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Sep 30, 2020
Independence Realty Trust Q3 2020 Earnings Report
Independence Realty Trust's portfolio remained resilient, benefiting from its focus on middle-market communities and strategic investments in the Sunbelt region. The company strategically navigated the current environment through resident-focused initiatives and maintained a strong liquidity position.
Key Takeaways
Independence Realty Trust (IRT) reported a resilient performance in Q3 2020, characterized by a strong portfolio of assets in non-gateway markets and a focus on middle-market communities. The company maintained a solid occupancy rate and average effective rent, while also making progress in its value-add program. IRT's strategic initiatives and strong balance sheet have positioned it well to navigate the current environment.
IRT owns and operates 58 communities with 15,805 units and $1.9B in gross assets as of September 30, 2020.
Same-store NOI growth was 2.6% year-over-year through September 30, 2020.
The average effective rent was $1,106 in Q3 2020.
The average occupancy rate was 94.0% in Q3 2020.
Independence Realty Trust
Independence Realty Trust
Forward Guidance
IRT is focused on long-term growth through operational efficiencies, value add community redevelopment, and a clear investment strategy.
Positive Outlook
- Improved online marketing and leasing to enhance resident experience.
- Increased usage of mobile and IoT technologies for operational efficiencies.
- Automation of workflows and big data for greater profitability and margin expansion.
- Redevelopment ongoing at 5,212 units across 17 properties, creating outsized NOI growth.
- Expect 15-20% return on investment on the remaining units with ongoing property redevelopment, unlocking an additional $3.6 million in annual NOI.
Challenges Ahead
- Redevelopment on hold at 1,864 units across 6 properties, to be assessed as market conditions improve.
- Uncertainty in market conditions due to COVID-19 may impact redevelopment plans.
- Delays in completing value add initiatives could affect projected rent increases and occupancy levels.
- Legislative restrictions may delay or limit collections of past-due rents.
- Unexpected costs of REIT qualification compliance could impact financial performance.