INDEPENDENCE REALTY TRUST, INC.

Except as set forth below, there have not been any material changes from the risk factors disclosed in Part I, Item 1A of our 2025 Annual Report.

Risks Relating to the Mergers

The Mergers may not be consummated on the terms or timeline currently contemplated, or at all. Consummation of the Mergers is subject to many conditions and if these conditions are not satisfied or waived, the Mergers will not be consummated, which could adversely affect the business of IRT and, in certain circumstances, result in IRT being required to pay a termination fee to CSR.

Consummation of the Mergers is subject to certain conditions, including: (1) the receipt of required approvals from IRT’s stockholders and from CSR’s shareholders; (2) approval for listing on the New York Stock Exchange (the “NYSE”), subject to official notice of issuance, of the shares of IRT Common Stock to be issued in the Mergers, including shares of IRT Common Stock issuable upon conversion of IROP Common Units, IROP Series A Preferred Units and IROP Series B Preferred Units issued in the Partnership Merger; (3) the absence of a court order or other legal restraint preventing the consummation of the Mergers; (4) accuracy of each party’s representations and warranties, subject in most cases to materiality or material adverse effect qualifications; (5) material compliance with each party’s covenants; (6) receipt by CSR of an opinion to the effect that the Company Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”); (7) receipt by IRT of an opinion of counsel to CSR that CSR qualifies as a REIT under the Code, and receipt by CSR of an opinion of counsel to IRT that IRT qualifies as a REIT under the Code; and (8) the absence of any continuing material adverse effect on CSR or IRT since the date of the Merger Agreement.

IRT cannot provide assurance that the conditions to consummation of the Mergers will be satisfied or waived, and accordingly, that the Mergers will be consummated on the terms or timeline that the parties anticipate, or at all. IRT or CSR may terminate the Merger Agreement under certain circumstances, including, among other reasons, if the Mergers are not consummated on or before June 30, 2027.

Failure to consummate the Mergers may adversely affect IRT’s results of operations, financial condition and business prospects for many reasons, including, among others:

The Exchange Ratio will not be adjusted in the event of any change in the price of IRT Common Stock or in the relative values of IRT and CSR.

At the Company Merger Effective Time, each issued and outstanding share of CSR Common Stock (other than certain shares set forth in the Merger Agreement) will be automatically converted into the right to receive newly issued shares of IRT Common Stock equal to the Exchange Ratio, with cash paid in lieu of fractional shares. At the Partnership Merger Effective Time, each issued and outstanding common unit of CSR OP will be automatically converted into the right to receive a number of IROP Common Units equal to the Exchange Ratio, rounded up to the nearest whole unit (for each holder of common units of CSR OP, after aggregation of all fractional IROP Common Units otherwise to be received by such holder). The Exchange Ratio will not be adjusted for changes in the market price of IRT Common Stock or in the relative values of IRT and CSR. It may be adjusted for stock splits, reverse stock splits, combinations, subdivisions or reclassifications of IRT Common Stock and CSR Common Stock and for cash dividends or other cash distributions reasonably determined in good faith to be necessary to maintain IRT’s or CSR’s qualification as a REIT or to avoid the incurrence of income or excise taxes (“REIT Dividends”) declared before the closing date of the Mergers, as provided in the Merger Agreement. The price of IRT Common Stock at the closing of the Mergers may vary from its price on September 8, 2026, the date the Original Merger Agreement was executed. Changes in the price of IRT Common Stock prior to consummation of the Mergers will affect the market value of the merger consideration, which may be more or less than the fair value of CSR’s net assets on the closing date of the Mergers. Changes in IRT Common Stock price may result from a variety of factors (many of which are beyond the control of IRT), including the following factors:

The pendency of the Mergers could adversely affect the business and operations of IRT and CSR.

In connection with the pending Mergers, current and prospective employees of IRT and CSR may experience uncertainty about their future roles with IRT following the Mergers, which may materially adversely affect the ability of each of IRT and CSR to attract and retain key personnel during the pendency of the Mergers. If IRT is unable to retain personnel who are critical to the future operations of the companies, IRT could face disruptions in its operations, loss of existing residents, loss of key information, expertise or know-how and unanticipated additional recruitment and training costs. In addition, the loss of key IRT and CSR personnel could diminish the anticipated benefits of the Mergers. No assurance can be given that the combined company will be able to retain or attract employees to the same extent that IRT and CSR have previously been able to retain or attract their own employees. In addition, due to operating covenants in the Merger Agreement, IRT may be unable (without the other party’s prior written consent), during the pendency of the Mergers, to pursue strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions, even if such actions would prove beneficial. Similarly, some current or prospective operators or vendors of each of IRT and CSR may delay or defer decisions, which could adversely affect the revenues, earnings, funds from operations, cash flows and expenses of IRT and CSR, regardless of whether the Mergers are consummated.

IRT stockholders will be diluted by the Mergers.

The Mergers will dilute the ownership position of IRT stockholders. IRT may also issue additional shares of common stock or preferred stock in the future and IROP may issue additional units of limited partnership in the future and such issuances would create further dilution. Consequently, IRT stockholders, as a general matter, will have less influence over the management and policies of IRT after consummation of the Mergers than they currently exercise.

Management’s attention may be diverted from ongoing business operations and opportunities during the pendency of the Mergers.

The Mergers may divert management’s attention from ongoing business operations and opportunities. Completion of the Mergers will require a significant amount of time and focus from the management teams of IRT, which may divert attention from day-to-day operations and the execution of other strategic initiatives. The diversion of management’s attention and any difficulties encountered in the transition and integration process could adversely affect the business, financial results and stock price of IRT.

The Mergers and related transactions are subject to approval by stockholders of both IRT and CSR.

In order for the Mergers to be consummated, CSR shareholders must approve the Company Merger, which requires the affirmative vote of the holders of at least a majority of the outstanding shares of CSR Common Stock entitled to vote on such proposal. In addition, IRT stockholders must approve the issuance of IRT Common Stock by the affirmative vote of at least a majority of the votes cast on such proposal. This approval by IRT stockholders is required under applicable NYSE rules.

The Merger Agreement contains provisions that could discourage a potential competing acquiror of CSR or could result in any competing proposal being at a lower price than it might otherwise be.

The Merger Agreement contains provisions that, subject to limited exceptions, restrict CSR from soliciting, initiating, knowingly encouraging or facilitating competing third-party proposals to effect, among other things, a merger, reorganization, share sale, share exchange, asset sale, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving any purchase or sale of 20% or more of the consolidated assets of CSR or 20% or more of the outstanding CSR Common Stock, and contains mirrored restrictions applicable to IRT with respect to competing proposals involving IRT. IRT generally has an opportunity to offer to modify the terms of the Merger Agreement in response to any competing acquisition proposal before the board of trustees of CSR may withdraw or modify its recommendation or terminate the Merger Agreement to enter into such a competing acquisition proposal, and CSR has a mirrored opportunity with respect to any competing proposal involving IRT (except that IRT may not terminate the Merger Agreement to accept a competing acquisition proposal). In some circumstances, on termination of the Merger Agreement, CSR may be required to pay IRT a termination fee of $45.0 million, or IRT may be required to pay CSR a termination fee of $60.0 million.

These provisions could discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of CSR or IRT from considering or proposing such an acquisition, even if it were prepared to pay or offer consideration with a higher value than the value expected to be received or realized in the Mergers, or might result in a potential competing acquiror proposing to offer less consideration or less favorable terms than it might otherwise have proposed because of the added expense of the termination fee that may become payable in certain circumstances under the Merger Agreement.

An adverse outcome in any litigation or other legal proceedings relating to the Merger Agreement, or the transactions contemplated thereby, could have a material adverse impact on the businesses of IRT and CSR and their ability to consummate the transactions contemplated by the Merger Agreement.

Transactions similar to the Mergers are frequently the subject of litigation or other legal proceedings, including actions alleging that either party’s board of directors or board of trustees, as applicable, breached their respective duties by entering into a merger agreement or any other claims (contractual or otherwise) arising out of a merger or the transactions related thereto. If litigation or other legal proceedings are brought against IRT, CSR, the board of directors of IRT, the board of trustees of CSR or their respective subsidiaries in connection with the Merger Agreement, or the transactions contemplated thereby, the respective parties to the proceeding intend to defend against such actions but they might not be successful in doing so. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on IRT’s or CSR’s ability to consummate the Mergers or their respective business, results of operations or financial position, including through the possible diversion of either company’s resources or distraction of key personnel.

IRT may finance a portion of the transactions contemplated by the Merger Agreement, including the refinancing of indebtedness of CSR and its subsidiaries, and pay related costs, fees and expenses, with the Merger Term Loan.

IRT may finance a portion of the transactions contemplated by the Merger Agreement, including the refinancing of indebtedness of CSR and its subsidiaries, and pay related costs, fees and expenses, with the Merger Term Loan (as defined below). To this end, IROP entered into a commitment letter, dated as of September 8, 2026 (the “Debt Commitment Letter”), with Royal Bank of Canada, pursuant to which Royal Bank of Canada committed to provide, on the terms and subject to the conditions set forth in the Debt Commitment Letter, on the closing date of the Mergers, up to $716,000,000 under a senior unsecured term loan facility (the “Merger Term Loan”). In the event the Merger Term Loan contemplated by the Debt Commitment Letter is not available on the anticipated terms, there is a risk that other financing may not be available on acceptable terms, in a timely manner or at all.

Risks Relating to IRT Following Consummation of the Mergers

IRT expects to incur substantial expenses related to the Mergers and the transactions contemplated by the Merger Agreement.

IRT expects to incur substantial expenses in consummating the Mergers and integrating the business, operations, networks, systems, technologies, policies and procedures of IRT and CSR. There are a large number of systems that must be integrated or separated in connection with the Mergers, and the other transactions contemplated by the Merger Agreement, including leasing, billing, management information, purchasing, accounting and finance, sales, payroll and benefits, fixed asset, lease administration and regulatory compliance. While IRT has assumed that a certain level of transaction and integration expenses would be incurred, there are a number of factors beyond its control that could affect the total amount or the timing of its integration expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. The expenses in connection with the Mergers and the transactions contemplated by the Merger Agreement are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.

Following consummation of the Mergers, IRT may be unable to integrate the business of CSR successfully or realize the anticipated synergies and related benefits of the Mergers and the transactions contemplated by the Merger Agreement or do so within the anticipated time frame.

The Mergers involve the combination of IRT and CSR, two companies which currently operate as independent companies. In addition, CSR recently completed a series of transactions to provide for the internalization of its previously externalized management functions. IRT will be required to devote significant management attention and resources to integrating their business practices and operations. Potential difficulties that IRT may encounter in the integration process include the following:

For all these reasons, it is possible that the integration process could result in the distraction of the combined company’s management, the disruption of the combined company’s ongoing business or inconsistencies in the combined company’s services, standards, controls, procedures and policies, any of which could adversely affect the ability of the combined company to maintain relationships with residents, customers, vendors, joint venture partners and employees or to achieve the anticipated benefits of the Mergers, or could otherwise adversely affect the business and financial results of the combined company. Furthermore, while it is anticipated that certain expenses will be incurred to achieve synergies, cost savings and related benefits of the Mergers, such expenses are difficult to estimate accurately, and may exceed current estimates. Accordingly, the benefits expected to be realized from the Mergers may be offset by costs incurred to, or delays in, integrating the businesses of IRT and CSR.

IRT’s level of indebtedness will increase upon consummation of the Mergers and may increase the related risks IRT now faces.

Upon consummation of the Mergers, IRT intends to assume and/or refinance certain indebtedness of CSR, CSR OP and their subsidiaries and, as a result, IRT’s consolidated indebtedness will increase and it will be subject to increased risks associated with debt financing, including an increased risk that IRT’s cash flows could be insufficient to meet required payments on its indebtedness or to continue to pay dividends on its common stock. On September 30, 2026, IRT had consolidated indebtedness of approximately $2.401 billion, net of approximately $10.941 million of unamortized deferred financing costs and $15.795 million of loan premiums, net. Taking into account CSR’s consolidated indebtedness of approximately $812.607 million, net of approximately $31.212 million of unamortized deferred financing costs, premiums and discounts, on September 30, 2026, the total consolidated indebtedness of the combined company (excluding fair value adjustments) as of September 30, 2026 would have been approximately $3.214 billion, net of unamortized deferred financing costs, premiums and discounts.

The combined company’s increased indebtedness could have important consequences to holders of its common stock, including:

IRT may incur additional indebtedness in the future.

In connection with executing its business strategy following the Mergers, IRT expects to evaluate the possibility of acquiring additional properties and making strategic investments, and it may elect to finance these transactions by incurring additional indebtedness. The amount of such indebtedness could have material adverse consequences for the combined company following the Mergers, including hindering its ability to adjust to changing market, industry or economic conditions; limiting its ability to access the capital markets to refinance maturing debt or to fund acquisitions; limiting the amount of cash flow available for future operations, acquisitions, dividends, stock repurchases or other uses; making the combined company more vulnerable to economic or industry downturns, including interest rate increases; and placing the combined company at a competitive disadvantage compared to less leveraged competitors.

Tax protection agreements could limit the combined company’s ability to sell or otherwise dispose of certain properties and are expected to require the combined company to maintain certain debt levels that otherwise would not be required to operate its business.

In connection with the Mergers, the combined company is expected to succeed to or assume tax protection agreements that provide that if the combined company or IROP sells, exchanges, transfers, conveys or otherwise disposes of certain properties in a taxable transaction for a specified period of time, the combined company or IROP will indemnify certain protected partners against certain tax liabilities attributable to built-in gain that existed with respect to such properties at the time of their acquisition by CSR OP, together with a gross up for tax liabilities incurred as a result of such indemnification payment. Therefore, although it may be in the combined company’s stockholders’ best interest for the combined company to sell one or more of these properties, it may be economically prohibitive for the combined company to do so because of these indemnity obligations. Moreover, the combined company is expected to be required to maintain certain minimum levels of indebtedness, and in certain cases to provide certain protected partners with the opportunity to guarantee qualifying indebtedness, in each case, in order to enable such protected partners to continue to defer certain tax liabilities. These obligations are expected to require the combined company to maintain more or different indebtedness than it would otherwise require for its business. If IROP is unable to maintain the minimum levels or appropriate types of indebtedness required under the tax protection agreements, IRT or IROP may be required to indemnify certain protected partners in amounts determined by reference to the gain recognized by such protected partners as a result of such failure, together with a gross up for tax liabilities incurred as a result of such indemnification payment. As a result, these tax protection agreements may restrict the combined company’s ability to take actions or make decisions that otherwise would be in its best interests, including in connection with any future strategic transaction.

The Mergers will result in changes to IRT’s board of directors that may affect its strategy and operations.

Upon consummation of the Mergers, IRT’s board of directors will be comprised of the nine incumbent directors of IRT’s board of directors and two incumbent trustees of CSR’s board of trustees. IRT will cause its board of directors to include two of the individuals then serving as independent members of CSR’s board of trustees, subject to the evaluation and recommendation by the Nominating and Governance Committee of IRT’s board of directors in its sole discretion in accordance with such committee’s charter. Scott F. Schaeffer, currently IRT’s Chairman of the board of directors and Chief Executive Officer, will continue in these positions. This new composition of IRT’s board of directors may affect IRT’s business strategy and operating decisions following consummation of the Mergers. In addition, there can be no assurances that the new board of directors will function effectively as a team and that there will not be any adverse effects on IRT’s business as a result.

IRT will depend on key personnel for its future success, and the loss of key personnel or inability to attract and retain personnel could harm the combined company’s business.

The success of the combined company following consummation of the Mergers will depend in part upon its ability to retain key IRT and CSR executives and other employees. Key executives and other employees may depart either before or after consummation of the Mergers because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company following consummation of the Mergers. Accordingly, no assurance can be given that IRT or, following consummation of the Mergers, the combined company, will be able to retain key executives or other employees to the same extent as in the past.

The future results of IRT will suffer if IRT does not effectively manage its operations following consummation of the Mergers and the transactions contemplated by the Merger Agreement.

Following the Mergers, IRT expects to continue to expand its operations through additional acquisitions, development opportunities and other strategic transactions, some of which involve complex challenges. The future success of the combined company will depend, in part, upon the ability of the combined company to manage its expansion opportunities, which pose substantial challenges for the combined company to integrate new operations into its existing business in an efficient and timely manner, to successfully monitor its operations, costs, regulatory compliance and service quality and to maintain other necessary internal controls. IRT cannot assure you that following consummation of the Mergers, the combined company’s expansion or acquisition opportunities will be successful, or that the combined company will realize its expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits.

The combined company may be subject to environmental liabilities and the cost of remediating contamination may be substantial.

Under various federal, state and local environmental, health and safety laws and regulations, a current or former owner or operator of real property may be liable for the cost of removal, remediation or disposal of hazardous or toxic substances on, under or in such property. These laws typically impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of the hazardous or toxic substances. The costs of investigation, removal or remediation of hazardous or toxic substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner’s or operator’s ability to sell or rent the affected property or to borrow using the property as collateral. Environmental laws may impose restrictions on the manner in which property may be used or transferred, or in which businesses may be operated, and may require expenditures to bring the property into compliance. Persons who arrange for the disposal of hazardous or toxic substances at a disposal site may be liable for the costs of removal or remediation of hazardous substances at that disposal site. In addition, certain environmental laws may impose liability for releases of hazardous substances into the air or water from a property, including asbestos-containing materials, and third parties may seek recovery from owners or operators of real property for personal injury or property damage associated with exposure to released hazardous substances. The combined company cannot provide assurance that it will be able to identify all potential environmental liabilities prior to its acquisition of CSR or that the combined company will not incur material environmental liabilities in the future.

The combined company may be required to record impairment charges or write-downs of CSR’s assets following the Mergers.

The combined company will be required to account for the Mergers using the acquisition method of accounting. Under this method of accounting, the combined company will record the assets acquired and liabilities assumed by it in connection with the Mergers at their estimated fair values as of the closing date of the Mergers. The estimated fair values of acquired assets may be affected by changes in the operations of the properties, changes in local, regional and national market conditions and other factors such as changes in interest rates. Following the Mergers, the combined company may be required to write-down or record impairment charges with respect to CSR’s assets if their carrying values exceed their estimated fair values or such assets are otherwise determined to be impaired. Any such write-down or impairment charges could have a material adverse effect on the combined company’s business, financial condition and results of operations.

The trading price of shares of IRT Common Stock following consummation of the Mergers may be affected by factors different from those affecting the price of shares of IRT Common Stock before consummation of the Mergers.

If the Mergers are consummated, then, based on the shares of IRT Common Stock and CSR Common Stock outstanding as of October 2, 2026, legacy IRT stockholders and holders of IROP Common Units are estimated to own approximately 78% of the issued and outstanding shares of IRT Common Stock and IROP Common Units, and legacy CSR shareholders and holders of common units of CSR OP will own approximately 22% of the issued and outstanding shares of IRT Common Stock and IROP Common Units. The results of operations of IRT, as well as the trading price of IRT Common Stock, after consummation of the Mergers may be affected by factors different from those currently affecting the trading prices of IRT Common Stock. These different factors include:

Accordingly, the historical trading prices of IRT Common Stock and the historical financial results of IRT and CSR may not be indicative of these matters for IRT after the Mergers.

Holders of outstanding indebtedness of CSR and its subsidiaries, and other third parties, may exercise contractual rights under the respective debt agreements in connection with the Mergers.

CSR and its subsidiaries are party to debt agreements that give the holders of indebtedness under such agreements certain rights following a merger or change of control, including the right to demand immediate repayment upon the merger or change of control absent a waiver or consent by the applicable holders of indebtedness. Debt agreements covering substantially all of CSR’s indebtedness include such provisions. While IRT is working to gain holder waivers and/or consents required to assume certain indebtedness of CSR’s subsidiaries that carries such provisions to avoid the risk of accelerated repayment, there is no assurance that any or all of the holders of such indebtedness will provide requested waivers or consents and if they do not, and such indebtedness and any other indebtedness of CSR and its subsidiaries that carries such provisions is not refinanced at or prior to the consummation of the Mergers, then the aggregate amount of indebtedness that would become due and payable upon consummation of the Mergers would be substantial and could result in a material adverse effect on IRT. To mitigate the risk of the need to refinance indebtedness of CSR and its subsidiaries, IROP has entered into the Debt Commitment Letter to provide short-term liquidity, if needed.

The completion of the Mergers may also trigger change-in-control, right of first refusal or other provisions in other agreements to which CSR is a party. If CSR is unable to negotiate waivers of those provisions, the counterparties may exercise their rights and remedies under the applicable agreements, including in some instances potentially terminating the agreements or seeking monetary damages. Even if CSR is able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to the combined company.

IRT has the right to defer the closing of the Mergers if consent to the transactions contemplated by the Merger Agreement has not been obtained from the holders of certain indebtedness of CSR’s subsidiaries.

IRT has the right, in its sole discretion and by written notice to CSR, to defer the closing of the Mergers until the earliest of (i) the tenth business day after, with respect to each designated mortgage loan of CSR’s subsidiaries that has not been repaid, refinanced or defeased in accordance with the Merger Agreement, the applicable lender has granted the required lender consent to the transactions contemplated by the Merger Agreement or has indicated that it is ready, willing and able to grant that consent subject only to the closing of the Mergers and satisfaction of conditions thereto that by their nature are to be satisfied at the closing of the Mergers and all other conditions to the effectiveness of that consent have been satisfied or waived, and (ii) the tenth business day before June 30, 2027. Any such deferral could delay consummation of the Mergers and increase the risk that the Mergers will not be consummated before June 30, 2027, the outside date under the Merger Agreement.

Risks Relating to REIT Status and Certain Tax Matters

IRT may incur adverse tax consequences if IRT or CSR has failed or fails to qualify as a REIT for U.S. federal income tax purposes.

Each of IRT and CSR has operated in a manner that it believes has allowed it to qualify as a REIT for U.S. federal income tax purposes under the Code and intends to continue to do so through the time of the Mergers. IRT intends to continue operating in such a manner following the Mergers. Neither IRT nor CSR has requested or plans to request a ruling from the Internal Revenue Service (the “IRS”) that it qualifies as a REIT. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within the control of IRT or CSR may affect each company’s ability to qualify as a REIT. In order to qualify as a REIT, each of IRT and CSR must satisfy a number of requirements, including requirements regarding the ownership of its stock and the composition of its gross income and assets. Also, a REIT must make distributions to stockholders aggregating annually at least 90% of its net taxable income, excluding any net capital gains.

Consummation of the Mergers is conditioned on receipt by IRT of an opinion from Hunton Andrews Kurth LLP (or other nationally recognized tax counsel) generally to the effect that CSR, during the period commencing with its taxable year ended April 30, 2016 and ending with its taxable year ended December 31, 2025, was organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and, with respect to any taxable year of CSR beginning on or after January 1, 2026 and ending on or prior to the closing date of the Mergers, was organized and operated in conformity with such requirements without regard to the distribution requirement described in Section 857(a)(1) of the Code for such taxable year. Consummation of the Mergers is also conditioned on receipt by CSR of an opinion from Troutman Pepper Locke LLP (or other nationally recognized tax counsel) to the effect that IRT, commencing with its taxable year ended December 31, 2016, was organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code and its current and proposed method of operation will enable it to continue to qualify for taxation as a REIT through the end of the taxable year that includes the closing date of the Mergers.

The foregoing REIT opinions will be based on factual representations provided by IRT and CSR to counsel and limited by the assumptions set forth therein, and are not a guarantee that IRT or CSR, in fact, has qualified, or, in the case of IRT, will continue to qualify as a REIT, nor are such opinions binding on the IRS. Moreover, as noted above, neither IRT nor CSR has requested or plans to request a ruling from the IRS that it qualifies as a REIT.

If IRT loses its REIT status, or is determined to have lost its REIT status in a prior year, it will face serious tax consequences that would substantially reduce its cash available for distribution, including cash available to pay dividends to its stockholders, because:

Even if IRT retains its REIT status, if CSR is determined to have lost its REIT status for a taxable year ending on or before the Mergers, IRT would be subject to adverse tax consequences. This could substantially reduce IRT’s cash available for distribution, including cash available to pay dividends to its stockholders, because, assuming that IRT otherwise maintains its REIT qualification:

If there is an adjustment to CSR’s taxable income or dividends paid deductions for taxable years ending on or prior to the Mergers, IRT could elect to use the deficiency dividend procedure in order to maintain CSR’s REIT status for such taxable years. That deficiency dividend procedure could require IRT to make significant distributions to its stockholders and to pay significant interest to the IRS.

As a result of all these factors, IRT’s or CSR’s failure to qualify as a REIT could impair IRT’s ability to expand its business and raise capital, and would materially adversely affect the market value of its common stock. In addition, for years in which IRT does not qualify as a REIT, it would not otherwise be required to make distributions to stockholders.

Risks Relating to an Investment in Common Stock of IRT following Consummation of the Mergers and the Transactions Contemplated by the Merger Agreement

The market price of IRT Common Stock may decline as a result of the Mergers and the transactions contemplated by the Merger Agreement.

The market price of IRT Common Stock may fluctuate significantly following completion of the Mergers, and holders of IRT Common Stock could lose some or all of the value of their investment. In particular, the market price of IRT Common Stock may decline as a result of the Mergers and the transactions contemplated by the Merger Agreement if, among other things, IRT does not achieve the perceived benefits of the Mergers and the transactions contemplated by the Merger Agreement or the effect of the Mergers and the transactions contemplated by the Merger Agreement on IRT’s results of operations or financial condition is not consistent with the expectations of financial or industry analysts.

In addition, upon consummation of the Mergers and the transactions contemplated by the Merger Agreement, IRT stockholders will own interests in IRT, which will operate an expanded business with a different mix of properties, risks and liabilities. Stockholders of IRT may not wish to continue to invest in IRT, or may wish to dispose of some or all of their shares of IRT Common Stock. If, following the effective time of the Mergers or while the Mergers are pending, large amounts of IRT Common Stock are sold, the market price of IRT Common Stock could decline, perhaps substantially.

Following consummation of the Mergers and the transactions contemplated by the Merger Agreement, IRT may not continue to pay dividends at the rate currently paid by IRT.

Following consummation of the Mergers, IRT may not pay dividends at the same level at which IRT currently pays dividends, or with the same frequency, including because of factors such as the following:

Stockholders of IRT will have no contractual or other legal right to dividends that have not been declared by IRT’s board of directors.

Each of IRT and CSR may have liabilities that are not known to the other party, or that may materialize in a manner not consistent with the other party’s expectations.

Each of IRT and CSR may have liabilities that the other party failed, or was unable, to discover in the course of performing its respective due diligence investigations. IRT and CSR may learn additional information about the other party that materially adversely affects it, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. As a result of these factors, the combined company may incur additional costs and expenses and may be forced to later write-down or write-off assets, restructure operations or incur impairment or other charges that could result in the combined company reporting losses. Even if IRT’s and CSR’s respective due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with its expectations. If any of these risks materialize, this could adversely affect the combined company’s financial condition and results of operations and could contribute to negative market perceptions about, or price movements of, IRT Common Stock following the Mergers.

Other Risks

The unaudited pro forma condensed consolidated financial statements filed with the SEC do not purport to be indicative of IRT’s results after consummation of the Mergers and the transactions contemplated by the Merger Agreement, and accordingly, you will have limited financial information on which to evaluate the future performance of IRT.

The unaudited pro forma condensed consolidated financial statements filed with the SEC were presented for informational purposes only and do not purport to be indicative of the financial position or results of operations that actually would have occurred had the Mergers and the transactions contemplated by the Merger Agreement been consummated as of the dates indicated, nor do they purport to be indicative of the future operating results or financial position of IRT after the Mergers and the transactions contemplated by the Merger Agreement. The unaudited pro forma condensed consolidated financial statements reflect adjustments, which are based upon preliminary estimates, to allocate the purchase price to CSR’s assets and liabilities.

In addition, the unaudited pro forma condensed consolidated financial statements do not reflect other future events that may occur after consummation of the Mergers, including the costs related to the planned integration of IRT and CSR and any future non-recurring charges resulting from the Mergers and the transactions contemplated by the Merger Agreement, and do not consider potential impacts of current market conditions on revenues or expense efficiencies. The unaudited pro forma condensed consolidated financial statements filed with the SEC were based in part on certain estimates and assumptions (including the estimated purchase price allocation described above) regarding the Mergers and the transactions contemplated by the Merger Agreement that IRT and CSR believe are reasonable under the circumstances. IRT cannot assure you that the estimates and assumptions will prove to be appropriate.