INDEPENDENCE REALTY TRUST, INC.

Previous wording

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act. Such forward-looking statements include, but are not limited to, our planned use of remaining proceeds from our recent sales of common stock on a forward basis and, our unsecured notes in a private placement, our expectations with respect to the two properties which we are under contract to acquire, and our expectations with respect to future acquisitions. All statements in this Quarterly Report on Form 10-Q that address financial and operating performance, events or developments that we expect or anticipate will occur or be achieved in the future are forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act. Such forward-looking statements include, but are not limited to, our planned use of remaining proceeds from our sales of common stock on a forward basis, our expectations with respect to the one property which we are under contract to acquire, our expectations with respect to the three properties which are classified as held for sale and our expectations with respect to future acquisitions and dispositions. All statements in this Quarterly Report on Form 10-Q that address financial and operating performance, events or developments that we expect or anticipate will occur or be achieved in the future are forward-looking statements.

Previous wording

Our forward-looking statements are not guarantees of future performance and involve estimates, projections, forecasts and assumptions, including as to matters that are not within our control, and are subject to risks and uncertainties including, without limitation, risks and uncertainties related to changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could lead to declines in occupancy and rent levels, uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital, unexpected changes in our intention or ability to repay certain debt prior to maturity, increased costs on account of inflation, increased competition in the labor market, and our planned use of remaining proceeds from our recent sales of common stock on a forward basis and our unsecured notes in a private placement, inability to sell certain assets, including those assets designated as held for sale, within the time frames or at the pricing levels expected, failure to achieve expected benefits from the redeployment of proceeds from asset sales, inability or failure to achieve anticipated benefits from future acquisitions, delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve rent increases and occupancy levels on account of the value add initiatives, unexpected impairments or impairments in excess of our estimates, increased regulations generally and specifically on the rental housing market, including legislation that may regulate rents and fees or delay or limit our ability to evict non-paying residents, risks endemic to real estate and the real estate industry generally, the impact of potential outbreaks of infectious diseases and measures intended to prevent the spread or address the effects thereof, economic conditions, including inflation and recessionary conditions and their related impacts on the real estate industry, U.S. and global trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, the effects of natural and other disasters, unknown or unexpected liabilities, including the cost of legal proceedings, costs and disruptions as the result of a cybersecurity incident or other technology disruption, including but not limited to a third party's unauthorized access to our data or the data of our residents, unexpected capital needs, inability to obtain appropriate insurance coverages at reasonable rates, or at all, or losses from catastrophes in excess of our insurance coverages, and share price fluctuations. Please refer to the documents filed by us with the SEC, including specifically the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2024, and our other filings with the SEC, which identify additional factors that could cause act…

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Current wording

Our forward-looking statements are not guarantees of future performance and involve estimates, projections, forecasts and assumptions, including as to matters that are not within our control, and are subject to risks and uncertainties including, without limitation, risks and uncertainties related to changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could lead to declines in occupancy and rent levels, uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital, unexpected changes in our intention or ability to repay certain debt prior to maturity, increased costs on account of inflation, increased competition in the labor market, and our planned use of remaining proceeds from our sales of common stock on a forward basis, inability to sell certain assets, including those assets designated as held for sale, within the time frames or at the pricing levels expected, failure to achieve expected benefits from the redeployment of proceeds from asset sales, inability or failure to achieve anticipated benefits from future acquisitions and dispositions, delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve rent increases and occupancy levels on account of the value add initiatives, unexpected impairments or impairments in excess of our estimates, increased regulations generally and specifically on the rental housing market, including legislation that may regulate rents and fees or delay or limit our ability to evict non-paying residents, risks endemic to real estate and the real estate industry generally, the impact of potential outbreaks of infectious diseases and measures intended to prevent the spread or address the effects thereof, economic conditions, including inflation and recessionary conditions and their related impacts on the real estate industry, U.S. and global trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, the effects of natural and other disasters, unknown or unexpected liabilities, including the cost of legal proceedings, costs and disruptions as the result of a cybersecurity incident or other technology disruption, including but not limited to a third party's unauthorized access to our data or the data of our residents, unexpected capital needs, inability to obtain appropriate insurance coverages at reasonable rates, or at all, or losses from catastrophes in excess of our insurance coverages, and share price fluctuations. Please refer to the documents filed by us with the SEC, including specifically the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, and our other filings with the SEC, which identify a…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We are currently under contract to acquire two properties in Orlando, FL and Colorado Springs, CO (included in our Denver, CO market data) which are expected to expand our footprint in each of these markets and support enhanced scale and synergies. The aggregate purchase price of these two properties is approximately $154.8 million, which we expect to fund using forward equity sales proceeds and draws on our unsecured revolver. We expect to close on the acquisitions during late-second quarter or early-third quarter 2025; however, there can be no assurance that these acquisitions will be consummated at expected pricing levels, within expected time frames, or at all.

Current wording

We are currently under contract to acquire one property in Orlando, FL for approximately $94.75 million. We expect to fund this acquisition on a leverage neutral basis using remaining proceeds from forward equity sales and draws on our unsecured revolver. This property will expand our footprint in Orlando, FL and we believe it will support enhanced scale and synergies. We expect to close on the acquisition before year end; however, there can be no assurance that this acquisition will be consummated at expected pricing levels, within expected time frames, or at all.

Previous wording

During the first quarter of 2025, Metropolis at Innsbrook, a 402 unit property in Richmond, VA, was listed for sale during the three months ended March 31, 2025 and is under contract to be sold during the three months ended June 30, 2025. From the sale, we expect to receive a return of our invested capital in the amount of $24.5 million and to recognize a gain of approximately $10.3 million.

Current wording

Metropolis at Innsbrook, a 402-unit property in Richmond, VA, was listed for sale during the three months ended March 31, 2025 and sold on July 21, 2025. We received $31.1 million in proceeds from the sale, comprised of a return of our initial investment of $24.5 million and equity proceeds of $6.6 million. We expect to recognize a gain of approximately $10.4 million from this sale during the third quarter 2025.

Previous wording

As of March 31, 2025 and December 31, 2024, we had investments in unconsolidated real estate entities of $101.6 million and $92.0 million, respectively.

Current wording

As of June 30, 2025 and December 31, 2024, we had investments in unconsolidated real estate entities of $106.9 million and $92.0 million, respectively.

Previous wording

As part of our merger with Steadfast Apartment REIT, Inc., we acquired two land parcels in Denver, Colorado that were being developed into multifamily properties that will contain 621 units, in the aggregate, upon completion, one of which was completed in 2024. As of March 31, 2025, we had one investment in real estate under development of $117.8 million.

Current wording

As part of our merger with Steadfast Apartment REIT, Inc., we acquired two land parcels in Denver, Colorado that were being developed into multifamily properties that will contain 621 units, in the aggregate, upon completion, one of which was completed in 2024. As of June 30, 2025, we had one investment in real estate under development of $91.8 million that is expected to contain 296 units upon completion.

Previous wording

Our value add program provides us with the opportunity to improve long-term growth through targeted unit renovations at communities where there is the potential for outsized rent growth. We completed renovations on 275 units during the three months ended March 31, 2025. From inception of our value add program in January 2018 through March 31, 2025, we completed renovations on 9,717 of the 14,593 units currently in our value add program, achieving a return on investment of 16.6% (and approximately 18.5% on the interior portion of such renovation costs). We compute return on cost by using the rent premium per unit per month, multiplied by 12, divided by the applicable renovation costs per unit and we compute the rent premium as the difference between the rental rate on the renovated unit (excluding the impact of concessions) and the market rent for a comparable unrenovated unit as of the date presented, as determined by management consistent with its customary rent-setting and evaluation procedures.

Current wording

Our value add program provides us with the opportunity to improve long-term growth through targeted unit renovations at communities where there is the potential for outsized rent growth. We completed renovations on 454 units during the three months ended June 30, 2025. From inception of our value add program in January 2018 through June 30, 2025, we completed renovations on 10,171 of the 17,381 units currently in our value add program, achieving a return on investment of 16.5% (and approximately 18.4% on the interior portion of such renovation costs). We compute return on investment by using the rent premium per unit per month, multiplied by 12, divided by the applicable renovation costs per unit and we compute the rent premium as the difference between the rental rate on the renovated unit (excluding the impact of concessions) and the market rent for a comparable unrenovated unit as of the date presented, as determined by management consistent with its customary rent-setting and evaluation procedures.

Previous wording

The Fifth Restated Credit Agreement increases the aggregate amount of borrowings under the credit agreement to $1.35 billion and permits IROP to request an increase in such aggregate amount to up to $2.0 billion subject to certain terms and conditions, including receipt of commitments from one or more lenders, whether or not currently parties to the Fifth Restated Credit Agreement, to provide such increased amounts, which increase may be allocated, at IROP’s option, to the Unsecured Revolver and/or to one or more of the term loans, in accordance with the Fifth Restated Credit Agreement. Refer to our 2024 Annual Report on Form 10-K for additional borrowing terms and financial covenant details.

Current wording

The Fifth Restated Credit Agreement increased the aggregate amount of borrowings under the credit agreement to $1.35 billion and permits IROP to request an increase in such aggregate amount to up to $2.0 billion subject to certain terms and conditions, including receipt of commitments from one or more lenders, whether or not currently parties to the Fifth Restated Credit Agreement, to provide such increased amounts, which increase may be allocated, at IROP’s option, to the Unsecured Revolver and/or to one or more of the term loans, in accordance with the Fifth Restated Credit Agreement. Refer to our 2024 Annual Report on Form 10-K for additional borrowing terms and financial covenant details.

Previous wording

During the three months ended March 31, 2025, we entered into forward sales transactions under the ATM Program for the forward sale of an aggregate of 2.7 million shares of our common stock. The forward sales transactions had not settled as of March 31, 2025, and we had not received any net proceeds from these transactions as of March 31, 2025. Subject to our right to elect net share settlement, we expect to physically settle the forward sales transactions by the maturity date of March 31, 2026. Assuming the forward sales transactions are physically settled in full utilizing the current forward sales price of $20.86 per share, we expect to receive proceeds, net of sales commissions of approximately $55.9 million, subject to adjustment in accordance with the forward sales transactions. We intend to use substantially all of the net proceeds to fund potential acquisitions and other investment opportunities or for general corporate purposes, including the reduction of outstanding borrowings under our unsecured revolver.

Current wording

During the three months ended March 31, 2025, we entered into forward sales transactions under the ATM Program for the forward sale of an aggregate of 2.7 million shares of our common stock. The forward sales transactions had not settled as of June 30, 2025, and we had not received any net proceeds from these transactions as of June 30, 2025. Subject to our right to elect net share settlement, we expect to physically settle the forward sales transactions by the maturity date of March 31, 2026. Assuming the forward sales transactions are physically settled in full utilizing the current forward sales price of $20.88 per share, we expect to receive proceeds, net of sales commissions of approximately $56.0 million, subject to adjustment in accordance with the forward sales transactions. We intend to use substantially all of the net proceeds to fund potential acquisitions and other investment opportunities or for general corporate purposes, including the reduction of outstanding borrowings under our unsecured revolver.

Previous wording

As of March 31, 2025, we owned and consolidated 113 multifamily apartment properties, of which 108 comprised the Same-Store Portfolio.

Current wording

As of June 30, 2025, we owned and consolidated 113 multifamily apartment properties, of which 105 comprised the Same-Store Portfolio.

Previous wording

Depreciation and amortization expense. Depreciation and amortization expense increased $5.0 million to$58.7 million for the three months ended March 31, 2025 from$53.7 million for the three months ended March 31, 2024. The increase was primarily due to depreciation expenses driven by capital expenditures related to our value add program and higher intangible asset amortization expenses from our recent property acquisitions compared to the prior year.

Current wording

Depreciation and amortization expense. Depreciation and amortization expense increased $5.7 million to$59.8 million for the three months ended June 30, 2025 from$54.1 million for the three months ended June 30, 2024. The increase was primarily due to depreciation expenses driven by capital expenditures related to our value add program and higher intangible asset amortization expenses from our recent property acquisitions compared to the same prior year period.

Previous wording

Interest expense. Interest expense decreased $1.3 million to $19.3 million for the three months ended March 31, 2025 from $20.6 million for the three months ended March 31, 2024. The decrease in interest expense was primarily driven by a $152 million decrease in our average outstanding debt during the three months ended March 31, 2025, due to payoffs of mortgages from property sales.

Current wording

Interest expense. Interest expense increased $1.3 million to $18.8 million for the three months ended June 30, 2025 from $17.5 million for the three months ended June 30, 2024. The increase in interest expense was primarily driven by an increase in our effective interest rate on consolidated debt from 4.1% for the three months ended June 30, 2024 to 4.2% for the three months ended June 30, 2025, and lower interest capitalization on recently stabilized development in Denver, Colorado.

Previous wording

Rental and other property revenue. Revenue from rental and other property revenue of the consolidated portfolio increased $0.6 million to $160.9 million for the three months ended March 31, 2025 from $160.3 million for the three months ended March 31, 2024. The increase was primarily attributable to a $3.4 million increase in same-store rental and other property revenue driven by a 0.9% increase in average effective monthly rents and a 1.0% increase in average occupancy compared to the prior year period, partially offset by a $2.8 million decrease in non same-store revenue due to property sales.

Current wording

Rental and other property revenue. Revenue from rental and other property revenue of the consolidated portfolio increased $4.4 million to $322.8 million for the six months ended June 30, 2025 from $318.4 million for the six months ended June 30, 2024. The increase was primarily attributable to a $5.0 million increase in same-store rental and other property revenue driven by a 0.9% increase in average effective monthly rents and a 0.7% increase in average occupancy compared to the prior year period.

Previous wording

Property operating expenses. Property operating expenses decreased $0.7 million to $59.3 million for the three months ended March 31, 2025 from $60.0 million for the three months ended March 31, 2024. The decrease was due to a $1.6 million decrease in non same-store property operating expenses due to property sales, partially offset by a $0.8 million increase in same-store operating expenses.

Current wording

Property operating expenses. Property operating expenses decreased $0.7 million to $120.2 million for the six months ended June 30, 2025 from $120.9 million for the six months ended June 30, 2024. The decrease was due to a $1.0 million decrease in non same-store property operating expenses due to property sales, partially offset by a $0.3 million increase in same-store operating expenses.

Previous wording

Property management expenses. Property management expenses increased $0.3 million to $7.8 millionfor the three months ended March 31, 2025 from $7.5 million for the three months ended March 31, 2024 primarily due to higher personnel costs, software subscriptions and training costs compared to the prior year.

Current wording

Property management expenses. Property management expenses increased $0.3 million to $15.5 million for the six months ended June 30, 2025 from $15.2 million for the six months ended June 30, 2024. The increase was primarily due to higher compensation costs compared to the same prior year period.

Previous wording

*Casualty (gains) losses, net.*During the three months ended March 31, 2025 and March 31, 2024 we incurred casualty gain of $0.1 million and casualty loss of $2.3 million, respectively. The loss during the three months ended March 31, 2024 was primarily due to winter storm damage and fire at various properties, where the carrying value of the damage exceeded insurance proceeds due to policy deductible levels.

Current wording

*Casualty losses.*During the six months ended June 30, 2025 and June 30, 2024, we incurred $0.1 million and $2.8 million in casualty losses, respectively. The loss during the six months ended June 30, 2024 was primarily due to winter storm damage and fire damage at various properties, where the carrying value of the damage exceeded insurance proceeds due to policy deductible levels.

Previous wording

Gain on sale (loss on impairment) of real estate assets, net. During the three months ended March 31, 2025, we sold one multi-family property resulting in a gain on sale of $1.5 million. During the three months ended March 31, 2024, we sold five multifamily properties under our Portfolio Optimization and Deleveraging Strategy resulting in an aggregate gain of $25.6 million partially offset by a loss on impairment of $15.1 million in the three months ended March 31, 2024, as a result of the carrying value of the real estate exceeding the expected sales price less transaction costs.

Current wording

Gain on sale (loss on impairment) of real estate assets, net. During the six months ended June 30, 2025, we sold one multi-family property resulting in a gain on sale of $1.5 million. During the six months ended June 30, 2024, we sold six multi-family properties and recognized a gain on sale of real estate, net of $10.4 million comprised of a $25.5 million gain on sale of real estate, net, partially offset by a loss on impairment of $15.1 million for one property held for sale as of June 30, 2024, as a result of the carrying value of the real estate exceeding the expected sales price less transaction costs.

Previous wording

Set forth below is a reconciliation of net income to FFO and CFFO for the three months ended March 31, 2025 and 2024 (in thousands, except share and per share information):

Current wording

Set forth below is a reconciliation of net income to FFO and CFFO for the three and six months ended June 30, 2025 and 2024 (in thousands, except share and per share information):

Previous wording

Set forth below is a reconciliation of GAAP net income to Same-Store Portfolio NOI for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

Set forth below is a reconciliation of GAAP net income to Same-Store Portfolio NOI for the three and six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

Set forth below is Same-Store Portfolio(a) NOI for the three months ended March 31, 2025 and 2024 (in thousands, except per unit data):

Current wording

Set forth below is Same-Store Portfolio(a) NOI for the three and six months ended June 30, 2025 and 2024 (in thousands, except per unit data):

Previous wording

As of March 31, 2025 and 2024, we maintained cash and cash equivalents, and restricted cash of approximately $48.3 million and $41.9 million, respectively. Our cash and cash equivalents were generated from the following activities (dollars in thousands):

Current wording

As of June 30, 2025 and 2024, we maintained cash and cash equivalents, and restricted cash of approximately $42.5 million and $47.4 million, respectively. Our cash and cash equivalents were generated from the following activities (dollars in thousands):

Previous wording

Our cash inflows from operating activities during the three months ended March 31, 2025 and 2024 were primarily driven by ongoing operations of our properties. The $16.3 million increase in cash inflows from operating activities during the three months ended March 31, 2025, were primarily driven by the decrease in real estate tax obligations associated with the sale of 10 properties as part of our Portfolio Optimization and Deleveraging Strategy, our recent acquisitions in Charlotte, Indianapolis, Orlando and Tampa-St. Petersburg and successful appeals to lower the assessed values at certain properties. In addition, our cash inflows from operating activities increased during the three months ended March 31, 2025, as a result of the timing of interest payments on unsecured private placement notes entered into in October 2024, an increase in prepaid rent and improved operations at our portfolio driven primarily by increasing occupancy and average rental rates.

Current wording

Our cash inflows from operating activities during the six months ended June 30, 2025 were primarily driven by ongoing operations of our properties. The $15.5 million increase in cash inflows from operating activities during the six months ended June 30, 2025 were primarily driven by the decrease in real estate tax obligations associated with the sale of 10 properties as part of our previously disclosed Portfolio Optimization and Deleveraging Strategy, our recent acquisitions in Charlotte, Indianapolis, Orlando and Tampa-St. Petersburg and successful appeals to lower the assessed values at certain properties. In addition, our cash inflows from operating activities increased during the six months ended June 30, 2025, as a result of improved operations at our portfolio driven primarily by increasing occupancy and average rental rates. Our cash inflows from operating activities during the six months ended June 30, 2024 were primarily driven by ongoing operations of our properties.

Previous wording

Our cash inflows from investing activities during the three months ended March 31, 2025 were primarily due to $109.2 million of proceeds from the disposition of one property, partially offset by $58.6 million to acquire one multifamily property, $21.5 million of capital expenditures, $10.3 million of investments in unconsolidated real estate entities and $7.1 million of investments in real estate under development. Our cash inflows from investing activities during the three months ended March 31, 2024 were primarily due to $292.7 million of proceeds from the disposition of five properties under our Portfolio Optimization and Deleveraging Strategy and $2.7 million of proceeds from insurance claims, partially offset by $24.6 million of capital expenditures, $1.3 million of investments in unconsolidated real estate entities, and $14.1 million of investments in real estate under development.

Current wording

Our cash outflows from investing activities during the six months ended June 30, 2025 were primarily due to the acquisition of one multifamily property in the amount of $58.6 million, $53.7 million of capital expenditures, $16.1 million of investments in unconsolidated real estate entities, $12.2 million of investments in real estate under development and $3.8 million in escrow deposits for pending real estate acquisitions, partially offset by $109.2 million of proceeds from the disposition of one property. Our cash inflows from investing activities during the six months ended June 30, 2024 were primarily due to $320.6 million of proceeds from the disposition of six properties under our Portfolio Optimization and Deleveraging Strategy and $3.5 million of proceeds from insurance claims, partially offset by $55.7 million of capital expenditures, $26.9 million of investments in real estate under development and $3.0 million of investments in unconsolidated real estate entities.

Previous wording

Our cash outflows from financing activities during the three months ended March 31, 2025 were primarily due to mortgage principal repayments of $74.4 million and payment of dividends on our common stock and noncontrolling interests of $38.1 million, partially offset by the $50.0 million issuance of common stock from our forward equity transactions. Our cash outflows from financing activities during the three months ended March 31, 2024 were primarily due to credit facility and mortgage principal repayments of $362.7 million, payment of dividends on our common stock and noncontrolling interests of $37.1 million, partially offset by $94.0 million of draws on our unsecured revolver.

Current wording

Our cash outflows from financing activities during the six months ended June 30, 2025 were primarily due to mortgage principal repayments of $94.4 million and payment of dividends on our common stock and noncontrolling interests of $76.0 million, partially offset by the $49.9 million issuance of common stock from our forward equity transactions. Our cash outflows from financing activities during the six months ended June 30, 2024 were primarily due to unsecured credit facility and mortgage principal repayments of $422.3 million, payment of dividends on our common stock and noncontrolling interests of $74.0 million, partially offset by $131.0 million of draws on our unsecured revolver.

Previous wording

There were no off-balance sheet arrangements during the three months ended March 31, 2025 that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our interests.

Current wording

There were no off-balance sheet arrangements during the six months ended June 30, 2025 that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our interests.