Independence Realty Trust (IRT) Q2 2024 earnings summary

Executive summary

• Owned 110 multifamily properties with 32,685 units as of June 30, 2024, focused on non-gateway U.S. markets.

• Achieved a 120 basis point increase in average occupancy to 95.4% in Q2 2024, with lease-over-lease effective rental rate growth of 3.5% for renewals and resident retention at 55.8%.

• Completed Portfolio Optimization and Deleveraging Strategy, selling ten properties for $525.3M and repaying $517.1M of debt.

• Completed renovations on 378 units in Q2, achieving a 15.7% weighted average ROI and $236 average monthly rent premium over unrenovated units.

• Net income for Q2 2024 was $10.6M, down slightly from $11.0M in Q2 2023; six-month net income rose to $28.5M from $19.9M year-over-year.

Financial highlights

• Q2 2024 total revenue was $158.4M, down from $164.0M in Q2 2023, mainly due to property sales.

• Core FFO for Q2 2024 was $63.6M ($0.28 per share), nearly unchanged from Q2 2023.

• Same-store NOI grew 2.8% year-over-year, with portfolio average occupancy up 120 bps to 95.4%.

• Bad debt improved to 1.6% of revenue, down 40 basis points year-over-year.

• Interest expense decreased $4.7M year-over-year in Q2 2024 due to debt reduction from property sales.

Outlook and guidance

• Increased midpoint of full-year EPS and core FFO per share guidance by $0.01; core FFO midpoint now $1.15 per share.

• Full-year same-store revenue growth expected at 3%-3.3%, with average occupancy of 95.6% and blended rental rate growth of 2.3% in H2 2024.

• Full-year same-store NOI growth guidance raised to 3.2% at midpoint, 28% higher than previous guidance.

• Interest expense guidance updated to $83.0–$84.0 million for 2024.

• Acquisition volume expected at $80-$82 million, with value-add and non-recurring CapEx guidance reduced to $77 million.