Independence Realty Trust, Inc.

Good morning, thank you for attending today's Independent Realty Trust Incorporated Q3 Earnings Conference call. My name is Forum and I will be your moderator for today's call. All lines will remain muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. It is now my pleasure to pass the conference over to our host, Lauren Torres.

Thank you, and good morning, everyone. Thank you for joining us to review Independence Realty Trust's third quarter 2022 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 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 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 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 parent report on the Form 8-K 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 on this call 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. I would like to begin our call today by thanking our on-site teams who played an integral part in ensuring the safety of our residents and communities that felt the effects of Hurricane Ian in Florida and the Carolinas. I'm happy to report that we did not experience any significant damage to any of our properties. And now onto our results. In the third quarter, we delivered 11.5% combined same-store NOI growth and 33% core FFO per share growth on a year-over-year basis. We attribute this strength to our portfolio concentration in non-gateway markets in the attractive Sunbelt region, where demand continues to outweigh supply. In addition, we achieved double-digit average rental rate growth of 13.3% in the quarter. We continue to balance occupancy and rental rate growth to maximize revenue for the long term. To that point, this rental rate growth combined with the start of eight new value-add projects in the third quarter put some pressure on occupancy, but locked in attractive lease rates, generating a strong revenue earn in for 2023. As of today, our occupancy is 95.4% in our non-value add communities. Over the past quarter, and as part of our capital recycling strategy, we entered into agreements of sale for two communities, one in Louisville, Kentucky, and one in Terre Haute, Indiana. We also acquired a community in Charlotte, North Carolina, and another in Tampa, Florida, expanding our footprint in these attractive markets. And we entered into a joint venture for the development of a community in Las Colinas, Texas, which is part of the Dallas-Fort Worth metropolitan area and is experiencing strong job growth and population migration. These are all exciting opportunities to grow the portfolio in core IRT markets that have favorable fundamentals. We believe it is important to be patient and selective as we allocate company capital in the current economic environment and will only acquire new communities or invest in joint ventures as part of our capital recycling strategy. We are also making progress with our value-add program, having renovated 795 units this year and achieving a return on investment of 27.1%. While we remain excited about our value-add program and the increased units to be added from our merger with Star, we expect to moderate our plan in 2023 by delaying the start of renovations at communities in new value-add markets until we have better clarity on the state of the economy. Currently, we expect to complete between 2,500 and 3,000 units next year. While acknowledging current macroeconomic uncertainty, we at IRT remain confident in our portfolio and strategy that will enable us to continue to drive outsized returns. Our confidence is underlined by the following. First, real estate fundamentals remain strong, and we are encouraged about our position in the multifamily sector. Second, we have an optimal portfolio footprint across key Sunbelt markets that continue to see significant migration and job growth, and we expect to outperform during all points of market cycles. Third, this position of strength has been further bolstered by the Star merger, which has added scale in our top markets as well enhanced our operating platform. Fourth, as you can see with our performance year to date, we continue to successfully execute our portfolio strategy, combining the creative leasing activity with progress on our value-add renovations and capital recycling initiatives, all which will ultimately drive long-term value for our business. And finally, all of this has been done while achieving the most robust balance sheet in IRT's history, a true signal of strength as we move forward through the current operating environment. With all that said, we are reiterating our full 2022 guidance that we previously raised for combined same-store NOI growth of 13.75% and core FFO per share growth of 28%, each at the midpoint of our guided ranges. Looking forward, it is important to note that we expect 2023 to be a year of continued NOI and core FFO per share growth and provide a more detailed outlook for the next year during our year-end earnings call. And now I'd like to turn the call over to Ella for an operational update.