Independence Realty Trust, Inc.

Thank you for standing by. My name is Dee, and I will be your conference operator today. At this time, I would like to welcome everyone to the Independence Realty Trust first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Lauren Torres. Please go ahead.

Thank you, and good morning, everyone. Thank you for joining us to review Independence Realty Trust first quarter 2024 financial results. On the call with me today are Scott Schaefer, Chief Executive Officer, Mike Daly, EVP of Operations and People, Jim Sebra, Chief Financial Officer, and Janice Richards, SVP of Operations. We also have a special guest joining us today, Lily Schaffer, Scott's grandchild as it's Bring Your Child to Work Day. Welcome, Lily. 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 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 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. During the first quarter, we made notable progress on our initiative to grow occupancy and increase resident retention. execute our portfolio optimization and deleveraging strategy, and deliver on our planned value-add improvements. We are pleased with the results of our efforts in the first quarter as we delivered an increase of 120 basis points in average occupancy to 94.4%, lease renewal at 65.4%, and resident retention at 54.3%, all above first quarter of 2023. And we continue to see sequential improvements in April with same-store occupancy today at 95.4%, with lease renewal at 66.7%, and total resident retention at 55.7%. Year-to-date, our lead volume is up approximately 17.4% year-over-year due to our enhanced marketing initiatives. This lead volume, along with the improvement in occupancy, puts us in a position of strength to drive growth in the coming months and keeps us on track to deliver our full-year operating guidance. Last October, with the view that interest rates would stay higher for longer, we announced our portfolio optimization and deleveraging strategy in which we identified 10 non-core properties for sale. I'm pleased to report we have closed on the sale of nine of these properties, exited four single asset markets, and paid off $489 million of debt, thereby extending our maturity profile and eliminating all of our exposure to floating rate debt. The 10th and final property targeted for sale under this program is currently under contract with a hard deposit and we expect it to close on April 30th. This puts us on track to achieve our six times net debt to EBITDA target in the fourth quarter of this year. To that end, we received an investment grade credit rating from Fitch Ratings in early March. This is a significant milestone for IRT and reflects our efforts to fundamentally reset our leverage profile through profitable growth with lower leverage. With this rating, we can further improve our cost of capital and gain access to additional capital sources to implement our business plan and invest in our portfolio. Additionally, as part of our regular capital recycling initiative, we have identified an asset in Birmingham, Alabama as held for sale and may use the proceeds to purchase one of our new construction joint venture assets in Nashville. Jim will discuss this in more detail during his remarks, but the Birmingham property is now under contract and is expected to close in the third quarter of 2024. With respect to value-add renovations, our program is well received by both current and prospective residents as we seek to improve the quality and value of their rental experience. We now continue to see significant premiums as compared to unrenovated comparable units, despite current market dynamics that are impacting new lease rates. With that, we completed renovations on 320 units during the first quarter and achieved a weighted average return on investment of 18% when compared to unrenovated comps. Throughout the rest of 2024, we expect to complete renovations at approximately 2,100 additional units. Please note, this number could vary depending on resident retention. In addition, we currently own over 12,000 additional units that are appropriate for renovation over the long term. We believe these efforts address strong demand and attract value-driven residents seeking an effective alternative to newer Class A communities at a lower price point. We continue to believe in the strength of our portfolio and our team's ability to manage through a difficult operating environment in 2024. While the Sunbelt region continues to see elevated levels of new supply, IRT's predominantly B-class portfolio is somewhat insulated from the resulting effects, and we are confident in our ability to navigate these headwinds. Before I wrap up my remarks, I also wanted to highlight that we recently published our 2023 Sustainability Report, which details the progress we have made on our sustainability strategy over the last year and the initiatives we have in place to continue building a sustainable and inclusive future for our business and all of our stakeholders. We see continuing opportunities to further enhance our sustainability practice and look forward to continuing these initiatives, which will support our long-term success. In conclusion, our results demonstrate the strength and resiliency of our portfolio and the ability of our team during a challenging economic climate. I'm confident these results will drive further growth throughout 2024, and we look forward to continuing to build on these successes going forward. And I'll now turn the call over to Mike.