Independence Realty Trust, Inc.

Thank you for standing by and welcome to the Independence Realty Trust Inc. Q4 earnings conference call. My name is Sam and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star followed by one on your telephone keypad. I'll now turn the call over to Lauren Torres. Lauren, 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 2022 financial results. On the call with me today are Scott Schaefer, Chief Executive Officer, Mike Daly, EBP of Operations and People, 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 current report on the Form 8K 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 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. 2022 was a strong year for IRT as we integrated the Star portfolio and exceeded our initial synergies and full-year operating guidance during a challenging macroeconomic environment. Our ability to deliver nearly 30% core FFO per share growth in 2022 was the result of the strategic positioning of our expanded portfolio concentrated in non-gateway markets within the Sunbelt region, where we continue to benefit from positive supply and demand dynamics. Our team delivered another year of robust performance, which was reflected in our fourth quarter and full-year results. Specifically, our average rental rate increased 12% in 2022, supporting a double-digit increase in revenue. Our same-store NOI increased 13% in the fourth quarter and 13.7% for the full year, compared to last year. And we continue to effectively reduce our leverage from 7.7 times EBITDA a year ago to 6.9 times at year end 2022 ahead of our low sevens guided target. We also made meaningful progress on our value-add program as we renovated 656 units in the fourth quarter and 1,451 units for the full year while achieving an annual return on investment of more than 24%. This positions us well to deliver the 2,500 to 3,000 units that we previously guided for in 2023. We remain confident about the potential of our Value-Add program and will continue to assess the economic landscape as we determine the pace and scope of renovations of properties in selected markets. While coming off a strong year, we recognize there is more work to be done to drive sustainable occupancy gains across the entire portfolio and can assure you that this is a top priority for us in 2023. We are focused on working with our regional leaders and frontline leasing teams to improve all aspects of our leasing and sales process. As we mentioned previously, our target occupancy is 95% for non-value-add communities, and we will continue to drive rent growth where appropriate. Looking ahead, we are factoring in a mild recession, which we expect to be more pronounced in the second half of this year. Despite these uncertain conditions, we remain well-positioned to earn all points of market cycles due to our portfolio footprint across key Sunbelt markets that continue to see significant migration and job growth. And we expect to build upon our solid foundation and continue to deliver outsized growth rates as shown in our 2023 guidance, which includes a 6.5% NOI growth at the midpoint of our guided range. This is on top of NOI growth of 11.4% in 2021 and 13.7% in 2022. Our 2023 guidance also includes 5.6% core FFO for share growth at the midpoint. We are off to a good start this year and remain very excited about the growth opportunities for IRT and optimistic about our future as real estate fundamentals remain strong in our resilient growth markets. I'd now like to introduce you to Mike Daly, our EVP of Operations and People. Mike is a core member of the IRT team, overseeing all aspects of our day-to-day operations. Mike has been with IRT since 2019 and successfully guided us through the pandemic with consistently strong operational performance. He is a seasoned executive and returned to lead the operations in December 2022. With that introduction, I'd like to hand the call over to Mike.