Independence Realty Trust (IRT) 8-K Independence Realty Trust Announces Fourth Quarter and Full Year 2018 Financial Results

Exhibit 99.2

1

TABLE OF CONTENTS

Company Information	3
Forward-Looking Statements	4
Earnings Release Text	5
Financial & Operating Highlights	11
Balance Sheets	12
Statements of Operations, FFO & CORE FFO
Trailing 5 Quarters	13
Three and Twelve Months Ended December 31, 2018 and 2017	14
Adjusted EBITDA Reconciliations and Coverage Ratio
Trailing 5 Quarters	15
Three and Twelve Months Ended December 31, 2018 and 2017	15
Same-Store Portfolio Net Operating Income
Trailing 5 Quarters	16
Three and Twelve Months Ended December 31, 2018 and 2017	17
Net Operating Income Bridge	18
Capital Recycling Activity	19
Value Add Summary	20
Property Summary	21
NOI Exposure by Market	22
Debt Summary	23
Definitions	24

2

Independence Realty Trust

December 31, 2018

Company Information:

Independence Realty Trust (NYSE: IRT) is a real estate investment trust that currently owns and operates 58 multifamily apartment properties, totaling 15,880 units, across non-gateway U.S. markets, including Atlanta, Louisville, Memphis, and Raleigh. IRT’s investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return of capital through distributions and capital appreciation.

Corporate Headquarters	Two Liberty Place
	50 S. 16th Street, Suite 3575
	Philadelphia, PA 19102
	267.270.4800
Trading Symbol	NYSE: “IRT”
Investor Relations Contact	Edelman Financial Communications & Capital Markets
	Ted McHugh and Lauren Tarola
	212-277-4322
	IRT@edelman.com

3

Forward-Looking Statements

This supplemental information contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “seek,” “outlook,” “assumption,” “projected,” “strategy”, “guidance” or other, similar words. Because such forward-looking statements involve significant risks, uncertainties and contingencies, many of which are not within IRT’s control, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such statements. These forward-looking statements are based upon the current judgements and expectations of IRT’s management.  Risks and uncertainties that might cause IRT’s actual results to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: adverse changes in national, regional and local economic climates; changes in market demand for rental apartment homes and pricing pressures from competitors that could limit our ability to lease units or increase rents; competition that could adversely affect our ability to acquire additional properties; volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital; unexpected changes in the assumptions underlying our 2019 EPS, CFFO and same store NOI growth guidance; delays in completing, and cost overruns incurred in connection with, the value add initiatives and failure to achieve projected rent increases and occupancy levels on account of the initiatives; risks associated with pursuit of strategic acquisitions, including risks associated with the need to raise additional capital to fund the acquisitions and failure of acquisitions to produce expected returns; failure to complete planned sales on expected terms or at all; unexpected costs of REIT qualification compliance; costs and disruptions as the result of a cybersecurity incident or other technology disruption; and share price fluctuations.  Additional risks and uncertainties that could cause our actual results to differ materially from those expressed or implied by the forward-looking statements in this press release are discussed in IRT’s filings with the Securities and Exchange Commission (“SEC”), including those under the heading “Risk Factors” in IRT’s most recently filed Annual Report on Form 10-K.  Dividends are subject to the discretion of IRT’s Board of Directors, and will depend on IRT’s financial condition, results of operations, capital requirements, compliance with applicable laws and agreements and any other factors deemed relevant by IRT’s Board.  IRT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

4

Independence Realty Trust Announces Fourth Quarter and Full Year 2018 Financial Results

Introduces 2019 Full Year Guidance Metrics

PHILADELPHIA – (BUSINESS WIRE) – February 21, 2019 — Independence Realty Trust, Inc. (“IRT”) (NYSE: IRT), a multifamily apartment REIT, today announced its fourth quarter and full year 2018 financial results.

Fourth Quarter Highlights

• Net income allocable to common shares of $14.6 million for the quarter ended December 31, 2018 as compared to $6.3 million for the quarter ended December 31, 2017.

• Earnings per diluted share of $0.16 for the quarter ended December 31, 2018 as compared to $0.08 for the quarter ended December 31, 2017.

• Core Funds from Operations (“CFFO”) of $16.6 million for the quarter ended December 31, 2018 as compared to $15.3 million for the quarter ended December 31, 2017. CFFO per share was $0.19 for the fourth quarter of 2018 as compared to $0.18 for the fourth quarter of 2017.

• Adjusted EBITDA of $25.7 million for the quarter ended December 31, 2018 as compared to $21.7 million for the quarter ended December 31, 2017.

Full Year Highlights:

• Since the inception of our value add program, IRT has completed renovations in 1,232 units, achieving a weighted average return on investment of 18.4% on interior renovations.

• Net income allocable to common shares of $26.3 million for the twelve months ended December 31, 2018 as compared to $30.2 million for the twelve months ended December 31, 2017.

• Earnings per diluted share of $0.30 for the twelve months ended December 31, 2018 as compared to $0.41 for the twelve months ended December 31, 2017.

• Core Funds from Operations (“CFFO”) of $65.1 million for the twelve months ended December 31, 2018 as compared to $55.7 million for the twelve months ended December 31, 2017. CFFO per share was $0.74 for the full year 2018 as compared to $0.73 for the full year 2017.

• Adjusted EBITDA of $97.1 million for the twelve months ended December 31, 2018 as compared to $81.0 million for the twelve months ended December 31, 2017.

Included later in this press release are definitions of CFFO, Adjusted EBITDA and other Non-GAAP financial measures and reconciliations of such measures to their most comparable financial measures as calculated and presented under GAAP.  

Management Commentary:

“IRT’s 2018 performance highlights our focus on providing strong, consistent results at the property level while investing in long-term growth through portfolio enhancements.,” said Scott Schaeffer, IRT’s Chairman and CEO. “We are executing on our value add program which is designed to increase rents while lowering operating costs resulting in expanded operating margins, as highlighted by the 3.9% same store NOI growth achieved in the fourth quarter. During 2018 we continued to demonstrate our ability to identify high-quality, middle market communities in core markets like Columbus and Tampa, while exiting markets where we do not see favorable, long-term fundamentals.  We also strengthened the balance sheet with a new $200 million term loan, extending our maturities by over 2 years and reducing our interest cost by 15 basis points.  As we look to 2019, we are encouraged by the positive macro outlook for multifamily communities, and are dedicated to driving strong NOI growth through our value add program. We are confident that our strategies and execution puts us on the right path to achieve our long-term objectives.”

5

Same Store Property Operating Results

	Fourth Quarter 2018 Compared to Fourth Quarter 2017(1)	Twelve Months Ended 12/31/18 Compared to Twelve Months Ended 12/31/17(1)
Rental income	1.6% increase	1.7% increase
Total revenues	1.7% increase	2.0% increase
Property level operating expenses	1.5% decrease	1.1% increase
Net operating income (“NOI”)	3.9% increase	2.6% increase
Portfolio average occupancy	170 bps decrease to 93.1%	60 bps decrease to 94.1%
Portfolio average rental rate	3.3% increase to $1,049	2.4% increase to $1,033
NOI Margin	130 bps increase to 61.7%	30 bps increase to 60.1%

(1) Same store portfolio for the three and twelve months ended December 31, 2018 includes 37 properties, which represent 10,329 units.

Same Store Property Operating Results, Excluding Value Add

The same store portfolio results below exclude seven communities that are both part of our same store portfolio and part of our Value Add program for the three and twelve months ended December 31, 2018.

	Fourth Quarter 2018 Compared to Fourth Quarter 2017(1)	Twelve Months Ended 12/31/18 Compared to Twelve Months Ended 12/31/17(1)
Rental income	2.2% increase	2.1% increase
Total revenues	2.5% increase	2.5% increase
Property level operating expenses	0.9% increase	2.4% increase
Net operating income (“NOI”)	3.5% increase	2.6% increase
Portfolio average occupancy	50 bps decrease to 94.3%	30 bps increase to 95.0%
Portfolio average rental rate	2.8% increase to $1,045	1.9% increase to $1,032
NOI Margin	50 bps increase to 61.3%	10 bps increase to 60.0%

(1) Same store portfolio, excluding value add, for the three and twelve months ended December 31, 2018 includes 30 properties, which represent 7,976 units.

Capital Recycling

As previously announced, IRT commenced a capital recycling initiative in the third quarter of 2018 aimed to dispose of assets in markets that lack desirable long-term fundamentals in order to invest in attractive non-gateway markets to gain scale. As part of this capital recycling initiative, IRT identified four acquisitions in target markets as well as five properties in its portfolio that it identified as held for sale. IRT completed the acquisition of the fourth target community during the quarter, and completed the disposition of two communities held for sale in the quarter.

Acquisitions completed in the fourth quarter:

• On October 11, 2018, IRT completed the acquisition of a 260-unit community located in McDonough, GA for a purchase price of $30.5 million. IRT assumed $15.5 million of property level debt in connection with this acquisition. As of December 31, 2018, the community was 96.9% occupied with average rent per unit of $981. IRT closed this acquisition using proceeds from its line of credit in advance of completing sales associated with the capital recycling initiative.

• On November 7, 2018, IRT completed the acquisition of a 276-unit community located in Brandon, FL for a purchase price of $47.0 million. As of December 31, 2018, the community was 96.4% occupied with average rent per unit of $1,145. IRT closed this acquisition using proceeds from its line of credit in advance of completing sales associated with the capital recycling initiative.

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Dispositions completed in the fourth quarter:

• On December 20, 2018, IRT completed the disposition of a 346-unit community located in Greenville, SC for $52.5 million, which was previously identified as held for sale.

• On December 27, 2018, IRT completed the disposition of a 170-unit community located in Ridgeland, MS for $24.8 million, which was previously identified as held for sale.

Term Loan Agreement

As previously announced, on October 30, 2018 IRT entered into a five-year, $200 million unsecured term loan that will mature in January 2024. The proceeds were used to paydown borrowings outstanding under the revolving portion of IRT’s $300 million unsecured credit facility. The term loan bears interest at a spread over LIBOR based on IRT’s overall leverage. At closing, the spread to LIBOR was 145 basis points. To continue IRT’s practice of reducing exposure to floating interest rates, IRT purchased an interest rate collar that caps LIBOR at 2.50%, subject to a floor on LIBOR of 2.25%, during the five-year term.

At-the-Market Offering

During the fourth quarter of 2018, IRT issued 273,000 shares of common stock under IRT’s at-the-market sales program at a weighted average per share price of $10.35, yielding net proceeds of approximately $2.8 million.

Capital Expenditures

For the three months ended December 31, 2018, recurring capital expenditures for the total portfolio were $1.9 million, or $120 per unit. For the twelve months ended December 31, 2018, recurring capital expenditures for the total portfolio were $7.3 million, or $463 per unit.

Value Add Update

Value add initiatives, comprised of renovations and upgrades at selected communities to drive increased rental rates, remain a core component of IRT’s growth strategy for the fourth quarter of 2018 and beyond. IRT currently executing on two phases of value add projects covering 4,314 units across 14 communities. Seven of these 14 communities are part of the same store portfolio in 2018. These value-add initiatives have an estimated total investment of approximately $50.0 million and are expected to unlock an additional $8.0 to $9.0 million in NOI once all of the renovations are completed.  

During the fourth quarter of 2018, IRT continued to execute on its value add program completing 385 units, which brings the total units completed to 1,232 units, or 29% of the Phase 1 and 2 value add program. The remaining value add projects, covering 3,082 units, are expected to be completed in 2019 and through the beginning of 2020. To-date, 90% of the completed units have been leased with a rental premium of $156 per unit per month, generating an 18.4% return on interior renovations. In addition to interior unit renovations, we are also improving many of the common area amenities at these value add communities as we position them to compete with Class A properties in their markets, but at a much lower price point.  See the “Value Add Summary” within our Supplemental Information for additional detail.

Distributions

On December 13, 2018, IRT’s Board of Directors declared a quarterly cash dividend for the fourth quarter of 2018 of $0.18 per share of IRT common stock, payable on January 24, 2019 to stockholders of record on December 27, 2018.

2019 EPS and CFFO Guidance

IRT is announcing 2019 full year guidance. EPS per diluted share is projected to be in a range of $0.76 to $0.80. CFFO per diluted share, a non-GAAP financial measure, is projected to be in the range of $0.74 to $0.78. A reconciliation of IRT's projected net income allocable to common shares to its projected CFFO per share, is included below. Also, included below are the primary assumptions underlying these estimates. See the schedules and definitions at the end of this release for further information regarding how IRT calculates CFFO and for management’s definition and rationale for the usefulness of CFFO.

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2019 Full Year EPS and CFFO Guidance (1)(2)	Low	High
Earnings per share	$0.76	$0.80
Adjustments:
Depreciation and amortization	0.43	0.47
Gains on sale of assets	(0.51)	(0.55)
Share base compensation	0.04	0.04
Amortization of deferred financing fees	0.02	0.02
CORE FFO per share allocated to common shareholders	$0.74	$0.78

(1) This guidance, including the underlying assumptions, constitutes forward-looking information. Actual full year 2019 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements” below. Our guidance is based on the following key assumptions for our 2019 performance.

(2) Per share guidance is based on weighted average shares and units outstanding of 90.2 million.

Same Store Communities	2019 Outlook
Number of properties/units	50 properties / 13,697 units
Property revenue growth	4.0% to 6.0%
Controllable property operating expense growth	2.5% to 3.5%
Real estate tax and insurance expense increase (1)	6.0% to 12.0%
Total real estate operating expense growth	4.0% to 6.0%
Property NOI growth	3.5% to 5.5%
Corporate Expenses
General and administrative expenses (excluding stock based compensation)	$9.0 to $10.0 million
Transaction/Investment Volume
Acquisition volume (2)	$30.0 to $110.0 million
Disposition volume (3)	$100.0 to $180.0 million
Capital Expenditures
Recurring	$8.0 to $9.0 million
Value add & non-recurring	$30.0 to $38.0 million

(1) In 2019, we are expecting increases in real estate tax expense in several of our recently acquired communities that are new to our same store portfolio. Our underwriting contemplates tax increases due to re-assessments, however, the ultimate timing is difficult to predict.

(2) Acquisition volume includes the completion of acquisitions from the 2018 capital recycling program ($30.0 million) and potential capital recycling acquisitions in 2019.

(3) Dispositions include the completion of dispositions from the 2018 capital recycling program ($100.0 million) and potential capital recycling dispositions in 2019.

Selected Financial Information

See the schedules at the end of this earnings release for selected financial information for IRT.

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Non-GAAP Financial Measures and Definitions

IRT discloses the following non-GAAP financial measures in this earnings release: FFO, CFFO, Adjusted EBITDA and NOI.  Included at the end of this release is a reconciliation of IRT’s reported net income to its FFO and CFFO, a reconciliation of IRT’s same store NOI to its reported net income, a reconciliation of IRT’s Adjusted EBITDA to net income, and management’s respective definitions and rationales for the usefulness of each of these non-GAAP financial measures and other definitions used in this release.

Conference Call

All interested parties can listen to the live conference call webcast at 10:00 AM ET on Thursday, February 21, 2019 from the investor relations section of the IRT website at www.irtliving.com or by dialing 1.844.775.2542, access code 4378632.For those who are not available to listen to the live call, the replay will be available shortly following the live call from the investor relations section of IRT’s website and telephonically until Thursday, February 28, 2019 by dialing 1.855.859.2056, access code 4378632.

Supplemental Information

IRT produces supplemental information that includes details regarding the performance of the portfolio, financial information, non-GAAP financial measures, same store information and other useful information for investors.  The supplemental information is available via the Company's website, www.irtliving.com, through the "Investor Relations" section.

About Independence Realty Trust, Inc.

Independence Realty Trust (NYSE: IRT) is a real estate investment trust that currently owns and operates 58 multifamily apartment properties, totaling 15,880 units, across non-gateway U.S. markets, including Atlanta, Louisville, Memphis, and Raleigh. IRT’s investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return of capital through distributions and capital appreciation.

9

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “seek,” “outlook,” “assumption,” “projected,” “strategy”, “guidance” or other, similar words. Because such forward-looking statements involve significant risks, uncertainties and contingencies, many of which are not within IRT’s control, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such statements. These forward-looking statements are based upon the current judgements and expectations of IRT’s management.  Risks and uncertainties that might cause IRT’s actual results to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: adverse changes in national, regional and local economic climates; changes in market demand for rental apartment homes and pricing pressures from competitors that could limit our ability to lease units or increase rents; competition that could adversely affect our ability to acquire additional properties; volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital; unexpected changes in the assumptions underlying our 2019 EPS, CFFO and same store NOI growth guidance; delays in completing, and cost overruns incurred in connection with, the value add initiatives and failure to achieve projected rent increases and occupancy levels on account of the initiatives; risks associated with pursuit of strategic acquisitions, including risks associated with the need to raise additional capital to fund the acquisitions and failure of acquisitions to produce expected returns; failure to complete planned sales on expected terms or at all; unexpected costs of REIT qualification compliance; costs and disruptions as the result of a cybersecurity incident or other technology disruption; and share price fluctuations.  Additional risks and uncertainties that could cause our actual results to differ materially from those expressed or implied by the forward-looking statements in this press release are discussed in IRT’s filings with the Securities and Exchange Commission (“SEC”), including those under the heading “Risk Factors” in IRT’s most recently filed Annual Report on Form 10-K.  Dividends are subject to the discretion of IRT’s Board of Directors, and will depend on IRT’s financial condition, results of operations, capital requirements, compliance with applicable laws and agreements and any other factors deemed relevant by IRT’s Board.  IRT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

Independence Realty Trust, Inc. Contact

Edelman Financial Communications & Capital Markets

Ted McHugh and Lauren Tarola

212.277.4322

IRT@edelman.com

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FINANCIAL & OPERATING HIGHLIGHTS

Dollars in thousands, except share and per share data

	As of or For the Three Months Ended
	December 31, 2018				September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Selected Financial Information:
Operating Statistics:
Net income allocable to common shares	$	14,580			$	4,787		$	3,509		$	3,412		$	6,293
Earnings (loss) per share -- diluted	$	0.16			$	0.05		$	0.04		$	0.04		$	0.08
Total property revenue	$	49,718			$	48,644		$	46,734		$	45,616		$	42,307
Total property operating expenses	$	19,450			$	19,792		$	18,703		$	18,418		$	16,610
Net operating income	$	30,268			$	28,852		$	28,031		$	27,198		$	25,697
NOI margin		60.9	%			59.3	%		60.0	%		59.6	%		60.7	%
Adjusted EBITDA	$	25,653			$	24,748		$	23,722		$	23,012		$	21,743
FFO per share -- diluted	$	0.16			$	0.18		$	0.17		$	0.17		$	0.14
CORE FFO per share -- diluted	$	0.19			$	0.19		$	0.19		$	0.18		$	0.18
Dividends per share	$	0.18			$	0.18		$	0.18		$	0.18		$	0.18
CORE FFO payout ratio		94.7	%			94.7	%		94.7	%		100.0	%		100.0	%
Portfolio Data:
Total gross assets	$	1,798,736			$	1,782,186		$	1,706,465		$	1,689,689		$	1,551,238
Total number of properties		58				58			56			56			52
Total units		15,880				15,860			15,280			15,280			14,017
Period end occupancy		92.5	%			92.3	%		93.8	%		93.5	%		94.0	%
Total portfolio average occupancy		92.3	%			93.5	%		94.1	%		93.7	%		94.1	%
Total portfolio average effective monthly rent, per unit	$	1,035			$	1,024		$	1,009		$	1,004		$	1,003
Same store period end occupancy (a)		93.2	%			93.2	%		94.3	%		94.2	%		95.1	%
Same store portfolio average occupancy (a)		93.1	%			94.1	%		94.8	%		94.5	%		94.8	%
Same store portfolio average effective monthly rent, per unit (a)	$	1,049			$	1,041		$	1,025		$	1,018		$	1,015
Capitalization:
Total debt	$	985,488			$	963,238		$	911,772		$	903,286		$	778,442
Common share price, period end	$	9.18			$	10.53		$	10.31		$	9.18		$	10.09
Market equity capitalization	$	826,802			$	945,615		$	906,696		$	806,671		$	885,094
Total market capitalization	$	1,812,290			$	1,908,853		$	1,818,468		$	1,709,957		$	1,663,536
Total debt/total gross assets		54.8	%			54.0	%		53.4	%		53.5	%		50.2	%
Net debt to adjusted EBITDA		9.5	x	(b)		9.7	x		9.5	x		9.7	x		8.8	x
Interest coverage		2.6	x			2.7	x		2.8	x		2.8	x		3.0	x
Common shares and OP Units:
Shares outstanding		89,184,443				88,920,879			87,044,121			86,973,397			84,708,551
OP units outstanding		881,107				881,107			899,215			899,215			3,011,351
Common shares and OP units outstanding		90,065,550				89,801,986			87,943,336			87,872,612			87,719,902
Weighted average common shares and units		89,532,373				88,585,940			87,543,931			87,466,518			86,646,371

(a) Same store portfolio consists of 37 properties, which represent 10,329 units.

(b) Net debt to adjusted EBITDA would be 9.2x if adjusted for the timing of acquisitions, the full quarter effect of current value add initiatives, and the completion of the announced 2018 capital recycling activities.  

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BALANCE SHEETS

Dollars in thousands, except per share data

	As of
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Assets
Investments in real estate at cost	$	1,660,423		$	1,572,015		$	1,496,591		$	1,638,544		$	1,504,156
Less: accumulated depreciation		(112,270	)		(101,589	)		(91,426	)		(94,001	)		(84,097	)
Investments in real estate, net		1,548,153			1,470,426			1,405,165			1,544,543			1,420,059
Real estate held for sale		77,285			141,853			141,132			—			—
Cash and cash equivalents		9,316			7,645			10,896			10,399			9,985
Restricted cash		6,729			8,265			7,051			5,645			4,634
Accounts receivable and other assets		8,802			6,924			6,712			5,318			7,556
Derivative assets		8,307			12,440			11,755			10,525			7,291
Intangible assets, net		744			555			406			1,449			1,099
Total assets	$	1,659,336		$	1,648,108		$	1,583,117		$	1,577,879		$	1,450,624
Liabilities and Equity
Total indebtedness	$	985,488		$	963,238		$	911,772		$	903,286		$	778,442
Accounts payable and accrued expenses		22,815			28,477			24,173			17,896			17,216
Accrued interest payable		719			540			423			373			249
Dividends payable		16,162			16,113			15,922			15,754			5,245
Other liabilities		4,107			3,697			3,520			3,580			3,353
Total liabilities		1,029,291			1,012,065			955,810			940,889			804,505
Equity
Shareholders' Equity:
Preferred shares, $0.01 par value per share		—			—			—			—			—
Common shares, $0.01 par value per share		892			889			870			868			846
Additional paid in capital		742,429			739,152			719,656			718,260			703,849
Accumulated other comprehensive income (loss)		2,016			9,788			9,103			7,890			4,626
Retained earnings (deficit)		(122,342	)		(120,924	)		(109,762	)		(97,581	)		(85,221	)
Total shareholders' equity		622,995			628,905			619,867			629,437			624,100
Noncontrolling Interests		7,050			7,138			7,440			7,553			22,019
Total equity		630,045			636,043			627,307			636,990			646,119
Total liabilities and equity	$	1,659,336		$	1,648,108		$	1,583,117		$	1,577,879		$	1,450,624

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STATEMENTS OF OPERATIONS, FFO & CORE FFO

TRAILING 5 QUARTERS

Dollars in thousands, except per share data

	For the Three Months Ended
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Revenue:
Rental income	$	44,562		$	43,418		$	41,675		$	40,858		$	38,029
Reimbursement and other property income		5,156			5,226			5,059			4,758			4,278
Total property revenue		49,718			48,644			46,734			45,616			42,307
Property management and other income		91			135			155			139			140
Total revenue		49,809			48,779			46,889			45,755			42,447
Expenses:
Real estate operating expenses		19,450			19,792			18,703			18,418			16,610
Property management expenses		2,027			1,661			1,592			1,683			1,696
General and administrative expenses		2,633			2,578			2,872			2,734			2,398
Acquisition and integration expenses		—			—			—			—			386
Depreciation and amortization expense		11,631			10,783			11,583			11,224			9,912
Casualty related costs		46			—			—			—			—
Total expenses		35,787			34,814			34,750			34,059			31,002
Operating Income (loss)		14,022			13,965			12,139			11,696			11,445
Interest expense		(9,943	)		(9,129	)		(8,594	)		(8,340	)		(7,129	)
Other income (expense)		—			—			—			144			94
Net gains (losses) on sale of assets		10,650			—			—			—			2,952
Acquisition related debt extinguishment expenses		—			—			—			—			(843	)
Net income (loss)		14,729			4,836			3,545			3,500			6,519
(Income) loss allocated to noncontrolling interests		(149	)		(49	)		(36	)		(88	)		(226	)
Net income (loss) allocable to common shares	$	14,580		$	4,787		$	3,509		$	3,412		$	6,293
EPS - basic	$	0.16		$	0.05		$	0.04		$	0.04		$	0.08
Weighted-average shares outstanding - Basic		88,651,266			87,702,078			86,644,716			85,303,010			83,612,566
EPS - diluted	$	0.16		$	0.05		$	0.04		$	0.04		$	0.08
Weighted-average shares outstanding - Diluted		89,032,952			88,046,311			86,908,978			85,535,089			83,849,367
Funds From Operations (FFO):
Net Income (loss)	$	14,729		$	4,836		$	3,545		$	3,500		$	6,519
Add-Back (Deduct):
Depreciation		11,577			10,738			11,550			11,201			9,868
Net (gains) losses on sale of assets		(11,561	)		—			—			—			(4,455	)
FFO	$	14,745		$	15,574		$	15,095		$	14,701		$	11,932
FFO per share	$	0.16			0.18		$	0.17		$	0.17		$	0.14
CORE Funds From Operations (CFFO):
FFO	$	14,745		$	15,574		$	15,095		$	14,701		$	11,932
Add-Back (Deduct):
Stock compensation expense		558			563			933			470			420
Amortization of deferred financing costs		352			309			325			444			309
Acquisition and integration expenses		—			—			—			—			386
Other depreciation and amortization		54			45			33			23			44
Other expense (income)		—			—			—			(52	)		(94	)
Debt extinguishment costs included in net gains (losses) on sale of assets		911			—			—			—			1,503
Acquisition related debt extinguishment expenses		—			—			—			—			843
CFFO	$	16,620		$	16,491		$	16,386		$	15,586		$	15,343
CFFO per share	$	0.19		$	0.19		$	0.19		$	0.18		$	0.18
Weighted-average shares and units outstanding		89,532,373			88,585,940			87,543,931			87,466,518			86,646,371

13

STATEMENTS OF OPERATIONS, FFO & CORE FFO

THREE AND TWELVEMONTHS ENDED DECEMBER 31, 2018and 2017

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2018			2017			2018			2017
Revenue:
Rental income	$	44,562			38,029		$	170,513			143,473
Reimbursement and other property income		5,156			4,278			20,199			17,024
Total property revenue		49,718			42,307			190,712			160,497
Property management and other income		91			140			520			719
Total revenue		49,809			42,447			191,232			161,216
Expenses:
Real estate operating expenses		19,450			16,610			76,363			64,716
Property management expenses		2,027			1,696			6,963			6,006
General and administrative expenses		2,633			2,398			10,817			9,526
Acquisition and integration expenses		—			386			—			1,342
Depreciation and amortization expense		11,631			9,912			45,221			34,201
Casualty related costs		46			—			46			—
Total expenses		35,787			31,002			139,410			115,791
Operating Income (loss)		14,022			11,445			51,822			45,425
Interest expense		(9,943	)		(7,129	)		(36,006	)		(28,702	)
Other income (expense)		—			94			144			89
Net gains (losses) on sale of assets		10,650			2,952			10,650			18,825
Gains(losses) on extinguishment of debt		—			—			—			(572	)
Acquisition related debt extinguishment expenses		—			(843	)		—			(3,624	)
Net income (loss)		14,729			6,519			26,610			31,441
(Income) loss allocated to noncontrolling interests		(149	)		(226	)		(322	)		(1,235	)
Net income (loss) available to common shares	$	14,580		$	6,293		$	26,288		$	30,206
EPS - basic	$	0.16		$	0.08		$	0.30		$	0.41
Weighted-average shares outstanding - Basic		88,651,266			83,612,566			87,086,585			73,338,219
EPS - diluted	$	0.16		$	0.08		$	0.30		$	0.41
Weighted-average shares outstanding - Diluted		89,032,952			83,849,367			87,376,991			73,599,869
Funds From Operations (FFO):
Net Income (loss)	$	14,729		$	6,519		$	26,610		$	31,441
Adjustments:
Real estate depreciation and amortization		11,577			9,868			45,067			34,097
Net (gains) losses on sale of assets		(11,561	)		(4,455	)		(11,561	)		(23,076	)
Funds From Operations	$	14,745		$	11,932		$	60,116		$	42,462
FFO per share	$	0.16		$	0.14		$	0.68		$	0.56
Core Funds From Operations (CFFO):
Funds From Operations	$	14,745		$	11,932		$	60,116		$	42,462
Adjustments:
Stock compensation expense		558			420			2,524			1,967
Amortization of deferred financing costs		352			309			1,430			1,469
Acquisition and integration expenses		—			386			—			1,342
Other depreciation and amortization		54			44			154			104
Other expense (income)		—			(94	)		(52	)		(94	)
(Gains) losses on extinguishment of debt		—			—			—			572
Debt extinguishment costs included in net gains (losses) on sale of assets		911			1,503			911			4,251
Acquisition related debt extinguishment expenses		—			843			—			3,624
CFFO	$	16,620		$	15,343		$	65,083		$	55,697
CFFO per share	$	0.19		$	0.18		$	0.74		$	0.73
Weighted-average shares and units outstanding		89,532,373			86,646,371			88,289,110			76,291,465

14

ADJUSTED EBITDA RECONCILIATION AND COVERAGE RATIO

Dollars in thousands

	Three Months Ended
ADJUSTED EBITDA:	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Net income (loss)	$	14,729		$	4,836		$	3,545		$	3,500		$	6,519
Add-Back (Deduct):
Depreciation and amortization		11,631			10,783			11,583			11,224			9,912
Interest expense		9,943			9,129			8,594			8,340			7,129
Other (income) expense		—			—			—			(52	)		(94	)
Acquisition and integration expenses		—			—			—			—			386
Net (gains) losses on sale of assets		(10,650	)		—			—			—			(2,952	)
(Gains) losses on extinguishment of debt		—			—			—			—			—
Acquisition related debt extinguishment expenses		—			—			—			—			843
Adjusted EBITDA	$	25,653		$	24,748		$	23,722		$	23,012		$	21,743
INTEREST COST:
Interest expense	$	9,943		$	9,129		$	8,594		$	8,340		$	7,129
INTEREST COVERAGE:		2.6	x		2.7	x		2.8	x		2.8	x		3.0	x

	Three Months Ended						Twelve Months Ended
ADJUSTED EBITDA:	December 31, 2018			December 31, 2017			December 31, 2018			December 31, 2017
Net income (loss)	$	14,729		$	6,519		$	26,610		$	31,441
Add-Back (Deduct):
Depreciation and amortization		11,631			9,912			45,221			34,201
Interest expense		9,943			7,129			36,006			28,702
Other (income) expense		—			(94	)		(52	)		(89	)
Acquisition and integration expenses		—			386			—			1,342
Net (gains) losses on sale of assets		(10,650	)		(2,952	)		(10,650	)		(18,825	)
(Gains) losses on extinguishment of debt		—			—			—			572
Acquisition related debt extinguishment expenses		—			843			—			3,624
Adjusted EBITDA	$	25,653		$	21,743		$	97,135		$	80,968
INTEREST COST:
Interest expense	$	9,943		$	7,129		$	36,006		$	28,702
INTEREST COVERAGE:		2.6	x		3.0	x		2.7	x		2.8	x

15

SAME STORE PORTFOLIO NET OPERATING INCOME

TRAILING 5 QUARTERS

Dollars in thousands, except per unit data

	For the Three-Months Ended (a)
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Revenue:
Rental income	$	29,069		$	29,136		$	28,860		$	28,527		$	28,612
Reimbursement and other property income		3,423			3,628			3,621			3,503			3,326
Total revenue		32,492			32,764			32,481			32,030			31,938
Operating Expenses:
Real estate taxes		4,145			3,922			3,990			4,039			3,864
Property insurance		624			638			646			713			678
Personnel expenses		3,035			3,249			3,198			3,064			3,008
Utilities		2,041			2,083			1,964			2,107			1,995
Repairs and maintenance		818			1,345			1,274			889			936
Contract services		955			1,004			1,068			997			964
Advertising expenses		290			376			370			381			413
Other expenses		540			748			506			717			784
Total operating expenses		12,448			13,365			13,016			12,907			12,642
Same-store net operating income (a)	$	20,044		$	19,399		$	19,465		$	19,123		$	19,296
Same-store NOI margin		61.7	%		59.2	%		59.9	%		59.7	%		60.4	%
Average occupancy		93.1	%		94.1	%		94.8	%		94.5	%		94.8	%
Average effective monthly rent, per unit	$	1,049		$	1,041		$	1,025		$	1,018		$	1,015
Reconciliation of same-store net operating    income to net income (loss)
Same-store net operating income	$	20,044		$	19,399		$	19,465		$	19,123		$	19,296
Non same-store net operating income		10,224			9,453			8,566			8,075			6,401
Property management income		91			135			155			139			140
Property management expenses		(2,027	)		(1,661	)		(1,592	)		(1,683	)		(1,696	)
General and administrative expenses		(2,633	)		(2,578	)		(2,872	)		(2,734	)		(2,398	)
Acquisition and integration expenses		—			—			—			—			(386	)
Depreciation and amortization expense		(11,631	)		(10,783	)		(11,583	)		(11,224	)		(9,912	)
Casualty related costs		(46	)		—			—			—			—
Interest expense		(9,943	)		(9,129	)		(8,594	)		(8,340	)		(7,129	)
Other income (expense)		—			—			—			144			94
Net gains (losses) on sale of assets		10,650			—			—			—			2,952
Acquisition related debt extinguishment expenses		—			—			—			—			(843	)
Net income (loss)	$	14,729		$	4,836		$	3,545		$	3,500		$	6,519

(a) Same store portfolio consists of 37 properties, which represent 10,329 units.

16

SAME STORE PORTFOLIO NET OPERATING INCOME

THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2018 and 2017

Dollars in thousands, except per unit data

	Three-Months Ended December 31									Twelve-Months Ended December 31
	2018			2017			% change			2018			2017			% change
Revenue:
Rental income	$	29,069		$	28,612			1.6	%	$	115,592		$	113,705			1.7	%
Reimbursement and other property income		3,423			3,326			2.9	%		14,175			13,554			4.6	%
Total revenue		32,492			31,938			1.7	%		129,767			127,259			2.0	%
Operating Expenses:
Real estate taxes		4,145			3,864			7.3	%		16,096			15,456			4.1	%
Property insurance		624			678			-8.0	%		2,621			2,752			-4.8	%
Personnel expenses		3,035			3,008			0.9	%		12,546			12,282			2.1	%
Utilities		2,041			1,995			2.3	%		8,195			8,015			2.2	%
Repairs and maintenance		818			936			-12.6	%		4,326			4,606			-6.1	%
Contract services		955			964			-0.9	%		4,024			3,890			3.4	%
Advertising expenses		290			413			-29.8	%		1,417			1,458			-2.8	%
Other expenses		540			784			-31.1	%		2,511			2,739			-8.3	%
Total operating expenses		12,448			12,642			-1.5	%		51,736			51,198			1.1	%
Same-store net operating income (a)	$	20,044		$	19,296			3.9	%	$	78,031		$	76,061			2.6	%
Same-store NOI margin		61.7	%		60.4	%		1.3	%		60.1	%		59.8	%		0.3	%
Average occupancy		93.1	%		94.8	%		-1.7	%		94.1	%		94.7	%		-0.6	%
Average effective monthly rent, per unit	$	1,049		$	1,015			3.3	%	$	1,033		$	1,009			2.4	%
Reconciliation of same-store net operating    income to net income (loss)
Same-store portfolio net operating income	$	20,044		$	19,296					$	78,031		$	76,061
Non same-store net operating income		10,224			6,401						36,318			19,720
Property management income		91			140						520			719
Property management expenses		(2,027	)		(1,696	)					(6,963	)		(6,006	)
General and administrative expenses		(2,633	)		(2,398	)					(10,817	)		(9,526	)
Acquisition and integration expenses		—			(386	)					—			(1,342	)
Depreciation and amortization expense		(11,631	)		(9,912	)					(45,221	)		(34,201	)
Casualty related costs		(46	)		—						(46	)		—
Interest expense		(9,943	)		(7,129	)					(36,006	)		(28,702	)
Other income (expense)		—			94						144			89
Net gains (losses) on sale of assets		10,650			2,952						10,650			18,825
Acquisition related debt extinguishment expenses		—			(843	)					—			(3,624	)
Gains (losses) on extinguishment of debt		—			—						—			(572	)
Net income (loss)	$	14,729		$	6,519					$	26,610		$	31,441

(a) Same store portfolio consists of 37 properties, which represent 10,329 units.

17

NET OPERATING INCOME (NOI) BRIDGE

TRAILING 5 QUARTERS

	For the Three-Months Ended
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Property revenue
Same store (a)	$	32,492		$	32,764		$	32,481		$	32,030		$	31,938
Non same store		17,226			15,880			14,253			13,586			10,369
Total property revenue		49,718			48,644			46,734			45,616			42,307
Property expenses
Same store (a)		12,448			13,365			13,016			12,907			12,642
Non same store		7,002			6,427			5,687			5,511			3,968
Total property expenses		19,450			19,792			18,703			18,418			16,610
Net operating income
Same store (a)		20,044			19,399			19,465			19,123			19,296
Non same store		10,224			9,453			8,566			8,075			6,401
Total property net operating income	$	30,268		$	28,852		$	28,031		$	27,198		$	25,697
Reconciliation of NOI to net income (loss)
Total property net operating income	$	30,268		$	28,852		$	28,031		$	27,198		$	25,697
Property management and other income		91			135			155			139			140
Property management expenses		(2,027	)		(1,661	)		(1,592	)		(1,683	)		(1,696	)
General and administrative expenses		(2,633	)		(2,578	)		(2,872	)		(2,734	)		(2,398	)
Acquisition and integration expenses		—			—			—			—			(386	)
Depreciation and amortization expense		(11,631	)		(10,783	)		(11,583	)		(11,224	)		(9,912	)
Casualty related costs		(46	)		—			—			—			—
Interest expense		(9,943	)		(9,129	)		(8,594	)		(8,340	)		(7,129	)
Other income (expense)		—			—			—			144			94
Net gains (losses) on sale of assets		10,650			—			—			—			2,952
Acquisition related debt extinguishment expenses		—			—			—			—			(843	)
Net income (loss)	$	14,729		$	4,836		$	3,545		$	3,500		$	6,519

(a) Same store portfolio consists of 37 properties, which represent 10,329 units.

18

CAPITAL RECYCLING ACTIVITY

Dollars in thousands with respect to Contract Price and Price per Unit

Acquisitions
2018 Acquisitions	Market	Units		Acquisition Date	Contract Price		Price per Unit		Average Rent Per Unit
Creekside Corners (a)	Atlanta, GA	444		January 3, 2018	$	43,901	$	99	$	933
Hartshire Lakes (a)	Indianapolis, IN	272		January 3, 2018		27,597		101		917
The Chelsea (a)	Columbus, OH	312		January 4, 2018		36,750		118		1,079
Avalon Oaks (a)	Columbus, OH	235		February 27, 2018		23,000		98		881
Bridgeview Apartments	Tampa-St. Petersburg, FL		348	July 11, 2018		43,000		124		1,029
Collier Park	Columbus, OH		232	July 26, 2018		21,200		91		850
Waterford Landing	Atlanta, GA		260	October 11, 2018		30,500		117		993
Lucerne Apartments	Tampa-St. Petersburg, FL		276	November 7, 2018		47,000		170		1,220
Total - 2018 Acquisitions			2,379		$	272,948	$	115	$	991
Dispositions
2018 Dispositions	Market	Units		Disposition Date	Contract Price		Price per Unit		Average Rent Per Unit
The Aventine Greenville	Greenville, SC	346		December 20, 2018	$	52,500	$	152	$	1,083
Arbors at the Reservoir	Jackson, MS	170		December 27, 2018		24,800		146		1,154
Total - 2018 Dispositions		516			$	77,300	$	150	$	1,106

(a) Property was acquired with the proceeds from our September 2017 public stock offering.

19

VALUE ADD SUMMARY

YEAR TO DATE AS OF DECEMBER 31, 2018

													Renovation Costs per Unit (a)
Property	Market	Total Units		Units Complete		Units Leased		Rent Premium (b)		% Rent Increase			Interior		Exterior		Total		ROI - Interior Costs(c)			ROI - Total Costs (d)
Phase 1
Jamestown (f)	Louisville, KY		356		146		125	$	242		21.9	%	$	17,453	$	3,187	$	20,639		16.6	%		14.1	%
The Village at Auburn	Raleigh-Durham, NC		328		196		155		187		15.7	%		13,345		1,192		14,537		16.8	%		15.4	%
Pointe at Canyon Ridge (f)	Atlanta, GA		494		227		217		176		19.4	%		8,115		1,633		9,748		26.1	%		21.7	%
Haverford	Lexington, KY		160		88		82		73		8.7	%		5,241		557		5,798		16.7	%		15.1	%
Crestmont (f)	Atlanta, GA		228		122		102		138		15.6	%		12,028		9,413		21,441		13.8	%		7.7	%
Total/Weighted Average			1,566		779		681	$	173		17.1	%	$	11,259	$	2,853	$	14,113		17.4	%		14.7	%
Phase 2
Oxmoor (f)	Louisville, KY		432		125		86	$	191		20.2	%	$	11,574	$	79	$	11,653		19.8	%		19.7	%
Brunswick Point	Myrtle Beach, SC - Wilmington, NC		288		85		79		97		11.0	%		6,200		39		6,239		18.8	%		18.6	%
Schirm Farms	Columbus, OH		264		57		65		73		7.8	%		6,521		310		6,831		13.4	%		12.8	%
Kensington Commons	Columbus, OH		264		20		18		143		14.3	%		8,656		75		8,731		19.8	%		19.6	%
Creekside Corners	Atlanta, GA		441		67		88		125		12.5	%		9,152		1,371		10,523		16.4	%		14.3	%
Stonebridge Crossing (f)	Memphis, TN		500		71		66		102		11.5	%		8,065		489		8,553		15.2	%		14.3	%
Arbors River Oaks (f)	Memphis, TN		191		28		27		240		23.7	%		7,343		163		7,507		39.3	%		38.4	%
King's Landing (e) (f)	St. Louis, MO		152		—		—		—		—			—		—		—					—
Riverchase (e)	Indianapolis, IN		216		—		—		—		—			—		—		—					—
Total/Weighted Average			2,748		453		429	$	130		13.7	%	$	8,393	$	440	$	8,833		20.4	%		17.6	%
Grand Total/Weighted Average			4,314		1,232		1,110	$	156		15.8	%	$	10,152	$	1,377	$	11,529		18.4	%		16.2	%

(a) Includes all costs to renovate the interior units and make certain exterior renovations, including clubhouses and amenities.  Interior costs per unit are based on units leased.  Exterior costs per unit are based on total units at the community. Excludes internal costs to support and manage the value add program as those costs relate to the entire program and cannot be allocated to individual projects.

(b) The rent change per unit per month reflects the difference between the rental rate on the renovated unit and the market rent for an unrenovated unit as of the date presented, as determined by management consistent with its customary rent-setting and evaluation procedures.

(c) Calculated using the rent change per unit per month, multiplied by 12, divided by the interior renovation costs per unit.

(d) Calculated using the rent change per unit per month, multiplied by 12, divided by the total renovation costs per unit.

(e) Renovations are scheduled to commence in Q2 2019.

(f) Property is included in our same store portfolio.

20

Property Summary

					Investments in Real Estate
Property Name	Market	Acquisition Date	Year Built / Renovated (a)		Gross Cost		Accumulated Depreciation			Net Book Value		Units (b)		Period End Occupancy (c)		Average Occupancy (d)		Effective Rent (e)
Same Store Properties:
Crestmont	Atlanta, GA	4/29/2011	2010 (f)			20,984		(4,361	)		16,623		228	93.9%	(f)	87.5%	(f)		1,018
Runaway Bay	Indianapolis, IN	10/11/2012		2002		16,406		(2,293	)		14,113		192	92.2%		93.1%			1,049
Windrush	Oklahoma City, OK	2/28/2014		2011		9,789		(1,135	)		8,654		160	93.1%		94.5%			769
Heritage Park	Oklahoma City, OK	2/28/2014		2011		18,576		(2,204	)		16,372		453	96.3%		94.0%			657
Raindance	Oklahoma City, OK	2/28/2014		2011		15,299		(1,826	)		13,473		504	94.1%		95.3%			570
Augusta	Oklahoma City, OK	2/28/2014		2011		12,179		(1,526	)		10,653		197	95.4%		96.0%			737
Invitational	Oklahoma City, OK	2/28/2014		2011		19,938		(2,511	)		17,427		344	93.9%		93.3%			679
King's Landing	St. Louis, MO	3/31/2014		2005		33,347		(3,797	)		29,550		152	96.1%		95.9%			1,411
Walnut Hill	Memphis, TN	8/28/2014		2001		28,765		(3,234	)		25,531		362	93.4%		94.5%			1,032
Lenoxplace	Raleigh - Durham, NC	9/5/2014		2012		24,862		(2,544	)		22,318		268	95.5%		95.1%			961
Stonebridge Crossing	Memphis, TN	9/15/2014	1994 (f)			32,102		(3,454	)		28,648		500	92.6%	(f)	91.2%	(f)		884
Bennington Pond	Columbus, OH	11/24/2014		2000		18,272		(1,926	)		16,346		240	93.8%		94.6%			942
Prospect Park	Louisville, KY	12/8/2014		1990		14,570		(1,262	)		13,308		138	91.3%		90.0%			969
Brookside	Louisville, KY	12/8/2014		1987		21,336		(1,907	)		19,429		224	95.5%		94.9%			888
Jamestown	Louisville, KY	12/8/2014	1970 (f)			42,314		(3,960	)		38,354		356	89.3%	(f)	86.9%	(f)		1,091
Oxmoor	Louisville, KY	12/8/2014	1999-2000 (f)			58,304		(5,370	)		52,934		432	78.9%	(f)	81.2%	(f)		1,012
Meadows	Louisville, KY	12/8/2014		1988		38,670		(3,513	)		35,157		400	91.0%		90.0%			845
Iron Rock Ranch	Austin, TX	12/30/2014	2001-2002			35,935		(3,295	)		32,640		300	92.7%		92.8%			1,270
Bayview Club	Indianapolis, IN	5/1/2015		2004		26,403		(2,388	)		24,015		236	92.8%		92.9%			1,017
Arbors River Oaks	Memphis, TN	9/17/2015	2010 (f)			22,625		(1,896	)		20,729		191	94.8%	(f)	94.2%	(f)		1,300
Aston	Raleigh - Durham, NC	9/17/2015		2013		38,207		(2,887	)		35,320		288	93.1%		95.5%			1,148
Avenues at Craig Ranch	Dallas, TX	9/17/2015		2013		48,120		(3,536	)		44,584		334	96.1%		95.9%			1,308
Bridge Pointe	Huntsville, AL	9/17/2015		2002		16,318		(1,293	)		15,025		178	96.1%		98.0%			928
Creekstone at RTP	Raleigh - Durham, NC	9/17/2015		2013		38,489		(2,766	)		35,723		256	95.7%		96.0%			1,220
Fountains Southend	Charlotte, NC	9/17/2015		2013		42,040		(3,089	)		38,951		208	94.2%		92.7%			1,506
Fox Trails	Dallas, TX	9/17/2015		1981		29,096		(2,082	)		27,014		286	95.5%		95.7%			1,105
Lakeshore on the Hill	Chattanooga, TN	9/17/2015		2015		11,860		(968	)		10,892		123	94.3%		96.0%			1,010
Millenia 700	Orlando, FL	9/17/2015		2012		48,173		(3,552	)		44,621		297	98.0%		96.8%			1,439
Miller Creek at German Town	Memphis, TN	9/17/2015		2013		57,168		(4,442	)		52,726		330	91.2%		92.2%			1,290
Pointe at Canyon Ridge	Atlanta, GA	9/17/2015	2007 (f)			53,409		(3,883	)		49,526		494	92.1%	(f)	92.1%	(f)		1,087
St James at Goose Creek	Charleston, SC	9/17/2015		2009		32,084		(2,450	)		29,634		244	92.6%		93.2%			1,159
Talison Row at Daniel Island	Charleston, SC	9/17/2015		2013		47,330		(3,500	)		43,830		274	90.5%		91.7%			1,401
Trails at Signal Mountain	Chattanooga, TN	9/17/2015		2015		14,810		(1,215	)		13,595		172	92.4%		92.3%			943
Vue at Knoll Trail	Dallas, TX	9/17/2015		2015		9,436		(570	)		8,866		114	97.4%		98.4%			949
Waterstone at Brier Creek	Raleigh - Durham, NC	9/17/2015		2014		39,171		(2,899	)		36,272		232	95.7%		96.1%			1,287
Waterstone Big Creek	Atlanta, GA	9/17/2015		2014		69,896		(5,114	)		64,782		370	93.8%		94.7%			1,447
Westmont Commons	Asheville, NC	9/17/2015	2003, 2008			28,506		(2,207	)		26,299		252	96.4%		97.3%			1,106
TOTAL Same Store					$	1,134,789	$	(100,855	)	$	1,033,934		10,329	93.2%		93.1%		$	1,049
Non-Same Store Properties:
Reserve at Eagle Ridge (h)	Chicago, IL	1/31/2014		2008		29,889		(2,862	)		27,027		370	93.2%		91.9%			1,065
Carrington Park (h)	Little Rock, AR	5/7/2014		1999		23,064		(2,445	)		20,619		202	98.0%		95.1%			1,039
Stonebridge at the Ranch (h)	Little Rock, AR	12/16/2014		2005		32,264		(2,625	)		29,639		260	94.6%		93.6%			921
Lakes of Northdale	Tampa-St. Petersburg, FL	2/27/2017		2016		30,149		(1,270	)		28,879		216	94.4%		95.3%			1,238
Haverford Place	Louisville, KY	5/24/2017	2001 (f)			15,037		(539	)		14,498		160	88.8%	(f)	89.9%	(f)		946
The Village at Auburn	Raleigh - Durham, NC	6/30/2017	2002 (f)			47,158		(1,759	)		45,399		328	76.5%	(f)	74.1%	(f)		1,152
Cherry Grove	Myrtle Beach, SC - Wilmington, NC	9/26/2017		2001		16,630		(553	)		16,077		172	87.8%		92.3%			1,075
Kensington Commons	Columbus, OH	9/26/2017	2004 (f)			24,836		(700	)		24,136		264	93.6%	(f)	93.1%	(f)		954
Schirm Farms	Columbus, OH	9/26/2017	2002 (f)			24,421		(660	)		23,761		264	80.7%	(f)	79.7%	(f)		907
Riverchase	Indianapolis, IN	9/26/2017		2000		19,103		(563	)		18,540		216	93.5%		92.8%			858
Live Oak Trace	Baton Rouge, LA	10/25/2017		2002		28,610		(813	)		27,797		264	74.6%	(g)	75.4%	(g)		952
Tides at Calabash	Myrtle Beach, SC - Wilmington, NC	11/14/2017		2010		14,359		(352	)		14,007		168	91.7%		94.5%			913
Brunswick Point	Myrtle Beach, SC - Wilmington, NC	12/12/2017	2005 (f)			31,159		(749	)		30,410		288	96.5%	(f)	96.4%	(f)		930
Creekside Corners	Atlanta, GA	1/3/2018	2001 (f)			45,727		(965	)		44,762		444	92.3%	(f)	90.2%	(f)		1,015
Hartshire Lakes	Indianapolis, IN	1/3/2018		2008		27,584		(575	)		27,009		272	91.2%		94.5%			985
The Chelsea	Columbus, OH	1/4/2018		2013		36,603		(779	)		35,824		312	92.3%		91.2%			1,116
Avalon Oaks	Columbus, OH	2/27/2018		1999		23,343		(397	)		22,946		235	93.2%		92.7%			946
Bridgeview	Tampa-St. Petersburg, FL	7/11/2018		1986		42,754		(335	)		42,419		348	94.0%		91.9%			1,020
Collier Park	Columbus, OH	7/26/2018		2000		21,110		(197	)		20,913		232	97.0%		96.9%			876
Waterford Landing	Atlanta, GA	10/11/2018		1999		30,392		(114	)		30,278		260	96.9%		97.8%			981
Lucerne	Tampa-St. Petersburg, FL	11/7/2018		2002		46,659		(95	)		46,564		276	96.4%		94.6%			1,145
TOTAL Non-Same Store					$	610,851	$	(19,347	)	$	591,504		5,551	91.2%		90.8%		$	1,007
TOTAL					$	1,745,640	$	(120,202	)	$	1,625,438		15,880	92.5%		92.3%		$	1,035

(a) All dates for the later of (i) the year in which construction was completed or (ii) the year in which a significant renovation program was completed.

(b) Units represent the total number of apartment units available for rent at December 31, 2018.

(c) Physical occupancy for each of our properties is calculated as (i) total units rented as of December 31, 2018 divided by (ii) total units available as of December 31, 2018, expressed as a percentage.

(d) Average occupancy represents the daily average occupied units for the three-month period ended December 31, 2018.

(e) Average monthly effective rent, per unit, represents the average monthly rent for all occupied units for the three-month period ended December 31, 2018.

(f) Properties are undergoing renovation.

(g) Property was recently renovated and impacted units are in the process of being leased up.

(h) Properties are classified as held for sale.

21

NOI EXPOSURE BY MARKET

Dollars in thousands, except rent per unit

										For the Three Months Ended December 31, 2018
Market	Number of Properties		Units		Gross Real Estate Assets		Period End Occupancy			Average Effective Monthly Rent per Unit		Net Operating Income (c)		% of NOI
Atlanta, GA	5			1,796	$	220,408		93.4	%	$	1,119	$	3,799		13.0	%
Raleigh - Durham, NC	5			1,372		187,887		90.5	%		1,149		2,899		9.9	%
Memphis, TN	4			1,383		140,660		92.8	%		1,077		2,742		9.4	%
Louisville, KY	6			1,710		190,231		88.0	%		963		2,725		9.3	%
Columbus, OH	6			1,547		148,585		91.6	%		964		2,511		8.6	%
Oklahoma City, OK	5			1,658		75,781		94.7	%		655		1,970		6.7	%
Indianapolis, IN	4			916		89,496		92.4	%		977		1,552		5.3	%
Dallas, TX	3			734		86,652		95.8	%		1,173		1,501		5.1	%
Tampa-St. Petersburg, FL	3			840		119,562		94.9	%		1,117		1,412		4.8	%
Myrtle Beach, SC - Wilmington, NC	3			628		62,148		92.8	%		965		1,176		4.0	%
Charleston, SC	2			518		79,414		91.5	%		1,287		1,144		3.9	%
Orlando, FL	1			297		48,173		98.0	%		1,439		847		2.9	%
Little Rock, AR (a)	2			462		55,328		96.1	%		972		814		2.8	%
Chicago, IL (b)	1			370		29,889		93.2	%		1,065		667		2.3	%
Charlotte, NC	1			208		42,040		94.2	%		1,506		648		2.2	%
Asheville, NC	1			252		28,506		96.4	%		1,106		610		2.1	%
Austin, TX	1			300		35,935		92.7	%		1,270		605		2.1	%
Chattanooga, TN	2			295		26,670		93.2	%		971		487		1.7	%
St. Louis, MO	1			152		33,347		96.1	%		1,411		469		1.6	%
Baton Rouge, LA	1			264		28,610		74.6	%		952		364		1.2	%
Huntsville, AL	1			178		16,318		96.1	%		928		357		1.2	%
Total/Weighted Average		58		15,880	$	1,745,640		92.5	%	$	1,035	$	29,299		100.0	%

(a) Market includes two properties which have been classified as held for sale as of December 31, 2018.

(b) Market includes one property which has been classified as held for sale as of December 31, 2018.

(c) Excludes $969 of net operating income from properties sold in the three months ended December 31, 2018.

22

DEBT SUMMARY AS OF DECEMBER 31, 2018

Dollars in thousands

	Amount			Rate			Type	Weighted Average Maturity (in years)
Debt:
Credit facility (a)	$	155,743			3.9	%	Floating		2.7
Term loans (b)		250,000			4.0	%	Floating		5.4
Mortgages		585,672			3.8	%	Fixed		5.1
Unamortized debt premiums		(5,927	)
Total Debt		985,488			3.9	%			4.8
Market Equity Capitalization, at period end		826,802
Total Capitalization	$	1,812,289

(a) Credit facility total capacity is $300,000, of which $155,743 was drawn as of December 31, 2018, comprised of a $50,000 term loan and a revolving commitment of up to $250,000. The maturity date on the term loan is May 1, 2022, and the maturity date on borrowings outstanding under the revolving commitment is May 1, 2021.

(b) Comprised of a $150,000 term loan with a maturity date of January 17, 2024 and a $100,000 term loan with a maturity date of November 20, 2024.

(a) As of December 31, 2018, IRT maintained a float-to-fixed interest swap with a $150,000 notional amount. This swap, which expires on June 17, 2021 and has a fixed rate of 1.1325%, has converted $150,000 of our floating rate debt to fixed rate debt. We also maintain: (1) An interest rate collar with a $100,000 notional amount., which expires on November 20, 2024 has a floor of 1.25% and a cap of 2.00%. and (2) An interest rate collar with a $150,000 notional amount, which expires on January 17, 2024, has a floor of 2.25% and a cap of 2.50%. These collars have converted $250,000 of our floating rate debt to fixed rate debt when LIBOR is above the cap rate or below the floor rate.

Encumbered & Unencumbered Statistics	Total Units		% of Total			Gross Assets		% of Total			Q4 2018 NOI		% of Total
Unencumbered assets		7,733		48.7	%	$	799,415		44.4	%	$	12,970	42.9%
Encumbered assets		8,147		51.3	%		999,321		55.6	%		17,298	57.1%
		15,880		100.0	%	$	1,798,736		100.0	%	$	30,268	100.0%

23

Definitions

Average Effective Monthly Rent per Unit

Average effective rent per unit represents the average of gross rent amounts, divided by the average occupancy (in units) for the period presented.  We believe average effective rent is a helpful measurement in evaluating average pricing.  This metric, when presented, reflects the average effective rent per month.

Average Occupancy

Average occupancy represents the average of the daily physical occupancy for the period presented.

EBITDA and Adjusted EBITDA

EBITDA is defined as net income before interest expense including amortization of deferred financing costs, income tax expense, and depreciation and amortization expenses. Adjusted EBITDA is EBITDA before certain other non-cash or non-operating gains or losses related to items such as acquisition and integration expenses, asset sales, debt extinguishments and acquisition related debt extinguishment expenses. EBITDA and Adjusted EBITDA are each non-GAAP measures.  We consider each of EBITDA and Adjusted EBITDA to be an appropriate supplemental measure of our performance because it eliminates interest, income taxes, depreciation and amortization, and other non-cash or non-operating gains and losses, which permits investors to view income from operations without these non-cash or non-operating items. IRT’s calculation of Adjusted EBITDA differs from the methodology used for calculating Adjusted EBITDA by certain other REITs and, accordingly, IRT’s Adjusted EBITDA may not be comparable to Adjusted EBITDA reported by other REITs.

Funds From Operations (“FFO”) and Core Funds From Operations (“CFFO”)

IRT believes that FFO and Core FFO, or CFFO, each of which is a non-GAAP financial measure, are additional appropriate measures of the operating performance of a REIT and us in particular. IRT computes FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net income or loss allocated to common shares (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, gains or losses on sales of real estate and the cumulative effect of changes in accounting principles. While IRT’s calculation of FFO is in accordance with NAREIT’s definition, it may differ from the methodology for calculating FFO utilized by other REITs and, accordingly, may not be comparable to FFO computations of such other REITS.

IRT computes CFFO by adjusting FFO to remove the effect of items that do not reflect ongoing property operations, including stock compensation expense, depreciation and amortization of other items not 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 debt extinguishment costs we incur when IRT sells a property subject to secured debt, asset sales, debt extinguishments, and acquisition related debt extinguishment expenses. NAREIT does not provide guidelines for computing CFFO.

IRT’s calculation of CFFO differs from the methodology used for calculating CFFO by certain other REITs and, accordingly, IRT’s CFFO may not be comparable to CFFO reported by other REITs. IRT’s management utilizes FFO and CFFO as measures of IRT’s operating performance, and believe they are also useful to investors, because they facilitate an understanding of IRT’s operating performance after adjustment for certain non-cash or non-recurring items that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and IRT’s operating performance between periods. Furthermore, although FFO, CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, IRT believes that FFO and CFFO may provide IRT and IRT’s investors with an additional useful measure to compare IRT’s financial performance to certain other REITs. Neither FFO nor CFFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and CFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Accordingly, FFO and CFFO do not measure whether cash flow is sufficient to fund all of IRT’s cash needs, including principal amortization and capital improvements. Neither FFO nor CFFO should be considered as an alternative to net income or any other GAAP measurement as an indicator of IRT’s operating performance or as an alternative to cash flow from operating, investing, and financing activities as a measure of IRT’s liquidity.

24

Interest Coverage

Interest coverage is a ratio computed by dividing our Adjusted EBITDA by our interest expense.

Net Debt

Net debt, a non-GAAP financial measure, equals total debt less cash and cash equivalents. The following table provides a reconciliation of total debt to net debt (Dollars in thousands).

							As of
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Total debt	$	985,488		$	963,238		$	911,772		$	903,286		$	778,442
Less: cash and cash equivalents		(9,316	)		(7,645	)		(10,896	)		(10,399	)		(9,985	)
Total net debt	$	976,172		$	955,593		$	900,876		$	892,887		$	768,457

IRT presents net debt because management believes it is a useful measure of IRT’s credit position and progress toward reducing leverage.  The calculation is limited because IRT may not always be able to use cash to repay debt on a dollar for dollar basis.

Net Operating Income

IRT believes that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful measure of its operating performance. IRT defines NOI as total property revenues less total property operating expenses, excluding interest expenses, depreciation and amortization, acquisition expenses, property management expenses, casualty related costs, and general and administrative expenses. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same store and non-same store basis because NOI measures the core operations of property performance by excluding corporate level expenses, 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 measure of our financial performance.

Same Store Properties and Same Store Portfolio

IRT reviews its same store portfolio at the beginning of each calendar year.  Properties are added into the same store portfolio if they were owned at the beginning of the previous year.  Properties that are held-for-sale or have been sold are excluded from the same store portfolio.

Total Gross Assets

Total Gross Assets equals total assets plus accumulated depreciation and accumulated amortization, including fully depreciated or amortized real estate and real estate related assets.  The following table provides a reconciliation of total assets to total gross assets (Dollars in thousands).

					As of
	December 31, 2018		September 30, 2018		June 30, 2018		March 31, 2018		December 31, 2017
Total assets	$	1,659,336	$	1,648,108	$	1,583,117	$	1,577,879	$	1,450,624
Plus: Accumulated Depreciation (a)		120,202		114,660		104,496		94,001		84,097
Plus: Accumulated Amortization		19,198		19,418		18,852		17,809		16,517
Total gross assets	$	1,798,736	$	1,782,186	$	1,706,465	$	1,689,689	$	1,551,238

(a) Includes previously recognized depreciation on properties that are classified as held-for-sale.

25