# Independence Realty Trust, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Independence Realty Trust, Inc.](/companies/irt.md) (CIK 1466085)
- Form: 10-Q
- Filed: 2025-05-01
- Accepted by EDGAR: May 1, 2025, 16:08 ET
- Period: 2025-03-31
- Accession: 0001437749-25-014089
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1466085/000143774925014089/irt20250331d_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1466085/000143774925014089/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $161.2m | us-gaap:Revenues |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $19.3m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $8.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.04 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.04 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 231,828,484 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $60.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $37.2m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2025-03-31 | $29.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-03-31 | $5.98bn | us-gaap:Assets |
| Total liabilities | at 2025-03-31 | $2.40bn | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $2.25bn | us-gaap:LongTermDebt |
| Shareholders' equity | at 2025-03-31 | $3.46bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 41,752 characters.

### Forward-Looking Statements

The Securities and Exchange Commission (the “SEC”), encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This report contains or incorporates by reference such “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements.

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

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

These forward-looking statements are based upon the beliefs and expectations of our management at the time of this Quarterly Report on Form 10-Q and our actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

### Overview

### Our Company

We are a self-administered and self-managed Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”). We are primarily engaged in the ownership, operation, management, improvement, and acquisition of multifamily apartment communities in non-gateway markets. As of March 31, 2025, we owned and operated 113 multifamily apartment properties (including one owned through a consolidated joint venture) that contain an aggregate of 33,175 units. Our properties are located in Alabama, Colorado, Florida, Georgia, Indiana, Kentucky, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee and Texas. In addition, as of March 31, 2025, we owned and consolidated one investment in real estate under development in Colorado that will, upon completion, contain an aggregate of 296 units. As of March 31, 2025, we also owned interests in five unconsolidated joint ventures, three that own and operate multifamily apartment communities that contain an aggregate of 886 units and two that are developing multifamily apartment communities that will contain, upon completion, an aggregate of 702 units. We do not have any foreign operations and our business is not seasonal.

### Our Business Objective and Investment Strategies

Our primary business objective is to maximize stockholder value through diligent portfolio management, strong operational performance, and a consistent return of capital through distributions and capital appreciation. Our investment strategy is focused on the following:

- gaining scale within key amenity rich submarkets of non-gateway cities that offer good school districts, high-quality retail and major employment centers and are unlikely to experience substantial new apartment construction in the foreseeable future;
- increasing cash flows at our existing apartment properties through prudent property management and strategic renovation projects; and
- acquiring additional properties that have strong and stable occupancies and support a rise in rental rates or that have the potential for repositioning through capital expenditures or tailored management strategies.

### Consolidated Property Portfolio (1)

As of March 31, 2025, we owned and consolidated 113 multifamily apartment properties, totaling 33,175 units. Below is a summary of our consolidated property portfolio by market.

*(Dollars in thousands, except per unit data)*

| As of March 31, 2025 Market Number of Properties |  | Units | Gross Real Estate Assets | Period End Occupancy | For the Three Months Ended March 31, 2025 Average Effective Monthly Rent per Unit | Net Operating Income | % of NOI |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Atlanta, GA | 13 | 5,180 | $1,113,211 | 93.0% | $1,596 | $14,466 | 14.4% |
| Dallas, TX | 14 | 4,007 | 883,203 | 96.1% | 1,815 | 13,803 | 13.7% |
| Columbus, OH | 10 | 2,510 | 381,887 | 95.7% | 1,523 | 7,172 | 7.0% |
| Tampa-St. Petersburg, FL | 6 | 1,791 | 398,502 | 95.6% | 1,913 | 6,692 | 6.7% |
| Denver, CO (1)(2) | 7 | 1,722 | 496,398 | 93.7% | 1,803 | 6,365 | 6.3% |
| Indianapolis, IN | 8 | 2,259 | 352,933 | 95.6% | 1,470 | 5,941 | 5.9% |
| Oklahoma City, OK | 8 | 2,147 | 338,709 | 96.0% | 1,232 | 5,554 | 5.5% |
| Raleigh - Durham, NC | 6 | 1,690 | 255,085 | 94.9% | 1,546 | 5,091 | 5.1% |
| Nashville, TN | 5 | 1,508 | 376,030 | 95.6% | 1,615 | 4,976 | 5.0% |
| Memphis, TN | 4 | 1,383 | 159,747 | 95.7% | 1,486 | 3,969 | 4.0% |
| Charlotte, NC | 4 | 1,014 | 262,750 | 93.4% | 1,713 | 3,471 | 3.5% |
| Houston, TX | 5 | 1,308 | 215,603 | 95.5% | 1,437 | 3,444 | 3.4% |
| Huntsville, AL | 4 | 1,051 | 241,774 | 94.8% | 1,446 | 3,061 | 3.0% |
| Lexington, KY | 3 | 886 | 164,494 | 96.8% | 1,419 | 2,867 | 2.9% |
| Louisville, KY | 4 | 1,150 | 143,363 | 94.9% | 1,344 | 2,869 | 2.9% |
| Orlando, FL | 2 | 617 | 133,044 | 94.1% | 1,840 | 2,163 | 2.2% |
| Cincinnati, OH | 2 | 542 | 125,449 | 95.4% | 1,636 | 1,812 | 1.8% |
| Myrtle Beach, SC - Wilmington, NC | 3 | 628 | 68,708 | 94.7% | 1,393 | 1,812 | 1.8% |
| Charleston, SC | 2 | 518 | 82,399 | 94.8% | 1,756 | 1,688 | 1.7% |
| Greenville, SC | 1 | 702 | 126,624 | 92.1% | 1,296 | 1,587 | 1.6% |
| San Antonio, TX | 1 | 306 | 57,580 | 97.7% | 1,451 | 838 | 0.8% |
| Austin, TX | 1 | 256 | 60,440 | 95.7% | 1,786 | 797 | 0.8% |
| Total/Weighted Average | 113 | 33,175 | $6,437,933 | 94.9% | $1,583 | $100,438 | 100.0% |

(1) Excludes our development properties. See Non-GAAP financial measures for the definition of a development property.

(2) Includes properties in our Fort Collins, CO and Colorado Springs, CO markets.

### Current Developments

### Dispositions

On February 14, 2025, we sold one multifamily apartment community in Birmingham, AL for a gross sales price of $111.0 million and used the proceeds to fund recent and anticipated property acquisitions as described below.

### Acquisitions

On February 27, 2025, we acquired Autumn Breeze in Indianapolis, IN, a 280-unit multifamily apartment community for $59.5 million. This acquisition expanded our footprint in Indianapolis from 1,979 units to 2,259 units.

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

### Investments in Unconsolidated Real Estate Entities

To create another avenue for accretive capital allocation and to increase our options for capital investment, we have partnered with, and may in the future partner with, developers through preferred equity investments and joint venture relationships focused on new multifamily development.

On January 30, 2025, we entered into a joint venture for the development of Nexton Pine Hollow, a to-be-built multifamily apartment project comprised of 324 units in Charleston, SC. We have committed to invest an aggregate of $28.6 million in this joint venture, and, as of March 31, 2025, had funded $8.9 million on account of this commitment.

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

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

### Investments in Real Estate Under Development

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

### Value Add

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

### Capital Markets

### Unsecured Revolver and Term Loans

On January 8, 2025, IROP entered into the Fifth Amended and Restated Credit Agreement (the “Fifth Restated Credit Agreement”), which amended and restated in its entirety the Fourth Amended and Restated Credit Agreement dated as of July 25, 2022. The Fifth Restated Credit Agreement increased the maximum principal amount of the unsecured revolver to $750 million, which represents an increase of $250 million over the prior credit agreement, extended its maturity date until January 8, 2029 and reduced the margin on our unsecured revolver and existing $200 million term loan while leaving the terms of our existing $400 million term loan unchanged. In summary, the Fifth Restated Credit Agreement provides for a $750 million unsecured revolving credit facility (the “Unsecured Revolver”) with a January 8, 2029 maturity date and two unsecured term loans, specifically: (i) a $200 million term loan with a May 18, 2026 maturity date and (ii) a $400 million term loan with a January 28, 2028 maturity date.

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

### 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 (including 1.5 million shares offered pursuant to the underwriter’s option to purchase additional shares, which was exercised in full) offered by the Forward Seller in connection with the forward sale agreements described below. We did not initially receive any proceeds from the sale of our common stock by the Forward Seller and we completed the offering on September 5, 2024.

In connection with the offering, we also entered into two forward sale agreements (the “Forward Sale Agreements”) pursuant to which the Forward Seller (or its affiliate) borrowed from third parties and sold to the Underwriters an aggregate of 11.5 million shares of our common stock that was sold in the offering.

On March 31, 2025, we physically settled 2.65 million of those shares at a weighted average price of $18.89 per share and we received proceeds of $50.1 million. All of the net proceeds were used to fund new acquisitions. As of March 31, 2025, 5.6 million shares of our common stock remained to be settled under the Forward Sale Agreements, which if physically settled would provide additional proceeds to us of $105.8 million based on the forward price as of March 31, 2025. We expect to physically settle the remaining Forward Sale Agreements and receive proceeds, subject to certain adjustments, from the sale of those shares upon one or more such physical settlements within approximately twelve months from the date of the prospectus supplement, no later than September 5, 2025, the scheduled maturity date of the Forward Sale Agreements. Although we expect to settle the remaining Forward Sale Agreements entirely by the physical delivery of shares of our common stock for cash proceeds, we may also elect to cash or net share settle all or a portion of our obligations under the Forward Sale Agreements, in which case, we may receive or owe cash or shares of our common stock from or to the Forward Seller. The Forward Sale Agreements provided for an initial forward sale price of $18.96 per share, subject to certain adjustments pursuant to the terms of each of the Forward Sale Agreements. The Forward Sale Agreements are subject to early termination or settlement under certain circumstances.

### 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 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. 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.

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

### Results of Operations

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

#### Three Months Ended March 31, 2025 compared to the Three Months Ended March 31, 2024

*(Dollars in thousands)*

| SAME-STORE PORTFOLIO Three Months Ended March 31, 2025 2024 Property Data: | Increase (Decrease) | % Change | NON SAME-STORE PORTFOLIO Three Months Ended March 31, 2025 | 2024 | Increase (Decrease) | % Change | CONSOLIDATED Three Months Ended March 31, 2025 | 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Number of properties (1) 108 108 | — | — | 5 | 3 | 2 | 66.7% | 113 | 111 | 2 | 1.8% |
| Number of units (1) 31,662 31,662 | — | — | 1,513 | 1,215 | 298 | 24.5% | 33,175 | 32,877 | 298 | 0.9% |
| Average occupancy (1) 95.4% 94.4% | 1.0% | — | 93.3% | 93.6% | (0.3)% | — | 95.3% | 94.4% | 0.9% | — |
| Average effective monthly rent, per unit (1) $1,568 $1,554 | $14 | 0.9% | $1,892 | $1,456 | $436 | 29.9% | $1,583 | $1,550 | $33 | 2.1% |
| **Revenue:** |  |  |  |  |  |  |  |  |  |  |
| Rental and other property revenue $151,724 $148,326 | $3,398 | 2.3% | $9,181 | $12,005 | $(2,824) | (23.5)% | $160,905 | $160,331 | $574 | 0.4% |
| **Expenses:** |  |  |  |  |  |  |  |  |  |  |
| Property operating expenses 56,129 55,264 | 865 | 1.6% | 3,134 | 4,707 | (1,573) | (33.4)% | 59,263 | 59,971 | (708) | (1.2)% |
| **Net Operating Income** $95,595 $93,062 | $2,533 | 2.7% | $6,047 | $7,298 | $(1,251) | (17.1)% | $101,642 | $100,360 | $1,282 | 1.3% |
| **Other Revenue:** |  |  |  |  |  |  |  |  |  |  |
| Other revenue |  |  |  |  |  |  | $338 | $203 | $135 | 66.5% |
| **Corporate and other expenses:** |  |  |  |  |  |  |  |  |  |  |
| Property management expenses |  |  |  |  |  |  | 7,826 | 7,499 | 327 | 4.4% |
| General and administrative expenses |  |  |  |  |  |  | 8,406 | 8,381 | 25 | 0.3% |
| Depreciation and amortization expense |  |  |  |  |  |  | 58,725 | 53,721 | 5,004 | 9.3% |
| Casualty (gains) losses, net |  |  |  |  |  |  | (115) | 2,301 | (2,416) | (105.0)% |
| Interest expense |  |  |  |  |  |  | (19,348) | (20,603) | 1,255 | (6.1)% |
| Gain on sale (loss on impairment) of real estate assets, net |  |  |  |  |  |  | 1,496 | 10,530 | (9,034) | (85.8)% |
| (Loss) gain on extinguishment of debt |  |  |  |  |  |  | (67) | 203 | (270) | (133.0)% |
| Other loss |  |  |  |  |  |  | (103) | (1) | (102) | 10200.0% |
| Loss from investments in unconsolidated real estate entities |  |  |  |  |  |  | (590) | (829) | 239 | (28.8)% |
| Net income |  |  |  |  |  |  | 8,526 | 17,961 | $(9,435) | (52.5)% |
| Income allocated to noncontrolling interests |  |  |  |  |  |  | (172) | (384) | 212 | (55.2)% |
| **Net income available to common shares** |  |  |  |  |  |  | $8,354 | $17,577 | $(9,223) | (52.5)% |

(1) Excludes our development projects. See Non-GAAP Financial Measures for our definition of a development property and our methodology for determining same-store properties.

### Revenue

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

### Expenses

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

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

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

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

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

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

### Non-GAAP Financial Measures

### Funds from Operations (FFO) and Core Funds from Operations (CFFO)

We believe that FFO and Core FFO (“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. We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), as net income or loss allocated to common shares (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, gains or losses on sales of real estate and the cumulative effect of changes in accounting principles. While our calculation of FFO is in accordance with NAREIT’s definition, it may differ from the methodology for calculating FFO utilized by other REITs and, accordingly, may not be comparable to FFO computations of such other REITs.

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 and debt extinguishment costs from the determination of FFO.

Our calculation of CFFO may differ from the methodology used for calculating CFFO by other REITs and, accordingly, our CFFO may not be comparable to CFFO reported by other REITs. Our management utilizes FFO and CFFO as measures of our operating performance, and believe they are also useful to investors, because they facilitate an understanding of our operating performance after adjustment for certain non-cash or non-recurring items that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and our operating performance between periods. Furthermore, although FFO, CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we believe that FFO and CFFO may provide us and our investors with an additional useful measure to compare our financial performance to certain other REITs. Neither FFO nor CFFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and CFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Accordingly, FFO and CFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization and capital improvements. 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.

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

|  | For the Three Months Ended March 31, 2025 Amount | Per Share(1) | 2024 Amount | Per Share(2) |
| --- | ---: | ---: | ---: | ---: |
| **Net income** | $8,526 | $0.04 | $17,961 | $0.08 |
| Adjustments: |  |  |  |  |
| Real estate depreciation and amortization | 58,308 | 0.24 | 53,390 | 0.23 |
| Our share of real estate depreciation and amortization from investments in unconsolidated real estate entities | 457 | — | 598 | — |
| Loss on impairment (gain on sale) of real estate assets net, excluding prepayment gains | 73 | — | (9,609) | (0.04) |
| FFO | $67,364 | $0.28 | $62,340 | $0.27 |
| FFO | $67,364 | $0.28 | $62,340 | $0.27 |
| Adjustments: |  |  |  |  |
| Other depreciation and amortization | 417 | — | 331 | — |
| Casualty (gains) losses, net | (115) | — | 2,301 | 0.01 |
| Loan (premium accretion) discount amortization, net | (2,029) | (0.01) | (2,395) | (0.01) |
| Prepayment (gains) losses on asset dispositions | (1,569) | — | (921) | — |
| Loss (gain) on extinguishment of debt | 67 | — | (203) | — |
| Other loss | 103 | — | 1 | — |
| CFFO | $64,238 | $0.27 | $61,454 | $0.27 |

(1) Based on 236,665,226 weighted-average shares and units outstanding for the three months ended March 31, 2025.

(2) Based on 230,570,707 weighted-average shares and units outstanding for the three months ended March 31, 2024.

### 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. 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 and net gains on sale of assets. 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 use NOI to evaluate our performance on a same-store and non same-store basis because NOI measures the core operations of property performance by excluding corporate level expenses, financing expenses, and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of our financial performance.

### Same-Store Properties and Same-Store Portfolio

We review our same-store portfolio at the beginning of each calendar year. Properties are added into the same-store portfolio if they were owned and not a development property at the beginning of the previous year. Properties that are held for sale or have been sold are excluded from the 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.

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

|  | Three Months Ended March 31, 2025 | 2024 | % change |
| --- | ---: | ---: | ---: |
| **Net income** | $8,526 | $17,961 | (52.5)% |
| Other revenue | (338) | (203) | 66.5% |
| Property management expenses | 7,826 | 7,499 | 4.4% |
| General and administrative expenses | 8,406 | 8,381 | 0.3% |
| Depreciation and amortization expense | 58,725 | 53,721 | 9.3% |
| Casualty (gains) losses, net | (115) | 2,301 | (105.0)% |
| Interest expense | 19,348 | 20,603 | (6.1)% |
| (Gain on sale) loss on impairment of real estate assets, net | (1,496) | (10,530) | (85.8)% |
| Loss (gain) on extinguishment of debt | 67 | (203) | (133.0)% |
| Other loss | 103 | 1 | 10200.0% |
| Loss from investments in unconsolidated real estate entities | 590 | 829 | (28.8)% |
| **NOI** | 101,642 | 100,360 | 1.3% |
| Less: Non same-store portfolio NOI | 6,047 | 7,298 | (17.1)% |
| **Same-store portfolio (a) NOI** | $95,595 | $93,062 | 2.7% |

(a) Same-Store Portfolio for the three months ended March 31, 2025 and 2024 included 108 properties containing 31,662 units.

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

| Revenue: | Three Months Ended March 31, 2025 | 2024 | % change |
| --- | ---: | ---: | ---: |
| Rental and other property revenue | $151,724 | $148,326 | 2.3% |
| **Property Operating Expenses** |  |  |  |
| Real estate taxes | 18,834 | 18,678 | 0.8% |
| Property insurance | 3,870 | 4,096 | (5.5)% |
| Personnel expenses | 11,887 | 11,998 | (0.9)% |
| Utilities | 7,851 | 7,423 | 5.8% |
| Repairs and maintenance | 4,421 | 4,747 | (6.9)% |
| Contract services | 5,697 | 5,061 | 12.6% |
| Advertising expenses | 1,906 | 1,588 | 20.0% |
| Other expenses | 1,663 | 1,673 | (0.6)% |
| Total property operating expenses | 56,129 | 55,264 | 1.6% |
| **Same-store portfolio NOI** | $95,595 | $93,062 | 2.7% |
| **Same-store portfolio NOI Margin** | 63.0% | 62.7% | 0.3% |
| **Average Occupancy** | 95.4% | 94.4% | 1.0% |
| **Average effective monthly rent, per unit** | $1,568 | $1,554 | 0.9% |

(a) Same-Store Portfolio for the three months ended March 31, 2025 and 2024 included 108 properties containing 31,662 units.

### Average Effective Monthly Rent per Unit

Average effective rent per unit represents the average of net rent amounts, after concessions amortized over the life of the lease, divided by the average occupancy (in units) for the period presented. We believe average effective rent is a helpful measurement in evaluating average pricing. This metric, when presented, reflects the average effective rent per month.

### Average Occupancy

Average occupancy represents the average occupied units for the reporting period divided by the average of total units available for rent for the reporting period.

### 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%.

### Liquidity and Capital Resources

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. We believe our available cash balances, financing arrangements and cash flows from operations will be sufficient to fund our liquidity requirements with respect to our existing portfolio for the next twelve months and the foreseeable future.

Our primary cash requirements are to:

- make investments to continue our value add initiatives to improve the quality and performance of our properties;
- repay our indebtedness;
- fund costs necessary to maintain our properties;
- continue funding our current real estate developments until completion;
- pay our operating expenses; and
- distribute a minimum of 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gain) and to make investments in a manner that enables us to maintain our qualification as a REIT.

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 $29.1 million as of March 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.

### Cash Flows

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

|  | For the Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Cash flow provided by operating activities | $60,365 | $44,057 |
| Cash flow provided by investing activities | 10,441 | 255,403 |
| Cash flow used in financing activities | (65,924) | (308,292) |
| Net change in cash and cash equivalents, and restricted cash | 4,882 | (8,832) |
| Cash and cash equivalents, and restricted cash, beginning of period | 43,452 | 50,732 |
| Cash and cash equivalents, and restricted cash, end of the period | $48,334 | $41,900 |

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

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

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

### Contractual Obligations

Our 2024 Annual Report on Form 10-K includes a table of contractual obligations. There were no material changes to these obligations since the filing of our 2024 Annual Report on Form 10-K.

### Off-Balance Sheet Arrangements

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

### Critical Accounting Estimates and Policies

Our 2024 Annual Report on Form 10-K contains a discussion of our critical accounting policies. Management discusses our critical accounting policies and management’s judgments and estimates with the audit committee of our board of directors. There were no material changes to our critical accounting policies since the filing of our Annual Report on Form 10-K.

## Market risk

As filed, 299 characters.

Our 2024 Annual Report on Form 10-K contains a discussion of qualitative and quantitative market risks. There have been no material changes in quantitative and qualitative market risks during the three months ended March 31, 2025 from the disclosures included in our 2024 Annual Report on Form 10-K.

## Controls and procedures

As filed, 1,469 characters.

#### Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Effective as of March 31, 2025, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

#### Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation referred to above during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 1,509 characters.

There have not been any material changes from the risk factors disclosed in Part 1, Item 1A of our 2024 Annual Report on Form 10-K, except as described below.

***We face the risk of fluctuations in the cost, availability and quality of our materials and products from new or increased tariffs or otherwise, which could impact tenants or prospective tenants and adversely affect our results of operations and financial condition.***

There have been significant changes, and continue to be ongoing discussions regarding potential significant changes to U.S. trade policies, treaties and tariffs, creating significant uncertainty about future relationships between the United States and other countries with respect to trade policies, treaties and tariffs. The potential disruptions in the supply or cost of materials or products or the inability of contractors to perform on a timely basis, or at all, due to new or higher tariffs or otherwise, could cause delays in completing ongoing or future value add projects and other capital improvements at our multifamily communities and development projects. In addition, developments with respect to trade policies, treaties and tariffs, or the perception that such developments could occur, and the uncertainty related to such developments, could impact tenants or prospective tenants and could adversely affect our ability to lease our properties, which in turn could have a material adverse effect on our business, results of operations and financial condition.

Filed May 1, 2025.
Source: SEC EDGAR, the filing index for accession 0001437749-25-014089. Last ingested by Listed: Nov 2, 2026, 16:43 ET. No prices; not investment advice.