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What changed in INDEPENDENCE REALTY TRUST, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of INDEPENDENCE REALTY TRUST, INC.'s 2024 and 2025 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 2025 report.

+315 added−322 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-18)

Top changes in INDEPENDENCE REALTY TRUST, INC.'s 2025 10-K

315 paragraphs added · 322 removed · 231 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

56 edited+27 added−26 removed40 unchanged
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.
Biggest changeThe table below reconciles the differences between reported net income, total taxable income and estimated REIT taxable income for the three years ended December 31, 2025 (dollars in thousands): For the Years Ended December 31, 2025 2024 2023 Net income (loss) $ 57,707 $ 40,033 $ (17,807 ) Add (deduct): Depreciation and amortization differences 71,452 57,866 48,013 Gain/loss differences 48,744 148,964 173,337 Other book to tax differences: Share-based compensation expense (1,212 ) 60 (5,744 ) Other 3,525 4,382 8,036 Total taxable income $ 180,216 $ 251,305 $ 205,835 Deductible capital gain distribution (68,784 ) (136,161 ) (102,877 ) Taxable income allocable to noncontrolling interest (4,415 ) (6,122 ) (4,854 ) Estimated REIT taxable income before dividends paid deduction $ 107,017 $ 109,022 $ 98,104 For the year ended December 31, 2025, 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 3/28/2025 4/21/2025 $ 0.1600 $ 0.0930 $ 0.0670 $ 0.0257 $ — $ 0.0930 6/27/2025 7/18/2025 0.1700 0.0988 0.0712 0.0273 — 0.0988 9/30/2025 10/24/2025 0.1700 0.0988 0.0712 0.0273 — 0.0988 12/31/2025 1/23/2026 0.1700 0.0988 0.0712 0.0273 — 0.0988 $ 0.6700 $ 0.3894 $ 0.2806 $ 0.1076 $ — $ 0.3894 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 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.
The Restated Credit Agreement provides for certain customary events of default, including among others, non-payment of principal, interest or other amounts when due, inaccuracy of representations and warranties, violation of covenants, cross defaults with certain other indebtedness, insolvency or inability to pay debts, bankruptcy, or a change of control.
The Sixth Restated Credit Agreement provides for certain customary events of default, including among others, non-payment of principal, interest or other amounts when due, inaccuracy of representations and warranties, violation of covenants, cross defaults with certain other indebtedness, insolvency or inability to pay debts, bankruptcy, or a change of control.
Our Clawback Policy is filed with this Annual Report as Exhibit 97. In addition, our Clawback Policy is available on our website, www.irtliving.com, and copies of our Clawback Policy can be obtained, free of charge, upon written request to Investor Relations, 1835 Market Street, Philadelphia, PA 19103.
Our Clawback Policy is filed with this Annual Report as Exhibit 97.1. In addition, our Clawback Policy is available on our website, www.irtliving.com, and copies of our Clawback Policy can be obtained, free of charge, upon written request to Investor Relations, 1835 Market Street, Philadelphia, PA 19103.
The Fifth Restated Credit Agreement contains customary covenants for credit facilities of this type, including restrictions on our ability to take the following actions: (i) make distributions after an event of default; (ii) incur debt; (iii) make investments; (iv) grant or suffer liens; (v) undertake mergers, consolidations, asset sales and other fundamental entity changes; (vi) make material changes to contracts and organizational documents; and (vii) enter into transactions with affiliates.
The Sixth Restated Credit Agreement contains customary covenants for credit facilities of this type, including restrictions on our ability to take the following actions: (i) make distributions after an event of default; (ii) incur debt; (iii) make investments; (iv) grant or suffer liens; (v) undertake mergers, consolidations, asset sales and other fundamental entity changes; (vi) make material changes to contracts and organizational documents; and (vii) enter into transactions with affiliates.
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.
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 rate increases or that have the potential to be repositioned through our Value Add Initiative or tailored management strategies.
Under the 2023 ATM Program, we may also enter into one or more forward sale transactions for the sale of shares of our common stock on a forward basis.
Under the ATM Program, we may also enter into one or more forward sale transactions for the sale of shares of our common stock on a forward basis.
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
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. 8 Table of Contents
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.
For further description of our indebtedness at December 31, 2025, 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.
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.
The Sixth 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.
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.
The remaining 2.4% 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.
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.
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.
The applicable margin will be determined based upon IRT’s credit rating. At the time of closing, based on IRT’s credit rating along with IROP’s consolidated leverage ratio, the applicable SOFR margin was 77.5 basis points for the Unsecured Revolver and 85 basis points for both the 2026 Term Loan and 2028 Term Loan.
The applicable margin will be determined based upon IRT’s credit rating. At the time of closing, based upon IRT’s credit rating along with IROP’s consolidated leverage ratio, the applicable SOFR margin was 77.5 basis points for the Unsecured Revolver and 85 basis points for both the 2028 Term Loan and 2030 Term Loan.
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.
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, 2025 managed 33,462 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.
Completed Public Offering of 11.5 Million Shares of Common Stock On September 3, 2024, we entered into an underwriting agreement with Citigroup Global Markets Inc., KeyBanc Capital Markets Inc. and RBC Capital Markets LLC as representatives of the several underwriters named therein, (collectively, the “Underwriters”), and Citigroup Global Markets Inc. in its capacity as agent (in such capacity, the “Forward Seller”) for Citibank, N.A., as forward counterparty (the “Forward Counterparty”) and the Forward Counterparty related to the offering of an aggregate of 11.5 million shares of our common stock, at a price of $18.96 per share consisting of 11.5 million shares of our common stock offered by the Forward Seller in connection with the forward sale agreements described below (including 1.5 million shares offered pursuant to the Underwriter’s option to purchase additional shares, which was exercised in full).
Public Offering of 11.5 Million Shares of Common Stock On September 3, 2024, we entered into an underwriting agreement with Citigroup Global Markets Inc., KeyBanc Capital Markets Inc. and RBC Capital Markets LLC as representatives of the several underwriters named therein, (collectively, the “Underwriters”), and Citigroup Global Markets Inc. in its capacity as agent (in such capacity, the “Forward Seller”) for Citibank, N.A., as forward counterparty (the “Forward Counterparty”) and the Forward Counterparty related to the offering of an aggregate of 11.5 million shares of our common stock, par value $0.01 per share, at a price of $18.96 per share consisting of 11.5 million shares of our common stock offered by the Forward Seller in connection with the forward sale agreements described below (including 1.5 million shares offered pursuant to the Underwriters’ option to purchase additional shares, which was exercised in full).
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.
In addition, as of December 31, 2025, we owned one investment in real estate under development in Denver, Colorado that will, upon completion, contain 296 units.
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.
The Sixth Restated Credit Agreement also increases the aggregate amount of borrowings under the credit agreement to $1.5 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 Sixth 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 Sixth Restated Credit Agreement.
In addition to offering competitive salaries and wages, we offer our employees incentive compensation linked to the achievement of individual and corporate goals, and all of our employees receive stock-based compensation that vests over a number of years.
Compensation, Benefits, Safety and Wellness . In addition to offering competitive salaries and wages, we offer our employees incentive compensation linked to the achievement of individual and corporate goals, and all of our employees receive stock-based compensation that vests over a number of years.
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.
We expect to begin renovations at the remaining value add projects contemplated in connection with our Value Add Initiative at the selected communities throughout 2026.
Our current employee benefits include, but are not limited to, Medical, Prescription Drug, Dental and Vision Plans, Health Savings Accounts (HSA), Short-Term and Long-Term Disability Income, Life and Accidental Death and Dismemberment Insurance, Paid Time Off, Adoption Benefits, telemed services and a company-matched 401(K) Retirement Savings Plan.
Our current employee benefits include, but are not limited to, Medical, Prescription Drug, Dental and Vision Plans, Health Savings Accounts (HSA), Short-Term and Long-Term Disability Income, Life and Accidental Death and Dismemberment Insurance, Paid Time Off, Parental and Adoption Benefits, Employee Assistance Program (EAP), Employee Wellness Program, telemed services and a company-matched 401(K) Retirement Savings Plan.
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.
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.
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 4 Table of Contents points, or (ii) a base rate plus a margin of 0 to 60 basis points.
The margin for borrowings under the Unsecured Revolver, the 2028 Term Loan and the new 2030 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 and new 2030 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.
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.
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, 2025, IRT owned a 97.6% interest in IROP.
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.
As of December 31, 2025, we owned and operated 114 multifamily apartment properties (including one owned through a consolidated joint venture) that contain an aggregate of 33,462 units in the following Southeastern and Midwestern states: Alabama, Colorado, Florida, Georgia, Indiana, Kentucky, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, and Texas.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The internet address of the SEC site is http://www.sec.gov . Our internet address is http://www.irtliving.com .
Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The internet address of the SEC site is http://www.sec.gov . Our internet address is http://www.irtliving.com .
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”).
The Fifth Restated Credit Agreement provided for a $750.0 million unsecured revolving credit facility (the “Unsecured Revolver”) with a January 8, 2029 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”).
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.
As of December 31, 2025, no shares of our common stock remained to be settled under the Forward Sale Agreements. 4 Table of Contents ATM Program 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 “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.
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.
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.
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.
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.
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.
Accordingly, any of our title insurance policies may be in an amount less than the current value of the related property. 7 Table of Contents 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.
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).
Through December 31, 2025, we renovated 11,445 of these units at an average cost per unit of $17,372 and achieved a return on our total renovation costs for these units of approximately 16.1% (and approximately 18.2% on the interior portion of such renovation costs).
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.
In addition, we generally obtain title insurance policies when we acquire a property, with each policy covering an amount equal to the initial purchase price of each property.
On December 30, 2024, we physically settled 3.25 million shares at a weighted average price of $19.04 per share, and we received proceeds of $61.9 million. All of the net proceeds will be used to fund new acquisitions.
On December 30, 2024, we physically settled 3.25 million shares of our common stock that was sold in the offering at a weighted average price of $19.04 per share, and we received net proceeds of $61.9 million.
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.
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.
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.
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 .
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.
Substantially all of our assets are comprised of multifamily real estate assets generally leased to residents for a term of one-year or less. We aggregate our real estate assets for reporting purposes and operate in two reportable segments, same-store and non same-store.
The number of competitive properties relative to demand in a particular area has a material effect on our ability to lease apartment units at our properties and on the rents we charge.
If our competitors offer leases at rental rates below current market rates, or below the rental rates we currently charge our residents, we may lose potential residents. 5 Table of Contents The number of competitive properties relative to demand in a particular area has a material effect on our ability to lease apartment units at our properties and on the rents we charge.
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.
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.
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.
A copy of our Insider Trading Policy is filed as an exhibit to this Annual Report and is available on our website, www.irtliving.com. In addition to being accessible through this Annual Report 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.
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.
As of December 31, 2025, we also owned interests in four unconsolidated joint ventures, two of which own and operate multifamily apartment properties that contain an aggregate of 653 units and two that are developing multifamily apartment properties that will, upon completion, contain an aggregate of 642 units.
Competition In attracting and retaining residents to occupy our properties, we compete with numerous other housing alternatives. Our properties compete directly with other rental apartments as well as condominiums and single-family homes that are available for rent or purchase in the sub-markets in which our properties are located.
Our properties compete directly with other rental apartments as well as condominiums and single-family homes that are available for rent or purchase in the sub-markets in which our properties are located. Principal factors of competition include rent or price charged, attractiveness of the location and property, and quality and breadth of services and amenities.
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 .
Many of our employees completed leadership training courses and our Service teams and Sales teams receive training through a combination of online courses, simulation training, and hands-on training. In addition to company-specific training, we have established professional education and certification benefits and guidelines under which our team members may receive financial assistance for professional certifications and continued education.
For a discussion of the tax implications of our REIT status to us and our stockholders, see “Material U.S.
For a discussion of the tax implications of our REIT status to us and our stockholders, see “Material U.S. Federal Income Tax Considerations” contained in Exhibit 99.1 to this Annual Report on Form 10-K.
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.
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. 2 Table of Contents 2025 Highlights Property Acquisitions and Dispositions 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 from the dispositions into investments with higher growth potential and/or towards debt reduction.
This competition affects our ability to acquire properties and the price that we pay for such acquisitions. Human Capital Our Purpose is to provide exceptional living experiences. 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 .
This competition affects our ability to acquire properties and the price that we pay for such acquisitions. Human Capital Our Purpose is to provide exceptional living experiences, which we cannot achieve without our employees.
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 have experienced no material interruptions of our operations due to disputes with our employees. 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 720 on-demand e-learning, and virtual workshop courses.
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.
Moreover, no assurance can be given concerning future laws, ordinances or regulations, or the potential introduction of hazardous or toxic substances by neighboring properties or residents. 6 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 are not incorporating by reference into this report any material from our website.
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.
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.
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 18,789 units across 61 properties identified for renovation and upgrade.
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.
On July 31, 2025, we acquired a 240-unit multifamily apartment community in Orlando, Florida for a gross purchase price of $60.3 million. The property was built in 2024 with an average rent per unit of $1,885 at the time of our acquisition.
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”).
The property is a 378-unit community in Austin, Texas that was 24% occupied as of February 10, 2026, and will be consolidated into our financial results effective January 20, 2026. 3 Table of Contents Capital Markets Unsecured Revolver and Term Loans On February, 11, 2026, Independence Realty Operating Partnership, LP (“IROP”) entered into the Sixth Amended and Restated Credit Agreement (the “Sixth Restated Credit Agreement”) by and among IROP, as borrower, Independence Realty Trust, Inc., 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 Fifth Amended and Restated Credit Agreement dated as of January 8, 2025 (the “Fifth Restated Credit Agreement”).
Our core health and welfare benefits are supplemented with a variety of specific programs designed to promote our employees’ well-being.
Our core health and welfare benefits are supplemented with a variety of specific programs designed to promote our employees’ well-being. 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.
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.
Two Properties Held for Sale As of December 31, 2025, we had two properties classified as held for sale, one in Memphis, Tennessee and one in Denver, Colorado. We recognized a loss on impairment of $12.8 million on the property held for sale in Denver, Colorado during the year ended December 31, 2025.
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.
On February 14, 2025, we sold one multifamily apartment community in Birmingham, Alabama for a gross sales price of $111.0 million and used the proceeds to fund property acquisitions described below. We recognized a loss on impairment of $20,928 during the three months ended December 31, 2024.
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.
During the three months ended March 31, 2025, we entered into forward sales transactions under the ATM Program for the forward sale of an aggregate of 2.7 million shares of our common stock at a weighed average price of $20.96 per share.
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 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, 2025, we had 904 employees, all of whom were employed in the United States, and none of whom are covered by collective bargaining agreements.
On December 30, 2024, we physically settled all of these 2,498,300 shares of our common stock at a weighted average price of $20.06 per share and we received proceeds of $50.1 million. As of December 31, 2024, approximately $399.4 million remained available for issuance under the 2023 ATM Program.
During the year ended December 31, 2025, we repurchased and retired approximately 1.9 million shares of our common stock under our Stock Repurchase Program at a weighted average price of $16.00 per share, for a total aggregate cost of $30.0 million.
Removed
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.
Added
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.
Removed
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.
Added
On February 27, 2025, we acquired a 280-unit multifamily apartment community in Indianapolis, Indiana for a gross purchase price of $59.5 million. The property was built in 2008 with an average rent per unit of $1,548 at the time of our acquisition. This acquisition increased our exposure in Indianapolis from 1,979 units to 2,259 units.
Removed
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.
Added
On August 14, 2025, we acquired a 403-unit multifamily apartment community in Orlando, Florida for a gross purchase price of $94.8 million. The property was built in 2019 with an average rent per unit of $1,835 at the time of our acquisition. The acquisition of these two properties increased our exposure in Orlando from 617 units to 1,260 units.
Removed
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.
Added
We used $101.0 million of proceeds from sales of our common stock under our forward sale agreements to acquire these communities. On November 13, 2025, we sold one multifamily apartment community in Louisville, Kentucky for a gross sales price of $50.0 million.
Removed
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.
Added
We used the sale of this property to complete a reverse 1031 exchange with the property acquired on July 31, 2025. We recognized a gain on sale of $17.5 million during the three months ended December 31, 2025.
Removed
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.
Added
We expect both property sales to close in 2026 and we plan to use the proceeds to fund future property acquisitions. There can be no assurance that these dispositions will be consummated at expected pricing levels, within expected time frames, or at all.
Removed
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.
Added
Subsequent Acquisition Subsequent to year-end, on January 15, 2026, we acquired a 140-unit community in Columbus, Ohio for a gross purchase price of $29.5 million. The acquisition increased our exposure in Columbus from 2,510 units to 2,650 units.
Removed
We expect to close on the acquisition of this property during the first quarter of 2025.
Added
On January 30, 2025, we entered into a joint venture to develop Nexton Pine Hollow, a multifamily apartment project that is expected to contain upon completion 324 units in Charleston, South Carolina.
Removed
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.
Added
We have committed to invest an aggregate of $28.6 million in this joint venture, and, as of December 31, 2025, had funded $21.4 million on account of this commitment. On July 21, 2025, one of our joint ventures sold the Metropolis at Innsbrook, a 402-unit property in Richmond, Virginia.
Removed
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.
Added
We received $31.4 million in proceeds from the sale, comprised of a return of our initial investment of $24.5 million and equity proceeds of $6.9 million. During the year ended December 31, 2025, we recognized a gain of $10.6 million from this sale.
Removed
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.
Added
On October 8, 2025, we entered into a joint venture to develop a 318-unit multifamily project in Indianapolis, Indiana.
Removed
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.
Added
We have committed to invest an aggregate of $20.0 million in this joint venture in exchange for a 66.6% preferred equity interest in the joint venture, and, as of December 31, 2025, we had funded $3.4 million on account of this commitment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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.
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. • Cybersecurity incidents 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. • Fluctuations in the cost, availability and quality of our materials and products from new or increased tariffs, trade barriers or otherwise, could increase our expenses or impact our property operations and renovations which could adversely affect our results of operations and financial condition. • Increased labor costs or labor shortages could lead to staffing shortages or renovation delays that could impact our financial results. • Geopolitical uncertainty or increased volatility in the U.S. economy could affect our business. • New infectious diseases could adversely affect our business operations. • The use of artificial intelligence in connection with our operations and marketing could subject us to reputational and legal risks due to potential inaccuracies, bias or data privacy problems that may result from the software being used.
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.
In any such case, we may incur liabilities that could result in losses that 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.
If new U.S. government regulations (i) heighten Fannie Mae’s and Freddie Mac’s underwriting standards, (ii) adversely affect interest rates and (iii) continue to reduce the amount of capital they can make available to the multifamily sector, it could reduce or remove entirely a vital resource for multifamily financing.
If new U.S. government regulations (i) heighten Fannie Mae’s and Freddie Mac’s underwriting standards, (ii) adversely affect interest rates and/or (iii) continue to reduce the amount of capital they can make available to the multifamily sector, it could reduce or remove entirely a vital resource for multifamily financing.
Such investments may involve risks not otherwise present when we acquire or develop properties without third parties, including the following: • a co-venturer or partner may have certain approval rights over major decisions, including as to forms, amounts and timing of equity and debt financing, operating and capital budgets, and timing of sales and liquidations, which may prevent us from taking actions that we believe are in the best interest of our stockholders but are opposed by our co-venturers or partners; • a co-venturer or partner may at any time have economic or business interests or goals which are or become inconsistent with our business interests or goals, including inconsistent goals relating to the sale of properties held in the joint venture or the timing of termination or liquidation of the joint venture; • a co-venturer or partner might experience financial distress, become insolvent or bankrupt or fail to fund its share of required capital contributions, which may delay construction or development of a property or increase our financial commitment to the joint venture; • we may incur liabilities as a result of an action taken by our co-venturer or partner; • a co-venturer or partner may be in a position to take actions contrary to our instructions, requests, objectives or policies, including our policy with respect to qualifying and maintaining our qualification as a REIT; • agreements governing joint ventures, limited liability companies and partnerships often contain restrictions on the transfer of a member’s or partner’s interest or “buy-sell” or other provisions that may result in a purchase or sale of the interest at a disadvantageous time or on disadvantageous terms; • disputes between us and our co-venturer or partner may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the joint venture to additional risk; and • under certain joint venture arrangements, neither venture partner may have the power to control the venture, and an impasse could be reached which may result in a delay of key decisions and such delay may have a negative effect on the joint venture.
Such investments may involve risks not otherwise present when we acquire or develop properties without third parties, including the following: 18 Table of Contents • a co-venturer or partner may have certain approval rights over major decisions, including as to forms, amounts and timing of equity and debt financing, operating and capital budgets, and timing of sales and liquidations, which may prevent us from taking actions that we believe are in the best interest of our stockholders but are opposed by our co-venturers or partners; • a co-venturer or partner may at any time have economic or business interests or goals which are or become inconsistent with our business interests or goals, including inconsistent goals relating to the sale of properties held in the joint venture or the timing of termination or liquidation of the joint venture; • a co-venturer or partner might experience financial distress, become insolvent or bankrupt or fail to fund its share of required capital contributions, which may delay construction or development of a property or increase our financial commitment to the joint venture; • we may incur liabilities as a result of an action taken by our co-venturer or partner; • a co-venturer or partner may be in a position to take actions contrary to our instructions, requests, objectives or policies, including our policy with respect to qualifying and maintaining our qualification as a REIT; • agreements governing joint ventures, limited liability companies and partnerships often contain restrictions on the transfer of a member’s or partner’s interest or “buy-sell” or other provisions that may result in a purchase or sale of the interest at a disadvantageous time or on disadvantageous terms; • disputes between us and our co-venturer or partner may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the joint venture to additional risk; and • under certain joint venture arrangements, neither venture partner may have the power to control the venture, and an impasse could be reached which may result in a delay of key decisions and such delay may have a negative effect on the joint venture.
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.
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.
In addition, our acquisition activities pose the following risks to our ongoing operations: • we may not achieve the increased occupancy, cost savings and operational efficiencies projected at the time of acquiring a property; • management may incur significant costs and expend significant resources evaluating and negotiating potential acquisitions, including those that we subsequently are unable to complete; • we may acquire properties that are not initially accretive to our results upon acquisition, and we may not successfully manage and operate those properties to meet our expectations; • we may acquire properties outside of our existing markets where we are less familiar with local economic and market conditions; • some properties may be worth less or may generate less revenue than, or simply not perform as well as, we believed at the time of the acquisition; • we may be unable to assume mortgage indebtedness with respect to properties we seek to acquire or obtain financing for acquisitions on favorable terms or at all; • we may forfeit earnest money deposits with respect to acquisitions we are unable to complete due to lack of financing, failure to satisfy closing conditions or certain other reasons; • we may spend more than budgeted to make necessary improvements or renovations to acquired properties; and • we may acquire properties without any recourse, or with only limited recourse, for liabilities, whether known or unknown, such as clean-up of environmental contamination, claims by residents, vendors or other persons against the former owners of the properties, and claims for indemnification by general partners, trustees, officers, and others indemnified by the former owners of the properties.
In addition, our acquisition activities pose the following risks to our ongoing operations: • we may not achieve the increased occupancy, cost savings and operational efficiencies projected at the time of acquiring a property; • management may incur significant costs and expend significant resources evaluating and negotiating potential acquisitions, including those that we subsequently are unable to complete; • we may acquire properties that are not initially accretive to our results upon acquisition, and we may not successfully manage and operate those properties to meet our expectations; • we may acquire properties outside of our existing markets where we are less familiar with local economic and market conditions; • some properties may be worth less or may generate less revenue than, or simply not perform as well as, we believed at the time of the acquisition; 13 Table of Contents • we may be unable to assume mortgage indebtedness with respect to properties we seek to acquire or obtain financing for acquisitions on favorable terms or at all; • we may forfeit earnest money deposits with respect to acquisitions we are unable to complete due to lack of financing, failure to satisfy closing conditions or certain other reasons; • we may spend more than budgeted to make necessary improvements or renovations to acquired properties; and • we may acquire properties without any recourse, or with only limited recourse, for liabilities, whether known or unknown, such as clean-up of environmental contamination, claims by residents, vendors or other persons against the former owners of the properties, and claims for indemnification by general partners, trustees, officers, and others indemnified by the former owners of the properties.
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.
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.
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.
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. 28 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.
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.
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. 23 Table of Contents United States Federal Income Tax Risks Legislative or regulatory action could adversely affect the returns to our investors.
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.
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.
We have acquired and are developing, and may continue to acquire or develop, properties through joint ventures, and any investment that we may make in joint ventures could be adversely affected by our lack of sole decision-making authority regarding major decisions, our reliance on our joint venture partners’ financial condition and ability to perform their obligations, any disputes that may arise between us and our joint venture partners and our exposure to potential losses from the actions of our joint ventures.
We have acquired and are developing, and may continue to acquire or develop, properties through joint ventures, and any investment that we may make in joint ventures could be adversely affected by our lack of sole decision-making authority regarding major decisions, our reliance on our joint venture partners ’ financial condition and ability to perform their obligations, any disputes that may arise between us and our joint venture partners and our exposure to potential losses from the actions of our joint ventures.
While we provide guidance and specific requirements in some cases, we do not directly control any of such parties’ information technology security operations, or the amount of investment they place in guarding against cybersecurity threats. Accordingly, we are subject to any flaws in or breaches to their information technology systems or those which they operate for us.
While we provide guidance and specific requirements in some cases, we do not directly control any of such parties’ information technology security operations, or the amount of investment they make in guarding against cybersecurity threats. Accordingly, we are subject to any flaws in or breaches to their information technology systems or those which they operate for us.
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.
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. 26 Table of Contents Our stockholders may be restricted from acquiring or transferring certain amounts of our common stock.
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.
A number of our markets had tax reassessments in 2025 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.
DETAILED DISCUSSION OF RISK FACTORS Risks Related to Our Business and Operations We are dependent on a concentration of our investments in a single asset class, making our results of operations more vulnerable to a downturn in the sector. As of December 31, 2024, substantially all of our investments are concentrated in the multifamily apartment sector.
DETAILED DISCUSSION OF RISK FACTORS Risks Related to Our Business and Operations We are dependent on a concentration of our investments in a single asset class, making our results of operations more vulnerable to a downturn in the sector. As of December 31, 2025, substantially all of our investments are concentrated in the multifamily apartment sector.
Our business may be adversely affected by social, political and economic instability, unrest or disruption, including legal, regulatory and policy changes by a new presidential administration in the U.S., protests, demonstrations, strikes, riots, civil disturbance, disobedience, insurrection, or social and other political unrest.
Our business may be adversely affected by social, political and economic instability, unrest or disruption, including legal, regulatory and policy changes by a new presidential administration in the U.S., protests, demonstrations, immigration enforcement, strikes, riots, civil disturbance, disobedience, insurrection, or social and other political unrest.
We must comply with the Fair Housing Amendments Act of 1988 (the “FHAA”), and failure to comply could result in substantial costs. We must comply with the FHAA, which requires that apartment properties first occupied after March 13, 1991 be accessible to handicapped residents and visitors.
We must comply with the Fair Housing Amendments Act of 1988 (the “ FHAA ” ), and failure to comply could result in substantial costs. We must comply with the FHAA, which requires that apartment properties first occupied after March 13, 1991 be accessible to handicapped residents and visitors.
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.
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.
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.
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, inoculation rate and effectiveness of any vaccines, all of which are uncertain and difficult to predict.
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.
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. 11 Table of Contents Monetary policy actions by the U.S.
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.
These measures make our ability to enforce tenants’ contractual rental obligations through evictions more onerous. 16 Table of Contents 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.
In addition, if interest rates applicable to financing apartment properties rise, that may negatively affect the values of our properties in any period when capitalization rates for our properties, an important valuation metric, do not make corresponding adjustments. Increasing real estate taxes, utilities and insurance costs may negatively impact operating results.
In addition, if interest rates applicable to financing apartment properties rise, that may negatively affect the values of our properties in any period when capitalization rates for our properties, an important valuation metric, do not make corresponding adjustments. 17 Table of Contents Increasing real estate taxes, utilities and insurance costs may negatively impact operating results.
As of the date of this report, the implementation of the new climate-related disclosures remains indefinitely stayed. Additionally, administrative changes resulting from U.S. presidential elections, as well as changes in the majority party in both the U.S. House of Representatives and/or Senate from congressional elections, may create regulatory uncertainty with 20 Table of Contents respect to climate change policy.
As of the date of this report, the implementation of the new climate-related disclosures remains indefinitely stayed. Additionally, administrative changes resulting from U.S. presidential elections, as well as changes in the majority party in both the U.S. House of Representatives and/or Senate from congressional elections, may create regulatory uncertainty with respect to climate change policy.
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.
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.
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.
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.
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.
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.
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”).
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”).
Each of these events could in turn cause the value of our common stock and distributions payable to stockholders to be reduced. Any mortgage debt which we place on properties may prohibit prepayment and/or impose a prepayment penalty upon the sale of a mortgaged property.
Each of these events could in turn cause the value of our common stock and distributions payable to stockholders to be reduced. 19 Table of Contents Any mortgage debt which we place on properties may prohibit prepayment and/or impose a prepayment penalty upon the sale of a mortgaged property.
Our portfolio of properties consists primarily of multifamily communities geographically concentrated in the Southeastern United States, including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL.
Our portfolio of properties consists primarily of multifamily communities geographically concentrated in the Southeast region of the United States, including, Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL.
Federal Income Tax Considerations” of this report, provided specific requirements are met.
Federal Income Tax Considerations” of this Annual Report, provided specific requirements are met.
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.
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.
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.
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.
Federal Income Tax Considerations” to this report for further discussion of the tax issues related to an investment in us. The ability of our Board of Directors to revoke our REIT election without stockholder approval may cause adverse consequences to our stockholders.
Federal Income Tax Considerations” to this report for further discussion of the tax issues related to an investment in us. 24 Table of Contents The ability of our Board of Directors to revoke our REIT election without stockholder approval may cause adverse consequences to our stockholders.
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.
All other matters are subject to the discretion of our Board of Directors. 27 Table of Contents 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 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.
Federal Reserve could adversely impact our financial condition and our ability to make distributions to our stockholders. During 2025, the U.S. Federal Reserve decreased the target range for the federal funds rate by a total of 75 basis points in response to easing inflation with the goal of encouraging individuals and businesses to invest and spend.
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.
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, 2025, the financing arrangements of our outstanding indebtedness could require us to make lump-sum or “balloon” payments of approximately $2,202.0 million at maturity dates that range from 2026 to 2034.
These adverse weather and natural events could cause damage or losses that may be greater than insured levels. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected property, as well as anticipated future revenue related to the property.
These adverse weather and natural events could cause damage or losses that may be greater than available insurance proceeds. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected property, as well as anticipated future revenue related to the property.
ITEM 1A. Risk Factors You should carefully consider these risk factors, together with all of the other information included in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes thereto, before you decide whether to make an investment in our securities.
ITEM 1A. Risk Factors You should carefully consider these risk factors, together with all of the other information included in this Annual Report, including our consolidated financial statements and the related notes thereto, before you decide whether to make an investment in our securities.
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.
If any claim was asserted against us relating to those properties, 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.
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.
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.
The adoption of, or changes to, rent control, rent stabilization, eviction, tenants’ rights and similar laws and regulations in our markets could have an adverse effect on our results of operations and property values.
The adoption of, or changes to, rent control, rent stabilization, eviction, tenants ’ rights and similar laws and regulations in our markets could have an adverse effect on our results of operations and property values.
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.
These conditions include: • changes in national, regional and local economic conditions, which may be negatively impacted by concerns about inflation, deflation, government deficits, tax and fiscal legislation, political uncertainty, government shutdowns, 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, increase insurance costs and/or premiums, decrease the availability of insurance coverage, increase the risks of property damage, 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; • rent control or stabilization laws, or other laws regulating rental housing, which could prevent us from raising rents to offset increases in operating costs; and • fluctuations in the cost, availability and quality of building materials and supplies.
This, in turn, could reduce cash available for distribution to our security holders and may hinder our ability to raise more capital by issuing more stock or by borrowing more money. Some of our mortgage loans may have “due on sale” provisions, which may impact the manner in which we acquire, sell and/or finance our properties.
This, in turn, could reduce cash available for distribution to our security holders and may hinder our ability to raise more capital by issuing more stock or by borrowing more money. Some of our mortgage loans may have “ due on sale ” provisions, which may impact the manner in which we acquire, sell and/or finance our properties.
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.
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, 2025, the average age of our multifamily communities was approximately 15.7 years.
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.
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.
The resale value of the property could be diminished because the market value of a particular property will depend principally upon the net revenues generated by the property. In addition, increases in operating costs due to inflation may not be offset by increased multifamily rental rates.
The resale value of the property could be diminished because the market value of a particular property will depend principally upon the net revenues generated by the property. In addition, increases in operating costs due to inflation, tariffs or other trade barriers may not be offset by increased multifamily rental rates.
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.
Taking into account our current interest rate swap and collar agreements, a 100-basis point increase in interest rates would result in no increase in annual interest expense. See Item 7.
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.
In order to partially mitigate our exposure to increases in interest rates, we have entered into interest rate swaps and collars on all $798.9 million of our variable rate debt, which involve the exchange of variable for fixed rate interest payments.
Further, employees or others may disclose non-public information regarding us or our business or otherwise make negative comments regarding us on social networking or other websites, which could adversely affect our business and results of operations. As social media evolves, we will be presented with new risks and challenges. Lawsuits or other legal proceedings could result in substantial costs.
Further, employees or others may disclose non-public information regarding us or our business or otherwise make negative comments regarding us on social networking or other websites, which could adversely affect our business and results of operations. As social media evolves, we will be presented with new risks and challenges.
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.
As of December 31, 2025, the federal funds rate was set at a range from 3.50% to 3.75% and this range was subsequently maintained at the U.S. Federal Reserve’s January 2026 meeting. In considering any adjustments to the target range for the federal funds rate, the U.S.
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.
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.
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.
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. 9 Table of Contents 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.
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).
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), federal or state government policies, including policies related to immigration enforcement, that may impact our residents or the communities in which we operate, and increased operating costs (including real estate taxes and utilities).
The credit agreement governing our unsecured revolving credit facility and unsecured term loans (the “Unsecured Credit Agreement”) provides that the benchmark for our debt is determined using the Secured Overnight Financing Rate (“SOFR”), unless SOFR was unavailable.
The credit agreement governing our unsecured revolving credit facility and unsecured term loans (the “Unsecured Credit Agreement”) provides that the benchmark for our debt is determined using the SOFR, unless SOFR is unavailable.
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.
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, 2025, $798.9 million of our $2,271.0 million of total outstanding consolidated indebtedness bore interest at variable rates.
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.
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.
Additionally, changes in federal policy that affect the geopolitical landscape, such as the imposition of tariffs and changes to U.S. trade policy, have, and could in the future, lead to adverse effects on the U.S. domestic economy and our business operations. ITEM 1B. Unresolved Staff Comments None.
Additionally, changes in federal policy that affect the geopolitical landscape, such as the imposition of tariffs and changes to U.S. trade policy, have, and could in the future, lead to adverse effects on the U.S. domestic economy and our business operations. 30 Table of Contents
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.
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 or increased volatility 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 or geopolitical tensions could affect oil and gas prices, cause supply chain disruptions and increase cybersecurity risks. 10 Table of Contents In addition, local real estate conditions such as an oversupply of properties or a reduction in demand for properties, availability of “for sale” properties and competition from other similar properties, our ability to provide adequate maintenance, insurance and management services, increased operating costs (including real estate taxes), the attractiveness and location of the property and changes in market rental rates, may adversely affect a property’s income and value.
This would also result in our losing REIT status, and becoming subject to a corporate level tax on our own income. This would substantially reduce our cash available to pay distributions and the yield on any investment in our securities.
In such event, this would reduce the amount of distributions that IROP could make to us. This would also result in our losing REIT status, and becoming subject to a corporate level tax on our own income. This would substantially reduce our cash available to pay distributions and the yield on any investment in our securities.
We intend that all transactions between us and any TRS we form will be conducted on an arm’s-length basis, and, therefore, any amounts paid to us by any TRS we form to us will not be subject to the excise tax. However, no assurance can be given that no excise tax would arise from such transactions.
We intend that all transactions between us and any TRS we form will be conducted on an arm’s-length basis, and, therefore, any amounts paid to us by any TRS we form to us will not be subject to the excise tax.
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.
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.
If we fail to do so, our business could be negatively affected and our independent registered public accounting firm may be unable to attest to the accuracy of our financial statements.
We depend on our ability to produce accurate and timely financial statements in order to run our business. If we fail to do so, our business could be negatively affected and our independent registered public accounting firm may be unable to attest to the accuracy of our financial statements.
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.
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.
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.
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.
During the year ended December 31, 2024, we recognized an aggregate of $36.1 million in impairment charges.
During the year ended December 31, 2025, we recognized an aggregate of $12.8 million in impairment charges.
For example, if interest rates rise without an increase in our distribution rate, the market price of our common stock could decrease because potential investors may require a higher distribution yield on our common stock as market rates on interest-bearing securities, such as bonds, rise.
For example, if interest rates rise without an increase in our distribution rate, the market price of our common stock could decrease because potential investors may require a higher distribution yield on our common stock as market rates on interest-bearing securities, such as bonds, rise. 29 Table of Contents Some of our distributions may include a return of capital for U.S. federal income tax purposes.
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, 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, 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.
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 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.
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 such case, the value of our common stock and the trading price of our securities could decline, and you may lose all or a significant part of your investment. Some statements in the following risk factors constitute forward-looking statements. Please refer to the explanation of the qualifications and limitations on forward-looking statements under “Forward-Looking Statements” of this Form 10-K.
In such case, the value of our common stock and the trading price of our securities could decline, and you may lose all or a significant part of your investment. Some statements in the following risk factors constitute forward-looking statements.
Fannie Mae and Freddie Mac are a major source of financing for the multifamily residential real estate sector. Many multifamily companies depend heavily on Fannie Mae and Freddie Mac to finance growth by purchasing or guarantying multifamily loans and to refinance outstanding indebtedness as it matures.
Many multifamily companies depend heavily on Fannie Mae and Freddie Mac to finance growth by purchasing or guarantying multifamily loans and to refinance outstanding indebtedness as it matures.
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.
If we are unable to manage these risks and costs effectively, our results of operations, financial condition and ability to make distributions may be adversely affected. 20 Table of Contents 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.
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.
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.
We are subject to risks normally associated with debt financing, including the risk that our cash flows will be insufficient to meet required payments of principal and interest.
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. We are subject to risks normally associated with debt financing, including the risk that our cash flows will be insufficient to meet required payments of principal and interest.
Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of IROP and its subsidiaries will be able to satisfy your claims as stockholders only after all of our and IROP’s and its subsidiaries’ liabilities and obligations have been paid in full. 36 Table of Contents Our rights and the rights of our stockholders to recover on claims against our directors are limited, which could reduce your and our recovery against them if they negligently cause us to incur losses.
Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of IROP and its subsidiaries will be able to satisfy your claims as stockholders only after all of our and IROP’s and its subsidiaries’ liabilities and obligations have been paid in full.
Prior observed patterns, if any, in the behavior of market variables and their relation to SOFR, such as correlations, may change in the future. While some pre-publication historical data has been released by the Federal Reserve Bank of New York (“FRBNY”), production of such historical indicative SOFR data inherently involves assumptions, estimates and approximations.
While some pre-publication historical data has been released by the Federal Reserve Bank of New York (“FRBNY”), production of such historical indicative SOFR data inherently involves assumptions, estimates and approximations. No future performance of SOFR may be inferred from any of the historical actual or historical indicative SOFR data.
All real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety.
The costs of compliance with environmental laws and regulations may adversely affect our net income and the cash available for any distributions. All real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety.
As a result, until the end of 2025, our ordinary income dividends will be taxed at 80% of an individual’s marginal tax rate. The current maximum rate for individuals is 37%, resulting in a maximum tax rate of 29.6% on our dividends after application of the 20% deduction.
The current maximum rate for individuals is 37%, resulting in a maximum tax rate of 29.6% on our dividends after application of the 20% deduction.
However, if the IRS were to successfully challenge the status of IROP as a partnership or disregarded entity for such purposes, it would be taxable as a corporation. In such event, this would reduce the amount of distributions that IROP could make to us.
We intend to maintain the status of IROP as a partnership or disregarded entity for U.S. federal income tax purposes. However, if the IRS were to successfully challenge the status of IROP as a partnership or disregarded entity for such purposes, it would be taxable as a corporation.
As of December 31, 2024, we had $794.5 million of such unsecured debt and interest rate swaps and collars with an aggregate notional value of $700.0 million outstanding that were indexed to SOFR. In addition, we had $305.5 million of available liquidity under our Unsecured Revolver that would be indexed to SOFR upon borrowing.
As of December 31, 2025, we had $798.9 million of such unsecured debt and interest rate swaps and collars with an aggregate notional value of $800.0 million outstanding that were indexed to SOFR.

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Item 2. Properties

Properties — owned and leased real estate

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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 .
Biggest changeAdditional information on our consolidated properties is contained in “Schedule III - Real Estate and Accumulated Depreciation” in this Annual Report, which is incorporated herein by reference. 32 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.
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).
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). The following table presents an overview of our consolidated portfolio as of December 31, 2025(including one development property).
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.
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.
(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.
(b) Period end occupancy for each of our properties is calculated as (i) total units rented as of December 31, 2025 divided by (ii) total units available for rent as of December 31, 2025, expressed as a percentage. Excludes Flatiron Flats, which, as of December 31, 2025, was in lease-up phase and had not reached 90% occupancy.
(“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.
On July 2, 2025, the Attorney General of Kentucky filed a complaint against RealPage and nine other defendants who own and/or manage multifamily residential rental housing, including IRT, on behalf of the Commonwealth of Kentucky, also alleging that the defendants conspired to fix, raise, maintain, and stabilize rent prices in violation of Section 1 of the Sherman Act.
Removed
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.
Added
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 $ 1,132,430 $ (164,387 ) $ 968,043 94.7 % 93.8 % $ 1,570 Austin, TX 1 256 61,552 (8,990 ) 52,562 96.9 % 95.3 % 1,784 Charleston, SC 2 518 84,269 (19,710 ) 64,559 95.3 % 94.9 % 1,776 Charlotte, NC 4 1,014 263,466 (25,875 ) 237,591 95.7 % 94.7 % 1,660 Cincinnati, OH 2 542 127,244 (14,956 ) 112,288 97.6 % 96.9 % 1,696 Columbus, OH 10 2,510 385,826 (65,867 ) 319,959 95.2 % 95.7 % 1,547 Dallas, TX 14 4,007 898,823 (122,773 ) 776,050 96.9 % 96.0 % 1,807 Denver, CO 8 2,018 559,005 (54,361 ) 504,644 92.8 % 93.9 % 1,811 Greenville, SC 1 702 127,920 (15,528 ) 112,392 95.1 % 93.5 % 1,265 Houston, TX 5 1,308 218,032 (25,026 ) 193,006 96.8 % 96.4 % 1,457 Huntsville, AL 4 1,051 242,892 (26,331 ) 216,561 95.1 % 95.4 % 1,403 Indianapolis, IN 8 2,259 361,777 (47,878 ) 313,899 94.3 % 95.3 % 1,499 Lexington, KY 3 886 168,248 (19,956 ) 148,292 97.6 % 96.9 % 1,506 Louisville, KY 3 794 100,837 (25,914 ) 74,923 96.3 % 96.2 % 1,349 Memphis, TN 4 1,383 160,512 (45,234 ) 115,278 91.5 % 92.9 % 1,459 Myrtle Beach, SC - Wilmington, NC 3 628 69,993 (15,213 ) 54,780 94.9 % 95.1 % 1,382 Nashville, TN 5 1,508 379,975 (45,190 ) 334,785 96.1 % 95.8 % 1,614 Oklahoma City, OK 8 2,147 347,624 (56,331 ) 291,293 95.6 % 96.0 % 1,266 Orlando, FL 4 1,260 283,559 (16,566 ) 266,993 86.2 % 90.4 % 1,900 Raleigh - Durham, NC 6 1,690 259,425 (57,297 ) 202,128 93.8 % 94.9 % 1,537 San Antonio, TX 1 306 57,743 (6,870 ) 50,873 98.0 % 97.4 % 1,441 Tampa-St.
Removed
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.
Added
Petersburg, FL 6 1,791 398,423 (52,094 ) 346,329 96.1 % 95.8 % 1,930 TOTAL 115 33,758 $ 6,689,575 $ (932,347 ) $ 5,757,228 94.9 % 95.0 % $ 1,593 (a) Units represent the total number of units in each market at December 31, 2025, including 296 units at Flatiron Flats development property.
Removed
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.
Added
(c) Average occupancy represents the daily average occupancy of available units for the three-month period ended December 31, 2025. Excludes Flatiron Flats, which, as of December 31, 2025, was in lease-up and had not reached 90% occupancy.
Removed
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.
Added
(d) Average effective monthly rent, per unit, represents the average monthly rent for all occupied units for the three-month period ended December 31, 2025. Excludes Flatiron Flats, which, as of December 31, 2025, was in lease-up and had not reached 90% occupancy.
Removed
Some of the complaints, including one filed on November 14, 2022 in the U.S. District Court for the Northern District of Illinois, named us as one of the defendants, and others did not.
Added
On September 15, 2025, IRT and other defendants in the complaint filed motions to dismiss the case. On February 2, 2026, the court denied the motions to dismiss.
Removed
On April 10, 2023, the United States Judicial Panel on Multidistrict Litigation issued an order transferring the cases to the United States District Court for the Middle District of Tennessee for coordinated and consolidated pretrial proceedings, where plaintiffs filed a consolidated complaint. We filed an answer to the consolidated complaint and asserted affirmative defenses.
Added
This proceeding is in the early stages, and it is not possible for the Company to predict the outcome nor is it possible to estimate the amount of loss, if any, which may be associated with an adverse decision in this matter.
Removed
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
Added
We deny all allegations of wrongdoing in connection with the complaint and intend to defend against these claims vigorously. We are engaged in certain other legal proceedings, as disclosed in Note 12, “Commitments and Contingencies”, which disclosure is incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+4 added−1 removed3 unchanged
Biggest changeOur 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.
Biggest changeAn aggregate of 5,941,643 IROP units held by unaffiliated third parties were outstanding at December 31, 2025 and as of February 17, 2026. 34 Table of Contents Issuer Purchases of Equity Securities On May 18, 2022, our Board of Directors authorized a Stock Repurchase Program covering the repurchase of up to $250 million in shares of our common stock.
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.
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, 2020 and ending December 31, 2025 with the cumulative total returns of the National Association of Real Estate Investment Trusts (NAREIT) Equity REIT index and the Russell 3000 Index.
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.
At the close of business on February 12, 2026, the closing price for our common stock on the NYSE was $15.93 per share and there were 4,287 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 $0.17 per common share.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information; Holders Our common stock is listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “IRT”.
Market Information; Holders Our common stock is listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “IRT”.
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.
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. When we do issue shares of common stock the shares are exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
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.
The following graph assumes that each index was 100 on the initial day of the relevant measurement period and that all dividends were reinvested. Unregistered Sales of Equity Securities As of January 1, 2025, an aggregate of 5,941,643 IROP units were outstanding and held by unaffiliated third parties.
Removed
Issuer Purchases of Equity Securities None. ITEM 6. Reserved
Added
ITEM 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The information required by Item 201(d) of Regulation S-K is incorporated herein by reference to the registrant's definitive proxy statement, under “Equity Compensation Plan Information”, to be filed with the SEC within 120 days of the end of the fiscal year.
Added
We issued no shares of common stock in exchange for an equal number of IROP units during the year ended December 31, 2025.
Added
Under the Stock Repurchase Program, we, in our discretion, may purchase our shares of common stock from time to time in the open market or in privately negotiated transactions.
Added
The following table summarizes our repurchases of common stock under our Stock Repurchase Program during the quarter ended December 31, 2025: Period (a) Total Number of Shares (or Units) Purchased (b) Average Price Paid per Share (or Unit) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Be Purchased Under the Plans or Programs (in thousands) October 2025 — — — — November 2025 1,872,684 $ 16.00 1,872,684 $ 220,000 December 2025 — — — — ITEM 6.

Item 7. Management's Discussion & Analysis

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

63 edited+19 added−50 removed34 unchanged
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.
Biggest changeYear Ended December 31, 2025 Compared to the Year Ended December 31, 2024 SAME-STORE PORTFOLIO NON SAME-STORE PORTFOLIO CONSOLIDATED (Dollars in thousands) Year Ended December 31, Year Ended December 31, Year Ended December 31, Increase % Increase % Increase % 2025 2024 (Decrease) Change 2025 2024 (Decrease) Change 2025 2024 (Decrease) Change Property Data: Number of properties (1) 105 105 — — 9 8 1 12.5 % 114 113 1 0.9 % Number of units (1) 30,502 30,502 — — 2,960 3,113 (153 ) (4.9 )% 33,462 33,615 (153 ) (0.5 )% Average occupancy (1) 95.4 % 95.1 % 0.3 % 0.3 % 91.1 % 90.3 % 0.8 % 0.9 % 95.0 % 95.0 % (0.0 )% (0.0 )% Average effective monthly rent, per unit (1) $ 1,578 $ 1,565 $ 13 0.8 % $ 1,765 $ 1,604 $ 161 10.0 % $ 1,588 $ 1,572 $ 16 1.0 % Revenue: Rental and other property revenue $ 595,601 $ 585,431 $ 10,170 1.7 % $ 60,880 $ 53,482 $ 7,398 13.8 % $ 656,481 $ 638,913 $ 17,568 2.7 % Expenses: Property operating expenses 215,550 214,436 1,114 0.5 % 23,607 21,152 2,455 11.6 % 239,157 235,588 3,569 1.5 % Net Operating Income $ 380,051 $ 370,995 $ 9,056 2.4 % $ 37,273 $ 32,330 $ 4,943 15.3 % $ 417,324 $ 403,325 $ 13,999 3.5 % Other Revenue: Other revenue $ 1,215 $ 1,122 $ 93 8.3 % Corporate and other expenses: Property management expenses 30,107 29,923 184 0.6 % General and administrative expenses 23,966 24,245 (279 ) (1.2 )% Depreciation and amortization expense 243,241 220,854 22,387 10.1 % Casualty losses 1,314 3,935 (2,621 ) (66.6 )% Interest expense (78,998 ) (76,141 ) (2,857 ) 3.8 % Gain on sale (loss on impairment) of real estate assets, net 6,147 (9,862 ) 16,009 (162.3 )% (Loss) gain on extinguishment of debt (67 ) 200 (267 ) (133.5 )% Other loss (352 ) (1 ) (351 ) 35100.0 % Income from investments in unconsolidated real estate entities 11,066 347 10,719 3089.0 % Net income $ 57,707 $ 40,033 $ 17,674 44.1 % Income allocated to noncontrolling interests (1,149 ) (742 ) (407 ) 54.9 % Net income available to common shares $ 56,558 $ 39,291 $ 17,267 43.9 % (1) Excludes our one development project.
Under the Stock Repurchase Program, we, in our discretion, may purchase our shares from time to time in the open market or in privately negotiated transactions. The amount and timing of the purchases will depend on a number of factors, including the price and availability of our shares, trading volumes and general market conditions.
Under the Stock Repurchase Program, we, in our discretion, may purchase our shares of common stock from time to time in the open market or in privately negotiated transactions. The amount and timing of the purchases will depend on a number of factors, including the price and availability of our shares of common stock, trading volumes and general market conditions.
CFFO is a computation made by analysts and investors to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations, including depreciation and amortization of other items not included in FFO, and other non-cash or non-operating gains or losses related to items such as casualty (gains) losses, loan premium accretion and discount amortization, debt extinguishment costs, merger and integration costs, and restructuring costs from the determination of FFO.
CFFO is a computation made by analysts and investors to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations, including depreciation and amortization of other items not included in FFO, and other non-cash or non-operating gains or losses related to items such as casualty (gains) losses, loan premium accretion and discount amortization, debt extinguishment costs and restructuring costs from the determination of FFO.
Under the 2023 ATM Program, we may also enter into one or more forward sale transactions for the sale of shares of our common stock on a forward basis.
Under the ATM Program, we may also enter into one or more forward sale transactions for the sale of shares of our common stock on a forward basis.
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.
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. 36 Table of Contents Revenue Rental and other property revenue.
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.
The margin for borrowings under the Unsecured Revolver, the 2028 Term Loan and the new 2030 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 and new 2030 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.
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.
The Sixth 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.
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.
ATM Program 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 “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.
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.
Refer to Item 7, “Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 for a comparison of the year ended December 31, 2024 to the year ended December 31, 2023.
The applicable margin will be determined based upon IRT’s credit rating. At the time of closing, based on IRT’s credit rating along with IROP’s consolidated leverage ratio, the applicable SOFR margin was 77.5 basis points for the Unsecured Revolver and 85 basis points for both the 2026 Term Loan and 2028 Term Loan.
The applicable margin will be determined based upon IRT’s credit rating. At the time of closing, based upon IRT’s credit rating along with IROP’s consolidated leverage ratio, the applicable SOFR margin was 77.5 basis points for the Unsecured Revolver and 85 basis points for both the 2028 Term Loan and 2030 Term Loan.
The Fifth Restated Credit Agreement contains customary covenants for credit facilities of this type, including restrictions on our ability to take the following actions: (i) make distributions after an event of default; (ii) incur debt; (iii) make investments; (iv) grant or suffer liens; (v) undertake mergers, consolidations, asset sales and other fundamental entity 54 Table of Contents changes; (vi) make material changes to contracts and organizational documents; and (vii) enter into transactions with affiliates.
The Sixth Restated Credit Agreement contains customary covenants for credit facilities of this type, including restrictions on our ability to take the following actions: (i) make distributions after an event of default; (ii) incur debt; (iii) make investments; (iv) grant or suffer liens; (v) undertake mergers, consolidations, asset sales and other fundamental entity changes; (vi) make material changes to contracts and organizational documents; and (vii) enter into transactions with affiliates.
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.
The Sixth Restated Credit Agreement also increases the aggregate amount of borrowings under the credit agreement to $1.5 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 Sixth 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 Sixth Restated Credit Agreement.
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.
Business for discussion regarding our business objective and investment strategies and for an additional discussion regarding developments in our business during 2025. 35 Table of Contents Results of Operations The following discussion is based on our Consolidated Financial Statements for the years ended December 31, 2025 and 2024.
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.
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. Income from investments in unconsolidated real estate entities.
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help provide an understanding of our business, financial condition and results of operations.
ITEM 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help provide an understanding of our business, financial condition and results of operations.
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.
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.
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.
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 public offering of an aggregate of 11.5 million shares of our common stock discussed below.
(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.
(3) Represents the weighted average effective interest rate for the three months ended December 31, 2025, 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.
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).
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 $23.6 million as of December 31, 2025; • existing and future unsecured financing, including advances under our unsecured revolver, and financing secured directly or indirectly by the apartment properties in our portfolio; • cash generated from operating activities; • net cash proceeds from property sales, including sales undertaken as part of our capital recycling 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 ATM Program (as defined below).
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”).
The Fifth Restated Credit Agreement provided for a $750.0 million unsecured revolving credit facility (the “Unsecured Revolver”) with a January 8, 2029 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”).
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.
Our cash flows used in investing activities during the year ended December 31, 2025 were primarily driven by $152.7 million of outflows related to the acquisitions of three multifamily apartment communities, $135.6 million of capital expenditures, $35.7 million of outflows related to payments to fund our investments in our unconsolidated real estate entities and $18.2 million in additions to real estate under development, partially offset by $157.9 million of inflows from property dispositions and $40.5 million of inflows from returns of investments in unconsolidated real estate entities. 40 Table of Contents 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 of outflows related to payments to fund 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.
(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.
(2) Our unsecured revolver and term loans assumed a SOFR rate of 3.87% as of December 31, 2025. 43 Table of Contents 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.
Unsecured Revolver and Term Loans 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”).
Capitalization Unsecured Revolver and Term Loans On February, 11, 2026, IROP entered into the Sixth Amended and Restated Credit Agreement (the “Sixth 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 Fifth Amended and Restated Credit Agreement dated as of January 8, 2025 (the “Fifth Restated Credit Agreement”).
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.
Our cash and cash equivalents were generated from the following activities (dollars in thousands): For the Years Ended December 31, 2025 2024 2023 Cash flows provided by operating activities $ 282,149 $ 259,753 $ 262,170 Cash flows used in investing activities (142,911 ) (20,605 ) (1,712 ) Cash flows used in financing activities (135,068 ) (246,428 ) (253,743 ) Net change in cash and cash equivalents, and restricted cash 4,170 (7,280 ) 6,715 Cash and cash equivalents, and restricted cash, beginning of period 43,452 50,732 44,017 Cash and cash equivalents, and restricted cash, end of the period $ 47,622 $ 43,452 $ 50,732 Our cash flows provided by operating activities during the years ended December 31, 2025, 2024 and 2023 were primarily driven by the ongoing operations of our properties.
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.
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. Our lease terms are generally for one year or less and average twelve months.
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.
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; • any future downturn or increased volatility 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; • international military conflicts or geopolitical tensions could affect oil and gas prices, cause supply chain disruptions and increase cybersecurity risks; • fluctuations in the costs, availability and quality of building materials and supplies, due to tariffs, trade barriers or otherwise, could adversely affect our financial condition or results of operations; • Failure to hedge effectively against interest rates may adversely affect results of operations; and • Additional factors as discussed in Item 1A.
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.
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.
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.
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. Transaction costs and fees incurred related to the financing of an acquisition are capitalized and amortized over the life of the related financing.
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.
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.
This MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included elsewhere in this report. This report, including the following MD&A, contains forward-looking statements regarding future events or trends that are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
This Annual Report, including the following MD&A, contains forward-looking statements regarding future events or trends that are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
(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.
During the year ended December 31, 2024, we sold seven multifamily properties, resulting in an aggregate gain on sale of $11.1 million.
Completed Public Offering of 11.5 Million Shares of Common Stock On September 3, 2024, we entered into an underwriting agreement with Citigroup Global Markets Inc., KeyBanc Capital Markets Inc. and RBC Capital Markets LLC as representatives of the several underwriters named therein, (collectively, the “Underwriters”), and Citigroup Global Markets Inc. in its capacity as agent (in such capacity, the “Forward Seller”) for Citibank, N.A., as forward counterparty (the “Forward Counterparty”) and the Forward Counterparty related to the offering of an aggregate of 11.5 million shares of our common stock, par value $0.01 per share, at a price of $18.96 per share consisting of 11.5 million shares of our common stock offered by the Forward Seller in connection with the forward sale agreements described below (including 1.5 million shares offered pursuant to the Underwriter’s option to purchase additional shares, which was exercised in full).
The Sixth Restated Credit Agreement provides for certain customary events of default, including among others, non-payment of principal, interest or other amounts when due, inaccuracy of representations and warranties, violation of covenants, cross defaults with certain other indebtedness, insolvency or inability to pay debts, bankruptcy, or a change of control. 41 Table of Contents Public Offering of 11.5 Million Shares of Common Stock On September 3, 2024, we entered into an underwriting agreement with Citigroup Global Markets Inc., KeyBanc Capital Markets Inc. and RBC Capital Markets LLC as representatives of the several underwriters named therein, (collectively, the “Underwriters”), and Citigroup Global Markets Inc. in its capacity as agent (in such capacity, the “Forward Seller”) for Citibank, N.A., as forward counterparty (the “Forward Counterparty”) and the Forward Counterparty related to the offering of an aggregate of 11.5 million shares of our common stock, par value $0.01 per share, at a price of $18.96 per share consisting of 11.5 million shares of our common stock offered by the Forward Seller in connection with the forward sale agreements described below (including 1.5 million shares offered pursuant to the Underwriters’ option to purchase additional shares, which was exercised in full).
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.
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.
Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income insofar as the measure reflects only operating income and expense at the property level.
We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income insofar as the measure reflects only operating income and expense at the property level.
We define NOI as total property revenues less total property operating expenses, excluding interest expenses, depreciation and amortization, casualty related costs and gains, property management expenses, general and administrative expense, net gains on sale of assets, merger and integration costs, and restructuring costs.
We define NOI as total property revenues less total property operating expenses, excluding interest expenses, depreciation and amortization, casualty related costs and gains, property management expenses, general and administrative expense, net gains on sale of assets, and restructuring costs. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs.
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.
Expenses Property operating expenses. Property operating expenses increased $3.6 million to $239.2 million for the year ended December 31, 2025 from $235.6 million for the year ended December 31, 2024.
On December 30, 2024, we physically settled 3.25 million shares at a weighted average price of $19.04 per share and we received proceeds of $61.9 million. All of the net proceeds will be used to fund new acquisitions.
On December 30, 2024, we physically settled 3.25 million shares of our common stock that was sold in the offering at a weighted average price of $19.04 per share, and we received net proceeds of $61.9 million.
We have successfully continued to implement these strategies to reduce our leverage and reduce our exposure to short term indebtedness. Stock Repurchase Program On May 18, 2022, our Board of Directors authorized a common stock repurchase program (the “Stock Repurchase Program”) covering up to $250 million in shares of our common stock.
Stock Repurchase Program On May 18, 2022, our Board of Directors authorized a common stock repurchase program (the “Stock Repurchase Program”) covering the repurchase of up to $250 million in shares of our common stock.
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.
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”.
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.
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.
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.
Set forth below is a reconciliation of net income (loss) to FFO and CFFO for the years ended December 31, 2025, 2024 and 2023 (in thousands, except share and per share information): For the Year Ended December 31, For the Year Ended December 31, For the Year Ended December 31, 2025 2024 2023 Amount Per Share(1) Amount Per Share(2) Amount Per Share(2) Net income (loss) $ 57,707 $ 0.24 $ 40,033 $ 0.17 $ (17,807 ) $ (0.08 ) Adjustments: Real estate depreciation and amortization 241,462 1.00 219,360 0.95 217,716 0.94 Our share of real estate depreciation and amortization from investments in unconsolidated real estate entities 1,898 0.01 1,581 0.01 2,115 0.01 (Gain on sale) loss on impairment of real estate assets net, excluding prepayment gains (4,577 ) (0.02 ) 11,815 0.05 68,447 0.30 Gain on sale of real estate associated with unconsolidated real estate entities (10,576 ) (0.04 ) — — — — FFO $ 285,914 $ 1.19 $ 272,789 $ 1.18 $ 270,471 $ 1.17 FFO $ 285,914 $ 1.19 $ 272,789 $ 1.18 $ 270,471 $ 1.17 Adjustments: Other depreciation and amortization 1,779 0.01 1,493 0.01 1,252 0.01 Casualty losses 1,314 0.01 3,935 0.02 925 0.01 Loan (premium accretion) discount amortization, net (8,028 ) (0.03 ) (9,167 ) (0.04 ) (10,899 ) (0.04 ) Prepayment (gains) losses on asset dispositions (1,570 ) (0.01 ) (1,953 ) (0.01 ) (1,900 ) (0.01 ) Loss (gain) on extinguishment of debt 67 — (200 ) — 124 — Other loss 352 — 1 — 743 — Restructuring costs — — — — 3,213 0.01 CFFO $ 279,828 $ 1.17 $ 266,898 $ 1.16 $ 263,929 $ 1.15 (1) Based on 239,865,259, 230,741,085, and 230,364,184 weighted average shares and units outstanding for the years ended December 31, 2025, 2024, and 2023, respectively. 38 Table of Contents Same-Store Properties and Same-Store Portfolio We review our same-store portfolio at the beginning of each calendar year.
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. 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%.
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.
Quarterly Dividend Distribution On December 15, 2025, our Board of Directors declared a quarterly dividend of $0.17 per share of common stock, which was paid on January 23, 2026 to stockholders of record at the close of business on December 31, 2025. 42 Table of Contents Consolidated Debt The following tables contain summary information concerning our consolidated indebtedness as of December 31, 2025 (dollars in thousands): Consolidated Debt: Outstanding Principal Unamortized Debt Issuance Costs Unamortized Loan (Discount)/Premiums Carrying Amount Type Weighted Average Contractual Rate (2) Weighted Average Effective Rate (3) Weighted Average Maturity (in years) Unsecured revolver (1) $ 198,892 $ (4,535 ) $ — $ 194,357 Floating 4.5 % 4.8 % 3.0 Unsecured term loans 600,000 (1,142 ) — 598,858 Floating 4.6 % 4.0 % 1.5 Secured credit facilities 582,535 (1,525 ) 12,157 593,167 Fixed 4.2 % 4.4 % 2.9 Mortgages 739,596 (2,741 ) 9,693 746,548 Fixed 3.9 % 4.0 % 3.3 Unsecured notes 150,000 (1,455 ) — 148,545 Fixed 5.4 % 5.6 % 7.3 Total Consolidated Debt $ 2,271,023 $ (11,398 ) $ 21,850 $ 2,281,475 4.3 % 4.3 % 3.0 (1) The unsecured revolver total capacity is $750,000, of which $198,892 was outstanding as of December 31, 2025.
(2) Includes indebtedness secured by real estate held for sale of $59,032. As of December 31, 2024 we were in compliance with all financial covenants contained in our consolidated indebtedness.
As of December 31, 2025 we were in compliance with all financial covenants contained in our consolidated indebtedness.
Original maturities on or before December 31, Debt: 2025 2026 2027 2028 2029 Thereafter Unsecured revolver (1) $ — $ 194,478 $ — $ — $ — $ — Unsecured term loans — 200,000 — 400,000 — — Secured credit facilities 3,065 9,111 10,081 453,937 2,669 106,772 Mortgages (2) 44,780 127,773 12,341 179,861 416,039 — Unsecured notes — — — — — 150,000 Total $ 47,845 $ 531,362 $ 22,422 $ 1,033,798 $ 418,708 $ 256,772 (1) On January 8, 2025, we amended and restated our unsecured credit agreement, which increased our revolver capacity to $750,000, and extended the maturity date of borrowings under the unsecured revolver to January 8, 2029.
Original maturities on or before December 31, Debt: 2026 2027 2028 2029 2030 Thereafter Unsecured revolver (1) $ — $ — $ — $ 198,892 $ — $ — Unsecured term loans 200,000 — 400,000 — — — Secured credit facilities 9,111 10,081 453,936 2,670 106,737 — Mortgages 126,763 11,281 126,019 416,031 — 59,502 Unsecured notes — — — — — 150,000 Total $ 335,874 $ 21,362 $ 979,955 $ 617,593 $ 106,737 $ 209,502 (1) On January 8, 2025, we amended and restated our unsecured credit agreement, which increased our revolver capacity to $750,000, and extended the maturity date of borrowings under the unsecured revolver to January 8, 2029.
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.
The increase was primarily attributable to a $10.2 million increase in same-store rental and other property revenue, driven by a 0.8% increase in average effective monthly rents and a 0.3% increase in average occupancy compared to the prior year period and to a $7.4 million increase in non same-store rental and other property revenue driven by the acquisition of three properties in the second half of 2024, and three properties in 2025.
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.
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.
Our cash flows used in financing activities during the year ended December 31, 2022 were primarily driven by distributions on our common stock of $105.8 million, and mortgage principal repayments of $53.4 million partially offset by proceeds from the issuance of common stock of $48.7 million.
Our cash flows used in financing activities during the year ended December 31, 2025 were primarily driven by distributions of $158.3 million, mortgage principal repayments of $100.7 million and repurchases of common stock under our Share Repurchase Program of $30.0 million, partially offset by $162.4 million of proceeds from the issuance of common stock in connection with our public offering of an aggregate of 11.5 million shares of our common stock discussed below.
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.
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.
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.
The increase was primarily due to a $2.5 million increase in non same-store property operating expenses, due to the acquisition of three properties in the second half of 2024 and three properties in 2025 and by a $1.1 million increase in same-store property operating expenses primarily due to higher advertising expense, contract services (landscaping, trash, cable/internet, janitorial), and utilities costs, partially offset by a decrease in property insurance, turnover costs, payroll expense and real estate taxes.
On January 8, 2025, we amended and restated our unsecured credit agreement, which increased our revolver capacity to $750,000, and extended the maturity date of borrowings under the unsecured revolver to January 8, 2029. (2) Includes indebtedness secured by real estate held for sale of $59,032.
On January 8, 2025, we amended and restated our unsecured credit agreement, which increased our revolver capacity to $750,000, and extended the maturity date of borrowings under the unsecured revolver to January 8, 2029. (2) Represents the weighted average of the contractual interest rates in effect as of year-end without regard to any interest rate swaps or collars.
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.
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. 44 Table of Contents 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.
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.
Depreciation and amortization expense. Depreciation and amortization expense increased $22.4 million to $243.2 million for the year ended December 31, 2025 from $220.9 million for the year ended December 31, 2024.
As of December 31, 2024, 8.25 million shares of our common stock remain to be settled under the Forward Sale Agreements, which if physically settled would provide additional proceeds to us of $155.8 million based on the forward price as of December 31, 2024.
As of December 31, 2025, no shares of our common stock remained to be settled under the Forward Sale Agreements.
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.
During the three months ended March 31, 2025, we entered into forward sales transactions under the ATM Program for the forward sale of an aggregate of 2.7 million shares of our common stock at a weighted average price of $20.96 per share.
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.
This was partially offset by lower depreciation expenses from the sale of seven properties in 2024 compared to the sale of two properties in 2025. Casualty losses. Casualty losses decreased $2.6 million to $1.3 million for the year ended December 31, 2025 from $3.9 million for the year ended December 31, 2024.
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.
Set forth below is a reconciliation of GAAP net income to Same-Store Portfolio(a) NOI for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 % change Net income $ 57,707 $ 40,033 44.1 % Other revenue (1,215 ) (1,122 ) 8.3 % Property management expenses 30,107 29,923 0.6 % General and administrative expenses 23,966 24,245 (1.2 )% Depreciation and amortization expense 243,241 220,854 10.1 % Casualty losses 1,314 3,935 (66.6 )% Interest expense 78,998 76,141 3.8 % (Gain on sale) loss on impairment of real estate assets, net (6,147 ) 9,862 (162.3 )% Loss (gain) on extinguishment of debt 67 (200 ) (133.5 )% Other loss 352 1 35100.0 % Income from investments in unconsolidated real estate entities (11,066 ) (347 ) 3089.0 % NOI 417,324 403,325 3.5 % Less: Non same-store portfolio NOI 37,273 32,330 15.3 % Same-store portfolio (a) NOI $ 380,051 $ 370,995 2.4 % (a) Same-Store Portfolio for the years ended December 31, 2025 and 2024 included 105 properties containing 30,502 units.
Non-GAAP Financial Measures Funds from Operations (FFO) and Core Funds from Operations (CFFO) We believe that FFO and CFFO, each of which is a non-GAAP financial measure, are additional appropriate measures of the operating performance of a REIT and us in particular.
The increase was primarily due to a gain on sale of $10.6 million during the three months ended September 30, 2025 attributable to the sale of an operating property in Richmond, Virginia on July 21, 2025 by an unconsolidated joint venture (Metropolis at Innsbrook) in which we held an 84.8% ownership interest. 37 Table of Contents Non-GAAP Financial Measures Funds from Operations ( “ FFO ” ) and Core Funds from Operations ( “ CFFO ” ) We believe that FFO and CFFO, each of which is a non-GAAP financial measure, are additional appropriate measures of the operating performance of a REIT and us in particular.
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.
The Stock Repurchase Program has no time limit and may be suspended or discontinued at any time. During the year ended December 31, 2025, we repurchased and retired 1.9 million shares of our common stock at a weighted average price of $16.00 per share, at a total cost of $30.0 million.
On December 30, 2024, we physically settled all of these 2,498,300 shares of our common stock at a weighted average price of $20.06 per share and we received proceeds of $50.1 million. As of December 31, 2024, approximately $399.4 million remained available for issuance under the 2023 ATM Program.
We used substantially all of the net proceeds to fund the repurchase of shares of common stock under our Stock Repurchase Program. As of December 31, 2025, approximately $342.4 million remained available for issuance under our ATM Program.
During the year ended December 31, 2023, we sold five multifamily properties resulting in a loss on impairment of $33.5 million.
Gain on sale (loss on impairment) of real estate assets, net. During the year ended December 31, 2025, we sold two multifamily properties, recognizing a gain on sale of $19.0 million in connection with one of the properties and an impairment loss of $12.8 million in connection with one property held for sale.
Contractual Obligations The table below summarizes our material cash requirement related to contractual obligations, which primarily consist of principal and interest payments on our outstanding consolidated debt obligations and operating lease obligations as of December 31, 2024 (dollars in thousands). 2025 2026 2027 2028 2029 Thereafter Total Principal payments on outstanding debt obligations (1) $ 47,845 $ 531,362 $ 22,422 $ 1,033,798 $ 418,708 $ 256,772 $ 2,310,907 Interest payments on outstanding debt obligations (2) 105,870 87,731 79,201 48,618 23,450 28,953 373,823 Operating lease obligations 525 568 576 538 383 — 2,590 Total $ 154,240 $ 619,661 $ 102,199 $ 1,082,954 $ 442,541 $ 285,725 $ 2,687,320 (1) On January 8, 2025, we amended and restated our unsecured credit agreement, which increased our revolver capacity to $750,000, and extended the maturity date of borrowings under the unsecured revolver to January 8, 2029.
Contractual Obligations The table below summarizes our material cash requirement related to contractual obligations, which primarily consist of principal and interest payments on our outstanding consolidated debt obligations and operating lease obligations as of December 31, 2025 (dollars in thousands). 2026 2027 2028 2029 2030 Thereafter Total Principal payments on outstanding debt obligations (1) $ 335,874 $ 21,362 $ 979,955 $ 617,593 $ 106,737 $ 209,502 $ 2,271,023 Interest payments on outstanding debt obligations (2) 90,911 84,081 58,183 27,057 12,788 117,473 390,493 Operating lease obligations 811 827 796 649 228 — 3,311 Total $ 427,596 $ 106,270 $ 1,038,934 $ 645,299 $ 119,753 $ 326,975 $ 2,664,827 (1) On January 8, 2025, we amended and restated our unsecured credit agreement, which increased our revolver capacity to $750,000, and extended the maturity date of borrowings under the unsecured revolver to January 8, 2029.
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.
Income from investments in unconsolidated real estate entities increased by $10.7 million for the year ended December 31, 2025 from $0.3 million for the year ended December 31, 2024.
Removed
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.
Added
This MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included elsewhere in this Annual Report.
Removed
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.
Added
Rental and other property revenue increased $17.6 million to $656.5 million for the year ended December 31, 2025 from $638.9 million for the year ended December 31, 2024.
Removed
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.
Added
The increase was primarily due to depreciation expenses driven by capital expenditures related to our Value Add Initiative and higher intangible asset amortization expenses from our property acquisitions in 2025, compared to the prior year period.
Removed
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.
Added
The decrease was primarily due to a decrease in the number and severity of casualty events in 2025 compared to 2024 where the carrying value of the damage exceeded insurance proceeds due to policy deductibles. Interest expense.
Removed
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.
Added
Interest expense increased $2.9 million to $79.0 million for the year ended December 31, 2025 from $76.1 million for the year ended December 31, 2024 primarily due to lower capitalized interest on our real estate under development, higher amortization of deferred financing costs associated with the refinancing of our unsecured credit agreement on January 8, 2025, partially offset by lower average borrowings under our unsecured revolver.
Removed
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.
Added
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.
Removed
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.
Added
Set forth below is Same-Store Portfolio (a) NOI for the years ended December 31, 2025 and 2024 (in thousands, except per unit data): Year Ended December 31, 2025 2024 % change Revenue: Rental and other property revenue $ 595,601 $ 585,431 1.7 % Property Operating Expenses Real estate taxes 67,926 68,534 (0.9 )% Property insurance 13,323 15,174 (12.2 )% Personnel expenses 47,460 48,068 (1.3 )% Utilities 29,720 28,923 2.8 % Repairs and maintenance 18,836 18,872 (0.2 )% Contract services 22,927 21,276 7.8 % Advertising expenses 9,079 7,380 23.0 % Other expenses 6,279 6,209 1.1 % Total property operating expenses 215,550 214,436 0.5 % Same-store portfolio (a) NOI $ 380,051 $ 370,995 2.4 % Same-store portfolio NOI Margin 63.8 % 63.4 % 0.4 % Average Occupancy 95.4 % 95.1 % 0.3 % Average effective monthly rent, per unit $ 1,578 $ 1,565 0.8 % (a) Same-Store Portfolio for the years ended December 31, 2025 and 2024 included 105 properties containing 30,502 units. 39 Table of Contents Liquidity and Capital Resources Overview Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain investments, pay distributions and other general business needs.
Removed
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.
Added
Stock Repurchase Program On May 18, 2022, our Board of Directors authorized a common stock repurchase program (the “Stock Repurchase Program”) covering up to $250.0 million in shares of our common stock. Under the Stock Repurchase Program, we, in our discretion, may purchase our shares from time to time in the open market or in privately negotiated transactions.
Removed
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−0 removed14 unchanged
Biggest changeAs 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.
Biggest changeAs of December 31, 2025, 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 $798.9 million was floating rate, four float-to-fixed interest rate swaps with a total notional amount of $600.0 million, two interest rate collars with a total notional amount of $200.0 million and one forward starting float-to-fixed rate swap with a total notional amount of $150.0 million.
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.
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, 2025 and 2024, 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.
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, 2025 and 2024, the fair value of our fixed-rate indebtedness was $1.4 billion and $1.4 billion, respectively.
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.
As of December 31, 2025, our interest rate swaps and interest rate collars had a combined asset fair value of $9.5 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.
Fair value of fixed-rate indebtedness as of December 31, 2024 is shown. 62 Table of Contents
Fair value of fixed-rate indebtedness as of December 31, 2025 is shown. 45 Table of Contents
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.
Liabilities Subject to Interest 100 Basis Point 100 Basis Point Rate Sensitivity (a) Increase Decrease Interest expense from variable-rate indebtedness $ — $ — $ — Fair value of fixed-rate indebtedness 1,437,027 (45,100 ) 47,092 (a) Unpaid and unhedged balance of variable-rate indebtedness as of December 31, 2025 is shown.

Other IRT 10-K year-over-year comparisons