Independence Realty Trust, Inc.

Thank you for standing by, and welcome to the Independence Realty Trust fourth quarter and full year 2020 earnings release call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. Thank you. I would now like to hand the conference over to Lauren Torres. Ms. Torres, please go ahead.

Thank you, and good morning, everyone. Thank you for joining us to review Independence Realty Trust's fourth quarter and full year 2020 financial results. On the call today with me are Scott Schaefer, our Chief Executive Officer, Jim Sebra, our Chief Financial Officer, and Farrell Ender, President of IRT. Today's call is being webcast on our website at www.irtliving.com. There will be a replay of the call available via webcast on our Investor Relations website and telephonically beginning approximately 12 p.m. Eastern Time today. Before I turn the call over to Scott, I'd like to remind everyone that there may be forward-looking statements made on this call. These forward-looking statements reflect IRT's current views with respect to future events and financial performance. Actual results could differ substantially and materially from what IRT has projected. Such statements are made in good faith pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to IRT's press release Supplemental Information and Filings with the SEC for factors that could affect the accuracy of our expectations or cause our future results to differ materially from those expectations. Participants may discuss non-GAAP financial measures during this call. A copy of IRT's press release and supplemental information containing financial information, other statistical information, and a reconciliation of non-GAAP financial measures to the most direct comparable GAAP financial measure is attached to IRT's most recent current report on the Form 8-K available at IRT's website under Investor Relations. IRT's other FCC filings are also available through this link. IRT does not undertake to update forward-looking statements in this call or with respect to matters described herein, except as may be required by law. With that, it's my pleasure to turn the call over to Scott Schaefer.

Thank you, Lauren, and thank you all for joining us this morning. 2020 was a year like no other for our company, our industry, and our country. We were faced with unexpected challenges brought on by the global pandemic, but due to the perseverance of our team and focus on accomplishing our objectives, we were able to deliver strong fourth quarter and full year results and better position our company for long-term success. We prioritized the needs of our people, which included protecting the health and well-being of our residents and employees, while providing flexibility to those residents demonstrating financial hardship. We focused on growing occupancy and driving leasing traffic while sustaining our financial flexibility and lowering leverage, thereby strengthening our balance sheet. As a result of successfully executing against these priorities, our same-store average occupancy increased 250 basis points to 94.9% in the fourth quarter on a year-over-year basis, with average effective monthly rent per unit growing 2.6% in the quarter. We have collected 98.7% of fourth quarter rents. Our same-store NOI increased 4.4% in the fourth quarter and 3.1% for the full year compared to a year ago. Our core FFO improved more than 10% in the quarter and for the full year 2020. And we notably reduced our leverage this past quarter, having normalized net debt to adjusted EBITDA of 8.2 times at year end. Reducing our overall leverage has been a long-term objective of ours, and I'm very pleased that we were able to make meaningful progress against this commitment during the year when we faced unprecedented market conditions. We are pleased to note that this momentum continues, seeing strong results so far into 2021. Our total portfolio average occupancy was 95.2% in January, a 290 basis point improvement compared to the end of January last year. We have collected 96.9% of January rents, which is consistent with collections of December rents. And given our low lease expirations and high occupancy in the fourth quarter, we continue to drive rent growth. Another key component of our strategy is the advancement of our value-added capital recycling programs. While we paused these efforts in the first half of last year due to the pandemic, we resumed activity in the second half of 2020 after seeing more stable conditions in our markets and a rebound in demand for renovated units. Since the inception of our Value-Add program in January of 2018, we have completed renovations on 3,719 units through December 2020, achieving a weighted average return on investment of 18.3% on interior renovation costs. This momentum continues, and we expect to renovate another 1,300 units in 2021, supported by an improving market environment with growing rental demand. Regarding our capital recycling program, We expanded our presence in markets where we saw attractive long-term fundamentals, like Huntsville, Alabama, and Dallas, Texas, and exited markets where we had a small presence, such as Chattanooga and Baton Rouge. In addition to acquiring and divesting properties under our capital recycling program, we're exploring the potential for JV relationships focused on new multifamily development. This program would provide capital through preferred equity investments and joint ventures with third-party developers. We will target assets in core non-gateway markets where we see opportunity for growth, with a particular focus on the southeast and broader Sunbelt region. Our expectation is that these investments would deliver unlevered IRRs of approximately 20%, while giving us the ability to own the newly developed communities outright at attractive cap rates. We're excited about developing this initiative, giving IRT another avenue for accretive capital allocations. Looking ahead to 2021, we expect the gradual market recovery and industry fundamentals to improve. We are confident in our resilient portfolio of assets and non-gateway markets that is well positioned to benefit from migration and employment trends, particularly in the Sun Belt. We will remain focused on maintaining high occupancy levels while driving rent growth when appropriate and tightly managing our costs. And we will continue to engage in attractive investment opportunities under our value-add and capital recycling programs, supplemented by the potential for preferred equity, investments, and joint ventures. In sum, we entered 2020 from a position of strength with ample liquidity and reduced debt, and we look forward to executing on our strategic priorities and delivering value to our stakeholders. Before I turn the call over to Farrell, I'd like to once again thank our team and highlight their dedication and ability to adapt and learn from the challenges presented over the past year. While the pandemic undoubtedly impacted our people in the way we do business, it also enabled us to squarely focus on accomplishing our vision of being a trusted and respected provider of apartment communities by offering an unparalleled living experience for our residents and a world-class environment for our employees. This goes hand-in-hand with our recent announcement to increase the size of and further diversify our board of directors with the appointment of Lisa Washington. Lisa brings the IRT more than 25 years of experience in corporate governance and public company compliance as an accomplished legal executive and corporate officer. We welcome Lisa and are assured that she will bring a valuable perspective to our company. And with that, I'd like to turn the call over to Farrell for an operational update. Farrell?