INDEPENDENCE REALTY TRUST, INC. - Quarter Report: 2024 June (Form 10-Q)

) ) — — — ) — — — )— ()— — ()— () $ $ $ $()$ $ $ Investments in unconsolidated real estate entities()()Disposition of real estate properties, net Capital expenditures()()Real estate development expenditures()()Proceeds from insurance claims Cash flow provided by (used in) investing activities ()Cash flows from financing activities:Proceeds from unsecured credit facility and term loans Unsecured credit facility, secured credit facility and term loan repayments()()Mortgage principal repayments and payoffs()()Costs associated with debt payoffs() Payments for deferred financing costs()()Distributions on common stock()()Distributions to noncontrolling interests()()Repurchase of shares related to equity award tax withholding()() Costs from issuance of common stock, net()()Cash flow used in financing activities()()Net change in cash and cash equivalents, and restricted cash()()Cash and cash equivalents, and restricted cash, beginning of period Cash and cash equivalents, and restricted cash, end of the period$ $ Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Balance SheetsCash and cash equivalents$ $ Restricted cash Total cash, cash equivalents, and restricted cash, end of period$ $

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

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Independence Realty Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited and dollars in thousands, except share and per share data)

(unaudited) multifamily apartment properties (including owned through a consolidated joint venture) that contain an aggregate of (unaudited) units across non-gateway U.S. markets, including Atlanta, Columbus, Dallas, Denver, Houston, Indianapolis, Nashville, Oklahoma City, Raleigh-Durham, and Tampa. In addition, as of June 30, 2024, we owned investments in real estate under development in Denver, Colorado that will, upon completion, contain an aggregate of (unaudited) units. As of June 30, 2024, we also owned interests in unconsolidated joint ventures, of which own and operate multifamily apartment communities that contain an aggregate of (unaudited) units and of which are developing multifamily apartment properties that will, upon completion, contain an aggregate of (unaudited) units. We own all of our assets and conduct substantially all of our operations through Independence Realty Operating Partnership, LP, a Delaware limited partnership (“IROP”), of which we are the sole general partner.

As used herein, the terms “we,” “our,” and “us” refer to IRT and, as required by context, IROP and its subsidiaries.

No significant recognized or non-recognized subsequent events were noted other than those described in the footnotes.

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Independence Realty Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited and dollars in thousands, except share and per share data)

As of June 30, 2024 and December 31, 2023, we had $ and $, respectively, of restricted cash.

. During the three and six months ended June 30, 2024 and 2023, we did not acquire any in-place leases. For each of the three and six months ended June 30, 2024, we recorded $, and $, respectively, of amortization for intangible assets. For the three and six months ended June 30, 2023, we recorded $ and $, respectively, of amortization for intangible assets. For the three and six months ended June 30, 2024, we wrote-off fully amortized intangible assets of $ and $, respectively. For the three and six months ended June 30, 2023, we wrote-off fully amortized intangible assets of $ and $, respectively.

Business Combinations

For properties we acquire or transactions we enter into that are accounted for as business combinations, we apply the acquisition method of accounting under ASC 805, which requires the identification of the acquiror, the determination of the acquisition date, and the recognition and measurement, at fair value, of the assets acquired and liabilities assumed. To the extent that the fair value of net assets acquired differs from the fair value of consideration paid, ASC 805 requires the recognition of goodwill or a gain from a bargain purchase price, if any.

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Independence Realty Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited and dollars in thousands, except share and per share data)

and $, respectively, on account of real estate classified as held for sale and sold properties. For the three and six months ended June 30, 2023, we did incur an impairment charge.

Depreciation Expense

Depreciation expense for real estate assets is computed using a straight-line method based on a life of years for buildings and improvements and five to for furniture, fixtures, and equipment. For the three and six months ended June 30, 2024, we recorded $ and $ of depreciation expense, respectively. For the three and six months ended June 30, 2023, we recorded $ and $ of depreciation expense, respectively. During the three and six months ended June 30, 2024, we wrote-off fully depreciated fixed assets of $ and $, respectively. During the three and six months ended June 30, 2023, we wrote-off fully depreciated fixed assets of $ and $, respectively.

Casualty Related Costs

Occasionally, we incur losses at our communities from wind storms, floods, fires and similar hazards. Sometimes, a portion of these losses are not fully covered by our insurance policies due to deductibles. In these cases, we estimate the carrying value of the damaged property and record a casualty loss for the difference between the estimated carrying value and the insurance proceeds. Any amount of insurance recovery in excess of the amount of the losses incurred is considered a gain contingency and is recorded in casualty losses (gains), net when the proceeds are received. During the three and six months ended June 30, 2024, we recorded $ and $ of net casualty losses, respectively. During the three and six months ended June 30, 2023, we recorded $ and $ of net casualty losses, respectively.

For the three and six months ended June 30, 2024, we recorded $ and $, respectively, of capitalized interest expense on our investments in real estate under development. For the three and six months ended June 30, 2023, we recorded $ and $, respectively, of capitalized interest expense on our investments in real estate under development.

As of June 30, 2024 and December 31, 2023, the carrying value of our investments in real estate under development in Denver, Colorado totaled $ and $, respectively, net of $ and $ placed in service, respectively, and was recorded as a separate line item in our condensed consolidated balance sheets.

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Independence Realty Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited and dollars in thousands, except share and per share data)

investments in unconsolidated real estate entities and concluded that each investment is a voting interest entity. Our equity interest varies for each of our investments in unconsolidated real estate entities between % to % but, in each case, we share control of the major decisions that most significantly impact the joint ventures with our partners. Since we do not control the joint venture through our ownership interest, they are accounted for under the equity method of accounting, and are included in investments in unconsolidated real estate entities on the condensed consolidated balance sheets. Under the equity method of accounting, the investments are carried at cost plus our share of net earnings or losses. For the three and six months ended June 30, 2024, we recorded $ and $, respectively, of capitalized interest expense on our investments in unconsolidated real estate entities in our condensed consolidated balance sheets. For the three and six months ended June 30, 2023, we recorded $ and $, respectively, of capitalized interest expense on our investments in unconsolidated real estate entities in our condensed consolidated balance sheets.

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Independence Realty Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited and dollars in thousands, except share and per share data)

There were no transfers between levels in the fair value hierarchy for the six months ended June 30, 2024.

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Independence Realty Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited and dollars in thousands, except share and per share data)

$ $ $ Restricted cash Derivative assets LiabilitiesDebt:Unsecured Revolver Unsecured Term loans Secured credit facilities Mortgages (1)

(1)Includes indebtedness secured by real estate held for sale.

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Independence Realty Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited and dollars in thousands, except share and per share data)

$()$ $ Floating%%Unsecured term loans () Floating%%Secured credit facilities () Floating/Fixed%%Mortgages (2) () Fixed%%Total Consolidated Debt$ $()$ $ %%

(1)The unsecured revolver total capacity was $, of which $ was outstanding as of December 31, 2023.

(2)Includes indebtedness secured by real estate held for sale of $.

(3)Represents the weighted average of the contractual interest rates in effect as of year-end December 31, 2023, without regard to any interest rate swaps or collars.

(4)Represents the total weighted average effective interest rates for the full year ended December 31, 2023, after giving effect to all components of interest expense including the impact of interest rate swaps and collars, but excluding the impact of loan premium amortization, discount accretion, and interest capitalization.

As of June 30, 2024, we were in compliance with all financial covenants contained in our consolidated indebtedness.

$ $ $ $ $ Interest rate collars Forward interest rate collars Total$ $ $ $ $

Effective interest rate swaps and caps are reported in accumulated other comprehensive income, and the fair value of these hedge agreements is recorded as derivative assets or liabilities on the face of our condensed consolidated balance sheets.

For our interest rate swaps and collars that are considered highly effective hedges, we reclassified realized gains of $ and $ to earnings within interest expense for the three and six months ended June 30, 2024, and we expect gains of $ to be reclassified out of accumulated other comprehensive income to earnings over the next 12 months.

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Independence Realty Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited and dollars in thousands, except share and per share data)

and $ to earnings within interest expense.

per share on our common stock, which was paid on July 19, 2024 to common stockholders of record as of June 28, 2024.

On March 11, 2024, our board of directors declared a dividend of $ per share on our common stock, which was paid on April 19, 2024 to common stockholders of record as of March 29, 2024.

On May 18, 2022, our board of directors authorized a common stock repurchase program (the "Stock Repurchase Program") covering up to $ in shares of our common stock. Under the Stock Repurchase Program, we, in our discretion, may purchase our shares from time to time in the open market or in privately negotiated transactions. The amount and timing of the purchases will depend on a number of factors, including the price and availability of our shares, trading volumes and general market conditions. The Stock Repurchase Program has no time limit and may be suspended or discontinued at any time. During the three and six months ended June 30, 2024, and 2023, we had repurchases of shares under the Stock Repurchase Program. As of June 30, 2024, we had $ in shares of our common stock remaining authorized for purchase under the Stock Repurchase Program.

On June 14, 2023, we replaced our previous shelf registration statement with our new shelf registration statement. On July 28, 2023, we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock under our shelf registration statement having an aggregate offering price of up to $ (the “ATM Program”) in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). Under the ATM Program, we may also enter into one or more forward sale transactions for the sale of shares of our common stock on a forward basis. There were no forward sale transactions as of June 30, 2024, and shares of our common stock were sold under the ATM Program during the three and six months ended June 30, 2024.

Noncontrolling Interest

During the six months ended June 30, 2024, holders of IROP units exchanged units for shares of our common stock. As of June 30, 2024, IROP units held by unaffiliated third parties remain outstanding.

On June 10, 2024, our board of directors declared a dividend of $ per IROP unit, which was paid on July 19, 2024 to IROP unit holders of record as of June 28, 2024.

On March 11, 2024, our board of directors declared a dividend of $ per IROP unit, which was paid on April 19, 2024 to IROP unit holders of record as of March 29, 2024.

shares of our common stock (plus up to an additional shares of our common stock, to the extent that shares subject to outstanding awards under the Prior Plan are recycled into the 2022 Incentive Plan) may be

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Independence Realty Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited and dollars in thousands, except share and per share data)

period. In addition, we have granted unrestricted shares to our non-employee directors. These awards generally vest or vested immediately. $ Granted Vested() Forfeited()

Balance, June 30,(1)


(1)			The outstanding award balances above include and RSUs as of June 30, 2024 and December 31, 2023, respectively.

On February 26, 2024, our compensation committee awarded performance share units (“PSUs”) (measured at target) to our executive officers. The number of PSUs earned will be based on attainment of certain performance criteria over a period, with the actual number of shares issuable ranging between % and % of the target number of PSUs granted. Half of any PSUs earned will vest, and shares will be issued in respect thereof, immediately following the end of the performance period; the remaining half of any PSUs earned will vest, and shares will be issued in respect thereof, after an additional period of service.

During the six months ended June 30, 2024 and 2023, a portion of the RSUs and PSUs granted were issued to employees who are retirement eligible. The fact that the grantees are retirement eligible resulted in immediate recognition of the associated stock-based compensation expense totaling $ and $, respectively.

$ $ $ Income allocated to noncontrolling interest()()()()Net income allocable to common shares$ $ $ $ Weighted-average shares outstanding—Basic Weighted-average shares outstanding—Diluted Earnings per share—Basic$ $ $ $ Earnings per share—Diluted$ $ $ $

Certain IROP units, RSUs and restricted stocks awards were excluded from the earnings per share computation because their effect would have been anti-dilutive, totaling and for the three and six months ended June 30, 2024. Certain IROP units were excluded from the earnings per share computation because their effect would have been anti-dilutive, totaling and for the three and six months ended June 30, 2023, respectively.

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Independence Realty Trust, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited and dollars in thousands, except share and per share data)

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

Forward-Looking Statements

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

Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements.

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act. Such forward-looking statements include, but are not limited to, anticipated enhancements to our financial results and future growth from our Portfolio Optimization and Deleveraging Strategy. All statements in this Quarterly Report on Form 10-Q that address financial and operating performance, events or developments that we expect or anticipate will occur or be achieved in the future are forward-looking statements.

Our forward-looking statements are not guarantees of future performance and involve estimates, projections, forecasts and assumptions, including as to matters that are not within our control, and are subject to risks and uncertainties including, without limitation, risks and uncertainties related to changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could lead to declines in occupancy and rent levels, uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital, unexpected changes in our intention or ability to repay certain debt prior to maturity, increased costs on account of inflation, increased competition in the labor market, failure to realize cost savings, efficiencies and other benefits that we expect to result from our Portfolio Optimization and Deleveraging Strategy, inability to sell certain assets, including those assets designated as held for sale, within the time frames or at the pricing levels expected, failure to achieve expected benefits from the redeployment of proceeds from asset sales, delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve rent increases and occupancy levels on account of the value add initiatives, unexpected impairments or impairments in excess of our estimates, increased regulations generally and specifically on the rental housing market, including legislation that may regulate rents or delay or limit our ability to evict non-paying residents, risks endemic to real estate and the real estate industry generally, the impact of potential outbreaks of infectious diseases and measures intended to prevent the spread or address the effects thereof, the effects of natural and other disasters, unknown or unexpected liabilities, including the cost of legal proceedings, costs and disruptions as the result of a cybersecurity incident or other technology disruption, unexpected capital needs, inability to obtain appropriate insurance coverages at reasonable rates, or at all, or losses from catastrophes in excess of our insurance coverages, 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, 2023, 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.

These forward-looking statements are based upon the beliefs and expectations of our management at the time of this Quarterly Report on Form 10-Q 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. 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.

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Overview

Our Company

We are a self-administered and self-managed Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”). We are primarily engaged in the ownership, operation, management, improvement, and acquisition of multifamily apartment communities in non-gateway markets. As of June 30, 2024, we owned and operated 110 multifamily apartment properties (including one owned through a consolidated joint venture) that contain an aggregate of 32,685 units. Our properties are located in Alabama, Colorado, Florida, Georgia, Indiana, Kentucky, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee and Texas. In addition, as of June 30, 2024, we owned and consolidated two investments in real estate under development in Colorado that will, upon completion, contain an aggregate of 621 units. As of June 30, 2024, we also owned interests in four unconsolidated joint ventures, two that own and operate multifamily apartment communities that contain an aggregate of 810 units and two that are developing multifamily apartment communities that will contain, upon completion, an aggregate of 653 units. We do not have any foreign operations and our business is not seasonal.

Our Business Objective and Investment Strategies

Our primary business objective is to maximize stockholder value through diligent portfolio management, strong operational performance, and a consistent return of capital through distributions and capital appreciation. Our investment strategy is focused on the following:

•gaining scale within key amenity rich submarkets of non-gateway cities that offer good school districts, high-quality retail and major employment centers and are unlikely to experience substantial new apartment construction in the foreseeable future;

•increasing cash flows at our existing apartment properties through prudent property management and strategic renovation projects; and

•acquiring and developing additional properties that have strong and stable occupancies and support a rise in rental rates or that have the potential for repositioning through capital expenditures or tailored management strategies.

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Property Portfolio (1)

As of June 30, 2024, we owned and consolidated 110 multifamily apartment properties, totaling 32,685 units. Below is a summary of our consolidated property portfolio by market.


(Dollars in thousands, except per unit data)	As of June 30, 2024						For the Three Months Ended June 30, 2024
Market	Number of Properties	Units	Gross Real Estate Assets		Period End Occupancy		Average Effective Monthly Rent per Unit		Net Operating Income		% of NOI
Atlanta, GA	13	5,180	$	1,099,186	93.9	%	$	1,609	$	14,632	15.1	%
Dallas, TX	14	4,007	873,317		95.6	%	1,815		13,213		13.7	%
Columbus, OH	10	2,510	377,578		94.4	%	1,451		6,633		7.0	%
Oklahoma City, OK	8	2,147	332,776		95.4	%	1,204		5,362		5.4	%
Indianapolis, IN	7	1,979	295,293		97.1	%	1,396		5,359		5.5	%
Denver, CO (1)(2)	6	1,397	382,238		96.6	%	1,736		5,310		5.5	%
Tampa-St. Petersburg, FL	5	1,452	317,253		95.0	%	1,836		5,212		5.4	%
Nashville, TN	5	1,508	373,109		95.7	%	1,635		5,024		5.2	%
Raleigh - Durham, NC	6	1,690	254,444		95.5	%	1,545		4,987		5.2	%
Memphis, TN	4	1,383	161,192		94.6	%	1,518		4,043		4.2	%
Houston, TX	5	1,308	214,215		97.3	%	1,431		3,312		3.4	%
Huntsville, AL	4	1,051	241,753		96.5	%	1,487		3,190		3.3	%
Louisville, KY	4	1,150	145,766		96.3	%	1,312		2,860		3.0	%
Birmingham, AL (3)	2	1,074	219,565		94.7	%	1,455		2,786		2.9	%
Lexington, KY	3	886	161,833		98.3	%	1,353		2,697		2.8	%
Charlotte, NC	3	714	189,804		95.9	%	1,742		2,588		2.7	%
Myrtle Beach, SC - Wilmington, NC	3	628	68,296		95.9	%	1,407		1,827		1.9	%
Cincinnati, OH	2	542	124,084		98.1	%	1,604		1,760		1.8	%
Greenville, SC	1	702	125,347		94.2	%	1,308		1,620		1.7	%
Charleston, SC	2	518	82,009		96.3	%	1,697		1,551		1.6	%
Orlando, FL	1	297	50,708		93.9	%	1,794		902		0.9	%
San Antonio, TX	1	306	57,469		96.7	%	1,477		873		0.9	%
Austin, TX	1	256	59,954		94.5	%	1,805		850		0.9	%
Total/Weighted Average	110	32,685	$	6,207,189	95.5	%	$	1,554	$	96,591	100.0	%

(1)Excludes our development properties. See Non-GAAP financial measures for the definition of a development property.

(2)Includes properties in our Fort Collins, CO and Colorado Springs, CO markets.

(3)Includes one property with 354 units that was held for sale as of June 30, 2024.

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Current Developments

Portfolio Optimization and Deleveraging Strategy

The Portfolio Optimization and Deleveraging Strategy concluded with the sale of the tenth and final property on April 30, 2024 for a gross sales price of $28.5 million, and proceeds from the sale were used to pay outstanding mortgage debt in the amount of $15.0 million, and $13.3 million in borrowings under our unsecured revolver. The Portfolio Optimization and Deleveraging Strategy resulted in the sale of ten properties for an aggregate gross sales price of $525.3 million and proceeds from the sales were used to repay an aggregate of $517.1 million of debt.

Capital Recycling

Our capital recycling program consists of disposing of assets in markets where we lack scale and/or markets

where management believes that growth is slowing.

During the three months ended March 31, 2024, in connection with our capital recycling program, we identified one property in Birmingham, Alabama as held for sale and recognized a loss on impairment of $15.1 million. As of June 30, 2024, this property continued to be held for sale and was subsequently sold on July 17, 2024 for a gross sales price of $70.8 million. We expect to use the proceeds from this 1031 exchange sale to acquire a property in Tampa, Florida during the third quarter 2024.

Investments in Unconsolidated Real Estate Entities

To create another avenue for accretive capital allocation and to increase our options for capital investment, we have partnered with, and may in the future partner with, developers through preferred equity investments and joint venture relationships focused on new multifamily development.

No new investments in unconsolidated real estate entities were entered into during the three and six months ended June 30, 2024. On July 16, 2024, we amended the related joint venture agreement for the property, which is expected to result in the return of our invested capital and corresponding preferred return no later than December 31, 2024, while also providing us with a right of first refusal on any sale of The Crockett. The amendment of the joint venture agreement also converted the right of first offer on the Views of Music City II to a right of first refusal. As of June 30, 2024 and December 31, 2023, we had investments in unconsolidated real estate entities of $90.3 million and $89.0 million, respectively.

Investments in Real Estate Under Development

As part of our merger with Steadfast Apartment REIT, Inc. (the “STAR Merger”), we acquired two land parcels in Denver, Colorado that are being developed into multifamily properties that will contain 621 units, in the aggregate, upon completion. As of June 30, 2024 and December 31, 2023, we had investments in real estate under development of $115.2 million and $98.4 million, respectively, net of $87.1 million and $77.5 million placed in service, respectively.

Value Add

Our value add program provides us with the opportunity to improve long-term growth through targeted unit renovations at communities where there is the potential for outsized rent growth.

We completed renovations on 378 units during the three months ended June 30, 2024. From inception of our value add program in January 2018 through June 30, 2024, we completed renovations on 8,469 of the 13,281 units currently in our value add program, achieving a return on investment of 17.1% (and approximately 19.1% on the interior portion of such renovation costs). We compute return on cost by using the rent premium per unit per month, multiplied by 12, divided by the applicable renovation costs per unit and we compute the rent premium as the difference between the rental rate on the renovated unit (excluding the impact of concessions) and the market rent for a comparable unrenovated unit as of the date presented, as determined by management consistent with its customary rent-setting and evaluation procedures.

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Capital Markets

Shelf Registration Statement

On June 14, 2023, we replaced our previous shelf registration statement with our new shelf registration statement. On July 28, 2023, we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock under our shelf registration statement having an aggregate offering price of up to $450,000 (the “ATM Program”) in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act. Under the ATM Program, we may also enter into one or more forward sale transactions for the sale of shares of our common stock on a forward basis. There were no forward sale transactions as of June 30, 2024, and no shares of our common stock were sold under the ATM Program during the three and six months ended June 30, 2024.

Investment Grade Rating from Fitch

On March 4, 2024, we received an investment grade rating from Fitch Ratings (“Fitch”). Fitch has assigned a Long-Term Issuer Default Rating of ‘BBB’ to IRT with a stable outlook. In addition, Fitch has assigned a rating of ‘BBB’ to our subsidiary, Independence Realty Operating Partnership, LP and our senior unsecured debt, which includes credit facilities and unsecured term loans.

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Results of Operations

As of June 30, 2024, we owned and consolidated 110 multifamily apartment properties, of which 108 comprised the Same-Store Portfolio.

Three Months Ended June 30, 2024 compared to the Three Months Ended June 30, 2023


	SAME-STORE PORTFOLIO								NON SAME-STORE PORTFOLIO								CONSOLIDATED
(Dollars in thousands)	Three Months Ended June 30,								Three Months Ended June 30,								Three Months Ended June 30,
	2024		2023		Increase (Decrease)		% Change		2024		2023		Increase (Decrease)		% Change		2024		2023		Increase (Decrease)		% Change
Property Data:
Number of properties (1)	108		108		—		—		2		11		(9)		(81.8)%		110		119		(9)		(7.6)%
Number of units (1)	32,153		32,153		—		—		532		3,096		(2,564)		(82.8)%		32,685		35,249		(2,564)		(7.3)%
Average occupancy (1)	95.4%		94.2%		1.2%		—		94.7%		93.3%		1.4%		—		95.3%		94.1%		1.2%		—
Average effective monthly rent, per unit (1)	$1,555		$1,531		$24		1.6%		$1,545		$1,619		$(74)		(4.6)%		$1,554		$1,538		$16		1.0%
Revenue:
Rental and other property revenue	$	153,969	$	148,645	$	5,324	3.6	%	$	4,135	$	14,956	$	(10,821)	(72.4)	%	$	158,104	$	163,601	$	(5,497)	(3.4)	%
Expenses:
Property operating expenses	59,041		56,270		2,771		4.9	%	1,842		5,801		(3,959)		(68.2)	%	60,883		62,071		(1,188)		(1.9)	%
Net Operating Income	$	94,928	$	92,375	$	2,553	2.8	%	$	2,293	$	9,155	$	(6,862)	(75.0)	%	$	97,221	$	101,530	$	(4,309)	(4.2)	%

Other Revenue:
Other revenue																	$	298	$	354	$	(56)	(15.8)	%
Corporate and other expenses:
Property management expenses																	7,666		6,818		848		12.4	%
General and administrative expenses																	6,244		5,910		334		5.7	%
Depreciation and amortization expense																	54,127		53,984		143		0.3	%

Casualty losses																	465		680		(215)		(31.6)	%
Interest expense																	(17,460)		(22,227)		4,767		(21.4)	%
Loss on impairment of real estate assets, net																	(152)		—		(152)		100.0	%

Other (loss) income, net																	—		(72)		72		(100.0)	%
Loss from investments in unconsolidated real estate entities																	(850)		(1,205)		355		(29.5)	%


Net income																	$	10,555	$	10,988	$	(433)	(3.9)	%
Income allocated to noncontrolling interests																	(201)		(279)		78		(28.0)	%
Net income available to common shares																	$	10,354	$	10,709	$	(355)	(3.3)	%

(1)Excludes our development projects. See Non-GAAP Financial Measures for our definition of a development property and our methodology for determining same-store properties.

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Revenue

Rental and other property revenue. Revenue from rental and other property revenue of the consolidated portfolio decreased $5.5 million to $158.1 million for the three months ended June 30, 2024 from $163.6 million for the three months ended June 30, 2023. The decrease was primarily attributable to a $10.8 million decrease in non same-store rental and other property revenue driven by the sale of ten properties under the Portfolio Optimization and Deleveraging Strategy, partially offset by an increase in same-store rental and other property revenue of $5.3 million driven by a 1.6% increase in average effective monthly rents and a 1.2% increase in average occupancy compared to the prior year period.

Expenses

Property operating expenses. Property operating expenses decreased $1.2 million to $60.9 million for the three months ended June 30, 2024 from $62.1 million for the three months ended June 30, 2023. The decrease was due to a $4.0 million decrease in property operating expenses due to the sale of ten properties under our Portfolio Optimization and Deleveraging Strategy partially offset by a $2.8 million increase in same-store property operating expense, driven by an increase in repairs and maintenance, advertising expenses, personnel expenses and property insurance.

Property management expenses. Property management expenses increased $0.9 million to $7.7 million for the three months ended June 30, 2024 from $6.8 million for the three months ended June 30, 2023 primarily due to higher personnel costs driven by $0.2 million of employee retention credit benefits realized in the prior year period.

General and administrative expenses. General and administrative expenses increased $0.3 million to $6.2 million for the three months ended June 30, 2024 from $5.9 million for the three months ended June 30, 2023. The increase was primarily due to higher personnel costs compared to the prior year period.

Depreciation and amortization expense. Depreciation and amortization expense increased $0.1 million to $54.1 million for the three months ended June 30, 2024 from $54.0 million for the three months ended June 30, 2023. The increase was primarily due to depreciation expenses driven by capital expenditures related to our value add program partially offset by lower depreciation from sold properties.

Casualty losses. During the three months ended June 30, 2024, we incurred $0.5 million in net casualty losses primarily due to fire damage at two properties where the carrying value of the damage exceeded insurance proceeds due to policy deductibles. During the three months ended June 30, 2023, we incurred $0.7 million in casualty losses due to fires at two properties where the carrying value of the damage exceeded insurance proceeds due to policy deductibles.

Loss from investments in unconsolidated real estate entities. Loss from investments in unconsolidated joint ventures decreased $0.4 million to $0.9 million for the three months ended June 30, 2024, primarily due to the completion of construction activities at two investments in unconsolidated real estate entities and increased occupancies and operating results during the lease-up phase.

Interest expense. Interest expense decreased $4.7 million to $17.5 million for the three months ended June 30, 2024 from $22.2 million for the three months ended June 30, 2023. The decrease was primarily driven by the reduction of debt associated with the sale of ten properties under the Portfolio Optimization and Deleveraging Strategy.

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Results of Operations

Six Months Ended June 30, 2024 compared to the Six Months Ended June 30, 2023


	SAME-STORE PORTFOLIO							NON SAME-STORE PORTFOLIO							CONSOLIDATED
(Dollars in thousands)	Six Months Ended June 30,							Six Months Ended June 30,							Six Months Ended June 30,
	2024		2023		Increase (Decrease)		% Change	2024		2023		Increase (Decrease)		% Change	2024		2023		Increase (Decrease)		% Change
Property Data:
Number of properties (1)	108		108		—		—	2		11		(9)		(81.8)%	110		119		(9)		(7.6)%
Number of units (1)	32,153		32,153		—		—	532		3,096		(2,564)		(82.8)%	32,685		35,249		(2,564)		(7.3)%
Average occupancy (1)	94.9%		93.7%		1.2%		—	93.5%		92.9%		0.6%		—	94.9%		93.6%		1.3%		—
Average effective monthly rent, per unit (1)	$1,553		$1,529		$24		1.6%	$1,543		$1,614		$(71)		(4.4)%	$1,553		$1,545		$8		0.5%
Revenue:
Rental and other property revenue	$	304,587	$	294,346	$	10,241	3.5%	$	13,849	$	30,390	$	(16,541)	(54.4)%	$	318,436	$	324,736	$	(6,300)	(1.9)%
Expenses:
Property operating expenses	115,288		109,834		5,454		5.0%	5,566		11,493		(5,927)		(51.6)%	120,854		121,327		(473)		(0.4)%
Net Operating Income	$	189,299	$	184,512	$	4,787	2.6%	$	8,283	$	18,897	$	(10,614)	(56.2)%	$	197,582	$	203,409	$	(5,827)	(2.9)%

Other Revenue:
Other revenue															$	501	$	594	$	(93)	(15.7)%
Corporate and other expenses:
Property management expenses															15,165		13,189		1,976		15.0	%
General and administrative expenses															14,624		14,063		561		4.0	%
Depreciation and amortization expense															107,850		107,520		330		0.3	%

Casualty losses															2,767		831		1,936		233.0	%
Interest expense															(38,063)		(44,351)		6,288		(14.2)	%
Gain on sale of real estate assets, net															10,378		985		9,393		953.6	%
Gain on extinguishment of debt															203		—		203		100.0	%

Other (loss) income, net															(1)		21		(22)		(104.8)	%
Loss from investments in unconsolidated real estate entities															(1,679)		(1,981)		302		(15.2)	%
Restructuring costs															—		(3,213)		3,213		(100.0)	%
Net income															$28,515		$19,861		$8,654		43.6%
Income allocated to noncontrolling interests															(585)		(503)		(82)		16.3	%
Net income available to common shares															$27,930		$19,358		$8,572		44.3%

(1)Excludes our development projects. See Non-GAAP Financial Measures for our definition of a development property and our methodology for determining same-store properties.

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Revenue

Rental and other property revenue. Revenue from rental and other property revenue of the consolidated portfolio decreased $6.3 million to $318.4 million for the six months ended June 30, 2024 from $324.7 million for the six months ended June 30, 2023. The decrease was primarily attributable to a $16.5 million decrease in non same-store rental and other property revenue driven by the sale of ten properties under the Portfolio Optimization and Deleveraging Strategy. This decrease in non same-store rental and other property revenue was partially offset by an increase in same-store rental and other property revenue of $10.2 million driven by a 1.6% increase in average effective monthly rents and a 1.2% increase in average occupancy compared to the prior year period.

Expenses

Property operating expenses. Property operating expenses decreased $0.4 million to $120.9 million for the six months ended June 30, 2024 from $121.3 million for the six months ended June 30, 2023. The decrease was primarily due to the $5.9 million decrease in property operating expenses due to the sale of ten properties under our Portfolio Optimization and Deleveraging Strategy partially offset by a $5.5 million increase in same-store property operating expenses, primarily due to higher property insurance, personnel expenses, and advertising expenses.

Property management expenses. Property management expenses increased $2.0 million to $15.2 million for the six months ended June 30, 2024 from $13.2 million for the six months ended June 30, 2023 primarily due to higher personnel costs driven by $0.4 million of employee retention credit benefits realized in the prior year period and higher software license costs as a result of ongoing centralization efforts.

General and administrative expenses. General and administrative expenses increased $0.5 million to $14.6 million for the six months ended June 30, 2024 from $14.1 million for the six months ended June 30, 2023. The increase was primarily due to higher professional fees compared to the prior year period.

Casualty losses. During the six months ended June 30, 2024, we incurred $2.8 million in casualty losses where the carrying value of the damage exceeded insurance proceeds due to policy deductibles. During the six months ended June 30, 2023, we incurred $0.8 million in casualty losses due to fires at three properties where the carrying value of the damage exceeded insurance proceeds due to policy deductibles.

Interest expense. Interest expense decreased $6.3 million to $38.1 million for the six months ended June 30, 2024 from $44.4 million for the six months ended June 30, 2023 primarily due to the reduction of debt associated with the sale of ten properties under the Portfolio Optimization and Deleveraging Strategy.

Gain on sale of real estate assets, net. During the six months ended June 30, 2024, we sold six multi-family properties and recognized a gain on sale of real estate, net of $10.4 million comprised of a $25.5 million gain on sale of real estate, net, partially offset by a loss on impairment of $15.1 million for one property held for sale as of June 30, 2024, as a result of the carrying value of the real estate exceeding the expected sales price less transaction costs. During the six months ended June 30, 2023, we sold one multi-family property resulting in a gain on sale of real estate, net of $1.0 million.

Restructuring costs. During the six months ended June 30, 204, we incurred no restructuring costs. During the six months ended June 30, 2023, we incurred approximately $3.2 million of severance costs related to the reorganization of certain departments that impacted a limited number of employees.

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Non-GAAP Financial Measures

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.

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 casualty (gains) losses, loan premium accretion and discount amortization, debt extinguishment costs, and restructuring 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 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.

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Set forth below is a reconciliation of net income to FFO and CFFO for the three and six months ended June 30, 2024 and 2023 (in thousands, except share and per share information):


	For the Three Months Ended June 30,								For the Six Months Ended June 30,
	2024				2023				2024				2023
	Amount		Per Share(1)		Amount		Per Share(2)		Amount		Per Share(1)		Amount		Per Share(2)
Net income	$	10,555	$	0.05	$	10,988	$	0.05	$	28,515	$	0.12	$	19,861	$	0.09
Adjustments:
Real estate depreciation and amortization	53,757		0.23		53,701		0.23		107,149		0.46		106,989		0.46
Our share of real estate depreciation and amortization from investments in unconsolidated real estate entities	598		—		575		—		1,196		0.01		994		—
Loss on impairment (gain on sale) of real estate assets net, excluding prepayment gains	336		—		—		—		(9,273)		(0.04)		(314)		—
FFO	$	65,246	$	0.28	$	65,264	$	0.28	$	127,587	$	0.55	$	127,530	$	0.55

FFO	$	65,246	$	0.28	$	65,264	$	0.28	$	127,587	$	0.55	$	127,530	$	0.55
Adjustments:
Other depreciation and amortization	370		—		283		—		701		—		531		—

Casualty losses	465		0.01		680		0.01		2,767		0.01		831		0.01
Loan (premium accretion) discount amortization, net	(2,283)		(0.01)		(2,737)		(0.01)		(4,679)		(0.02)		(5,493)		(0.02)
Prepayment (gains) losses on asset dispositions	(184)		—		—		—		(1,105)		—		(670)		—
Gain on extinguishment of debt	—		—		—		—		(203)		—		—		—
Other expense	—		—		192		—		1		—		234		—

Restructuring costs	—		—		—		—		—		—		3,213		0.01
CFFO	$	63,614	$	0.28	$	63,682	$	0.28	$	125,069	$	0.54	$	126,176	$	0.55

(1)Based on 230,734,872 and 230,652,876 weighted-average shares and units outstanding for the three and six months ended June 30, 2024, respectively.

(2)Based on 230,369,086 and 230,278,208 weighted-average shares and units outstanding for the three and six months ended June 30, 2023, respectively.

Same-Store Portfolio Net Operating Income

We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful supplemental measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding interest expenses, depreciation and amortization, casualty related costs and gains, property management expenses, general and administrative expense, net gains on sale of assets, and restructuring costs. 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 insofar as the measure reflects only operating income and expense at the property level. We use NOI to evaluate performance on a same-store and non same-store basis because NOI measures the core operations of property performance by excluding corporate level expenses, financing expenses, and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of our financial performance.

Same-Store Properties and Same-Store Portfolio

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 and not a development property at the beginning of the previous year. Properties that are held for sale or have been sold are excluded from the same-store portfolio.

Non Same-Store Properties and Non Same-Store Portfolio

Properties that did not meet the definition of a same-store property as of the beginning of the previous year are added into the non same-store portfolio.

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Development Property

A development property is a property that is either currently under development or is in lease-up prior to reaching overall occupancy of 90%.

Set forth below is a reconciliation of GAAP net income to Same-Store Portfolio NOI for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2024		2023		% change		2024		2023		% change
Net income	$	10,555	$	10,988	(3.9)	%	$	28,515	$	19,861	43.6	%

Other revenue	(298)		(354)		(15.8)	%	(501)		(594)		(15.7)	%
Property management expenses	7,666		6,818		12.4	%	15,165		13,189		15.0	%
General and administrative expenses	6,244		5,910		5.7	%	14,624		14,063		4.0	%
Depreciation and amortization expense	54,127		53,984		0.3	%	107,850		107,520		0.3	%

Casualty losses	465		680		(31.6)	%	2,767		831		233.0	%
Interest expense	17,460		22,227		(21.4)	%	38,063		44,351		(14.2)	%
Loss on impairment (gain on sale) of real estate assets, net	152		—		100.0	%	(10,378)		(985)		953.6	%
Gain on extinguishment of debt	—		—		—	%	(203)		—		(100.0)	%
Other loss (income), net	—		72		(100.0)	%	1		(21)		(104.8)	%
Loss from investments in unconsolidated real estate entities	850		1,205		(29.5)	%	1,679		1,981		(15.2)	%

Restructuring costs	—		—		—	%	—		3,213		(100.0)	%
NOI	97,221		101,530		(4.2)	%	197,582		203,409		(2.9)	%
Less: Non same-store portfolio NOI	2,293		9,155		(75.0)	%	8,283		18,897		(56.2)	%
Same-store portfolio (a) NOI	$	94,928	$	92,375	2.8	%	$	189,299	$	184,512	2.6	%

(a)Same-Store Portfolio for the three and six months ended June 30, 2024 and 2023 included 108 properties containing 32,153 units.

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.

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Set forth below is Same-Store Portfolio (a) NOI for the three and six months ended June 30, 2024 and 2023 (in thousands, except per unit data):


	Three Months Ended June 30,						Six Months Ended June 30,
	2024		2023		% change		2024		2023		% change
Revenue:
Rental and other property revenue	$	153,969	$	148,645	3.6	%	$	304,587	$	294,346	3.5	%
Property Operating Expenses
Real estate taxes	18,626		18,576		0.3	%	37,596		37,055		1.5	%
Property insurance	4,014		3,600		11.5	%	8,164		6,566		24.3	%
Personnel expenses	12,806		11,745		9.0	%	25,005		22,870		9.3	%
Utilities	7,460		7,063		5.6	%	15,173		14,416		5.3	%
Repairs and maintenance	6,495		5,997		8.3	%	11,320		11,443		(1.1)	%
Contract services	5,886		5,941		(0.9)	%	10,987		11,038		(0.5)	%
Advertising expenses	2,065		1,592		29.7	%	3,661		2,894		26.5	%
Other expenses	1,689		1,756		(3.8)	%	3,382		3,552		(4.8)	%
Total property operating expenses	59,041		56,270		4.9	%	115,288		109,834		5.0	%
Same-store portfolio NOI	$	94,928	$	92,375	2.8	%	$	189,299	$	184,512	2.6	%


Same-store portfolio NOI Margin	61.7	%	62.1	%	(0.4)	%	62.1	%	62.7	%	(0.6)	%
Average Occupancy	95.4	%	94.2	%	1.2	%	94.9	%	93.7	%	1.2	%


Average effective monthly rent, per unit			$	1,555					$	1,531					1.6		%				$	1,553					$	1,529					1.6		%

(a)Same-Store Portfolio for the three and six months ended June 30, 2024 and 2023 included 108 properties containing 32,153 units.

Liquidity and Capital Resources

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

Our primary cash requirements are to:

•make investments to continue our value add initiatives to improve the quality and performance of our properties;

•repay our indebtedness;

•fund costs necessary to maintain our properties;

•continue funding our current real estate developments until completion;

•pay our operating expenses; and

•distribute a minimum of 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gain) and to make investments in a manner that enables us to maintain our qualification as a REIT.

We intend to meet our liquidity requirements primarily through a combination of one or more of the following:

•the use of our cash and cash equivalents of $21.0 million as of June 30, 2024;

•existing and future unsecured financing, including advances under our unsecured credit facility, and financing secured directly or indirectly by the apartment properties in our portfolio;

•cash generated from operating activities;

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•net cash proceeds from property sales, including sales undertaken as part of our capital recycling strategy and other sales; and

•proceeds from the sales of our common stock and other equity securities, including common stock that may be sold under our ATM program.

Cash Flows

As of June 30, 2024 and 2023, we maintained cash and cash equivalents, and restricted cash of approximately $47.4 million and $42.5 million, respectively. Our cash and cash equivalents were generated from the following activities (dollars in thousands):


	For the Six Months Ended June 30,
	2024		2023
Cash flow provided by operating activities	$	127,080	$	127,194
Cash flow provided by (used in) investing activities	238,553		(83,959)
Cash flow used in financing activities	(368,967)		(44,740)
Net change in cash and cash equivalents, and restricted cash	(3,334)		(1,505)
Cash and cash equivalents, and restricted cash, beginning of period	50,732		44,017
Cash and cash equivalents, and restricted cash, end of the period	$	47,398	$	42,512

Our cash inflows from operating activities during the six months ended June 30, 2024 and 2023 were primarily driven by ongoing operations of our properties.

Our cash inflows from investing activities during the six months ended June 30, 2024 were primarily due to $320.6 million of proceeds from the disposition of six properties under our Portfolio Optimization and Deleveraging Strategy and $3.5 million of proceeds from insurance claims, partially offset by $55.7 million of capital expenditures, $26.9 million of investments in real estate under development and $3.0 million of investments in unconsolidated real estate entities. Our cash outflows from investing activities during the six months ended June 30, 2023 were primarily due to $67.2 million of capital expenditures, $21.7 million of investments in unconsolidated real estate entities, and $30.6 million of investments in real estate under development, partially offset by $35.6 million of proceeds from one property disposition.

Our cash outflows from financing activities during the six months ended June 30, 2024 were primarily due to unsecured credit facility and mortgage principal repayments of $422.3 million, payment of dividends on our common stock and noncontrolling interests of $74.0 million, partially offset by $131.0 million of draws on our unsecured revolver. Our cash outflows from financing activities during the six months ended June 30, 2023 were primarily due to payment of dividends on our common stock and noncontrolling interests of $64.7 million partially offset by $27.5 million of net draws on our unsecured revolver.

Contractual Obligations

Our 2023 Annual Report on Form 10-K includes a table of contractual obligations. There were no material changes to these obligations since the filing of our 2023 Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements during the six months ended June 30, 2024 that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our interests.

Critical Accounting Estimates and Policies

Our 2023 Annual Report on Form 10-K contains a discussion of our critical accounting policies. Management discusses our critical accounting policies and management’s judgments and estimates with the audit committee of our board of directors. There were no material changes to our critical accounting policies since the filing of our Annual Report on Form 10-K.

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Item 3. Quantitative and Qualitative Disclosure About Market Risk.

Our 2023 Annual Report on Form 10-K contains a discussion of qualitative and quantitative market risks. There have been no material changes in quantitative and qualitative market risks during the six months ended June 30, 2024 from the disclosures included in our 2023 Annual Report on Form 10-K.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

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

Effective as of June 30, 2024, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation referred to above during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

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

Starting around November 2022, putative class action representatives began filing complaints in various United States District Courts across the country naming as defendants RealPage, Inc. (“RealPage”), a seller of revenue management products, and approximately 50 defendants who own and/or manage multifamily residential rental housing, alleging that the defendants conspired to fix, raise, maintain, and stabilize rent prices in violation of Section 1 of the Sherman Act. Some of the complaints, including one filed on November 14, 2022 in the U.S. District Court for the Northern District of Illinois, named us as one of the defendants, and others did not. On April 10, 2023, the United States Judicial Panel on Multidistrict Litigation issued an order transferring the cases to the United States District Court for the Middle District of Tennessee for coordinated and consolidated pretrial proceedings, where plaintiffs filed a consolidated complaint. We filed an answer to the consolidated complaint and asserted affirmative defenses. We deny all allegations of wrongdoing and intend to defend against these claims vigorously.

Item 1A. Risk Factors.

There have not been any material changes from the risk factors disclosed in Part 1, Item 1A of our 2023 Annual Report on Form 10-K.

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

During the three and six months ended June 30, 2024, holders of IROP units exchanged 0 and 4,928 units, respectively, for 0 and 4,928 shares, respectively, of our common stock. The issuance of these shares upon exchange of the units was exempt from registration under the Securities Act, pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act. As of June 30, 2024, 5,941,643 IROP units held by unaffiliated third parties remained outstanding.

During the three months ended June 30, 2024, we withheld shares of common stock to satisfy employee tax withholding obligations payable upon the vesting of restricted common stock awards as follow:


Period	Total Number of Shares Purchased	Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2)
Apr 2024	4,721	$	15.65	—	$	250,000
May 2024	—	—		—	250,000
Jun 2024	—	—		—	250,000
Total	4,721	$	15.65	—

(1)The price reported is the average price paid per share using our closing price on the NYSE on the vesting date of the relevant award.

(2)On May 18, 2022, our Board of Directors approved the Stock Repurchase Program covering up to $250,000 in shares of our common stock. Under the Stock Repurchase Program, we, in our discretion, may purchase our shares from time to time in the open market or in privately negotiated transactions. The amount and timing of the purchases will depend on a number of factors, including the price and availability of our shares, trading volumes and general market conditions. The Stock Repurchase Program has no time limit and may be suspended or discontinued at any time.

Item 3. Defaults Upon Senior Securities.

None.

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Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

During the three and six months ended June 30, 2024, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) , or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act). During the three and six months ended June 30, 2024, the Company did not adopt, terminate or modify a Rule 10b5-1 trading arrangement.

Item 6. Exhibits.

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


2.1			Agreement and Plan of Merger, dated as of July 26, 2021, by and among Independence Realty Trust, Inc., Independence Realty Operating Partnership, LP, IRSTAR Sub, LLC, LLC, Steadfast Apartment REIT, Inc. and Steadfast Apartment REIT Operating Partnership, L.P., incorporated by reference to Exhibit 2.1 to IRT’s Current Report on Form 8-K filed on July 26, 2021.*

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

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

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

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

101			iXBRL (Inline eXtensible Business Reporting Language). The following materials, formatted in iXBRL: (i) Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2024 and 2023, (iv) Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2024 and 2023, (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 and (vi) notes to the condensed consolidated financial statements as of June 30, 2024.

104			Cover Page Interactive Data File (embedded within the Inline XBRL document).

* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. IRT agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request by the SEC.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Independence Realty Trust, Inc.

Date: August 1, 2024	By:	/s/ SCOTT F. SCHAEFFER
		Scott F. Schaeffer
		Chairman of the Board and Chief Executive Officer
		(Principal Executive Officer)

Date: August 1, 2024	By:	/s/ JAMES J. SEBRA
		James J. Sebra
		Chief Financial Officer and Treasurer
		(Principal Financial Officer)

Date: August 1, 2024	By:	/s/ JASON R. DELOZIER
		Jason R. Delozier
		Chief Accounting Officer
		(Principal Accounting Officer)

INDEPENDENCE REALTY TRUST, INC. - Quarter Report: 2024 June (Form 10-Q)

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