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What changed in INDEPENDENCE REALTY TRUST, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of INDEPENDENCE REALTY TRUST, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+352 added−299 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-28)

Top changes in INDEPENDENCE REALTY TRUST, INC.'s 2024 10-K

352 paragraphs added · 299 removed · 230 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

42 edited+42 added−27 removed38 unchanged
Biggest changeFederal Income Tax Considerations” contained in Exhibit 99.1 to this Annual Report on Form 10-K. 7 Table of Contents The table below reconciles the differences between reported net income, total taxable income and estimated REIT taxable income for the three years ended December 31, 2023 (dollars in thousands): For the Years Ended December 31, 2023 2022 2021 Net (loss) income $ (17,807) $ 120,659 $ 45,529 Add (deduct): Depreciation and amortization differences 48,013 76,021 9,280 Gain/loss differences 173,337 10,457 (1,344) Other book to tax differences: Share-based compensation expense (5,744) (8,099) (392) Non Deductible Merger and integration costs — — 28,381 Other 8,036 414 12,974 Total taxable income $ 205,835 $ 199,452 $ 94,428 Deductible capital gain distribution (102,877) (119,120) (78,181) Taxable income allocable to noncontrolling interest (4,854) (5,078) (660) Estimated REIT taxable income before dividends paid deduction $ 98,104 $ 75,254 $ 15,587 For the year ended December 31, 2023, the tax classification of our dividends on common shares was as follows: Record Date Payment Date Dividend Paid Ordinary Income Total Capital Gain Distribution Unrecaptured Section 1250 Gain Return of Capital Section 199A 3/31/2023 4/21/2023 $ 0.1400 $ 0.0364 $ 0.1036 $ 0.0560 $ — $ 0.0364 6/30/2023 7/21/2023 0.1600 0.0417 0.1183 0.0640 — 0.0417 9/29/2023 10/20/2023 0.1600 0.0417 0.1183 0.0640 — 0.0417 12/29/2023 1/19/2024 0.1600 0.0417 0.1183 0.0640 — 0.0417 $ 0.6200 $ 0.1615 $ 0.4585 $ 0.2480 $ — $ 0.1615 For the year ended December 31, 2022, the tax classification of our dividends on common shares was as follows: Record Date Payment Date Dividend Paid Ordinary Income Total Capital Gain Distribution Unrecaptured Section 1250 Gain Return of Capital Section 199A 4/1/2022 4/22/2022 $ 0.1200 $ 0.0011 $ 0.1189 $ 0.0185 $ — $ 0.0011 7/1/2022 7/22/2022 0.1400 0.0013 0.1387 0.0216 — 0.0013 9/30/2022 10/21/2022 0.1400 0.0013 0.1387 0.0216 — 0.0013 12/30/2022 1/20/2023 0.1400 0.0013 0.1387 0.0216 — 0.0013 $ 0.5400 $ 0.0050 $ 0.5350 $ 0.0833 $ — $ 0.0050 Insurance Our multifamily properties are covered by all risk property insurance covering the replacement cost for each building and business interruption and rental loss insurance.
Biggest changeFederal Income Tax Considerations” contained in Exhibit 99.1 to this Annual Report on Form 10-K. 8 Table of Contents The table below reconciles the differences between reported net income, total taxable income and estimated REIT taxable income for the three years ended December 31, 2024 (dollars in thousands): For the Years Ended December 31, 2024 2023 2022 Net income (loss) $ 40,033 $ (17,807) $ 120,659 Add (deduct): Depreciation and amortization differences 57,866 48,013 76,021 Gain/loss differences 148,964 173,337 10,457 Other book to tax differences: Share-based compensation expense 60 (5,744) (8,099) Non Deductible Merger and integration costs — — — Other 4,382 8,036 414 Total taxable income $ 251,305 $ 205,835 $ 199,452 Deductible capital gain distribution (136,161) (102,877) (119,120) Taxable income allocable to noncontrolling interest (6,122) (4,854) (5,078) Estimated REIT taxable income before dividends paid deduction $ 109,022 $ 98,104 $ 75,254 For the year ended December 31, 2024, the tax classification of our dividends on common shares was as follows: Record Date Payment Date Dividend Paid Ordinary Income Total Capital Gain Distribution Unrecaptured Section 1250 Gain Return of Capital Section 199A 3/29/2024 4/19/2024 $ 0.1600 $ 0.0195 $ 0.1405 $ 0.0720 $ — $ 0.0195 6/28/2024 7/19/2024 0.1600 0.0195 0.1405 0.0720 — 0.0195 9/30/2024 10/18/2024 0.1600 0.0195 0.1405 0.0720 — 0.0195 12/27/2024 1/17/2025 0.1600 0.0195 0.1405 0.0720 — 0.0195 $ 0.6400 $ 0.0780 $ 0.5620 $ 0.2880 $ — $ 0.0780 For the year ended December 31, 2023, the tax classification of our dividends on common shares was as follows: Record Date Payment Date Dividend Paid Ordinary Income Total Capital Gain Distribution Unrecaptured Section 1250 Gain Return of Capital Section 199A 3/31/2023 4/21/2023 $ 0.1400 $ 0.0364 $ 0.1036 $ 0.0560 $ — $ 0.0364 6/30/2023 7/21/2023 0.1600 0.0417 0.1183 0.0640 — 0.0417 9/29/2023 10/20/2023 0.1600 0.0417 0.1183 0.0640 — 0.0417 12/29/2023 1/19/2024 0.1600 0.0417 0.1183 0.0640 — 0.0417 $ 0.6200 $ 0.1615 $ 0.4585 $ 0.2480 $ — $ 0.1615 Insurance Our multifamily properties are covered by all risk property insurance covering the replacement cost for each building and business interruption and rental loss insurance.
On July 28, 2023, we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock under our shelf registration statement having an aggregate offering price of up to $450 million (the “2023 ATM Program”) in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act.
On July 28, 2023, we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock under our shelf registration statement having an aggregate offering price of up to $450.0 million (the “2023 ATM Program”) in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act.
Clawback Policy On October 18, 2023, we adopted our Clawback Policy to provide for the recoupment of certain incentive compensation pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, in the manner required by Section 10D of the Exchange Act, Rule 10D-1 promulgated thereunder, and NYSE listing standards.
Clawback Policy On October 18, 2023, we adopted our current Clawback Policy to provide for the recoupment of certain incentive compensation pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, in the manner required by Section 10D of the Exchange Act, Rule 10D-1 promulgated thereunder, and NYSE listing standards.
We believe that tying compensation to specific goals and providing our employees’ an ownership interest in the company through stock awards aligns their interests more closely with those of our shareholders. We also offer comprehensive health and retirement benefits to eligible employees.
We believe that tying compensation to specific goals and providing our employees an ownership interest in the company through stock awards aligns their interests more closely with those of our shareholders. We also offer comprehensive health and retirement benefits to eligible employees.
These benefits help further stimulate an environment where we support and reward the efforts of our employees and their families to maintain and improve their overall well-being, their future plans, and their performance excellence. 6 Table of Contents Regulation Governmental Regulations Our properties are subject to various federal, state and local regulatory laws and requirements, including, but not limited to, the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, rent control, rent stabilization and other landlord/tenant laws, environmental regulations, zoning regulations, building codes and land use laws, and building, operation, occupancy and other permit and licensure requirements.
These benefits help further stimulate an environment where we support and reward the efforts of our employees and their families to maintain and improve their overall well-being, their future plans, and their performance excellence. 7 Table of Contents Regulation Governmental Regulations Our properties are subject to various federal, state and local regulatory laws and requirements, including, but not limited to, the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, rent control, rent stabilization and other landlord/tenant laws, environmental regulations, zoning regulations, building codes and land use laws, and building, operation, occupancy and other permit and licensure requirements.
Substantially all of our assets are comprised of multifamily real estate assets generally leased to residents for a term of one-year or less. Therefore, we aggregate our real estate assets for reporting purposes and operate in one reportable segment, see “Part II-Item 8, Financial Statements and Supplementary Data-Note 12: Segment Reporting” below.
Substantially all of our assets are comprised of multifamily real estate assets generally leased to residents for a term of one-year or less. Therefore, we aggregate our real estate assets for reporting purposes and operate in one reportable segment, see “Part II-Item 8, Financial Statements and Supplementary Data-Note 11: Segment Reporting” below.
Any amendments to or waivers of our Code of Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller and persons performing similar functions and that relate to any matter enumerated in Item 406(b) of Regulation S-K promulgated by the SEC will be disclosed on our website. 9 Table of Contents
Any amendments to or waivers of our Code of Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller and persons performing similar functions and that relate to any matter enumerated in Item 406(b) of Regulation S-K promulgated by the SEC will be disclosed on our website. 10 Table of Contents
Qualification as a Real Estate Investment Trust We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, (the “Code”), commencing with our taxable year ended December 31, 2011. We recorded no income tax expense for the years ended December 31, 2023, 2022, and 2021.
Qualification as a Real Estate Investment Trust We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, (the “Code”), commencing with our taxable year ended December 31, 2011. We recorded no income tax expense for the years ended December 31, 2024, 2023, and 2022.
In addition, we generally obtain title insurance policies when we 8 Table of Contents acquire a property, with each policy covering an amount equal to the initial purchase price of each property. Accordingly, any of our title insurance policies may be in an amount less than the current value of the related property.
In addition, we generally obtain title insurance policies when we 9 Table of Contents acquire a property, with each policy covering an amount equal to the initial purchase price of each property. Accordingly, any of our title insurance policies may be in an amount less than the current value of the related property.
The remaining 2.6% consists of IROP units issued to third parties in exchange for direct or indirect contributions of interests in properties to IROP. As limited partners in IROP, holders of IROP units have limited approval rights.
The remaining 2.5% consists of IROP units issued to third parties in exchange for direct or indirect contributions of interests in properties to IROP. As limited partners in IROP, holders of IROP units have limited approval rights.
We do not intend to limit ourselves to properties in this target profile, however, and we may make acquisitions outside of this profile or change our target profile whenever market conditions warrant.
We do not intend to limit ourselves to properties in this target profile, however, and we may make acquisitions outside of this profile or change our target profile whenever 2 Table of Contents market conditions warrant.
Our wholly owned subsidiary, IRT Management, LLC (“IRT Management”), which was formed on October 26, 2016, is a full-service apartment property management company that, as of December 31, 2023 managed 34,431 apartment units, all of which are owned by us. IRT Management provides services to us in connection with the rental, leasing, operation and management of our properties.
Our wholly owned subsidiary, IRT Management, LLC (“IRT Management”), which was formed on October 26, 2016, is a full-service apartment property management company that, as of December 31, 2024 managed 33,615 apartment units, all of which are owned by us. IRT Management provides services to us in connection with the rental, leasing, operation and management of our properties.
IROP was formed as a Delaware limited partnership on March 27, 2009. IRT is the sole general partner of IROP and manages and controls its business. As of December 31, 2023, IRT owned a 97.4% interest in IROP.
IROP was formed as a Delaware limited partnership on March 27, 2009. IRT is the sole general partner of IROP and manages and controls its business. As of December 31, 2024, IRT owned a 97.5% interest in IROP.
In addition to being accessible through our website, copies of our Insider Trading Policy can be obtained, free of charge, upon written request to Investor Relations, 1835 Market Street, Philadelphia, PA 19103. Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC.
In addition to being accessible through this Annual Report on Form 10-K and our website, copies of our Insider Trading Policy can be obtained, free of charge, upon written request to Investor Relations, 1835 Market Street, Philadelphia, PA 19103. Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC.
We did not make new investments in unconsolidated real estate entities during the year ended December 31, 2023. However, we continued to fund commitments to our existing investments in unconsolidated real estate entities. As of December 31, 2023 and December 31, 2022, we had investments in unconsolidated real estate of $89.0 million and $80.2 million, respectively.
We did not make new investments in unconsolidated real estate entities during the year ended December 31, 2024. However, we continued to fund commitments to our existing investments in unconsolidated real estate entities. As of December 31, 2024 and December 31, 2023, we had investments in unconsolidated real estate of $92.0 million and $89.0 million, respectively.
As discussed above, holders of IROP units have the right to tender their IROP units to us from time to time for cash in an amount equal to the market price (based on a trailing average computation) of an equivalent number of shares of IRT common stock at the time we receive notice of the exchange.
Holders of IROP units have the right to tender their IROP units to us from time to time for cash in an amount equal to the market price (based on a trailing average computation) of an 6 Table of Contents equivalent number of shares of IRT common stock at the time we receive notice of the exchange.
We seek to achieve these objectives by executing the following strategies: • Focus on properties in markets that have strong apartment demand, reduced competition from national apartment buyers and no substantial new apartment construction.
We seek to achieve our objective by executing the following strategies: • Non-Gateway Markets - We focus on properties in markets that have strong apartment demand, reduced competition from national apartment buyers and no substantial new apartment construction.
Our target profile for acquisitions currently is midrise/garden-style apartments containing 150-500 units with high quality amenities that we can acquire at less than replacement cost in the $35 million to $125 million price range with a three to fifteen-year operating track record.
We seek to acquire properties that we believe possess significant prospects for increased occupancy and rental revenue growth. Our target profile for acquisitions currently is midrise/garden-style apartments containing 150-500 units with high quality amenities that we can acquire at less than replacement cost in the $35 million to $125 million price range with a three to fifteen-year operating track record.
In addition to being accessible through our website, copies of our Code of Ethics can be obtained, free of charge, upon written request to Investor Relations, 1835 Market Street, Philadelphia, PA 19103.
A copy of our Code of Ethics is available on our website, www.irtliving.com . In addition to being accessible through our website, copies of our Code of Ethics can be obtained, free of charge, upon written request to Investor Relations, 1835 Market Street, Philadelphia, PA 19103.
Our investment strategy is focused on the following: • gaining scale near major employment centers within key amenity rich submarkets of non-gateway cities that offer good school districts and high-quality retail and are unlikely to experience substantial new apartment construction in the foreseeable future; • increasing cash flows at our existing apartment properties through prudent property management and strategic renovation projects; and • acquiring and developing additional properties that have strong and stable occupancies and support a rise in rental rates or that have the potential for repositioning through capital expenditures or tailored management strategies.
Our investment strategy is focused on the following: • gaining scale near major employment centers within key amenity-rich submarkets of non-gateway cities that offer good school districts, high-quality retail, and that are unlikely to experience substantial new apartment construction in the foreseeable future; • increasing cash flows at our existing apartment properties through prudent property management and strategic renovations (our "Value Add Initiative"); and • acquiring additional properties that have either stable occupancies that support rental rates increases or that have the potential to be repositioned through our Value Add Initiatives or tailored management strategies.
We have significant experience allocating capital to value-added improvements of apartment properties to produce increased occupancy and rental rates. We intend to continue to deploy capital into revenue-enhancing capital projects that we believe will improve the physical 2 Table of Contents plant or market positioning of particular apartment properties and generate increased income over time.
We have significant experience allocating capital to value-added improvements of apartment properties to produce increased occupancy and rental rates. We intend to continue deploying capital into revenue-enhancing capital projects that we believe will improve the physical plant or market positioning of particular apartment properties, thereby generating increased cash flow over time.
Insider Trading Policy We maintain an Insider Trader Policy governing the purchase, sale and other dispositions of our securities by directors, officers and employees that is designed to promote compliance with insider trading laws, rules and regulations and NYSE listing standards. A copy of our Insider Trading Policy is available on our website, www.irtliving.com.
Insider Trading Policy We have adopted an Insider Trader Policy governing the purchase, sale and/or other dispositions of our securities by directors, officers and employees, and by us, that is reasonably designed to promote compliance with insider trading laws, rules and regulations and NYSE listing standards.
As of December 31, 2023, we owned and operated 116 multifamily apartment properties (including one owned through a consolidated joint venture) that contain an aggregate of 34,431 units. These properties are located in Alabama, Colorado, Florida, Georgia, Indiana, Kentucky, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, and Texas.
As of December 31, 2024, we owned and operated 113 multifamily apartment properties (including one owned through a consolidated joint venture) that contain an aggregate of 33,615 units in the following Southeastern and Midwestern states: Alabama, Colorado, Florida, Georgia, Indiana, Kentucky, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, and Texas.
Risk Factors – Risks Associated with Debt Financing” below for more information about risks associated with indebtedness and operating on a leveraged basis. 4 Table of Contents Development and Structure of Our Company; Segment IRT was formed as a Maryland corporation on March 26, 2009 and conducts its business through a traditional umbrella partnership REIT (“UPREIT”) structure in which all of its assets are held by, and substantially all of its operations are conducted through, IRT’s operating partnership, IROP and subsidiaries of IROP.
Development and Structure of Our Company; Segment IRT was formed as a Maryland corporation on March 26, 2009 and conducts its business through a traditional umbrella partnership REIT (“UPREIT”) structure in which all of its assets are held by, and substantially all of its operations are conducted through, IRT’s operating partnership, IROP and subsidiaries of IROP.
We expect to begin renovations at the remaining value add projects contemplated in connection with our Value Add Initiative at the selected communities throughout 2024. 3 Table of Contents Investment in Unconsolidated Real Estate Entities To create another avenue for accretive capital allocation and to increase our options for capital investment, we have partnered with, and may in the future partner with, developers through preferred equity investments and joint venture relationships focused on new multifamily development.
Investment in Unconsolidated Real Estate Entities To create another avenue for accretive capital allocation and to increase our options for capital investment, we have partnered with, and may in the future partner with, developers through preferred equity investments and joint venture relationships focused on new multifamily development.
In addition, as of December 31, 2023, we owned two investments in real estate under development in Denver, Colorado that will, upon completion, contain an aggregate of 621 units.
In addition, as of December 31, 2024, we owned one investment in real estate under development in Denver, Colorado that will, upon completion, contain 296 units.
Many of our employees completed leadership training courses and our Service teams receive training through a combination of online courses, simulation training, and on-site, hands-on training. In addition to company-specific training, we have established professional education benefits and guidelines under which our team members may receive financial assistance for professional certifications and continued education. Compensation, Benefits, Safety and Wellness .
In addition to company-specific training, we have established professional education benefits and guidelines under which our team members may receive financial assistance for professional certifications and continued education. Compensation, Benefits, Safety and Wellness .
Through December 31, 2023, we renovated 7,771 of the 13,281 units currently owned at an average cost per unit of $15,716 and achieved a return on our total renovation costs for these units of 17.7% (and approximately 19.5% on the interior portion of such renovation costs).
Through December 31, 2024, we renovated 9,442 of these units at an average cost per unit of $16,628 and achieved a return on our total renovation costs for these units of approximately 16.8% (and approximately 18.7% on the interior portion of such renovation costs).
Code of Ethics We maintain a Code of Ethics applicable to our Board of Directors and all of our officers and employees, including our principal executive officer, principal financial officer, principal accounting officer, controller and persons performing similar functions. A copy of our Code of Ethics is available on our website, www.irtliving.com .
The reference to our website is an inactive textual reference to the uniform resource locator (“URL”) and is for your reference only.“ Code of Ethics We maintain a Code of Ethics applicable to our Board of Directors and all of our officers and employees, including our principal executive officer, principal financial officer, principal accounting officer, controller and persons performing similar functions.
Our Portfolio Optimization and Deleveraging Strategy On October 26, 2023, our Board of Directors approved a plan, which we refer to as our Portfolio Optimization and Deleveraging Strategy, which targeted the sale of 10 properties located in seven markets in order to exit or reduce our presence in these markets while also deleveraging our balance sheet.
In identifying properties for disposition, we evaluate the opportunity to strategically exit markets where we lack scale and the potential benefits from using sales proceeds to fund acquisitions and renovations versus reducing our leverage in lieu of raising additional capital. 2024 Highlights Property Dispositions and Acquisitions Portfolio Optimization and Deleveraging Strategy On October 26, 2023, our Board of Directors approved a plan, which we refer to as our Portfolio Optimization and Deleveraging Strategy, which targeted the sale of 10 properties located in seven markets in order to exit or reduce our presence in these markets while also deleveraging our balance sheet.
As of December 31, 2023, we also owned interests in four unconsolidated joint ventures, two of which own and operate multifamily apartment properties that contain an aggregate of 810 units and two that are developing multifamily apartment properties that will, upon completion, contain an aggregate of 653 units.
As of December 31, 2024, we also owned interests in four unconsolidated joint ventures, three of which own and operate multifamily apartment properties that contain an aggregate of 886 units and one that is developing a multifamily apartment property that will, upon completion, contain 378 units. We do not have any foreign operations and our business is not seasonal.
For further description of our indebtedness at December 31, 2023, see “Part II-Item 8 Financial Statements and Supplementary Data-Note 6: Indebtedness” below. See also “Part I-Item 1A.
For further description of our indebtedness at December 31, 2024, see “Part II-Item 8 Financial Statements and Supplementary Data-Note 5: Indebtedness” below. See also “Part I-Item 1A. Risk Factors – Risks Associated with Debt Financing” below for more information about risks associated with indebtedness and operating on a leveraged basis.
We have expertise in acquiring and managing properties to maximize the net operating income of such properties through effective marketing and leasing, disciplined management of rental rates and efficient expense management. We seek to acquire properties that we believe possess significant prospects for increased occupancy and rental revenue growth.
This Value Add Initiative is a core component of our growth strategy. • Acquisitions - We acquire properties that have operating upside through professional property management strategies. We have expertise in acquiring and managing properties to maximize the net operating income of such properties through effective marketing and leasing, disciplined management of rental rates and efficient expense management.
In addition, we promote pay equity with clear and consistent performance criteria, performance reviews, and non-discriminatory pay practices. Training and Development and Program . We are committed to providing the resources to engage our employees and enhance their educational and professional growth. We provide technical and leadership training to employees through more than 300 on-demand e-learning courses.
We are committed to providing the resources to engage our employees and enhance their educational and professional growth. We provide technical and leadership training to employees through more than 300 on-demand e-learning courses. Many of our employees completed leadership training courses and our Service teams receive training through a combination of online courses, simulation training, and on-site, hands-on training.
We generally seek to avoid markets where we believe potential yields have decreased as a result of the acquisition and development efforts of large institutional buyers. • Acquire properties that have operating upside through professional property management strategies.
We generally seek to avoid markets where we believe potential yields have decreased as a result of the acquisition and development efforts of large institutional buyers. • Value Add Initiative - We selectively use our capital to improve apartment properties where we believe the return on our investment will be accretive to stockholders.
We are not incorporating by reference into this report any material from our website. The reference to our website is an inactive textual reference to the uniform resource locator (URL) and is for your reference only.
We are not incorporating by reference into this report any material from our website.
Value Add Initiative Our Value Add Initiative, comprised of renovations and upgrades at selected communities to drive increased rental rates, commenced in 2018 and currently has a pipeline of 13,281 units across 41 properties identified for renovation and upgrade.
While this property is under contract, there can be no assurance that this acquisition will be consummated at expected pricing levels, within expected time frames, or at all. 3 Table of Contents Value Add Initiative Our Value Add Initiative, comprised of renovations and upgrades at selected communities to drive increased rental rates, commenced in 2018 and currently has a pipeline of 17,380 units across 55 properties identified for renovation and upgrade.
This value add initiative is a core component of our growth strategy. • Selectively dispose of properties that no longer meet our long-term strategy or when market conditions are favorable. Dispositions also allow us to realize a portion of the value created through our investments and provide additional liquidity.
Dispositions also allow us to realize a portion of the value created through our investments and provide additional liquidity.
We do not have any foreign operations and our business is not seasonal. Our principal executive offices are located at 1835 Market Street, Suite 2601, Philadelphia, PA 19103 and our telephone number is (267) 270-4800.
Our principal executive offices are located at 1835 Market Street, Suite 2601, Philadelphia, PA 19103 and our telephone number is (267) 270-4800. Our Business Objective and Investment Strategies Our primary business objective is to provide attractive risk-adjusted returns to stockholders through diligent portfolio management, strong operational performance, and consistent returns on capital through distributions and capital appreciation.
We believe our employees drive our success and fostering a workplace built on our core values of excellence, opportunity, integrity, and service is vital to our long-term success. Our People . As of December 31, 2023, we had 952 employees, all of whom were employed in the United States, and none of whom are covered by collective bargaining agreements.
As of December 31, 2024, we had 917 employees, all of whom were employed in the United States, and none of whom are covered by collective bargaining agreements. We have experienced no material interruptions of our operations due to disputes with our employees. Training and Development and Program .
We may also deploy capital through joint ventures with unaffiliated third parties to facilitate future acquisitions or development of multifamily communities. • Selectively use our capital to improve apartment properties where we believe the return on our investment will be accretive to stockholders.
We may also deploy capital through joint ventures with unaffiliated third parties to facilitate future acquisitions or development of multifamily communities. • Capital Recycling - Our capital recycling program consists of disposing of assets in markets where we lack scale and/or markets where management believes that growth is slowing and allocating the proceeds into investments with higher growth potential and/or towards debt reduction.
There were no forward sale transactions as of December 31, 2023, and no shares of our common stock were sold under the 2023 ATM Program during the year ended December 31, 2023.
During the three months ended September 30, 2024, and December 31, 2024, we entered into forward sale transactions under the 2023 ATM Program for the forward sale of an aggregate 2,498,300 shares of our common stock with a maturity date of September 5, 2025 or November 13, 2025, respectively, as set forth in the forward sale transactions placement notice.
Removed
Our Business Objective and Investment Strategies Our primary business objective is to maximize stockholder value through diligent portfolio management, strong operational performance, and a consistent return of capital through distributions and capital appreciation.
Added
During 2024, we completed our Portfolio Optimization and Deleveraging Strategy with the sale of six properties, totaling 1,746 units, for an aggregate gross sale price of $324.6 million and recognized an aggregate gain on sale of $25.5 million.
Removed
In evaluating potential dispositions, we evaluate the opportunity to strategically exit markets where we lack scale and redeploy sales proceeds to fund acquisitions and renovations and to reduce our leverage in lieu of raising additional capital. 2023 Developments 2023 Property Sales and Properties Held for Sale During the three months ended March 31, 2023, we sold one multifamily apartment community for a gross sales price of $37.3 million and recognized a gain on sale of $1.2 million.
Added
In total, our Portfolio Optimization and Deleveraging Strategy resulted in the sale of ten properties for an aggregate gross sales price of $525.3 million and proceeds from the sales were used to repay an aggregate of $517.1 million of our outstanding debt.
Removed
Proceeds from the sale were used to reduce our indebtedness.
Added
Capital Recycling Our capital recycling program consists of disposing of assets in markets where we lack scale and/or markets where management believes that growth is slowing and allocating the proceeds into investments with higher growth potential and/or towards debt reduction.
Removed
During the three months ended December 31, 2023, we sold four of these targeted properties, totaling 996 units, for an aggregate gross sale price of $200.7 million and recognized an aggregate impairment loss on sale of $34.8 million.
Added
During 2024, in connection with our capital recycling program, we identified one 354-unit property in Birmingham, Alabama as held for sale and recognized a loss on impairment of $15.1 million. On July 17, 2024, we sold this multifamily apartment community for a gross sales price of $70.8 million.
Removed
These sales represent a reduction in our exposure to the Denver, Colorado market and our exit from the Chicago, Illinois, Norfolk, Virginia, and Fort Wayne, Indiana markets. As discussed further below, as of December 31, 2023, the six remaining properties targeted for sale under our Portfolio Optimization and Deleveraging Strategy were classified as held for sale.
Added
On August 13, 2024, we used the proceeds from this sale as part of a 1031 exchange to acquire a 288-unit property in Tampa-St. Petersburg, Florida for $82.0 million. The property was built in 2021 and had an average rent per unit of $2,228 at the time of our acquisition.
Removed
We sold two of these properties, totaling 648 units, subsequent to December 31, 2023 for an aggregate gross sale price of $128 million. In addition, as of the date of this Annual Report, we have executed contracts of sale for the four remaining properties and expect to consummate these sales in the first quarter of 2024.
Added
Two Additional Acquisitions During 2024, we used the proceeds from equity offerings described further below to acquire two additional multifamily communities totaling 620 units, for an aggregate gross purchase price of $157.8 million. These acquisitions expand our presence in Charlotte, North Carolina and Orlando, Florida.
Removed
Once the sale of all 10 properties has been completed, we expect to have generated $525 million in gross sales proceeds, used net proceeds to reduce our debt by approximately $519 million and to have exited five single asset markets.
Added
The property we acquired in Charlotte was built in 2023 with an average rent per unit of $1,703 at the time of our acquisition on November 1, 2024. The property we acquired in Orlando was built in 2024 with an average rent per unit of $1,905 at the time of our acquisition on December 5, 2024.
Removed
While the four remaining properties that are part of the Portfolio Optimization and Deleveraging Strategy are under contracts of sale, there can be no assurance that the sales will be consummated at expected pricing levels, within expected time frames, or at all.
Added
One Property Held for Sale As of December 31, 2024, we had one 720-unit property in Birmingham, Alabama classified as held for sale. We recognized an impairment loss of $20.9 million during the three months ended December 31, 2024.
Removed
During 2023, we entered into an amendment to the Virtuoso joint venture agreement which provided us with control over the major decisions that most significantly impact the joint venture and removed our joint venture partner’s rights to a promote interest.
Added
On February 14, 2025, we sold this property for a gross sales price of $111.0 million and expect to use the proceeds to fund future property acquisitions.
Removed
As a result of the amendment, we reassessed the accounting for Virtuoso, a former unconsolidated real estate entity, that consists of 178 units in Huntsville, Alabama, during the quarter ended September 30, 2023.
Added
Subsequent Acquisition We are currently under contract on the acquisition of a 280-unit multifamily apartment property in Indianapolis, Indiana, which will expand our footprint in the Indianapolis market while providing enhanced scale and synergies. The aggregate purchase price of this property is approximately $59.5 million.
Removed
Because we concluded that Virtuoso is a voting interest entity and that we now control the major decisions that most significantly impact the joint venture through our 90% voting interest, we began consolidating the assets and liabilities and operating results of Virtuoso, effective August 1, 2023.
Added
We expect to close on the acquisition of this property during the first quarter of 2025.
Removed
In accordance with FASB Topic ASC 805, upon consolidation, we recognized the assets and liabilities of Virtuoso at carryover basis, allocating the individual assets and liabilities based upon their relative fair values on our consolidated balance sheets. Capital Markets Shelf Registration Statement On June 14, 2023, we replaced our previous shelf registration statement with our new shelf registration statement.
Added
We expect to begin renovations at the remaining value add projects contemplated in connection with our Value Add Initiative at the selected communities throughout 2025.
Removed
Swap Agreement On March 16, 2023, we entered into an interest rate swap contract with a notional value of $200 million, a strike rate of 3.39% and a maturity date of March 17, 2030.
Added
On July 16, 2024, we amended the related joint venture agreement governing the entity that owns the Crockett, which resulted in the return of our invested capital in the amount of $5.5 million and preferred return in the amount of $3.0 million thereon on October 17, 2024, while also providing us with a right of first refusal on any sale of the Crockett.
Removed
We designated this interest rate swap as a cash flow hedge at inception and determined that the hedge is highly effective in offsetting interest rate fluctuations associated with the identified indebtedness. Financing Strategy We use a combination of debt and equity sources to fund our business objectives.
Added
The amendment of the joint venture agreement also converted the right of first offer on the Views of Music City II to a right of first refusal.
Removed
This competition affects our ability to acquire properties and the price that we pay for such acquisitions. Sustainability In 2022, we published our inaugural Sustainability Report, which disclosed our sustainability progress and vision for the future as we continue to integrate Environmental, Social and Governance (ESG) initiatives into our business strategy.
Added
Capital Markets Expanded Unsecured Revolver On January 8, 2025, IROP entered into the Fifth Amended and Restated Credit Agreement (the “Fifth Restated Credit Agreement”) by and among IROP, as borrower, IRT as parent guarantor, KeyBank National Association, as administrative agent, and the other agents and lender parties thereto, which amended and restated in its entirety the Fourth Amended and Restated Credit Agreement dated as of July 25, 2022 (the “Fourth Restated Credit Agreement”).
Removed
The data and disclosures within the report were aligned with the Sustainability Accounting Standards Board (SASB) Standards for the real estate industry. We also identified the United Nations Sustainable Development Goals (SDGs) that we believe best aligned with our business activities and key priorities.
Added
The Fourth Restated Credit Agreement provided for a $500.0 million unsecured revolving credit facility (the “Unsecured Revolver”) with a January 31, 2026 scheduled maturity date and two unsecured term loans, specifically: (i) a $200.0 million term loan with a May 18, 2026 maturity date (the “2026 Term Loan”) and (ii) a $400.0 million term loan with a January 28, 2028 maturity date (the “2028 Term Loan”).
Removed
We strive to advance sustainability initiatives across our organization and communities and to strengthen our resilience to climate risks through thoughtful portfolio management and the diligent handling of external risks.
Added
The Fifth Restated Credit Agreement increases the maximum principal amount of the Unsecured Revolver to $750.0 million, which represents an increase of $250.0 million over the Fourth Restated Credit Agreement, and extends its maturity date until January 8, 2029. The Fifth Restated Credit Agreement also releases the Subsidiary Guarantors which were parties to the Fourth Restated Credit Agreement.
Removed
As part of our Value Add Initiative, we make capital investments which improve our residents’ living experience and lessen our combined impact on the environment through the installation of energy efficient appliances and lighting and plumbing fixtures, and longer-lasting vinyl plank flooring and hard-surface counter tops.
Added
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 Restated Credit Agreement.
Removed
As a steward of our assets, and a provider of homes to thousands of individuals, we seek to bolster our resilience to climate hazards and severe weather through the implementation of proactive facilities management practices and the preparation of and adherence to emergency operating plans if weather-related events impact our communities.
Added
Borrowings under the 2026 Term Loan bear interest at a rate equal to either (i) the SOFR rate plus a margin of 80 to 160 basis points, or (ii) a base rate plus a margin of 0 to 60 basis points. These margins represent a 5-basis point decrease from those applicable to the 2026 Term Loan.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

107 edited+24 added−20 removed310 unchanged
Biggest changeRISK FACTOR SUMMARY Risks Related to Our Business and Operations • We depend on residents for revenue and if residents fail to pay rent it may cause a material decline in our operating results. • Future unfavorable changes in economic conditions could adversely impact us. • Our concentration of investments in a single asset class makes our results of operations more vulnerable to a downturn in the multifamily sector. • Competition could limit our ability to lease apartments or increase or maintain rental income, and short-term leases make us more susceptible to these risks. • Redevelopment risks may cause our revenues and expenses to fluctuate significantly from one period to another which may result in losses. • Labor and materials required for maintenance, repair, renovation or capital expenditure may be more expensive than anticipated or significantly delayed. • We face the risk of fluctuations in the cost, availability and quality of our materials and products, which could adversely affect our results of operations. • Capital expenditure costs, and other costs of operating real estate assets, may be greater than anticipated which may adversely affect our results of operations. • Increasing real estate taxes, utilities and insurance costs may negatively impact operating results. • Substantial inflationary pressures could adversely affect our financial condition or results of operations. • The loss of services of any of our senior officers or key employees and increased competition for personnel could adversely affect us and/or increase our labor costs. • We may fail to grow our portfolio through acquisitions or such acquisitions may not yield the cash flows expected. • A cybersecurity incident and other technology disruptions could negatively impact our business. • Damage from catastrophic weather and other natural events could result in losses. • International military conflicts or war could negatively impact our business, increase costs, and increase the likelihood of a cybersecurity incident. • We may be subject to contingent or unknown uninsurable liabilities related to properties or businesses that we have acquired. • We may be adversely affected by changes in state and local tax laws and may become subject to tax audits from time to time. • We may fail to produce accurate and timely financial statements. • We may acquire or develop properties through joint ventures, which may be riskier than our typical acquisitions. • Bankruptcy or defaults of our counterparties could adversely affect our performance. • If we sell properties by providing financing to purchasers, we will bear the risk of default by the purchaser. • New strains of the COVID-19 virus or other infectious diseases could adversely affect our business operations. • We are subject to ESG risks that could adversely affect our reputation and the market price of our securities. 10 Table of Contents Risks Associated with Debt Financing • We plan to incur mortgage indebtedness and other borrowings and are not limited in the amount or percentage of indebtedness that we may incur, which may increase our business risk. • Debt financing and other required capital may not be available to us or may only be available on unfavorable terms. • Rising interest rates could both increase our borrowing costs, thereby adversely affecting our cash flows and the amounts available for distribution to our stockholders, and decrease our share price, if investors seek higher yields through other investments. • Failure to hedge effectively against interest rates may adversely affect our results of operations. • Lender-imposed restrictions may affect our ability to make distributions to our stockholders and otherwise affect our operating policies. • We may guaranty certain debt made to the entities that own our properties.
Biggest changeRISK FACTOR SUMMARY Risks Related to Our Business and Operations • We depend on residents for revenue and if residents fail to pay rent it may cause a material decline in our operating results. • Future unfavorable changes in economic conditions could adversely impact us. • Our concentration of investments in a single asset class makes our results of operations more vulnerable to a downturn in the multifamily sector. • Competition could limit our ability to lease apartments or increase or maintain rental income, and short-term leases make us more susceptible to these risks. • Redevelopment risks may cause our revenues and expenses to fluctuate significantly from one period to another which may result in losses. • Substantial inflationary pressures could adversely affect our financial condition or results of operations. • The loss of services of any of our senior officers or key employees and increased competition for personnel could adversely affect us and/or increase our labor costs. • We may fail to grow our portfolio through acquisitions or such acquisitions may not yield the cash flows expected. • A cybersecurity incident and other technology disruptions could negatively impact our business. • Damage from catastrophic weather and other natural events could result in losses. • We may fail to produce accurate and timely financial statements. • We may acquire or develop properties through joint ventures, which may be riskier than our typical acquisitions. • New infectious diseases could adversely affect our business operations.
We undertake various actions to maintain the security and integrity of our information technology networks and related systems and have implemented various measures to manage the risk of a security breach or disruption. We also maintain cyber liability insurance to provide some coverage for certain risks arising out data and network breaches.
We undertake various actions to maintain the security and integrity of our information technology networks and related systems and have implemented various measures to manage the risk of a security breach or disruption. We also maintain cyber liability insurance to provide some coverage for certain risks arising out of data and network breaches.
If we fail to qualify as a REIT in any taxable year: • we would not be allowed to deduct our distributions to our stockholders when computing our taxable income; • we would be subject to U.S. federal income tax (including any applicable alternative minimum tax in tax years beginning before January 1, 2018) on our taxable income at regular corporate rates; • for tax years beginning after December 31, 2022, we would possibly also be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations such as the nondeductible one percent excise tax on certain stock repurchases; • we generally would be disqualified from being taxed as a REIT for the four taxable years following the year during which qualification was lost, unless entitled to relief under certain statutory provisions; • we would have less cash to make distributions to our stockholders; and • we might be required to borrow additional funds or sell some of our assets in order to pay corporate tax obligations we may incur as a result of our disqualification.
If we fail to qualify as a REIT in any taxable year: • we would not be allowed to deduct our distributions to our stockholders when computing our taxable income; • we would be subject to U.S. federal income tax (including any applicable alternative minimum tax in tax years beginning before January 1, 2018) on our taxable income at regular corporate rates; • for tax years beginning after December 31, 2022, we would possibly also be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations such as the nondeductible one percent excise tax on certain stock repurchases; 31 Table of Contents • we generally would be disqualified from being taxed as a REIT for the four taxable years following the year during which qualification was lost, unless entitled to relief under certain statutory provisions; • we would have less cash to make distributions to our stockholders; and • we might be required to borrow additional funds or sell some of our assets in order to pay corporate tax obligations we may incur as a result of our disqualification.
These conditions include: • changes in national, regional and local economic conditions, which may be negatively impacted by concerns about inflation, deflation, government deficits, high unemployment rates, decreased consumer confidence and liquidity concerns, particularly in markets in which we have a high concentration of properties; • fluctuations in interest rates, which could adversely affect our ability to obtain financing on favorable terms or at all, or could reduce our ability to deploy capital in investments that are accretive to our stockholders; • the inability of our residents to pay rent timely, or at all; • the existence and quality of the competition, such as the attractiveness of our properties as compared to our competitors’ properties based on considerations such as convenience of location, rental rates, amenities and safety record; • increased operating costs, including increased real property taxes, maintenance, insurance, utilities and labor costs; • weather conditions that may increase or decrease energy costs and other weather-related expenses; • civil unrest, acts of God, including earthquakes, floods, hurricanes and other natural disasters, which may result in uninsured losses, acts of war or terrorism, or other natural or human causes beyond our control, which may disrupt or interrupt our operations; • oversupply of multifamily housing or a reduction in demand for real estate in the markets in which our properties are located; • a favorable interest rate environment that may result in a significant number of potential residents of our multifamily communities deciding to purchase homes instead of renting; • changes in, or increased costs of compliance with, laws and/or governmental regulations, including those governing usage, zoning, the environment and taxes; and • rent control or stabilization laws, or other laws regulating rental housing, which could prevent us from raising rents to offset increases in operating costs. 21 Table of Contents Economic conditions may adversely affect the residential real estate market and our income.
These conditions include: • changes in national, regional and local economic conditions, which may be negatively impacted by concerns about inflation, deflation, government deficits, high unemployment rates, decreased consumer confidence and liquidity concerns, particularly in markets in which we have a high concentration of properties; • fluctuations in interest rates, which could adversely affect our ability to obtain financing on favorable terms or at all, or could reduce our ability to deploy capital in investments that are accretive to our stockholders; • the inability of our residents to pay rent timely, or at all; • the existence and quality of the competition, such as the attractiveness of our properties as compared to our competitors’ properties based on considerations such as convenience of location, rental rates, amenities and safety record; • increased operating costs, including increased real property taxes, maintenance, insurance, utilities and labor costs; 21 Table of Contents • weather conditions that may increase or decrease energy costs and other weather-related expenses; • civil unrest, acts of God, including earthquakes, floods, hurricanes and other natural disasters, which may result in uninsured losses, acts of war or terrorism, or other natural or human causes beyond our control, which may disrupt or interrupt our operations; • oversupply of multifamily housing or a reduction in demand for real estate in the markets in which our properties are located; • a favorable interest rate environment that may result in a significant number of potential residents of our multifamily communities deciding to purchase homes instead of renting; • changes in, or increased costs of compliance with, laws and/or governmental regulations, including those governing usage, zoning, the environment and taxes; and • rent control or stabilization laws, or other laws regulating rental housing, which could prevent us from raising rents to offset increases in operating costs.
Risks associated with development, redevelopment and associated construction activities include: • unavailability of favorable financing sources in the debt and equity markets; • construction cost overruns, including on account of rising interest rates, diminished availability of materials and labor, and increases in the costs of materials and labor; • construction and lease-up delays, including on account of delays in obtaining materials, and failure to achieve target occupancy levels and rental rates, resulting in increased debt service and lower than projected returns on our investment; • complications in obtaining, or inability to obtain, necessary zoning, land-use, building occupancy and other governmental or quasi-governmental permits and authorizations, which could result in increased costs or the delay or abandonment of opportunities and impairment charges; • unexpected environmental remediation costs; • potential disputes with, and negligent performance by, construction contractors, architects, engineers and other service providers with which we may contract as part of a development or redevelopment project, which would expose us to unexpected costs, delays and potential liabilities; and • occupancy rates, rents and concessions at a newly developed community may fluctuate depending on a number of factors, including market and economic conditions, preventing us from meeting our expected return on our investment and our overall profitability goals.
Risks associated with development, redevelopment and associated construction activities include: • unavailability of favorable financing sources in the debt and equity markets; • construction cost overruns, including on account of rising interest rates, diminished availability of materials and labor, and increases in the costs of materials and labor; • construction and lease-up delays, including on account of delays in obtaining materials, and failure to achieve target occupancy levels and rental rates, resulting in increased debt service and lower than projected returns on our investment; 17 Table of Contents • complications in obtaining, or inability to obtain, necessary zoning, land-use, building occupancy and other governmental or quasi-governmental permits and authorizations, which could result in increased costs or the delay or abandonment of opportunities and impairment charges; • unexpected environmental remediation costs; • potential disputes with, and negligent performance by, construction contractors, architects, engineers and other service providers with which we may contract as part of a development or redevelopment project, which would expose us to unexpected costs, delays and potential liabilities; and • occupancy rates, rents and concessions at a newly developed community may fluctuate depending on a number of factors, including market and economic conditions, preventing us from meeting our expected return on our investment and our overall profitability goals.
Some of our outstanding mortgage indebtedness contains, and we may in the future acquire or finance properties with, lock-out provisions, which may prohibit us from selling a property, or may require us to maintain specified debt levels for a period of years on some properties.
Some of our outstanding mortgage indebtedness contains, and we may in the future acquire or finance properties with debt that contains, lock-out provisions, which may prohibit us from selling a property, or may require us to maintain specified debt levels for a period of years on some properties.
Moreover, we cannot predict whether all of the coverage that we currently maintain will be available to us in the future, or what the future costs or limitations on any coverage that is available to us will be. We rely on third party insurance providers for our property, general liability and worker’s compensation insurance.
We cannot predict whether all of the coverage that we currently maintain will be available to us in the future, or what the future costs or limitations on any coverage that is available to us will be. We rely on third party insurance providers for our property, general liability and worker’s compensation insurance.
However, there are certain exceptions to this rule, including: • under certain circumstances, part of the income and gain recognized by certain qualified employee pension trusts with respect to our stock may be treated as UBTI if our stock is predominately held by qualified employee pension trusts, such that we are a “pension-held” REIT (which we do not expect to be the case); • part of the income and gain recognized by a tax-exempt investor with respect to our stock would constitute UBTI if such investor incurs debt in order to acquire our common stock; and • part or all of the income or gain recognized with respect to our stock held by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans which are exempt from U.S. federal income taxation under Sections 501(c)(7), (9), (17) or (20) of the Code may be treated as UBTI.
However, there are certain exceptions to this rule, including: • under certain circumstances, part of the income and gain recognized by certain qualified employee pension trusts with respect to our stock may be treated as UBTI if our stock is predominately held by qualified employee pension trusts, such that we are a “pension-held” REIT (which we do not expect to be the case); • part of the income and gain recognized by a tax-exempt investor with respect to our stock would constitute UBTI if such investor incurs debt in order to acquire our common stock; and • part or all of the income or gain recognized with respect to our stock held by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal 33 Table of Contents services plans which are exempt from U.S. federal income taxation under Sections 501(c)(7), (9), (17) or (20) of the Code may be treated as UBTI.
Federal Reserve has indicated that it will carefully assess incoming economic data, the evolving outlook for inflation, and the balance of risks. The U.S.
Federal Reserve has indicated that it will carefully assess incoming economic data, the evolving outlook for inflation, and the balance of risks. Should the U.S.
Severe or inclement weather and climate change could result in losses to us. Certain of our properties are located in areas that may experience catastrophic weather and other natural events from time to time, including fires, snow or ice storms, windstorms or hurricanes, earthquakes, flooding, prolonged periods of extreme temperatures or other severe weather.
Severe or inclement weather and climate change could result in losses to us. Certain of our properties are located in areas that have experienced and may experience catastrophic weather or other natural events from time to time, including fires, snow or ice storms, windstorms or hurricanes, earthquakes, flooding, prolonged periods of extreme temperatures or other severe weather.
A number of our markets had tax reassessments in 2023 and we expect this to continue in future years. If our costs continue to rise, without being offset by a corresponding increase in rental rates, our results of operations could be negatively impacted, and our ability to pay our dividends and distributions and senior debt could be affected.
A number of our markets had tax reassessments in 2024 and we expect this to continue in future years. If our costs continue to rise, without being offset by a corresponding increase in rental rates, our results of operations could be negatively impacted, and our ability to pay our dividends and distributions and senior debt could be affected.
Although we take a proactive approach to property preservation, utilizing a preventative maintenance plan, and selective improvements that mitigate the cost impact of maintaining exterior building features and aging building components, if we are not able to cost-effectively maximize the life of our properties, we may incur greater than anticipated capital expenditure costs which may adversely affect our ability to make distributions to our stockholders.
Although we take a proactive approach to property preservation, utilizing a preventative maintenance plan, and 16 Table of Contents selective improvements that mitigate the cost impact of maintaining exterior building features and aging building components, if we are not able to cost-effectively maximize the life of our properties, we may incur greater than anticipated capital expenditure costs which may adversely affect our ability to make distributions to our stockholders.
Our revenues may be adversely affected by the general or local economic climate, local real estate considerations (such as oversupply of or reduced demand for multifamily units), the perception by prospective residents of the safety, convenience and attractiveness of the areas in which our multifamily communities are located 12 Table of Contents (including the quality of local schools and other amenities) and increased operating costs (including real estate taxes and utilities).
Our revenues may be adversely affected by the general or local economic climate, local real estate considerations (such as oversupply of or reduced demand for multifamily units), the perception by prospective residents of the safety, convenience and attractiveness of the areas in which our multifamily communities are located (including the quality of local schools and other amenities) and increased operating costs (including real estate taxes and utilities).
To the extent we purchase real estate in such an environment, we are subject to the risk that, if the real estate market subsequently ceases to attract the same level of capital investment, or if the number of investors seeking to acquire such assets decreases, our returns will be lower and the value of our assets may not appreciate or may decrease significantly 22 Table of Contents below the amount we paid for such assets.
To the extent we purchase real estate in such an environment, we are subject to the risk that, if the real estate market subsequently ceases to attract the same level of capital investment, or if the number of investors seeking to acquire such assets decreases, our returns will be lower and the value of our assets may not appreciate or may decrease significantly below the amount we paid for such assets.
In order to partially mitigate our exposure to increases in interest rates, we have entered into interest rate swaps and collars on $750.0 million of our variable rate debt, which involve the exchange of variable for fixed rate interest payments.
In order to partially mitigate our exposure to increases in interest rates, we have entered into interest rate swaps and collars on $700.0 million of our variable rate debt, which involve the exchange of variable for fixed rate interest payments.
Risks Related to Regulation and Compliance with Laws • We are subject to significant regulations, which could adversely affect our results of operations. • The costs of compliance with laws and regulations may adversely affect our net income and the cash available for any distributions. • A change in the United States government policy with regard to Fannie Mae and Freddie Mac could impact our financial condition.
Risks Related to Regulation and Compliance with Laws • We are subject to significant regulations, which could adversely affect our results of operations. 11 Table of Contents • The costs of compliance with laws and regulations may adversely affect our net income and the cash available for any distributions. • A change in the United States government policy with regard to Fannie Mae and Freddie Mac could impact our financial condition.
Our unsecured credit facility and unsecured term loans include restrictions and requirements relating to the incurrence of debt, permitted investments, maximum level of distributions, maintenance of insurance, mergers and sales of assets and transactions with affiliates. We expect that any other loan agreements we enter into will contain similar covenants and may also impose other restrictions and limitations.
Our unsecured revolver and unsecured term loans include restrictions and requirements relating to the incurrence of debt, permitted investments, maximum level of distributions, maintenance of insurance, mergers and sales of assets and transactions with affiliates. We expect that any other loan agreements we enter into will contain similar covenants and may also impose other restrictions and limitations.
If we cease to maintain our qualification as a REIT, we would become subject to U.S. federal 31 Table of Contents income tax on our taxable income without the benefit of the dividends paid deduction and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on the total return to our stockholders.
If we cease to maintain our qualification as a REIT, we would become subject to U.S. federal income tax on our taxable income without the benefit of the dividends paid deduction and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on the total return to our stockholders.
This resolution, however, may be altered or repealed in whole or in part at any time. If this resolution is repealed, or our board of directors does not otherwise approve a business combination, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.
This resolution, however, may be altered or 35 Table of Contents repealed in whole or in part at any time. If this resolution is repealed, or our board of directors does not otherwise approve a business combination, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.
In any such case, we may incur liabilities that could result in losses and could harm our operating results and, therefore distributions we make to our stockholders. 18 Table of Contents We rely on information technology systems in our operations, and any breach or security failure of those systems could materially adversely affect our business, results of operations, financial condition and reputation.
In any such case, we may incur liabilities that could result in losses and could harm our operating results and, therefore distributions we make to our stockholders. We rely on information technology systems in our operations, and any breach or security failure of those systems could materially adversely affect our business, results of operations, financial condition and reputation.
Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance 29 Table of Contents requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities.
Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities.
In addition, if a significant number of our stockholders decide to sell their shares in order to pay taxes owed with respect to taxable stock dividends, it may put downward pressure on the trading price of our stock. Our stockholders may be restricted from acquiring or transferring certain amounts of our common stock.
In addition, if a significant number of our stockholders decide to sell their shares in order to pay taxes owed with respect to taxable stock dividends, it may put downward pressure on the trading price of our stock. 34 Table of Contents Our stockholders may be restricted from acquiring or transferring certain amounts of our common stock.
Adverse economic conditions may reduce or eliminate our returns and profitability and, as a result, our ability to make distributions to our stockholders. Our operating results may be materially and adversely affected by market and economic challenges, which may reduce or eliminate our returns and profitability and, as a result, our ability to make distributions to our stockholders.
Our operating results may be materially and adversely affected by market and economic challenges, which may reduce or eliminate our returns and profitability and, as a result, our ability to make distributions to our stockholders.
Taking into account our current interest rate swap and collar agreements, a 100-basis point increase in interest rates would result in a $0.9 million increase in annual interest expense. See Item 7.
Taking into account our current interest rate swap and collar agreements, a 100-basis point increase in interest rates would result in a $1.0 million increase in annual interest expense. See Item 7.
We cannot be sure that we will be successful in obtaining suitable investments on financially attractive terms or at all. Additionally, as a public company, we are subject to the ongoing reporting requirements under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”).
We cannot be sure that we will be successful in obtaining suitable investments on financially attractive terms or at all. 15 Table of Contents Additionally, as a public company, we are subject to the ongoing reporting requirements under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”).
A 15 Table of Contents material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected, on a timely basis by the company’s internal controls.
A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected, on a timely basis by the company’s internal controls.
Our properties may be subject to increases in tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance, administrative and other expenses. Real estate taxes, utilities costs and insurance premiums, in particular, are subject to significant increases and fluctuations, which can be widely outside of our control.
Our properties may be subject to increases in tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance, administrative and other expenses. Real estate taxes, utilities costs and insurance premiums, in particular, 22 Table of Contents are subject to significant increases and fluctuations, which can be widely outside of our control.
Any such unfavorable changes to our borrowing costs and stock price could significantly impact our ability to raise new debt and equity capital going forward. We face competition from third parties, including other multifamily properties, which may limit our profitability and the return on any investment in our securities. The multifamily industry is highly competitive.
Any such unfavorable changes to our borrowing costs and stock price could significantly impact our ability to raise new debt and equity capital going forward. 14 Table of Contents We face competition from third parties, including other multifamily properties, which may limit our profitability and the return on any investment in our securities. The multifamily industry is highly competitive.
The defense or settlement of any lawsuit or claim may adversely affect our business, financial condition, or results of operations or result in increased insurance premiums. 37 Table of Contents The percentage of ownership of any of our common stockholders may be diluted if we issue new shares of common stock.
The defense or settlement of any lawsuit or claim may adversely affect our business, financial condition, or results of operations or result in increased insurance premiums. The percentage of ownership of any of our common stockholders may be diluted if we issue new shares of common stock.
Any such 25 Table of Contents covenants, restrictions or limitations may limit our ability to make distributions to you and could make it difficult for us to satisfy the requirements necessary to maintain our qualification as a REIT for U.S. federal income tax purposes. Lenders may be able to recover against our other properties under our mortgage loans.
Any such covenants, restrictions or limitations may limit our ability to make distributions to you and could make it difficult for us to satisfy the requirements necessary to maintain our qualification as a REIT for U.S. federal income tax purposes. Lenders may be able to recover against our other properties under our mortgage loans.
This competition may increase as investments in real estate become increasingly attractive relative to other forms of investment. As a result 16 Table of Contents of competition, we may be unable to acquire additional properties as we desire or the purchase price may be significantly elevated.
This competition may increase as investments in real estate become increasingly attractive relative to other forms of investment. As a result of competition, we may be unable to acquire additional properties as we desire or the purchase price may be significantly elevated.
Federal, state and local governments or courts also have made, and may make in the future, changes to laws related to allowable fees and rents, eviction, resident screening and other tenants’ rights laws and regulations (including changes in response to the COVID-19 pandemic and other changes that apply retroactively) that could adversely impact our results of operations and the value of our properties.
Federal, state and local governments or courts also have made, and may make in the future, changes to laws related to allowable fees and rents, eviction, resident screening and other tenants’ rights laws and regulations (including changes that apply retroactively) that could adversely impact our results of operations and the value of our properties.
Under the Maryland General Corporation Law, “business combinations” between a Maryland corporation and an “interested stockholder” or an affiliate of an interested stockholder are prohibited for five years after the most recent date 34 Table of Contents on which the interested stockholder became an interested stockholder.
Under the Maryland General Corporation Law, “business combinations” between a Maryland corporation and an “interested stockholder” or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder became an interested stockholder.
Under our Charter, and bylaws and the Maryland General Corporation Law, our stockholders generally have a right to vote only on the following matters: • the election or removal of directors; • certain mergers, consolidations, statutory share exchanges and transfers of assets; • our dissolution; • adoption, amendment, alteration or repeal of provisions in our bylaws; • the amendment of our charter, except that our board of directors may amend our charter without stockholder approval to: • change our name; • change the name or other designation or the par value of any class or series of stock and the aggregate par value of our stock; • increase or decrease the aggregate number of our authorized shares; • increase or decrease the number of our shares of any class or series of stock that we have the authority to issue; and • effect certain reverse stock splits. 35 Table of Contents All other matters are subject to the discretion of our board of directors.
Under our Charter, and bylaws and the Maryland General Corporation Law, our stockholders generally have a right to vote only on the following matters: • the election or removal of directors; • certain mergers, consolidations, statutory share exchanges and transfers of assets; • our dissolution; • adoption, amendment, alteration or repeal of provisions in our bylaws; • the amendment of our charter, except that our board of directors may amend our charter without stockholder approval to: • change our name; • change the name or other designation or the par value of any class or series of stock and the aggregate par value of our stock; • increase or decrease the aggregate number of our authorized shares; • increase or decrease the number of our shares of any class or series of stock that we have the authority to issue; and • effect certain reverse stock splits.
In addition, changes in federal, state, and local legislation and regulation based on concerns about climate change and increasing climate-related disclosures, including the rules proposed by the SEC, could result in increased capital expenditures to improve the energy efficiency of our existing properties without a corresponding increase in revenues or may increase compliance and data collection costs if, and when, such laws and regulations become effective.
In addition, changes in federal, state, and local legislation and regulation based on concerns about climate change and increasing climate-related disclosures could result in increased capital expenditures to improve the energy efficiency of our existing properties without a corresponding increase in revenues or may increase compliance and data collection costs if, and when, such laws and regulations become effective.
A foreign investor disposing of a U.S. real property interest, including shares of stock of a U.S. corporation whose assets consist principally of U.S. real property interests, is generally subject to FIRPTA tax on the gain recognized on the 33 Table of Contents disposition.
A foreign investor disposing of a U.S. real property interest, including shares of stock of a U.S. corporation whose assets consist principally of U.S. real property interests, is generally subject to FIRPTA tax on the gain recognized on the disposition.
If we are not able to cost-effectively maximize the life of our properties, we may incur greater than anticipated capital expenditure costs, which may adversely affect our ability to make distributions to our stockholders. As of December 31, 2023, the average age of our multifamily communities was approximately 18 years.
If we are not able to cost-effectively maximize the life of our properties, we may incur greater than anticipated capital expenditure costs, which may adversely affect our ability to make distributions to our stockholders. As of December 31, 2024, the average age of our multifamily communities was approximately 16 years.
Lock-out 26 Table of Contents provisions may prohibit us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties.
Lock-out provisions may prohibit us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties.
These market and economic challenges include, principally, the following: • adverse conditions in the real estate industry could harm our business and financial condition by reducing the value of our existing assets, limiting our access to debt and equity capital and otherwise negatively impacting our operations; • any future downturn in the U.S. economy and the related reduction in spending, reduced home prices and high unemployment may result in resident defaults under leases, vacancies at our multifamily communities and concessions or reduced rental rates under new leases due to reduced demand; • the rate of household formation or population growth in our markets or a continued or exacerbated economic slow-down experienced by the local economies where our properties are located or by the real estate industry generally may result in changes in supply of, or demand for, multifamily units in our markets; and • the failure of the real estate market to attract the same level of capital investment in the future that it attracts at the time of our purchases, or a reduction in the number of companies seeking to acquire properties, may result in the value of our investments not appreciating or decreasing significantly below the amount we pay for these investments.
These market and economic challenges include, principally, the following: • adverse conditions in the real estate industry could harm our business and financial condition by reducing the value of our existing assets, limiting our access to debt and equity capital and otherwise negatively impacting our operations; • any future downturn in the U.S. economy and the related reduction in spending, reduced home prices and high unemployment may result in resident defaults under leases, vacancies at our multifamily communities and concessions or reduced rental rates under new leases due to reduced demand; • the rate of household formation or population growth in our markets or a continued or exacerbated economic slow-down experienced by the local economies where our properties are located or by the real estate industry generally may result in changes in supply of, or demand for, multifamily units in our markets; • the failure of the real estate market to attract the same level of capital investment in the future that it attracts at the time of our purchases, or a reduction in the number of companies seeking to acquire properties, may result in the value of our investments not appreciating or decreasing significantly below the amount we pay for these investments; and • international military conflicts could affect oil and gas prices, cause supply chain disruptions and increase cybersecurity risks.
Consequently, we may rely on third-party sources to fund our capital needs. We may not be able to obtain financing on favorable terms or 17 Table of Contents at all. Any additional debt we incur may increase our leverage or impose additional and more stringent restrictions on our operations than we currently have.
Consequently, we may rely on third-party sources to fund our capital needs. We may not be able to obtain financing on favorable terms or at all. Any additional debt we incur may increase our leverage or impose additional and more stringent restrictions on our operations than we currently have.
If any claim was asserted against us relating to those properties or entities, or if any adverse condition existed with respect to the properties or entities, we might have to pay substantial sums to settle or cure it, which could adversely affect our cash flow and operating results.
If any claim was asserted against us relating to those properties or 18 Table of Contents entities, or if any adverse condition existed with respect to the properties or entities, we might have to pay substantial sums to settle or cure it, which could adversely affect our cash flow and operating results.
No assurance can be given that any particular property we own, directly or through any subsidiary entity, including IROP, but excluding a “TRS”, will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business. 32 Table of Contents The use of TRSs would increase our overall tax liability.
No assurance can be given that any particular property we own, directly or through any subsidiary entity, including IROP, but excluding a TRS, will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business. The use of TRSs would increase our overall tax liability.
Compliance with all such laws and regulations may be difficult due to the uncertainty surrounding the interpretation of such laws. Such laws may also increase our operating costs and adversely impact our ability to market our properties and services.
Compliance with all such laws and regulations may be difficult due to the uncertainty surrounding the interpretation of such laws. Such laws may also increase our operating costs and adversely impact our ability to market our 19 Table of Contents properties and services.
As of December 31, 2023, the federal funds rate was set at a range from 5.25% to 5.50% and this range was subsequently maintained at the U.S. Federal Reserve's January 2024 meeting. In considering any adjustments to the target range for the federal funds rate, the U.S.
As of December 31, 2024, the federal funds rate was set at a range from 4.25% to 4.50% and this range was subsequently maintained at the U.S. Federal Reserve’s January 2025 meeting. In considering any adjustments to the target range for the federal funds rate, the U.S.
However, under the Tax Cuts and Jobs Act (the “TCJA”), for taxable years beginning prior to January 1, 2026, ordinary income dividends from REITs are treated as income from a pass-through entity and are eligible for a 20% 30 Table of Contents deduction.
However, under the Tax Cuts and Jobs Act (the “TCJA”), for taxable years beginning prior to January 1, 2026, ordinary income dividends from REITs are treated as income from a pass-through entity and are eligible for a 20% deduction.
In addition, we will continue to incur expenses, including maintenance costs, insurance costs and property taxes, even though a property maintains a high vacancy rate, and our financial performance will suffer if our revenues decrease or our costs increase.
In addition, we will continue to incur expenses, including 13 Table of Contents maintenance costs, insurance costs and property taxes, even though a property maintains a high vacancy rate, and our financial performance will suffer if our revenues decrease or our costs increase.
Certain of our outstanding debt contains, and we may in the future acquire or finance properties with debt containing, limited or no principal amortization, which would require that the principal be repaid at the maturity of the loan in a so-called “balloon payment.” As of December 31, 2023, the financing arrangements of our outstanding indebtedness could require us to make lump-sum or “balloon” payments of approximately $2,401.6 million at maturity dates that range from 2024 to 2030.
Certain of our outstanding debt contains, and we may in the future acquire or finance properties with debt containing, limited or no principal amortization, which would require that the principal be repaid at the maturity of the loan in a so-called “balloon payment.” As of December 31, 2024, the financing arrangements of our outstanding indebtedness could require us to make lump-sum or “balloon” payments of approximately $2,221.7 million at maturity dates that range from 2025 to 2034.
The general risk of inflation is that interest on our debt, general and administrative expenses and other expenses, including our costs of personnel, capital improvements and expenditures, increase at a rate faster than increases in our residential rental rates, which would adversely affect our financial condition or results of operations.
The general risk of inflation is that interest on our debt, general and administrative expenses and other expenses, including our costs of personnel, capital improvements and expenditures, increase at a rate faster than increases in our residential rental rates, which would adversely affect our financial condition or results of operations. Monetary policy actions by the U.S.
United States Federal Income Tax Risks • Legislative or regulatory action could adversely affect the returns to our investors. • Dividends paid by REITs generally do not qualify for the reduced tax rates applicable to qualified dividend income provided under current law. • The ability of our Board of Directors to revoke our REIT election without stockholder approval may cause adverse consequences to our stockholders. • Failure to qualify as a REIT could have adverse consequences. • We may take action to maintain our REIT status which could adversely affect our overall financial performance. • Certain of our business activities are potentially subject to the prohibited transaction tax, which could reduce the return on any investment in our securities. • The income of TRSs will be subject to federal and possibly state corporate income tax. • If our operating partnership, IROP, is not treated as a partnership or disregarded entity for U.S. federal income tax purposes, its income may be subject to taxation. • Distributions to tax-exempt investors may be classified as unrelated business taxable income, or UBTI, and tax-exempt investors would be required to pay tax on such income and to file income tax returns. • Distributions to foreign investors may be treated as an ordinary income distribution to the extent that it is made out of current or accumulated earnings and profits. • Foreign investors may be subject to FIRPTA tax upon the sale of their shares of our stock or upon a capital gain dividend. • We may make distributions consisting of both stock and cash, in which case stockholders may be required to pay income taxes in excess of the cash distributions they receive.
United States Federal Income Tax Risks • Legislative or regulatory action could adversely affect the returns to our investors. • Dividends paid by REITs generally do not qualify for the reduced tax rates applicable to qualified dividend income provided under current law. • Failure to qualify as a REIT could have adverse consequences. • We may take action to maintain our REIT status which could adversely affect our overall financial performance. • Certain of our business activities are potentially subject to the prohibited transaction tax, which could reduce the return on any investment in our securities. • If our operating partnership, IROP, is not treated as a partnership or disregarded entity for U.S. federal income tax purposes, its income may be subject to taxation. • Distributions to tax-exempt investors may be classified as unrelated business taxable income, or UBTI, and tax-exempt investors would be required to pay tax on such income and to file income tax returns. • Distributions to foreign investors may be treated as an ordinary income distribution to the extent that it is made out of current or accumulated earnings and profits. • We may make distributions consisting of both stock and cash, in which case stockholders may be required to pay income taxes in excess of the cash distributions they receive.
An increase in market interest rates may have an adverse effect on the market price of our common stock. One of the factors that investors may consider in deciding whether to buy or sell our common stock is our distribution yield, which is our distribution rate as a percentage of our share price, relative to market interest rates.
One of the factors that investors may consider in deciding whether to buy or sell our common stock is our distribution yield, which is our distribution rate as a percentage of our share price, relative to market interest rates.
The extent of the effect of a future outbreak of COVID-19 or other infectious disease on our operational and financial performance will depend on future developments of the infectious disease and the spread and intensity of any such infectious disease, all of which are uncertain and difficult to predict.
The extent of the effect of a future outbreak of infectious disease on our operational and financial performance will depend on future developments of the infectious disease, the spread and intensity of any such infectious disease and the availability and effectiveness of any vaccines, all of which are uncertain and difficult to predict.
In addition, the deterioration of global economic conditions as a result of COVID-19 or other infectious disease outbreaks may ultimately decrease the demand for multifamily communities within the markets in which we operate and may adversely impact occupancy levels and rental rates across our portfolio.
The COVID-19 pandemic caused, and new outbreaks or pandemics could cause, severe economic, market and other disruptions worldwide. In addition, the deterioration of global economic conditions as a result of infectious disease outbreaks may ultimately decrease the demand for multifamily communities within the markets in which we operate and may adversely impact occupancy levels and rental rates across our portfolio.
Our ability to diversify our portfolio may be limited both as to the number of investments owned and the geographic regions in which our investments are located.
Our investment strategy may limit an increase in the diversification of our investments. Our ability to diversify our portfolio may be limited both as to the number of investments owned and the geographic regions in which our investments are located.
Sales of substantial amounts of common stock, including shares of common stock issuable upon the exchange of units of our operating partnership, IROP, that we may issue from time to time, the sale of shares of common stock held by our current stockholders and the sale of any shares we may issue under our long-term incentive plan, or the perception that these sales could occur, may adversely affect prevailing market prices for our common stock.
Sales of substantial amounts of common stock, including shares of common stock issuable upon the exchange of units of our operating partnership, IROP, that we may issue from time to time, the sale of shares of common stock held by our current stockholders and the sale of any shares we may issue under our long-term incentive plan, or the perception that these sales could occur, may adversely affect prevailing market prices for our common stock. 38 Table of Contents An increase in market interest rates may have an adverse effect on the market price of our common stock.
Laws and regulations regarding rent control, rent stabilization, eviction, resident screening, tenants’ rights, and similar matters, as well as any lawsuits against us arising from such laws and regulations, may limit our ability to charge market rents, limit our ability to increase rents, evict delinquent tenants or change fees, or recover increases in our operating expenses, which could have an adverse effect on our results of operations and the value of our properties.
Laws and regulations regarding rent control, rent stabilization, eviction, resident screening, tenants’ rights, and similar matters, as well as any lawsuits against us arising from such laws and regulations, may limit our ability to charge market rents, limit our ability to increase rents, evict delinquent tenants or change fees, or recover increases in our operating expenses, which could have an adverse effect on our results of operations and the value of our properties. 30 Table of Contents United States Federal Income Tax Risks Legislative or regulatory action could adversely affect the returns to our investors.
The costs of removal or remediation could be substantial. These laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of the hazardous or toxic substances.
These laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of the hazardous or toxic substances.
We expect that most of our resident leases will be for a term of one year or less. Because these leases generally permit the residents to leave at the end of the lease term without any penalty, our rental revenues may be impacted by declines in market rents more quickly than if our leases were for longer terms.
Because these leases generally permit the residents to leave at the end of the lease term without any penalty, our rental revenues may be impacted by declines in market rents more quickly than if our leases were for longer terms.
A downturn or slowdown in the demand for multifamily housing may have more pronounced effects on our results of operations or on the value of our assets than if we had diversified our investments into more than one asset class.
As a result, we are subject to risks inherent in investments in a single type of property. A downturn or slowdown in the demand for multifamily housing may have more pronounced effects on our results of operations or on the value of our assets than if we had diversified our investments into more than one asset class.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, will be the sole and exclusive forum for (a) any Internal Corporate Claim, as such term is defined in Section 1-101(p) of the Maryland General Corporation Law, or any successor provision thereof, (b) any derivative action or proceeding brought on our behalf, (c) any action asserting a claim of breach of any duty owed by any of our directors or officers or other employees to us or to our stockholders, (d) any action asserting a claim against us or any of our directors or officers or other employees arising pursuant to any provision of the Maryland General Corporation Law or our charter or bylaws, or (e) any other action asserting a claim against us or any of our directors or officers or other employees that is governed by the internal affairs doctrine. 36 Table of Contents General Risk Factors If we are unable to retain or obtain key personnel, our ability to implement our investment strategies could be hindered, which could reduce our ability to make distributions and adversely affect the trading price of our common stock.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, will be the sole and exclusive forum for (a) any Internal Corporate Claim, as such term is defined in Section 1-101(p) of the Maryland General Corporation Law, or any successor provision thereof, (b) any derivative action or proceeding brought on our behalf, (c) any action asserting a claim of breach of any duty owed by any of our directors or officers or other employees to us or to our stockholders, (d) any action asserting a claim against us or any of our directors or officers or other employees arising pursuant to any provision of the Maryland General Corporation Law or our charter or bylaws, or (e) any other action asserting a claim against us or any of our directors or officers or other employees that is governed by the internal affairs doctrine.
Any income or gain derived by us from transactions that hedge certain risks, such as the risk of changes in interest rates, will not be treated as gross income for purposes of either the 75% or the 95% Gross Income Test, as defined in Exhibit 99.1 “Material U.S. Federal Income Tax Considerations” of this report, provided specific requirements are met.
Any income or gain derived by us from transactions that hedge certain risks, such as the risk of changes in interest rates, will not be 26 Table of Contents treated as gross income for purposes of either the 75% or the 95% Gross Income Test, as defined in Exhibit 99.1 “Material U.S.
We may also borrow funds, if necessary, to satisfy the requirement that we generally distribute to stockholders as dividends at least 90% of our annual REIT taxable income (computed without regard to dividends paid and excluding net capital gain), or otherwise as is necessary or advisable to assure that we maintain our qualification as a REIT for U.S. federal income tax purposes.
We may also borrow funds, if necessary, to satisfy the requirement that we generally distribute to stockholders as dividends at least 90% of our annual REIT taxable income (computed without regard to dividends paid and excluding net capital gain), or otherwise as is necessary or advisable to assure that we maintain our qualification as a REIT for U.S. federal income tax purposes. 24 Table of Contents Our Articles of Restatement, which we refer to as our Charter, and our bylaws do not limit the amount or percentage of indebtedness that we may incur.
Our variable rate indebtedness subjects us to interest rate risk, and interest rate hedges that we may obtain may be costly and ineffective. As of December 31, 2023, $835.1 million of our $2,515.7 million of total outstanding consolidated indebtedness bore interest at variable rates.
Our variable rate indebtedness subjects us to interest rate risk, and interest rate hedges that we may obtain may be costly and ineffective. As of December 31, 2024, $794.5 million of our $2,310.9 million of total outstanding consolidated indebtedness bore interest at variable rates.
We have and intend to acquire properties subject to existing financing or by borrowing new funds. In addition, we have and intend to incur additional mortgage debt by obtaining loans secured by some, or all, of our real properties in order to obtain funds to acquire additional real properties and/or make capital improvements to properties.
In addition, we have incurred, and may in the future, incur additional mortgage debt by obtaining loans secured by some, or all, of our real properties in order to obtain funds to acquire additional real properties and/or make capital improvements to properties.
To the extent the economic conditions, job growth and unemployment in any of these markets deteriorate or any of these areas experiences natural disasters, the value of our portfolio, our results of operations and our ability to make payments on our debt and to make distributions could be adversely affected.
To the extent the economic conditions, job growth and unemployment in any of these markets deteriorate or any of these areas experiences natural disasters, the value of our portfolio, our results of operations and our ability to make payments on our debt and to make distributions could be adversely affected. 12 Table of Contents Adverse economic conditions may reduce or eliminate our returns and profitability and, as a result, our ability to make distributions to our stockholders.
Hypothetical or historical performance data are not indicative of, and have no bearing on, the potential performance of SOFR. Since the initial publication of SOFR, daily changes in the rate have, on occasion, been more volatile than daily changes in other benchmark or market rates, such as USD LIBOR, during corresponding periods.
Since the initial publication of SOFR, daily changes in the rate have, on occasion, been more volatile than daily changes in other benchmark or market rates, such as USD LIBOR, during corresponding periods.
Our authorized but unissued shares of common and preferred stock may prevent a change in our control. Our Charter authorizes us to issue additional authorized but unissued shares of common or preferred stock.
All other matters are subject to the discretion of our board of directors. Our authorized but unissued shares of common and preferred stock may prevent a change in our control. Our Charter authorizes us to issue additional authorized but unissued shares of common or preferred stock.
Federal Reserve could adversely impact our financial condition and our ability to make distributions to our stockholders. During 2023, the U.S. Federal Reserve increased the target range for the federal funds rate by a total of 100 basis points in response to sticky inflation.
Federal Reserve could adversely impact our financial condition and our ability to make distributions to our stockholders. During 2024, the U.S. Federal Reserve decreased the target range for the federal funds rate by a total of 100 basis points in response to easing inflation with the goal of encouraging individuals and businesses to invest and spend.
During the year ended December 31, 2023, we recognized an aggregate of $66.5 million in impairment charges.
During the year ended December 31, 2024, we recognized an aggregate of $36.1 million in impairment charges.
In addition, we cannot predict what requirements may be enacted in the future or that such requirements will not increase our costs of regulatory compliance or prohibit us from pursuing business opportunities that could be profitable to us, which could adversely affect our results of operations.
In addition, we cannot predict what requirements may be enacted in the future or that such requirements will not increase our costs of regulatory compliance or prohibit us from pursuing business opportunities that could be profitable to us, which could adversely affect our results of operations. 28 Table of Contents The costs of compliance with environmental laws and regulations may adversely affect our net income and the cash available for any distributions.
In addition, the amount of securities of a single issuer that we hold, other than securities qualifying under the 75% asset test and certain other securities, must generally not exceed either 5% of the value of our gross assets or 10% of the vote or value of such issuer’s outstanding securities.
In addition, the amount of securities of a single issuer that we hold, other than securities qualifying under the 75% asset test and certain other securities, must generally not exceed either 5% of the value of our gross assets or 10% of the vote or value of such issuer’s outstanding securities. 32 Table of Contents A REIT’s net income from prohibited transactions is subject to a 100% penalty tax.
A REIT’s net income from prohibited transactions is subject to a 100% penalty tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held in inventory or primarily for sale to customers in the ordinary course of business.
In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held in inventory or primarily for sale to customers in the ordinary course of business.
Material losses may occur in excess of insurance proceeds with respect to any property, and there are types of losses, generally of a catastrophic nature, such as losses due to wars, pollution, environmental matters (such as snow or ice storms, windstorms, tornadoes, hurricanes, earthquakes, flooding or other severe weather) and mold, which are either uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments.
Material losses may occur in excess of insurance proceeds with respect to any property, and there are types of losses, generally of a catastrophic nature, such as losses due to wars, pollution, environmental matters (such as snow or ice storms, windstorms, tornadoes, hurricanes, earthquakes, flooding or other severe weather) and mold, which are either uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. 37 Table of Contents We also maintain comprehensive insurance for errors and omissions, cyber security and other corporate events, with policy specifications and insured limits that we believe are adequate and appropriate under the circumstances.
United States Federal Income Tax Risks Legislative or regulatory action could adversely affect the returns to our investors. Legislative, regulatory or administrative changes could be enacted or promulgated at any time, either prospectively or with retroactive effect, and may adversely affect us and/or our stockholders.
Legislative, regulatory or administrative changes could be enacted or promulgated at any time, either prospectively or with retroactive effect, and may adversely affect us and/or our stockholders.
Competition for such personnel is intense, and we cannot assure you that we will be successful in attracting and retaining such personnel or that we will not need to incur additional expense to attract and retain such personnel.
Moreover, we believe our future success depends upon our ability to hire and retain experienced managerial, operational and marketing personnel. Competition for such personnel is intense, and we cannot assure you that we will be successful in attracting and retaining such personnel or that we will not need to incur additional expense to attract and retain such personnel.
Our board of directors will determine the amount and timing of distributions. In making this determination, our directors will consider all relevant factors, including REIT minimum distribution requirements, the amount of core funds from operation, restrictions under Maryland law, capital expenditures and reserve requirements and general operational requirements.
In making this determination, our directors will consider all relevant factors, including REIT minimum distribution requirements, the amount of core funds from operation, restrictions under Maryland law, capital expenditures and reserve requirements and general operational requirements. We cannot assure you that we will be able to make distributions in the future or in amounts similar to our past distributions.
Various federal, state and local authorities have issued measures imposing restrictions on our ability to enforce tenants’ contractual rental obligations or more burdensome eviction processes to combat rising evictions resulting from financial hardships caused by the COVID-19 pandemic. These measures make more onerous our ability to enforce tenants’ contractual rental obligations through evictions.
In response to infectious disease outbreaks in the past, various federal, state and local authorities have issued measures imposing restrictions on our ability to enforce tenants’ contractual rental obligations or more burdensome eviction processes to combat rising evictions resulting from financial hardships caused by the pandemic, and these authorities could issue similar measures if an infectious disease outbreak arises in the future.
The potential negative impact of COVID-19 and any future outbreaks or pandemics of infectious diseases on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during a disruption.
These measures make our ability to enforce tenants’ contractual rental obligations through evictions more onerous. The potential negative impact of outbreaks or pandemics of infectious diseases on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during a disruption.
Costs associated with addressing indoor air quality issues, moisture infiltration and resulting mold remediation may be costly. As a general matter, concern about indoor exposure to mold or other air contaminants has been increasing as such exposure has been alleged to have a variety of adverse effects on health.
As a general matter, concern about indoor exposure to mold or other air contaminants has been increasing as such exposure has been alleged to have a variety of adverse effects on health.
Investors may consider the steps taken and resources allocated by multifamily owners and operators and other commercial organizations to address ESG matters when making investment and operational decisions.
Investors may consider the steps taken and resources allocated by multifamily owners and operators and other commercial organizations to address ESG matters when making investment and operational decisions. Certain investors may incorporate the business risks of climate change and the adequacy of companies’ responses to the risks posed by climate change and other ESG matters into their investment theses.
Fluctuations in the market prices of our common stock may not be correlated in a predictable way to our performance or operating results.
Fluctuations in the market prices of our common stock may not be correlated in a predictable way to our performance or operating results. The prices at which our common stock trade may fluctuate as a result of factors that are beyond our control or unrelated to our performance or operating results.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeManagement, in coordination with our information technology department, is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel. Management is also responsible for approving budgets, approving cybersecurity processes, and reviewing cybersecurity assessments and other cybersecurity-related matters.
Biggest changeManagement, in coordination with our information technology department, is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy by educating, and communicating key priorities such as potential threat awareness, vendor scrutiny and device security to relevant personnel.
On a quarterly basis, our Executive Vice President of Technology provides information to our Chief Financial Officer, who reports to our Chief Executive Officer and the Risk Committee on our cybersecurity risk capabilities and threats.
On a quarterly basis, our Executive Vice President of Technology provides information to our President and Chief Financial Officer, who reports to our Chief Executive Officer and the Risk Committee on our cybersecurity risk capabilities and threats.
We rely on a multidisciplinary team, including our information security function, legal department, management, and third-party service providers, as described further below, to identify, assess, and manage cybersecurity threats and risks.
We rely on a multidisciplinary team, including our information security personnel, legal department, management, and third-party service providers, as described further below, to identify, assess, and manage cybersecurity threats and risks.
Our Executive Vice President of Technology heads the team responsible for implementing and maintaining cybersecurity and data protection practices at IRT and reports directly to the Chief Financial Officer. 40 Table of Contents
Our Executive Vice President of Technology heads the team responsible for implementing and maintaining cybersecurity and data protection practices at IRT and reports directly to the President and Chief Financial Officer. 41 Table of Contents
We have a cybersecurity committee that is composed of our Executive Vice President of Technology, our Director of Information Technology and our General Counsel. The committee meets quarterly to review any incidents and 39 Table of Contents incident responses and reports its findings to the Chief Financial Officer.
We have a cybersecurity committee that is composed of our Executive Vice President of Technology, our Director of Information Technology and our General Counsel. The committee meets quarterly to review any incidents and incident responses and reports its findings to the President and Chief Financial Officer.
We may incur substantial costs and suffer other negative consequences such as liability, reputational harm and significant remediation costs and experience material harm to our business and financial results if we, or our vendors or suppliers fall victim to other successful cyber-attacks.
We may incur substantial costs and suffer other negative consequences such as liability, reputational harm and significant remediation costs and experience 40 Table of Contents material harm to our business and financial results if we, or our vendors or suppliers fall victim to other successful cyber-attacks.
We also work with third parties that assist us in identifying, assessing, and managing cybersecurity risks, including professional services firms, consulting firms, threat intelligence service providers, and penetration testing firms. We seek to engage reliable, reputable service providers that maintain cybersecurity programs.
Management is also responsible for approving budgets, approving cybersecurity processes, and reviewing cybersecurity assessments and other cybersecurity-related matters. We also work with third parties that assist us in identifying, assessing, and managing cybersecurity risks, including professional services firms, consulting firms, threat intelligence service providers, and penetration testing firms. We seek to engage reliable, reputable service providers that maintain cybersecurity programs.
Our Executive Vice President of Technology has extensive cybersecurity knowledge and skills gained from over five years of work experience on the security team at IRT and an extensive career in the technology and cybersecurity industries as a President and Chief Information Officer at Results Theory, Inc..
Our Executive Vice President of Technology has extensive cybersecurity knowledge and skills gained from over six years of work experience on the security team at IRT and an extensive career in the technology and cybersecurity industries.

Item 2. Properties

Properties — owned and leased real estate

6 edited+4 added−4 removed2 unchanged
Biggest changeAdditional information on our consolidated properties is contained in “Schedule III - Real Estate and Accumulated Depreciation” in this Annual Report on Form 10-K, which is incorporated herein by reference. 41 Table of Contents ITEM 3 . Legal Proceedings We are subject to various legal proceedings and claims that arise in the ordinary course of our business operations.
Biggest change(d) Average effective monthly rent, per unit, represents the average monthly rent for all occupied units for the three-month period ended December 31, 2024. Additional information on our consolidated properties is contained in “Schedule III - Real Estate and Accumulated Depreciation” in this Annual Report on Form 10-K, which is incorporated herein by reference. ITEM 3 .
We deny all allegations of wrongdoing and intend to defend against these claims vigorously. ITEM 4. Mine Safety Disclosures Not applicable. 42 Table of Contents PART II
We deny all allegations of wrongdoing and are currently defending, and will continue to defend against these claims vigorously. ITEM 4. Mine Safety Disclosures Not applicable. 43 Table of Contents PART II
ITEM 2. Properties We hold fee title to all of the multifamily properties in our portfolio (other than four properties owned by unconsolidated joint ventures in which we hold interests). The following table presents an overview of our consolidated portfolio as of December 31, 2023 (including one development property).
ITEM 2. Properties We hold fee title to all of the multifamily properties in our portfolio (other than four properties owned by unconsolidated joint ventures in which we hold interests and one development property).
Matters which arise out of allegations of bodily injury, property damage, and employment practices are generally covered by insurance. While the resolution of these matters cannot be predicted with certainty, we currently believe the final outcome of such matters will not have a material adverse effect on our financial position, results of operations or cash flows.
While the resolution of these matters cannot be predicted with certainty, we currently believe the final outcome of such matters will not have a material adverse effect on our financial position, results of operations or cash flows.
(b) Period end occupancy for each of our properties is calculated as (i) total units rented as of December 31, 2023 divided by (ii) total units available for rent as of December 31, 2023, expressed as a percentage. Excludes the Destination at Arista, which, as of December 31, 2023, is in the lease-up phase and has not reached 90% occupancy.
(b) Period end occupancy for each of our properties is calculated as (i) total units rented as of December 31, 2024 divided by (ii) total units available for rent as of December 31, 2024, expressed as a percentage. (c) Average occupancy represents the daily average occupancy of available units for the three-month period ended December 31, 2024.
Starting around November 2022, putative class action representatives began filing complaints in various United States District Courts across the country naming as defendants RealPage, Inc. (“RealPage”) and approximately 50 defendants who own and/or manage multifamily residential rental housing, alleging that the defendants conspired to fix, raise, maintain, and stabilize rent prices in violation of Section 1 of the Sherman Act.
(“RealPage”), a seller of revenue 42 Table of Contents management products, and approximately 50 defendants who own and/or manage multifamily residential rental housing, alleging that the defendants conspired to fix, raise, maintain, and stabilize rent prices in violation of Section 1 of the Sherman Act and requesting damages thereunder.
Removed
Market Property Count Units (a) Gross Cost Accumulated Depreciation Net Book Value Period End Occupancy (b) Average Occupancy (c) Average Effective Rent per Occupied Unit (d) Asheville, NC 1 252 $ 29,377 $ (5,815) $ 23,562 96.8% 96.6% $ 1,552 Atlanta, GA 13 5,180 1,090,677 (90,537) 1,000,140 93.6% 92.2% 1,648 Austin, TX 1 256 58,946 (3,893) 55,053 94.1% 92.1% 1,808 Birmingham, AL 2 1,074 233,911 (13,897) 220,014 93.2% 91.8% 1,482 Charleston, SC 2 518 81,866 (15,589) 66,277 94.6% 94.6% 1,692 Charlotte, NC 3 714 189,558 (14,754) 174,804 94.4% 95.5% 1,762 Chattanooga, TN 1 192 30,179 (1,935) 28,244 89.1% 91.5% 1,377 Cincinnati, OH 2 542 123,465 (6,990) 116,475 92.3% 94.5% 1,598 Columbus, OH 10 2,510 374,054 (43,394) 330,660 94.8% 94.7% 1,425 Dallas, TX 14 4,007 866,009 (65,789) 800,220 94.6% 94.2% 1,814 Denver, CO 9 2,400 614,501 (33,686) 580,815 94.7% 94.9% 1,734 Greenville, SC 1 702 124,546 (7,330) 117,216 96.0% 94.2% 1,293 Houston, TX 7 1,932 316,463 (17,722) 298,741 95.2% 95.3% 1,459 Huntsville, AL 4 1,051 241,112 (14,487) 226,625 94.8% 95.4% 1,527 Indianapolis, IN 7 1,979 293,760 (28,197) 265,563 94.6% 95.4% 1,369 Lexington, KY 3 886 161,068 (9,316) 151,752 96.7% 96.7% 1,323 Louisville, KY 4 1,150 147,034 (35,701) 111,333 96.3% 94.2% 1,284 Memphis, TN 4 1,383 162,113 (39,830) 122,283 93.0% 93.5% 1,519 Myrtle Beach, SC - Wilmington, NC 3 628 68,185 (11,901) 56,284 93.3% 94.8% 1,420 Nashville, TN 5 1,508 371,562 (21,450) 350,112 95.0% 93.6% 1,634 Oklahoma City, OK 8 2,147 328,355 (29,900) 298,455 95.1% 93.9% 1,184 Orlando, FL 1 297 50,331 (10,029) 40,302 94.9% 93.8% 1,815 Raleigh - Durham, NC 6 1,690 254,971 (45,528) 209,443 95.5% 94.4% 1,562 San Antonio, TX 1 306 57,300 (3,380) 53,920 95.4% 96.2% 1,475 Tampa-St.
Added
The following table presents an overview of our consolidated portfolio as of December 31, 2024: Market Property Count Units (a) Gross Cost Accumulated Depreciation Net Book Value Period End Occupancy (b) Average Occupancy (c) Average Effective Rent per Occupied Unit (d) Atlanta, GA 13 5,180 $ 1,107,680 $ (124,992) $ 982,688 93.8% 93.8% $ 1,599 Austin, TX 1 256 60,302 (6,152) 54,150 96.5% 96.5% 1,791 Birmingham, AL 1 720 122,694 (12,582) 110,112 96.1% 96.1% 1,425 Charleston, SC 2 518 82,210 (17,489) 64,721 95.7% 95.7% 1,739 Charlotte, NC 4 1,014 262,601 (19,508) 243,093 93.6% 93.6% 1,562 Cincinnati, OH 2 542 124,877 (10,806) 114,071 96.8% 96.8% 1,624 Columbus, OH 10 2,510 380,928 (53,930) 326,998 95.6% 95.6% 1,511 Dallas, TX 14 4,007 880,188 (93,128) 787,060 96.5% 96.5% 1,809 Denver, CO 7 1,722 495,388 (38,339) 457,049 95.0% 95.0% 1,775 Greenville, SC 1 702 126,274 (11,283) 114,991 92.8% 92.8% 1,290 Houston, TX 5 1,308 214,977 (18,267) 196,710 96.6% 96.6% 1,432 Huntsville, AL 4 1,051 241,595 (20,027) 221,568 95.7% 95.7% 1,456 Indianapolis, IN 7 1,979 294,522 (36,802) 257,720 95.3% 95.3% 1,435 Lexington, KY 3 886 163,697 (14,278) 149,419 96.8% 96.8% 1,408 Louisville, KY 4 1,150 143,283 (35,057) 108,226 96.8% 96.8% 1,330 Memphis, TN 4 1,383 160,408 (42,175) 118,233 94.7% 94.7% 1,495 Myrtle Beach, SC - Wilmington, NC 3 628 68,341 (13,111) 55,230 94.3% 94.3% 1,396 Nashville, TN 5 1,508 375,025 (32,435) 342,590 96.0% 96.0% 1,627 Oklahoma City, OK 8 2,147 337,446 (42,305) 295,141 96.3% 96.3% 1,228 Orlando, FL 2 617 132,879 (11,243) 121,636 94.0% 94.0% 1,840 Raleigh - Durham, NC 6 1,690 254,625 (50,440) 204,185 94.2% 94.2% 1,553 San Antonio, TX 1 306 57,527 (5,107) 52,420 98.0% 98.0% 1,444 Tampa-St.
Removed
Petersburg, FL 5 1,452 309,847 (35,354) 274,493 96.3% 94.7% 1,822 TOTAL 117 34,756 $ 6,579,190 $ (606,404) $ 5,972,786 94.6% 94.2% $ 1,558 (a) Units represent the total number of units available for rent at December 31, 2023, including 325 units at the Destination at Arista development property.
Added
Petersburg, FL 6 1,791 399,163 (44,083) 355,080 96.1% 96.1% 1,963 TOTAL 113 33,615 $ 6,486,630 $ (753,539) $ 5,733,091 95.4% 95.4% $ 1,572 (a) Units represent the total number of units available for rent at December 31, 2024.
Removed
(c) Average occupancy represents the daily average occupancy of available units for the three-month period ended December 31, 2023. Excludes the Destination at Arista, which, as of December 31, 2023, is in the lease-up phase and has not reached 90% occupancy.
Added
Legal Proceedings We are subject to various legal proceedings and claims that arise in the ordinary course of our business operations. Matters which arise out of allegations of bodily injury, property damage, and employment practices are generally covered by insurance.
Removed
(d) Average effective monthly rent, per unit, represents the average monthly rent for all occupied units for the three-month period ended December 31, 2023. Excludes the Destination at Arista, which, as of December 31, 2023, is in the lease-up phase and has not reached 90% occupancy.
Added
Starting around November 2022, putative class action representatives began filing complaints in various United States District Courts across the country naming as defendants RealPage, Inc.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−1 removed3 unchanged
Biggest changeWe expect to make future quarterly distributions to stockholders; however, future distributions will be at the discretion of our Board of Directors and will depend on our actual funds from operations, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code (see “Business - Qualification as a Real Estate Investment Trust” above) and such other factors as our Board of Directors deems relevant. 43 Table of Contents PERFORMANCE GRAPH The following graph compares the index of the cumulative total stockholder return on our common stock for the measurement period beginning December 31, 2018 and ending December 31, 2023 with the cumulative total returns of the National Association of Real Estate Investment Trusts (NAREIT) Equity REIT index and the Russell 3000 Index.
Biggest changeWe expect to make future quarterly distributions to stockholders; however, future distributions will be at the discretion of our Board of Directors and will depend on our actual funds from operations, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code (see “Business - Qualification as a Real Estate Investment Trust” above) and such other factors as our Board of Directors deems relevant.
At the close of business on February 23, 2024, the closing price for our common stock on the NYSE was $14.94 per share and there were 5,638 holders of record, one of which is the holder for all beneficial owners who hold in street name. Dividends Our quarterly dividend rate is currently $0.16 per common share.
At the close of business on February 13, 2025, the closing price for our common stock on the NYSE was $20.51 per share and there were 4,685 holders of record, one of which is the holder for all beneficial owners who hold in street name. Dividends Our quarterly dividend rate is currently $0.16 per common share.
We have the option, in lieu of paying cash, to settle the exchange for a number of shares of IRT common stock equal to the number of IROP units tendered for exchange. On January 9, 2023, we issued 144,600 shares of common stock in exchange for an equal number of IROP units.
We have the option, in lieu of paying cash, to settle the exchange for a number of shares of IRT common stock equal to the number of IROP units tendered for exchange. On February 6, 2024, we issued 4,928 shares of common stock in exchange for an equal number of IROP units.
Our issuances of shares of common stock were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
Our issuances of shares of common stock were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. As a result of the foregoing exchange of IROP units, an aggregate of 5,941,643 IROP units held by unaffiliated third parties were outstanding at December 31, 2024 and as of February 13, 2025.
The following graph assumes that each index was 100 on the initial day of the relevant measurement period and that all dividends were reinvested. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 IRT 100.00 162.40 162.77 320.96 215.42 203.29 Russell 3000 100.00 130.93 158.21 198.65 160.40 201.96 NAREIT Equity 100.00 128.66 122.07 172.49 129.45 144.16 Unregistered Sales of Equity Securities As of January 1, 2023, an aggregate of 6,091,171 IROP units were outstanding and held by unaffiliated third parties.
The following graph assumes that each index was 100 on the initial day of the relevant measurement period and that all dividends were reinvested. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 IRT 100.00 100.23 197.63 132.65 125.18 167.97 Russell 3000 100.00 120.83 151.72 122.50 154.25 190.83 NAREIT Equity 100.00 94.88 134.06 100.62 112.04 117.56 44 Table of Contents Unregistered Sales of Equity Securities As of January 1, 2024, an aggregate of 5,946,571 IROP units were outstanding and held by unaffiliated third parties.
Removed
As a result of the foregoing exchange of IROP units, an aggregate of 5,946,571 IROP units held by unaffiliated third parties were outstanding at December 31, 2023 and as of February 14, 2024 reduced by 4,928 IROP units exchanged on February 6, 2024. Issuer Purchases of Equity Securities None. ITEM 6. Reserved 44 Table of Contents
Added
PERFORMANCE GRAPH The following graph compares the index of the cumulative total stockholder return on our common stock for the measurement period beginning December 31, 2019 and ending December 31, 2024 with the cumulative total returns of the National Association of Real Estate Investment Trusts (NAREIT) Equity REIT index and the Russell 3000 Index.
Added
Issuer Purchases of Equity Securities None. ITEM 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

54 edited+49 added−16 removed44 unchanged
Biggest changeYear Ended December 31, 2023 Compared to the Year Ended December 31, 2022 SAME-STORE PROPERTIES NON SAME-STORE PROPERTIES CONSOLIDATED (Dollars in thousands except per unit data) 2023 2022 Increase (Decrease) % Change 2023 2022 Increase (Decrease) % Change 2023 2022 Increase (Decrease) % Change Statistical Property Data: Number of properties (1) 106 106 — — 10 14 (4) (28.6)% 116 120 (4) (3.3)% Number of units (1) 31,829 31,829 — — 2,602 3,697 (1,095) (29.6)% 34,431 35,526 (1,095) (3.1)% Average occupancy (1) 94.0% 94.7% (0.7)% (0.7)% 93.6% 94.3% (0.7)% (0.7)% 94.0% 94.6% (0.6)% (0.6)% Average effective monthly rent, per unit (1) $1,537 $1,445 $92 6.4% $1,627 $1,496 $131 8.7% $1,543 $1,431 $112 7.9% Revenue: Rental and other property revenue $589,749 $558,203 $31,546 5.7% $70,092 $69,211 $881 1.3% $659,841 $627,414 $32,427 5.2% Expenses: Property operating expenses 218,209 206,687 11,522 5.6% 26,121 25,588 533 2.1% 244,330 232,275 12,055 5.2% Net Operating Income $371,540 $351,516 $20,024 5.7% $43,971 $43,623 $348 0.8% $415,511 $395,139 $20,372 5.2% Other Revenue: Other revenue $1,142 $1,111 $31 2.8% Corporate and other expenses: Property management expenses 27,081 24,033 3,048 12.7% General and administrative expenses 22,766 26,260 (3,494) (13.3)% Depreciation and amortization expense 218,968 252,849 (33,881) (13.4)% Casualty losses (gains), net 925 (8,866) 9,791 (110.4)% Interest expense (89,921) (86,955) (2,966) 3.4% (Loss on impairment) gain on sale of real estate assets, net (66,547) 111,756 (178,303) (159.5)% Loss on extinguishment of debt (124) — (124) 100.0% Merger and integration costs — (5,505) 5,505 (100.0)% Other (loss) income, net (427) 1,558 (1,985) (127.4)% Loss from investments in unconsolidated real estate entities (4,488) (2,169) (2,319) 106.9% Restructuring costs (3,213) — (3,213) 100.0% Net (loss) income (17,807) 120,659 (138,466) (114.8)% Loss (income) allocated to noncontrolling interests 580 (3,410) 3,990 (117.0)% Net (loss) income available to common shares $(17,227) $117,249 $(134,476) (114.7)% (1) Excludes our development projects.
Biggest changeYear Ended December 31, 2024 Compared to the Year Ended December 31, 2023 SAME-STORE PROPERTIES NON SAME-STORE PROPERTIES CONSOLIDATED (Dollars in thousands except per unit data) 2024 2023 Increase (Decrease) % Change 2024 2023 Increase (Decrease) % Change 2024 2023 Increase (Decrease) % Change Statistical Property Data: Number of properties (1) 107 107 — — 6 9 (3) (33.3)% 113 116 (3) (2.6)% Number of units (1) 31,433 31,433 — — 2,182 2,998 (816) (27.2)% 33,615 34,431 (816) (2.4)% Average occupancy (1)(2) 95.2% 94.1% 1.1% 1.1% 92.4% 93.5% (1.1)% (1.2)% 95.0% 94.0% 1.0% 1.1% Average effective monthly rent, per unit (1)(2) $1,563 $1,543 $20 1.3% $1,616 $1,617 $(1) (0.1)% $1,572 $1,543 $29 1.9% Revenue: Rental and other property revenue $602,584 $585,277 $17,307 3.0% $36,329 $74,564 $(38,235) (51.3)% $638,913 $659,841 $(20,928) (3.2)% Expenses: Property operating expenses 221,000 215,697 5,303 2.5% 14,588 28,633 (14,045) (49.1)% 235,588 244,330 (8,742) (3.6)% Net Operating Income $381,584 $369,580 $12,004 3.2% $21,741 $45,931 $(24,190) (52.7)% $403,325 $415,511 $(12,186) (2.9)% Other Revenue: Other revenue $1,122 $1,142 $(20) (1.8)% Corporate and other expenses: Property management expenses 29,923 27,081 2,842 10.5% General and administrative expenses 24,245 22,766 1,479 6.5% Depreciation and amortization expense 220,854 218,968 1,886 0.9% Casualty losses 3,935 925 3,010 325.4% Interest expense (76,141) (89,921) 13,780 (15.3)% (Loss on impairment) gain on sale of real estate assets, net (9,862) (66,547) 56,685 (85.2)% (Gain) loss on extinguishment of debt 200 (124) 324 -261.3% Other (loss) income, net (1) (427) 426 (99.8)% Income (loss) from investments in unconsolidated real estate entities 347 (4,488) 4,835 (107.7)% Restructuring costs — (3,213) 3,213 (100.0)% Net income (loss) 40,033 (17,807) 57,840 (324.8)% (Income) loss allocated to noncontrolling interests (742) 580 (1,322) (227.9)% Net income (loss) available to common shares $39,291 $(17,227) $56,518 (328.1)% (1) Excludes our one development project.
Our primary cash requirements are to: • make investments to continue our value add initiatives to improve the quality and performance of our properties; • repay our indebtedness; • fund costs necessary to maintain our properties; • continue funding our current real estate developments until completion; • pay our operating expenses; and • distribute a minimum of 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gain) and to make investments in a manner that enables us to maintain our qualification as a REIT.
Our primary cash requirements are to: • make investments, continue our value add initiatives, and improve the quality and performance of our properties; • repay our indebtedness; • fund costs necessary to maintain our properties; • continue funding our current real estate developments until completion; • pay our operating expenses; and • distribute a minimum of 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gain) and to make investments in a manner that enables us to maintain our qualification as a REIT.
Factors which may cause our actual results or performance to differ materially from those contemplated by forward-looking statements include, but are not limited to, the following: • Unfavorable changes in economic conditions, either nationally or regionally in one or more of the markets in which we operate, could adversely impact us; • Short-term leases expose us to the effects of declining rents; • Competition could limit our ability to lease our units or increase or maintain rental income; • Redevelopment risks could impact our profitability; • Impairment charges; • Labor and materials required for maintenance, repair, renovation or capital expenditure may be more expensive than anticipated or significantly delayed; • Competition could adversely affect our ability to acquire properties; • Our acquisition strategy may not produce the cash flows expected; • Failure to qualify as a REIT could have adverse consequences; • Litigation risks could affect our business; • A cybersecurity incident and other technology disruptions could negatively impact our business; • Damage from catastrophic weather and other natural events could result in losses; • Volatility in capital markets may result in fluctuations in our share price; • Debt financing and other required capital may not be available to us or may only be available on adverse terms; • Substantial inflationary or deflationary pressures could adversely affect our financial condition or results of operations; • Rising interest rates could both increase our borrowing costs, thereby adversely affecting our cash flows and the amounts available for distribution to our stockholders, and decrease our share price, if investors seek higher yields through other investments; • Failure to hedge effectively against interest rates may adversely affect results of operations; and • Additional factors as discussed in Item 1A.
Factors which may cause our actual results or performance to differ materially from those contemplated by forward-looking statements include, but are not limited to, the following: • Unfavorable changes in economic conditions, either nationally or regionally in one or more of the markets in which we operate, could adversely impact us; • Short-term leases expose us to the effects of declining rents; • Competition could limit our ability to lease our units or increase or maintain rental income; • Redevelopment risks could impact our profitability; • Impairment charges; • Labor and materials required for maintenance, repair, renovation or capital expenditure may be more expensive than anticipated or significantly delayed; • Competition could adversely affect our ability to acquire properties; • Our acquisition strategy may not produce the cash flows expected; • Failure to qualify as a REIT could have adverse consequences; • Litigation risks could affect our business; • A cybersecurity incident and other technology disruptions could negatively impact our business; • Damage from catastrophic weather and other natural events could result in losses; • Volatility in capital markets may result in fluctuations in our share price; • Debt financing and other required capital may not be available to us or may only be available on adverse terms; • Substantial inflationary or deflationary pressures could adversely affect our financial condition or results of operations; • Rising interest rates could both increase our borrowing costs, thereby adversely affecting our cash flows and the amounts available for distribution to our stockholders, and decrease our share price, if investors seek higher yields through other investments; 45 Table of Contents • Failure to hedge effectively against interest rates may adversely affect results of operations; and • Additional factors as discussed in Item 1A.
Inflation Our resident leases at our apartment communities allow, at the time of renewal, for adjustments in the rent payable thereunder, and thus may enable us to seek rent increases. Almost all leases are for one year or less. The short-term nature of these leases has generally served to reduce our risk to adverse effects of inflation.
Inflation Our resident leases at our apartment communities allow, at the time of renewal, for adjustments in the rent payable thereunder, and thus may enable us to seek rent increases. Almost all leases are for approximately one year or less. The short-term nature of these leases has generally served to reduce our risk to adverse effects of inflation.
Under such leases, the resident typically agrees to pay an initial deposit (generally one month’s rent) and/or associated application and move in-fees, and then pays rent on a monthly basis during the term of the lease.
Under such leases, the resident typically agrees to pay an initial deposit (generally one month’s rent) or deposit alternative, and/or associated application and move in-fees, and then pays rent on a monthly basis during the term of the lease.
On July 28, 2023, we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock under our shelf registration statement having an aggregate offering price of up to $450,000 (the “2023 ATM Program”) in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act.
On July 28, 2023, we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock under our shelf registration statement having an aggregate offering price of up to $450 million (the “2023 ATM Program”) in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act.
During the year ended December 31, 2023, we incurred $0.9 million in net casualty losses due to fires at three properties and winter storm damage at various properties where the carrying value of the damage exceeded insurance proceeds due to policy deductible levels.
During the year ended December 31, 2023, we incurred $0.9 million in net casualty losses due to fires at three properties and winter storm damage at various properties where the carrying value of the damage exceeded insurance proceeds due to policy deductible levels. Interest expense.
Our cash flows used in financing activities during the year ended December 31, 2023 were primarily driven by distributions of $138.5 million and mortgage principal repayments of $129.6 million partially offset by new borrowings on the unsecured credit facility, net of repayments of $19.7 million.
Our cash flows used in financing activities during the year ended December 31, 2023 were primarily driven by distributions of $138.5 million and mortgage principal repayments of $129.6 million partially offset by new borrowings on the unsecured revolver, net of repayments of $19.7 million.
Refer to Item 7, “Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a comparison of the year ended December 31, 2022 to the year ended December 31, 2021.
Refer to Item 7, “Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 for a comparison of the year ended December 31, 2023 to the year ended December 31, 2022.
During the year ended December 31, 2023, we incurred approximately $3.2 million of severance costs related to the reorganization of certain departments that impacted a limited number of employees.
Restructuring costs . We incurred no restructuring costs during the year ended December 31, 2024. During the year ended December 31, 2023, we incurred approximately $3.2 million of severance costs related to the reorganization of certain departments that impacted a limited number of employees.
Proceeds of the new 2028 Term Loan were used to (i) repay and retire the 2024 Term Loans, and (ii) reduce $100,000 of outstanding borrowings under the Revolving Credit Facility. In addition, the Fourth Restated Credit Agreement changed the LIBOR interest rate option to SOFR.
Proceeds of the new 2028 Term Loan were used to (i) repay and retire the 2024 Term Loans, and (ii) reduce $100,000 of outstanding borrowings under the Unsecured Revolver. In addition, the Fourth Restated Credit Agreement changed the LIBOR interest rate option to SOFR.
Business for discussion regarding our business objective and investment strategies and for an additional discussion regarding developments in our business during 2023. 45 Table of Contents Results of Operations The following discussion is based on our Consolidated Financial Statements for the years ended December 31, 2023 and 2022.
Business for discussion regarding our business objective and investment strategies and for an additional discussion regarding developments in our business during 2024. 46 Table of Contents Results of Operations The following discussion is based on our Consolidated Financial Statements for the years ended December 31, 2024 and 2023.
In addition, as of December 31, 2023, we identified six multifamily properties as held for sale and recorded a loss on impairment of $33.0 million as a result of the carrying value of the real estate exceeding the expected sales price, less transaction costs.
In addition, as of December 31, 2023, we identified six multifamily properties as held for sale and recorded a loss on impairment of $33.0 million as a result of the carrying value of the real estate exceeding the expected sales price, less transaction costs. Income (loss) from investments in unconsolidated real estate entities.
We intend to meet our liquidity requirements primarily through a combination of one or more of the following: • the use of our cash and cash equivalents of $22.9 million as of December 31, 2023; • existing and future unsecured financing, including advances under our unsecured credit facility, and financing secured directly or indirectly by the apartment properties in our portfolio; 51 Table of Contents • cash generated from operating activities; • net cash proceeds from property sales, including sales undertaken as part of our capital recycling strategy, Portfolio Optimization and Deleveraging Strategy, and other sales; and • proceeds from the sales of our common stock and other equity securities, including common stock that may be sold under our 2023 ATM Program (as defined below).
We intend to meet our liquidity requirements primarily through a combination of one or more of the following: • the use of our cash and cash equivalents of $21.2 million as of December 31, 2024; • existing and future unsecured financing, including advances under our unsecured revolver, and financing secured directly or indirectly by the apartment properties in our portfolio; 52 Table of Contents • cash generated from operating activities; • net cash proceeds from property sales, including sales undertaken as part of our capital recycling strategy, Portfolio Optimization and Deleveraging Strategy, and other sales; and • proceeds from the sales of our common stock and other equity securities, including common stock that may be sold under our 2023 ATM Program (as defined below).
Under asset acquisition accounting, the costs to acquire real estate, including transaction costs related to the acquisition, are accumulated and then allocated to the individual assets and liabilities acquired based upon their relative fair 56 Table of Contents value.
Under asset acquisition accounting, the costs to acquire real estate, including transaction costs related to the acquisition, are accumulated and then allocated to the individual assets and liabilities acquired based upon their relative fair value.
The Stock Repurchase Program has no time limit and may be suspended or discontinued at any time. During the year ended December 31, 2023, we had no repurchases of shares under the Stock Repurchase Program. Cash Flows As of December 31, 2023 and 2022, we maintained cash, cash equivalents, and restricted cash of approximately $50.7 million and $44.0 million, respectively.
The Stock Repurchase Program has no time limit and may be suspended or discontinued at any time. During the year ended December 31, 2024, we had no repurchases of shares under the Stock Repurchase Program. Cash Flows As of December 31, 2024 and 2023, we maintained cash, cash equivalents, and restricted cash of approximately $43.5 million and $50.7 million, respectively.
Interest only payments are payable monthly through August 1, 2025 and April 1, 2027 on the first three tranches and fourth tranche, respectively, with interest and principal payments due monthly thereafter. As of December 31, 2023, and 2022, the outstanding principal balance under the Newmark MCFA was $510,038 and $558,880, respectively.
Interest only payments are payable monthly through August 1, 2025 and April 1, 2027 on the first three tranches and fourth tranche, respectively, with interest and principal payments due monthly thereafter. As of December 31, 2024, and 2023, the outstanding principal balance under the Newmark MCFA was $509,386 and $510,038, respectively.
The Fourth Restated Credit Agreement represents an increase of $100,000 over the Third Restated Credit Agreement which provided for (i) the Revolving Credit Facility, (ii) the 2026 Term Loan, and (iii) two additional term loans of $200,000 and $100,000, which had maturity dates of January 17, 2024 and November 20, 2024, respectively (collectively, the “2024 Term Loans”).
The Fourth Restated Credit Agreement represented an increase of $100,000 over the Third Restated Credit Agreement which provided for (i) the Unsecured Revolver, (ii) the 2026 Term Loan, and (iii) two additional term loans of $200,000 and $100,000, which had maturity dates of January 17, 2024 and November 20, 2024, respectively (collectively, the “2024 Term Loans”).
The Fourth Restated Credit Agreement otherwise continues, without material change, the 2026 Term Loan and the Revolving Credit Facility. We recognized the restructuring of the Fourth Restated Credit Agreement as a modification of debt for all lenders except for one and incurred deferred financing costs of $1,477 associated with the transaction.
The Fourth Restated Credit Agreement otherwise continued, without material change, the 2026 Term Loan and the Unsecured Revolver. We recognized the restructuring of the Fourth Restated Credit Agreement as a modification of debt for all lenders except for one and incurred deferred financing costs of $1,477 associated with the transaction.
Newmark Secured Credit Facility On December 16, 2021, in connection with the STAR Merger, we assumed the Newmark secured credit facility (“Newmark MCFA”), which includes four tranches: (1) a fixed rate loan in the aggregate principal amount of $331,001 that accrues interest at 4.43% per annum; (2) a fixed rate loan in the aggregate principal amount of $137,917 that accrues interest at 4.57% per annum; (3) a variable rate loan in the aggregate principal amount of $49,493 that accrues interest at the one-month LIBOR plus 1.70% per annum; and (4) a fixed rate loan in the aggregate principal amount of $40,468 that 54 Table of Contents accrues interest at 3.34% per annum.
As of December 31, 2024, and 2023 the outstanding principal balance was $76,249 and $76,248, respectively. 57 Table of Contents Newmark Secured Credit Facility On December 16, 2021, in connection with the STAR Merger, we assumed the Newmark secured credit facility (“Newmark MCFA”), which includes four tranches: (1) a fixed rate loan in the aggregate principal amount of $331,001 that accrues interest at 4.43% per annum; (2) a fixed rate loan in the aggregate principal amount of $137,917 that accrues interest at 4.57% per annum; (3) a variable rate loan in the aggregate principal amount of $49,493 that accrues interest at the one-month LIBOR plus 1.70% per annum; and (4) a fixed rate loan in the aggregate principal amount of $40,468 that accrues interest at 3.34% per annum.
Unsecured Revolving Credit Facility and Term Loans On July 25, 2022, we entered into the Fourth Amended, Restated and Consolidated Credit Agreement (the “Fourth Restated Credit Agreement”) which amended and restated in its entirety the Third Amended and Restated Credit Agreement dated as of December 14, 2021 (the “Third Restated Credit Agreement”).
On July 25, 2022, we entered into the Fourth Restated Credit Agreement which amended and restated in its entirety the Third Amended and Restated Credit Agreement dated as of December 14, 2021 (the “Third Restated Credit Agreement”).
Our cash flows used in investing activities during the year ended December 31, 2023 were primarily driven by $146.6 million of capital expenditures, $66.2 million in additions to real estate under development, and $26.0 million of outflows related to our investments in four unconsolidated real estate entities, partially offset by $230.8 million of inflows from property dispositions and $4.2 million in proceeds from insurance claims.
Our cash flows used in investing activities during the year ended December 31, 2023 were primarily driven by $146.6 million of capital expenditures, $66.2 million in additions to real estate under development, and $26.0 million of outflows related to our investments in four unconsolidated real estate entities, partially offset by $230.8 million of inflows from property dispositions and $4.2 million in proceeds from insurance claims. 53 Table of Contents Our cash flows used in investing activities during the year ended December 31, 2022 were primarily driven by $201.8 million of outflows related to the acquisitions of three multifamily apartment communities, $84.0 million of capital expenditures, $61.8 million in additions to real estate under development, and $60.8 million of outflows related to our investment in five unconsolidated real estate entities, partially offset by $253.6 million of inflows from property dispositions and $15.6 million in proceeds from insurance claims.
Neither FFO nor CFFO should be considered as an alternative to net income or any other GAAP measurement as an indicator of our operating performance or as an alternative to cash flow from operating, investing, and financing activities as a measure of our liquidity. 48 Table of Contents Set forth below is a reconciliation of net (loss) income to FFO and CFFO for the years ended December 31, 2023, 2022 and 2021 (in thousands, except share and per share information): For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 Amount Per Share (1) Amount Per Share (1) Amount Per Share (1) Net (loss) income $ (17,807) $ (0.08) $ 120,659 $ 0.53 $ 45,529 $ 0.41 Adjustments: Real estate depreciation and amortization 217,716 0.94 251,545 1.10 76,487 0.70 Our share of real estate depreciation and amortization from investments in unconsolidated real estate entities 2,115 0.01 2,320 0.01 — — Loss on impairment (gain on sale) of real estate assets, net, excluding prepayment gains 68,447 0.30 (111,347) (0.49) (90,277) (0.82) FFO $ 270,471 $ 1.17 $ 263,177 $ 1.15 $ 31,739 $ 0.29 FFO $ 270,471 $ 1.17 $ 263,177 $ 1.15 $ 31,739 $ 0.29 Adjustments: Other depreciation and amortization 1,252 0.01 1,304 0.01 423 — Casualty losses (gains), net 925 0.01 (8,866) (0.04) 359 — Loan (premium accretion) discount amortization, net (10,899) (0.04) (11,005) (0.05) (501) — Prepayment (gains) losses on asset dispositions (1,900) (0.01) (409) — 2,607 0.02 Loss on extinguishment of debt 124 — — — 10,261 0.09 Other expense (income) 743 — (2,298) (0.01) — — Merger and integration costs — — 5,505 0.02 47,063 0.44 Restructuring costs 3,213 0.01 — — — — CFFO $ 263,929 $ 1.15 $ 247,408 $ 1.08 $ 91,951 $ 0.84 (1) Based on 230,364,184, 228,452,958, and 109,418,810 weighted average shares and units outstanding for the years ended December 31, 2023, 2022, and 2021, respectively.
Neither FFO nor CFFO should be considered as an alternative to net income or any other GAAP measurement as an indicator of our operating performance or as an alternative to cash flow from operating, investing, and financing activities as a measure of our liquidity. 49 Table of Contents Set forth below is a reconciliation of net income (loss) to FFO and CFFO for the years ended December 31, 2024, 2023 and 2022 (in thousands, except share and per share information): For the Year Ended December 31, 2024 For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 Amount Per Share (1) Amount Per Share (1) Amount Per Share (1) Net income (loss) $ 40,033 $ 0.17 $ (17,807) $ (0.08) $ 120,659 $ 0.53 Adjustments: Real estate depreciation and amortization 219,360 0.95 217,716 0.94 251,545 1.10 Our share of real estate depreciation and amortization from investments in unconsolidated real estate entities 1,581 0.01 2,115 0.01 2,320 0.01 Loss on impairment (gain on sale) of real estate assets, net, excluding prepayment gains 11,815 0.05 68,447 0.30 (111,347) (0.49) FFO $ 272,789 $ 1.18 $ 270,471 $ 1.17 $ 263,177 $ 1.15 FFO $ 272,789 $ 1.18 $ 270,471 $ 1.17 $ 263,177 $ 1.15 Adjustments: Other depreciation and amortization 1,493 0.01 1,252 0.01 1,304 0.01 Casualty losses (gains), net 3,935 0.02 925 0.01 (8,866) (0.04) Loan (premium accretion) discount amortization, net (9,167) (0.04) (10,899) (0.04) (11,005) (0.05) Prepayment (gains) losses on asset dispositions (1,953) (0.01) (1,900) (0.01) (409) — (Gain) loss on extinguishment of debt (200) — 124 — — — Other expense (income) 1 — 743 — (2,298) (0.01) Merger and integration costs — — — — 5,505 0.02 Restructuring costs — — 3,213 0.01 — — CFFO $ 266,898 $ 1.16 $ 263,929 $ 1.15 $ 247,408 $ 1.08 (1) Based on 230,741,085, 230,364,184, and 228,452,958 weighted average shares and units outstanding for the years ended December 31, 2024, 2023, and 2022, respectively.
An impairment charge is recognized when it is determined that the carrying value of the asset exceeds the fair value. The estimated cash flows and estimated fair value used in the impairment analysis are determined based on our plans for the respective assets, including the expected hold period, and our assessment of market and economic conditions.
The estimated cash flows and estimated fair value used in the impairment analysis are determined based on our plans for the respective assets, including the expected hold period, and our assessment of market and economic conditions.
Our cash and cash equivalents were generated from the following activities (dollars in thousands): For the Years Ended December 31, 2023 2022 2021 Cash flows provided by operating activities $ 262,170 $ 249,537 $ 52,257 Cash flows used in investing activities (1,712) (135,766) (216,124) Cash flows (used in) provided by financing activities (253,743) (135,425) 215,923 Net change in cash and cash equivalents, and restricted cash 6,715 (21,654) 52,056 Cash and cash equivalents, and restricted cash, beginning of period 44,017 65,671 13,615 Cash and cash equivalents, and restricted cash, end of the period $ 50,732 $ 44,017 $ 65,671 Our cash flows provided by operating activities during the year ended December 31, 2023 were primarily driven by the ongoing operations of our properties.
Our cash and cash equivalents were generated from the following activities (dollars in thousands): For the Years Ended December 31, 2024 2023 2022 Cash flows provided by operating activities $ 259,753 $ 262,170 $ 249,537 Cash flows used in investing activities (20,605) (1,712) (135,766) Cash flows used in financing activities (246,428) (253,743) (135,425) Net change in cash and cash equivalents, and restricted cash (7,280) 6,715 (21,654) Cash and cash equivalents, and restricted cash, beginning of period 50,732 44,017 65,671 Cash and cash equivalents, and restricted cash, end of the period $ 43,452 $ 50,732 $ 44,017 Our cash flows provided by operating activities during the years ended December 31, 2024, 2023 and 2022 were primarily driven by the ongoing operations of our properties.
As of December 31, 2023 we were in compliance with all financial covenants contained in our consolidated indebtedness. PNC Secured Credit Facility On December 16, 2021, in connection with the STAR Merger, we assumed the PNC multifamily credit facility agreement (“PNC MCFA”), a fixed rate multifamily note and other loan documents for the benefit of PNC Bank.
PNC Secured Credit Facility On December 16, 2021, in connection with the STAR Merger, we assumed the PNC multifamily credit facility agreement (“PNC MCFA”), a fixed rate multifamily note and other loan documents for the benefit of PNC Bank.
As landlord, we are directly responsible for all real estate taxes, sales and use taxes, special assessments, property-level utilities, insurance, building repairs, and other building operation and management 55 Table of Contents costs. Individual residents are generally responsible for the utility costs of their unit. Our lease terms are generally for one year or less and average twelve months.
As landlord, we are directly responsible for all real estate taxes, sales and use taxes, special assessments, property-level utilities, insurance, building repairs, and other building operation and management costs. Individual residents are generally responsible for the utility costs of their unit.
The increase was primarily attributable to a $31.5 million increase in same-store rental and other property revenue driven by a 6.4% increase in average effective monthly rents and partially offset by a 0.7% decrease in average occupancy compared to the prior year period. Expenses Property operating expenses.
This decrease in non same-store rental and other property revenue was partially offset by an increase in same-store rental and other property revenue of $17.3 million driven by a 1.3% increase in average effective monthly rents and a 1.1% increase in average occupancy compared to the prior year period. Expenses Property operating expenses.
We estimate the fair value of acquired tangible assets (consisting of land, building and improvements), identified intangible assets (consisting of in-place leases), and assumed debt at the date of acquisition, based on the evaluation of information and estimates available at that date.
Transaction costs and fees incurred related to the financing of an acquisition are capitalized and amortized over the life of the related financing. 60 Table of Contents We estimate the fair value of acquired tangible assets (consisting of land, building and improvements), identified intangible assets (consisting of in-place leases), and assumed debt at the date of acquisition, based on the evaluation of information and estimates available at that date.
In addition, advertising expenses increased 31% during the year ended December 31, 2023 compared to the prior year period, as we increased investment in our brand. Property management expenses. Property management expenses increased $3.1 million to $27.1 million for the year ended December 31, 2023 from $24.0 million for the year ended December 31, 2022.
Same-store advertising expenses increased 19.5% during the year ended December 31, 2024 compared to the prior year period, as we increased investment in our brand. Property management expenses. Property management expenses increased $2.8 million to $29.9 million for the year ended December 31, 2024 from $27.1 million for the year ended December 31, 2023.
Properties that are held for sale or have been sold are excluded from the same-store portfolio. 49 Table of Contents Non Same-Store Properties and Non Same-Store Portfolio Properties that did not meet the definition of a same-store property as of the beginning of the previous year are added into the non same-store portfolio.
Non Same-Store Properties and Non Same-Store Portfolio Properties that did not meet the definition of a same-store property as of the beginning of the previous year are added into the non same-store portfolio.
(2) Includes indebtedness secured by real estate held for sale of $122,621. (3) Represents the weighted average of the contractual interest rates in effect as of year-end without regard to any interest rate swaps or collars.
(3) Represents the weighted average of the contractual interest rates in effect as of year-end without regard to any interest rate swaps or collars.
Terms of Leases and Resident Characteristics The leases for our portfolio typically follow standard forms customarily used between landlords and residents in the geographic area in which the relevant property is located.
(2) Our unsecured revolver and term loans assumed a SOFR rate of 4.64% as of December 31, 2024. Terms of Leases and Resident Characteristics The leases for our portfolio typically follow standard forms customarily used between landlords and residents in the geographic area in which the relevant property is located.
The Fourth Restated Credit Agreement provides for an aggregate amount available for borrowing of $1,100,000, which consists of (i) a $500,000 unsecured revolving credit facility with a January 31, 2026 scheduled maturity date (the “Revolving Credit Facility”), (ii) a $400,000 term loan with a January 28, 2028 maturity date (the “2028 Term Loan”); and (iii) a $200,000 term loan with a May 18, 2026 maturity date (the “2026 Term Loan”).
The Fourth Restated Credit Agreement provided for an aggregate amount available for borrowing of $1,100,000, which consisted of (i) the Unsecured Revolver with a January 31, 2026 scheduled maturity date (ii) the 2028 Term Loan; and (iii) the 2026 Term Loan.
(4) Represents the total weighted average effective interest rate for the full year ended December 31, 2023, after giving effect to all components of interest expense including the impact of interest rate swaps and collars, but excluding the impact of loan premium amortization, discount accretion, and interest capitalization.
(4) Represents the total weighted average effective interest rate for the three months ended December 31, 2024, including the impact of interest rate swaps and collars, the amortization of hedging costs, and deferred financing costs, but excluding the impact of loan premium amortization, discount accretion, and interest capitalization.
Insurance Our multifamily properties are covered by all risk property insurance covering the replacement cost for each building and business interruption and rental loss insurance.
Our apartment properties predominantly consist of one-bedroom and two-bedroom units, although some of our apartment properties also have studio and three-bedroom units. Insurance Our multifamily properties are covered by all risk property insurance covering the replacement cost for each building and business interruption and rental loss insurance.
Property operating expenses increased $12.1 million to $244.3 million for the year ended December 31, 2023 from $232.3 million for the year ended December 31, 2022.
Property operating expenses decreased $8.7 million to $235.6 million for the year ended December 31, 2024 from $244.3 million for the year ended December 31, 2023.
Our cash flows used in investing activities during the year ended December 31, 2022 were primarily driven by $201.8 million of outflows related to the acquisitions of three multifamily apartment communities, $84.0 million of capital expenditures, $61.8 million in additions to real estate under development, and $60.8 million of outflows related to our investment in five unconsolidated real estate entities, partially offset by $253.6 million of inflows from property dispositions and $15.6 million in proceeds from insurance claims. 52 Table of Contents Our cash flows used in investing activities during the year ended December 31, 2021 were primarily driven by $186.1 million of outflows related to the STAR Merger, $139.5 million of outflows related to two property acquisitions, $25.0 million of outflows related to our investment in two unconsolidated real estate entities, and capital expenditures of $43.0 million, partially offset by $177.5 million of inflows from property dispositions.
Our cash flows used in investing activities during the year ended December 31, 2024 were primarily driven by $238.6 million of outflows related to the acquisitions of three multifamily apartment communities, $118.3 million of capital expenditures, $56.8 million in additions to real estate under development, and $11.6 million of outflows related to our investments in four unconsolidated real estate entities, partially offset by $390.9 million of inflows from property dispositions, $9.1 million in return of investments in unconsolidated real estate entities and $4.7 million in proceeds from insurance claims.
Loss from investments in unconsolidated joint ventures increased $2.3 million to $4.5 million for the year ended December 31, 2023, from $2.2 million for the year ended December 31, 2022, primarily due to an increase in our proportionate share of net losses of unconsolidated real estate entities, which primarily included increases in interest expense and depreciation and amortization recognized by the unconsolidated real estate entities. 47 Table of Contents Restructuring costs .
Income (loss) from investments in unconsolidated real estate entities increased $4.8 million to a $0.3 million gain for the year ended December 31, 2024, from $4.5 million loss for the year ended December 31, 2023, primarily due to an increase in our proportionate share of net 48 Table of Contents earnings of unconsolidated real estate entities, which primarily included a gain from the liquidation of one of our unconsolidated real estate entities partially offset by the operating losses of the unconsolidated real estate entities.
However, NOI should only be used as an alternative measure of our financial performance. Same-Store Properties and Same-Store Portfolio We review our same-store portfolio at the beginning of each calendar year. Properties are added into the same-store portfolio if they were owned and not a development property at the beginning of the previous year.
Same-Store Properties and Same-Store Portfolio We review our same-store portfolio at the beginning of each calendar year. Properties are added into the same-store portfolio if they were owned and not a development property at the beginning of the previous year. Properties that are held for sale or have been sold are excluded from the same-store portfolio.
Same-Store Portfolio Net Operating Income We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful supplemental measure of our operating performance.
Development Property A development property is a property that is either currently under development or is in lease-up prior to reaching overall occupancy of 90%. 50 Table of Contents Same-Store Portfolio Net Operating Income We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful supplemental measure of our operating performance.
Set forth below is a reconciliation of GAAP net (loss) income to Same-Store Portfolio (a) NOI for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 % change Net (loss) income $ (17,807) $ 120,659 (114.8) % Other revenue (1,142) (1,111) 2.8 % Property management expenses 27,081 24,033 12.7 % General and administrative expenses 22,766 26,260 (13.3) % Depreciation and amortization expense 218,968 252,849 (13.4) % Casualty losses (gains), net 925 (8,866) (110.4) % Interest expense 89,921 86,955 3.4 % Loss on impairment (gain on sale) of real estate assets, net 66,547 (111,756) (159.5) % Loss on extinguishment of debt 124 — 100.0 % Other loss (income), net 427 (1,558) (127.4) % Loss from investments in unconsolidated real estate entities 4,488 2,169 106.9 % Merger and integration costs — 5,505 (100.0) % Restructuring costs 3,213 — 100.0 % NOI 415,511 395,139 5.2 % Less: Non same-store portfolio NOI 43,971 43,623 0.8 % Same-store portfolio (a) NOI $ 371,540 $ 351,516 5.7 % (a) Same-Store Portfolio for the years ended December 31, 2023 and 2022 included 106 properties containing 31,829 units. 50 Table of Contents Set forth below is Same-Store Portfolio (a) NOI for the years ended December 31, 2023 and 2022 (in thousands, except per unit data): Year Ended December 31, 2023 2022 % change Revenue: Rental and other property revenue $ 589,749 $ 558,203 5.7 % Property Operating Expenses Real estate taxes 72,947 72,406 0.7 % Property insurance 14,647 11,683 25.4 % Personnel expenses 46,179 45,347 1.8 % Utilities 29,277 28,026 4.5 % Repairs and maintenance 20,545 18,484 11.2 % Contract services 21,612 18,998 13.8 % Advertising expenses 6,350 4,852 30.9 % Other expenses 6,652 6,891 (3.5) % Total property operating expenses 218,209 206,687 5.6 % Same-store portfolio (a) NOI $ 371,540 $ 351,516 5.7 % Same-store portfolio NOI Margin 63.0 % 63.0 % 0.0 % Average Occupancy 94.0 % 94.7 % (0.7) % Average effective monthly rent, per unit $ 1,537 $ 1,445 6.4 % (a) Same-Store Portfolio for the years ended December 31, 2023 and 2022 included 106 properties containing 31,829 units.
Set forth below is a reconciliation of GAAP net income (loss) to Same-Store Portfolio (a) NOI for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 % change Net income (loss) $ 40,033 $ (17,807) 324.8 % Other revenue (1,122) (1,142) (1.8) % Property management expenses 29,923 27,081 10.5 % General and administrative expenses 24,245 22,766 6.5 % Depreciation and amortization expense 220,854 218,968 0.9 % Casualty losses 3,935 925 325.4 % Interest expense 76,141 89,921 (15.3) % Loss on impairment (gain on sale) of real estate assets, net 9,862 66,547 (85.2) % (Gain) loss on extinguishment of debt (200) 124 (261.3) % Other loss (income), net 1 427 (99.8) % (Income) loss from investments in unconsolidated real estate entities (347) 4,488 107.7 % Restructuring costs — 3,213 (100.0) % NOI 403,325 415,511 (2.9) % Less: Non same-store portfolio NOI 21,741 45,931 (52.7) % Same-store portfolio (a) NOI $ 381,584 $ 369,580 3.2 % (a) Same-Store Portfolio for the years ended December 31, 2024 and 2023 included 107 properties containing 31,433 units. 51 Table of Contents Set forth below is Same-Store Portfolio (a) NOI for the years ended December 31, 2024 and 2023 (in thousands, except per unit data): Year Ended December 31, 2024 2023 % change Revenue: Rental and other property revenue $ 602,584 $ 585,277 3.0 % Property Operating Expenses Real estate taxes 69,863 72,518 (3.7) % Property insurance 15,698 14,618 7.4 % Personnel expenses 49,504 45,592 8.6 % Utilities 30,210 28,296 6.8 % Repairs and maintenance 19,791 20,122 (1.6) % Contract services 21,846 21,584 1.2 % Advertising expenses 7,578 6,342 19.5 % Other expenses 6,510 6,625 (1.7) % Total property operating expenses 221,000 215,697 2.5 % Same-store portfolio (a) NOI $ 381,584 $ 369,580 3.2 % Same-store portfolio NOI Margin 63.3 % 63.1 % 0.2 % Average Occupancy 95.2 % 94.1 % 1.1 % Average effective monthly rent, per unit $ 1,563 $ 1,543 1.3 % (a) Same-Store Portfolio for the years ended December 31, 2024 and 2023 included 107 properties containing 31,433 units.
Our apartment resident composition varies across the regions in which we operate, includes singles, roommates and family renters and is generally reflective of the principal employers in the relevant region. Our apartment properties predominantly consist of one-bedroom and two-bedroom units, although some of our apartment properties also have studio and three-bedroom units.
Our lease terms are generally for one year or less and average twelve months. 59 Table of Contents Our apartment resident composition varies across the regions in which we operate, includes singles, roommates and family renters and is generally reflective of the principal employers in the relevant region.
This accounting standard requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that recoverability of the assets is not assured. We review our long-lived assets on an ongoing basis and evaluate the recoverability of the carrying value when there is an indicator of impairment.
We review our long-lived assets on an ongoing basis and evaluate the recoverability of the carrying value when there is an indicator of impairment. An impairment charge is recognized when it is determined that the carrying value of the asset exceeds the fair value.
The increase was primarily driven by a 0.3% increase in our weighted average effective interest rate from 3.9% for the full year 2022 to 4.2% for the full year 2023. (Loss on impairment) gain on sale of real estate assets, net.
The decrease was primarily driven by the reduction of debt associated with the sale of ten properties under the Portfolio Optimization and Deleveraging Strategy, partially offset by a 0.1% increase in our weighted average effective interest rate from 4.2% for the full year 2023 to 4.3% for the full year 2024.
The identifiable assets acquired in the business combination included investments in real estate properties measured using a combination of income, market and cost approaches. Impairment of Long-Lived Assets Management evaluates the recoverability of its investment in real estate assets, including related identifiable intangible assets, in accordance with FASB ASC Topic 360, “Property, Plant and Equipment”.
Impairment of Long-Lived Assets Management evaluates the recoverability of its investment in real estate assets, including related identifiable intangible assets, in accordance with FASB ASC Topic 360, “Property, Plant and Equipment”. This accounting standard requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that recoverability of the assets is not assured.
See Non-GAAP Financial Measures for our definition of a development property and our methodology for determining same-store properties. 46 Table of Contents Revenue Rental and other property revenue. Rental and other property revenue increased $32.4 million to $659.8 million for the year ended December 31, 2023 from $627.4 million for the year ended December 31, 2022.
See Non-GAAP Financial Measures for our definition of a development property and our methodology for determining same-store properties. (2) Excludes one former development project that reached overall occupancy of 90.0% during the three months ended December 31, 2024. 47 Table of Contents Revenue Rental and other property revenue.
On May 10, 2023, our board of directors approved a quarterly dividend of $0.16 per share on our common stock, which represented a 14% increase in the dividend over the prior quarterly rate of $0.14 per share. 53 Table of Contents Consolidated Debt The following tables contain summary information concerning our consolidated indebtedness as of December 31, 2023 (dollars in thousands): Debt: Outstanding Principal Unamortized Debt Issuance Costs Unamortized Loan (Discount)/Premiums Carrying Amount Type Weighted Average Contractual Rate (3) Weighted Average Effective Rate (4) Weighted Average Maturity (in years) Unsecured revolver (1) $ 234,479 $ (1,117) $ — $ 233,362 Floating 6.6% 5.4% 2.1 Unsecured term loans 600,000 (2,456) — 597,544 Floating 6.5% 3.9% 3.5 Secured credit facilities 586,286 (1,949) 21,762 606,099 Floating/Fixed 4.2% 4.6% 4.9 Mortgages (2) 1,094,933 (5,250) 22,721 1,112,404 Fixed 3.8% 4.0% 4.3 Total Debt $ 2,515,698 $ (10,772) $ 44,483 $ 2,549,409 4.8% 4.2% 4.0 (1) The unsecured credit facility total capacity is $500,000, of which $234,479 was outstanding as of December 31, 2023.
Quarterly Dividend Distribution On December 16, 2024, our board of directors declared a quarterly dividend of $0.16 per share of common stock, which was paid on January 17, 2025 to stockholders of record at the close of business on December 31, 2024. 56 Table of Contents Consolidated Debt The following tables contain summary information concerning our consolidated indebtedness as of December 31, 2024 (dollars in thousands): Debt: Outstanding Principal Unamortized Debt Issuance Costs Unamortized Loan (Discount)/Premiums Carrying Amount Type Weighted Average Contractual Rate (3) Weighted Average Effective Rate (4) Weighted Average Maturity (in years) Unsecured revolver (1) $ 194,478 $ (526) $ — $ 193,952 Floating 5.5% 4.8% 4.0 Unsecured term loans 600,000 (1,831) — 598,169 Floating 5.6% 4.0% 2.5 Secured credit facilities 585,635 (1,901) 17,034 600,768 Fixed 4.2% 4.4% 3.9 Mortgages (2) 780,794 (3,175) 14,687 792,306 Fixed 3.8% 4.0% 3.7 Unsecured notes 150,000 (1,512) — 148,488 Fixed 5.4% 5.6% 8.3 Total Debt $ 2,310,907 $ (8,945) $ 31,721 $ 2,333,683 4.6% 4.3% 3.8 (1) The unsecured revolver total capacity was $500,000, of which $194,478 was outstanding as of December 31, 2024.
During the year ended December 31, 2022, six multifamily properties were sold resulting in a gain on sale of real estate, net of $111.8 million. Merger and integration costs. We incurred no STAR Merger-related integration costs during the year ended December 31, 2023 compared to $5.5 million during the year ended December 31, 2022.
(Loss on impairment) gain on sale of real estate assets, net. During the year ended December 31, 2024, we sold seven multifamily properties resulting in a gain on sale of $11.1 million.
The increase was primarily due to higher personnel costs, stock compensation, and subscription costs related to the rollout of community call centers, compared to the prior year. General and administrative expenses. General and administrative expenses decreased $3.5 million to $22.8 million for the year ended December 31, 2023 from $26.3 million for the year ended December 31, 2022.
The increase was primarily due to higher personnel costs primarily driven by employee retention credits recognized in 2023 and higher software costs driven by centralization efforts. General and administrative expenses. General and administrative expenses increased $1.5 million to $24.2 million for the year ended December 31, 2024 from $22.8 million for the year ended December 31, 2023.
Our cash flows provided by financing activities during the year ended December 31, 2021 were primarily driven by $594.5 million of term loan and credit facility proceeds and $317.0 million of proceeds from sales of common stock partially offset by $312.9 million of mortgage repayments, $302.3 million of credit facility repayments, and $49.8 million of distributions on our common stock.
Our cash flows used in financing activities during the year ended December 31, 2024 were primarily driven by mortgage principal repayments of $314.1 million, distributions of $147.8 million, and repayments under our credit facilities, net of new borrowings of $40.7 million, partially offset by $150.0 million of proceeds from our private placement of unsecured notes, and $111.3 million of proceeds from the issuance of common stock in connection with our recent public equity offering.
The decrease was primarily due to lower personnel costs from the departure of executives in 2023, including from the forfeiture of their bonus and stock awards. Depreciation and amortization expense. Depreciation and amortization expense decreased $33.9 million to $219.0 million for the year ended December 31, 2023 from $252.8 million for the year ended December 31, 2022.
Depreciation and amortization expense increased $1.9 million to $220.9 million for the year ended December 31, 2024 from $219.0 million for the year ended December 31, 2023. The increase was primarily due to higher intangible asset amortization expenses during the year ended December 31, 2024, compared to the prior year.
In addition to certain negative covenants, the Fourth Restated Credit Agreement has financial covenants that require us to (i) maintain a consolidated leverage ratio below specified thresholds, (ii) maintain a minimum consolidated fixed charge coverage ratio, and (iii) maintain a minimum consolidated tangible net worth, (iv) and maintain secured and unsecured leverage ratios below specified thresholds.
The Fifth Restated Credit Agreement also contains financial covenants applicable to us involving (i) maximum consolidated total debt to total asset value, (ii) maximum distributions, (iii) maximum secured debt to total asset value, (iv) maximum unsecured debt to eligible unencumbered properties, and (v) minimum consolidated fixed charge coverage.
There were no forward sale transactions as of December 31, 2023, and no shares of our common stock were sold under the 2023 ATM Program during the year ended December 31, 2023.
During the three months ended September 30, 2024, and December 31, 2024, we entered into forward sale transactions under the 2023 ATM Program for the forward sale of an aggregate 2,498,300 shares of our common stock with a maturity date of September 5, 2025 or November 13, 2025, respectively, as set forth in the forward sale transactions placement notice.
Removed
The increase was primarily due to the $11.5 million increase in same-store property operating expenses, primarily due to inflationary pressures resulting in higher contract services, insurance expense, and repairs and maintenance during the year ended December 31, 2023.
Added
Rental and other property revenue decreased $20.9 million to $638.9 million for the year ended December 31, 2024 from $659.8 million for the year ended December 31, 2023. The decrease was primarily attributable to a $38.2 million decrease in non same-store rental and other property revenue driven by the sale of ten properties under the Portfolio Optimization and Deleveraging Strategy.
Removed
The decrease was primarily due to lower intangible asset amortization expenses during the year ended December 31, 2023 compared to the prior year period as a result of the full amortization in 2022 of the intangible assets acquired in the STAR merger on December 16, 2021. Casualty losses (gains), net.
Added
The decrease was primarily due to a $14.0 million decrease in non same-store property operating expenses, due to the sale of ten properties under our Portfolio Optimization and Deleveraging Strategy partially offset by a $5.3 million increase in same-store property operating expenses primarily due to higher personnel expenses, utilities, advertising, and property insurance, partially offset by a decrease in real estate taxes.
Removed
During the year ended December 31, 2022, we recognized net casualty gains of $8.9 million as a result of receiving insurance proceeds in excess of the carrying value of the associated damage. Interest expense. Interest expense increased $3.0 million to $89.9 million for the year ended December 31, 2023 from $86.9 million for the year ended December 31, 2022.
Added
The increase was primarily due to the prior year period including the reversal of stock compensation and bonus expense related to executive departures that occurred in 2023 and employee retention credits recognized in 2023. Depreciation and amortization expense.
Removed
These costs in the prior year period primarily consisted of technology migration and implementation costs, consulting and professional fees and employee severance costs. Loss from investments in unconsolidated joint ventures.
Added
This was partially offset by lower depreciation expenses from properties sold in 2024. Casualty losses (gains), net. During the year ended December 31, 2024, we incurred $3.9 million in net casualty losses due to winter storm damage and fire at various properties where the carrying value of the damage exceeded insurance proceeds due to policy deductibles.
Removed
Development Property A development property is a property that is either currently under development or is in lease-up prior to reaching overall occupancy of 90%.
Added
Interest expense decreased $13.8 million to $76.1 million for the year ended December 31, 2024 from $89.9 million for the year ended December 31, 2023.
Removed
Our cash flows provided by operating activities during the years ended December 31, 2022 and 2021 were primarily driven by an increase in the size of our operating portfolio by the STAR Merger and ongoing operations of our properties, respectively.
Added
In addition, as of December 31, 2024, we identified one multifamily property as held for sale and recorded a loss on impairment of $21.0 million as a result of the carrying value of the real estate exceeding the expected sales price, less transaction costs.
Removed
Capitalization Shelf Registration Statement On June 14, 2023, we replaced our previous shelf registration statement with our new shelf registration statement.
Added
However, NOI should only be used as an alternative measure of our financial performance.
Removed
Swap Agreement On March 16, 2023, we entered into an interest rate swap contract with a notional value of $200,000, a strike rate of 3.39% and a maturity date of March 17, 2030.
Added
Capitalization Expanded Unsecured Revolver On January 8, 2025, IROP entered into the Fifth Amended and Restated Credit Agreement (the “Fifth Restated Credit Agreement”) by and among IROP, as borrower, IRT as parent guarantor, KeyBank National Association, as administrative agent, and the other agents and lender parties thereto,which amended and restated in its entirety the Fourth Amended and Restated Credit Agreement dated as of July 25, 2022 (the “Fourth Restated Credit Agreement”).
Removed
We designated this interest rate swap as a cash flow hedge at inception and determined that the hedge is highly effective in offsetting interest rate fluctuations associated with the identified indebtedness. Dividend Distribution On December 11, 2023, our board of directors declared a quarterly dividend of $0.16 per share of common stock.
Added
The Fourth Restated Credit Agreement provided for a $500.0 million unsecured revolving credit facility (the “Unsecured Revolver”) with a January 31, 2026 scheduled maturity date and two unsecured term loans, specifically: (i) a $200.0 million term loan with a May 18, 2026 maturity date (the “2026 Term Loan”) and (ii) a $400.0 million term loan with a January 28, 2028 maturity date (the “2028 Term Loan”).
Removed
The fourth quarter dividend was paid on January 19, 2024 to stockholders of record at the close of business on December 29, 2023.
Added
The Fifth Restated Credit Agreement increases the maximum principal amount of the Unsecured Revolver to $750.0 million, which represents an increase of $250.0 million over the Fourth Restated Credit Agreement, and extends its maturity date until January 8, 2029. The Fifth Restated Credit Agreement also releases the Subsidiary Guarantors which were parties to the Fourth Restated Credit Agreement.
Removed
Original maturities on or before December 31, Debt: 2024 2025 2026 2027 2028 Thereafter Unsecured revolver $ — $ — $ 234,479 $ — $ — $ — Unsecured term loans — — 200,000 — 400,000 — Secured credit facilities — 3,065 9,111 10,081 454,589 109,440 Mortgages (1) 66,827 135,924 144,235 15,198 200,659 532,090 Total $ 66,827 $ 138,989 $ 587,825 $ 25,279 $ 1,055,248 $ 641,530 (1) Includes indebtedness secured by real estate held for sale of $122,621.
Added
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 Restated Credit Agreement.
Removed
As of December 31, 2023, and 2022 the outstanding principal balance was $76,248 and $76,248, respectively.
Added
Borrowings under the 2026 Term Loan bear interest at a rate equal to either (i) the SOFR rate plus a margin of 80 to 160 basis points, or (ii) a base rate plus a margin of 0 to 60 basis points. These margins represent a 5-basis point decrease from those applicable to the 2026 Term Loan.
Removed
Additionally, the covenants (i) limit (a) the amount of distributions that we could make to a percentage of Funds from Operations (as such term was described in the debt agreement), (b) and the ratio of unencumbered asset adjusted net operating income to unsecured interest expense.
Added
The margin for borrowings under the Unsecured Revolver and the 2028 Term Loan remain unchanged, with (1) Unsecured Revolver borrowings bearing interest at a rate equal to either (i) the SOFR rate plus a margin of 72.5 to 140 basis points, or (ii) a base rate plus a margin of 0 to 40 basis points; and (2) 2028 Term Loan borrowings bearing interest at a rate equal to either (i) the SOFR rate plus a margin of 80 to 160 basis points, or (ii) a base rate plus a margin of 0 to 60 basis points.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−1 removed11 unchanged
Biggest changeA change in market interest rates 57 Table of Contents applicable to the fixed-rate portion of our indebtedness affects the fair value, but it has no effect on interest incurred or cash flows.
Biggest changeA change in market interest rates applicable to the fixed-rate portion of our indebtedness affects the fair value, but it has no effect on interest incurred or cash flows. A change in market interest rates applicable to the variable portion of our indebtedness affects the interest incurred and cash flows, but does not affect the fair value.
The fair value of our fixed rate indebtedness was estimated using a discounted cash flow analysis utilizing rates that we believe a market participant would expect to pay for debt of a similar type and remaining maturity as if the debt was originated at December 31, 2023 and 2022, respectively.
The fair value of our fixed rate indebtedness was estimated using a discounted cash flow analysis utilizing rates that we believe a market participant would expect to pay for debt of a similar type and remaining maturity as if the debt was originated on December 31, 2024 and 2023, respectively.
As of December 31, 2023, our interest rate swaps and interest rate collars had a combined asset fair value of $29.9 million. The fair values of our interest rate swaps and interest rate collars were estimated using a discounted cash flow analysis based on forward interest rate curves.
As of December 31, 2024, our interest rate swaps and interest rate collars had a combined asset fair value of $29.3 million. The fair values of our interest rate swaps and interest rate collars were estimated using a discounted cash flow analysis based on forward interest rate curves.
We monitor interest rate risk routinely and seek to minimize the possibility that a change in interest rates would impact the interest incurred and our cash flows. To mitigate such risk, we may use interest rate derivative contracts. As of December 31, 2023 and 2022, the fair value of our fixed-rate indebtedness was $1.58 billion and $1.63 billion, respectively.
We monitor interest rate risk routinely and seek to minimize the possibility that a change in interest rates would impact the interest incurred and our cash flows. To mitigate such risk, we may use interest rate derivative contracts. As of December 31, 2024 and 2023, the fair value of our fixed-rate indebtedness was $1.4 billion and $1.6 billion, respectively.
As of December 31, 2023, our only interest rate sensitive assets or liabilities related to our principal amount of $2.52 billion of outstanding indebtedness, of which $1.68 billion was fixed rate and $0.84 billion was floating rate, three float-to-fixed interest rate swaps with a total notional amount of $500 million, two interest rate collars with a total notional amount of $250 million and two forward interest rate collars with a total notional amount of $200 million.
As of December 31, 2023, our only interest rate sensitive assets or liabilities related to our principal amount of $2.5 billion of outstanding indebtedness, of which $1.7 billion was fixed rate and $840.0 million was floating rate, three 61 Table of Contents float-to-fixed interest rate swaps with a total notional amount of $500.0 million, and two interest rate collars with a total notional amount of $250.0 million, and two forward interest rate collars with a total notional amount of $200.0 million.
Fair value of fixed-rate indebtedness as of December 31, 2023 is shown. 58 Table of Contents
Fair value of fixed-rate indebtedness as of December 31, 2024 is shown. 62 Table of Contents
As of December 31, 2022, our only interest rate sensitive assets or liabilities related to our principal amount of $2.59 billion of outstanding indebtedness, of which $1.77 billion was fixed rate and $0.82 billion was floating rate, two float-to-fixed interest rate swaps with a total notional amount of $300 million, and two interest rate collars with a total notional amount of $250 million, and two forward interest rate collars with a total notional amount of $200 million.
As of December 31, 2024, our only interest rate sensitive assets or liabilities related to our principal amount of $2.3 billion of outstanding indebtedness, of which $1.5 billion was fixed rate and $794.5 million was floating rate, three float-to-fixed interest rate swaps with a total notional amount of $500.0 million, three interest rate collars with a total notional amount of $200.0 million.
The impact of the interest rate swaps and interest rate collars have been included in the table below: Liabilities Subject to Interest Rate Sensitivity (a) 100 Basis Point Increase 100 Basis Point Decrease Interest expense from variable-rate indebtedness $ 85,131 $ 865 $ (865) Fair value of fixed-rate indebtedness 1,582,574 (61,492) 64,564 (a) Unpaid and unhedged balance of variable-rate indebtedness as of December 31, 2023 is shown.
Liabilities Subject to Interest Rate Sensitivity (a) 100 Basis Point Increase 100 Basis Point Decrease Interest expense from variable-rate indebtedness $ 94,478 $ 958 $ (958) Fair value of fixed-rate indebtedness 1,437,631 (53,006) 55,595 (a) Unpaid and unhedged balance of variable-rate indebtedness as of December 31, 2024 is shown.
Removed
A change in market interest rates applicable to the variable portion of our indebtedness affects the interest incurred and cash flows, but does not affect the fair value.
Added
The impact of the interest rate swaps and interest rate collars have been included in the table below.

Other IRT 10-K year-over-year comparisons