Exhibit 99.2
NYSE: IRT
WWW.IRTLIVING.COM
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TABLE OF CONTENTS
Company Information | | 3 |
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Forward-Looking Statements | | 4 |
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Earnings Release Text | | 5 |
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Financial & Operating Highlights | | 12 |
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Balance Sheets | | 13 |
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Statements of Operations, FFO & CORE FFO | | |
Trailing Five Quarters | | 14 |
Three and Twelve Months Ended December 31, 2021 and 2020 | | 15 |
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Adjusted EBITDA Reconciliations and Coverage Ratio | | |
Trailing Five Quarters | | 16 |
Three and Twelve Months Ended December 31, 2021 and 2020 | | 16 |
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Same-Store Portfolio Net Operating Income | | |
Trailing Five Quarters | | 17 |
Three and Twelve Months Ended December 31, 2021 and 2020 | | 18 |
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Net Operating Income Bridge | | 19 |
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Same-Store Portfolio Net Operating Income by Market Three Months Ended December 31, 2021 and 2020 | | 20 |
Twelve Months Ended December 31, 2021 and 2020 | | 21 |
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Total Portfolio NOI Exposure by Market | | 22 |
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Value Add Summary | | 23 |
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Capital Recycling Activity | | 25 |
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Debt Summary | | 26 |
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Debt Covenant & Unencumbered Asset Statistics | | 27 |
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Definitions | | 28 |
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Appendix A | | 31 |
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Appendix B | | 32 |
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Independence Realty Trust
December 31, 2021
Company Information:
Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily apartment properties in 119 communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Oklahoma City, OK, Raleigh-Durham, NC, Houston, TX , Nashville, TN, and Memphis, TN. IRT’s investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation. More information may be found on the Company’s website www.irtliving.com.
Corporate Headquarters | | 1835 Market Street, Suite 2601 |
| | Philadelphia, PA 19103 |
| | 267.270.4800 |
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Trading Symbol | | NYSE: “IRT” |
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Investor Relations Contact | | Edelman Financial Communications & Capital Markets |
| | Ted McHugh and Lauren Torres |
| | 917-365-7979 |
| | IRT@edelman.com |
| | |
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Forward-Looking Statements
This supplemental package contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. These forward-looking statements include, without limitation, our expectations with respect to our operating performance and financial results, including our 2022 earnings guidance, timing and amount of future dividends, timing and terms of property acquisitions, dispositions, joint venture investments, developments and redevelopments and other capital expenditures, timing and terms of capital raising and other financing activity, lease pricing, revenue and expense growth, occupancy levels, supply levels, job growth, interest rates and other economic expectations, and anticipated benefits of our recently completed merger (the “STAR Merger”) with Steadfast Apartment REIT, Inc. (“STAR”), including as to the amount of synergies from the STAR Merger. Such forward-looking statements involve risks, uncertainties, estimates and assumptions and our actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and not within our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Risks and uncertainties that might cause our future actual results and/or future dividends to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: (i) risks related to the impact of COVID-19 and other potential outbreaks of infectious diseases on our financial condition, results of operations, cash flows and the impact of such risks on the financial condition of our residents and their ability to pay rent; (ii) the nature and duration of measures taken by federal, state and local government authorities to combat the spread of disease; (iii) changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could limit our ability to lease units or increase rents or that could lead to declines in occupancy and rent levels; (iv) uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital; (v) increased costs on account of inflation; (vi) inability of tenants to meet their rent and other lease obligations and charge-offs in excess of our allowance for bad debt; (vii) legislative restrictions that may regulate rents or delay or limit collections of past due rents; (viii) risks endemic to real estate and the real estate industry generally; (ix) impairment charges; (x) the effects of natural and other disasters; (xi) delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve projected rent increases and occupancy levels on account of the initiatives; (xii) failure to realize the cost savings, synergies and other benefits expected to result from the STAR Merger; (xiii) unexpected costs or delays in integration of the IRT and STAR businesses; (xiv) unknown or unexpected liabilities related to the STAR Merger; (xv) unexpected costs of REIT qualification compliance; (xvi) unexpected changes in our intention or ability to repay certain debt prior to maturity; (xvii) inability to sell certain assets within the time frames or at the pricing levels expected; (xviii) costs and disruptions as the result of a cybersecurity incident or other technology disruption; and (xix) and share price fluctuations. Please refer to the documents filed by us with the SEC, including specifically the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2020, our subsequently filed quarterly reports on Form 10-Q and our other filings with the SEC, which identify additional factors that could cause actual results to differ from those contained in forward-looking statements. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law. In addition, the declaration of dividends on our common stock is subject to the discretion of our Board of Directors and depends upon a broad range of factors, including our results of operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, applicable legal requirements and such other factors as our Board of Directors may from time to time deem relevant.
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Independence Realty Trust Announces Fourth Quarter and Full Year 2021 Financial Results
Introduces Full Year 2022 Guidance
PHILADELPHIA – (BUSINESS WIRE) – February 16, 2022 — Independence Realty Trust, Inc. (“IRT”) (NYSE: IRT), a multifamily apartment REIT, today announced its fourth quarter and full year 2021 financial results.
Fourth Quarter Highlights
| • | Net income available to common shares of $28.6 million for the quarter ended December 31, 2021 compared to $13.3 million for the quarter ended December 31, 2020. |
| • | Earnings per diluted share of $0.23 for the quarter ended December 31, 2021 compared to $0.14 for the quarter ended December 31, 2020. |
| • | Same store net operating income (“NOI”) growth of 15.1% for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020. |
| • | Core Funds from Operations (“CFFO”) of $31.0 million for the quarter ended December 31, 2021 compared to $19.7 million for the quarter ended December 31, 2020. CFFO per share was $0.24 for the fourth quarter of 2021, as compared to $0.21 for the fourth quarter of 2020. |
| • | Adjusted EBITDA of $42.3 million for the quarter ended December 31, 2021 compared to $28.5 million for the quarter ended December 31, 2020. |
| • | Completed our strategic merger with Steadfast Apartment REIT, Inc. (“STAR”) on December 16, 2021, adding 68 properties aggregating 21,394 rentable units and two development properties aggregating 621 rentable units. |
Full Year Highlights
| • | Since the inception of our value add program in January 2018 through December 31, 2021, IRT has completed |
renovations at 4,672 units, achieving a weighted average return on investment of 20.2% on interior renovations and 18.0% on total renovation costs.
| • | Net income available to common shares of $44.6 million for the year ended December 31, 2021 compared to |
$14.8 million for the year ended December 31, 2020.
| • | Earnings per diluted share of $0.41 for the year ended December 31, 2021 compared to $0.16 for the year ended December 31, 2020. |
| • | Same store net operating income (“NOI”) growth of 11.4% for the year ended December 31, 2021 compared to the year ended December 31, 2020. |
| • | Core Funds from Operations (“CFFO”) of $92.0 million for the year ended December 31, 2021 compared to $68.9 |
million for the year ended December 31, 2020. CFFO per share was $0.84 for the full year 2021, as compared to
$0.73 for the full year 2020.
| • | Adjusted EBITDA of $128.9 million for the year ended December 31, 2021 compared to $105.3 million for the |
year ended December 31, 2020.
2022 Guidance Highlights
| • | Introduced 2022 guidance including CFFO per share of $1.02 at the mid-point of our guidance range. |
| • | 2022 same store NOI growth of 11.0% at the mid-point of our guidance range. |
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Included later in this press release are definitions of NOI, CFFO, Adjusted EBITDA and other Non-GAAP financial measures and reconciliations of such measures to their most comparable financial measures as calculated and presented in accordance with GAAP.
Management Commentary
“2021 was an exceptional year for IRT underscored by outsized organic growth across the portfolio, as well as the completion of the STAR merger that cements our position as a leading multifamily REIT focused on the high growth U.S. Sunbelt region,” said Scott Schaeffer, Chairman and CEO of IRT. “We delivered fourth quarter and full year same store NOI growth of 15.1% and 11.4%, respectively, supported by improvements in average occupancy rates and rental income. In addition, we continued to advance our high return value add program and drive accretive growth through asset acquisitions and dispositions, as well as joint venture relationships in new multifamily development.”
“Looking ahead, we are excited for our next phase of growth, having doubled our property and unit count through our merger with STAR. Our integration efforts remain on-track, with our property and revenue management systems now fully implemented across all properties. In addition, we expect to achieve at least $28 million in annual synergies and effectively improve our leverage position. These advancements, along with our plans to continue to drive strong operating results, well position IRT to realize attractive growth in the multifamily sector for years to come.”
Same Store Property Operating Results
| | |
| Fourth Quarter 2021 Compared to Fourth Quarter 2020(1) | Full Year 2021 Compared to Full Year 2020(1) |
Rental and other property revenue | 10.2% increase | 8.4% increase |
Property operating expenses | 1.8% increase | 3.8% increase |
Net operating income (“NOI”) | 15.1% increase | 11.4% increase |
Portfolio average occupancy | 90 bps increase to 95.7% | 230 bps increase to 95.7% |
Portfolio average rental rate | 9.7% increase to $1,266 | 5.9% increase to $1,209 |
NOI Margin | 280 bps increase to 65.6% | 170 bps increase to 62.7% |
| (1) | Same store portfolio for the three and twelve months ended December 31, 2021 includes 47 properties, which represent 12,838 units. |
Same Store Property Operating Results, Excluding Value Add
The same store portfolio results below exclude 18 communities that are both part of the same store portfolio and were actively undergoing Value Add renovations during the three and twelve months ended December 31, 2021.
| | |
| Fourth Quarter 2021 Compared to Fourth Quarter 2020(1) | Full Year 2021 Compared to Full Year 2020(1) |
Rental and other property revenue | 8.5% increase | 6.1% increase |
Property operating expenses | 5.3% increase | 4.0% increase |
Net operating income (“NOI”) | 10.4% increase | 7.4% increase |
Portfolio average occupancy | 80 bps increase to 96.6% | 180 bps increase to 96.6% |
Portfolio average rental rate | 8.4% increase to $1,254 | 4.5% increase to $1,203 |
NOI Margin | 100 bps increase to 64.6% | 80 bps increase to 62.5% |
| (1) | Same store portfolio, excluding value add, for the three and twelve months ended December 31, 2021 includes 29 properties, which represent 7,034 units. |
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IRT and STAR Merger
On December 16, 2021, we completed our merger with STAR. Through the STAR Merger, we acquired 68 apartment communities that contain 21,394 units and two apartment communities that are under development and approved for 621 units in the aggregate. We acquired assets totaling $4.8 billion, assumed liabilities totaling $1.9 billion, and issued an aggregate of 99,720,948 shares of common stock and 6,429,481 IROP units in our merger with STAR. Leading up to and after the closing of the STAR Merger, we also successfully delevered the combined balance sheet through a combination of our July forward equity raise of $271 million on 16.1 million shares, the disposition of three STAR properties in November 2021 for a total sales price of $107 million, and the disposition of six IRT properties between December 2021 and February 2022 for a total sales price of $297 million.
Same Store Comparisons and STAR
As discussed above, we completed our merger with STAR, which more than doubled our property and unit counts. We will continue to follow our previous definition of same store and will formally add STAR to the same store pool on January 1, 2023 in accordance with our current same store definition. However, in 2022 we will begin presenting a Combined Same Store portfolio to help investors understand the larger same store portfolio. We’ve included two new appendices this quarter. Appendix A shows the impact of consolidating STAR’s business for 2021. To aid in future modeling, we have added Appendix B, which provides the 2021 quarterly property operating results for the 2022 Combined Same Store portfolio. The following Operating Metrics and 2022 Guidance are presented considering these new same store portfolios. See the Definitions section of this release for full definitions of these new same store portfolios.
Operating Metrics
The table below summarizes operating metrics for the noted same store portfolios for the applicable periods.
| | |
| 4Q 2021 | 1Q 2022(3) |
IRT Same Store Portfolio (47 properties / 12,838 units) (1) |
Average Occupancy | 95.7% | 95.4% |
Lease Over Lease Effective Rental Rate Growth (2): | | |
New Leases | 22.3% | 20.3% |
Renewal Leases | 8.0% | 11.3% |
Blended | 15.2% | 14.3% |
Resident retention rate | 42.6% | 48.4% |
STAR Same Store Portfolio (62 properties / 19,860 units) (1) |
Average Occupancy | 96.1% | 95.3% |
Lease Over Lease Effective Rental Rate Growth (2): | | |
New Leases | 16.2% | 13.7% |
Renewal Leases | 11.4% | 9.3% |
Blended | 13.6% | 10.9% |
Resident retention rate | 45.7% | 47.7% |
Combined Same Store Portfolio (109 properties / 32,698 units) (1) |
Average Occupancy | 95.9% | 95.4% |
Lease Over Lease Effective Rental Rate Growth (2): | | |
New Leases | 18.8% | 16.4% |
Renewal Leases | 10.2% | 10.2% |
Blended | 14.2% | 12.4% |
Resident retention rate | 44.8% | 48.0% |
| (1) | See same store definitions. |
| (2) | Lease-over-lease effective rent growth represents the change in effective monthly rent, as adjusted for concessions, for each unit that had a prior lease and current lease that are for a term of 9-13 months. |
| (3) | 1Q 2022 average occupancy and resident retention rates are as through February 14, 2022.1Q 2022 new lease and renewal rates are for leases commencing during 1Q 2022 that were signed as of February 14, 2022. |
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Value Add Program
We completed renovations on 253 units and 953 units during the quarter ended and year ended December 31, 2021, respectively. From inception of our value add program in January 2018 through December 31, 2021, we completed renovations on 4,672 units, achieving a return on investment of 18.0% (20.2% on interior renovation costs) and an average monthly rental increase of 19.6%.
Dispositions/Property Held for Sale:
In connection with our merger with STAR, we completed the following dispositions and used net proceeds from these sales to repay debt of the combined company.
| • | Crestmont in Atlanta, GA: sold on December 13, 2021 and recognized a gain on disposition of $33.1 million. |
| • | Creekside Corner in Atlanta, GA: sold on December 16, 2021 and recognized a gain on disposition of $43.1 million. |
| • | Riverchase in Indianapolis, IN: sold on January 18, 2022 and expect to recognize a gain on disposition of $13.0 million. |
| • | Haverford Place in Louisville, KY: sold on February 2, 2022 and expect to recognize a gain on disposition of $16.8 million. |
| • | Heritage Park in Oklahoma City, OK: sold on February 2, 2022 and expect to recognize a gain on disposition of $31.5 million. |
| • | Raindance in Oklahoma City, OK: sold on February 2, 2022 and expect to recognize a gain on disposition of $33.9 million. |
Capital Expenditures
For the three months ended December 31, 2021, recurring capital expenditures for the total portfolio were $1.8 million, or $112 per unit. For the year ended December 31, 2021, recurring capital expenditures for the total portfolio were $6.8
million, or $422 per unit.
Distributions
On December 2, 2021, our Board of Directors declared two prorated quarterly cash dividends based on IRT’s current quarterly dividend rate of $0.12 per share of our common stock. The first prorated dividend was $0.09913 and was paid on January 14, 2022 to stockholders of record as of the close of business on December 15, 2021. The second prorated dividend was $0.02087 and was paid on January 21, 2022 to stockholders of record as of the close of business on December 30, 2021.
2022 EPS and CFFO Guidance
We are introducing 2022 full year guidance. Earnings per diluted share is projected to be in the range of $0.32 to $0.36. A reconciliation of IRT's projected net income allocable to common shares to its projected CFFO per share is included below. 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.
| | |
2022 Full Year EPS and CFFO Guidance (1)(2) | Low | High |
Earnings per share | $0.32 | $0.36 |
Adjustments: | | |
Depreciation and amortization (3) | 1.10 | 1.10 |
Gain on sale of real estate assets (4) | (0.42) | (0.42) |
Core FFO per share | $1.00 | $1.04 |
| (1) | This guidance, including the underlying assumptions presented in the table below, constitutes forward-looking information. Actual full year 2022 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements” below. Our guidance is based on the key guidance assumptions detailed below. |
| (2) | Per share guidance is based on 228.0 million weighted average shares and units outstanding. |
| (3) | Depreciation and amortization includes $53.3 million ($0.23 per share) of amortization related to STAR in-place lease intangibles that are a result of GAAP purchase accounting. These intangibles are expected to be amortized over less than one year. |
| (4) | Gains on sale of real estate assets include only the four asset sales that occurred in January and February 2022. |
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2022 Guidance Assumptions
Our key guidance assumptions for 2022 are enumerated below. Note, the same store portfolio assumptions reflect the expected composition of the same store portfolio in 2022 as indicated. See definitions at the end of this release for further information regarding our same store definitions. See also, Appendix B, which includes 2021 property operating results for the 2022 Combined Same Store portfolio.
| |
Combined Same Store Portfolio
| 2022 Outlook (1) |
Number of properties/units | 115 properties / 34,454 units |
Property revenue growth | 8.1% to 9.1% |
Controllable operating expense growth | 2.5% to 3.5% |
Real estate tax and insurance expense growth | 6.5% to 8.5% |
Total operating expense growth | 4.0% to 5.5% |
Property NOI growth | 10.0% to 12.0% |
| |
General and administrative & Property management expenses | $48.0 million to $51.0 million |
Interest expense (2) | $100.0 million to $103.0 million |
| |
Transaction/Investment Volume (3) | |
Acquisition volume | None assumed |
Disposition volume | $157 million |
| |
Capital Expenditures | |
Recurring | $18.5 million to $21.5 million |
Value add & non-recurring | $42.5 million to $47.5 million |
Development | $65.0 million to $75.0 million |
| (1) | This guidance, including the underlying assumptions, constitutes forward-looking information. Actual results could vary significantly from the projections presented. See “Forward-Looking Statements” below. |
| (2) | Interest expense includes amortization of deferred financing costs but excludes loan premium accretion, net. As a result of purchase accounting, we recorded a $72.1 million loan premium, net, related to STAR debt. This loan premium will be accreted into and reduce GAAP interest expense over the remaining term of the associated debt. However, loan premium accretion will be excluded from CFFO. |
| (3) | Disposition volume guidance represents only the four asset sales that occurred in January and February 2022. Net proceeds from these four assets sales were used to reduce indebtedness. We continue to evaluate our portfolio for capital recycling opportunities so actual acquisitions and dispositions could vary significantly from our projections. We undertake no duty to update these assumptions. See “Forward-Looking Statements” below. |
Selected Financial Information
See the schedules at the end of this earnings release for selected financial information for IRT.
Non-GAAP Financial Measures and Definitions
We disclose the following non-GAAP financial measures in this earnings release: FFO, CFFO, NOI and Adjusted EBITDA. Included at the end of this release are definitions of these non-GAAP financial measures and a reconciliation of our reported net income to our FFO and CFFO, a reconciliation of our same store NOI to our reported net income, a reconciliation of our Adjusted EBITDA to net income, and management’s rationales for the usefulness of each of these and other non-GAAP financial measures used in this release.
Conference Call
All interested parties can listen to the live conference call webcast at 9:00 AM ET on Thursday, February 17, 2022 from the investor relations section of the IRT website at www.irtliving.com or by dialing 1.844.200.6205, access code 873786. 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 24, 2022 by dialing 1.866.813.9403, access code 506270.
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Supplemental Information
We produce supplemental information that includes details regarding the performance of the portfolio, financial information, non-GAAP financial measures, same store information and other useful information for investors. The supplemental information is available via our website, www.irtliving.com, through the "Investor Relations" section.
About Independence Realty Trust, Inc.
Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily apartment properties in 119 communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Oklahoma City, OK, Raleigh-Durham, NC, Houston, TX , Nashville, TN, and Memphis, TN. IRT’s investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation. More information may be found on the Company’s website www.irtliving.com.
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Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. These forward-looking statements include, without limitation, our expectations with respect to our operating performance and financial results, including our 2022 earnings guidance, timing and amount of future dividends, timing and terms of property acquisitions, dispositions, joint venture investments, developments and redevelopments and other capital expenditures, timing and terms of capital raising and other financing activity, lease pricing, revenue and expense growth, occupancy levels, supply levels, job growth, interest rates and other economic expectations, and anticipated benefits of our recently completed merger (the “STAR Merger”) with Steadfast Apartment REIT, Inc. (“STAR”), including as to the amount of synergies from the STAR Merger. Such forward-looking statements involve risks, uncertainties, estimates and assumptions and our actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and not within our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Risks and uncertainties that might cause our future actual results and/or future dividends to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: (i) risks related to the impact of COVID-19 and other potential outbreaks of infectious diseases on our financial condition, results of operations, cash flows and the impact of such risks on the financial condition of our residents and their ability to pay rent; (ii) the nature and duration of measures taken by federal, state and local government authorities to combat the spread of disease; (iii) changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could limit our ability to lease units or increase rents or that could lead to declines in occupancy and rent levels; (iv) uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital; (v) increased costs on account of inflation; (vi) inability of tenants to meet their rent and other lease obligations and charge-offs in excess of our allowance for bad debt; (vii) legislative restrictions that may regulate rents or delay or limit collections of past due rents; (viii) risks endemic to real estate and the real estate industry generally; (ix) impairment charges; (x) the effects of natural and other disasters; (xi) delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve projected rent increases and occupancy levels on account of the initiatives; (xii) failure to realize the cost savings, synergies and other benefits expected to result from the STAR Merger; (xiii) unexpected costs or delays in integration of the IRT and STAR businesses; (xiv) unknown or unexpected liabilities related to the STAR Merger; (xv) unexpected costs of REIT qualification compliance; (xvi) unexpected changes in our intention or ability to repay certain debt prior to maturity; (xvii) inability to sell certain assets within the time frames or at the pricing levels expected; (xviii) costs and disruptions as the result of a cybersecurity incident or other technology disruption; and (xix) and share price fluctuations. Please refer to the documents filed by us with the SEC, including specifically the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2020, our subsequently filed quarterly reports on Form 10-Q and our other filings with the SEC, which identify additional factors that could cause actual results to differ from those contained in forward-looking statements. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law. In addition, the declaration of dividends on our common stock is subject to the discretion of our Board of Directors and depends upon a broad range of factors, including our results of operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, applicable legal requirements and such other factors as our Board of Directors may from time to time deem relevant.
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FINANCIAL & OPERATING HIGHLIGHTS
Dollars in thousands, except per share data
| | For the Three Months Ended | |
| | December 31, 2021 | | September 30, 2021 | | June 30, 2021 | | March 31, 2021 | | December 31, 2020 | |
Selected Financial Information: | | | | | | | | | | | |
Operating Statistics: | | | | | | | | | | | |
Net income available to common shares | | $28,615 | | $11,502 | | $3,386 | | $1,086 | | $13,261 | |
Earnings (loss) per share -- diluted | | $0.23 | | 0.11 | | $0.03 | | $0.01 | | $0.14 | |
Rental and other property revenue | | $76,803 | | $60,592 | | $57,286 | | $54,811 | | $53,923 | |
Property operating expenses | | $26,952 | | $23,164 | | $22,298 | | $20,838 | | $20,138 | |
Net operating income | | $49,851 | | $37,428 | | $34,988 | | $33,973 | | $33,785 | |
NOI margin | | 64.9% | | 61.8% | | 61.1% | | 62.0% | | 62.7% | |
Adjusted EBITDA | | $42,301 | | $31,432 | | $28,729 | | $26,389 | | $28,534 | |
CORE FFO per share (c) | | $0.24 | | $0.21 | | $0.20 | | $0.18 | | $0.22 | |
Dividends per share | | $0.12 | | $0.12 | | $0.12 | | $0.12 | | $0.12 | |
CORE FFO payout ratio | | 50.0% | | 57.1% | | 60.0% | | 66.7% | | 54.5% | |
Portfolio Data: | | | | | | | | | | | |
Total gross assets | | $6,785,648 | | $2,114,743 | | $2,133,021 | | $1,970,979 | | $1,962,895 | |
Total number of operating properties | | 123 | | 57 | | 58 | | 56 | | 56 | |
Total units | | 36,831 | | 16,109 | | 16,261 | | 15,667 | | 15,667 | |
Period end occupancy | | 95.6% | | 96.0% | | 95.6% | | 95.5% | | 95.3% | |
Total portfolio average occupancy | | 96.0% | | 96.1% | | 95.9% | | 95.4% | | 95.0% | |
Total portfolio average effective monthly rent, per unit | | $1,329 | | $1,212 | | $1,171 | | $1,142 | | $1,136 | |
Same store period end occupancy (a) | | 95.6% | | 95.8% | | 95.4% | | 95.2% | | 95.1% | |
Same store portfolio average occupancy (a) | | 95.7% | | 96.0% | | 95.9% | | 95.1% | | 94.8% | |
Same store portfolio average effective monthly rent, per unit (a) | | $1,266 | | $1,227 | | $1,183 | | $1,161 | | $1,154 | |
Capitalization: | | | | | | | | | | | |
Total debt (d) | | $2,705,336 | | $996,270 | | $1,036,841 | | $947,631 | | $945,686 | |
Common share price, period end | | $25.83 | | $20.35 | | $18.23 | | $15.20 | | $13.43 | |
Market equity capitalization | | $5,882,410 | | $2,150,162 | | $1,926,218 | | $1,561,165 | | $1,376,283 | |
Total market capitalization | | $8,587,746 | | $3,146,432 | | $2,963,059 | | $2,508,796 | | $2,321,969 | |
Total debt/total gross assets | | 39.9% | | 47.1% | | 48.6% | | 48.1% | | 48.2% | |
Net debt to Adjusted EBITDA (pro forma) (b) | | 7.7x | | 8.2x | | 8.5x | | 8.2x | | 8.2x | |
Interest coverage | | 3.9x | | 3.6x | | 3.4x | | 3.1x | | 3.2x | |
Common shares and OP Units: | | | | | | | | | | | |
Shares outstanding | | 220,753,735 | | 105,106,714 | | 105,109,649 | | 102,033,733 | | 101,803,762 | |
OP units outstanding | | 6,981,841 | | 552,360 | | 552,360 | | 674,515 | | 674,517 | |
Common shares and OP units outstanding | | 227,735,577 | | 105,659,074 | | 105,662,009 | | 102,708,248 | | 102,478,278 | |
Weighted average common shares and OP units | | 127,046,225 | | 107,094,044 | | 102,584,809 | | 102,353,380 | | 95,529,788 | |
| (a) | Same store portfolio consists of 47 properties, which represent 12,838 units. |
| (b) | Reflects pro forma net debt to Adjusted EBITDA for each period presented, which includes adjustments for the timing of acquisitions, the full quarter effect of current value add initiatives, the completion of capital recycling activities including paydown of associated indebtedness, and the normalization of items impacting quarterly EBITDA. Actual net debt to Adjusted EBITDA multiples for the five quarters ended December 31, 2021 were 15.4x, 8.0x, 9.1x, 8.9x, and 8.3x, respectively. |
| (c) | Reflects adjustment to prior periods to conform to our current definition of CFFO. See our definition of CFFO for additional discussion. |
| (d) | Includes indebtedness associated with real estate held for sale. |
12
BALANCE SHEETS
Dollars in thousands, except per share data
| | As of |
| | December 31, 2021 | | September 30, 2021 | | June 30, 2021 | | March 31, 2021 | | December 31, 2020 |
Assets: | | | | | | | | | | |
Real estate held for investment, at cost | | $6,462,355 | | $1,904,760 | | $2,035,988 | | $1,922,071 | | $1,916,770 |
Less: accumulated depreciation | | (243,475) | | (223,244) | | (231,866) | | (223,187) | | (208,618) |
Real estate held for investment, net | | 6,218,880 | | 1,681,516 | | 1,804,122 | | 1,698,884 | | 1,708,152 |
Real estate held for sale | | 61,560 | | 120,409 | | 27,910 | | — | | — |
Real estate under development | | 41,777 | | — | | — | | — | | — |
Cash and cash equivalents | | 35,972 | | 8,720 | | 7,566 | | 8,653 | | 8,751 |
Restricted cash | | 29,699 | | 6,138 | | 6,441 | | 4,449 | | 4,864 |
Investment in unconsolidated real estate entities | | 24,999 | | 13,561 | | 10,205 | | — | | — |
Other assets | | 38,052 | | 15,053 | | 17,311 | | 12,824 | | 12,338 |
Derivative assets | | 2,488 | | 1,168 | | 853 | | 2,810 | | — |
Intangible assets, net | | 53,269 | | 346 | | 714 | | 396 | | 792 |
Total assets | | $6,506,696 | | $1,846,911 | | $1,875,122 | | $1,728,016 | | $1,734,897 |
Liabilities and Equity: | | | | | | | | | | |
Indebtedness, net | | $2,705,336 | | $996,270 | | $1,036,841 | | $947,631 | | $945,686 |
Indebtedness associated with real estate held for sale, net | | — | | 22,459 | | 19,622 | | — | | — |
Accounts payable and accrued expenses | | 106,332 | | 39,593 | | 30,530 | | 24,535 | | 25,416 |
Accrued interest payable | | 7,175 | | 1,708 | | 1,909 | | 1,888 | | 1,976 |
Dividends payable | | 16,792 | | 12,648 | | 12,648 | | 12,293 | | 12,257 |
Derivative liabilities | | 11,896 | | 17,492 | | 19,386 | | 19,540 | | 29,842 |
Other liabilities | | 17,089 | | 6,756 | | 6,903 | | 6,991 | | 6,949 |
Total liabilities | | 2,864,620 | | 1,096,926 | | 1,127,839 | | 1,012,878 | | 1,022,126 |
Equity: | | | | | | | | | | |
Shareholders' Equity: | | | | | | | | | | |
Preferred shares, $0.01 par value per share | | — | | — | | — | | — | | — |
Common shares, $0.01 par value per share | | 2,208 | | 1,051 | | 1,051 | | 1,018 | | 1,018 |
Additional paid in capital | | 3,678,903 | | 965,018 | | 963,754 | | 920,042 | | 919,615 |
Accumulated other comprehensive income (loss) | | (11,940) | | (19,507) | | (22,011) | | (20,497) | | (33,822) |
Retained earnings (deficit) | | (188,410) | | (200,429) | | (199,350) | | (190,151) | | (178,751) |
Total shareholders' equity | | 3,480,761 | | 746,133 | | 743,444 | | 710,412 | | 708,060 |
Noncontrolling Interests | | 161,315 | | 3,852 | | 3,839 | | 4,726 | | 4,711 |
Total equity | | 3,642,076 | | 749,985 | | 747,283 | | 715,138 | | 712,771 |
Total liabilities and equity | | $6,506,696 | | $1,846,911 | | $1,875,122 | | $1,728,016 | | $1,734,897 |
13
STATEMENTS OF OPERATIONS, FFO & CORE FFO
TRAILING FIVE QUARTERS
Dollars in thousands, except per share data
| | For the Three-Months Ended |
| | December 31, 2021 | | September 30, 2021 | | June 30, 2021 | | March 31, 2021 | | December 31, 2020 |
Revenue: | | | | | | | | | | |
Rental and other property revenue | | $76,803 | | $60,592 | | $57,286 | | $54,811 | | $53,923 |
Other revenue | | 113 | | 188 | | 158 | | 301 | | 165 |
Total revenue | | 76,916 | | 60,780 | | 57,444 | | 55,112 | | 54,088 |
Expenses: | | | | | | | | | | |
Property operating expenses | | 26,952 | | 23,164 | | 22,298 | | 20,838 | | 20,138 |
Property management expenses | | 3,221 | | 2,199 | | 2,176 | | 1,943 | | 2,183 |
General and administrative expenses | | 4,442 | | 3,985 | | 4,241 | | 5,942 | | 3,233 |
Depreciation and amortization expense | | 26,210 | | 17,384 | | 16,763 | | 16,552 | | 15,396 |
Casualty losses | | — | | — | | — | | 359 | | 300 |
Total expenses | | 60,825 | | 46,732 | | 45,478 | | 45,634 | | 41,250 |
Interest expense | | (10,757) | | (8,700) | | (8,559) | | (8,385) | | (8,872) |
Gain on sale (loss on impairment) of real estate assets, net | | 76,179 | | 11,492 | | — | | — | | 9,394 |
Loss on extinguishment of debt | | (10,261) | | — | | — | | — | | — |
Merger and integration costs | | (41,787) | | (5,276) | | — | | — | | — |
Net income (loss) | | 29,465 | | 11,564 | | 3,407 | | 1,093 | | 13,360 |
(Income) loss allocated to noncontrolling interests | | (850) | | (62) | | (21) | | (7) | | (99) |
Net income (loss) available to common shares | | $28,615 | | $11,502 | | $3,386 | | $1,086 | | $13,261 |
EPS - basic | | $0.23 | | $0.11 | | $0.03 | | $0.01 | | $0.14 |
Weighted-average shares outstanding - Basic | | 125,375,694 | | 104,918,674 | | 102,023,204 | | 101,678,865 | | 94,846,369 |
EPS - diluted | | $0.23 | | $0.11 | | $0.03 | | $0.01 | | $0.14 |
Weighted-average shares outstanding - Diluted | | 126,675,551 | | 107,668,675 | | 102,923,924 | | 102,763,106 | | 95,876,357 |
Funds From Operations (FFO): | | | | | | | | | | |
Net Income (loss) | | $29,465 | | $11,564 | | $3,407 | | $1,093 | | $13,360 |
Add-Back (Deduct): | | | | | | | | | | |
Real estate depreciation and amortization | | 26,068 | | 17,263 | | 16,683 | | 16,472 | | 15,316 |
Loss on impairment (gain on sale) of real estate assets, net, excluding debt extinguishment costs | | (78,490) | | (11,788) | | — | | — | | (9,394) |
FFO | | $(22,957) | | $17,039 | | $20,090 | | $17,565 | | $19,282 |
FFO per share | | $(0.18) | | $0.16 | | $0.20 | | $0.17 | | $0.20 |
CORE Funds From Operations (CFFO): (a) | | | | | | | | | | |
FFO | | $(22,957) | | $17,039 | | $20,090 | | $17,565 | | $19,282 |
Add-Back (Deduct): | | | | | | | | | | |
Other depreciation and amortization | | 142 | | 121 | | 80 | | 80 | | 80 |
Casualty losses | | — | | — | | — | | 359 | | 300 |
Loan (premium accretion) discount amortization | | (501) | | — | | — | | — | | — |
Prepayment penalties on asset dispositions | | 2,312 | | 295 | | — | | — | | — |
Loss on extinguishment of debt | | 10,261 | | — | | — | | — | | — |
Merger and integration costs | | 41,787 | | 5,276 | | — | | — | | — |
CFFO | | $31,044 | | $22,731 | | $20,170 | | $18,004 | | $19,662 |
CFFO per share | | $0.24 | | $0.21 | | $0.20 | | $0.18 | | $0.21 |
Weighted-average shares and units outstanding | | 127,046,225 | | 107,094,044 | | 102,584,809 | | 102,353,380 | | 95,529,788 |
| (a) | Reflects adjustment to prior periods to conform to our current definition of CFFO. See our definition of CFFO for additional discussion. |
14
STATEMENTS OF OPERATIONS, FFO & CORE FFO
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2021 and 2020
Dollars in thousands, except per share data
| | For the Three Months Ended December 31, | | For the Year Ended December 31, |
| | 2021 | | 2020 | | 2021 | | 2020 |
Revenue: | | | | | | | | |
Rental and other property revenue | | $76,803 | | $53,923 | | $249,492 | | $211,167 |
Other revenue | | 113 | | 165 | | 760 | | 739 |
Total revenue | | 76,916 | | 54,088 | | 250,252 | | 211,906 |
Expenses: | | | | | | | | |
Property operating expenses | | 26,952 | | 20,138 | | 93,252 | | 82,978 |
Property management expenses | | 3,221 | | 2,183 | | 9,539 | | 8,494 |
General and administrative expenses | | 4,442 | | 3,233 | | 18,610 | | 15,095 |
Depreciation and amortization expense | | 26,210 | | 15,396 | | 76,909 | | 60,687 |
Abandoned deal costs | | — | | — | | — | | 130 |
Casualty losses | | — | | 300 | | 359 | | 711 |
Total expenses | | 60,825 | | 41,250 | | 198,669 | | 168,095 |
Interest expense | | (10,757) | | (8,872) | | (36,401) | | (36,488) |
Gain on sale (loss on impairment) of real estate assets, net | | 76,179 | | 9,394 | | 87,671 | | 7,554 |
Loss on extinguishment of debt | | (10,261) | | — | | (10,261) | | — |
Merger and integration costs | | (41,787) | | — | | (47,063) | | — |
Net income (loss) | | 29,465 | | 13,360 | | 45,529 | | 14,877 |
(Income) loss allocated to noncontrolling interests | | (850) | | (99) | | (940) | | (109) |
Net income (loss) available to common shares | | $28,615 | | $13,261 | | $44,589 | | $14,768 |
EPS - basic | | $0.23 | | $0.14 | | $0.41 | | $0.16 |
Weighted-average shares outstanding - Basic | | 125,375,694 | | 94,846,369 | | 108,552,185 | | 93,660,086 |
EPS - diluted | | $0.23 | | $0.14 | | $0.41 | | $0.16 |
Weighted-average shares outstanding - Diluted | | 126,675,551 | | 95,876,357 | | 109,831,520 | | 94,688,440 |
| | | | | | | | |
Funds From Operations (FFO): | | | | | | | | |
Net Income (loss) | | $29,465 | | $13,360 | | $45,529 | | $14,877 |
Adjustments: | | | | | | | | |
Real estate depreciation and amortization | | 26,068 | | 15,316 | | 76,487 | | 60,352 |
Loss on impairment (gain on sale) of real estate assets, net, excluding debt extinguishment costs | | (78,490) | | (9,394) | | (90,277) | | (7,554) |
Funds From Operations | | $(22,957) | | $19,282 | | $31,739 | | $67,675 |
FFO per share | | $(0.18) | | $0.20 | | $0.29 | | $0.72 |
Core Funds From Operations (CFFO): (a) | | | | | | | | |
Funds From Operations | | $(22,957) | | $19,282 | | $31,739 | | $67,675 |
Adjustments: | | | | | | | | |
Other depreciation and amortization | | 142 | | 80 | | 423 | | 335 |
Abandoned deal costs | | — | | — | | — | | 130 |
Casualty losses | | — | | 300 | | 359 | | 711 |
Loan (premium accretion) discount amortization | | (501) | | — | | (501) | | — |
Prepayment penalties on asset dispositions | | 2,312 | | — | | 2,607 | | — |
Loss on extinguishment of debt | | 10,261 | | — | | 10,261 | | — |
Merger and integration costs | | 41,787 | | — | | 47,063 | | — |
Core Funds From Operations | | $31,044 | | $19,662 | | $91,951 | | $68,851 |
CFFO per share | | $0.24 | | $0.21 | | $0.84 | | $0.73 |
Weighted-average shares and units outstanding | | 127,046,225 | | 95,529,788 | | 109,418,810 | | 94,430,935 |
| (a) | Reflects adjustment to prior periods to conform to our current definition of CFFO. See our definition of CFFO for additional discussion. |
15
ADJUSTED EBITDA RECONCILIATION AND COVERAGE RATIO
Dollars in thousands
| | Three Months Ended | |
ADJUSTED EBITDA: | | December 31, 2021 | | September 30, 2021 | | June 30, 2021 | | March 31, 2021 | | December 31, 2020 | |
Net income (loss) | | $29,465 | | $11,564 | | $3,407 | | $1,093 | | $13,360 | |
Add-Back (Deduct): | | | | | | | | | | | |
Depreciation and amortization | | 26,210 | | 17,384 | | 16,763 | | 16,552 | | 15,396 | |
Casualty losses | | — | | — | | — | | 359 | | 300 | |
Interest expense | | 10,757 | | 8,700 | | 8,559 | | 8,385 | | 8,872 | |
Net loss on impairment (gain on sale) of real estate assets | | (76,179) | | (11,492) | | — | | — | | (9,394) | |
Loss on extinguishment of debt | | 10,261 | | — | | — | | — | | — | |
Merger and integration costs | | 41,787 | | 5,276 | | — | | — | | — | |
Adjusted EBITDA | | $42,301 | | $31,432 | | $28,729 | | $26,389 | | $28,534 | |
| | | | | | | | | | | |
INTEREST COST: | | | | | | | | | | | |
Interest expense | | $10,757 | | $8,700 | | $8,559 | | $8,385 | | $8,872 | |
| | | | | | | | | | | |
INTEREST COVERAGE: | | 3.9x | | 3.6x | | 3.4x | | 3.1x | | 3.2x | |
| | | | | | | | | | | |
| |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | |
| | For the Three Months Ended December 31, | | For the Year Ended December 31, |
ADJUSTED EBITDA: | | 2021 | | 2020 | | 2021 | | 2020 |
Net income (loss) | | $29,465 | | $13,360 | | $45,529 | | $14,877 |
Add-Back (Deduct): | | | �� | | | | | |
Depreciation and amortization | | 26,210 | | 15,396 | | 76,909 | | 60,687 |
Abandoned deal costs | | — | | — | | — | | 130 |
Casualty losses | | — | | 300 | | 359 | | 711 |
Interest expense | | 10,757 | | 8,872 | | 36,401 | | 36,488 |
Net loss on impairment (gain on sale) of real estate assets | | (76,179) | | (9,394) | | (87,671) | | (7,554) |
Loss on extinguishment of debt | | 10,261 | | — | | 10,261 | | — |
Merger and integration costs | | 41,787 | | — | | 47,063 | | — |
Adjusted EBITDA | | $42,301 | | $28,534 | | $128,851 | | $105,339 |
| | | | | | | | |
INTEREST COST: | | | | | | | | |
Interest expense | | $10,757 | | $8,872 | | $36,401 | | $36,488 |
| | | | | | | | |
INTEREST COVERAGE: | | 3.9x | | 3.2x | | 3.5x | | 2.9x |
| | | | | | | | |
| | | | | | | | |
16
SAME STORE PORTFOLIO NET OPERATING INCOME
TRAILING FIVE QUARTERS
Dollars in thousands, except per unit data
| | For the Three-Months Ended (a) |
| | December 31, 2021 | | September 30, 2021 | | June 30, 2021 | | March 31, 2021 | | December 31, 2020 |
Revenue: | | | | | | | | | | |
Rental and other property revenue | | $49,758 | | $48,942 | | $47,251 | | $45,574 | | $45,169 |
Property Operating Expenses: | | | | | | | | | | |
Real estate taxes | | 5,125 | | 5,384 | | 5,947 | | 5,871 | | 5,486 |
Property insurance | | 1,019 | | 1,107 | | 1,078 | | 1,036 | | 1,039 |
Personnel expenses | | 4,192 | | 4,434 | | 4,197 | | 3,876 | | 3,965 |
Utilities | | 2,569 | | 2,584 | | 2,270 | | 2,509 | | 2,320 |
Repairs and maintenance | | 1,405 | | 2,124 | | 1,996 | | 1,431 | | 1,353 |
Contract services | | 1,771 | | 1,894 | | 1,895 | | 1,776 | | 1,758 |
Advertising expenses | | 447 | | 474 | | 488 | | 453 | | 407 |
Other expenses | | 568 | | 491 | | 518 | | 496 | | 471 |
Total property operating expenses | | 17,096 | | 18,492 | | 18,389 | | 17,448 | | 16,799 |
Same-store net operating income (a) | | $32,662 | | $30,450 | | $28,862 | | $28,126 | | $28,370 |
Same-store NOI margin | | 65.6% | | 62.2% | | 61.1% | | 61.7% | | 62.8% |
Average occupancy | | 95.7% | | 96.0% | | 95.9% | | 95.1% | | 94.8% |
Average effective monthly rent, per unit | | $1,266 | | $1,227 | | $1,183 | | $1,161 | | $1,154 |
Reconciliation of same-store net operating income to net income (loss) | | | | | | | | | | |
Same-store net operating income | | $32,662 | | $30,450 | | $28,862 | | $28,126 | | $28,370 |
Non same-store net operating income | | 17,189 | | 6,978 | | 6,126 | | 5,847 | | 5,415 |
Other revenue | | 113 | | 188 | | 158 | | 301 | | 165 |
Property management expenses | | (3,221) | | (2,199) | | (2,176) | | (1,943) | | (2,183) |
General and administrative expenses | | (4,442) | | (3,985) | | (4,241) | | (5,942) | | (3,233) |
Depreciation and amortization expense | | (26,210) | | (17,384) | | (16,763) | | (16,552) | | (15,396) |
Casualty losses | | — | | — | | — | | (359) | | (300) |
Interest expense | | (10,757) | | (8,700) | | (8,559) | | (8,385) | | (8,872) |
Gain on sale (loss on impairment) of real estate assets, net | | 76,179 | | 11,492 | | — | | — | | 9,394 |
Loss on extinguishment of debt | | (10,261) | | — | | — | | — | | — |
Merger and integration costs | | (41,787) | | (5,276) | | — | | — | | — |
Net income (loss) | | $29,465 | | $11,564 | | $3,407 | | $1,093 | | $13,360 |
(a) | Same store portfolio consists of 47 properties, which represent 12,838 units. |
17
SAME STORE PORTFOLIO NET OPERATING INCOME
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2021 and 2020
Dollars in thousands, except per unit data
| | For the Three Months Ended December 31, | | For the Year Ended December 31, |
| | 2021 | | 2020 | | % change | | 2021 | | 2020 | | % change |
Revenue: | | | | | | | | | | | |
Rental and other property revenue | | $49,758 | | $45,169 | | 10.2% | | $191,525 | | $176,651 | | 8.4% |
Property Operating Expenses: | | | | | | | | | | | |
Real estate taxes | | 5,125 | | 5,486 | | -6.6% | | 22,327 | | 22,780 | | -2.0% |
Property insurance | | 1,019 | | 1,039 | | -1.9% | | 4,240 | | 3,869 | | 9.6% |
Personnel expenses | | 4,192 | | 3,965 | | 5.7% | | 16,699 | | 16,082 | | 3.8% |
Utilities | | 2,569 | | 2,320 | | 10.7% | | 9,932 | | 9,418 | | 5.5% |
Repairs and maintenance | | 1,405 | | 1,353 | | 3.8% | | 6,956 | | 5,995 | | 16.0% |
Contract services | | 1,771 | | 1,758 | | 0.7% | | 7,336 | | 7,011 | | 4.6% |
Advertising expenses | | 447 | | 407 | | 9.8% | | 1,862 | | 1,789 | | 4.1% |
Other expenses | | 568 | | 471 | | 20.6% | | 2,073 | | 1,897 | | 9.3% |
Total property operating expenses | | 17,096 | | 16,799 | | 1.8% | | 71,425 | | 68,841 | | 3.8% |
Same-store net operating income (a) | | $32,662 | | $28,370 | | 15.1% | | $120,100 | | $107,810 | | 11.4% |
Same-store NOI margin | | 65.6% | | 62.8% | | 2.8% | | 62.7% | | 61.0% | | 1.7% |
Average occupancy | | 95.7% | | 94.8% | | 0.9% | | 95.7% | | 93.4% | | 2.3% |
Average effective monthly rent, per unit | | $1,266 | | $1,154 | | 9.7% | | $1,209 | | $1,142 | | 5.9% |
Reconciliation of same-store net operating income to net income (loss) | | | | | | | | | | | | |
Same-store portfolio net operating income | | $32,662 | | $28,370 | | | | $120,100 | | $107,810 | | |
Non same-store net operating income | | 17,189 | | 5,415 | | | | 36,140 | | 20,379 | | |
Other revenue | | 113 | | 165 | | | | 760 | | 739 | | |
Property management expenses | | (3,221) | | (2,183) | | | | (9,539) | | (8,494) | | |
General and administrative expenses | | (4,442) | | (3,233) | | | | (18,610) | | (15,095) | | |
Depreciation and amortization expense | | (26,210) | | (15,396) | | | | (76,909) | | (60,687) | | |
Abandoned deal costs | | — | | — | | | | — | | (130) | | |
Casualty losses | | — | | (300) | | | | (359) | | (711) | | |
Interest expense | | (10,757) | | (8,872) | | | | (36,401) | | (36,488) | | |
Gain on sale (loss on impairment) of real estate assets, net | | 76,179 | | 9,394 | | | | 87,671 | | 7,554 | | |
Loss on extinguishment of debt | | (10,261) | | — | | | | (10,261) | | — | | |
Merger and integration costs | | (41,787) | | — | | | | (47,063) | | — | | |
Net income (loss) | | $29,465 | | $13,360 | | | | $45,529 | | $14,877 | | |
(a) | Same store portfolio consists of 47 properties, which represent 12,838 units. |
18
NET OPERATING INCOME (NOI) BRIDGE
TRAILING FIVE QUARTERS
Dollars in thousands
| | For the Three-Months Ended |
| | December 31, 2021 | | September 30, 2021 | | June 30, 2021 | | March 31, 2021 | | December 31, 2020 |
Rental and other property revenue | | | | | | | | | | |
Same store (a) | | $49,758 | | $48,942 | | $47,251 | | $45,574 | | $45,169 |
Non same-store | | 27,045 | | 11,650 | | 10,035 | | 9,237 | | 8,754 |
Total rental and other property revenue | | 76,803 | | 60,592 | | 57,286 | | 54,811 | | 53,923 |
Property operating expenses | | | | | | | | | | |
Same store (a) | | 17,096 | | 18,492 | | 18,389 | | 17,448 | | 16,799 |
Non same-store | | 9,856 | | 4,672 | | 3,909 | | 3,390 | | 3,339 |
Total property operating expenses | | 26,952 | | 23,164 | | 22,298 | | 20,838 | | 20,138 |
Net operating income | | | | | | | | | | |
Same-store (a) | | 32,662 | | 30,450 | | 28,862 | | 28,126 | | 28,370 |
Non same-store | | 17,189 | | 6,978 | | 6,126 | | 5,847 | | 5,415 |
Total property net operating income | | $49,851 | | $37,428 | | $34,988 | | $33,973 | | $33,785 |
Reconciliation of NOI to net income (loss) | | | | | | | | | | |
Total property net operating income | | $49,851 | | $37,428 | | $34,988 | | $33,973 | | $33,785 |
Other revenue | | 113 | | 188 | | 158 | | 301 | | 165 |
Property management expenses | | (3,221) | | (2,199) | | (2,176) | | (1,943) | | (2,183) |
General and administrative expenses | | (4,442) | | (3,985) | | (4,241) | | (5,942) | | (3,233) |
Depreciation and amortization expense | | (26,210) | | (17,384) | | (16,763) | | (16,552) | | (15,396) |
Casualty losses | | — | | — | | — | | (359) | | (300) |
Interest expense | | (10,757) | | (8,700) | | (8,559) | | (8,385) | | (8,872) |
Gain on sale (loss on impairment) of real estate assets, net | | 76,179 | | 11,492 | | — | | — | | 9,394 |
Loss on extinguishment of debt | | (10,261) | | — | | — | | — | | — |
Merger and integration costs | | (41,787) | | (5,276) | | — | | — | | — |
Net income (loss) | | $29,465 | | $11,564 | | $3,407 | | $1,093 | | $13,360 |
(a) | Same store portfolio consists of 47 properties, which represent 12,838 units. |
19
SAME-STORE PORTFOLIO NET OPERATING INCOME BY MARKET
THREE MONTHS ENDED DECEMBER 31, 2021
Dollars in thousands, except rent per unit
| | | | | | Rental and Other Property Revenue | | Property Operating Expenses | | Net Operating Income | | Average Occupancy | | Average Effective Monthly Rent per Unit | |
Market | | Number of Properties | | Units | | 2021 | | 2020 | | % Change | | 2021 | | 2020 | | % Change | | 2021 | | 2020 | | % Change | | 2021 | | 2020 | | % Change | | 2021 | | 2020 | | % Change |
Raleigh - Durham, NC | | 6 | | 1,690 | | $6,690 | | $6,291 | | 6.3% | | $2,160 | | $2,167 | | -0.3% | | $4,530 | | $4,124 | | 9.8% | | 95.4% | | 95.7% | | -0.3% | | $1,302 | | $1,197 | | 8.8% |
Atlanta, GA | | 4 | | 1,348 | | 5,778 | | 5,165 | | 11.9% | | 1,799 | | 1,663 | | 8.2% | | 3,979 | | 3,502 | | 13.6% | | 96.7% | | 95.8% | | 0.9% | | 1,410 | | 1,260 | | 11.9% |
Columbus, OH | | 6 | | 1,547 | | 5,485 | | 4,941 | | 11.0% | | 1,624 | | 1,942 | | -16.4% | | 3,861 | | 2,999 | | 28.7% | | 96.0% | | 93.1% | | 3.0% | | 1,173 | | 1,076 | | 9.0% |
Memphis, TN | | 4 | | 1,383 | | 5,517 | | 5,081 | | 8.6% | | 1,748 | | 1,715 | | 1.9% | | 3,769 | | 3,366 | | 12.0% | | 94.5% | | 96.1% | | -1.6% | | 1,344 | | 1,193 | | 12.7% |
Louisville, KY | | 5 | | 1,550 | | 5,300 | | 4,758 | | 11.4% | | 2,193 | | 2,091 | | 4.9% | | 3,107 | | 2,667 | | 16.5% | | 92.7% | | 89.9% | | 2.7% | | 1,096 | | 1,015 | | 8.0% |
Tampa-St. Petersburg, FL | | 4 | | 1,104 | | 4,897 | | 4,231 | | 15.7% | | 1,880 | | 1,761 | | 6.8% | | 3,017 | | 2,470 | | 22.1% | | 95.6% | | 94.6% | | 1.0% | | 1,464 | | 1,307 | | 12.0% |
Dallas, TX | | 3 | | 734 | | 2,989 | | 2,722 | | 9.8% | | 1,146 | | 1,114 | | 2.9% | | 1,843 | | 1,608 | | 14.6% | | 98.3% | | 95.0% | | 3.4% | | 1,326 | | 1,217 | | 9.0% |
Indianapolis, IN | | 3 | | 700 | | 2,671 | | 2,451 | | 9.0% | | 1,003 | | 945 | | 6.1% | | 1,668 | | 1,506 | | 10.8% | | 95.7% | | 96.7% | | -1.0% | | 1,232 | | 1,108 | | 11.1% |
Myrtle Beach, SC - Wilmington, NC | | 3 | | 628 | | 2,245 | | 1,968 | | 14.1% | | 596 | | 627 | | -4.9% | | 1,649 | | 1,341 | | 23.0% | | 97.4% | | 94.8% | | 2.6% | | 1,164 | | 1,052 | | 10.6% |
Charleston, SC | | 2 | | 518 | | 2,286 | | 2,131 | | 7.3% | | 1,008 | | 916 | | 10.0% | | 1,278 | | 1,215 | | 5.2% | | 95.7% | | 95.8% | | -0.1% | | 1,375 | | 1,310 | | 4.9% |
Oklahoma City, OK | | 3 | | 701 | | 1,793 | | 1,654 | | 8.4% | | 645 | | 633 | | 1.9% | | 1,148 | | 1,021 | | 12.4% | | 97.0% | | 97.6% | | -0.7% | | 814 | | 758 | | 7.5% |
Orlando, FL | | 1 | | 297 | | 1,392 | | 1,299 | | 7.2% | | 506 | | 473 | | 7.0% | | 886 | | 826 | | 7.3% | | 96.7% | | 96.1% | | 0.6% | | 1,524 | | 1,446 | | 5.4% |
Charlotte, NC | | 1 | | 208 | | 1,078 | | 1,007 | | 7.1% | | 330 | | 311 | | 6.1% | | 748 | | 696 | | 7.5% | | 97.9% | | 96.5% | | 1.4% | | 1,606 | | 1,489 | | 7.9% |
Asheville, NC | | 1 | | 252 | | 966 | | 857 | | 12.7% | | 267 | | 249 | | 7.2% | | 699 | | 608 | | 15.0% | | 98.5% | | 95.5% | | 3.0% | | 1,244 | | 1,137 | | 9.4% |
Huntsville, AL | | 1 | | 178 | | 671 | | 613 | | 9.5% | | 191 | | 192 | | -0.5% | | 480 | | 421 | | 14.0% | | 97.4% | | 98.3% | | -0.9% | | 1,189 | | 1,071 | | 11.0% |
Total/Weighted Average | | 47 | | 12,838 | | 49,758 | | $45,169 | | 10.2% | | $17,096 | | $16,799 | | 1.8% | | $32,662 | | $28,370 | | 15.1% | | 95.7% | | 94.8% | | 0.9% | | $1,266 | | $1,154 | | 9.7% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
20
SAME-STORE PORTFOLIO NET OPERATING INCOME BY MARKET
TWELVE MONTHS ENDED DECEMBER 31, 2021
Dollars in thousands, except rent per unit
| | | | | | Rental and Other Property Revenue | | Property Operating Expenses | | Net Operating Income | | Average Occupancy | | Average Effective Monthly Rent per Unit | |
Market | | Number of Properties | | Units | | 2021 | | 2020 | | % Change | | 2021 | | 2020 | | % Change | | 2021 | | 2020 | | % Change | | 2021 | | 2020 | | % Change | | 2021 | | 2020 | | % Change |
Raleigh - Durham, NC | | 6 | | 1,690 | | $26,141 | | $24,722 | | 5.7% | | $8,689 | | $8,803 | | -1.3% | | $17,452 | | $15,919 | | 9.6% | | 95.7% | | 94.2% | | 1.5% | | $1,247 | | $1,190 | | 4.8% |
Atlanta, GA | | 4 | | 1,348 | | 22,132 | | 20,145 | | 9.9% | | 7,120 | | 6,786 | | 4.9% | | 15,012 | | 13,359 | | 12.4% | | 96.7% | | 94.6% | | 2.1% | | 1,336 | | 1,244 | | 7.4% |
Memphis, TN | | 4 | | 1,383 | | 21,438 | | 19,106 | | 12.2% | | 7,300 | | 7,088 | | 3.0% | | 14,138 | | 12,018 | | 17.6% | | 95.9% | | 92.0% | | 3.9% | | 1,272 | | 1,168 | | 8.9% |
Columbus, OH | | 6 | | 1,547 | | 20,919 | | 19,322 | | 8.3% | | 8,267 | | 8,639 | | -4.3% | | 12,652 | | 10,683 | | 18.4% | | 95.0% | | 93.2% | | 1.7% | | 1,121 | | 1,052 | | 6.6% |
Louisville, KY | | 5 | | 1,550 | | 20,414 | | 18,691 | | 9.2% | | 9,039 | | 8,118 | | 11.3% | | 11,375 | | 10,573 | | 7.6% | | 93.0% | | 89.0% | | 4.0% | | 1,053 | | 1,017 | | 3.6% |
Tampa-St. Petersburg, FL | | 4 | | 1,104 | | 18,521 | | 16,386 | | 13.0% | | 7,339 | | 6,850 | | 7.1% | | 11,182 | | 9,536 | | 17.3% | | 95.0% | | 91.9% | | 3.1% | | 1,384 | | 1,281 | | 8.0% |
Dallas, TX | | 3 | | 734 | | 11,470 | | 10,851 | | 5.7% | | 4,883 | | 4,645 | | 5.1% | | 6,587 | | 6,206 | | 6.1% | | 96.8% | | 95.2% | | 1.6% | | 1,271 | | 1,213 | | 4.8% |
Indianapolis, IN | | 3 | | 700 | | 10,224 | | 9,488 | | 7.8% | | 4,077 | | 3,796 | | 7.4% | | 6,147 | | 5,692 | | 8.0% | | 96.4% | | 95.9% | | 0.5% | | 1,171 | | 1,089 | | 7.6% |
Myrtle Beach, SC - Wilmington, NC | | 3 | | 628 | | 8,609 | | 7,735 | | 11.3% | | 2,693 | | 2,589 | | 4.0% | | 5,916 | | 5,146 | | 15.0% | | 95.9% | | 92.8% | | 3.2% | | 1,113 | | 1,042 | | 6.8% |
Charleston, SC | | 2 | | 518 | | 8,872 | | 8,541 | | 3.9% | | 3,901 | | 3,789 | | 3.0% | | 4,971 | | 4,752 | | 4.6% | | 95.8% | | 94.8% | | 1.0% | | 1,349 | | 1,312 | | 2.8% |
Oklahoma City, OK | | 3 | | 701 | | 6,938 | | 6,516 | | 6.5% | | 2,711 | | 2,535 | | 6.9% | | 4,227 | | 3,981 | | 6.2% | | 97.4% | | 96.7% | | 0.7% | | 784 | | 746 | | 5.1% |
Orlando, FL | | 1 | | 297 | | 5,392 | | 5,191 | | 3.9% | | 2,151 | | 1,999 | | 7.6% | | 3,241 | | 3,192 | | 1.5% | | 96.6% | | 95.1% | | 1.5% | | 1,477 | | 1,471 | | 0.4% |
Charlotte, NC | | 1 | | 208 | | 4,160 | | 4,050 | | 2.7% | | 1,320 | | 1,339 | | -1.4% | | 2,840 | | 2,711 | | 4.8% | | 96.3% | | 94.8% | | 1.5% | | 1,551 | | 1,512 | | 2.6% |
Asheville, NC | | 1 | | 252 | | 3,704 | | 3,489 | | 6.2% | | 1,111 | | 1,070 | | 3.8% | | 2,593 | | 2,419 | | 7.2% | | 98.1% | | 96.1% | | 2.0% | | 1,188 | | 1,145 | | 3.8% |
Huntsville, AL | | 1 | | 178 | | 2,591 | | 2,418 | | 7.2% | | 824 | | 795 | | 3.6% | | 1,767 | | 1,623 | | 8.9% | | 97.8% | | 97.9% | | -0.1% | | 1,133 | | 1,048 | | 8.1% |
Total/Weighted Average | | 47 | | 12,838 | | $191,525 | | $176,651 | | 8.4% | | $71,425 | | $68,841 | | 3.8% | | $120,100 | | $107,810 | | 11.4% | | 95.7% | | 93.4% | | 2.3% | | $1,209 | | $1,142 | | 5.9% |
21
TOTAL PORTFOLIO (1) NOI (2) EXPOSURE BY MARKET
Dollars in thousands, except rent per unit
| | | | | | | | | | For the Three Months Ended December 31, 2021 |
Market | | Number of Properties | | Units | | Gross Real Estate Assets | | Period End Occupancy | | Average Effective Monthly Rent per Unit | | Net Operating Income (2) | | % of NOI |
Atlanta, GA | | 13 | | 5,180 | | $1,047,607 | | 95.4% | | $1,422 | | $15,791 | | 16.5% |
Dallas, TX | | 14 | | 4,007 | | 841,560 | | 96.5% | | 1,580 | | 11,446 | | 12.0% |
Denver, CO (3) | | 9 | | 2,292 | | 601,124 | | 95.4% | | 1,526 | | 7,242 | | 7.6% |
Columbus, OH | | 10 | | 2,510 | | 358,637 | | 96.1% | | 1,223 | | 6,231 | | 6.5% |
Indianapolis, IN | | 8 | | 2,256 | | 320,335 | | 95.7% | | 1,160 | | 5,125 | | 5.4% |
Oklahoma City, OK | | 8 | | 2,147 | | 311,480 | | 95.7% | | 1,038 | | 4,666 | | 4.9% |
Raleigh - Durham, NC | | 6 | | 1,690 | | 251,364 | | 95.3% | | 1,302 | | 4,530 | | 4.7% |
Houston, TX | | 7 | | 1,932 | | 319,930 | | 95.8% | | 1,315 | | 4,428 | | 4.6% |
Nashville, TN | | 4 | | 1,412 | | 337,656 | | 95.8% | | 1,429 | | 4,391 | | 4.6% |
Memphis, TN | | 4 | | 1,383 | | 154,345 | | 94.6% | | 1,344 | | 3,769 | | 3.9% |
Louisville, KY | | 5 | | 1,550 | | 190,723 | | 93.7% | | 1,096 | | 3,493 | | 3.6% |
Tampa-St. Petersburg, FL | | 4 | | 1,104 | | 187,669 | | 94.7% | | 1,464 | | 3,017 | | 3.2% |
Birmingham, AL | | 2 | | 1,074 | | 230,944 | | 93.4% | | 1,356 | | 2,777 | | 2.9% |
Huntsville, AL | | 3 | | 873 | | 189,796 | | 96.0% | | 1,437 | | 2,705 | | 2.8% |
Lexington, KY | | 3 | | 886 | | 159,063 | | 96.4% | | 1,153 | | 1,867 | | 2.0% |
Cincinnati, OH | | 2 | | 542 | | 121,352 | | 98.9% | | 1,323 | | 1,666 | | 1.7% |
Myrtle Beach, SC - Wilmington, NC | | 3 | | 628 | | 66,152 | | 97.0% | | 1,164 | | 1,649 | | 1.7% |
Charlotte, NC | | 2 | | 480 | | 108,919 | | 97.1% | | 1,492 | | 1,488 | | 1.6% |
Greenville, SC | | 1 | | 702 | | 122,557 | | 94.4% | | 1,103 | | 1,289 | | 1.3% |
Charleston, SC | | 2 | | 518 | | 80,749 | | 95.3% | | 1,375 | | 1,278 | | 1.3% |
Chicago, IL | | 1 | | 374 | | 89,756 | | 94.1% | | 1,638 | | 1,188 | | 1.2% |
Orlando, FL | | 1 | | 297 | | 49,985 | | 97.0% | | 1,524 | | 886 | | 0.9% |
San Antonio, TX | | 1 | | 306 | | 56,947 | | 96.4% | | 1,413 | | 784 | | 0.8% |
Terra Haute, IN | | 1 | | 250 | | 45,767 | | 92.8% | | 1,376 | | 760 | | 0.8% |
Norfolk, VA | | 1 | | 183 | | 53,862 | | 96.2% | | 1,706 | | 758 | | 0.8% |
Asheville, NC | | 1 | | 252 | | 29,069 | | 97.2% | | 1,244 | | 699 | | 0.7% |
Austin, TX | | 1 | | 256 | | 54,336 | | 95.7% | | 1,534 | | 665 | | 0.7% |
Fort Wayne, IN | | 1 | | 222 | | 43,903 | | 94.1% | | 1,273 | | 584 | | 0.6% |
Chattanooga, TN | | 1 | | 192 | | 36,768 | | 97.4% | | 1,290 | | 554 | | 0.6% |
Total/Weighted Average | | 119 | | 35,498 | | $6,462,355 | | 95.6% | | $1,348 | | $95,726 | | 100.0% |
| | | | | | | | | | | | | | |
| (1) | Excludes assets classified as held for sale. |
| (2) | NOI for the three months ended December 31, 2021 includes pro forma adjustments to show a full quarter of operations for the properties acquired in the STAR Merger. |
| (3) | Includes properties in our Fort Collins, CO and Colorado Springs, CO markets. |
22
VALUE ADD SUMMARY
| | | | | | | | | | Renovation Costs per Unit (b) | | |
Property | Market | | Percentage Complete | | Total Units To Be Renovated | Units Complete | Units Leased | Rent Premium (a) | % Rent Increase | Interior | Exterior | Total | ROI - Interior Costs(c) | ROI - Total Costs (d) |
| | | | | | | | | | | | | | |
Ongoing | | | | | | | | | | | | | | |
Stonebridge Crossing | Memphis, TN | | 80.4% | | 500 | 402 | 387 | 151 | 17.4% | 10,697 | 1,131 | 11,829 | 16.9% | 15.3% |
The Commons at Canal Winchester | Columbus, OH | | 78.8% | | 264 | 208 | 190 | 217 | 24.2% | 10,859 | 402 | 11,261 | 24.0% | 23.1% |
Vantage at Hillsborough | Tampa-St. Petersburg, FL | | 77.3% | | 348 | 269 | 255 | 197 | 18.2% | 13,930 | 2,155 | 16,085 | 17.0% | 14.7% |
Avalon Oaks | Columbus, OH | | 70.6% | | 235 | 166 | 156 | 286 | 32.6% | 11,704 | 1,021 | 12,726 | 29.3% | 26.9% |
Lucerne | Tampa-St. Petersburg, FL | | 68.8% | | 276 | 190 | 184 | 252 | 21.7% | 13,396 | 634 | 14,030 | 22.6% | 21.6% |
Waterford Landing | Atlanta, GA | | 62.7% | | 260 | 163 | 151 | 182 | 16.3% | 8,977 | 685 | 9,662 | 24.4% | 22.6% |
North Park | Atlanta, GA | | 59.4% | | 224 | 133 | 128 | 195 | 17.6% | 8,319 | 268 | 8,587 | 28.1% | 27.2% |
Rocky Creek | Tampa-St. Petersburg, FL | | 38.6% | | 264 | 102 | 101 | 390 | 28.3% | 12,439 | 960 | 13,400 | 37.6% | 34.9% |
Walnut Hill | Memphis, TN | | 29.8% | | 362 | 108 | 95 | 463 | 43.7% | 13,058 | 807 | 13,864 | 42.6% | 40.1% |
Thornhill | Raleigh-Durham, NC | | 29.6% | | 318 | 94 | 70 | 167 | 13.8% | 13,729 | 1,046 | 14,775 | 14.6% | 13.5% |
Meadows | Louisville, KY | | 13.0% | | 400 | 52 | 38 | 189 | 20.0% | 10,193 | 415 | 10,608 | 22.2% | 21.4% |
Total/Weighted Average | | | 54.7% | | 3,451 | 1,887 | 1,755 | $225 | 21.9% | $11,574 | $904 | $12,477 | 23.4% | 21.7% |
| | | | | | | | | | | | | | |
Future 2022 Projects (e) | | | | | | | | | | | | | | |
Collier Park | Columbus, OH | | 0.0% | | 232 | 0 | 0 | - | 0.0% | - | - | - | 0.0% | 0.0% |
Bayview Club | Indianapolis, IN | | 0.0% | | 236 | 0 | 0 | - | 0.0% | - | - | - | 0.0% | 0.0% |
Augusta | Oklahoma City, OH | | 0.0% | | 197 | 0 | 0 | - | 0.0% | - | - | - | 0.0% | 0.0% |
Invitational | Oklahoma City, OH | | 0.0% | | 344 | 0 | 0 | - | 0.0% | - | - | - | 0.0% | 0.0% |
Fox Trails | Dallas, TX | | 0.0% | | 286 | 0 | 0 | - | 0.0% | - | - | - | 0.0% | 0.0% |
Total/Weighted Average | | | | | 1,295 | 0 | 0 | $- | 0.0% | $- | $- | $- | 0.0% | 0.0% |
| | | | | | | | | | | | | | |
Completed (f) | | | | | | | | | | | | | | |
The Village at Auburn | Raleigh-Durham, NC | | 99.1% | | 328 | 325 | 308 | 183 | 17.4% | 14,453 | 2,108 | 16,561 | 15.2% | 13.3% |
Pointe at Canyon Ridge | Atlanta, GA | | 89.7% | | 494 | 443 | 426 | 175 | 18.0% | 9,233 | 1,773 | 11,006 | 22.8% | 19.1% |
Oxmoor | Louisville, KY | | 90.0% | | 432 | 389 | 377 | 181 | 20.0% | 16,043 | 127 | 16,169 | 13.6% | 13.5% |
Jamestown | Louisville, KY | | 91.2% | | 296 | 270 | 282 | 278 | 33.5% | 15,732 | 5,161 | 20,893 | 21.2% | 16.0% |
Haverford | Louisville, KY | | 88.1% | | 160 | 141 | 141 | 103 | 12.0% | 5,639 | 798 | 6,437 | 21.9% | 19.2% |
Schirm Farms | Columbus, OH | | 87.5% | | 264 | 231 | 220 | 100 | 11.5% | 7,966 | 613 | 8,579 | 15.0% | 13.9% |
Arbors River Oaks | Memphis, TN | | 86.9% | | 191 | 166 | 162 | 253 | 20.6% | 11,507 | 561 | 12,068 | 26.4% | 25.1% |
Brunswick Point | Myrtle Beach, SC - Wilmington, NC | | 85.1% | | 288 | 245 | 235 | 64 | 6.3% | 6,998 | 56 | 7,054 | 11.0% | 10.9% |
Total/Weighted Average | | | 90.1% | | 2,453 | 2,210 | 2,151 | $179 | 18.3% | $11,563 | $1,386 | $12,949 | 18.5% | 16.6% |
| | | | | | | | | | | | | | |
Grand Total/Weighted Average | Current Total/Weighted Average | | | | 7,199 | 4,097 | 3,906 | $196 | 19.9% | $11,581 | $1,172 | $12,754 | 20.3% | 18.4% |
| | | | | | | | | | | | | | |
Sold Properties (g) | | | | | 652 | 575 | 533 | $169 | 14.9% | $10,313 | $3,495 | $13,808 | 19.7% | 14.7% |
PROJECT LIFE TO DATE AS OF DECEMBER 31, 2021
23
| (a) | The rent premium reflects the per unit per month difference between the rental rate on the renovated unit and the market rent for an unrenovated unit as of the date presented, as determined by management consistent with its customary rent-setting and evaluation procedures. |
| (b) | Includes all costs to renovate the interior units and make certain exterior renovations, including clubhouses and amenities. Interior costs per unit are based on units leased. Exterior costs per unit are based on total units at the community. Excludes overhead costs to support and manage the value add program as those costs relate to the entire program and cannot be allocated to individual projects. |
| (c) | Calculated using the rent premium per unit per month, multiplied by 12, divided by the interior renovation costs per unit. |
| (d) | Calculated using the rent premium per unit per month, multiplied by 12, divided by the total renovation costs per unit. |
| (e) | The Collier Park and Bayview Club projects commenced during Q1 2022 and we expect the other future projects to commence in mid-2022. |
| (f) | We consider value add projects completed when over 85% of the property’s units to be renovated have been completed. We continue to renovate remaining unrenovated units as leases expire until we complete 100% of the property’s units. |
| (g) | Includes the Crestmont and Creekside properties that were formerly a part of the value add program but were sold in December 2021. |
24
INVESTMENT AND DEVELOPMENT ACTIVITY
Dollars in thousands with respect to Contract Price and Price per Unit
| | | | | | | | | | | | |
| | | | | | | | | | | | |
2021 Acquisitions | | Market | | Units | | Acquisition Date | | Purchase Price | | Price per Unit | | Average Rent Per Unit |
Solis City Park | | Charlotte, NC | | 272 | | May 18, 2021 | | $66,544 | | $245 | | $1,374 |
Cyan at Craig Ranch | | Dallas, TX | | 322 | | June 8, 2021 | | 73,372 | | 228 | | 1,404 |
STAR Portfolio | | Various | | 21,394 | | December 16, 2021 | | 4,677,522 | | 219 | | 1,385 |
Total | | | | 21,988 | | | | $4,817,438 | | $219 | | $1,385 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
2021 Dispositions | | Location | | Units | | Disposition Date | | Sale Price | | Price per Unit | | Average Rent Per Unit |
Kings Landing | | St. Louis, MO | | 152 | | July 28, 2021 | | $40,100 | | $264 | | $1,457 |
Crestmont | | Atlanta, GA | | 228 | | December 13, 2021 | | 48,500 | | $213 | | 1,258 |
Creekside | | Atlanta, GA | | 444 | | December 16, 2021 | | 91,000 | | $205 | | 1,250 |
Total | | | | 824 | | | | $179,600 | | $218 | | $1,290 |
| | | | | | | | | | | | |
Assets Held for Sale as of December 31, 2021 | | Location | | Units | | Disposition Date |
Riverchase | | Indianapolis, IN | | 216 | | January 18, 2022 |
Heritage Park | | Oklahoma City, OK | | 453 | | February 2, 2022 |
Raindance | | Oklahoma City, OK | | 504 | | February 2, 2022 |
Haverford | | Louisville, KY | | 160 | | February 2, 2022 |
| | | | | | |
Total | | | | 1,333 | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | Projected | | Development Costs |
| | | | | | | | | | | | | | | | | | |
Real estate Under Development | | Location | | Planned Units | | Start Date | | Initial Occupancy Date | | Completion Date | | Stabilization Date | | Total Estimated | | Total through 12/31/21 | | Remaining |
Destination Arista | | Denver, CO | | 325 | | 3Q 2021 | | 2Q 2023 | | 4Q 2023 | | 1Q 2025 | | $102,200 | | $31,947 | | $70,253 |
Flatirons Apartments | | Denver, CO | | 296 | | 3Q 2022 | | 3Q 2024 | | 3Q 2024 | | 2Q 2026 | | 96,400 | | 9,830 | | 86,570 |
| | | | | | | | | | | | | | | | | | |
Total | | | | 621 | | | | | | | | | | $198,600 | | $41,777 | | $156,823 |
Investments in Unconsolidated Real Estate Entities | | Location | | Units | | Estimated Delivery Date | | Total Construction Budget | | Total Project Debt | | IRT Equity Interest in JV | | Total Expected IRT Investment | | Current IRT Investment |
Metropolis at Innsbrook | | Richmond, VA | | 402 | | 2Q 2023 | | $83,383 | | $64,000 | | 84.8% | | $16,430 | | $14,632 |
Views of Music City I & II / The Jackson | | Nashville, TN | | 504 | | 1Q 2022 | | 83,074 | | 54,275 | | 50.0% | | 14,400 | | 10,368 |
| | | | | | | | | | | | | | | | |
Total | | | | 906 | | | | $166,457 | | $118,275 | | | | $30,830 | | $24,999 |
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DEBT SUMMARY AS OF DECEMBER 31, 2021
Dollars in thousands
| | Amount | | Weighted Average Rate (d) | | Type | | Weighted Average Maturity (in years) | |
Debt: | | | | | | | | | |
Unsecured revolver (a) | | $277,003 | | 1.5% | | Floating | | 4.1 | |
Unsecured term loans (b) | | 500,000 | | 1.4% | | Floating | | 3.2 | |
Secured credit facilities (c) | | 635,128 | | 4.0% | | Floating/Fixed | | 6.9 | |
Mortgages | | 1,238,612 | | 3.9% | | Fixed | | 6.1 | |
Total Principal | | 2,650,743 | | 3.2% | | | | 5.6 | |
Loan premiums (discounts), net | | 71,586 | | | | | | | |
Unamortized deferred financing costs | | (16,993) | | | | | | | |
Total Debt | | 2,705,336 | | | | | | | |
Market Equity Capitalization, at period end | | 5,882,410 | | | | | | | |
Total Capitalization | | $8,587,746 | | | | | | | |
| (a) | Unsecured revolver total capacity is $500,000, of which $277,003 was drawn as of December 31, 2021. The maturity date of borrowings under the unsecured revolver is January 31, 2026. We repaid $147,500 of this facility in January and February 2022 using proceeds from asset sales. |
| (b) | Consisted of a (i) $200,000 unsecured term loan with a maturity date of January 17, 2024, a (ii) $100,000 unsecured term loan with a maturity date of November 20, 2024, and a (iii) $200,000 unsecured term loan with a maturity date of May 18, 2026. |
| (c) | Consists of a (i) $558,880 secured credit facility, three tranches of which, in an aggregate principal amount of $518,412, have a maturity date of August 1, 2028 and the fourth tranche of which, in the principal amount of $40,468, has a maturity date of March 1, 2030 and a (ii) $76,248 secured credit facility with a maturity date of July 1, 2030. |
| (d) | Represents the weighted average of the contractual interest rates in effect as of quarter-end without regard to any interest rate swaps or collars. Our total weighted average effective interest rate during the three months ended December 31, 2021, after giving effect to the impact of interest rate swaps and collars, was 3.3%. |
| (e) | As of December 31, 2021, we maintained the following hedges that have effectively fixed a portion of our floating rates debt. Fixed v. Floating percentage above includes impact of future starting swaps. |
Hedges: | | Notional | | Start | | End | | Swap Rate | | Floor Rate | | Cap Rate |
Collar | | $100,000 | | 11/17/2017 | | 11/17/2024 | | - | | 1.25% | | 2.00% |
Collar | | $150,000 | | 10/17/2018 | | 1/17/2024 | | - | | 2.25% | | 2.50% |
Swap | | $150,000 | | 6/17/2021 | | 6/17/2026 | | 2.1760% | | - | | - |
Forward starting swap | | $150,000 | | 5/17/2022 | | 5/17/2027 | | 0.9850% | | - | | - |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
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DEBT COVENANT AND UNENCUMBERED ASSET STATS AS OF DECEMBER 31, 2021
Dollars in thousands
Debt Covenant Summary (a) | Requirement | Actual | Compliance |
Consolidated leverage ratio | ≤ 60% | 35.7% | Yes |
Consolidated fixed charge coverage ratio | ≥ 1.5x | 3.3x | Yes |
Unsecured leverage ratio | ≤ 60% | 23.5% | Yes |
| (a) | For a complete listing of all debt covenants along with definitions of each covenant calculation see the Third Amended, Restated and Consolidated Credit Agreement, which is included as exhibit 10.1 of the Form 8-K filed on December 14, 2021. |
Encumbered & Unencumbered Statistics (1) | | | Total Units | | % of Total | | Gross Assets | | % of Total | | Proforma Q4 2021 NOI (2) | | % of Total |
Unencumbered assets | | | 17,486 | | 49.3% | | $3,016,709 | | 44.9% | | $45,965 | | 48.0% |
Encumbered assets | | | 18,012 | | 50.7% | | 3,696,731 | | 55.1% | | 49,761 | | 52.0% |
| | | 35,498 | | 100.0% | | $6,713,440 | | 100.0% | | $95,726 | | 100.0% |
| (1) | Excludes assets classified as held for sale. |
| (2) | Net operating income was adjusted to present on a pro forma basis a full quarter of operations for the properties acquired in the STAR merger. |
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Definitions
Average Effective Monthly Rent per Unit
Average effective rent per unit represents the average of gross rent amounts, divided by the average occupancy (in units) for the period presented. We believe average effective rent is a helpful measurement in evaluating average pricing. This metric, when presented, reflects the average effective rent per month.
Average Occupancy
Average occupancy represents the average occupied units for the reporting period divided by the average of total units available for rent for the reporting period.
EBITDA and Adjusted EBITDA
Each of EBITDA and Adjusted EBITDA is a non-GAAP financial measure. EBITDA is defined as net income before interest expense including amortization of deferred financing costs, income tax expense, and depreciation and amortization expenses. Adjusted EBITDA is EBITDA before certain other non-cash or non-operating gains or losses related to items such as asset sales, debt extinguishments and acquisition related debt extinguishment expenses, casualty losses, and abandoned deal costs. We consider each of EBITDA and Adjusted EBITDA to be an appropriate supplemental measure of performance because it eliminates interest, income taxes, depreciation and amortization, and other non-cash or non-operating gains and losses, which permits investors to view income from operations without these non-cash or non-operating items. Our calculation of Adjusted EBITDA differs from the methodology used for calculating Adjusted EBITDA by certain other REITs and, accordingly, our Adjusted EBITDA may not be comparable to Adjusted EBITDA reported by other REITs.
Funds From Operations (“FFO”) and Core Funds From Operations (“CFFO”)
We believe that FFO and Core FFO (“CFFO”), each of which is a non-GAAP financial measure, are additional appropriate measures of the operating performance of a REIT and us in particular. We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), as net income or loss allocated to common shares (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, gains or losses on sales of real estate and the cumulative effect of changes in accounting principles. While our calculation of FFO is in accordance with NAREIT’s definition, it may differ from the methodology for calculating FFO utilized by other REITs and, accordingly, may not be comparable to FFO computations of such other REITs.
We updated our definition of CFFO during Q1 2021 to the definition described below. All prior periods have been adjusted to conform to the current CFFO definition.
CFFO is a computation made by analysts and investors to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations, including depreciation and amortization of other items not included in FFO, and other non-cash or non-operating gains or losses related to items such as merger and integration costs, casualty losses, abandoned deal costs and debt extinguishment costs from the determination of FFO.
Our calculation of CFFO may differ from the methodology used for calculating CFFO by other REITs and, accordingly, our CFFO may not be comparable to CFFO reported by other REITs. Our management utilizes FFO and CFFO as measures of our operating performance, and believe they are also useful to investors, because they facilitate an understanding of our operating performance after adjustment for certain non-cash or non-recurring items that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and our operating performance between periods. Furthermore, although FFO, CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we believe that FFO and CFFO may provide us and our investors with an additional useful measure to compare our financial performance to certain other REITs. Neither FFO nor CFFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and CFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Accordingly, FFO and CFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization and capital improvements. Neither FFO nor CFFO should be considered as an
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alternative to net income or any other GAAP measurement as an indicator of our operating performance or as an alternative to cash flow from operating, investing, and financing activities as a measure of our liquidity.
Interest Coverage
Interest coverage is a ratio computed by dividing Adjusted EBITDA by interest expense.
Net Debt
Net debt, a non-GAAP financial measure, equals total debt less cash and cash equivalents and loan premiums and discounts. The following table provides a reconciliation of total debt to net debt (Dollars in thousands).
We present net debt because management believes it is a useful measure of our credit position and progress toward reducing leverage. The calculation is limited because we may not always be able to use cash to repay debt on a dollar for dollar basis.
| As of |
| December 31, 2021 | | September 30, 2021 | | June 30, 2021 | | March 31, 2021 | | December 30, 2020 |
Total debt | $2,705,336 | | $1,018,729 | | $1,056,463 | | $947,631 | | $945,686 |
Less: cash and cash equivalents | (35,972) | | (8,720) | | (7,566) | | (8,653) | | (8,751) |
Less: loan discounts and premiums, net | (71,586) | | - | | - | | - | | - |
Total net debt | $2,597,778 | | $1,010,009 | | $1,048,897 | | $938,978 | | $936,935 |
| | | | | | | | | |
Net Operating Income
We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding depreciation and amortization, casualty related costs, property management expenses, general administrative expenses, interest expense, and net gains on sale of assets.
Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same store and non same store basis because NOI measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of our financial performance.
Same Store Properties and Same Store Portfolio
We review our same store portfolio at the beginning of each calendar year. Properties are added into the same store portfolio if they were owned at the beginning of the previous year. Properties that are held-for-sale or have been sold are excluded from the same store portfolio. We may also refer to the Same Store Portfolio as the IRT Same Store Portfolio.
STAR Same Store Portfolio
STAR Same Store Portfolio represents the STAR portfolio that would be part of the Same Store Portfolio had the STAR portfolio been owned by IRT since January 1, 2020 and assuming the actual purchase date for any properties owned by a STAR-related entity prior to STAR’s merger with Steadfast Income REIT, Inc. on March 6, 2020. Because these properties have only been owned by IRT since December 16, 2021, they are not included in the IRT Same Store Portfolio. Results for periods prior to December 16, 2021 have been adjusted for consistency with IRT accounting policies and classifications.
Combined Same Store Portfolio
Combined Same Store Portfolio represents the combination of the IRT Same Store Portfolio and the STAR Same Store Portfolio considered as a single portfolio.
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Total Gross Assets
| As of |
| December 31, 2021 | | September 30, 2021 | | June 30, 2021 | | March 31, 2021 | | December 30, 2020 |
Total assets | $6,506,696 | | $1,846,911 | | $1,875,122 | | $1,728,016 | | $1,734,897 |
Plus: accumulated depreciation (a) | 254,123 | | 247,563 | | 237,684 | | 223,187 | | 208,618 |
Plus: accumulated amortization | 24,829 | | 20,269 | | 20,215 | | 19,776 | | 19,380 |
Total gross assets | $6,785,648 | | $2,114,743 | | $2,133,021 | | $1,970,979 | | $1,962,895 |
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).
| (a) | Includes accumulated depreciation associated with real estate held for sale. |
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APPENDIX A
STAR MERGER IMPACT ON STATEMENTS OF OPERATIONS, FFO & CORE FFO
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2021
Dollars in thousands, except per share data
| | For the Three Months Ended December 31, 2021 | | For the Year Ended December 31, 2021 | |
| | IRT | STAR | Total | | IRT | STAR | Total | |
| | | | | | | | | |
Property revenue | | $61,218 | $15,585 | $76,803 | | $233,907 | $15,585 | $249,492 | |
Property operating expenses | | 20,940 | 6,012 | 26,952 | | 87,240 | 6,012 | 93,252 | |
Net operating income | | $40,278 | $9,573 | $49,851 | | $146,667 | $9,573 | $156,240 | |
| | | | | | | | | |
Other revenue | | 113 | — | 113 | | 760 | — | 760 | |
Property management expenses | | 2,498 | 723 | 3,221 | | 8,816 | 723 | 9,539 | |
General and administrative expenses | | 4,325 | 117 | 4,442 | | 18,493 | 117 | 18,610 | |
Depreciation and amortization expense | | 16,643 | 9,567 | 26,210 | | 67,342 | 9,567 | 76,909 | |
Casualty losses | | — | — | — | | 359 | — | 359 | |
Interest expense | | 8,126 | 2,631 | 10,757 | | 33,770 | 2,631 | 36,401 | |
Loss on impairment (gain on sale) of real estate assets, net | | (76,179) | — | (76,179) | | (87,671) | — | (87,671) | |
Loss on extinguishment of debt | | 10,261 | — | 10,261 | | 10,261 | — | 10,261 | |
Merger and integration costs | | 41,787 | — | 41,787 | | 47,063 | — | 47,063 | |
Net income (loss) | | 32,930 | (3,465) | 29,465 | | 48,994 | (3,465) | 45,529 | |
(Income) loss allocated to noncontrolling interests | | (850) | — | (850) | | (940) | — | (940) | |
Net income (loss) available to common shares | | $32,080 | $(3,465) | $28,615 | | $48,054 | $(3,465) | $44,589 | |
EPS - basic | | $0.30 | ($0.07) | $0.23 | | $0.46 | ($0.05) | $0.41 | |
Weighted-average shares outstanding - Basic | | 108,071,107 | 17,304,587 | 125,375,694 | | 104,190,480 | 4,361,704 | 108,552,185 | |
EPS - diluted | | $0.29 | ($0.06) | $0.23 | | $0.46 | ($0.05) | $0.41 | |
Weighted-average shares outstanding - Diluted | | 109,370,964 | 17,304,587 | 126,675,551 | | 105,469,816 | 4,361,704 | 109,831,520 | |
| | | | | | | | | |
Funds From Operations (FFO): | | | | | | | | | |
Net Income (loss) | | $32,930 | $(3,465) | $29,465 | | $48,994 | $(3,465) | $45,529 | |
Adjustments: | | | | | | | | | |
Real estate depreciation and amortization | | 16,504 | 9,564 | 26,068 | | 66,923 | 9,564 | 76,487 | |
Loss on impairment (gain on sale) of real estate assets, net, excluding debt extinguishment costs | | (78,490) | — | (78,490) | | (90,277) | — | (90,277) | |
Funds From Operations | | $(29,056) | $6,099 | $(22,957) | | $25,640 | $6,099 | $31,739 | |
FFO per share | | $(0.27) | $0.09 | $(0.18) | | $0.25 | $0.04 | $0.29 | |
Core Funds From Operations (CFFO): (a) | | | | | | | | | |
Funds From Operations | | $(29,056) | $6,099 | $(22,957) | | $25,640 | $6,099 | $31,739 | |
Adjustments: | | | | | | | | | |
Other depreciation and amortization | | 139 | 3 | 142 | | 420 | 3 | 423 | |
Casualty losses | | — | — | — | | 359 | — | 359 | |
Loan (premium accretion) discount amortization | | — | (501) | (501) | | — | (501) | (501) | |
Prepayment penalties on asset dispositions | | 2,312 | — | 2,312 | | 2,607 | — | 2,607 | |
Loss on extinguishment of debt | | 10,261 | — | 10,261 | | 10,261 | — | 10,261 | |
Merger and integration costs | | 41,787 | — | 41,787 | | 47,063 | — | 47,063 | |
Core Funds From Operations | | $25,443 | $5,601 | $31,044 | | $86,350 | $5,601 | $91,951 | |
CFFO per share | | $0.23 | $0.01 | $0.24 | | $0.83 | $0.01 | $0.84 | |
Weighted-average shares and units outstanding | | 108,623,467 | 18,422,758 | 127,046,225 | | 104,625,266 | 4,793,544 | 109,418,810 | |
| | | | | | | | | |
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APPENDIX B
2022 PRO FORMA COMBINED SAME STORE PORTFOLIO NET OPERATING INCOME
TRAILING FOUR QUARTERS
Dollars in thousands, except per unit data
| | | | | | | | | |
| For the Three-Months Ended (a) |
| December 31, | | September 30, | | June 30, | | March 31, | | Total |
| 2021 | | 2021 | | 2021 | | 2021 | | 2021 |
Revenue: | | | | | | | | | |
Rental and other property revenue | $140,929 | | $138,795 | | $133,672 | | $129,699 | | $543,095 |
Property Operating Expenses: | | | | | | | | | |
Real estate taxes | 16,714 | | 16,397 | | 19,168 | | 18,393 | | 70,672 |
Property insurance | 3,056 | | 3,223 | | 2,761 | | 2,707 | | 11,747 |
Personnel expenses | 12,410 | | 12,274 | | 11,939 | | 11,645 | | 48,268 |
Utilities | 7,227 | | 7,406 | | 6,858 | | 7,354 | | 28,845 |
Repairs and maintenance | 5,477 | | 5,643 | | 4,758 | | 4,424 | | 20,302 |
Contract services | 4,756 | | 4,909 | | 4,749 | | 4,390 | | 18,804 |
Advertising expenses | 1,346 | | 1,359 | | 1,335 | | 1,282 | | 5,322 |
Other expenses | 1,542 | | 1,525 | | 1,567 | | 1,637 | | 6,271 |
Total property operating expenses | 52,528 | | 52,736 | | 53,135 | | 51,832 | | 210,231 |
Combined same-store net operating income | $88,401 | | $86,059 | | $80,537 | | $77,867 | | $332,864 |
Combined same-store NOI margin | 62.7% | | 62.0% | | 60.2% | | 60.0% | | 61.3% |
Average occupancy | 96.0% | | 96.5% | | 96.1% | | 95.2% | | 96.0% |
Average effective monthly rent, per unit | $1,339 | | $1,298 | | $1,254 | | $1,237 | | $1,282 |
Combined Same-store net operating income | $88,401 | | $86,059 | | $80,537 | | $77,867 | | $332,864 |
Combined Non Same-Store net operating income | 7,958 | | 6,978 | | 6,126 | | 5,847 | | 5,415 |
Pre-STAR Merger Combined Same-Store net operating income (b) | (46,508) | | (55,609) | | (51,675) | | (49,741) | | (182,039) |
Other revenue | 113 | | 188 | | 158 | | 301 | | 760 |
Property management expenses | (3,221) | | (2,199) | | (2,176) | | (1,943) | | (9,539) |
General and administrative expenses | (4,442) | | (3,985) | | (4,241) | | (5,942) | | (18,610) |
Depreciation and amortization expense | (26,210) | | (17,384) | | (16,763) | | (16,552) | | (76,909) |
Casualty losses | — | | — | | — | | (359) | | (359) |
Interest expense | (10,757) | | (8,700) | | (8,559) | | (8,385) | | (36,401) |
Gain on sale (loss on impairment) of real estate assets, net | 76,179 | | 11,492 | | — | | — | | 87,671 |
Loss on extinguishment of debt | (10,261) | | — | | — | | — | | (10,261) |
Merger and integration costs | (41,787) | | (5,276) | | — | | — | | (47,063) |
Net income as presented | $29,465 | | $11,564 | | $3,407 | | $1,093 | | $45,529 |
(a) | Combined Same Store Portfolio consists of 115 properties, which represent 34,454 units. This is the Combined Same Store Portfolio expected on a pro forma basis as of January 1, 2022. |
(b) | Amounts presented represent the operating results for STAR properties prior to the STAR merger that have been included in Combined same store net operating income. Prior year results have been adjusted for consistency with IRT accounting policies to facilitate year over-year comparisons. |
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