(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October 30, 2017~~May 4, 2020 there were ~~83,518,602~~94,708,263 shares of the Registrant’s common stock issued and outstanding.

	As of September 30, 2017			As of December 31, 2016			As of March 31, 2020			As of December 31, 2019
ASSETS:
Investments in real estate:
Investments in real estate, at cost	$	1,427,057		$	1,249,356		$	1,856,760		$	1,796,365
Accumulated depreciation		(75,084	)		(51,511	)		(172,789	)		(158,435	)
Investments in real estate, net		1,351,973			1,197,845			1,683,971			1,637,930
Real estate held for sale		22,031			60,786
Cash and cash equivalents		10,128			20,892			57,436			9,888
Restricted cash		6,665			5,518			4,740			4,545
Accounts receivable and other assets		9,416			5,211
Other assets								10,731			10,380
Derivative assets		3,581			3,867			—			953
Intangible assets, net of accumulated amortization of $664 and $0, respectively		1,418			118
Intangible assets, net of accumulated amortization of $464 and $540, respectively								260			410
Total Assets	$	1,405,212		$	1,294,237		$	1,757,138		$	1,664,106
LIABILITIES AND EQUITY:
Indebtedness, net of unamortized deferred financing costs of $5,697 and $6,371, respectively	$	731,625		$	743,817
Indebtedness, net of unamortized deferred financing costs of $5,294 and $5,606, respectively							$	1,049,541		$	985,572
Accounts payable and accrued expenses		23,236			14,028			21,250			25,399
Accrued interest payable		134			491			2,099			2,196
Dividends payable		5,176			4,297			17,128			16,491
Derivative liabilities								30,937			7,769
Other liabilities		3,063			2,913			7,012			6,922
Total Liabilities		763,234			765,546			1,127,967			1,044,349
Equity:
Stockholders’ equity:
Preferred stock, $0.01 par value; 50,000,000 shares authorized, 0 and 0 shares issued and outstanding, respectively		-			—			—			—
Common stock, $0.01 par value; 300,000,000 shares authorized, 83,518,602 and 68,996,070 shares issued and outstanding, including 295,846 and 281,000 unvested restricted common share awards, respectively		835			690
Common stock, $0.01 par value; 300,000,000 shares authorized, 94,691,806 and 91,070,637 shares issued and outstanding, including 326,577 and 326,541 unvested restricted common share awards, respectively								947			911
Additional paid-in capital		691,550			564,633			817,501			765,992
Accumulated other comprehensive income		3,466			3,683
Accumulated other comprehensive income (loss)								(35,750	)		(12,099	)
Retained earnings (accumulated deficit)		(76,419	)		(62,181	)		(159,045	)		(141,525	)
Total stockholders’ equity		619,432			506,825			623,653			613,279
Noncontrolling interests		22,546			21,866			5,518			6,478
Total Equity		641,978			528,691			629,171			619,757
Total Liabilities and Equity	$	1,405,212		$	1,294,237		$	1,757,138		$	1,664,106

The accompanying notes are an integral part of these condensed consolidated financial statements.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended March 31,
	2017			2016			2017			2016			2020			2019
REVENUE:
Rental income	$	35,531		$	34,333		$	105,444		$	103,271
Tenant reimbursement income		1,373			1,351			4,232			4,194
Other property income		2,960			2,680			8,514			7,892
Property management and other income		202			-			579			-
Rental and other property revenue													$	51,156		$	49,465
Other revenue														194			75
Total revenue		40,066			38,364			118,769			115,357			51,350			49,540
EXPENSES:
Property operating expenses		16,196			16,107			48,106			47,588			19,737			19,886
Property management expenses		1,328			1,219			4,310			3,710			2,156			1,813
General and administrative expenses		2,322			2,665			7,128			8,074			5,376			3,107
Acquisition and integration expenses		569			19			956			37
Depreciation and amortization expense		8,671			7,765			24,289			26,927			14,828			12,447
Abandoned deal costs														130			—
Total expenses		29,086			27,775			84,789			86,336			42,227			37,253
Operating income		10,980			10,589			33,980			29,021
Interest expense		(6,963	)		(8,820	)		(21,573	)		(27,815	)		(9,497	)		(9,721	)
Hedge ineffectiveness		12			-			-			-
Other income (expense)		-			(2	)		(5	)		(2	)
Net gains (losses) on sale of assets		(92	)		(1	)		15,873			31,773
Gains (losses) on extinguishment of debt		-			-			(572	)		(558	)
Acquisition related debt extinguishment expenses		(2,781	)		-			(2,781	)		-
Gains (losses) on TSRE merger		-			641			-			732
Net income (loss):		1,156			2,407			24,922			33,151			(374	)		2,566
(Income) loss allocated to noncontrolling interest		(59	)		(140	)		(1,009	)		(1,972	)
Income allocated to noncontrolling interest														2			(26	)
Net income (loss) allocable to common shares	$	1,097		$	2,267		$	23,913		$	31,179		$	(372	)	$	2,540
Earnings (loss) per share:
Earnings per share:
Basic	$	0.02		$	0.05		$	0.34		$	0.66		$ 0.00			$	0.03
Diluted	$	0.02		$	0.05		$	0.34		$	0.66		$ 0.00			$	0.03
Weighted-average shares:
Basic		71,972,394			47,215,918			69,875,802			47,164,543			90,895,488			88,989,450
Diluted		72,144,544			47,314,629			70,105,571			47,190,139			90,895,488			89,516,224

The accompanying notes are an integral part of these condensed consolidated financial statements.

Common
Shares

Par
Value
Common
Shares

Additional
Paid In
Capital

Accumulated Other Comprehensive Income

Retained
Earnings
(Deficit)

Total
Stockholders’
Equity

Noncontrolling
Interests

Total
Equity

Balance, January 1, 2017

68,996,070

$
690

$
564,633

$
3,683

$
(62,181
)

$
506,825

$
21,866

$
528,691

Net income

-

-

-

-

23,913

23,913

1,009

24,922

Other comprehensive income

-

-

-

(217
)

-

(217
)

(30
)

(247
)
Stock compensation expense

168,010

1

1,547

-

-

1,548

-

1,548

Issuance of common shares

14,375,000

144

125,563

125,707

125,707

Issuance of LP Units related to acquisitions

-

-

-

-

-

-

1,654

1,654

Repurchase of shares related to equity award tax withholding

(60,377
)

(1
)

(564
)

-

-

(565
)

-

(565
)
Conversion of noncontrolling interest to common shares

39,899

1

371

-

-

372

(372
)

-

Common dividends declared

-

-

-

-

(38,151
)

(38,151
)

-

(38,151
)
Distribution to noncontrolling interest declared

-

-

-

-

-

-

(1,581
)

(1,581
)
Balance, September 30, 2017

83,518,602

$
835

$
691,550

$
3,466

$
(76,419
)

$
619,432

$
22,546

$
641,978

	Common Shares			Par Value Common Shares			Additional Paid In Capital			Accumulated Other Comprehensive Income (loss)			Retained Earnings (Deficit)			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balance, December 31, 2019		91,070,637		$	911		$	765,992		$	(12,099	)	$	(141,525	)	$	613,279		$	6,478		$	619,757
Net income (loss)		—			—			—			—			(372	)		(372	)		(2	)		(374	)
Other comprehensive income (loss)		—			—			—			(23,651	)		—			(23,651	)		(189	)		(23,840	)
Stock compensation expense		183,940			2			2,642			—			—			2,644			—			2,644
Issuance of common shares		3,406,000			35			49,729			—			—			49,764			—			49,764
Repurchase of shares related to equity award tax withholding		(51,128	)		(1	)		(1,489	)		—			—			(1,490	)		—			(1,490	)
Conversion of noncontrolling interest to common shares		82,357			—			627			—			—			627			(627	)		—
Common dividends declared ($0.18 per share)		—			—			—			—			(17,148	)		(17,148	)		—			(17,148	)
Distribution to noncontrolling interest declared ($0.18 per unit)		—			—			—			—			—			—			(142	)		(142	)
Balance, March 31, 2020		94,691,806		$	947		$	817,501		$	(35,750	)	$	(159,045	)	$	623,653		$	5,518		$	629,171

The accompanying notes are an integral part of these condensed consolidated financial ~~statements.~~

	For the Nine Months Ended September 30,						For the March 31,
	2017			2016			2020			2019
Cash flows from operating activities:
Net income	$	24,922		$	33,151
Adjustments to reconcile net income (loss) to cash flow from operating activities:
Net income (loss)							$	(374	)	$	2,566
Adjustments to reconcile net income to cash flow from operating activities:
Depreciation and amortization		24,289			26,927			14,828			12,447
Amortization of deferred financing costs		1,160			2,236			361			339
Stock compensation expense		1,548			832			2,627			622
Net (gains) losses on sale of assets		(15,873	)		(31,773	)
(Gains) losses on extinguishment of debt		572			558
Acquisition related debt extinguishment expenses		2,781			-
(Gains) losses on TSRE merger		-			(732	)
Amortization related to derivative instruments								280			76
Changes in assets and liabilities:
Accounts receivable and other assets		(1,931	)		(1,377	)
Other assets								(875	)		722
Accounts payable and accrued expenses		8,098			3,895			(5,171	)		(2,607	)
Accrued interest payable		(345	)		(376	)		(59	)		(37	)
Other liabilities		(165	)		(11	)		67			76
Net cash provided by operating activities		45,056			33,330			11,684			14,204
Cash flows from investing activities:
Acquisition of real estate properties								(50,598	)		(520	)
Disposition of real estate properties		34,519			39,690			—			1,081
Acquisition of real estate properties		(169,156	)		-
Capital expenditures		(10,100	)		(8,039	)		(8,572	)		(8,688	)
(Increase) decrease in restricted cash		(1,147	)		(2,615	)
Cash flow (used in) provided by investing activities		(145,884	)		29,036
Cash flow used in investing activities								(59,170	)		(8,127	)
Cash flows from financing activities:
Proceeds from unsecured credit facility		148,190			93,501
Proceeds from unsecured credit facility and term loans								65,501			64,000
Unsecured credit facility repayments		(138,500	)		(197,666	)		—			(58,000	)
Proceeds from mortgages		-			105,980
Mortgage principal repayments		(1,969	)		(44,532	)		(1,843	)		(907	)
Payments for deferred financing costs		(1,166	)		(1,450	)		(50	)		—
Proceeds from issuance of common stock		125,707			-			49,764			5,309
Distributions on common stock		(37,279	)		(25,495	)		(16,493	)		(16,208	)
Distributions to noncontrolling interests		(1,573	)		(1,615	)		(160	)		(164	)
Payments related to extinguishment of debt		(2,781	)		-
Repurchase of shares related to equity award tax withholding		(565	)		(143	)		(1,490	)		—
Cash flow provided by (used in) financing activities		90,064			(71,420	)		95,229			(5,970	)
Net change in cash and cash equivalents		(10,764	)		(9,054	)
Cash and cash equivalents, beginning of period		20,892			38,301
Cash and cash equivalents, end of the period	$	10,128		$	29,247
Net change in cash and cash equivalents, and restricted cash								47,743			107
Cash and cash equivalents, and restricted cash, beginning of period								14,433			16,045
Cash and cash equivalents, and restricted cash, end of the period							$	62,176		$	16,152
Reconciliation of cash, cash equivalents, and restricted cash to the Consolidated Balance Sheet
Cash and cash equivalents							$	57,436		$	9,030
Restricted cash								4,740			7,122
Total cash, cash equivalents, and restricted cash, end of period							$	62,176		$	16,152

The accompanying notes are an integral part of these condensed consolidated financial ~~statements.~~statements

Independence Realty Trust, Inc. (“IRT”), ~~or IRT,~~is a self-administered and self-managed Maryland real estate investment trust (“REIT”) which was formed on March 26, ~~2009 as a Maryland corporation that has elected~~2009. Our primary purposes are to ~~be taxed as a real estate investment trust, or REIT, commencing with the taxable year ended December 31, 2011.~~acquire, own, operate, improve and manage multifamily apartment communities in non-gateway markets. As of ~~September 30, 2017,~~March 31, 2020, we ~~own~~owned and ~~operate 50~~operated 58 multifamily apartment properties, ~~totaling 13,729~~that contain 15,805 units across non-gateway U.S markets, including Atlanta, Louisville, Memphis, ~~Atlanta~~ and Raleigh. Our investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers. We aim to provide stockholders with attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return through distributions and capital appreciation. We own ~~substantially~~ all of our assets and conduct substantially all of our operations through Independence Realty Operating Partnership, LP ~~which we refer to as IROP,~~(“IROP”), of which we are the sole general partner.

We became an internally managed REIT on December 20, 2016. Prior to that date, we were externally managed by a subsidiary of RAIT Financial Trust, or RAIT, a publicly traded Maryland REIT whose common shares are listed on the New York Stock Exchange under the symbol “RAS” (referred to as our former advisor). On December 20, 2016, we completed our management internalization, which was announced on September 27, 2016 as part of the agreement, or the internalization agreement, with RAIT and RAIT affiliates that provided for transactions which changed us from being externally managed to being internally managed and separated us from RAIT. The management internalization consisted of two parts: (i) our acquisition of our former advisor, which was a subsidiary of RAIT, and (ii) our acquisition of substantially all of the assets and the assumption of certain liabilities relating to the multifamily property management business of RAIT, including property management contracts relating to apartment properties owned by us, RAIT and third parties. Also, pursuant to the internalization agreement, on October 5, 2016, we repurchased all of the 7,269,719 shares of our common stock owned by certain of RAIT’s subsidiaries and retired these shares.

As used herein, the terms “we,” “our” and “us” refer to Independence Realty Trust, Inc. and, as required by context, IROP and their subsidiaries.

The accompanying unaudited interim consolidated financial statements have been prepared by management in accordance with generally accepted accounting principles in the United States ~~or GAAP.~~(“GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although we believe that the included disclosures are adequate to make the information presented not misleading. The unaudited interim consolidated financial statements should be read in conjunction with our audited financial statements as of and for the year ended December 31, ~~2016~~2019 included in our 2019 Annual Report on Form ~~10-K, or the 2016 annual report.~~10-K. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position and consolidated results of operations and cash flows are included. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year.

The consolidated financial statements reflect our accounts and the accounts of IROP and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Pursuant to ~~FASB~~the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Topic 810, “Consolidation”, IROP is considered a variable interest ~~entity.~~entity to which we are the primary beneficiary. As our significant asset is our investment in IROP, substantially all of our assets and liabilities represent the assets and liabilities of IROP.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and cash equivalents include cash held in banks and highly liquid investments with maturities of three months or less when purchased. Cash, including amounts restricted, may at times exceed the Federal Deposit Insurance Corporation deposit insurance limit of $250 per institution. We mitigate credit risk by placing cash and cash equivalents with major financial institutions. To date, we have not experienced any losses on cash and cash equivalents.

Restricted cash includes escrows of our funds held by lenders to fund certain expenditures, such as real estate taxes and insurance, or to be released at our discretion upon the occurrence of certain pre-specified events. As of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, we had ~~$6,665~~$4,740 and ~~$5,518,~~$4,545, respectively, of restricted cash.

We make estimates of the collectability of our accounts receivable related to base rents, expense reimbursements and other revenue. We analyze accounts receivable and historical bad debt levels, tenant credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants experiencing financial difficulties are analyzed and estimates are made in connection with expected uncollectible receivables. Our reported operating results are affected by management’s estimate of the collectability of accounts receivable. For the three months ended September 30, 2017 and 2016, we recorded bad debt expense of $101 and $306, respectively. For the nine months ended September 30, 2017 and 2016, we recorded bad debt expense of $670 and $727, respectively.

Investments in real estate are recorded at cost less accumulated depreciation. Costs that both add value and appreciably extend the useful life of an asset are capitalized. Expenditures for repairs and maintenance are expensed as incurred.

Investments in real estate are classified as held for sale in the period in which certain criteria are met including when management commits to a plan to sell, an active program to locate a buyer has been initiated, the sale ~~of the asset~~ is probable, and actions required to complete the plan of sale indicate that it is unlikely that significant changes to the plan of sale will be made or the plan of sale will be withdrawn.

~~We account~~The properties we acquire are generally accounted for ~~acquisitions of properties that meet~~as asset acquisitions. Under asset acquisition accounting, the ~~definition of a business pursuant~~costs to ~~Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 805, “Business Combinations”. The fair value of the~~acquire real estate, ~~acquired is~~including transaction costs related to the acquisition, are accumulated and then allocated to the ~~acquired tangible assets, generally consisting of land, building and tenant improvements, and identified intangible~~individual assets and liabilities ~~consisting of the value of above-market and below-market leases for~~ acquired ~~in-place leases and the value of tenant relationships,~~ based ~~in each case on~~upon their relative fair values. Purchase accounting is applied to assets and liabilities associated with the real estate acquired. Transaction costs and fees incurred related to an acquisition are expensed as incurred. Transactionvalue. Transaction costs and fees incurred related to the financing of an acquisition are capitalized and amortized over the life of the related financing.

~~Upon the acquisition of properties, we~~We estimate the fair value of acquired tangible assets (consisting of land, building and improvements) ~~and~~, identified intangible assets (consisting of in-place leases), and assumed debt at the date of acquisition, based on the evaluation of information and estimates available at that date. Based on these estimates, we allocate the initial purchase price to the applicable assets and liabilities. As final information regarding fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments will be made to the purchase price allocation, in no case later than twelve months after the acquisition date.

The aggregate value of in-place leases is determined by evaluating various factors, including the terms of the leases that are in place and assumed lease-up periods. The value assigned to in-place lease assets is amortized over the assumed lease up period, typically six months. During the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020, we acquired in-place leases with a value of ~~$1,034 and $1,963, respectively,~~$221, as part of related property acquisitions that are discussed further in Note 3. ~~The value assigned to this intangible asset is amortized over the assumed lease up period, typically six months.~~ For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020 and 2019, we recorded ~~$416~~$371 and ~~$664,~~$556, respectively, of amortization expense for intangible assets. For the three ~~and~~

~~Independence Realty Trust, Inc.~~months ended March 31, 2020 and ~~Subsidiaries~~

2019, we wrote-off fully amortized intangible assets of $447 and $813, respectively. As of ~~September 30, 2017~~

~~nine months ended September 30, 2016, we recorded $0 and $3,735, respectively, of amortization expense for intangible assets. As of September 30, 2017,~~March 31, 2020, we expect to record additional amortization expense on current in-place intangible assets of ~~$795~~$260 for the remainder of ~~2017.~~2020.

Management evaluates the recoverability of our investment in real estate assets, including related identifiable intangible assets, in accordance with FASB ASC Topic 360, “Property, Plant and Equipment”. This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that recoverability of the assets is not assured.

Management reviews ~~its~~our long-lived assets on an ongoing basis and evaluates the recoverability of the carrying value when there is an indicator of impairment. An impairment charge is recorded when it is determined that the carrying value of the asset exceeds the fair value. The estimated cash flows used for the impairment analysis and the determination of estimated fair value are based on our plans for the respective assets and our views of market and economic conditions. The estimates consider matters such as current and historical rental rates, occupancies for the respective and/or comparable properties, and recent sales data for comparable properties. Changes in estimated future cash flows due to changes in our plans or views of market and economic conditions could result in recognition of impairment losses, which, under the applicable accounting guidance, could be substantial.

Depreciation expense for real estate assets is computed using a straight-line method based on a life of 40 years for buildings and improvements and five to ten years for equipment and fixtures. For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020 and 2019, we recorded ~~$8,255~~$14,457 and ~~$23,625 of depreciation expense, respectively. For the three and nine months ended September 30, 2016, we recorded $7,765 and $23,192~~$11,891 of depreciation expense, respectively.

Rental ~~revenues are recognized on an accrual basis when due from residents.~~and other property revenue

Management accounts for rental income in accordance with FASB ASC Topic 842, “Leases.” We primarily lease apartments units under operating leases generally with terms of one year or less. Rental payments are generally due monthly and rental revenues are recognized on an accrual basis when earned. ~~Rental income represents gross market rent less adjustments~~We have elected to account for ~~concessions~~lease (i.e. fixed payments including base rent) and ~~vacancy loss. Tenant reimbursement income represents reimbursement from tenants for utility charges while~~non-lease components (i.e. tenant reimbursements and other certain service fees) as a single combined operating lease component since (1) the timing and pattern of transfer of the lease and non-lease components is the same and (2) the lease component is the predominant element and (3) the combined single lease component would be classified as an operating lease.

We make ongoing estimates of the collectability of our base rents, tenant reimbursements, and other service fees included within rental and other property revenue. If collectability is not probable, we adjust rental and other property income ~~includes parking, trash, late fees, and other miscellaneous property related income.~~for the amount of uncollectible revenue.

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020 and 2019, we recognized ~~revenues~~gains of ~~$11~~$3 and $96, respectively, related to recoveries of lost rental revenue due to natural disasters and other insurable events from our insurance providers. For the three and nine months ended September 30, 2016, we recognized revenues of $38 and $151,$6, respectively, related to recoveries of lost rental revenue due to natural disasters and other insurable events from our insurance providers.

For the three and nine months ended September 30, 2017, we incurred $437 and $1,285 of advertising expenses, respectively. For the three and nine months ended September 30, 2016, we incurred $435 and $1,325 of advertising expenses, respectively. Advertising Expenses

For the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, we incurred $0$608 and ~~$1,933~~$548 of asset management and incentive fees, respectively. For the nine months ended September 30, 2017 and 2016, we incurred $0 and $5,491 of asset management and incentive fees, respectively. Asset management and incentive fees are now included in general and administrative expenses since as an internally-managed REIT, we no longer incur external asset management fees and the compensation cost of our employees who now perform this function are recorded within general and administrative expenses. See Note 8: Related Party Transactions and Arrangements.

~~For the three months ended September 30, 2017 and 2016, we incurred $1,328 and $1,219 of property management~~advertising expenses, respectively. For the nine months ended September 30, 2017 and 2016, we incurred $4,310 and $3,710 of property management expenses, respectively. Subsequent to our management internalization, property management expenses include payroll and related expenses that directly support on-site property management. Prior to our management internalization, property management expenses included property and construction management fees paid to our former property manager. See Note 8: Related Party Transactions and Arrangements.

We may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with our borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with our operating and financial structure, as well as to hedge specific anticipated transactions. While these instruments may impact our periodic cash flows, they benefit us by minimizing the risks and/or costs previously described. The counterparties to these contractual arrangements are major financial institutions with which we and our affiliates may also have other financial relationships. In the event of nonperformance by the counterparties, we are potentially exposed to credit loss. However, because of the high credit ratings of the counterparties, we do not anticipate that any of the counterparties will fail to meet their obligations.

In accordance with FASB ASC Topic 815, “Derivatives and Hedging”, we measure each derivative instrument ~~(including certain derivative instruments embedded in other contracts)~~ at fair value and record such amounts in our consolidated balance sheets as either an asset or liability. For derivatives designated as cash flow hedges, the changes in the fair value of the effective portions of the derivative are reported in other comprehensive income and changes in the fair value of the ineffective portions of cash flow hedges, if any, are recognized in earnings. For derivatives not designated as hedges (or designated as fair value hedges), ~~or for derivatives designated as cash flow hedges associated with debt for which we elected the fair value option under FASB ASC Topic 825, “Financial Instruments”,~~ the changes in fair value of the derivative instrument are recognized in earnings. Any derivatives that we designate in hedge relationships are done so at inception. At inception, we determine whether or not the derivative is highly effective in offsetting changes in the designated interest rate risk associated with the identified indebtedness using regression analysis. At each reporting period, we update our regression analysis and use the hypothetical derivative method to measure any ineffectiveness.

In accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures”, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity for disclosure purposes. Assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their value. Hierarchical levels, as defined in FASB ASC Topic 820, “Fair Value Measurements and Disclosures” and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities, are as follows:

The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of investment, whether the investment is new, whether the investment is traded on an active exchange or in the secondary market, and the current market condition. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in Level 3.

Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, our own assumptions are set to reflect those that management believes market participants would use in pricing the asset or liability at the measurement date. We use prices and inputs that management believes are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be transferred from Level 1 to Level 2 or Level 2 to Level 3.

Fair value for certain of our Level 3 financial instruments is derived using internal valuation models. These internal valuation models include discounted cash flow analyses developed by management using current interest rates, estimates of the term of the particular instrument, specific issuer information and other market data for securities without an active market. In accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures”, the impact of our own credit spreads is also considered when measuring the fair value of financial assets or liabilities, including derivative contracts. Where appropriate, valuation adjustments are made to account for various factors, including bid-ask spreads, credit quality and market liquidity. These adjustments are applied on a consistent basis and are based on observable inputs where available. Management’s estimate of fair value requires significant management judgment and is subject to a high degree of variability based upon market conditions, the availability of specific issuer information and management’s assumptions.

FASB ASC Topic 825, “Financial Instruments” requires disclosure of the fair value of financial instruments for which it is practicable to estimate that value. Given that cash and cash equivalents and restricted cash are short term in nature with limited fair value volatility, the carrying amount is deemed to be a reasonable approximation of fair value and the fair value input is classified as a Level 1 fair value measurement. The fair value input for the derivatives is classified as a Level 2 fair value measurement within the fair value hierarchy. The fair value inputs for our unsecured credit facility and ~~our former secured credit facility~~term loans are classified as Level 2 fair value measurements within the fair value hierarchy. The fair value of mortgage indebtedness is based on a discounted cash flows valuation technique. As this technique utilizes current credit spreads, which are generally unobservable, this is classified as a Level 3 fair value measurement within the fair value hierarchy. We determine appropriate credit spreads based on the type of debt and its maturity. There were 0 transfers between levels in the fair value hierarchy for the three months ended March 31, 2020. The following table summarizes the carrying amount and the fair value of our financial instruments as of the periods indicated:

Costs incurred in connection with debt financing are deferred and classified within indebtedness and charged to interest expense over the terms of the related debt agreements, under the effective interest method. ~~As of January 1, 2016, we adopted the accounting standard classified under~~

In accordance with FASB ASC Topic ~~835, “Interest” which~~842, “Leases”, lessees are required ~~deferred financing costs~~ to ~~be presented~~recognize a right-of-use asset and a lease liability on the balance sheet asat the lease commencement date for all leases, except those leases with terms of less than a ~~direct deduction from indebtedness.~~year. We lease corporate office space under leases with terms of up to 10 years and that may include extension options, but that do not include any residual value guarantees or restrictive covenants. As of March 31, 2020, we have $2,753 of operating lease right-of-use assets and $3,116 of operating lease liabilities related to our corporate office leases. The operating lease right-of-use assets are presented within other assets and the operating lease liabilities are presented within other liabilities in our consolidated balance sheet. We recorded $139 of total operating lease expense during the three months ended March 31, 2020, which is recorded within property management expense and general and administrative expenses in our consolidated statements of operations.

We have elected to be taxed as a REIT beginning with the taxable year ended December 31, 2011. Accordingly, we recorded no0 income tax expense for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016.~~2019.

To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our ordinary taxable income to stockholders. As a REIT, we generally are not subject to federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders; however, we believe that we are organized and operate in such a manner as to qualify and maintain treatment as a REIT and intend to operate in such a manner so that we will remain qualified as a REIT for federal income tax purposes.

Below is a brief description of recent accounting pronouncements that could have a material effect on our financial statements.

In ~~March~~February 2016, the FASB issued an accounting standard classified under FASB ASC Topic 842, “Leases”. For lessees, this accounting standard amends lease accounting by requiring (1) the recognition of lease assets and lease liabilities for those leases classified as operating leases on the balance sheet and (2) additional disclosure about leasing arrangements. For lessors, the guidance under the new lease standard is substantially similar to legacy lease accounting standards. This standard is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. In July 2018, the FASB issued an amendment to the new standard, which provides a package of practical expedients that (1) allows lessors to not separate lease and non-lease components in a contract and allocate the consideration in the contract to the separate components if both (i) the timing and pattern of revenue recognition for the non-lease component and the related lease component are the same and (ii) the combined single lease component would be classified as an operating lease and (2) provides a transition option that permits entities to not recast the comparative periods presented when transitioning to the standard. We adopted the new standard on January 1, 2019 using the modified retrospective approach and the package of practical expedients. We did 0t record a cumulative-effect adjustment on the effective date and all prior comparative periods are presented in accordance with legacy lease accounting standards. Our apartment leases, where we are lessor, continued to be accounted for as operating leases under the new standard and, therefore, there were not significant changes in accounting for these leases. For our various corporate office leases, where we are lessee, we recorded a $308 right of use asset and a lease liability on our consolidated balance sheets upon adoption.

In June 2016, the FASB issued an accounting standard classified under FASB ASC Topic 326, “Financial Instruments – Credit Losses.” The amendments in this update revise the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities and other financial instruments. The amendments require entities to estimate a lifetime expected credit loss for certain financial instruments, including trade receivable. This standard is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early application of the amendments in this standard is permitted. We adopted the new standard on January 1, 2020. The adoption of this standard has not had an effect on our consolidated financial statements.

In June 2018, the FASB issued an accounting standard classified under FASB ASC Topic 718, “Compensation – Stock ~~Compensation”. This accounting standard simplifies several aspects~~Compensation.” The amendments in this update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. As a result, the accounting for share-based payment award transactions including: (i) income tax consequences; (ii) classification of awards as either equity or liabilities; and (iii) classification on the statement of cash flows. This standard is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The adoption of this accounting standard did not have a material impact on our consolidated financial statements.

In May 2014, the FASB issued an accounting standard classified under FASB ASC Topic 606, “Revenue from Contracts with Customers”. This accounting standard generally replaces existing guidance by requiring an entity to recognize the amount of revenue to which it expects tocould be entitled for the transfer of promised goods or services to customers. This accounting standard applies to all contracts with customers, except those that are within the scope of other Topics in the FASB ASC. During 2016, the FASB issued three amendments to this accounting standard which provide further clarification to this accounting standard. These standards amending FASB ASC Topic 606 are currently effective for annual reporting periods beginning after December 15, 2017. We are finalizing our evaluation of the impact that these standards may have on our consolidated financial statements however, a majority of our revenue is derived from real estate lease contracts which are specifically excluded from the scope of this standard.

In February 2016, the FASB issued an accounting standard classified under FASB ASC Topic 842, “Leases”. This accounting standard amends lease accounting by requiring the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases on the balance sheet and disclosing key information about leasing arrangements.impacted. This standard is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early application of the amendments in this standard is permitted. ~~Management is currently evaluating~~We adopted the ~~impact that~~new standard on January 1, 2019. As we have not issued share-based payments to non-employees since prior to our management internalization, the adoption of this standard ~~may have~~has not had an effect on our consolidated financial statements.

In ~~August 2016,~~March 2020, the FASB issued an accounting standard classified under FASB ASC Topic 230, “Statement of Cash Flows”. This accounting standard provides guidance on eight specific cash flow issues: (i) debt prepayment or debt extinguishment costs; (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (iii) contingent consideration payments made after a business combination; (iv) proceeds from the settlement of insurance claims; (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (vi) distributions received from equity method investees; (vii) beneficial interests in securitization transactions; and (viii) separately identifiable cash flows and application of the predominance principle. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Management is currently evaluating the impact that this standard may have on our consolidated statement of cash flows.

In January 2017, the FASB issued an accounting standard update under FASB ASC Topic 805, “Business Combinations” that changes the definition of a business to assist entities with evaluating whether a set of transferred assets is a business. As a result, the accounting for acquisitions of real estate could be impacted. The updated standard will be effective for us on January 1, 2018 with

early adoption permitted. The new definition will be applied prospectively to any transactions occurring within the period of adoption. Management expects that the updated standard will result in fewer acquisitions of real estate meeting the definition of a business and fewer acquisition-related costs being expensed in the period incurred.

~~In May 2017, the FASB issued an accounting standard update under FASB ASC Topic 718, “Compensation – Stock Compensation.~~848, “Reference Rate Reform.” The amendments in this update ~~provide~~contain practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance ~~about which changes~~in ASC 848 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, we have elected to ~~the terms or conditions of a share-based payment award require an entity to~~ apply ~~modification accounting in Topic 718. As a result, the accounting for~~ ~~share-based payment award transactions~~ could be impacted. The updated standard will be effective for us on January 1, 2018 with early adoption permitted. The new definition will be applied prospectively to an award modified on or after the adoption date. Management is currently evaluating the impact that this standard may have on our consolidated financial statements.

~~In August 2017, the FASB issued an accounting standard update under FASB ASC Topic 815, “Derivatives and Hedging.” The amendments in this update provide guidance about the application of~~ the hedge accounting ~~guidance in current GAAP~~expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the ~~feedback received from preparers, auditors, and other stakeholders. As a result,~~corresponding derivatives. Application of these expedients preserves the ~~accounting for~~presentation of derivatives ~~and hedging transactions~~ ~~could be impacted. The updated standard~~consistent with past presentation. We will ~~be effective for us on January 1, 2019 with early adoption permitted. The new definition will be applied prospectively~~continue to ~~any transactions occurring within the period of adoption. Management is currently evaluating~~evaluate the impact ~~that this standard~~of the guidance and may ~~have on our consolidated financial statements.~~apply other elections as applicable as additional changes in the market occur.

As of ~~September 30, 2017,~~March 31, 2020, our investments in real estate consisted of 5058 apartment properties ~~with 13,729~~that contain 15,805 units. The following table ~~below~~ summarizes our investments in real estate:

~~As of September 30, 2017 and December 31, 2016, we had investments in real estate with a carrying value of $22,031 and $60,786, respectively, classified as held for sale.~~

~~The below table summarizes the acquisitions~~In February 2020, we acquired a 251-unit property located in McKinney, TX for ~~the nine months ended September 30, 2017:~~$51,204.

The following table summarizes the aggregate relative fair value of the assets and liabilities associated with the ~~properties~~property acquired during the ~~nine-month~~three-month period ended ~~September 30, 2017,~~March 31, 2020, on the date of acquisition, accounted for under FASB ASC Topic ~~805.~~

The table below presents the revenue and net income (loss) for the properties acquired during the nine-month period ended September 30, 2017 as reported in our consolidated financial statements, excluding any related acquisition and integration expenses.

The table below represents the revenue, net income and earnings per share effect of the acquired property, as reported in our consolidated financial statements and on a pro forma basis as if the acquisition occurred on January 1, 2016. These pro forma results are not necessarily indicative of the results that actually would have occurred if the acquisition had occurred on January 1, 2016, nor does the pro forma financial information purport to represent the results of operations for future periods.

~~We did not make any purchase price allocation adjustments during the nine-month period ended September 30, 2017.~~

On October 25, 2017, we acquired a 264 unit residential community located in Baton Rouge, LA, known as Live Oak Trace, for $28,501. This acquisition was part of the nine-property portfolio acquisition announced on September 5, 2017.

The table below summarizes the dispositions for the nine months ended September 30, 2017 and also presents each property’s contribution to net income (loss) allocable to common shares, excluding the impact of the gain (loss) on sale:

The following tables contain summary information concerning our indebtedness as of ~~September 30, 2017:~~

~~As of September 30, 2017,~~March 31, 2020, we were in compliance with all financial covenants contained in the documents governing our indebtedness.

The following table contains summary information concerning our indebtedness as of December 31, ~~2016:~~2019:

~~In February 2017, IROP drew down $22,000 on the secured credit facility in connection with the Lakes of Northdale acquisition.~~

On May 1, 2017, we closed on a new $300,000 unsecured credit facility, refinancing and terminating the previous secured credit facility. The new facility is comprised of a $50,000 term loan and a revolving commitment of up to $250,000. The maturity date on the new term loan is May 1, 2022, and the maturity date on borrowings outstanding under the revolving commitment is May 1, 2021, extending the September 17, 2018 maturity of the previous secured credit facility. Based on our current leverage levels, our annual interest cost is LIBOR plus 145 basis points under the term loan and LIBOR plus 150 basis points for borrowings outstanding under the revolving commitments. We recognized the refinance as a partial extinguishment of our prior secured credit facility and recognized a loss on extinguishment of debt of $572.

~~In May 2017,~~ ~~IROP drew down $9,000 on the unsecured credit facility in connection with the Haverford Place acquisition.~~

~~In June 2017, IROP drew down $31,250 on the unsecured credit facility in connection with the South Terrace acquisition.~~

In September 2017, IROP (1) paid down $117,500 on the unsecured credit facility using proceeds from the common stock offering on September 11, 2017, which is discussed in Note 6: Shareholders Equity, and (2) drew down $85,000 in connection with the four properties acquired on September 26, 2017.

~~In connection with the three property dispositions during the nine months ended September 30, 2017, we extinguished, through defeasance, property mortgages totaling $20,586.~~

We have and may in the future use derivative financial instruments to hedge all or a portion of the interest rate risk associated with our borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with our operating and financial structure as well as to hedge specific anticipated transactions. While these instruments may impact our periodic cash flows, they benefit us by minimizing the risks and/or costs previously described. The counterparties to these contractual arrangements are major financial institutions with which we and our affiliates may also have other financial relationships. In the event of nonperformance by the counterparties, we are potentially exposed to credit loss. However, because of the high credit ratings of the counterparties, we do not anticipate that any of the counterparties will fail to meet their obligations.

~~Interest Rate Swaps~~The following table summarizes the aggregate notional amounts and ~~Caps~~

~~We have entered into an interest rate cap contract~~estimated net fair values of our derivative instruments as of March 31, 2020 and ~~an interest rate swap contract to hedge interest rate exposure on floating rate indebtedness.~~ December 31, 2019:

On ~~June 24, 2016,~~March 2, 2020 we entered into ana forward-starting interest rate swap ~~contract~~ with a notional value of ~~$150,000,~~$150,000 and a strike rate of ~~1.145%~~0.985%. This forward interest rate swap has an effective date of May 17, 2022 and a maturity date of ~~June~~May 17, ~~2021.~~2027. We designated this ~~interest rate swap as a cash flow hedge at inception and determined that the hedge~~

is highly effective in offsetting interest rate fluctuations associated with the identified indebtedness. We did not recognize any ineffectiveness associated with this cash flow hedge through April 2017. On April 17, 2017, in conjunction with the refinance of our credit facility, we restructured our existing interest rate swap to remove the LIBOR floor. This resulted in a decrease in the strike rate to 1.1325%. The notional value and maturity date remained the same. We designated the restructuredforward interest rate swap as a cash flow hedge at inception and determined that the hedge is highly effective in offsetting interest rate fluctuations associated with the identified indebtedness. However, since the fair value of the swap at inception of the hedging relationship was not zero, we expect some ineffectiveness to be recognized over the life of the instrument. During the three and nine months ended September 30, 2017, we recognized $(12) and $0 of ineffectiveness based on the hypothetical derivative method. Our interest rate cap is not designated as a cash flow hedge.

~~The following table summarizes the aggregate notional amount and estimated net fair value of our derivative instruments as of September 30, 2017 and December 31, 2016:~~

Effective interest rate swaps and caps are reported in accumulated other comprehensive income, and the fair value of these hedge agreements is included in other assets or other liabilities.

For our interest rate swap and collars that isare considered a highly effective ~~hedge,~~hedges, we reclassified realized gains of ~~$27 and losses of $156~~$138 to earnings within interest expense for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020, and we expect ~~$471~~$6,585 to be reclassified out of accumulated other comprehensive income tointo earnings over the next 12 months.

~~Our~~On March 16, 2020, our board of directors ~~has~~ declared ~~the following dividends in 2017:~~

~~Common Shares~~a dividend of $0.18 per share on our common stock, which was paid on April 24, 2020 to common stockholders of record as of April 2, 2020.

During the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020, we also paid ~~$0 and $126, respectively,~~$160 of dividends on restricted common share awards that vested during the period.

On August 4, 2017, we entered into an At-the-Market Issuance Sales Agreement (the ~~“Sales~~“ATM Sales Agreement”) with various sales agents. Pursuant to the ATM Sales Agreement, we may offer and sell shares of our common stock, $0.01 par value per share, having an aggregate offering price of up to $150,000, from time to time through the sales agents. The sales agents are entitled to compensation in an agreed amount not to exceed 2.0% of the gross sales price per share for any shares sold from time to time under the ATM Sales Agreement. We have no0 obligation to sell any of the shares under the ATM Sales Agreement and may at any time suspend solicitations and offers under the ATM Sales Agreement. NoNaN shares were issued ~~pursuant~~under the ATM Sale Agreement during the three months ended March 31, 2020.

On February 20, 2020, we entered into an underwriting agreement with KeyBanc Capital Markets Inc. and BMO Capital Markets Corp., as representatives of the several underwriters named therein (collectively, the “Underwriters”), BMO Capital Markets Corp. (the “Forward Seller”), and Bank of Montreal (the “Forward Counterparty”) relating to the ~~Sales Agreement as~~offering of ~~September 30, 2017.~~

~~On September 11, 2017, we issued 12,500,000 shares~~an aggregate of ~~our common stock at a public offering price of $9.25 per share. We also closed on the underwriters’ option to purchase an additional 1,875,000~~10,350,000 shares of common stock at a price to the ~~public offering price. As a result~~Underwriters of $14.688 per share, consisting of 10,350,000 shares of common stock offered by the ~~offering and exercise or the underwriters’ option, we received approximately $126,100 in net proceeds, after deducting the underwriting discount and offering expenses.~~

~~In June 2017, we issued 166,604 IROP units~~Forward Seller in connection with the forward sale agreements described below (including 1,350,000 shares offered pursuant to the Underwriter’s option to purchase additional shares, which was exercised in full). We did not initially receive any proceeds from the sale of common stock by the Forward Seller. We completed the offering on February 24, 2020.

In connection with the offering, we also entered into 2 forward sale agreements. The first forward sale agreement (the “Initial Forward Sale Agreement”), dated February 20, 2020, with the Forward Seller and Forward Counterparty, and the second forward sale agreement (the “Additional Forward Sale Agreement”, together with the Initial Forward Sale Agreement, the “Forward Sale Agreements”), dated February 20, 2020, with the Forward Seller and the Forward Counterparty. In connection with the Forward Sale Agreements, the Forward Seller or its affiliate borrowed from third parties and sold to the Underwriters an aggregate of 10,350,000 shares of common stock that was sold in the offering. We expect to physically settle the Forward Sale Agreements and receive proceeds from the sale of those shares upon one or more such physical settlements within approximately twelve months from the date of the prospectus, earlier than February 24, 2021, the scheduled maturity date of the Forward Sale Agreements. Although we expect to settle the Forward Sale Agreements entirely by the physical delivery of shares of common stock for cash proceeds, we may also elect to cash or net share settle all or a portion of its obligations under the Forward Sale Agreements, in which case, we may receive or owe cash or shares of common stock from or to the Forward Seller. The Forward Sale Agreements provide for an initial forward sale price of $14.688 per share, subject to certain adjustments pursuant to the terms of each of the Forward Sale Agreements. The Forward Sale Agreements are subject to early termination or settlement under certain circumstances.

We evaluated the accounting for the Forward Sale Agreements under FASB ASC Topic 480 “Distinguishing Liabilities from Equity” and FASB ASC Topic 815 “Derivatives and Hedging”. As the Forward Sale Agreements are considered indexed to our ~~acquisition~~own equity and since they meet the equity classification conditions in ASC 815-40-25, the Forward Sale Agreements have been classified as equity.

On March 31, 2020, we physically settled $50,000 under the Forward Sale Agreements by issuing 3,406,000 shares. As of ~~South Terrace. The IROP units were valued at $1,654~~March 31, 2020, 6,944,000 shares remain to be settled under the Forward Sale Agreements, which if physically settled would provide proceed to us of $100,753 based on the forward price as of May 4, 2020.

During the three months ended March 31, 2020, holders of IROP units exchanged 82,357 units for 82,357 shares of our common stock. ~~See Note 3: Investments in Real Estate for details on the property acquisition.~~

As of ~~September 30, 2017, 3,035,654~~March 31, 2020, 789,134 IROP units held by unaffiliated third parties remain ~~outstanding with a redemption value of $30,873, based on IRT’s stock price of $10.17 as of September 29, 2017.~~outstanding.

~~Our~~On March 16, 2020, our board of directors ~~has~~ declared ~~the following distributions~~a dividend of $0.18 per unit, which was paid on ~~IROP’s~~April 24, 2020 to IROP LP ~~units in 2017:~~unitholders of record as of April 2, 2020.

In May 2016, our shareholders approved and our board of directors adopted an amended and restated Long Term Incentive Plan ~~or the incentive plan,~~(the “Incentive Plan”), which provides for the grants of awards to our employees, officers, directors, ~~officers and full-time employees, full-time employees~~trustees, consultants or advisors (and those of our former advisor and its affiliates, full-time employees of entities that provide services to our former advisor, directors of our former advisor or of entities that provide services to it, certain of our consultants and certain consultants to our former advisor and its affiliates or to entities that provide services to our former advisor.affiliates). The ~~incentive plan~~Incentive Plan authorizes the grant of restricted or unrestricted shares of our common stock, performance-based restricted share units (“PSUs”), non-qualified and incentive stock options, restricted stock units (“RSUs”), stock appreciation rights (“SARs”), dividend equivalents and other stock- or cash-based awards. In conjunction with the amendment, the number of shares of common stock issuable under the ~~incentive plan~~Incentive Plan was increased to 4,300,000 shares and the term of the incentive plan was extended to May 12, 2026.

Under the ~~incentive plan or predecessor incentive plans,~~Incentive Plan, we have granted restricted shares, RSUs, and ~~stock appreciation rights, or SARs,~~PSUs to our ~~employees and employees of our former advisor.~~employees. These awards generally vest or vested over a ~~three-year~~two- to four-year period. In addition, we have granted unrestricted shares to our non-employee directors. These awards generally vest or vested immediately.

On ~~February 28, 2017,~~January 2, 2020, our compensation committee awarded, ~~143,180~~to our community-level employees, 71,604 restricted stock awards, valued at ~~$9.19~~$13.86 per share, or ~~$1,316~~$993 in the aggregate. ~~The~~These restricted stock awards vest over a ~~three-year period except for 6,585 awards that vested immediately. In addition,~~two-year period. On February 4, 2020, our compensation committee awarded, ~~performance~~to our non-executive corporate employees, 62,483 restricted stock awards, valued at $14.88 per share, ~~units,~~ or ~~PSUs,~~$930 in the aggregate. These restricted stock awards vest over a three-year period. On March 2, 2020, our compensation committee awarded, to ~~eligible~~our named executive officers, ~~under~~67,381 RSUs and 202,145 PSUs. The RSUs vest over a ~~newly adopted 2017 Annual Equity Award Program pursuant to~~four-year period and were valued at $13.87 per share, or $935 in the ~~incentive plan.~~aggregate. The number of PSUs ~~awarded~~earned will be based on attainment of certain performance criteria over a three-year period, with ~~226,469~~the actual number of shares issuable ranging between 0 and 150% of the number of PSUs ~~granted for achieving~~granted. Half of any PSUs earned will vest, and shares will be issued in respect thereof, immediately following the ~~maximum~~end of the three-year performance ~~criteria.~~period; the remaining half of any PSUs earned will vest, and shares will be issued in respect thereof, after an additional one-year period of service. The aggregate grant date fair value of the PSUs was ~~$1,076.~~$2,379.

~~On May 16, 2017, our~~During the three months ended March 31, 2020, a portion of the RSUs and PSUs granted were issued to employees who are retirement eligible. While the terms of the awards still provide for three-to-four years of time vesting, the fact that the grantees are retirement eligible results in immediate recognition of the associated stock-based compensation committee granted stock under the incentive plan such that our independent directors received an aggregate of 24,830 shares of our common stock, valued at $225 using our closing stock price of $9.06. These awards vested immediately.expense totaling $1,667.

~~On December 20, 2016, in connection with our management internalization, we acquired our former advisor and, therefore, fees and expenses to our former advisor are no longer incurred.~~

For the three months ended September 30, 2017 and 2016, our former advisor earned $0 and $1,727 of asset management fees, respectively, and $0 and $5,141 for the nine months ended September 30, 2017 and 2016, respectively. These fees are included within general and administrative expenses in our consolidated statements of operations.

For the three months ended September 30, 2017 and 2016, our former advisor earned $0 and $206 of incentive fees, respectively, and $0 and $350 for the nine months ended September 30, 2017 and 2016, respectively. These fees are included within general and administrative expenses in our consolidated statements of operations.

For the nine months ended September 30, 2017 and 2016, we incurred costs of $727 and $0, respectively, with respect to our shared services agreement with our former advisor. The term of the agreement was from December 21, 2016 to June 20, 2017 and the associated fees are included within general and administrative expenses in our consolidated statements of operations.

~~As of September 30, 2017 and December 31, 2016, we had no liabilities payable to our former advisor for asset management fees, incentive fees or shared service fees.~~

On December 20, 2016, in connection with our management internalization, we acquired property management agreements with respect to each of our properties from RAIT Residential, our former property manager, which is wholly owned by RAIT.

For the three months ended September 30, 2017 and 2016, our former property manager earned $0 and $1,219, respectively, and $0 and $3,710 for the nine months ended September 30, 2017 and 2016, respectively, of property management and leasing fees. As of September 30, 2017 and December 31, 2016, we had no liabilities payable to our property manager for property management and leasing fees.

~~On October 5, 2016, we repurchased and retired all 7,269,719 shares of our common stock owned by subsidiaries of RAIT.~~

Since October 5, 2016, RAIT has not owned any shares of our common stock. For the three months ended September 30, 2017 and 2016, we declared and subsequently paid dividends of $0 and $1,309, respectively, and $0 and $3,926 for the nine months ended September 30, 2017 and 2016, respectively, related to shares of common stock owned by subsidiaries of RAIT.

In the second quarter of 2016, we repaid $38,075 of mortgage indebtedness with proceeds from two property dispositions. This indebtedness was held by RAIT. Total interest expense paid to RAIT for the three and nine months ended September 30, 2017 and 2016 was $0 and $486, respectively.

In June 2017, we acquired South Terrace, a 328-unit property in Durham, NC for $42,950 from a joint venture, of which a subsidiary of RAIT was a controlling member. For further information, see Note 3: Investment in Real Estate.

The following table presents a reconciliation of basic and diluted earnings (loss) per share for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016:~~2019:

Certain IROP units, restricted stock ~~appreciation rights, or SARs,~~awards, RSUs, PSUs, and ~~unvested shares~~forward sale agreements were excluded from the earnings (loss) per share computation because their effect would have been anti-dilutive, totaling ~~3,035,654~~9,009,167 and 904,567 for the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020 and ~~2,915,008 and 3,091,380 for the three and nine months ended September 30, 2016,~~2019, respectively.

We are subject to various legal proceedings and claims that arise in the ordinary course of our business operations. Matters which arise out of allegations of bodily injury, property damage, and employment practices are generally covered by insurance. While the resolution of these matters cannot be predicted with certainty, we currently believe the final outcome of such matters will not have a material adverse effect on our financial position, results of operations or cash flows.

ToWe record an accrual for loss contingencies when a loss is probable and the amount of the loss can be reasonably estimated. Management reviews these accruals quarterly and makes revisions based on changes in facts and circumstances. When a loss contingency is not both probable and reasonably estimable, management does not accrue the loss. However, if the loss (or an additional loss in excess of an earlier accrual) is at least a reasonable possibility and material, then management discloses a reasonable estimate of the possible loss, or range of loss, if such reasonable estimate can be made. If we cannot make a reasonable estimate of the possible loss, or range of loss, then a statement to that effect is disclosed.

During and subsequent to the first quarter of 2020, the outbreak of COVID-19 has disrupted businesses and has slowed economic activity. IRT has been impacted by the COVID-19 pandemic and, in response, we have made numerous operational and policy changes to: (1) comply with governmental mandates on a jurisdiction by jurisdiction basis; (2) protect our employees, residents, and prospective residents; and (3) minimize the financial impact to IRT. The extent to which COVID-19 impacts our business, operations and financial results will depend on numerous evolving factors that ~~a natural disaster or similar event occurs with more than a remote risk~~are out of ~~having a material~~management’s control and that we are not able to predict at this time, including but not limited to: (1) the duration and scope of the COVID-19 outbreak; (2) the pandemic’s impact on current and future economic activity; and (3) the ~~consolidated financial statements, we will disclose~~actions of governments, businesses and individuals in response to the ~~estimated range of possible outcomes, and, if an outcome is probable, accrue an appropriate liability.~~COVID-19 pandemic.

The Securities and Exchange Commission ~~or SEC,~~(the “SEC”), encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This report contains or incorporates by reference such “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, ~~or Securities Act,~~ and Section 21E of the Securities Exchange Act of 1934, as ~~amended, or Exchange Act.~~amended.

Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements. As used herein, the terms “we,” “our” and “us” refer to Independence Realty Trust, Inc., which we refer to as IRT, and, as required by context, Independence Realty Operating Partnership, LP, which we refer to as IROP, and their subsidiaries.

We claim the protection of the safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995. These statements may be made directly in this report and they may also be incorporated by reference in this report to other documents filed with the SEC, and include, ~~but are not limited to,~~without limitation, statements about future financial and operating results and performance, statements about our plans, objectives, expectations and intentions with respect to future operations, products and services, and other statements that are not historical facts. 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 beyond 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. Actual results may differ materially from the anticipated results discussed in these forward-looking statements.

The risk factors discussed and identified in Item 1A of our ~~2016~~2019 Annual Report on Form 10-K and in Part II, Item 1A of this Quarterly Report, and in other of our public filings with the SEC, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this filing or to reflect the occurrence of unanticipated events.

We are a self-administered and self-managed Maryland ~~corporation~~real estate investment trust (“REIT”), that acquires, owns, operates, improves and ~~operates~~manages multifamily apartment communities across non-gateway U.S. markets. As of March 31, 2020, we owned and operated 58 multifamily apartment properties ~~across non-gateway U.S. markets, including Louisville, Memphis, Atlanta~~that contain 15,805 units. Our properties are located in Georgia, North Carolina, Tennessee, Kentucky, Ohio, Oklahoma, Indiana, Texas, Florida, South Carolina, Missouri, Louisiana, and ~~Raleigh.~~Alabama. We do not have any foreign operations and our business is not seasonal. Our ~~investment strategy~~executive offices are located at 1835 Market Street, Suite 2601, Philadelphia, PA 19103 and our telephone number is ~~focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail~~(267) 270-4800. We have offices in Philadelphia, Pennsylvania and ~~major employment centers. We aim~~Chicago, Illinois.

Our primary business objective is to ~~provide stockholders attractive risk-adjusted returns~~maximize stockholder value through diligent portfolio management, strong operational performance, and a consistent return of capital through distributions and capital appreciation. ~~We elected to be taxed as a REIT under~~Our investment strategy is focused on the ~~Internal Revenue Code of 1986, as amended, or the Code, commencing with our taxable year ended December 31, 2011.~~following:

As of ~~September 30, 2017,~~March 31, 2020, we owned 5058 multifamily apartment properties, totaling ~~13,729~~15,805 units. Below is a summary of our property portfolio by market.


(Dollars in thousands, except per unit data)	As of March 31, 2020									For the Three Months Ended March 31, 2020
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	$	256,395		93.1	%	$	1,194	$	4,720		15.0	%
Raleigh - Durham, NC		6		1,690		244,133		93.4	%		1,181		3,842		12.2	%
Louisville, KY		6		1,710		199,428		89.2	%		1,009		3,056		9.7	%
Memphis, TN		4		1,383		146,932		89.1	%		1,151		2,699		8.6	%
Columbus, OH		6		1,547		153,819		93.5	%		1,032		2,703		8.6	%
Tampa-St. Petersburg, FL		4		1,104		176,353		89.8	%		1,252		2,373		7.5	%
Oklahoma City, OK		5		1,658		78,628		97.2	%		681		2,108		6.7	%
Indianapolis, IN		4		916		91,375		95.9	%		1,030		1,740		5.5	%
Dallas, TX		4		985		139,320		91.8	%		1,298		1,806		5.7	%
Myrtle Beach, SC - Wilmington, NC		3		628		64,118		90.0	%		1,037		1,234		3.9	%
Charleston, SC		2		518		80,036		94.4	%		1,316		1,223		3.9	%
Orlando, FL		1		297		48,829		96.0	%		1,496		868		2.8	%
Charlotte, NC		1		208		42,194		95.7	%		1,564		740		2.4	%
Asheville, NC		1		252		28,738		96.4	%		1,157		620		2.0	%
Chattanooga, TN		2		295		27,455		96.6	%		994		497		1.6	%
St. Louis, MO		1		152		33,602		98.0	%		1,466		463		1.5	%
Huntsville, AL		1		178		16,495		98.9	%		1,010		383		1.2	%
Baton Rouge, LA		1		264		28,910		84.1	%		908		377		1.2	%
Total/Weighted Average		58		15,805	$	1,856,760		92.7	%	$	1,100	$	31,452		100.0	%

(Dollars in thousands, except per unit data)

As of September 30, 2017

For the Three Months Ended September 30, 2017

Market

Units

Gross Real
Estate
Assets

Period End
Occupancy

Average
Effective
Monthly Rent
per Unit

Net Operating
Income (a)

% of NOI

Louisville. KY

1,709

$
179,557

94.7
%

$
941

$
2,945

12.4
%
Memphis, TN

1,383

137,777

95.0
%

1,029

2,549

10.8
%
Atlanta, GA

1,092

136,681

96.1
%

1,105

2,419

10.2
%
Raleigh, NC

1,372

182,511

95.3
%

1,101

2,907

12.3
%
Oklahoma City, OK

1,658

73,256

92.8
%

642

1,595

6.7
%
Dallas, TX

734

85,390

95.9
%

1,138

1,480

6.3
%
Charleston, SC

690

94,948

95.8
%

1,220

1,217

5.1
%
Jackson, MS (b)

602

44,699

94.0
%

892

924

3.9
%
Little Rock, AR

462

54,298

94.8
%

992

849

3.6
%
Orlando, FL

297

47,517

94.9
%

1,380

760

3.2
%
Chicago, IL

370

29,385

93.8
%

1,007

675

2.9
%
Indianapolis, IN

645

60,600

95.0
%

928

710

3.0
%
Greenville, SC

346

48,176

93.9
%

1,092

687

2.9
%
Austin, TX

300

35,471

95.0
%

1,276

625

2.6
%
Charlotte, NC

208

41,749

93.8
%

1,461

628

2.7
%
Asheville, NC

252

28,291

94.8
%

1,054

576

2.4
%
Chattanooga, TN

295

25,951

95.9
%

961

486

2.1
%
Tampa-St. Petersburg, FL

216

29,735

92.6
%

1,212

489

2.1
%
St. Louis, MO

152

32,967

92.8
%

1,568

450

1.9
%
Columbus, OH

768

65,639

96.5
%

854

409

1.7
%
Huntsville, AL

178

16,070

98.3
%

849

277

1.2
%
Total/Weighted Average

13,729

$
1,450,668

94.8
%

$
1,004

$
23,657

100.0
%

As of ~~September 30, 2017,~~March 31, 2020, our same-store portfolio consisted of 4254 multifamily apartment properties, totaling ~~11,676~~14,748 units. See “Non-GAAP Financial Measures – Same Store Portfolio Net Operating Income” below for our definition of same store and definitions and reconciliations related to our net operating income and net operating income margin.

During ~~the three months ended September 30, 2017, we saw strong operational results. On a same-store basis, our total revenues were up 3.0% as compared~~and subsequent to the ~~third~~first quarter of ~~2016 driven~~2020, the outbreak of COVID-19 has disrupted businesses and has slowed economic activity. We have been impacted by ~~higher average effective monthly rents~~the COVID-19 pandemic and, ~~higher average occupancy. Revenue growth was especially strong~~ in response, have made numerous operational and policy changes to: (1) comply with governmental mandates on a jurisdiction by jurisdiction basis; (2) protect our employees, residents, and prospective residents; and (3) minimize the ~~Columbus, OH~~financial impact to us. The extent to which COVID-19 impacts our business, operations and ~~Atlanta, GA markets driven by steady occupancy~~financial results will depend on numerous evolving factors that are out of management’s control and ~~higher average effective rent per unit~~that we are not able to predict at this time, including but not limited to: (1) the duration and scope of the COVID-19 outbreak; (2) the pandemic’s impact on current and future economic activity; and (3) the actions of governments, businesses and individuals in ~~the third quarter of 2017 as compared~~response to the ~~third quarter~~COVID-19 pandemic.

~~Same-store net operating income increased 4.0% during~~ the ~~third quarter of 2017 as compared~~specific operational and policy changes we have made in response to the ~~same period~~COVID-19 pandemic include: (1) delaying or canceling capital recycling activity in ~~the prior year driven by the higher revenues and operating expenses that increased just 1.5% as we continued~~order to focus on ~~expense management. For the nine months ended September 30, 2017,~~current operations; (2) delaying or canceling capital spending, including pausing or otherwise delaying spending under our ~~same-store total revenues were 4.0% higher~~value-add program; and ~~our same-store net operating income~~(3) working to support residents impacted by COVID-19 while maximizing occupancy and rent collections.

Our capital recycling program consists of disposing of assets in markets where we lack scale and/or markets where management believes that growth is slowing.

In February 2020, we purchased a 251-unit located in McKinney, TX for $51.2 million. This acquisition was ~~4.9% higher than for the nine months ended September 30, 2016.~~

~~On June 20, 2017, we completed our use~~a part of ~~shared services previously provided by RAIT and fully completed~~ our previously ~~disclosed management internalization. The shared services~~announced 2019 capital recycling program.

In April 2020, we allowed a previously ~~provided included certain transitional services such as information technology, human resources, insurance, investor relations, legal, tax and accounting.~~

~~On July 31, 2017, we transferred the listing~~announced non-binding letter of ~~our common stock~~intent related to ~~the New York Stock Exchange (“NYSE”) from the NYSE MKT. Our common stock continues to trade under the ticker symbol “IRT”.~~

On September 3, 2017, IRT reached an agreement to acquire a portfolio of nine communities (the “HPI Portfolio”), totaling 2,353 units, for a gross purchase price of $228.1 million. The acquisition accelerates IRT’s penetration into a number of core existing markets, including Columbus, OH, Indianapolis, IN and Atlanta, GA, while providing entry into two new markets. The portfolio contains nine communities that were built or renovated between 2000 and 2011, had period end occupancy of 95% as of July 31, 2017, and had an average effective rent per unit of $884 for the three months ended July 31, 2017. On September 26, 2017, IRT closed on the acquisition of ~~four of these multifamily apartment~~three Class A communities ~~aggregating 917 units, representing~~in Atlanta, GA to expire, without realizing any financial penalty. This decision provides us with greater financial flexibility given the ~~consummation~~uncertainties surrounding the COVID-19 pandemic.

On February 20, 2020, we entered into an underwriting agreement with KeyBanc Capital Markets Inc. and BMO Capital Markets Corp., as representatives of the ~~first phase~~several underwriters name therein (collectively, the “Underwriters”), BMO Capital Markets Corp. (the “Forward Seller”), and Bank of ~~the portfolio acquisition. The acquisition of the remaining five communities are expected to close in succession during the fourth quarter of 2017, after and subject~~Montreal (the “Forward Counterparty”) relating to the satisfaction of customary closing conditions, as well as the debt assumption process on three of the five. On October 25, 2017, we acquired one of the remaining five communities, a 264 unit community located in Baton Rouge, LA, known as Live Oak Trace for $28,501.

~~On September 11, 2017, IRT announced the closing of its public~~ offering of ~~12,500,000 shares~~an aggregate of ~~its common stock at a public offering price of $9.25 per share. IRT also closed on the underwriters’ option to purchase an additional 1,875,000~~10.4 million shares of common stock at a price to the ~~public offering price. As a result~~Underwriters of the offering and the exercise of the underwriters’ option, IRT received approximately $126.1 million in net proceeds, after deducting the underwriting discount and estimated offering expenses. IRT is using the net$14.688 per share. We did not initially receive any proceeds from the sale of common stock by the Forward Seller. We completed the offering on February 24, 2020.

In connection with the offering, we also entered into two forward sale agreements (collectively, the “Forward Sale Agreements”) with the Forward Seller and the Forward Counterparty. In connection with the Forward Sale Agreements, the Forward Seller or its affiliate borrowed from third parties and sold to ~~pay~~the Underwriters an aggregate of 10.4 million shares of common stock that was sold in the offering. We expect to physically settle the Forward Sale Agreements and receive proceeds from the sale of those shares upon one or more such physical settlements within approximately twelve months from the date of the prospectus, earlier than February 24, 2021, the scheduled maturity date of the Forward Sale Agreements. Although we expect to settle the Forward Sale Agreements entirely by the physical delivery of shares of common stock for cash proceeds, we may also elect to cash or net share settle all or a portion of its obligations under the ~~purchase~~Forward Sale Agreements, in which case, we may receive or owe cash or shares of common stock from or to the Forward Seller. The Forward Sale Agreements provide for an initial forward sale price of $14.688 per share, subject to certain adjustments pursuant to the terms of each of the Forward Sale Agreements. The Forward Sale Agreements are subject to early termination or settlement under certain circumstances.

On March 31, 2020, we settled $50 million under the Forward Sale Agreements by issuing 3.4 million shares. As of March 31, 2020, 6.9 million shares remain to be settled under the forward sale agreement, which if physically settled would provide proceed to us of $100 million based on the forward price as of May 4, 2020. The offering and forward sale agreements provide us with further financial resources and flexibility considering the ongoing COVID-19 pandemic.

Value add initiatives, comprised of renovations and upgrades at selected communities to drive increased rental rates, remain a core component of our longer-term growth strategy. We have identified 7,136 units across 23 properties for renovations and upgrades as part of this initiative. As of March 31, 2020, we had completed renovations and upgrades at 3,025 of the 7,136 units. Given the COVID-19 pandemic, we are actively monitoring the markets where these value add renovations are occurring and have paused or otherwise delayed the volume of renovations where warranted.

Given our track record of NOI growth delivered through a combination of organic rent growth and the continued execution of our value add initiative, we were well positioned to achieve a normalized dividend payout ratio over time. Given market uncertainty, along with our decision to pause a portion of our value add program, we announced on May 6, 2020 that we expect to reduce our quarterly common stock dividend paid to common shareholders and IROP LP unitholders from $0.18 per share to $0.12 per share beginning with the dividend for the ~~HPI portfolio. Any remaining proceeds~~second quarter of 2020. The resulting dividend payout ratio is more in line with our peers and the reduced dividend will allow us to retain approximately $23 million annually, which can be used ~~for general corporate purposes.~~

Three Months Ended ~~September 30, 2017~~March 31, 2020 compared to the Three Months Ended ~~September 30, 2016~~March 31, 2019

SAME STORE PROPERTIES

NON SAME STORE PROPERTIES

CONSOLIDATED

(Dollars in thousands)

Three Months Ended September 30,

Three Months Ended September 30,

Three Months Ended September 30,

2017

2016

Increase (Decrease)

% Change

2017

2016

Increase (Decrease)

% Change

2017

2016

Increase (Decrease)

% Change

Revenue:

Rental income

$
32,483

$
31,698

$
785

2.5
%

$
3,048

$
2,635

$
413

15.7
%

$
35,531

$
34,333

$
1,198

3.5
%
Reimbursement and other income

3,913

3,645

268

7.4
%

420

386

34

8.8
%

4,333

4,031

302

7.5
%
Total revenue

36,396

35,343

1,053

3.0
%

3,468

3,021

447

14.8
%

39,864

38,364

1,500

3.9
%
Expenses:

Real estate operating expenses

14,744

14,520

224

1.5
%

1,452

1,587

(135
)

-8.5
%

16,196

16,107

89

0.6
%
Net Operating Income

$
21,652

$
20,823

$
829

4.0
%

$
2,016

$
1,434

$
582

40.6
%

$
23,668

$
22,257

$
1,411

6.3
%

Other Income:

Property management and other income

202

-

202

NM

Total other income

202

-

202

NM

Corporate and other expenses:

Property management expenses

1,328

1,219

109

8.9
%
General and administrative expenses

2,322

2,665

(343
)

-12.9
%
Acquisition and integration expenses

569

19

550

NM

Depreciation and amortization expense

8,671

7,765

906

11.7
%
Total corporate and other expenses

12,890

11,668

1,222

10.5
%
Operating Income (loss)

10,980

10,589

391

3.7
%
Interest expense

(6,963
)

(8,820
)

1,857

21.1
%
Hedge ineffectiveness

12

-

12

N/M

Other income (expense)

-

(2
)

2

N/M

Net gains (losses) on sale of assets

(92
)

(1
)

(91
)

NM

Gains (losses) on extinguishment of debt

-

-

-

N/M

Acquisition related debt extinguishment expenses

(2,781
)

-

(2,781
)

N/M

Gains (losses) on TSRE merger and property acquisitions

-

641

(641
)

-100.0
%
Net income (loss)

1,156

2,407

(1,251
)

-51.97
%
(Income) loss allocated to noncontrolling interests

(59
)

(140
)

81

57.9
%
Net income (loss) available to common shares

$
1,097

$
2,267

$
(1,170
)

-51.61
%

	SAME STORE PROPERTIES												NON SAME STORE PROPERTIES												CONSOLIDATED
(Dollars in thousands)	Three Months Ended March 31,												Three Months Ended March 31,												Three Months Ended March 31,
	2020			2019			Increase (Decrease)			% Change			2020			2019			Increase (Decrease)			% Change			2020			2019			Increase (Decrease)			% Change
Property Data:
Number of properties	54			54									4			4				-			0.0	%	58			58				-			0.0	%
Number of units		14,748			14,748									1,057			1,132			(75	)		-6.6	%		15,805			15,880			(75	)		-0.5	%
Average occupancy		92.7	%		92.8	%		-0.1	%	n/a				90.7	%		94.5	%		-3.8	%	n/a				92.5	%		92.9	%		-0.3	%	n/a
Average effective monthly rent, per unit		1,089			1,038			51			4.9	%		1,259			1,084			175			16.1	%		1,100			1,042			58			5.6	%
Revenue:
Rental and other property revenue	$	47,893		$	45,746		$	2,147			4.7	%	$	3,263		$	3,719		$	(456	)		-12.3	%	$	51,156		$	49,465		$	1,691			3.4	%
Expenses:
Property operating expenses		18,438			18,210			228			1.3	%		1,299			1,676			(377	)		-22.5	%		19,737			19,886			(149	)		-0.7	%
Net Operating Income	$	29,455		$	27,536		$	1,919			7.0	%	$	1,964		$	2,043		$	(79	)		-3.9	%	$	31,419		$	29,579		$	1,840			6.2	%

Other Revenue:
Other revenue																									$	194		$	75		$	119			158.7	%
Corporate and other expenses:
Property management expenses																										2,156			1,813			343			18.9	%
General and administrative expenses																										5,376			3,107			2,269			73.0	%
Depreciation and amortization expense																										14,828			12,447			2,381			19.1	%
Abandoned deal costs																										130			-			130		nm
Total corporate and other expenses																										22,490			17,367			4,993			28.7	%
Interest expense																										(9,497	)		(9,721	)		224			2.3	%
Net income																										(374	)		2,566			(2,810	)		-109.5	%
Income allocated to noncontrolling interests																										2			(26	)		28			107.7	%
Net income available to common shares																									$	(372	)	$	2,540		$	(2,782	)		-109.5	%

Rental ~~income~~and other property revenue. ~~Rental~~Revenue from rental and other property revenue of the consolidated portfolio increased ~~$1.2~~$1.7 million to ~~$35.5~~$51.2 million for the three months ended ~~September 30, 2017~~March 31, 2020 from ~~$34.3~~$49.5 million for the three months ended ~~September 30, 2016.~~March 31, 2019. The increase was primarily attributable to a ~~$0.8~~$2.1 million increase in same store rental ~~income~~and other property revenue driven by ~~higher~~a 4.9% increase in average effective monthly rents ~~and higher occupancy than~~compared to the prior year ~~period and~~period. This was partially offset by a ~~$0.4~~$0.5 million ~~increase~~decrease in non same store rental ~~income.~~and other property revenue. The non same store rental and other property revenue decrease was due to the difference in the number of properties included in each period as a result of the timing of property sales and acquisitions.

Property operating expenses. Property operating expenses decreased $0.2 million to $19.7 million for the three months ended March 31, 2020 from $19.9 million for the three months ended March 31, 2019. The decrease was primarily due to a $0.4 million decrease in non same store property operating expenses partially offset by a $0.2 million increase in the same store property operating expenses. The non same store property operating expense decrease was due to the number of properties included in each period being different as a result of the timing of property sales and acquisitions.

~~Reimbursement and other income. Reimbursement and other income~~Property management expenses. Property management expenses increased ~~$0.3~~$0.4 million to ~~$4.3~~$2.2 million for the three months ended ~~September 30, 2017~~March 31, 2020 from ~~$4.0~~$1.8 million for the three months ended ~~September 30, 2016. The~~March 31, 2019. This increase was primarily due to ~~a $0.3~~an increase in

personnel costs as the size of our property management team has grown to support our management platform.

General and administrative expenses. General and administrative expenses increased $2.3 million ~~increase in same store reimbursement and other income attributable~~ to ~~our continued focus on driving non-rental revenue and fee income.~~

~~Property management income.~~ ~~Property management income was $0.2~~$5.4 million for the three months ended ~~September 30, 2017 compared to $0.0~~March 31, 2020 from $3.1 million for the three months ended ~~September 30, 2016.~~March 31, 2019. This increase was primarily due to ~~third party property management income that we received for managing properties on behalf of third parties during the current period. This service did not exist prior~~$1.7 million in stock based compensation related to ~~our management internalization in December 2016.~~ performance share units and restricted stock units granted to employees who are retirement eligible.

~~Real estate operating expenses~~Depreciation and amortization expense. ~~Property operating expenses~~Depreciation and amortization expense increased ~~$0.1~~$2.4 million to ~~$16.2~~$14.8 million for the three months ended ~~September 30, 2017~~March 31, 2020 from ~~$16.1~~$12.4 million for the three months ended ~~September 30, 2016.~~

~~Property management expenses.~~ Property management expenses increased $0.1 million to $1.3 million for the three months ended September 30, 2017 from $1.2 million for the three months ended September 30, 2016. This increase coincides with the above-mentioned increase in property management income driven by our management internalization. After our management internalization, property management expenses include costs incurred to directly support on-site management. Prior to this, property management expenses included property and construction management fees paid to our former property manager.

~~General and administrative expenses.~~ General and administrative expenses decreased $0.4 million to $2.3 million for the three months ended September 30, 2017 from $2.7 million for the three months ended September 30, 2016. The decrease was due to cost savings from our management internalization.

~~Acquisition and integration expenses~~. Acquisition and integration expenses were $0.6 million for the three months ended September 30, 2017 compared to $0.0 million for the three months ended September 30, 2016. This increase was due to our acquisition of the HPI Portfolio. Acquisition and integration expenses include costs to identify, underwrite, close, and integrate new acquisitions.

~~Depreciation and amortization expense~~. Depreciation and amortization expense increased $0.9 million to $8.7 million for the three months ended September 30, 2017 from $7.8 million for the three months ended September 30, 2016. The increase was primarily attributable to $0.4 million of in-place lease intangible amortization recognized during the three months ended September 30, 2017 related to 2017 property acquisitions and a $0.5 million increase in depreciation expense due to property acquisitions during 2017.

~~Interest expense~~. Interest expense decreased $1.8 million to $7.0 million for the three months ended September 30, 2017 from $8.8 million for the three months ended September 30, 2016. The decrease was due to debt reductions during 2016 when our term loan was fully repaid and our credit facility balance decreased by $121.5 million.

~~Acquisition related debt extinguishment expenses.~~ Acquisition related debt extinguishment expenses were $2.8 million for the three months ended September 30, 2017 due to defeasance related costs incurred in connection with the HPI portfolio acquisitions.

~~Nine Months Ended September 30, 2017 compared to the Nine Months Ended September 30, 2016~~

SAME STORE PROPERTIES

NON SAME STORE PROPERTIES

CONSOLIDATED

(Dollars in thousands)

Nine Months Ended September 30,

Nine Months Ended September 30,

Nine Months Ended September 30,

2017

2016

Increase (Decrease)

% Change

2017

2016

Increase (Decrease)

% Change

2017

2016

Increase (Decrease)

% Change

Revenue:

Rental income

$
96,587

$
93,313

$
3,274

3.5
%

$
8,857

$
9,958

$
(1,101
)

-11.1
%

$
105,444

$
103,271

$
2,173

2.1
%
Reimbursement and other income

11,513

10,640

873

8.2
%

1,233

1,446

(213
)

-14.7
%

12,746

12,086

660

5.5
%
Total revenue

108,100

103,953

4,147

4.0
%

10,090

11,404

(1,314
)

-11.5
%

118,190

115,357

2,833

2.5
%
Expenses:

Real estate operating expenses

43,297

42,199

1,098

2.6
%

4,809

5,389

(580
)

-10.8
%

48,106

47,588

518

1.1
%
Net Operating Income

$
64,803

$
61,754

$
3,049

4.9
%

$
5,281

$
6,015

$
(734
)

-12.2
%

$
70,084

$
67,769

$
2,315

3.4
%

Other Income:

Property management and other income

579

-

579

-

Total other income

579

-

579

-

Corporate and other expenses:

Property management expenses

4,310

3,710

600

16.2
%
General and administrative expenses

7,128

8,074

(946
)

-11.7
%
Acquisition and integration expenses

956

37

919

NM

Depreciation and amortization expense

24,289

26,927

(2,638
)

-9.8
%
Total corporate and other expenses

36,683

38,748

(2,065
)

-5.3
%
Operating Income (loss)

33,980

29,021

4,959

17.1
%
Interest expense

(21,573
)

(27,815
)

6,242

22.4
%
Hedge ineffectiveness

-

-

-

N/M

Other income (expense)

(5
)

(2
)

(3
)

150.0
%
Net gains (losses) on sale of assets

15,873

31,773

(15,900
)

-50.0
%
Gains (losses) on extinguishment of debt

(572
)

(558
)

(14
)

2.5
%
Acquisition related debt extinguishment expenses

(2,781
)

-

(2,781
)

N/M

Gains (losses) on TSRE merger and property acquisitions

-

732

(732
)

N/M

Net income (loss)

24,922

33,151

(8,229
)

-24.82
%
(Income) loss allocated to noncontrolling interests

(1,009
)

(1,972
)

963

48.8
%
Net income (loss) available to common shares

$
23,913

$
31,179

$
(7,266
)

-23.30
%

~~Rental income.~~ ~~Rental revenue increased $2.2 million to $105.4 million for the nine months ended September 30, 2017 from $103.3 million for the nine months ended September 30, 2016.~~March 31, 2019. The increase was primarily attributable to a ~~$3.3~~$2.0 million increase in ~~same store rental income driven by higher average effective monthly rents and higher occupancy than~~depreciation expense at our value add properties for the ~~year-ago period. This increase was partially offset by $1.1 million of lower non same store rental income due~~three months ended March 31, 2020 compared to the ~~number of properties included in each period being different as a result of the timing of property sales and acquisitions.~~three months ended March 31, 2019.

~~Reimbursement and other income~~Interest expense. ~~Reimbursement and other income increased $0.6~~Interest expense decreased $0.2 million to ~~$12.7~~$9.5 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 from ~~$12.1~~$9.7 million for the ~~nine~~three months ended September 30, 2016. The increase was primarily due to a $0.9 million increase in same store reimbursement and other income attributable to our continued focus on driving non-rental revenue and fee income and a $0.3 million increase in reimbursement and other income due to the seven properties acquired during 2017. These increases were partially offset by a $0.6 million decrease in reimbursement and other income due to six properties sold in 2017 and 2016.

~~Property management income.~~ Property management income was $0.6 million for the nine months ended September 30, 2017 compared to $0.0 million for the nine months ended September 30, 2016. This was due to third party property management income that we received for managing properties on behalf of third parties during the current period. This service did not exist prior to our management internalization in December 2016.

~~Real estate operating expenses.~~ Property operating expenses increased $0.5 million to $48.1 million for the nine months ended September 30, 2017 from $47.6 million for the nine months ended September 30, 2016. The increase was due to higher personnel and real estate tax expenses, which drove a $1.1 million increase in real estate operating expenses at our same store properties partially offset by lower non-same store real estate operating expenses due to sold properties.

~~Property management expenses:~~ ~~Property management expenses~~increased $0.6 million to $4.3 million for the nine months ended September 30, 2017 from $3.7 million for the nine months ended September 30, 2016. This increase coincides with the above-mentioned increase in property management income driven by our management internalization. After our management internalization, property management expenses include costs incurred to directly support on-site management. Prior to this, property management expenses included property and construction management fees paid to our former property manager.

~~General and administrative expenses~~. General and administrative expenses decreased $1.0 million to $7.1 million for the nine months ended September 30, 2017 from $8.1 million for the nine months ended September 30, 2016. The decrease was due to cost savings from our management internalization.

~~Acquisition and integration expenses~~. Acquisition and integration expenses were $1.0 million for the nine months ended September 30, 2017 compared to $0.0 million for the nine months ended September 30, 2016. This increase was primarily due to our acquisition of the HPI Portfolio. Acquisition and integration expenses include costs to identify, underwrite, close, and integrate new acquisitions.

~~Depreciation and amortization expense. Depreciation and amortization expense decreased $2.6 million to $24.3 million for the nine months ended September 30, 2017 from $26.9 million for the nine months ended September 30, 2016.~~March 31, 2019. The decrease was primarily due to ~~a $3.7 million decrease in amortization of in-place leases related to 2015 property acquisitions as they were fully amortized~~lower interest rates during ~~2016. This was partially offset by a $0.7 million increase in amortization of in-place leases for acquisitions in 2017.~~

~~Interest expense. Interest expense decreased $6.2 million to $21.6 million for~~ the ~~nine~~three months ended ~~September 30, 2017 from $27.8 million for~~March 31, 2020 compared to the ~~nine~~three months ended ~~September 30, 2016. The decrease was due to debt reductions during 2016 when our term loan was fully repaid and our credit facility balance decreased by $121.5 million.~~

~~Net gains (losses) on sale of assets.~~ Net gains on sale of assets decreased $15.9 million to $15.9 million for the nine months ended September 30, 2017 from $31.8 million for the nine months ended September 30, 2016. The 2017 net gains were driven primarily by a $15.6 million gain on the sale of Copper Mill, a 320-unit apartment property in Austin, TX. The 2016 net gains were driven primarily by gains of $15.1 million and $14.2 million realized upon the sales of Tresa at Arrowhead and Belle Creek.

~~Gains (losses) on extinguishment of debt.~~ ~~Loss on extinguishment of debt was $0.6 million from the partial extinguishment of our prior secured credit facility.~~

~~Acquisition related debt extinguishment expenses.~~ Acquisition related debt extinguishment expenses were $2.8 million for the nine months ended September 30, 2017 due to defeasance related costs incurred in connection with the HPI portfolio acquisitions.March 31, 2019.

We believe that FFO and CFFO, each of which is a non-GAAP financial measure, are ~~additional~~ appropriate supplemental measures of the operating performance of a REIT and IRT in particular.

We ~~compute~~calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net income or loss (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.

We calculate 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~~as FFO, adjusted for stock compensation expense, depreciation and amortization of ~~other~~ items that are not ~~included~~added back in the computation of FFO, amortization of deferred financing costs, ~~acquisition and integration expenses,~~ and other non-cash or non-operating gains or losses related to items such as ~~hedge ineffectiveness,~~casualty related costs, defeasance costs that we incur when we sell a property subject to secured debt, asset sales, debt extinguishments, ~~acquisition related~~and acquisition-related debt extinguishment ~~expenses, gains on the TSRE merger,~~expenses.

Our calculations of FFO and management internalization expenses, from the determination of FFO. IRT incurs acquisition expenses in connection with acquisitions of real estate properties and expenses those costs when incurred in accordance with U.S. GAAP. As these expenses are one-time and reflective of investing activities rather than operating performance, IRT adds back these costs to FFO in determining CFFO.

~~Our calculation of~~ CFFO ~~differs~~may differ from the methodology ~~used~~ for calculating FFO, CFFO and similar supplemental measures utilized by ~~certain~~ other REITs and, accordingly, ~~our CFFO~~ may not be comparable to FFO, CFFO ~~reported~~or similar measures as calculated by other REITs. Our management utilizes FFO and CFFO as measures of our operating performance, and we believe they are also useful to investors because they facilitate an understanding of ~~IRT’s~~our operating performance after adjustment for certain non-cash or ~~non-recurring~~non-operating items that are required by GAAP to be expensed ~~but may not necessarily be indicative~~and facilitate comparison of our current operating performance ~~and that may not accurately compare our operating performance between~~to prior reporting 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~~measures to compare our financial performance to the performance of 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. Neither FFO nor CFFO should be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity.

Set forth below is a reconciliation of net income (loss) to FFO and CFFO for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 (in thousands, except share and per share information):

	For the Three Months Ended September 30, 2017					For the Three Months Ended September 30, 2016						For the Three Months Ended March 31, 2020					For the Three Months Ended March 31, 2019
	Amount			Per Share (1)		Amount			Per Share (2)			Amount			Per Share (1)		Amount		Per Share (2)
Funds From Operations (FFO):
Net income (loss)	$	1,156		$	0.02	$	2,407		$	0.05		$	(374	)	$ 0.00		$	2,566	$	0.03
Adjustments:
Real estate depreciation and amortization		8,645			0.11		7,765			0.15			14,725			0.16		12,318		0.14
Net (gains) losses on sale of assets excluding defeasance costs		92			-		1			-
Funds From Operations (FFO)	$	9,893		$	0.13	$	10,173		$	0.20
Net (gains) losses on sale of assets excluding debt extinguishment costs													—			—		—		—
FFO												$	14,351		$	0.16	$	14,884	$	0.17
Core Funds From Operations (CFFO):
Funds From Operations (FFO)	$	9,893		$	0.13	$	10,173		$	0.20
FFO												$	14,351		$	0.16	$	14,884	$	0.17
Adjustments:
Stock compensation expense		422			0.01		247			0.01			2,627			0.03		622		0.01
Amortization of deferred financing costs		282			-		597			0.01			361			—		339		—
Acquisition and integration expenses		569			0.01		19			-
Other depreciation and amortization		26			-		-			-			103			—		129		—
Hedge ineffectiveness		(12	)		-		-			-
Defeasance costs included in net gains (losses) on sale of assets		-			-		-
(Gains) losses on extinguishment of debt		-			-		(641	)		(0.01	)
Acquisition related debt extinguishment expenses		2,781			0.04		-			-
Core Funds From Operations (CFFO)	$	13,961		$	0.19	$	10,395		$	0.21
Abandoned deal costs													130			—		—		—
CFFO												$	17,572		$	0.19	$	15,974	$	0.18

For the Nine Months Ended September 30, 2017

For the Nine Months Ended September 30, 2016

Amount

Per Share (1)

Amount

Per Share (2)

Funds From Operations (FFO):

Net income (loss)

$
24,922

$
0.34

$
33,151

$
0.66

Adjustments:

Real estate depreciation and amortization

24,227

0.34

26,927

0.54

Net (gains) losses on sale of assets excluding defeasance costs

(18,621
)

(0.26
)

(33,169
)

(0.66
)
Funds From Operations (FFO)

$
30,528

$
0.42

$
26,909

$
0.54

Core Funds From Operations (CFFO):

Funds From Operations (FFO)

$
30,528

$
0.42

$
26,909

$
0.54

Adjustments:

Stock compensation expense

1,548

0.02

832

0.02

Amortization of deferred financing costs

1,160

0.01

2,543

0.05

Acquisition and integration expenses

956

0.01

37

-

Other depreciation and amortization

62

-

-

-

Hedge ineffectiveness

-

-

-

-

Defeasance costs included in net gains (losses) on sale of assets

2,748

0.04

1,396

0.03

(Gains) losses on extinguishment of debt

572

0.01

558

0.01

Acquisition related debt extinguishment expenses

2,781

0.04

-

-

(Gains) losses on TSRE merger and property acquisitions

-

-

(732
)

(0.02
)
Core Funds From Operations (CFFO)

$
40,355

$
0.55

$
31,543

$
0.63

We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is aan additional useful supplemental measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding interest expenses, depreciation and amortization, ~~asset management fees,~~casualty related costs, property management ~~fees, acquisition~~ expenses, and general and administrative expenses. In connection with our management internalization, which was completed in the fourth quarter of 2016, we modified our calculation of NOI to exclude property management expenses. We retrospectively adjusted previously reported NOI to conform to this change. 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 orand net ~~income.~~income as determined in accordance with GAAP. 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, financing 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 supplemental measure of our financial performance.

We review our same store properties or 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 have been sold or are classified as held for sale are excluded from the same store portfolio.

Set forth below is a reconciliation of same store net operating income to net income (loss) available to common shares for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 (in thousands, except per unit data):

Three Months Ended September 30, (a)

Nine Months Ended September 30, (a)

2017

2016

% change

2017

2016

% change

Revenue:

Rental income
$
32,483

$
31,698

2.5
%

$
96,587

$
93,313

3.5
%
Reimbursement and other income

3,913

3,645

7.4
%

11,513

10,640

8.2
%
Total revenue

36,396

35,343

3.0
%

108,100

103,953

4.0
%
Operating Expenses

Real estate taxes

4,388

4,280

2.5
%

13,153

12,845

2.4
%
Property insurance

747

748

-0.1
%

2,348

2,254

4.2
%
Personnel expenses

3,573

3,449

3.6
%

10,456

10,038

4.2
%
Utilities

2,353

2,280

3.2
%

6,699

6,540

2.4
%
Repairs and maintenance

1,550

1,460

6.2
%

4,117

3,816

7.9
%
Contract services

1,074

1,060

1.3
%

3,207

3,254

-1.4
%
Advertising expenses

397

399

-0.5
%

1,161

1,198

-3.1
%
Other expenses

662

844

-21.6
%

2,156

2,254

-4.3
%
Total operating expenses

14,744

14,520

1.5
%

43,297

42,199

2.6
%
Net operating income
$
21,652

$
20,823

4.0
%

$
64,803

$
61,754

4.9
%
NOI Margin

59.5
%

58.9
%

0.6
%

59.9
%

59.4
%

0.5
%
Average Occupancy

94.7
%

94.3
%

0.4
%

94.5
%

93.5
%

1.0
%
Average effective monthly rent, per unit
$
1,020

$
999

2.2
%

$
1,014

$
984

3.0
%
Reconciliation of Same-Store Net Operating Income to Net Income (Loss)

Same-store portfolio net operating income (a)
$
21,652

$
20,823

$
64,803

$
61,754

Non same-store net operating income

2,016

1,434

5,281

6,015

Property management income

202

-

579

-

Property management expenses

(1,328
)

(1,219
)

(4,310
)

(3,710
)

General and administrative expenses

(2,322
)

(2,665
)

(7,128
)

(8,074
)

Acquisition and integration expenses

(569
)

(19
)

(956
)

(37
)

Depreciation and amortization

(8,671
)

(7,765
)

(24,289
)

(26,927
)

Interest expense

(6,963
)

(8,820
)

(21,573
)

(27,815
)

Hedge ineffectiveness

12

-

-

-

Other income (expense)

-

(2
)

(5
)

(2
)

Net gains (losses) on sale of assets

(92
)

(1
)

15,873

31,773

Gains (losses) on extinguishment of debt

-

-

(572
)

(558
)

Acquisition related debt extinguishment expenses

(2,781
)

-

(2,781
)

-

Gains (losses) on TSRE merger

-

641

-

732

Net income (loss) available to common shares
$
1,156

$
2,407

$
24,922

$
33,151

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain investments, pay distributions and other general business needs. We believe our available cash balances, financing arrangements and cash flows from operations will be sufficient to fund our liquidity requirements with respect to our existing portfolio for the next 12twelve months and the foreseeable future.

On May 1, 2017, we closed on a new $300.0 million unsecured credit facility, refinancing and terminating the previous secured credit facility. The new facility is comprised of a $50.0 million term loan and a revolving commitment of up to $250.0 million. The maturity date on the new term loan is May 1, 2022, and the maturity date on borrowings outstanding under the revolving commitment is May 1, 2021, extending the September 17, 2018 maturitymore of the previous secured credit facility. Based on our current leverage levels, our annual interest cost is LIBOR plus 145 basis points under the term loan and LIBOR plus 150 basis points for borrowings outstanding under the revolving commitments, an annual savings of approximately 35 to 40 basis points from our previous secured credit facility.following:

As of ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, we maintained cash and cash equivalents, and restricted cash of approximately ~~$10.1~~$62.1 million and ~~$29.2~~$16.2 million, respectively. Our cash and cash equivalents were generated from the following activities (dollars in thousands):

~~The increase in our~~Our cash ~~flow~~inflow from operating activities during the ~~nine~~three months ended ~~September 30, 2017 was~~March 31, 2020 and 2019 were primarily driven by ~~the increased performance~~ongoing operations of our ~~property portfolio.~~properties.

Our cash outflow from investing activities during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 was primarily due to ~~seven~~our property ~~acquisitions partially offset by three property dispositions.~~acquisition and our capital expenditures. Our cash ~~inflow~~outflow from investing activities during the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2019 was primarily due to ~~the disposition of three properties.~~ four property acquisitions.

Our cash inflow from financing activities during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 was primarily due to $65.5 million of draws on our unsecured credit facility and a $50.0 million settlement on our forward sale agreements, partially offset by the distribution of dividends of our common stock. Our cash inflow from financing activities during the three months ended March 31, 2019 was primarily due to draws on our ~~current and previous~~unsecured credit ~~facilities~~facility related to the acquisitions of ~~seven properties, partially offset by~~four properties.

Our Annual Report on Form 10-K for the ~~proceeds from~~year ended December 31, 2019 filed on February 18, 2020, includes a table of contractual commitments. There were no material changes to these commitments since the ~~issuance~~filing of our common stock. Our cash outflow from financing activities during the nine months ended September 30, 2016 was primarily due to repayments of mortgage indebtedness and the interim facility with proceeds from the three property dispositions.

~~As a REIT, we evaluate our dividend coverage based~~Annual Report on ~~our cash flow from operating activities, excluding acquisition and integration expenses and changes in other assets and liabilities. During the nine months ended September 30, 2017, we paid~~Form 10-K.

distributions to our common stockholders and noncontrolling interests of $38.9 million and generated cash flow from operating activities excluding acquisition and integration expenses and changes in other assets and liabilities of $40.4 million.

There were no off-balance sheet arrangements during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our interests.

Our ~~2016~~2019 Annual Report on Form 10-K contains a discussion of our critical accounting policies. On January 1, 2016, we adopted three new accounting pronouncements and revised our accounting policies as described in Note 2 to the Consolidated Financial Statements included in Part I, Item 1 of this report. Management discusses our critical accounting policies and management’s judgments and estimates with the audit committee of our board of directors.

There were no material changes to our critical accounting policies sine the filing of our Annual Report on form 10-K.

~~Market risk is the adverse effect~~Our 2019 Annual Report on ~~the value~~Form 10-K contains a discussion of a financial instruments that results from a change in interest rates. We may be exposed to interest rate changes primarily as a result of long-term debt used to maintain liquidity, fund capital expendituresqualitative and expand our real estate investment portfolio and operations. Market fluctuations in real estate financing may affect the availability and cost of funds needed to expand our investment portfolio. In addition, restrictions upon the availability of real estate financing or high interest rates for real estate loans could adversely affect our ability to dispose of real estate in the future. We seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. We may use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets. Thequantitative market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. With regard to variable rate financing, we assess our interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both our outstanding and forecasted debt obligations as well as our potential offsetting hedge positions. While this hedging strategy is designed to minimize the impact on our net income and funds from operations of changes in interest rates, the overall returns on any investment in our securities may be reduced. We currently have limited exposure to financial market risks.

We may also be exposed to credit risk in derivative contracts we may use. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty will owe us, which creates credit risk for us. If the fair value of a derivative contract is negative, we will owe the counterparty and, therefore, do not have credit risk. We seek to minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties.

There have been no material changes in quantitative and qualitative market risks during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 from the disclosures included in our ~~2016~~2019 Annual Report on Form 10-K.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our ~~chief executive officer~~Chief Executive Officer and our ~~chief financial officer,~~Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. ~~In designing and evaluating~~

Effective as of March 31, 2020, we carried out an evaluation, under the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

~~Under the~~ supervision ~~of our chief executive officer and chief financial officer~~ and with the participation of our ~~disclosure committee, we have carried out an evaluation~~Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and ~~procedures as of the end of the period covered by this report.~~procedures. Based ~~upon~~on that evaluation, our ~~chief executive officer~~Chief Executive Officer and ~~chief financial officer~~Chief Financial Officer concluded that ~~our~~the disclosure controls and procedures are effective atto ensure that information required to be disclosed by us in our Exchange Act filings is recorded, processed, summarized and reported within the ~~reasonable assurance level.~~time periods specified in the SEC’s rules and forms.

There ~~has been~~were no ~~change~~changes in our internal control over financial reporting oridentified in ~~other factors~~connection with the evaluation referred to above during the quarter ended ~~September 30, 2017,~~March 31, 2020 that have materially affected, or ~~were~~are reasonably likely to materially affect, our internal control over financial reporting.

The risks set out below represent changes ~~from the~~to risk factors ~~previously~~ disclosed in Part I, Item ~~1A—“Risk Factors” in~~1A of our ~~2016~~ Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2019. The information in this Quarterly Report on Form 10-Q should be read in conjunction with the other factors described in “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

The ongoing COVID-19 pandemic and measures intended to prevent its spread could have a material adverse effect on our business, results of operations, cash flows and financial condition.

In December 2019, COVID-19 was first reported, and in March 2020, the World Health Organization declared COVID-19 a pandemic. The outbreak has led governments and other authorities around the world, including federal, state and local authorities in the United States, including where we own properties and where our corporate headquarters is located, to impose measures intended to

control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, school closures, quarantines and shelter-in-place orders.

The impact of the COVID-19 pandemic and measures to prevent its spread could negatively impact our businesses in a number of ways, including our residents’ ability or willingness to pay rents. In some cases, we may waive fees or restructure residents’ rent obligations including in the form of deferred payment arrangements, and may do so on terms less favorable to us than those currently in place. In the event of resident nonpayment, default or bankruptcy, we may incur costs in protecting our investment and re-leasing our property. Additionally, local and national authorities may expand or extend certain measures imposing restrictions on our ability to enforce tenants’ contractual rental obligations.

Restrictions inhibiting our employees’ ability to meet with existing and potential residents has disrupted and could in the future further disrupt our ability to lease apartments which could adversely impact our rental rate and occupancy levels. In addition, social distancing efforts, including limiting contractors on-site and in residential apartment units, could reduce our ability to operate our properties as effectively and efficiently as we had in the past.

In response to executive orders issued by state and local authorities, most of our employees based at our headquarters are currently working remotely. The effects of these executive orders, including an extended period of remote work arrangements, could strain our business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, and impair our ability to manage our business.

The potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during this disruption.

The COVID-19 pandemic has also caused, and is likely to continue to cause, severe economic, market and other disruptions worldwide. We cannot assure you that conditions will not continue to deteriorate as a result of the pandemic. In addition, the deterioration of global economic conditions as a result of the pandemic may ultimately decrease the demand for multifamily communities within the markets in which we operate and may adversely impact occupancy levels and rental rates across our portfolio.

The extent of the COVID-19 pandemic’s effect on our operational and financial performance will depend on future developments including the duration, spread and intensity of the outbreak, all of which are uncertain and difficult to predict. Due to the speed with which the situation is developing, we are not able at this time to estimate the effect of these factors on our business, but the adverse impact on our business, results of operations, financial condition and cash flows could be material. Moreover, many of the risks described in the risk factors set forth in our 2019 Annual Report on Form 10-K may be more likely to impact us as a result of the COVID-19 pandemic and the responses to curb its spread, including specifically:

~~We have previously disclosed four “UPREIT” transactions completed in May 2014, August 2014, November 2014~~During the three months ended March 31, 2020, holders of IROP units exchanged 82,357 units for 82,357 shares of our common

stock. The exchange of the 82,357 units for 82,357 shares occurred on February 29, 2020 and ~~December 2014 wherein IROP issued, in~~ the aggregate, 1,282,449 common units, or units, to unaffiliated entities or persons in order to acquire properties. In addition, we have previously disclosed that in September 2015, IROP issued 1,925,419 units, plus cash in lieuissuance of ~~fractional TSR OP units, in a transaction related to~~ the ~~TSRE acquisition. In June 2017, IROP issued 166,604 units in connection with our acquisition of South Terrace. All such issuances were~~shares was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act. ~~No underwriters were involved with such issuances. As previously disclosed, these units are subject to exchange agreements containing~~

During the ~~terms and conditions under which the units could be exchanged for cash in an amount equal to the value of an equivalent number of~~three months ended March 31, 2020, we withheld shares of ~~our~~ common stock asto satisfy employee tax withholding obligations payable upon the vesting of the date IROP receives the holder’s notice of its desire to exchange the units for cash or, at IROP’s option, for the equivalent number of shares of our common stock. During the first half of 2017, IROP exchanged 39,899 units for 39,899 shares of ourrestricted common stock (with fractional units being settled in cash). At September 30, 2017, there were 3,035,654 units held by unaffiliated third parties outstanding. The issuance of the shares of our common stock in these exchanges was exempt from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D; all the persons receiving such shares were accredited investors. No underwriters were involved with such issuances.

Exhibit 99.1 (Material U.S. Federal Income Tax Considerations) filed with this Form 10-Q replaces Exhibit 99.1 (Material U.S. Federal Income Tax Considerations) to the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 to reflect recent legislative changes under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

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 thereunto duly authorized.

Maryland	26-4567130
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

~~Two Liberty Place~~ ~~50 S. 16~~^th1835 Market Street, Suite ~~3575~~2601 Philadelphia, PA	~~19102~~19103
(Address of Principal Executive Offices)	(Zip Code)

Large Accelerated filer	☐☒	Accelerated filer	☒	☐

Non-Accelerated filer	☐~~(Do not check if a smaller reporting company)~~	Smaller reporting company		☐

Emerging growth company	☐

		Page

PART I—FINANCIAL INFORMATION		3

Item 1.	Financial Statements (unaudited)	3

	Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~201~~20196	3

	Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months ended ~~September 30, 2017~~March 31, 2020 and ~~September 30,~~March 31, 20169	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three ~~and Nine~~ Months ended ~~September 30, 2017~~March 31, 2020 and ~~September 30, 2016~~March 31, 2019	5

	Condensed Consolidated Statements of Changes in Equity for the ~~Nine~~Three Months ended ~~September 30,~~March 31, 2020 and March 31, 20179	6

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months ended ~~September 30, 2017~~March 31, 2020 and ~~September 30, 2016~~March 31, 2019	7

	~~Condensed~~ Notes to Condensed Consolidated Financial Statements as of ~~September 30, 2017~~March 31, 2020	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2217

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3225

Item 4.	Controls and Procedures	3225

PART II—OTHER INFORMATION		33

Item 1.	Legal Proceedings	3325

Item 1A.	Risk Factors	3325

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3327

Item 3.	Defaults Upon Senior Securities	3327

Item 4.	Mine Safety Disclosures	3327

Item 5.	Other Information	3327

Item 6.	Exhibits	3327

Signatures		3529

Property Name	Date of Purchase	Location	Units (unaudited)		Purchase Price
Lakes of Northdale	2/27/2017	Tampa, FL		216	$	29,750
Haverford Place	5/24/2017	Lexington, KY		160	$	14,240
South Terrace (1)	6/30/2017	Durham, NC		328	$	42,950
Cherry Grove (2)	9/26/2017	North Myrtle Beach, SC		172	$	16,157
Riverchase (2)	9/26/2017	Indianapolis, IN		217	$	18,899
Kensington (2)	9/26/2017	Canal Winchester, OH		264	$	24,409
Schirm Farms (2)	9/26/2017	Canal Winchester, OH		264	$	23,749
Total				1,621	$	170,154

Description	Fair Value of Assets Acquired During the Nine-Month Period Ended September 30, 2017
Assets acquired:
Investments in real estate	$	168,191
Accounts receivable and other assets	$	463
Intangible assets	$	1,963
Total assets acquired	$	170,617
Liabilities assumed:
Accounts payable and accrued expenses	$	1,502
Other liabilities	$	490
Total liabilities assumed	$	1,992
Estimated fair value of net assets acquired	$	168,625


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock		IRT		NYSE

	As of September 30, 2017			As of December 31, 2016			Depreciable Lives (In years)		As of March 31, 2020			As of December 31, 2019			Depreciable Lives (In years)
Land	$	187,935		$	165,120			—	$	238,723		$	234,050			—
Building		1,211,985			1,066,611			40		1,499,441			1,453,052			40
Furniture, fixtures and equipment		27,137			17,625		5-10			118,596			109,263		5-10
Total investment in real estate	$	1,427,057		$	1,249,356				$	1,856,760		$	1,796,365
Accumulated depreciation		(75,084	)		(51,511	)				(172,789	)		(158,435	)
Investments in real estate, net	$	1,351,973		$	1,197,845				$	1,683,971		$	1,637,930

	For the Three-Month Period Ended September 30, 2017				For the Nine-Month Period Ended September 30, 2017
Property	Total revenue		Net income (loss) allocable to common shares		Total revenue		Net income (loss) allocable to common shares
Lakes of Northdale	$	789	$	223	$	1,829	$	447
Haverford Place	$	452	$	107	$	637	$	179
South Terrace	$	1,039	$	198	$	1,049	$	203
Cherry Grove	$	26	$	17	$	26	$	17
Riverchase	$	25	$	13	$	25	$	13
Kensington	$	35	$	25	$	35	$	25
Schirm Farms	$	35	$	23	$	35	$	23
Total	$	2,401	$	606	$	3,636	$	907

Description	For the Three-Month Period Ended September 30, 2017		For the Three-Month Period Ended September 30, 2016		For the Nine-Month Period Ended September 30, 2017		For the Nine-Month Period Ended September 30, 2016
Pro forma total revenue (unaudited)		43,421		42,695		128,834		128,350
Pro forma net income (loss) allocable to common shares (unaudited)		2,347		3,211		27,663		34,012
Earnings (loss) per share attributable to common shareholders:
Basic-pro forma (unaudited)	$	0.03	$	0.07	$	0.40	$	0.72
Diluted-pro forma (unaudited)	$	0.03	$	0.07	$	0.39	$	0.72

							Net income (loss) allocable to common shares
Property Name	Date of Sale	Sale Price		Gain (loss) on sale (1)			For the Three Months Ended September 30, 2017			For the Nine Months Ended September 30, 2017
Copper Mill	5/5/2017	$	32,000	$	15,616		$	(3	)	$	794
Heritage Trace	6/1/2017		11,600		(1,237	)		(3	)		477
Berkshire	6/9/2017		16,000		1,579			(33	)		457
Total		$	59,600	$	15,958		$	(39	)	$	1,728

Debt:	Outstanding Principal		Unamortized Discount and Debt Issuance Costs			Carrying Amount		Type	Weighted Average Rate		Weighted Average Maturity (in years)		Outstanding Principal		Unamortized Debt Issuance Costs			Carrying Amount		Type	Weighted Average Rate	Weighted Average Maturity (in years)
Unsecured credit facility ~~(2)~~(1)	$	159,690	$	(2,527	)	$	157,163	Floating		2.7%		3.9	$	251,802	$	(2,209	)	$	249,593	Floating	2.3%		3.1
Mortgages-Fixed rate		577,632		(3,170	)		574,462	Fixed		3.7%		6.0
Unsecured term loans														300,000		(1,498	)		298,502	Floating	2.2%		4.1
Mortgages														503,033		(1,587	)		501,446	Fixed	3.9%		3.7
Total Debt	$	737,322	$	(5,697	)	$	731,625			3.5%		5.6	$	1,054,835	$	(5,294	)	$	1,049,541		3.0%		3.7

	Original maturities on or before December 31,
Debt:	2017		2018		2019		2020		2021		Thereafter
Unsecured credit facility	$	-	$	-	$	-	$	-	$	109,690	$	50,000
Mortgages-Fixed rate		685		3,245		4,660		7,611		102,597		458,834
Total	$	685	$	3,245	$	4,660	$	7,611	$	212,287	$	508,834

	Scheduled maturities on or before December 31,
Debt:	2020		2021		2022		2023		2024		Thereafter
Unsecured credit facility	$	—	$	—	$	—	$	251,802	$	—	$	—
Unsecured term loans		—		—		—		—		300,000		—
Mortgages		6,094		76,174		70,798		107,479		58,028		184,460
Total	$	6,094	$	76,174	$	70,798	$	359,281	$	358,028	$	184,460

	As of March 31, 2020						As of December 31, 2019
	Notional		Fair Value of Assets		Fair Value of Liabilities		Notional		Fair Value of Assets		Fair Value of Liabilities
Cash flow hedges:
Interest rate swap	$	150,000	$	—	$	1,495	$	150,000	$	953	$	—
Interest rate collars		250,000		—		14,875		250,000		—		4,330
Forward interest rate swaps		—		—		14,567		—		—		3,439
Total	$	400,000	$	—	$	30,937	$	400,000	$	953	$	7,769

Month	Declaration Date	Record Date	Payment Date	Dividend Declared Per Share
January 2017	January 12, 2017	January 31, 2017	February 15, 2017	$	0.06
February 2017	January 12, 2017	February 28, 2017	March 15, 2017	$	0.06
March 2017	January 12, 2017	March 31, 2017	April 17, 2017	$	0.06
April 2017	April 12, 2017	April 28, 2017	May 15, 2017	$	0.06
May 2017	April 12, 2017	May 31, 2017	June 15, 2017	$	0.06
June 2017	April 12, 2017	June 30, 2017	July 17, 2017	$	0.06
July 2017	July 14, 2017	July 31, 2017	August 15, 2017	$	0.06
August 2017	July 14, 2017	August 31, 2017	September 15, 2017	$	0.06
September 2017	July 14, 2017	September 29, 2017	October 13, 2017	$	0.06
October 2017	October 12, 2017	October 31, 2017	November 15, 2017	$	0.06
November 2017	October 12, 2017	November 30, 2017	December 15, 2017	$	0.06
December 2017	October 12, 2017	December 29, 2017	January 15, 2018	$	0.06

	Three Months Ended March 31, (a)
	2020			2019			% change
Revenue:
Rental and other property revenue	$	47,893		$	45,746			4.7	%
Property Operating Expenses
Real estate taxes		5,921			6,092			-2.8	%
Property insurance		917			953			-3.8	%
Personnel expenses		4,385			4,308			1.8	%
Utilities		2,766			2,578			7.3	%
Repairs and maintenance		1,500			1,499			0.1	%
Contract services		1,751			1,652			6.0	%
Advertising expenses		535			464			15.3	%
Other expenses		663			664			-0.2	%
Total property operating expenses		18,438			18,210			1.3	%
Net operating income	$	29,455		$	27,536			7.0	%
NOI Margin		61.5	%		60.2	%		1.3	%
Average Occupancy		92.7	%		92.8	%		-0.1	%
Average effective monthly rent, per unit	$	1,089		$	1,038			4.9	%
Reconciliation of Same-Store Net Operating Income to Net Income (Loss)
Same-store portfolio net operating income (a)	$	29,455		$	27,536
Non same-store net operating income		1,964			2,043
Other revenue		194			75
Property management expenses		(2,156	)		(1,813	)
General and administrative expenses		(5,376	)		(3,107	)
Depreciation and amortization		(14,828	)		(12,447	)
Interest expense		(9,497	)		(9,721	)
Abandoned deal costs		(130	)		—
Net income (loss)	$	(374	)	$	2,566

	Three Months Ended September 30, (a)									Nine Months Ended September 30, (a)
	2017			2016			% change			2017			2016			% change
Revenue:
Rental income	$	32,483		$	31,698			2.5	%	$	96,587		$	93,313			3.5	%
Reimbursement and other income		3,913			3,645			7.4	%		11,513			10,640			8.2	%
Total revenue		36,396			35,343			3.0	%		108,100			103,953			4.0	%
Operating Expenses
Real estate taxes		4,388			4,280			2.5	%		13,153			12,845			2.4	%
Property insurance		747			748			-0.1	%		2,348			2,254			4.2	%
Personnel expenses		3,573			3,449			3.6	%		10,456			10,038			4.2	%
Utilities		2,353			2,280			3.2	%		6,699			6,540			2.4	%
Repairs and maintenance		1,550			1,460			6.2	%		4,117			3,816			7.9	%
Contract services		1,074			1,060			1.3	%		3,207			3,254			-1.4	%
Advertising expenses		397			399			-0.5	%		1,161			1,198			-3.1	%
Other expenses		662			844			-21.6	%		2,156			2,254			-4.3	%
Total operating expenses		14,744			14,520			1.5	%		43,297			42,199			2.6	%
Net operating income	$	21,652		$	20,823			4.0	%	$	64,803		$	61,754			4.9	%
NOI Margin		59.5	%		58.9	%		0.6	%		59.9	%		59.4	%		0.5	%
Average Occupancy		94.7	%		94.3	%		0.4	%		94.5	%		93.5	%		1.0	%
Average effective monthly rent, per unit	$	1,020		$	999			2.2	%	$	1,014		$	984			3.0	%
Reconciliation of Same-Store Net Operating Income to Net Income (Loss)
Same-store portfolio net operating income (a)	$	21,652		$	20,823					$	64,803		$	61,754
Non same-store net operating income		2,016			1,434						5,281			6,015
Property management income		202			-						579			-
Property management expenses		(1,328	)		(1,219	)					(4,310	)		(3,710	)
General and administrative expenses		(2,322	)		(2,665	)					(7,128	)		(8,074	)
Acquisition and integration expenses		(569	)		(19	)					(956	)		(37	)
Depreciation and amortization		(8,671	)		(7,765	)					(24,289	)		(26,927	)
Interest expense		(6,963	)		(8,820	)					(21,573	)		(27,815	)
Hedge ineffectiveness		12			-						-			-
Other income (expense)		-			(2	)					(5	)		(2	)
Net gains (losses) on sale of assets		(92	)		(1	)					15,873			31,773
Gains (losses) on extinguishment of debt		-			-						(572	)		(558	)
Acquisition related debt extinguishment expenses		(2,781	)		-						(2,781	)		-
Gains (losses) on TSRE merger		-			641						-			732
Net income (loss) available to common shares	$	1,156		$	2,407					$	24,922		$	33,151

Period	Total Number of Shares Purchased		Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
01/01/2020 to 01/31/2020		—		—		—		—
02/01/2020 to 02/29/2020		30,591	$	14.62		30,591		—
03/01/2020 to 03/31/2020		20,537	$	12.83		20,537		—
Total		51,128	$	13.90		51,128		—

10.1		~~HPI Purchase~~Confirmation of Issuer Forward Sale Transaction, dated February 20, 2020, by and ~~Sale Agreement dated September 3, 2017,~~among Independence Realty Trust, Inc. (“IRT”), Bank of Montreal and BMO Capital Markets Inc. (Incorporated by reference to Exhibit 1.2 to Current Report on Form 8-K filed ~~herewith.~~on February 24, 2020.

10.2		~~First Amendment~~Confirmation of Issuer Forward Sale Transaction, dated February 20, 2020, by and among IRT, Bank of Montreal and BMO Capital Markets Inc. (Incorporated by reference to ~~HPI Purchase and Sale Agreement dated September 25, 2017,~~Exhibit 1.3 to Current Report on Form 8-K filed ~~herewith.~~on February 24, 2020.

10.3		~~Second Amendment to HPI Purchase and Sale~~Employment Agreement, dated ~~October 24, 2017,~~March 1, 2020, by and between IRT and Jessica Norman, filed herewith.*

~~12.1~~10.4		~~Statements regarding computation of ratios as of September 30, 2017,~~Employment Agreement, dated March 1, 2020, by and between IRT and Jason R. Delozier, filed herewith.*


31.1		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

99.1		Material U.S. Federal Income Tax Considerations filed herewith.

101		~~XBRL (eXtensible~~iXBRL (Inline eXtensible Business Reporting Language). The following materials, formatted in ~~XBRL:~~iXBRL: (i) Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, (ii) Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, (iii) Consolidated Statement of Comprehensive Income (Loss) for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, (iv) Consolidated Statements of Changes in Equity for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020 and 2019, (v) Consolidated Statements of Cash Flows for the ~~nine~~three months ~~ended September 30, 2017~~March 31, 2020 and ~~2016~~2019 and (vi) notes to the consolidated financial statements as of ~~September 30, 2017.~~March 31, 2020.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document). *Management contract or compensatory plan or arrangement.

	Independence Realty Trust, Inc.

Date: ~~October 31, 2017~~May 7, 2020	By:	/s/ Scott f. Schaeffer
		Scott F. Schaeffer
		Chairman of the Board and Chief Executive Officer
		(Principal Executive Officer)

Date: ~~October 31, 2017~~May 7, 2020	By:	/s/ James J. Sebra
		James J. Sebra
		Chief Financial Officer and Treasurer
		(Principal Financial Officer)

Date: May 7, 2020	By:	/s/ Jason R. Delozier
		Jason R. Delozier
		Chief Accounting Officer ~~and~~
		(Principal Accounting Officer)