PHILADELPHIA--(BUSINESS WIRE)--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
Full Year Highlights
2022 Guidance Highlights
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 Comparedto Fourth Quarter 2020(1)
Full Year 2021 Compared toFull 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 Comparedto Fourth Quarter 2020(1)
Full Year 2021 Compared toFull 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.
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. Weve included two new appendices this quarter. Appendix A shows the impact of consolidating STARs 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
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