |
- |
- |
0.0% |
0.0% |
|
Westmont Commons (f) |
Asheville, NC |
0.0% |
|
252 |
0 |
0 |
- |
0.0% |
- |
- |
- |
0.0% |
0.0% |
|
Total/Weighted Average |
|
|
|
1,600 |
0 |
0 |
$- |
0.0% |
$- |
$- |
$- |
0.0% |
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total/Weighted Average |
|
|
|
7,076 |
3,861 |
3,750 |
$175 |
18.5% |
$11,325 |
$1,681 |
$13,006 |
18.5% |
16.1% |
|
|
(a) |
The rent premium reflects the per unit per month difference between the rental rate on the renovated unit and the market rent for an unrenovated unit as of the date presented, as determined by management consistent with its customary rent-setting and evaluation procedures. |
|
|
(b) |
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. |
|
|
(c) |
Calculated using the rent premium per unit per month, multiplied by 12, divided by the interior renovation costs per unit. |
|
|
(d) |
Calculated using the rent premium per unit per month, multiplied by 12, divided by the total renovation costs per unit. |
|
|
(e) |
Renovations at Thornhill and Walnut Hill began in April 2021. Renovations at Meadows are expected to commence in late June 2021. |
|
|
(f) |
We continue to evaluate market conditions with respect to these two properties. |
21
DEBT SUMMARY AS OF MARCH 31, 2021
Dollars in thousands
|
|
|
Amount |
|
Weighted Average Rate (c) |
|
Type |
|
Weighted Average Maturity (in years) |
|
|
Debt: |
|
|
|
|
|
|
|
|
|
|
Unsecured credit facility (a) |
|
$194,302 |
|
1.6% |
|
Floating |
|
2.1 |
|
|
Unsecured term loans (b) |
|
300,000 |
|
1.5% |
|
Floating |
|
3.1 |
|
|
Mortgages |
|
457,173 |
|
3.8% |
|
Fixed |
|
3.0 |
|
|
Unamortized deferred financing costs |
|
(3,844) |
|
|
|
|
|
|
|
|
Total Debt |
|
947,631 |
|
2.6% |
|
|
|
2.8 |
|
|
Market Equity Capitalization, at period end |
|
1,561,165 |
|
|
|
|
|
|
|
|
Total Capitalization |
|
$2,508,796 |
|
|
|
|
|
|
|
|
|
(a) |
Credit facility total capacity is $350,000, comprised entirely of an unsecured revolving line of credit, of which $194,302 was drawn as of March 31, 2021. The maturity date of borrowings under the revolving line of credit is May 9, 2023. |
|
|
(b) |
Comprised of a $200,000 unsecured term loan with a maturity date of January 17, 2024 and a $100,000 unsecured term loan with a maturity date of November 20, 2024. |
|
|
(c) |
Represents the weighted average of the contractual interest rates in effect as of quarter-end without regard to any interest rate swaps or collars. Our total weighted average effective interest rate during 1Q 2021, after giving effect to the impact of interest rate swaps and collars, was 3.5%. |
|
|
(d) |
As of March 31, 2021, we maintained the following hedges that have effectively fixed a portion of our floating rates debt. |
|
Hedges: |
|
Notional |
|
Start |
|
End |
|
Swap Rate |
|
Floor Rate |
|
Cap Rate |
|
Swap |
|
$150,000 |
|
4/17/2017 |
|
6/17/2021 |
|
1.1325% |
|
- |
|
- |
|
Collar |
|
$100,000 |
|
11/17/2017 |
|
11/17/2024 |
|
- |
|
1.25% |
|
2.00% |
|
Collar |
|
$150,000 |
|
10/17/2018 |
|
1/17/2024 |
|
- |
|
2.25% |
|
2.50% |
|
Forward starting swap |
|
$150,000 |
|
6/17/2021 |
|
6/17/2026 |
|
2.1760% |
|
- |
|
- |
|
Forward starting swap |
|
$150,000 |
|
5/17/2022 |
|
5/17/2027 |
|
0.9850% |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
DEBT COVENANT AND UNENCUMBERED ASSET STATS AS OF MARCH 31, 2021
Dollars in thousands
|
Debt Covenant Summary (a) |
Requirement |
Actual |
Compliance |
|
Consolidated leverage ratio |
≤ 60% |
41.6% |
Yes |
|
Consolidated fixed charge coverage ratio |
≥ 1.5x |
2.5 |
Yes |
|
Unsecured leverage ratio |
≤ 60% |
42.5% |
Yes |
|
Unencumbered asset debt service ratio |
≥ 1.3x |
2.0 |
Yes |
|
|
(a) |
For a complete listing of all debt covenants along with definitions of each covenant calculation see the Unsecured Credit Facility and Unsecured Term Loan Agreements, which are included as exhibits 10.20, 10.6, and 10.15 of our Form 10-K. |
|
Encumbered & Unencumbered Statistics |
|
|
Total Units |
|
% of Total |
|
Gross Assets |
|
% of Total |
|
Q1 2021 NOI |
|
% of Total |
|
Unencumbered assets |
|
|
9,409 |
|
60.1% |
|
$1,175,172 |
|
59.6% |
|
$19,776 |
|
58.2% |
|
Encumbered assets |
|
|
6,258 |
|
39.9% |
|
795,807 |
|
40.4% |
|
14,197 |
|
41.8% |
|
|
|
|
15,667 |
|
100.0% |
|
$1,970,979 |
|
100.0% |
|
$33,973 |
|
100.0% |
23
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.
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 asset sales, debt extinguishments and acquisition related debt extinguishment expenses, casualty losses, and abandoned deal 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 Core FFO (“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, gains or losses on sales 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.
We updated our definition of CFFO during Q1 2021 to the definition described below. All prior periods have been adjusted to conform to the current CFFO definition.
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 losses, abandoned deal costs and debt extinguishment 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 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
24
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 debt less cash and cash equivalents. The following table provides a reconciliation of total debt to net debt (Dollars in thousands).
We present net debt 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.
|
|
As of |
||||||||
|
|
March 31, 2021 |
|
December 30, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Total debt |
$947,631 |
|
$945,686 |
|
$1,004,237 |
|
$1,008,911 |
|
$1,049,541 |
|
Less: cash and cash equivalents |
(8,653) |
|
(8,751) |
|
(9,891) |
|
(11,652) |
|
(57,436) |
|
Total net debt |
$938,978 |
|
$936,935 |
|
$994,346 |
|
$997,259 |
|
$992,105 |
|
|
|
|
|
|
|
|
|
|
|
Same Store Portfolio 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 depreciation and amortization, casualty related costs, property management expenses, general administrative expenses, interest expense, and net gains on sale of assets.
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.
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 at the beginning of the previous year. Properties that are held-for-sale or have been sold are excluded from the same store portfolio.
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 |
||||||||
|
|
March 31, 2021 |
|
December 30, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Total assets |
$1,728,016 |
|
$1,734,897 |
|
$1,700,428 |
|
$1,708,912 |
|
$1,757,138 |
|
Plus: accumulated depreciation |
223,187 |
|
208,618 |
|
194,645 |
|
187,758 |
|
172,789 |
|
Plus: accumulated amortization |
19,776 |
|
19,380 |
|
19,827 |
|
19,754 |
|
19,567 |
|
Total gross assets |
$1,970,979 |
|
$1,962,895 |
|
$1,914,900 |
|
$1,916,424 |
|
$1,949,494 |
25