Independence Realty Trust, Inc.

Hello and welcome to Independence Realty Trust's fourth quarter 2021 earnings release. My name is Emily and I'll be coordinating the call today. During the presentation you will have the opportunity to ask a question by pressing start followed by one on your telephone keypads. I will now hand the call over to our host Lauren Torres. Please go ahead Lauren.

Thank you and good morning everyone. Thank you for joining us to review Independence Realty Trust fourth quarter and full year 2021 financial results. On the call with me today are Scott Schaefer, Chief Executive Officer, Ellen Nalen, Chief Operating Officer, Farrell Ender, President of IRT, and Jim Sebra, Chief Financial Officer. 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 at 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, financial performance, and the merger with Steadfast Apartment REIT which will be referenced herein as star. 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 filing for 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 earnings 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 current report on the Form 8 available at IRT's website under Investor Relations. IRT's other SEC filings are also available through this link. IRT does not undertake to update forward-looking statements made 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 today. 2021 was an exceptional year for IRT, not only due to our strong results, but also due to the December completion of our merger with Steadfast Department REIT, or STAR. The combination of IRT and STAR created a leading multifamily REIT with an equity market capitalization of approximately $5.9 billion and total enterprise value of $8.6 billion at year end. We are incredibly excited about the opportunities that lie ahead and look forward to discussing them with you in more detail on today's call. Before we do that, I'd first like to provide some quarterly and full year 2021 highlights. In the fourth quarter, positive trends and performance continued, building upon the momentum experienced in the first nine months of 2021. IRT's success has stemmed from our ability to execute a strategic plan which focuses on non-gateway communities in the Sunbelt region where there is strong resident demand. This has allowed us to benefit from positive trends such as population and employment growth, as well as new household formation. And as we've highlighted on recent calls, our selective approach, along with the housing shortage in our markets, has led us to achieve high and stable occupancy levels and significant rental rate growth, which was clearly reflected in our fourth quarter and full year results. Specifically, we delivered an industry-leading same-store NOI growth of 15.1% in the quarter and 11.4% for the full year. And our quarterly core FFO improved 58% compared to a year ago, while our annual core FFO grew 34% year over year. Since the merger closed on December 16th, these results include only two weeks of star property operations. The full benefit of the merger will be realized in 2022 and beyond. We are very pleased with our results, particularly in light of the challenges which have impacted our industry during the pandemic. Our team's efforts have enabled us to deliver attractive growth on a same-store basis while realizing additional opportunities through our long-standing value-add program and our more recent joint venture investments in new multi-family developments. And now, as a result of our merger with Star, we have doubled our portfolio to 119 communities, increasing our presence in attractive markets like Atlanta and Dallas and entering new markets like Denver and Nashville. Our exposure to the Sun Belt represents approximately 70% of our NOI, and we expect strong growth fundamentals to persist in this region, with people continuing to migrate to cities with a lower cost of living, a better tax policy, and more economic opportunities. With our larger footprint in these desired U.S. markets, we are confident in our ability to implement our strategic initiatives, capture incremental growth, particularly through our redevelopment efforts, and to strengthen our total company platform with increased economies of scale. One thing that won't change at IRT is our simple capital structure and strong balance sheet. We will maintain our conservative financial and credit policies and further de-lever the balance sheet through organic NOI growth, value-add renovations, and non-core asset sales. Our larger portfolio was well positioned to generate increasing NOI, which will allow us to fund future growth opportunities in markets where we expect to see continued strong residential demand while continuing to improve our net debt to EBITDA ratio. We finished 2021 with a net debt to adjusted EBITDA ratio of 7.7 times, reaching this target a full year earlier than projected due to the strong operating results and the significant value received from our properties recently sold. We have now completed the sale of all nine properties previously identified for sale and with the corresponding debt repayments now have a net debt to EBITDA ratio of 7.5 times. Overall, we exited 2021 from a position of strength and scale and are excited about the future growth potential of IRT. We are also confident that we have the right team in the right place to execute our strategy. And with that said, I'd like to turn the call over to Ella Nayland, IRT's Chief Operating Officer. Ella joined us from STAR and is an experienced multifamily executive. We welcome her and look forward to her valued contribution to our team. Ella?