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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________
Commission file number 001-36041
______________________________________________________
INDEPENDENCE REALTY TRUST, INC.

(Exact Name of Registrant as Specified in Its Charter)

Maryland | 26-4567130
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.)
1835 Market Street, Suite 2601 Philadelphia, PA | 19103
(Address of Principal Executive Offices) | (Zip Code)

(267) 270-4800
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
_________________________________________________________________________________________________
Securities registered pursuant to section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common stock |  | IRT |  | NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer | x |  | Accelerated filer | o
Non-Accelerated filer | o |  | Smaller reporting company | o
Emerging growth company | o |  |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of October 24, 2022 there were 224,074,403 shares of the Registrant’s common stock issued and outstanding.

Table of Contents
INDEPENDENCE REALTY TRUST, INC.
INDEX

|  | Page
PART I—FINANCIAL INFORMATION | 3
Item 1. | Financial Statements (unaudited) | 3
| Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 | 3
| Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2022 and September 30, 2021 | 4
| Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months ended September 30, 2022 and September 30, 2021 | 5
| Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months ended September 30, 2022 and September 30, 2021 | 6
| Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2022 and September 30, 2021 | 8
| Notes to Condensed Consolidated Financial Statements as of September 30, 2022 | 9
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 36
Item 4. | Controls and Procedures | 36
PART II—OTHER INFORMATION |
Item 1. | Legal Proceedings | 38
Item 1A. | Risk Factors | 38
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 38
Item 3. | Defaults Upon Senior Securities | 38
Item 4. | Mine Safety Disclosures | 38
Item 5. | Other Information | 38
Item 6. | Exhibits | 39
Signatures | 40

Table of Contents
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Independence Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited and dollars in thousands, except share and per share data)

| As of September 30, 2022 |  | As of December 31, 2021
ASSETS: |  |  |
Investments in real estate: |  |  |
Investments in real estate, at cost | $ | 6,634,087 |  |  | $ | 6,462,355 |
Accumulated depreciation | (379,171) |  |  | (243,475) |
Investments in real estate, net | 6,254,916 |  |  | 6,218,880 |
Real estate held for sale | 82,178 |  |  | 61,560 |
Investment in real estate under development | 86,763 |  |  | 41,777 |
Cash and cash equivalents | 23,753 |  |  | 35,972 |
Restricted cash | 35,829 |  |  | 29,699 |
Investments in unconsolidated real estate entities | 70,608 |  |  | 24,999 |
Other assets | 34,480 |  |  | 38,052 |
Derivative assets | 43,967 |  |  | 2,488 |
Intangible assets, net of accumulated amortization of $97 and $4,779, respectively | 1,039 |  |  | 53,269 |
Total Assets | $ | 6,633,533 |  |  | $ | 6,506,696 |
LIABILITIES AND EQUITY: |  |  |
Indebtedness, net | $ | 2,667,183 |  |  | $ | 2,705,336 |
Indebtedness associated with real estate held for sale | 46,442 |  |  | — |
Accounts payable and accrued expenses | 126,310 |  |  | 106,332 |
Accrued interest payable | 11,019 |  |  | 7,175 |
Dividends payable | 32,188 |  |  | 16,792 |
Derivative liabilities | — |  |  | 11,896 |
Other liabilities | 13,816 |  |  | 17,089 |
Total Liabilities | 2,896,958 |  |  | 2,864,620 |
Equity: |  |  |
Stockholders’ equity: |  |  |
Preferred stock, $0.01 par value; 50,000,000 shares authorized, 0 and 0 shares issued and outstanding, respectively | — |  |  | — |
Common stock, $0.01 par value; 500,000,000 shares authorized, 224,056,179 and 220,753,735 shares issued and outstanding, including 233,370 and 269,622 unvested restricted common share awards, respectively | 2,241 |  |  | 2,208 |
Additional paid-in capital | 3,749,550 |  |  | 3,678,903 |
Accumulated other comprehensive income (loss) | 37,569 |  |  | (11,940) |
Retained earnings (accumulated deficit) | (194,014) |  |  | (188,410) |
Total stockholders’ equity | 3,595,346 |  |  | 3,480,761 |
Noncontrolling interests | 141,229 |  |  | 161,315 |
Total Equity | 3,736,575 |  |  | 3,642,076 |
Total Liabilities and Equity | $ | 6,633,533 |  |  | $ | 6,506,696 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
3

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited and dollars in thousands, except share and per share data)

| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
REVENUE: |  |  |  |  |  |  |
Rental and other property revenue | $ | 160,300 |  |  | $ | 60,592 |  |  | $ | 464,921 |  |  | $ | 172,689 |
Other revenue | 300 |  |  | 188 |  |  | 805 |  |  | 647 |
Total revenue | 160,600 |  |  | 60,780 |  |  | 465,726 |  |  | 173,336 |
EXPENSES: |  |  |  |  |  |  |
Property operating expenses | 59,967 |  |  | 23,164 |  |  | 174,825 |  |  | 66,300 |
Property management expenses | 5,744 |  |  | 2,199 |  |  | 17,440 |  |  | 6,318 |
General and administrative expenses | 5,625 |  |  | 3,985 |  |  | 20,521 |  |  | 14,168 |
Depreciation and amortization expense | 49,722 |  |  | 17,384 |  |  | 200,688 |  |  | 50,699 |
Casualty (gains) losses, net | (191) |  |  | — |  |  | (7,176) |  |  | 359 |
Total expenses | 120,867 |  |  | 46,732 |  |  | 406,298 |  |  | 137,844 |
Interest expense | (22,093) |  |  | (8,700) |  |  | (63,618) |  |  | (25,644) |
Gain on sale of real estate assets, net | — |  |  | 11,492 |  |  | 94,712 |  |  | 11,492 |
Merger and integration costs | (275) |  |  | (5,276) |  |  | (3,477) |  |  | (5,276) |
Other income (expense) | 765 |  |  | — |  |  | 1,501 |  |  | — |
Loss from investments in unconsolidated real estate entities | (1,477) |  |  | — |  |  | (2,411) |  |  | — |
Net income: | 16,653 |  |  | 11,564 |  |  | 86,135 |  |  | 16,064 |
Income allocated to noncontrolling interest | (430) |  |  | (62) |  | (2,517) |  |  | (90)
Net income allocable to common shares | $ | 16,223 |  |  | $ | 11,502 |  |  | $ | 83,618 |  |  | $ | 15,974 |
Earnings per share: |  |  |  |  |  |  |
Basic | $ | 0.07 |  |  | $ | 0.11 |  |  | $ | 0.38 |  |  | $ | 0.16 |
Diluted | $ | 0.07 |  |  | $ | 0.11 |  |  | $ | 0.38 |  |  | $ | 0.15 |
Weighted-average shares: |  |  |  |  |  |  |
Basic | 221,960,609 |  |  | 104,918,674 |  |  | 221,312,261 |  |  | 102,882,723 |
Diluted | 222,867,546 |  |  | 107,668,675 |  |  | 222,359,585 |  |  | 104,062,661 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited and dollars in thousands)

| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Net income | $ | 16,653 |  |  | $ | 11,564 |  |  | $ | 86,135 |  |  | $ | 16,064 |
Other comprehensive income (loss): |  |  |  |  |  |  |
Change in fair value of interest rate hedges | 19,439 |  |  | 4,759 |  |  | 54,318 |  |  | 20,296 |
Realized gains (losses) on interest rate hedges reclassified to earnings | 214 |  |  | (2,238) |  |  | (3,408) |  |  | (5,859) |
Total other comprehensive income | 19,653 |  |  | 2,521 |  |  | 50,910 |  |  | 14,437 |
Comprehensive income before allocation to noncontrolling interests | 36,306 |  |  | 14,085 |  |  | 137,045 |  |  | 30,501 |
Allocation to noncontrolling interests | (944) |  |  | (79) |  |  | (3,918) |  |  | (212) |
Comprehensive income | $ | 35,362 |  |  | $ | 14,006 |  |  | $ | 133,127 |  |  | $ | 30,289 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Equity
(Unaudited and dollars in thousands, except share information)

|  |  |  |  | Common Shares |  | Par Value Common Shares |  | Additional Paid In Capital |  | Accumulated Other Comprehensive Income (Loss) |  | Retained Earnings (Accumulated Deficit) |  | Total Stockholders’ Equity |  | Noncontrolling Interests |  | Total Equity
Balance, December 31, 2021 |  |  |  |  | 220,753,735 |  |  | $ | 2,208 |  |  | $ | 3,678,903 |  |  | $ | (11,940) |  |  | $ | (188,410) |  |  | $ | 3,480,761 |  |  | $ | 161,315 |  |  | $ | 3,642,076 |
Net income |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 74,600 |  |  | 74,600 |  |  | 2,280 |  |  | 76,880 |
Common dividends declared ($0.12 per share) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (26,833) |  |  | (26,833) |  |  | — |  |  | (26,833) |
Other comprehensive income |  |  |  |  | — |  |  | — |  |  | — |  |  | 21,898 |  |  | — |  |  | 21,898 |  |  | 692 |  |  | 22,590 |
Stock compensation |  |  |  |  | 395,029 |  |  | 3 |  |  | 3,535 |  |  | — |  |  | — |  |  | 3,538 |  |  | — |  |  | 3,538 |
Repurchase of shares related to equity award tax withholding |  |  |  |  | (48,452) |  |  | — |  |  | (3,183) |  |  | — |  |  | — |  |  | (3,183) |  |  | — |  |  | (3,183) |
Conversion of noncontrolling interest to common shares |  |  |  |  | 10,848 |  |  | — |  |  | 68 |  |  | — |  |  | — |  |  | 68 |  |  | (68) |  |  | — |
Issuance of common shares, net |  |  |  |  | 51,498 |  |  | 1 |  |  | (845) |  |  | — |  |  | — |  |  | (844) |  |  | — |  |  | (844) |
Distribution to noncontrolling interest declared ($0.12 per unit) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (837) |  |  | (837) |
Balance, March 31, 2022 |  |  |  |  | 221,162,658 |  |  | $ | 2,212 |  |  | $ | 3,678,478 |  |  | $ | 9,958 |  |  | $ | (140,643) |  |  | $ | 3,550,005 |  |  | $ | 163,382 |  |  | $ | 3,713,387 |
Net loss |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (7,205) |  |  | (7,205) |  |  | (194) |  |  | (7,399) |
Common dividends declared ($0.14 per share) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (31,054) |  |  | (31,054) |  |  | — |  |  | (31,054) |
Other comprehensive income |  |  |  |  | — |  |  | — |  |  | — |  |  | 8,472 |  |  | — |  |  | 8,472 |  |  | 195 |  |  | 8,667 |
Stock compensation |  |  |  |  | 19,297 |  |  | — |  |  | 1,715 |  |  | — |  |  | — |  |  | 1,715 |  |  | — |  |  | 1,715 |
Repurchase of shares related to equity award tax withholding |  |  |  |  | (1,496) |  |  | — |  |  | (2,698) |  |  | — |  |  | — |  |  | (2,698) |  |  | — |  |  | (2,698) |
Conversion of noncontrolling interest to common shares |  |  |  |  | 879,821 |  |  | 9 |  |  | 21,384 |  |  | — |  |  | — |  |  | 21,393 |  |  | (21,393) |  |  | — |
Issuance of common shares, net |  |  |  |  | — |  |  | — |  |  | (116) |  |  | — |  |  | — |  |  | (116) |  |  | — |  |  | (116) |
Distribution to noncontrolling interest declared ($0.14 per unit) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (852) |  |  | (852) |
Balance, June 30, 2022 |  |  |  |  | 222,060,280 |  |  | $ | 2,221 |  |  | $ | 3,698,763 |  |  | $ | 18,430 |  |  | $ | (178,902) |  |  | $ | 3,540,512 |  |  | $ | 141,138 |  |  | $ | 3,681,650 |
Net income |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 16,223 |  |  | 16,223 |  |  | 430 |  |  | 16,653 |
Common dividends declared ($0.14 per share) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (31,335) |  |  | (31,335) |  |  | — |  |  | (31,335) |
Other comprehensive income |  |  |  |  | — |  |  | — |  |  | — |  |  | 19,139 |  |  | — |  |  | 19,139 |  |  | 514 |  |  | 19,653 |
Stock compensation |  |  |  |  | (3,080) |  |  | — |  |  | 1,096 |  |  | — |  |  | — |  |  | 1,096 |  |  | — |  |  | 1,096 |
Repurchase of shares related to equity award tax withholding |  |  |  |  | (1,021) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Issuance of common shares, net |  |  |  |  | 2,000,000 |  |  | 20 |  |  | 49,691 |  |  | — |  |  | — |  |  | 49,711 |  |  | — |  |  | 49,711 |
Distribution to noncontrolling interest declared ($0.14 per unit) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (853) |  |  | (853) |
Balance, September 30, 2022 |  |  |  |  | 224,056,179 |  |  | $ | 2,241 |  |  | $ | 3,749,550 |  |  | $ | 37,569 |  |  | $ | (194,014) |  |  | $ | 3,595,346 |  |  | $ | 141,229 |  |  | $ | 3,736,575 |

The accompanying notes are an integral part of these condensed consolidated financial statements
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Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Equity
(Unaudited and dollars in thousands, except share information)

|  |  |  |  | Common Shares |  | Par Value Common Shares |  | Additional Paid In Capital |  | Accumulated Other Comprehensive Income (Loss) |  | Retained Earnings (Accumulated Deficit) |  | Total Stockholders’ Equity |  | Noncontrolling Interests |  | Total Equity
Balance, December 31, 2020 |  |  |  |  | 101,803,762 |  |  | $ | 1,018 |  |  | $ | 919,615 |  |  | $ | (33,822) |  |  | $ | (178,751) |  |  | $ | 708,060 |  |  | $ | 4,711 |  |  | $ | 712,771 |
Net income |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,086 |  |  | 1,086 |  |  | 7 |  |  | 1,093 |
Common dividends declared ($0.12 per share) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (12,486) |  |  | (12,486) |  |  | — |  |  | (12,486) |
Other comprehensive income |  |  |  |  | — |  |  | — |  |  | — |  |  | 13,325 |  |  | — |  |  | 13,325 |  |  | 88 |  |  | 13,413 |
Stock compensation |  |  |  |  | 286,647 |  |  | 2 |  |  | 3,346 |  |  | — |  |  | — |  |  | 3,348 |  |  | — |  |  | 3,348 |
Repurchase of shares related to equity award tax withholding |  |  |  |  | (56,677) |  |  | (2) |  |  | (2,860) |  |  | — |  |  | — |  |  | (2,862) |  |  | — |  |  | (2,862) |
Issuance of common shares, net |  |  |  |  | — |  |  | — |  |  | (59) |  |  | — |  |  | — |  |  | (59) |  |  | — |  |  | (59) |
Distribution to noncontrolling interest declared ($0.12 per unit) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (80) |  |  | (80) |
Balance, March 31, 2021 |  |  |  |  | 102,033,732 |  |  | $ | 1,018 |  |  | $ | 920,042 |  |  | $ | (20,497) |  |  | $ | (190,151) |  |  | $ | 710,412 |  |  | $ | 4,726 |  |  | $ | 715,138 |
Net income |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,386 |  |  | 3,386 |  |  | 21 |  |  | 3,407 |
Other comprehensive income (loss) |  |  |  |  | — |  |  | — |  |  | — |  |  | (1,514) |  |  | — |  |  | (1,514) |  |  | 17 |  |  | (1,497) |
Stock compensation |  |  |  |  | 23,436 |  |  | 1 |  |  | 1,356 |  |  | — |  |  | — |  |  | 1,357 |  |  | — |  |  | 1,357 |
Repurchase of shares related to equity award tax withholding |  |  |  |  | (1,674) |  |  | 1 |  |  | (81) |  |  | — |  |  | — |  |  | (80) |  |  | — |  |  | (80) |
Issuance of common shares, net |  |  |  |  | 2,932,000 |  |  | 30 |  |  | 41,580 |  |  | — |  |  | — |  |  | 41,610 |  |  | — |  |  | 41,610 |
Conversion of noncontrolling interest to common shares |  |  |  |  | 122,155 |  |  | 1 |  |  | 857 |  |  | — |  |  | — |  |  | 858 |  |  | (858) |  |  | — |
Common dividends declared ($0.12 per share) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (12,585) |  |  | (12,585) |  |  | — |  |  | (12,585) |
Distribution to noncontrolling interest declared ($0.12 per unit) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (67) |  |  | (67) |
Balance, June 30, 2021 |  |  |  |  | 105,109,649 |  |  | $ | 1,051 |  |  | $ | 963,754 |  |  | $ | (22,011) |  |  | $ | (199,350) |  |  | $ | 743,444 |  |  | $ | 3,839 |  |  | $ | 747,283 |
Net income |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11,502 |  |  | 11,502 |  |  | 62 |  |  | 11,564 |
Other comprehensive income |  |  |  |  | — |  |  | — |  |  | — |  |  | 2,504 |  |  | — |  |  | 2,504 |  |  | 17 |  |  | 2,521 |
Stock compensation |  |  |  |  | (2,209) |  |  | — |  |  | 1,298 |  |  | — |  |  | — |  |  | 1,298 |  |  | — |  |  | 1,298 |
Repurchase of shares related to equity award tax withholding |  |  |  |  | (726) |  |  | — |  |  | 36 |  |  | — |  |  | — |  |  | 36 |  |  | — |  |  | 36 |
Issuance of common shares, net |  |  |  |  | — |  |  | — |  |  | (70) |  |  | — |  |  | — |  |  | (70) |  |  | — |  |  | (70) |
Common dividends declared ($0.12 per share) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (12,581) |  |  | (12,581) |  |  | — |  |  | (12,581) |
Distribution to noncontrolling interest declared ($0.12 per unit) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (66) |  |  | (66) |
Balance, September 30, 2021 |  |  |  |  | 105,106,714 |  |  | $ | 1,051 |  |  | $ | 965,018 |  |  | $ | (19,507) |  |  | $ | (200,429) |  |  | $ | 746,133 |  |  | $ | 3,852 |  |  | $ | 749,985 |

The accompanying notes are an integral part of these condensed consolidated financial statements
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Independence Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited and dollars in thousands)

| For the Nine Months Ended September 30,
| 2022 |  | 2021
Cash flows from operating activities: |  |  |
Net income | $ | 86,135 |  |  | $ | 16,064 |
Adjustments to reconcile net income to cash flow from operating activities: |  |  |
Depreciation and amortization | 200,688 |  |  | 50,699 |
Accretion of loan discounts and premiums, net | (8,245) |  |  | — |
Amortization of deferred financing costs, net | 2,727 |  |  | 1,154 |
Stock compensation expense | 6,238 |  |  | 5,914 |
Gain on sale of real estate assets, net | (94,712) |  |  | (11,492) |
Amortization related to derivative instruments | 958 |  |  | 920 |
Casualty (gains) losses, net | (7,176) |  |  | 359 |
Loss from investments in unconsolidated real estate entities | 2,411 |  |  | — |
Other (income) expense | (1,249) |  |  | — |
Changes in assets and liabilities: |  |  |
Other assets | (2,266) |  |  | (2,518) |
Accounts payable and accrued expenses | 5,507 |  |  | 12,834 |
Accrued interest payable | 3,844 |  |  | (268) |
Other liabilities | (3,619) |  |  | 59 |
Cash flow provided by operating activities | 191,241 |  |  | 73,725 |
Cash flows from investing activities: |  |  |
Acquisition of real estate properties | (201,777) |  |  | (139,231) |
Investments in unconsolidated real estate entities | (51,426) |  |  | (13,561) |
Return of investment in unconsolidated real estate entities | 3,406 |  |  | — |
Disposition of real estate properties, net | 155,639 |  |  | 39,182 |
Capital expenditures | (55,648) |  |  | (31,827) |
Additions to real estate under development | (40,009) |  |  | — |
Proceeds from insurance claims | 15,653 |  |  | — |
Cash flow used in investing activities | (174,162) |  |  | (145,437) |
Cash flows from financing activities: |  |  |
Proceeds from issuance of common stock, net | 48,751 |  |  | 41,481 |
Proceeds from unsecured credit facility and term loans | 687,500 |  |  | 387,500 |
Unsecured credit facility and term loan repayments | (666,525) |  |  | (234,800) |
Mortgage principal repayments | (5,514) |  |  | (79,582) |
Payments for deferred financing costs | (1,654) |  |  | (1,261) |
Distributions on common stock | (74,479) |  |  | (37,249) |
Distributions to noncontrolling interests | (1,891) |  |  | (228) |
Repurchase of shares related to equity award tax withholding | (5,881) |  |  | (2,906) |
Payments for interest rate collars | (3,475) |  |  | — |
Cash flow (used in) provided by financing activities | (23,168) |  |  | 72,955 |
Net change in cash and cash equivalents, and restricted cash | (6,089) |  |  | 1,243 |
Cash and cash equivalents, and restricted cash, beginning of period | 65,671 |  |  | 13,615 |
Cash and cash equivalents, and restricted cash, end of the period | $ | 59,582 |  |  | $ | 14,858 |
Reconciliation of cash, cash equivalents, and restricted cash to the Consolidated Balance Sheet |  |
Cash and cash equivalents | $ | 23,753 |  |  | $ | 8,720 |
Restricted cash | 35,829 |  |  | 6,138 |
Total cash, cash equivalents, and restricted cash, end of period | $ | 59,582 |  |  | $ | 14,858 |

The accompanying notes are an integral part of these condensed consolidated financial statements
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Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
NOTE 1: Organization
Independence Realty Trust, Inc. (“IRT”), is a self-administered and self-managed Maryland real estate investment trust (“REIT”) which was formed on March 26, 2009. Our primary purposes are to acquire, own, operate, improve and manage multifamily apartment communities in non-gateway markets. As of September 30, 2022, we owned and operated 122 multifamily apartment properties that contain 36,176 units (unaudited) across non-gateway U.S. markets including Atlanta, Columbus, Dallas, Denver, Houston, Indianapolis, Louisville, Memphis, Oklahoma City, and Raleigh. In addition, as of September 30, 2022, we owned interests in five unconsolidated joint ventures that are developing multifamily apartment communities. We own all of our assets and conduct substantially all of our operations through Independence Realty Operating Partnership, LP (“IROP”), of which we are the sole general partner.
As used herein, the terms “we,” “our” and “us” refer to Independence Realty Trust, Inc. and, as required by context, IROP and their subsidiaries.
On July 26, 2021, IRT, together with IROP, and IRSTAR Sub, LLC, a wholly-owned subsidiary of IRT (“IRT Merger Sub”), entered into an agreement and plan of merger (the “Merger Agreement”) with Steadfast Apartment REIT, Inc. (“STAR”) and its operating partnership, Steadfast Apartment REIT Operating Partnership, L.P. (“STAR OP”). Consummation of the mergers provided for in the Merger Agreement (which we refer to collectively as the “STAR Merger”) was subject to customary closing conditions, including, among others, receipt of IRT stockholder approval and STAR stockholder approval, which occurred on December 13, 2021. The STAR Merger closed on December 16, 2021. For further discussion, see Note 3: IRT and STAR Merger included in our 2021 Annual Report on Form 10-K.
NOTE 2: Summary of Significant Accounting Policies
a. Basis of Presentation
The accompanying unaudited interim consolidated financial statements have been prepared by management in accordance with generally accepted accounting principles in the United States (“GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although we believe that the included disclosures are adequate to make the information presented not misleading. The unaudited interim consolidated financial statements should be read in conjunction with our audited financial statements as of and for the year ended December 31, 2021 included in our 2021 Annual Report on Form 10-K. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position and consolidated results of operations and cash flows are included. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year. The Company evaluated subsequent events through the date its financial statements were issued. No significant recognized or non-recognized subsequent events were noted other than those described in the footnotes.
b. Principles of Consolidation
The consolidated financial statements reflect our accounts and the accounts of IROP and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Pursuant to the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Topic 810, “Consolidation”, IROP is considered a variable interest entity of which we are the primary beneficiary. As our significant asset is our investment in IROP, substantially all of our assets and liabilities represent the assets and liabilities of IROP.
c. Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
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Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
d. Cash and Cash Equivalents
Cash and cash equivalents include cash held in banks and highly liquid investments with original maturities of three months or less when purchased. Cash, including amounts restricted, may at times exceed the Federal Deposit Insurance Corporation deposit insurance limit of $250 per institution. We mitigate credit risk by placing cash and cash equivalents with major financial institutions. To date, we have not experienced any losses on cash and cash equivalents.
e. Restricted Cash
Restricted cash includes escrows of our funds held by lenders to fund certain expenditures, such as real estate taxes and insurance, or to be released at our discretion upon the occurrence of certain pre-specified events. As of September 30, 2022 and December 31, 2021, we had $35,829 and $29,699, respectively, of restricted cash.
f. Investments in Real Estate
Investments in real estate are recorded at cost less accumulated depreciation. Costs, including internal costs, that both add value and appreciably extend the useful life of an asset are capitalized. Expenditures for repairs and maintenance are expensed as incurred.
Investments in real estate are classified as held for sale in the period in which certain criteria are met including when the sale of the asset is probable, and actions required to complete the plan of sale indicate that it is unlikely that significant changes to the plan of sale will be made or the plan of sale will be withdrawn.
Allocation of Purchase Price of Acquired Assets
In accordance with FASB ASC Topic 805, the properties we acquire are generally accounted for as asset acquisitions. 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.
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.
The aggregate value of in-place leases is determined by evaluating various factors, including the terms of the leases that are in place and assumed lease-up periods. The value assigned to in-place lease assets is amortized over the assumed lease up period, typically six months. During the three and nine months ended September 30, 2022, we acquired in-place leases with a value of $1,099 and $1,136, respectively, related to our acquisitions that are discussed further in Note 3: Investments in Real Estate. For the three and nine months ended September 30, 2022, we recorded $79 and $53,367, respectively, of amortization for intangible assets. For the three and nine months ended September 30, 2021, we recorded $368 and $1,203, respectively, of amortization for intangible assets. For the three and nine months ended September 30, 2022, we wrote-off fully amortized intangible assets of $0 and $58,048, respectively. For the three and nine months ended September 30, 2021, we wrote-off fully amortized intangible assets of $0 and $792, respectively. As of September 30, 2022, we expect to record additional amortization expense on current in-place intangible assets of $556 for the remainder of 2022.
Business Combinations
For properties we acquire or transactions we entered into that are accounted for as business combinations, we apply the acquisition method of accounting under ASC 805, which requires the identification of the acquiror, the determination date, and the recognition and measurement, at fair value, of the assets acquired and liabilities assumed. To the extent that the fair value of net assets acquired differs from the fair value of consideration paid, ASC 805 requires the recognition of goodwill or a gain from a bargain purchase price, if any. For the three and nine months ended September 30, 2022, we incurred merger and integration costs of $275 and $3,477. These amounts were expensed as incurred, and are included in the consolidated statements of operations in the item titled "Merger and integration costs", and primarily consist of technology migration and implementation, consulting and professional fees and employee severance costs.
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Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
Impairment of Long-Lived Assets
Management evaluates the recoverability of our investment in real estate assets, including related identifiable intangible assets, in accordance with FASB ASC Topic 360, “Property, Plant and Equipment”. This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that recoverability of the assets is not assured.
Management reviews our long-lived assets on an ongoing basis and evaluates the recoverability of the carrying value when there is an indicator of impairment. An impairment charge is recorded when it is determined that the carrying value of the asset exceeds the fair value. The estimated cash flows used for the impairment analysis and the determination of estimated fair value are based on our plans for the respective assets and our views of market and economic conditions. The estimates consider matters such as current and historical rental rates, occupancies for the respective and/or comparable properties, and recent sales data for comparable properties. Changes in estimated future cash flows due to changes in our plans or views of market and economic conditions could result in recognition of impairment losses, which, under the applicable accounting guidance, could be substantial.
Depreciation Expense
Depreciation expense for real estate assets is computed using a straight-line method based on a life of 40 years for buildings and improvements and five to ten years for furniture, fixtures, and equipment. For the three and nine months ended September 30, 2022, we recorded $49,268 and $146,222 of depreciation expense, respectively. For the three and nine months ended September 30, 2021, we recorded $17,016 and $49,496 of depreciation expense, respectively. During the three and nine months ended September 30, 2022, we wrote-off fully depreciated fixed assets of $0 and $3,092, respectively.
Casualty Related Costs
Occasionally, we incur losses at our communities from wind storms, floods, fires and similar hazards. Sometimes, a portion of these losses are not fully covered by our insurance policies due to deductibles. In these cases, we estimate the carrying value of the damaged property and record a casualty loss for the difference between the estimated carrying value and the insurance proceeds. Any amount of insurance recovery in excess of the amount of the losses incurred is considered a gain contingency and is recorded in casualty (gains) losses, net when the proceeds are received. During the three and nine months ended September 30, 2022, we recorded $191 and $7,176 of net casualty gains, respectively. During the three and nine months ended September 30, 2021, we incurred $0 and $359 of casualty losses, respectively.
g. Investments in Real Estate Under Development
We capitalize direct and indirect project costs incurred during the development period such as construction, insurance, architectural, legal, interest costs, and real estate taxes. At such time as the development is considered substantially complete, the capitalization of certain indirect costs such as real estate taxes, interest costs, and all project-related costs in real estate under development are reclassified to investments in real estate.
As of September 30, 2022 and December 31, 2021, the carrying value of our investments in real estate under development totaled $86,763 and $41,777, respectively, and was recorded as a separate line item on the face of our consolidated balance sheet.
h. Investments in Unconsolidated Real Estate Entities
We invest in joint ventures in which we exercise significant influence but do not control the major decisions of the joint venture. Therefore, we account for these investments using the equity method of accounting. Under the equity method of accounting, the investments are carried at cost plus our share of net earnings or losses. As of September 30, 2022 and December 31, 2021, the carrying value of our investments in joint ventures totaled $70,608 and $24,999, respectively, and were recorded as a separate line item on the face of our consolidated balance sheet. We recognized losses of $1,477 and $2,411 from equity method investments during the three and nine months ended September 30, 2022, and these losses were recorded in loss from investments in unconsolidated real estate entities on the face of our consolidated statements of operations.
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Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
i. Revenue and Expenses
Rental and Other Property Revenue
We apply FASB ASC Topic 842, “Leases” with respect to our accounting for rental income. We primarily lease apartment units under operating leases generally with terms of one year or less. Rental payments are generally due monthly and rental revenues are recognized on an accrual basis when earned. We have elected to account for lease (i.e. fixed payments including base rent) and non-lease components (i.e. tenant reimbursements and certain other service fees) as a single combined operating lease component since (1) the timing and pattern of transfer of the lease and non-lease components is the same, (2) the lease component is the predominant element, and (3) the combined single lease component would be classified as an operating lease.
We make ongoing estimates of the collectability of our base rents, tenant reimbursements, and other service fees included within rental and other property revenue. If collectability is not probable, we adjust rental and other property income for the amount of uncollectible revenue.
j. Derivative Instruments
We may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with our borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with our operating and financial structure, as well as to hedge specific anticipated transactions. While these instruments may impact our periodic cash flows, they benefit us by minimizing the risks and/or costs previously described. The counterparties to these contractual arrangements are major financial institutions with which we and our affiliates may also have other financial relationships. In the event of nonperformance by the counterparties, we are potentially exposed to credit loss. However, because of the high credit ratings of the counterparties, we do not anticipate that any of the counterparties will fail to meet their obligations.
In accordance with FASB ASC Topic 815, “Derivatives and Hedging”, we measure each derivative instrument at fair value and record such amounts in our consolidated balance sheets as either an asset or liability. For derivatives designated as cash flow hedges, the changes in the fair value of the effective portions of the derivative are reported in other comprehensive income and changes in the fair value of the ineffective portions of cash flow hedges, if any, are recognized in earnings. For derivatives not designated as hedges (or designated as fair value hedges), the changes in fair value of the derivative instrument are recognized in earnings. Any derivatives that we designate in hedge relationships are done so at inception. At inception, we determine whether or not the derivative is highly effective in offsetting changes in the designated interest rate risk associated with the identified indebtedness using regression analysis. At each reporting period, we update our regression analysis and use the hypothetical derivative method to measure any ineffectiveness.
k. Fair Value of Financial Instruments
In accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures”, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity for disclosure purposes. Assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their value. Hierarchical levels, as defined in FASB ASC Topic 820, “Fair Value Measurements and Disclosures” and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities, are as follows:
•Level 1: Valuations are based on unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. The types of assets carried at Level 1 fair value generally are equity securities listed in active markets. As such, valuations of these investments do not entail a significant degree of judgment.
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Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
•Level 2: Valuations are based on quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
•Level 3: Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
FASB ASC Topic 825, “Financial Instruments” requires disclosure of the fair value of financial instruments for which it is practicable to estimate that value. Given that cash and cash equivalents and restricted cash are short term in nature with limited fair value volatility, the carrying amount is deemed to be a reasonable approximation of fair value and the fair value input is classified as a Level 1 fair value measurement. The fair value input for the derivatives is classified as a Level 2 fair value measurement within the fair value hierarchy. The fair value inputs for our unsecured credit facility and term loans are classified as Level 2 fair value measurements within the fair value hierarchy. The fair value of mortgage indebtedness is based on a discounted cash flows valuation technique. As this technique utilizes current credit spreads, which are generally unobservable, this is classified as a Level 3 fair value measurement within the fair value hierarchy. We determine appropriate credit spreads based on the type of debt and its maturity. There were no transfers between levels in the fair value hierarchy for the nine months ended September 30, 2022. The following table summarizes the carrying amount and the fair value of our financial instruments as of the periods indicated:

|  | As of September 30, 2022 |  | As of December 31, 2021
Financial Instrument |  | Carrying Amount |  | Estimated Fair Value |  | Carrying Amount |  | Estimated Fair Value
Assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 23,753 |  |  | $ | 23,753 |  |  | $ | 35,972 |  |  | $ | 35,972 |
Restricted cash |  | 35,829 |  |  | 35,829 |  |  | 29,699 |  |  | 29,699 |
Derivative assets |  | 43,967 |  |  | 43,967 |  |  | 2,488 |  |  | 2,488 |
Liabilities |  |  |  |  |  |  |  |
Debt: |  |  |  |  |  |  |  |
Unsecured Revolver |  | 195,932 |  |  | 195,932 |  |  | 274,109 |  |  | 274,109 |
Unsecured Term loans |  | 596,907 |  |  | 596,907 |  |  | 497,951 |  |  | 497,951 |
Secured credit facilities |  | 661,193 |  |  | 586,867 |  |  | 664,618 |  |  | 668,352 |
Mortgages(1) |  | 1,259,593 |  |  | 1,129,909 |  |  | 1,268,658 |  |  | 1,282,495 |
Derivative liabilities |  | — |  |  | — |  |  | 11,896 |  |  | 11,896 |

(1) | Includes indebtedness associated with real estate held for sale.

l. Deferred Financing Costs
Costs incurred in connection with debt financing are deferred and classified within indebtedness and charged to interest expense over the terms of the related debt agreements, under the effective interest method.
m. Office Leases
In accordance with FASB ASC Topic 842, “Leases”, lessees are required to recognize a right-of-use asset and a lease liability on the balance sheet at the lease commencement date for all leases, except those leases with terms of less than a year. We lease corporate office space under leases with terms of up to 10 years and that may include extension
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Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
options, but that do not include any residual value guarantees or restrictive covenants. As of September 30, 2022, we have $3,049 of operating lease right-of-use assets and $3,368 of operating lease liabilities related to our corporate office leases. The operating lease right-of-use assets are presented within other assets and the operating lease liabilities are presented within other liabilities in our consolidated balance sheet. We recorded $252 and $1,096 of total operating lease expense during the three and nine months ended September 30, 2022, which is recorded within property management expense and general and administrative expenses in our condensed consolidated statements of operations.
n. Income Taxes
We have elected to be taxed as a REIT. Accordingly, we recorded no income tax expense for the three and nine months ended September 30, 2022 and 2021.
To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our ordinary taxable income to stockholders. As a REIT, we generally are not subject to federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders; however, we believe that we are organized and operate in such a manner as to qualify and maintain treatment as a REIT and intend to operate in such a manner so that we will remain qualified as a REIT for federal income tax purposes.
o. Employee Retention Credit
Under the terms of the March 27, 2020 Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), we are eligible and applied for assistance in the form of a refundable employee retention credit. Since applicable GAAP guidance is limited, we adopted an accounting policy by analogizing to International Accounting Standard 20 “Accounting for Government Grants” to recognize employee retention credits as a reimbursement of payroll related expenses within property operating expenses, property management expenses, and general and administrative expenses in our condensed consolidated statements of operations. During the three months ended September 30, 2022, we received employee retention credit refunds totaling $6,238 and recognized $738 in property operating expenses, $212 in property management expenses and $211 in general and administrative expenses representing a reimbursement of previously paid employer payroll taxes, $788 in property operating expenses and $6 in property management expenses representing a reimbursement for retention costs and $257 representing interest within other income (expense) in our condensed consolidated statements of operations. The remainder will be included in accounts payable and accrued expenses in our condensed consolidated balance sheets and recognized on a systematic basis through December 2023 as a reimbursement of payroll related expenses attributable to off-cycle compensation increases awarded to employees beginning in July 2022 and intended to support employee retention during the pandemic and its ongoing effect on the macroeconomic environment. R
NOTE 3: Investments in Real Estate
As of September 30, 2022, our investments in real estate consisted of 122 apartment properties that contain 36,176 units (unaudited). The following table summarizes our investments in real estate:

| As of September 30, 2022 |  | As of December 31, 2021 |  | Depreciable Lives (In years)
Land | $ | 581,698 |  |  | $ | 567,507 |  |  | —
Building | 5,728,487 |  |  | 5,622,492 |  |  | 40
Furniture, fixtures and equipment | 323,902 |  |  | 272,356 |  |  | 5-10
Total investments in real estate | $ | 6,634,087 |  |  | $ | 6,462,355 |  |  |
Accumulated depreciation | (379,171) |  |  | (243,475) |  |  |
Investments in real estate, net | $ | 6,254,916 |  |  | $ | 6,218,880 |  |  |

As of September 30, 2022, we owned two properties that were classified as held for sale. The sale of Meadows Apartments closed on October 26, 2022 and we expect Sycamore Terrace to close in the fourth quarter of 2022. In
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Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
connection with the sale of these properties we expect to extinguish $46,087 of mortgage debt. The table below summarizes our held for sale properties.

Property Name |  | Net carrying value |  | Units (unaudited) |
Meadows Apartments - Louisville, KY |  | $ | 36,545 |  |  | 400 |  |
Sycamore Terrace - Terre Haute, IN |  | 45,633 |  |  | 250 |  |
Totals |  | $ | 82,178 |  |  | 650 |  |

Acquisitions
On April 6, 2022, we acquired Views of Music City (phase I), a 96-unit property (unaudited) located in Nashville, TN for $25,440. We purchased this property from one of our unconsolidated joint ventures. On account of our equity interest in this joint venture, we received $4,428 of the sales proceeds, comprised of $3,406 as a return of capital and $1,022 as a preferred return on capital. In accordance with ASC 970-323-30-7, we recorded the preferred return on capital as a reduction to the carrying value of the purchased real estate, deferring the gain which will be recognized as income on a pro rata basis as the real estate is depreciated or when it is sold to a third party.
On August 16, 2022, we acquired Cyan Mallard Creek, a 234-unit property (unaudited) located in Charlotte, NC for $80,000.
On September 13, 2022, we acquired The Enclave at Tranquility Lake, a 348-unit property (unaudited) located in Tampa, FL for $98,000.
The following table summarizes the relative fair value of the assets and liabilities associated with acquisitions during the nine months ended September 30, 2022, on the date of acquisition accounted for under FASB ASC Topic 805-50-15-3.

|  | Fair Value of Assets Acquired During the Nine Months Ended September 30, 2022
Assets acquired: |  |
Investments in real estate |  | $ | 201,611 |
Other assets |  | 229 |
Intangible assets |  | 1,136 |
Total assets acquired |  | 202,976 |
Liabilities assumed: |  |
Accounts payable and accrued expenses |  | 872 |
Other liabilities |  | 327 |
Total liabilities assumed |  | 1,199 |
Estimated fair value of net assets acquired |  | $ | 201,777 |

Dispositions
The following table summarizes our dispositions for the nine months ended September 30, 2022:

Property Name |  | Date of Sale |  | Sale Price |  | Gain on sale
Riverchase |  | 01/18/2022 |  | $ | 31,000 |  |  | $ | 12,901 |
Heritage Park |  | 02/02/2022 |  | 48,500 |  |  | 31,366 |
Raindance |  | 02/02/2022 |  | 47,500 |  |  | 33,748 |
Haverford |  | 02/02/2022 |  | 31,050 |  |  | 16,697 |
Total |  |  |  | $ | 158,050 |  |  | $ | 94,712 |

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Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
NOTE 4: Investments in Unconsolidated Real Estate
We have entered into joint ventures with unrelated third parties to own, operate, acquire, develop and manage real estate assets that are accounted for under the equity method of accounting, and are included in investments in unconsolidated real estate entities on the consolidated balance sheets.
Our joint ventures are funded with a combination of debt and equity. We will consolidate entities that we control as well as any variable interest entity where we are the primary beneficiary. Under the VIE model, we will consolidate an entity when we have the ability to direct the activities of the VIE and the obligations to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the voting model, we consolidate an entity when we control the entity through ownership of a majority voting interest. We separately analyzed the initial accounting for each investment in unconsolidated entity and concluded that each are a voting interest entity. Our equity interest varies for each joint venture between 50% to 90% but, in each case, we share control of the major decisions that most significantly impact the joint ventures with our partners. Since we do not control the joint venture through our ownership interest, they are accounted for under the equity method of accounting. As of September 30, 2022, our investments in unconsolidated real estate entities had aggregate land, building, and construction in progress costs capitalized of $174,839 and aggregate construction debt of $77,975. We do not guarantee any debt, capital payout or other obligations associated with our joint ventures. We recognize earnings or losses from our investments in unconsolidated real estate entities consisting of our proportionate share of the net earnings or losses of the joint ventures.
The following table summarizes our investments in unconsolidated real estate entities as of September 30, 2022 and December 31, 2021:

|  |  |  |  |  |  |  | Carrying Value As Of
Investments in Unconsolidated Real Estate Entities |  | Location |  | Units(1) (Unaudited) |  | IRT Ownership Interest |  | September 30, 2022 |  | December 31, 2021
Metropolis at Innsbrook |  | Richmond, VA |  | 402 |  | 84.8 | % |  | $ | 17,152 |  |  | $ | 14,632 |
Views of Music City II / The Crockett |  | Nashville, TN |  | 408 |  | 50.0 | % |  | 11,198 |  |  | 10,368 |
Virtuoso |  | Huntsville, AL |  | 400 |  | 90.0 | % |  | 14,170 |  |  | — |
Lakeline Station |  | Austin, TX |  | 378 |  | 90.0 | % |  | 18,810 |  |  | — |
The Mustang |  | Dallas, TX |  | 275 |  | 85.0 | % |  | 9,278 |  |  | — |
Total |  |  |  | 1,863 |  |  |  | $ | 70,608 |  |  | $ | 24,999 |

(1)Represents the total number of units after development is complete and each property is placed in service. As of September 30, 2022 only 178-units at the Virtuoso investment’s development is complete and has ongoing operations.
NOTE 5: Indebtedness
The following tables contain summary information concerning our indebtedness as of September 30, 2022:

Debt: |  | Outstanding Principal |  | Unamortized Debt Issuance Costs |  | Unamortized Loan (Discount)/Premiums |  | Carrying Amount |  | Type |  | Weighted Average Rate |  | Weighted Average Maturity (in years)
Unsecured revolver(1) |  | $ | 197,978 |  |  | $ | (2,046) |  |  | $ | — |  |  | $ | 195,932 |  |  | Floating |  | 3.6% |  | 3.3
Unsecured term loans |  | 600,000 |  |  | (3,093) |  |  | — |  |  | 596,907 |  |  | Floating |  | 3.4% |  | 4.8
Secured credit facilities |  | 635,128 |  |  | (2,783) |  |  | 28,848 |  |  | 661,193 |  |  | Floating/Fixed |  | 4.2% |  | 6.2
Mortgages(2) |  | 1,233,097 |  |  | (7,996) |  |  | 34,492 |  |  | 1,259,593 |  |  | Fixed |  | 3.9% |  | 5.4
Total Debt |  | $ | 2,666,203 |  |  | $ | (15,918) |  |  | $ | 63,340 |  |  | $ | 2,713,625 |  |  |  |  | 3.8% |  | 5.3

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Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)

(1) | The unsecured revolver's maximum borrowing capacity is $500,000, of which $197,978 was outstanding as of September 30, 2022.
(2) | Includes indebtedness associated with real estate held for sale.

The following table contains summary information concerning our indebtedness as of September 30, 2022:

|  | Scheduled maturities on our indebtedness outstanding as of September 30, 2022
Debt: |  | 2022 |  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | Thereafter |
Unsecured revolver |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 197,978 |  |  | $ | — |  |
Unsecured term loans |  | — |  |  | — |  |  | — |  |  | — |  |  | 200,000 |  |  | 400,000 |  |
Secured credit facilities |  | — |  |  | — |  |  | — |  |  | 3,525 |  |  | 10,492 |  |  | 621,110 |  |
Mortgages(1) |  | 2,327 |  |  | 10,998 |  |  | 70,292 |  |  | 194,259 |  |  | 145,383 |  |  | 809,839 |  |
Total |  | $ | 2,327 |  |  | $ | 10,998 |  |  | $ | 70,292 |  |  | $ | 197,784 |  |  | $ | 553,853 |  |  | $ | 1,830,949 |  |

(1) | Includes indebtedness associated with real estate held for sale. |

The following table contains summary information concerning our indebtedness as of December 31, 2021:

Debt: |  | Outstanding Principal |  | Unamortized Debt Issuance Costs |  | Unamortized Loan (Discount)/Premiums |  | Carrying Amount |  | Type |  | Weighted Average Rate |  | Weighted Average Maturity (in years)
Unsecured revolver(1) |  | $ | 277,003 |  |  | $ | (2,894) |  |  | $ | — |  |  | $ | 274,109 |  |  | Floating |  | 1.5% |  | 4.1
Unsecured term loans |  | 500,000 |  |  | (2,049) |  |  | — |  |  | 497,951 |  |  | Floating |  | 1.4% |  | 3.2
Secured credit facilities |  | 635,128 |  |  | (2,840) |  |  | 32,330 |  |  | 664,618 |  |  | Floating/Fixed |  | 4.0% |  | 6.9
Mortgages |  | 1,238,612 |  |  | (9,210) |  |  | 39,256 |  |  | 1,268,658 |  |  | Fixed |  | 3.9% |  | 6.1
Total Debt |  | $ | 2,650,743 |  |  | $ | (16,993) |  |  | $ | 71,586 |  |  | $ | 2,705,336 |  |  |  |  | 3.2% |  | 5.6

(1) | The unsecured revolver's maximum borrowing capacity was $500,000, of which $277,003 was outstanding as of December 31, 2021.

On July 25, 2022, we entered into the Fourth Amended, Restated and Consolidated Credit Agreement (the “Restated Credit Agreement”) which amended and restated in its entirety the Third Amended and Restated Credit Agreement dated as of December 14, 2021 (the "Prior Credit Agreement"). The Restated Credit Agreement provides for an aggregate amount available for borrowing of $1,100,000, which represents an increase of $100,000 over the Prior Credit Agreement. The Prior Credit Agreement provided for a $500,000 unsecured revolving credit facility (the “Revolving Credit Facility”) with a January 31, 2026 scheduled maturity date and three unsecured term loans, specifically: (i) a $200,000 term loan with a May 18, 2026 maturity date (the “2026 Term Loan”); (ii) a $200,000 term loan with a January 17, 2024 maturity date (the “January 2024 Term Loan”); and (iii) a $100,000 term loan with a November 20, 2024 maturity date (the “November 2024 Term Loan” and, together with the January 2024 Term Loan, the “2024 Term Loans”). The Restated Credit Agreement provides for a new $400,000 term loan with a January 28, 2028 maturity date (the “2028 Term Loan”). Proceeds of the new 2028 Term Loan were used to (i) repay and retire the 2024 Term Loans, and (ii) reduce $100,000 of outstanding borrowings under the Revolving Credit Facility. In addition, the Restated Credit Agreement changed the LIBOR interest rate option to SOFR. The Restated Credit Agreement otherwise continues, without material change, the 2026 Term Loan and the Revolving Credit Facility. We recognized the restructuring of the Restated Credit Agreement as a modification of debt for all lenders except for one and incurred deferred financing costs of $1,477 associated with the transaction. We recognized the portion of debt associated with the lender no longer participating in the Restated Credit Agreement as an extinguishment of debt and wrote off their de minimis deferred financing costs.
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Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
Borrowings under the 2028 Term Loan bear interest at a rate equal to either (i) the SOFR rate plus a margin of 115 to 180 basis points, or (ii) a base rate plus a margin of 15 to 80 basis points. These margins represent a 5-basis point decrease from those applicable to the term loans that were repaid and retired. The margin for borrowings under the Revolving Credit Facility and the 2026 Term Loan remained unchanged, with (1) Revolving Credit Facility borrowings bearing interest at a rate equal to either (i) the SOFR rate plus a margin of 125 to 200 basis points, or (ii) a base rate plus a margin of 25 to 100 basis points; and (2) 2026 Term Loan borrowings bearing interest at a rate equal to either (i) the SOFR rate plus a margin of 120 to 190 basis points, or (ii) a base rate plus a margin of 20 to 90 basis points. The applicable margin will be determined based upon IROP’s consolidated leverage ratio. At the time of closing, based on IROP’s consolidated leverage ratio, the applicable margin was 125 basis points for the Revolving Credit Facility, 120 basis points for the 2026 Term Loan and 115 basis points for the 2028 Term Loan.
IROP has the right to request an increase in the aggregate amount of the Restated Credit Agreement from $1,100,000 to up to $1,500,000, subject to certain terms and conditions, including receipt of commitments from one or more lenders, whether or not currently parties to the Restated Credit Agreement, to provide such increased amounts, which increase may be allocated, at IROP’s option, to the Revolving Credit Facility and/or to one or more of the Term Loans, in accordance with the Restated Credit Agreement.
As of September 30, 2022, we were in compliance with all financial covenants contained in the documents governing our indebtedness.
NOTE 6: Derivative Financial Instruments
The following table summarizes the aggregate notional amounts and estimated net fair values of our derivative instruments as of September 30, 2022 and December 31, 2021:

|  | As of September 30, 2022 |  | As of December 31, 2021
|  | Notional |  | Fair Value of Assets |  | Fair Value of Liabilities |  | Notional |  | Fair Value of Assets |  | Fair Value of Liabilities
Cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap |  | $ | 300,000 |  |  | $ | 27,907 |  |  | — |  |  | $ | 150,000 |  |  | $ | 2,488 |  |  | $ | 6,463 |
Interest rate collars |  | 250,000 |  |  | 8,253 |  |  | — |  |  | 250,000 |  |  | — |  |  | 5,433 |
Forward interest rate collars |  | 200,000 |  |  | 7,807 |  |  | — |  |  | — |  |  | — |  |  | — |
Total |  | $ | 750,000 |  |  | $ | 43,967 |  |  | — |  |  | $ | 400,000 |  |  | $ | 2,488 |  |  | $ | 11,896 |

Effective interest rate swaps and caps are reported in accumulated other comprehensive income, and the fair value of these hedge agreements is recorded as derivative assets or liabilities on the face of our consolidated balance sheet.
For our interest rate swap and collars that are considered highly effective hedges, we reclassified realized (gains) losses of $(537) and $2,452 to earnings within interest expense for the three and nine months ended September 30, 2022, and we expect $11,896 to be reclassified out of accumulated other comprehensive income to earnings over the next 12 months.
On July 12, 2022, we entered into forward starting interest rate collars with a total notional value of $200,000, a cap rate of 2.50%, a floor rate of 1.50% and a maturity date of January 17, 2028. The effective date for $100,000 of the forward interest rate collars is January 17, 2024 and November 17, 2024, respectively. We designated these forward interest rate collars as cash flow hedges at inception and determined that the hedges are highly effective in offsetting interest rate fluctuations associated with the identified indebtedness.
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Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
NOTE 7: Stockholders' Equity and Noncontrolling Interests
Stockholders’ Equity
On September 12, 2022, our board of directors declared a dividend of $0.14 per share on our common stock, which was paid on October 21, 2022 to common stockholders of record as of September 30, 2022.
On May 18, 2022, our board of directors declared a dividend of $0.14 per share on our common stock, which was paid on July 22, 2022 to common stockholders of record as of July 1, 2022.
On March 14, 2022, our board of directors declared a dividend of $0.12 per share on our common stock, which
was paid on April 22, 2022 to common stockholders of record as of April 1, 2022.
On November 13, 2020, we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock having an aggregate offering price of up to $150,000 (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 of 1933, as amended. 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. We entered into forward sale transactions under the ATM Program on November 1, 2021 and on March 7, 2022 each for the forward sale of 1,000,000 shares of our common stock.
On May 18, 2022, our Board of Directors authorized a common stock repurchase program (the "Stock Repurchase Program") covering up to $250,000 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. 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. The Stock Repurchase Program has no time limit and may be suspended or discontinued at any time. During the three and nine months ended September 30, 2022, we had no repurchases of shares under the Stock Repurchase Program. As of September 30, 2022, we had $250,000 remaining authorized for purchase under the Stock Repurchase Program.
On September 28, 2022, we physically settled in full 2,000,000 shares that were previously sold on a forward basis under the ATM Program. The forward shares were settled at the current weighted average sales price of $24.97 per share and we received proceeds, net of sales commissions, of approximately $49,935. No forward sale transactions under the ATM Program were entered into during the three months ended September 30, 2022 and there were no forward sale transactions that had not been settled as of September 30, 2022. As of September 30, 2022, approximately $56,836 remained available for issuance under the ATM Program.
Prior to the September 28, 2022 physical settlement, we evaluated the accounting for the forward sale transactions under FASB ASC Topic 480 “Distinguishing Liabilities from Equity” and FASB ASC Topic 815 “Derivatives and Hedging”. As the forward sale transactions were considered indexed to our own equity and since they met the equity classification conditions in ASC 815-40-25, the forward sale transactions were classified as equity.
Noncontrolling Interest
During the three and nine months ended September 30, 2022, holders of IROP units exchanged 0 and 890,669 units for 0 and 890,669 shares of our common stock, respectively. As of September 30, 2022, 6,091,171 IROP units held by unaffiliated third parties remain outstanding.
On September 12, 2022, our board of directors declared a dividend of $0.14 per unit, which was paid on October 21, 2022 to IROP LP unit holders of record as of September 30, 2022.
On May 18, 2022, our board of directors declared a dividend of $0.14 per unit, which was paid on July 22, 2022 to IROP LP unit holders of record as of July 1, 2022.
On March 14, 2022, our board of directors declared a dividend of $0.12 per unit, which was paid on April 22,
2022 to IROP LP unit holders of record as of April 1, 2022.
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Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
NOTE 8: Equity Compensation Plans
Long Term Incentive Plan
On May 18, 2022, our stockholders approved our 2022 Long Term Incentive Plan (the “2022 Incentive Plan”). The 2022 Incentive Plan replaces our 2016 Long Term Incentive Plan (the “Prior Plan”) and no new awards may be made under the Prior Plan, although awards outstanding under the Prior Plan will remain subject to the terms of the Prior Plan. The 2022 Incentive plan provides for grants of equity and equity-based awards to our employees, officers, directors, consultants and other service providers, and such awards may take the form of restricted or unrestricted shares of common stock, non-qualified stock options, incentive stock options, restricted stock units (“RSUs), stock appreciation rights (“SARs”), dividend equivalents and other equity and cash-based awards. A maximum of 8,000,000 shares of our common stock (plus up to an additional 1,280,610 shares of our common stock, to the extent that shares subject to outstanding awards under the Prior Plan are recycled into the 2022 Incentive Plan) may be awarded under the 2022 Stock Incentive Plan, subject to customary adjustment for stock splits, reverse stock splits and similar corporate events or transactions affecting shares of our common stock.
Under the 2022 Stock Incentive Plan and the Prior Plan, we have granted restricted shares, RSUs, and PSUs to our employees. These awards generally vest or vested over a two-to four-year period. In addition, we have granted unrestricted shares to our non-employee directors. These awards generally vest or vested immediately. A summary of restricted common share award and RSU activity is presented below.

| 2022
| Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
Balance, January 1, | 404,988 |  |  | $ | 13.75 |
Granted | 220,593 |  |  | 23.76 |
Vested | (183,455) |  |  | 12.78 |
Forfeited | (45,408) |  |  | 21.33 |
Balance, September 30,(1) | 396,718 |  |  | $ | 18.89 |

(1) | The outstanding award balances above include 163,348 and 67,381 RSUs as of September 30, 2022 and December 31, 2021, respectively.

On February 8, 2022, our compensation committee awarded 198,099 PSUs to our executive officers. The number of PSUs earned will be based on attainment of certain performance criteria over a three-year period, with the actual number of shares issuable ranging between 0% and 150% of the number of PSUs granted. Half of any PSUs earned will vest, and shares will be issued in respect thereof, immediately following the end of the three-year performance period; the remaining half of any PSUs earned will vest, and shares will be issued in respect thereof, after an additional one-year period of service.
During the nine months ended September 30, 2022 and 2021, a portion of the RSUs and PSUs granted were issued to employees who are retirement eligible. The fact that the grantees are retirement eligible resulted in immediate recognition of the associated stock-based compensation expense totaling $2,422 and $2,112, respectively.
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Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2022
(Unaudited and dollars in thousands, except share and per share data)
NOTE 9: Earnings Per Share
The following table presents a reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2022 and 2021:

| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Net income | $ | 16,653 |  |  | $ | 11,564 |  |  | $ | 86,135 |  |  | $ | 16,064 |
Income allocated to noncontrolling interest | (430) |  |  | (62) |  |  | (2,517) |  |  | (90) |
Net income allocable to common shares | $ | 16,223 |  |  | $ | 11,502 |  |  | $ | 83,618 |  |  | $ | 15,974 |
Weighted-average shares outstanding—Basic | 221,960,609 |  |  | 104,918,674 |  |  | 221,312,261 |  |  | 102,882,723 |
Weighted-average shares outstanding—Diluted | 222,867,546 |  |  | 107,668,675 |  |  | 222,359,585 |  |  | 104,062,661 |
Earnings per share—Basic | $ | 0.07 |  |  | $ | 0.11 |  |  | $ | 0.38 |  |  | $ | 0.16 |
Earnings per share—Diluted | $ | 0.07 |  |  | $ | 0.11 |  |  | $ | 0.38 |  |  | $ | 0.15 |

Certain IROP units were excluded from the earnings (loss) per share computation because their effect would have been anti-dilutive, totaling 6,091,171 and 6,091,171 for the three and nine months ended September 30, 2022, respectively, and 552,360 and 552,360 for three and nine months ended September 30, 2021, respectively.
NOTE 10: Other Disclosures
Litigation
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. 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.
Loss Contingencies
We record an accrual for loss contingencies when a loss is probable and the amount of the loss can be reasonably estimated. Management reviews these accruals quarterly and makes revisions based on changes in facts and circumstances. When a loss contingency is not both probable and reasonably estimable, management does not accrue the loss. However, if the loss (or an additional loss in excess of an earlier accrual) is at least a reasonable possibility and material, then management discloses a reasonable estimate of the possible loss, or range of loss, if such reasonable estimate can be made. If we cannot make a reasonable estimate of the possible loss, or range of loss, then a statement to that effect is disclosed.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
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.
We claim the protection of the safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995. These statements may be made directly in this report and they may also be incorporated by reference in this report to other documents filed with the SEC, and include, without limitation, statements about future financial and operating results and performance, statements about our plans, objectives, expectations and intentions with respect to future operations, products and services, and other statements that are not historical facts. These forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements.
The risk factors discussed and identified in Item 1A of our 2021 Annual Report on Form 10-K and in Part II, Item 1A of this Quarterly Report, and in other of our public filings with the SEC, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events.
Overview
Our Company
We are a self-administered and self-managed Maryland real estate investment trust (“REIT”), that acquires, owns, operates, improves and manages multifamily apartment communities across non-gateway U.S. markets. As of September 30, 2022, we owned and operated 122 multifamily apartment properties that contain 36,176 units. Our properties are located in Alabama, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, and Virginia. In addition, as of September 30, 2022, we owned interests in five unconsolidated joint ventures that are developing multifamily apartment communities that will contain, in aggregate, 1,863 units upon completion. 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.
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Property Portfolio
As of September 30, 2022, we owned and consolidated 122 multifamily apartment properties, totaling 36,176 units. Below is a summary of our consolidated property portfolio by market.

(Dollars in thousands, except per unit data) |  | As of September 30, 2022 |  | For the Three Months Ended September 30, 2022
Market |  | Number of Properties |  | Units |  | Gross Real Estate Assets |  | Period End Occupancy |  | Average Effective Monthly Rent per Unit |  | Net Operating Income |  | % of NOI
Atlanta, GA |  | 13 |  | 5,180 |  |  | $ | 1,057,156 |  |  | 93.1 | % |  | $ | 1,578 |  |  | $ | 14,556 |  |  | 14.5 | %
Dallas, TX |  | 14 |  | 4,007 |  |  | 846,383 |  |  | 95.6 | % |  | 1,722 |  |  | 12,329 |  |  | 12.3 | %
Denver, CO |  | 9 |  | 2,292 |  |  | 603,321 |  |  | 95.8 | % |  | 1,655 |  |  | 7,940 |  |  | 7.9 | %
Columbus, OH |  | 10 |  | 2,510 |  |  | 365,300 |  |  | 95.1 | % |  | 1,323 |  |  | 6,297 |  |  | 6.3 | %
Indianapolis, IN |  | 8 |  | 2,256 |  |  | 324,289 |  |  | 95.0 | % |  | 1,274 |  |  | 5,288 |  |  | 5.3 | %
Raleigh - Durham, NC |  | 6 |  | 1,690 |  |  | 254,799 |  |  | 94.6 | % |  | 1,462 |  |  | 5,028 |  |  | 5.0 | %
Oklahoma City, OK |  | 8 |  | 2,147 |  |  | 316,818 |  |  | 94.1 | % |  | 1,126 |  |  | 4,955 |  |  | 4.9 | %
Nashville, TN |  | 5 |  | 1,508 |  |  | 364,016 |  |  | 93.4 | % |  | 1,565 |  |  | 4,800 |  |  | 4.8 | %
Houston, TX |  | 7 |  | 1,932 |  |  | 321,804 |  |  | 94.9 | % |  | 1,409 |  |  | 4,378 |  |  | 4.4 | %
Memphis, TN |  | 4 |  | 1,383 |  |  | 158,953 |  |  | 93.4 | % |  | 1,519 |  |  | 4,077 |  |  | 4.1 | %
Tampa-St. Petersburg, FL |  | 5 |  | 1,452 |  |  | 289,386 |  |  | 94.7 | % |  | 1,736 |  |  | 3,817 |  |  | 3.8 | %
Louisville, KY |  | 5 |  | 1,550 |  |  | 193,937 |  |  | 94.0 | % |  | 1,181 |  |  | 3,309 |  |  | 3.3 | %
Birmingham, AL |  | 2 |  | 1,074 |  |  | 231,907 |  |  | 90.8 | % |  | 1,444 |  |  | 2,899 |  |  | 2.9 | %
Huntsville, AL |  | 3 |  | 873 |  |  | 190,086 |  |  | 94.8 | % |  | 1,493 |  |  | 2,775 |  |  | 2.8 | %
Lexington, KY |  | 3 |  | 886 |  |  | 159,694 |  |  | 97.6 | % |  | 1,242 |  |  | 2,363 |  |  | 2.4 | %
Charlotte, NC |  | 3 |  | 714 |  |  | 189,159 |  |  | 95.4 | % |  | 1,690 |  |  | 2,155 |  |  | 2.1 | %
Myrtle Beach, SC - Wilmington, NC |  | 3 |  | 628 |  |  | 67,713 |  |  | 96.2 | % |  | 1,380 |  |  | 1,876 |  |  | 1.9 | %
Cincinnati, OH |  | 2 |  | 542 |  |  | 121,970 |  |  | 96.4 | % |  | 1,542 |  |  | 1,708 |  |  | 1.7 | %
Greenville, SC |  | 1 |  | 702 |  |  | 123,093 |  |  | 96.7 | % |  | 1,213 |  |  | 1,601 |  |  | 1.6 | %
Charleston, SC |  | 2 |  | 518 |  |  | 81,186 |  |  | 95.9 | % |  | 1,573 |  |  | 1,370 |  |  | 1.4 | %
Chicago, IL |  | 1 |  | 374 |  |  | 90,073 |  |  | 94.1 | % |  | 1,727 |  |  | 1,226 |  |  | 1.2 | %
San Antonio, TX |  | 1 |  | 306 |  |  | 57,017 |  |  | 98.7 | % |  | 1,495 |  |  | 904 |  |  | 0.9 | %
Orlando, FL |  | 1 |  | 297 |  |  | 50,213 |  |  | 94.3 | % |  | 1,713 |  |  | 859 |  |  | 0.9 | %
Asheville, NC |  | 1 |  | 252 |  |  | 29,243 |  |  | 95.2 | % |  | 1,423 |  |  | 774 |  |  | 0.8 | %
Norfolk, VA |  | 1 |  | 183 |  |  | 53,970 |  |  | 97.8 | % |  | 1,840 |  |  | 676 |  |  | 0.7 | %
Fort Wayne, IN |  | 1 |  | 222 |  |  | 44,098 |  |  | 94.1 | % |  | 1,392 |  |  | 646 |  |  | 0.6 | %
Austin, TX |  | 1 |  | 256 |  |  | 55,165 |  |  | 89.4 | % |  | 1,690 |  |  | 644 |  |  | 0.6 | %
Terre Haute, IN |  | 1 |  | 250 |  |  | 46,030 |  |  | 93.2 | % |  | 1,405 |  |  | 642 |  |  | 0.6 | %
Chattanooga, TN |  | 1 |  | 192 |  |  | 36,915 |  |  | 95.8 | % |  | 1,412 |  |  | 514 |  |  | 0.5 | %
Total/Weighted Average |  | 122 |  | 36,176 |  |  | $ | 6,723,694 |  |  | 94.6 | % |  | $ | 1,484 |  |  | $ | 100,406 |  |  | 100.0 | %

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Current Developments
STAR Merger
On December 16, 2021, we completed our merger with STAR and STAR OP. Through the STAR Merger, we acquired 68 apartment communities that contained 21,394 units and two apartment communities that are under development and that will contain upon completion 621 units. Leading up to and shortly after the closing of the STAR Merger, we delevered our combined balance sheet through a combination of transactions totaling $600 million including the July 2021 underwritten offering, the disposition of three STAR properties prior to merger closing, the disposition of two properties in late 2021 and four properties in the first quarter of 2022 as described below.
2022 Property Sales
During the nine months ended September 30, 2022, we sold four communities for a gross sales price of $158.0 million and recognized a gain on sale of $94.7 million.
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.
As of September 30, 2022, we had two properties that were classified as held for sale. The sale of Meadows Apartments closed on October 26, 2022 and we expect Sycamore Terrace to close in the fourth quarter of 2022.
On April 6, 2022, we purchased, for $25.4 million, the Views of Music City (Phase 1), a 96-unit community in Nashville, TN, from one of our unconsolidated joint ventures (discussed below). On account of our equity interest in this joint venture, we received $4.4 million of the sales proceeds, comprised of $3.4 million as a return of capital and $1.0 million as a preferred return on capital.
On August 16, 2022, we acquired Cyan Mallard Creek, a 234-unit property located in Charlotte, NC for $80,000.
On September 13, 2022, we acquired The Enclave at Tranquility Lake, a 348-unit property located in Tampa, FL for $98,000.
Investment in Unconsolidated Real Estate Entities
To create another avenue for accretive capital allocation and to increase our options for capital investment, we partner with developers through preferred equity investments and joint venture relationships focused on new multifamily development.
In September 2021, we formed a joint venture to acquire and own the Views of Music City (comprised of Phase 1 and Phase 2) and The Crockett, each a multifamily community in Nashville, TN. As discussed above, on April 6, 2022, we purchased Phase 1 of the Views of Music City (comprised of 96 units), following completion of its development, from the joint venture. We expect Phase 2 of the Views of Music City development (comprised of 209 units) to be completed in the fourth quarter of 2023. We expect development of The Crockett (comprised of 199 units) to be completed by year-end 2022.
On March 31, 2022, we formed a joint venture to acquire and own a project comprised of 400 units in Huntsville, AL. Development of phase one of this project (comprised of 178 units) was completed in 2021. Upon acquisition of phase one by the joint venture, 85% of the units were leased. We expect phase two of the project (comprised of 222 units) to be completed during the fourth quarter of 2022. We have committed to invest an aggregate $37.1 million in this joint venture, and, as of September 30, 2022, had funded $16.4 million on account of this commitment.
On June 3, 2022, we entered into a joint venture for the development of Lakeline Station, a 378-unit community to be built in Austin, TX. We have committed to invest an aggregate $29.7 million in this joint venture, and, as of September 30, 2022, had funded $18.6 million on account of this commitment. The project is scheduled to be completed by the second quarter of 2024.
On August 16, 2022, we entered into a joint venture for the development of The Mustang, a 275-unit community to be built in Dallas, TX. We have committed to invest an aggregate $25.6 million in this joint venture, and, as of September 30, 2022, had funded $9.2 million on account of this commitment. The project is scheduled to be completed by the third quarter of 2024.
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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 457 units during the quarter ended September 30, 2022. From inception of our value add program in January 2018 through September 30, 2022, we completed renovations on 4,660 of the 9,233 ongoing and completed units, achieving a return on investment of 21.6% (and approximately 24.1% on the interior portion of such renovation costs) an average monthly rental increase of 23.9%. 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 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. We added 10 properties comprised of 3,350 units to our value add program with renovations expected to begin during the three months ended December 31, 2022. We expect to complete the remaining value add projects at the selected communities throughout 2022 and 2023.
Capital Markets
Forward Sale Agreements
On November 13, 2020, we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock having an aggregate offering price of up to $150,000 (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 of 1933, as amended. 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. For more information on our forward sale agreements, see Note 7 (Stockholders' Equity and Noncontrolling Interests). On September 28, 2022, we physically settled in full 2,000,000 shares that were previously sold on a forward basis under the ATM Program. The forward shares were settled at the current weighted average sales price of $24.97 per share and we received proceeds, net of sales commissions of approximately $49,935. No forward sale transactions under the ATM Program were entered into during the three months ended September 30, 2022 and there were no forward sale transactions that had not settled as of September 30, 2022.
New $400 Million Term Loan
On July 25, 2022, we entered into the Fourth Amended, Restated and Consolidated Credit Agreement (the “Restated Credit Agreement”) which amends and restates in its entirety the Third Amended and Restated Credit Agreement dated as of December 14, 2021 (the "Prior Credit Agreement"). The Restated Credit Agreement provides for an aggregate amount available for borrowing of $1.1 billion, which represents an increase of $100 million over the Prior Credit Agreement. The Prior Credit Agreement provided for a $500 million unsecured revolving credit facility (the “Revolving Credit Facility”) with a January 31, 2026 scheduled maturity date and three unsecured term loans, specifically: (i) a $200 million term loan with a May 18, 2026 maturity date (the “2026 Term Loan”); (ii) a $200 million term loan with a January 17, 2024 maturity date (the “January 2024 Term Loan”); and (iii) a $100 million term loan with a November 20, 2024 maturity date (the “November 2024 Term Loan” and, together with the January 2024 Term Loan, the “2024 Term Loans”). The Restated Credit Agreement provides for a new $400 million term loan with a January 28, 2028 maturity date (the “2028 Term Loan”). Proceeds of the new 2028 Term Loan were used to (i) repay and retire the 2024 Term Loans, and (ii) reduce $100 million of outstanding borrowings under the Revolving Credit Facility. In addition, the Restated Credit Agreement changes the LIBOR interest rate option to SOFR. The Restated Credit Agreement otherwise continues, without material change, the 2026 Term Loan and the Revolving Credit Facility. We recognized the restructuring of the Restated Credit Agreement as a modification of debt for all lenders except for one and incurred deferred financing costs of $1,477 associated with the transaction. We recognized the portion of debt associated with the lender no longer participating in the Restated Credit Agreement as an extinguishment of debt and wrote off their de minimis deferred financing costs.
Borrowings under the 2028 Term Loan bear interest at a rate equal to either (i) the SOFR rate plus a margin of 115 to 180 basis points, or (ii) a base rate plus a margin of 15 to 80 basis points. These margins represent a 5-basis point decrease from those applicable to the term loans that were repaid and retired. The margin for borrowings under the Revolving Credit Facility and the 2026 Term Loan remained unchanged, with (1) Revolving Credit Facility borrowings bearing interest at a rate equal to either (i) the SOFR rate plus a margin of 125 to 200 basis points, or (ii) a base rate plus a margin of 25 to 100 basis points; and (2) 2026 Term Loan borrowings bearing interest at a rate equal to either (i) the SOFR rate plus a margin of 120 to 190 basis points, or (ii) a base rate plus a margin of 20 to 90 basis points. The applicable margin will be determined based upon IROP’s consolidated leverage ratio. At the time of closing, based on IROP’s
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consolidated leverage ratio, the applicable margin was 125 basis points for the Revolving Credit Facility, 120 basis points for the 2026 Term Loan and 115 basis points for the 2028 Term Loan.
IROP has the right to request an increase in the aggregate amount of the Restated Credit Agreement from $1.1 billion to up to $1.5 billion, subject to certain terms and conditions, including receipt of commitments from one or more lenders, whether or not currently parties to the Restated Credit Agreement, to provide such increased amounts, which increase may be allocated, at IROP’s option, to the Revolving Credit Facility and/or to one or more of the Term Loans, in accordance with the Restated Credit Agreement.
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Results of Operations
As of September 30, 2022, we owned and consolidated 122 multifamily apartment properties, of which 113 comprised the Combined Same-Store Portfolio. We discuss below, under "Non-GAAP Financial Measures," our methodology for categorizing our 122 properties, as applicable, into IRT Same-Store Portfolio (48 properties as of September 30, 2022), STAR Same-Store Portfolio (65 properties as of September 30, 2022) and Combined Same-Store Portfolio (113 properties as of September 30, 2022). Because of substantial changes in our total property portfolio as the result of the STAR Merger that closed on December 16, 2021, the financial data presented below show significant changes in revenue and expenses from period-to-period.
Three Months Ended September 30, 2022 compared to the Three Months Ended September 30, 2021

| COMBINED SAME-STORE PORTFOLIO |  | COMBINED NON SAME-STORE PORTFOLIO |  | Q3 2021 Pre-Merger STAR Portfolio(1) |  | CONSOLIDATED
(Dollars in thousands) | Three Months Ended September 30, |  | Three Months Ended September 30, |  |  | Three Months Ended September 30,
| 2022 |  | 2021 |  | Increase (Decrease) |  | % Change |  | 2022 |  | 2021 |  | Increase (Decrease) |  | % Change |  |  | 2022 |  | 2021 |  | Increase (Decrease) |  | % Change
Property Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Number of properties | 113 |  | 113 |  | — |  | —% |  | 9 |  | 11 |  | (2) |  | (18.2)% |  | (67) |  | 122 |  | 57 |  | 65 |  | 114.0%
Number of units | 33,804 |  | 33,804 |  | — |  | —% |  | 2,372 |  | 3,257 |  | (885) |  | (27.2)% |  | (20,952) |  | 36,176 |  | 16,109 |  | 20,067 |  | 124.6%
Average occupancy | 94.2% |  | 96.5% |  | (2.3)% |  | NM |  | 94.3% |  | 96.9% |  | (2.6)% |  | NM |  | NM |  | 94.2% |  | 96.1% |  | (1.9)% |  | NM
Average effective monthly rent, per unit | 1,479 |  | 1,305 |  | 174 |  | 13.3% |  | 1,552 |  | 1,154 |  | 398 |  | 34.5% |  | NM |  | 1,484 |  | 1,212 |  | 272 |  | 22.4%
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental and other property revenue | 151,030 |  | 136,563 |  | 14,467 |  | 10.6% |  | 9,270 |  | 12,517 |  | (3,247) |  | (25.9)% |  | $(88,488) |  | $160,300 |  | $60,592 |  | $99,708 |  | 164.6%
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property operating expenses | 56,464 |  | 51,757 |  | 4,707 |  | 9.1% |  | 3,503 |  | 5,463 |  | (1,960) |  | (35.9)% |  | (34,056) |  | 59,967 |  | 23,164 |  | 36,803 |  | 158.9%
Net Operating Income | $94,566 |  | $84,806 |  | $9,760 |  | 11.5% |  | $5,767 |  | $7,054 |  | $(1,287) |  | (18.2)% |  | $(54,432) |  | $100,333 |  | $37,428 |  | $62,905 |  | 168.1%
Other Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $300 |  | $188 |  | $112 |  | 59.6%
Corporate and other expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property management expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,744 |  | 2,199 |  | 3,545 |  | 161.2%
General and administrative expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,625 |  | 3,985 |  | 1,640 |  | 41.2%
Depreciation and amortization expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 49,722 |  | 17,384 |  | 32,338 |  | 186.0%
Casualty (gains) losses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (191) |  | — |  | (191) |  | 100.0%
Other income (expense) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 765 |  | — |  | 765 |  | 100.0%
Loss from investments in unconsolidated real estate entities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,477 |  | — |  | 1,477 |  | 100.0%
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (22,093) |  | (8,700) |  | (13,393) |  | 153.9%
Merger and integration costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (275) |  | (5,276) |  | 5,001 |  | (94.8)%
Gain on sale of real estate assets, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  | 11,492 |  | (11,492) |  | (100.0)%
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $16,653 |  | $11,564 |  | $5,089 |  | 44.0%
Income allocated to noncontrolling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (430) |  | (62) |  | (368) |  | 593.5%
Net income available to common shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $16,223 |  | $11,502 |  | $4,721 |  | 41.0%

(1)Represents metrics of the STAR Portfolio for the three months ended September 30, 2021, the period of ownership prior to the consummation of the STAR Merger on December 16, 2021 and is presented for the purpose of reconciling combined same-store portfolio results to the consolidated results for the three months ended September 30, 2021.
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Revenue
Rental and other property revenue. Revenue from rental and other property revenue of the consolidated portfolio increased $99.7 million to $160.3 million for the three months ended September 30, 2022 from $60.6 million for the three months ended September 30, 2021. The increase was primarily attributable to the STAR Merger, which contributed a pre-merger revenue base of $88.5 million. In addition, there was year-over-year rental and other property revenue growth of $14.5 million, primarily driven by a $13.1 million increase in rental revenue, driven by a 13.3% increase in average effective monthly rents partially offset by lower average occupancy compared to the prior year period.
Expenses
Property operating expenses. Property operating expenses increased $36.8 million to $60.0 million for the three months ended September 30, 2022 from $23.2 million for the three months ended September 30, 2021. The increase was primarily due to the STAR Merger, which contributed a pre-merger property operating expense base of $34.1 million.
Property management expenses. Property management expenses increased $3.5 million to $5.7 million for the three months ended September 30, 2022 from $2.2 million for the three months ended September 30, 2021 as a result of higher costs associated with employees that joined IRT in connection with the STAR Merger.
General and administrative expenses. General and administrative expenses increased $1.6 million to $5.6 million for the three months ended September 30, 2022 from $4.0 million for the three months ended September 30, 2021. This increase was primarily due to the increase in costs associated with the employees that joined IRT in connection with the STAR Merger.
Depreciation and amortization expense. Depreciation and amortization expense increased $32.3 million to $49.7 million for the three months ended September 30, 2022 from $17.4 million for the three months ended September 30, 2021. The increase was primarily attributable to higher depreciation and amortization from properties acquired in the STAR Merger.
]Loss from investments in unconsolidated real estate entities. During the three months ended September 30, 2022, we recognized $1.5 million of losses on investments in unconsolidated real estate, which was primarily driven by $1.4 million of depreciation and amortization recognized by the unconsolidated real estate entities.
Interest expense. Interest expense increased $13.4 million to $22.1 million for the three months ended September 30, 2022 from $8.7 million for the three months ended September 30, 2021 primarily due to the assumption of debt in connection with the STAR Merger.
Gain on sale of real estate assets, net. During the three months ended September 30, 2021, one multi-family property was sold resulting in a gain of $11.5 million.
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Results of Operations
Nine Months Ended September 30, 2022 compared to the Nine Months Ended September 30, 2021

| COMBINED SAME-STORE PORTFOLIO |  | COMBINED NON SAME-STORE PORTFOLIO |  | 2021 Pre-Merger STAR Portfolio(1) |  | CONSOLIDATED
(Dollars in thousands) | Nine Months Ended September 30, |  | Nine Months Ended September 30, |  |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | Increase (Decrease) |  | % Change |  | 2022 |  | 2021 |  | Increase (Decrease) |  | % Change |  |  | 2022 |  | 2021 |  | Increase (Decrease) |  | % Change
Property Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Number of properties | 113 |  | 113 |  | — |  | —% |  | 9 |  | 11 |  | (2) |  | (18.2)% |  | (67) |  | 122 |  | 57 |  | 65 |  | 114.0%
Number of units | 33,804 |  | 33,804 |  | — |  | —% |  | 2,372 |  | 3,257 |  | (885) |  | (27.2)% |  | (20,952) |  | 36,176 |  | 16,109 |  | 20,067 |  | 124.6%
Average occupancy | 95.0% |  | 96.0% |  | (1.0)% |  | NM |  | 93.0% |  | 96.5% |  | (3.5)% |  | NM |  | NM |  | 94.9% |  | 95.8% |  | (0.9)% |  | NM
Average effective monthly rent, per unit | 1,421 |  | 1,270 |  | 151 |  | 11.9% |  | 1,501 |  | 1,100 |  | 401 |  | 36.5% |  | NM |  | 1,426 |  | 1,175 |  | 251 |  | 21.4%
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental and other property revenue | 439,292 |  | 395,774 |  | 43,518 |  | 11.0% |  | 25,629 |  | 30,056 |  | (4,427) |  | (14.7)% |  | $(253,141) |  | $464,921 |  | $172,689 |  | $292,232 |  | 169.2%
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property operating expenses | 164,822 |  | 154,906 |  | 9,916 |  | 6.4% |  | 10,003 |  | 13,018 |  | (3,015) |  | (23.2)% |  | (101,624) |  | 174,825 |  | 66,300 |  | 108,525 |  | 163.7%
Net Operating Income | $274,470 |  | $240,868 |  | $33,602 |  | 14.0% |  | $15,626 |  | $17,038 |  | $(1,412) |  | (8.3)% |  | $(151,517) |  | $290,096 |  | $106,389 |  | $183,707 |  | 172.7%
Other Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $805 |  | $647 |  | $158 |  | 24.4%
Corporate and other expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property management expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 17,440 |  | 6,318 |  | 11,122 |  | 176.0%
General and administrative expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 20,521 |  | 14,168 |  | 6,353 |  | 44.8%
Depreciation and amortization expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 200,688 |  | 50,699 |  | 149,989 |  | 295.8%
Casualty (gains) losses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (7,176) |  | 359 |  | (7,535) |  | (2098.9)%
Other income (expense) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,501 |  | — |  | 1,501 |  | 100.0%
Loss from investments in unconsolidated real estate entities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,411 |  | — |  | 2,411 |  | 100.0%
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (63,618) |  | (25,644) |  | (37,974) |  | 148.1%
Merger and integration costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (3,477) |  | (5,276) |  | 1,799 |  | (34.1)%
Gain on sale of real estate assets, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 94,712 |  | 11,492 |  | 83,220 |  | 724.2%
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $86,135 |  | $16,064 |  | $70,071 |  | 436.2%
Income allocated to noncontrolling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,517) |  | (90) |  | (2,427) |  | 2696.7%
Net income available to common shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $83,618 |  | $15,974 |  | $67,644 |  | 423.5%

(1)Represents metrics of the STAR Portfolio for the nine months ended September 30, 2021, the period of ownership prior to the consummation of the STAR Merger on December 16, 2021 and is presented for the purpose of reconciling combined same-store portfolio results to the consolidated results for the nine months ended September 30, 2021.
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Revenue
Rental and other property revenue. Revenue from rental and other property revenue of the consolidated portfolio increased $292.2 million to $464.9 million for the nine months ended September 30, 2022 from $172.7 million for the nine months ended September 30, 2021. The increase was primarily attributable to the STAR Merger, which contributed a pre-merger revenue base of $253.1 million. In addition, there was year-over-year rental and other property revenue growth of $43.5 million, driven primarily by a 11.9% increase in average effective monthly rents partially offset by a 1% decrease in average occupancy compared to the prior year period.
Expenses
Property operating expenses. Property operating expenses increased $108.5 million to $174.8 million for the nine months ended September 30, 2022 from $66.3 million for the nine months ended September 30, 2021. The increase was primarily due to the STAR Merger, which contributed a pre-merger property operating expense base of $101.6 million. In addition, there was a year-over-year same-store property operating expenses increase of $9.9 million, driven primarily by a 6.2% increase in real estate taxes and a 14.4% increase in repairs and maintenance as a result of inflationary pressures.
Property management expenses. Property management expenses increased $11.1 million to $17.4 million for the nine months ended September 30, 2022 from $6.3 million for the nine months ended September 30, 2021 as a result of higher costs associated with employees that joined IRT in connection with the STAR Merger.
General and administrative expenses. General and administrative expenses increased $6.4 million to $20.5 million for the nine months ended September 30, 2022 from $14.2 million for the nine months ended September 30, 2021. This increase was primarily due to the increase in costs associated with the employees that joined IRT in connection with the STAR Merger.
Depreciation and amortization expense. Depreciation and amortization expense increased $150.0 million to $200.7 million for the nine months ended September 30, 2022 from $50.7 million for the nine months ended September 30, 2021. The increase was primarily attributable to higher depreciation and amortization, including approximately $53.3 million of amortization of in-place lease intangibles, from properties acquired in the STAR Merger.
Casualty (gains) losses, net. During the nine months ended September 30, 2022, we recognized net casualty gains of $7.2 million as a result of receiving insurance proceeds in excess of losses incurred. During the nine months ended September 30, 2021, we incurred casualty losses incurred of $0.4 million related to severe winter storms at our Texas and Oklahoma properties.
Other income (expense). For the nine months ended September 30, 2022, other income (expense) consisted primarily of the change in fair value of our interest rate caps of $1.2 million.
Loss from unconsolidated joint venture. During the nine months ended September 30, 2022, we incurred losses of $2.4 on investments in unconsolidated joint ventures, which was primarily driven by $1.9 million of depreciation and amortization recognized by the unconsolidated real estate entities.
Interest expense. Interest expense increased $38.0 million to $63.6 million for the nine months ended September 30, 2022 from $25.6 million for the nine months ended September 30, 2021 primarily due to the assumption of debt in connection with the STAR Merger.
Merger and integration costs. We incurred approximately $3.5 million of STAR merger-related integration costs during the nine months ended September 30, 2022 compared to $5.2 million during the nine months ended September 30, 2021. These costs primarily consist of technology migration and implementation, consulting and professional fees and employee severance costs.
Gain on sale of real estate assets, net. During the nine months ended September 30, 2022, four multi-family properties were sold resulting in gains of $94.7 million. During the nine months ended September 30, 2021, one multi-family property was sold resulting in a gain of $11.5 million.
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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, debt extinguishment costs, and merger and integration 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 and nine months ended September 30, 2022 and 2021 (in thousands, except share and per share information):

|  | For the Three Months Ended September 30, 2022 |  | For the Three Months Ended September 30, 2021 |
|  | Amount |  | Per Share(1) |  | Amount |  | Per Share(2) |
Funds From Operations (FFO): |  |  |  |  |  |  |  |  |
Net income |  | $ | 16,653 |  |  | $ | 0.07 |  |  | $ | 11,564 |  |  | $ | 0.11 |  |
Adjustments: |  |  |  |  |  |  |  |  |
Real estate depreciation and amortization |  | 49,347 |  |  | 0.22 |  |  | 17,263 |  |  | 0.16 |  |
Real estate depreciation and amortization from investments in unconsolidated real estate entities |  | 1,388 |  |  | 0.01 |  |  | — |  |  | — |  |
Net gain on sale of real estate assets excluding debt extinguishment costs |  | — |  |  | — |  |  | (11,788) |  |  | (0.11) |  |
FFO |  | $ | 67,388 |  |  | $ | 0.30 |  |  | $ | 17,039 |  |  | $ | 0.16 |  |
Core Funds From Operations (CFFO): |  |  |  |  |  |  |  |  |
FFO |  | $ | 67,388 |  |  | $ | 0.30 |  |  | $ | 17,039 |  |  | $ | 0.16 |  |
Adjustments: |  |  |  |  |  |  |  |  |
Other depreciation and amortization |  | 375 |  |  | — |  |  | 121 |  |  | — |  |
Casualty (gains) losses, net |  | (191) |  |  | — |  |  | — |  |  | — |  |
Loan (premium accretion) discount amortization, net |  | (2,750) |  |  | (0.01) |  |  | — |  |  | — |  |
Prepayment penalties on asset dispositions |  | — |  |  | — |  |  | 295 |  |  | — |  |
Other (income) expense |  | (765) |  |  | (0.01) |  |  | — |  |  | — |  |
Merger and integration costs |  | 275 |  |  | — |  |  | 5,276 |  |  | 0.05 |  |
CFFO |  | $ | 64,332 |  |  | $ | 0.28 |  |  | $ | 22,731 |  |  | $ | 0.21 |  |

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|  | For the Nine Months Ended September 30, 2022 |  | For the Nine Months Ended September 30, 2021
|  | Amount |  | Per Share(1) |  | Amount |  | Per Share(2)
Funds From Operations (FFO): |  |  |  |  |  |  |  |
Net income |  | $ | 86,135 |  |  | $ | 0.38 |  |  | $ | 16,064 |  |  | $ | 0.16 |
Adjustments: |  |  |  |  |  |  |  |
Real estate depreciation and amortization |  | 199,588 |  |  | 0.88 |  |  | 50,418 |  |  | 0.49 |
Real estate depreciation and amortization from investments in unconsolidated real estate entities |  | 1,904 |  |  | 0.01 |  |  | — |  |  | — |
Net gain on sale of real estate assets excluding debt extinguishment costs |  | (94,712) |  |  | (0.42) |  |  | (11,788) |  |  | (0.12) |
FFO |  | 192,915 |  |  | $ | 0.85 |  |  | 54,694 |  |  | $ | 0.53 |
Core Funds From Operations (CFFO): |  |  |  |  |  |  |  |
FFO |  | $ | 192,915 |  |  | $ | 0.85 |  |  | $ | 54,694 |  |  | $ | 0.53 |
Adjustments: |  |  |  |  |  |  |  |
Other depreciation and amortization |  | 1,100 |  |  | — |  |  | 281 |  |  | — |
Casualty (gains) losses, net |  | (7,176) |  |  | (0.03) |  |  | 359 |  |  | 0.01 |
Loan (premium accretion) discount amortization, net |  | (8,245) |  |  | (0.04) |  |  | — |  |  | — |
Prepayment penalties on asset dispositions |  | — |  |  | — |  |  | 295 |  |  | — |
Other (income) expense |  | (1,438) |  |  | (0.01) |  |  | — |  |  | — |
Merger and integration costs |  | 3,477 |  |  | 0.02 |  |  | 5,276 |  |  | 0.05 |
CFFO |  | $ | 180,633 |  |  | $ | 0.79 |  |  | $ | 60,905 |  |  | $ | 0.59 |

(1)Based on 228,051,780 and 227,933,320 weighted-average shares and units outstanding for the three and nine months ended September 30, 2022.
(2)Based on 107,094,044 and 103,511,115 weighted-average shares and units outstanding for the three and nine months ended September 30, 2021.
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, property management expenses, and general and administrative expenses. 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 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 at the beginning of the previous year. Properties that are held-for-sale or have been sold are excluded from the same-store portfolio. Because our portfolio of properties changed significantly as the result of our STAR Merger, which closed on December 16, 2021, we present, as described below, information on the IRT Same-Store Portfolio, STAR Same-Store Portfolio and Combined Same-Store Portfolio.
IRT Same-Store Portfolio
IRT Same-Store Portfolio represents the 48 properties that IRT owned and consolidated as of January 1, 2021 and through September 30, 2022 (other than properties held for sale as of September 30, 2022).
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STAR Same-Store Portfolio
STAR Same-Store Portfolio represents the 65 properties that STAR owned and consolidated as of January 1, 2021 and that, following the consummation of the Merger on December 16, 2021, continued to be owned and consolidated by IRT through September 30, 2022 (other than properties held for sale as of September 30, 2022).
Combined Same-Store Portfolio
Combined Same-Store Portfolio represents the combination of the IRT Same-Store Portfolio and the STAR Same-Store Portfolio considered as a single portfolio of 113 properties which represent 33,804 units.
Combined Non Same-Store Portfolio
Combined Non Same-Store Portfolio represents the combination of six IRT non same-store properties and three STAR non same-store properties considered as a single non same-store portfolio of nine properties which represent 2,372 units acquired after January 1, 2021 (includes two properties held for sale as of September 30, 2022).
Pre-Merger STAR Portfolio NOI
In order to reconcile Combined Same-Store NOI to net income for periods prior to our December 16, 2021 merger with STAR, our reconciliation excludes NOI generated by the STAR Portfolio because IRT did not own these properties prior to December 16, 2021.
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Set forth below is a reconciliation of Combined Same-Store Portfolio net operating income to net income (loss) available to common shares for the three and nine months ended September 30, 2022 and 2021 (in thousands, except per unit data):

| Three Months Ended September 30,(a) |  | Nine Months Ended September 30,(a)
| 2022 |  | 2021 |  | % change |  | 2022 |  | 2021 |  | % change
Revenue: |  |  |  |  |  |  |  |  |  |  |
Rental and other property revenue | $ | 151,030 |  |  | $ | 136,563 |  |  | 10.6 | % |  | $ | 439,292 |  |  | $ | 395,774 |  |  | 11.0 | %
Property Operating Expenses |  |  |  |  |  |  |  |  |  |  |
Real estate taxes | 18,399 |  |  | 16,143 |  |  | 14.0 | % |  | 56,476 |  |  | 53,192 |  |  | 6.2 | %
Property insurance | 3,523 |  |  | 3,170 |  |  | 11.1 | % |  | 9,310 |  |  | 8,542 |  |  | 9.0 | %
Personnel expenses(b) | 11,921 |  |  | 12,064 |  |  | (1.2) | % |  | 36,221 |  |  | 35,282 |  |  | 2.7 | %
Utilities | 8,007 |  |  | 7,244 |  |  | 10.5 | % |  | 22,393 |  |  | 21,170 |  |  | 5.8 | %
Repairs and maintenance | 6,037 |  |  | 5,399 |  |  | 11.8 | % |  | 16,278 |  |  | 14,223 |  |  | 14.4 | %
Contract services | 5,317 |  |  | 4,915 |  |  | 8.2 | % |  | 15,165 |  |  | 14,006 |  |  | 8.3 | %
Advertising expenses | 1,459 |  |  | 1,334 |  |  | 9.4 | % |  | 3,861 |  |  | 3,900 |  |  | (1.0) | %
Other expenses | 1,801 |  |  | 1,488 |  |  | 21.0 | % |  | 5,118 |  |  | 4,591 |  |  | 11.5 | %
Total property operating expenses | 56,464 |  |  | 51,757 |  |  | 9.1 | % |  | 164,822 |  |  | 154,906 |  |  | 6.4 | %
Net operating income | $ | 94,566 |  |  | $ | 84,806 |  |  | 11.5 | % |  | $ | 274,470 |  |  | $ | 240,868 |  |  | 14.0 | %

NOI Margin | 62.6 | % |  | 62.1 | % |  | 0.5 | % |  | 62.5 | % |  | 60.9 | % |  | 1.6 | %
Average Occupancy | 94.2 | % |  | 96.5 | % |  | (2.3) | % |  | 95.0 | % |  | 96.0 | % |  | (1.0) | %

Average effective monthly rent, per unit | $ | 1,479 |  |  | $ | 1,305 |  |  | 13.3 | % |  | $ | 1,421 |  |  | $ | 1,270 |  |  | 11.9 | %
Reconciliation of Combined Same-Store Portfolio NOI to Net Income: |  |  |  |
Combined same-store portfolio NOI(a) | $ | 94,566 |  |  | $ | 84,806 |  |  |  |  | $ | 274,470 |  |  | $ | 240,868 |  |  |
Combined non same-store portfolio NOI | 5,767 |  |  | 7,054 |  |  |  |  | 15,626 |  |  | 17,038 |  |  |
Pre-Merger STAR Portfolio NOI(c) | — |  |  | (54,432) |  |  |  |  | — |  |  | (151,517) |  |  |
Other revenue | 300 |  |  | 188 |  |  |  |  | 805 |  |  | 647 |  |  |
Property management expenses | (5,744) |  |  | (2,199) |  |  |  |  | (17,440) |  |  | (6,318) |  |  |
General and administrative expenses | (5,625) |  |  | (3,985) |  |  |  |  | (20,521) |  |  | (14,168) |  |  |
Depreciation and amortization | (49,722) |  |  | (17,384) |  |  |  |  | (200,688) |  |  | (50,699) |  |  |
Casualty gains (losses), net | 191 |  |  | — |  |  |  |  | 7,176 |  |  | (359) |  |  |
Interest expense | (22,093) |  |  | (8,700) |  |  |  |  | (63,618) |  |  | (25,644) |  |  |
Gain on sale of real estate assets, net | — |  |  | 11,492 |  |  |  |  | 94,712 |  |  | 11,492 |  |  |
Other income (expense) | 765 |  |  | — |  |  |  |  | 1,501 |  |  | — |  |  |
Loss from investments in unconsolidated real estate entities | (1,477) |  |  | — |  |  |  |  | (2,411) |  |  | — |  |  |
Merger and integration costs | (275) |  |  | (5,276) |  |  |  |  | (3,477) |  |  | (5,276) |  |  |
Net income | $ | 16,653 |  |  | $ | 11,564 |  |  |  |  | $ | 86,135 |  |  | $ | 16,064 |  |  |

(a)Combined Same-Store Portfolio for the three and nine months ended September 30, 2022 and 2021 included 113 properties containing 33,804 units.
(b)Included in the three and nine months ended September 30, 2022 is a refund of previously paid employer payroll taxes of $0.7 million from a portion of an employee retention credit received.
(c)Represents NOI of the STAR Portfolio for periods prior to the consummation of the STAR Merger on December 16, 2021.
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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;
•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 $23.8 million as of September 30, 2022;
•existing and future unsecured financing, including advances under our unsecured credit facility, and financing secured directly or indirectly by the apartment properties in our portfolio;
•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 we expect to issue in settlement of our forward sale agreement.
Stock Repurchase Program
On May 18, 2022, our Board of Directors authorized a common stock repurchase program (the "Stock Repurchase Program") covering up to $250,000 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. 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. The Stock Repurchase Program has no time limit and may be suspended or discontinued at any time.
Cash Flows
As of September 30, 2022 and 2021, we maintained cash and cash equivalents, and restricted cash of approximately $59.6 million and $14.9 million, respectively. Our cash and cash equivalents were generated from the following activities (dollars in thousands):

| For the Nine Months Ended September 30,
| 2022 |  | 2021
Cash flow provided by operating activities | $ | 191,241 |  |  | $ | 73,725 |
Cash flow (used in) investing activities | (174,162) |  |  | (145,437) |
Cash flow (used in) provided by financing activities | (23,168) |  |  | 72,955 |
Net change in cash and cash equivalents, and restricted cash | (6,089) |  |  | 1,243 |
Cash and cash equivalents, and restricted cash, beginning of period | 65,671 |  |  | 13,615 |
Cash and cash equivalents, and restricted cash, end of the period | $ | 59,582 |  |  | $ | 14,858 |

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Our cash inflows from operating activities during the nine months ended September 30, 2022 and 2021 were primarily driven by ongoing operations of our properties.
Our cash outflows from investing activities during the nine months ended September 30, 2022 were primarily due $201.8 million of acquisitions of real estate properties, $55.6 million of capital expenditures, $51.4 million of investments in unconsolidated real estate entities, and $40.0 million of investments in real estate under development partially offset by $155.6 million of proceeds from four property dispositions and proceeds from insurance claims of $15.7 million. Our cash outflows from investing activities during the nine months ended September 30, 2021 were primarily due to $139.2 million of cash used to acquire two properties and $31.8 million of capital expenditures partially offset by $39.2 million of proceeds from the disposition of one property.
Our cash outflows from financing activities during the nine months ended September 30, 2022 were primarily due to credit facility and term loan repayments of $666.5 million and payment of dividends on our common stock and noncontrolling interests of $76.4 million partially offset by $687.5 million of proceeds from unsecured credit facilities and term loan restructurings and $48.8 million of proceeds from the issuance of common stock. Our cash inflows from financing activities during the nine months ended September 30, 2021 were primarily due to proceeds from the unsecured credit facility and term loans of $387.5 million partially offset by credit facility repayments of $234.8 million, mortgage principal repayments of $79.6 million and dividends on our common stock and noncontrolling interests of $37.5 million.
Contractual Commitments
Our 2021 Annual Report on Form 10-K includes a table of contractual commitments. There were no material changes to these commitments since the filing of our Annual Report on Form 10-K except for the Restated Credit Agreement entered into on July 25, 2022. See —Note 5 (Indebtedness) for details of our Restated Credit Agreement.
Off-Balance Sheet Arrangements
There were no off-balance sheet arrangements during the nine months ended September 30, 2022 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 2021 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.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Our 2021 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 nine months ended September 30, 2022 from the disclosures included in our 2021 Annual Report on Form 10-K.
Item 4. Controls and Procedures.
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 Securities Exchange Act of 1934, as amended, or 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 September 30, 2022, 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.
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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 September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. 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. 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.
Item 1A. Risk Factors.
There have not been any material changes from the risk factors disclosed in Part 1, Item 1A of our 2021 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the three months ended September 30, 2022, no holders of IROP units exchanged shares of our common stock or cash. The exchange of units for shares and the issuance of shares is exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act. As of September 30, 2022, 6,091,171 IROP units held by unaffiliated third parties remained outstanding.
During the three months ended September 30, 2022, we withheld shares of common stock to satisfy employee tax withholding obligations payable upon the vesting of restricted common stock awards as follow:

Period |  | Total Number of Shares Purchased |  | Price Paid per Share (1) |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2)
July 2022 |  | 999 |  |  | $ | 19.18 |  |  | — |  |  | $ | 250,000 |
August 2022 |  | 22 |  |  | 20.03 |  |  | — |  |  | 250,000 |
September 2022 |  | — |  |  | — |  |  | — |  |  | 250,000 |
Total |  | 1,021 |  |  | $ | 19.18 |  |  | — |  |  |

(1)The price reported is the average price paid per share using our closing price on the NYSE on the vesting date of the relevant award.
(2)On May 18, 2022, our Board of Directors approved the Stock Repurchase Program covering up to $250,000 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. 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. The Stock Repurchase Program has no time limit and may be suspended or discontinued at any time.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
None.
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Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

2.1 | Agreement and Plan of Merger, dated as of July 26, 2021, by and among Independence Realty Trust, Inc., Independence Realty Operating Partnership, LP, IRSTAR Sub, LLC, LLC, Steadfast Apartment REIT, Inc. and Steadfast Apartment REIT Operating Partnership, L.P., incorporated by reference to Exhibit 2.1 to IRT’s Current Report on Form 8-K filed on July 26, 2021.*
10.1 | Fourth Amended, Restated and Consolidated Credit Agreement (the “Credit Agreement”), dated as of July 25, 2022, by and among the Independence Realty Operating Partnership, LP as borrower, Independence Realty Trust, Inc., and the other guarantors party thereto, collectively, as guarantors, Citibank, N.A. (together with any successor in interest, “Citibank”) and KeyBank National Association (together with any successor in interest, “KeyBank”), as initial Lenders, Issuing Lenders and Swing Loan Lenders, the other lending institutions which are parties to the Credit Agreement as “Lenders”, the other lending institutions that may become parties to the Credit Agreement and KeyBank, as administrative agent for Lenders, with Citibank, and The Huntington National Bank, as Revolving Facility Co-Syndication Agents, Regions Bank, and Capital One, National Association, as 2021 Term Loan Co-Syndication Agents, Capital One, National Association and PNC Bank, National Association, as 2022 Term Loan Co-Syndication Agents, Bank Of America, N.A., Capital One, National Association, Citizens Bank, PNC Bank, National Association, Regions Bank, BMO Harris Bank, N.A., The Huntington National Bank and Truist Bank (successor by merger to SunTrust Bank), as Co-Documentation Agents, Citibank, and KeyBanc Capital Markets, as Revolving Facility and 2021 Term Loan Joint Bookrunners, KeyBanc Capital Markets, Capital One, National Association, and The Huntington National Bank, as 2022 Term Loan Joint Bookrunners, and KeyBanc Capital Markets, Citibank, and The Huntington National Bank, as Revolving Facility Joint Lead Arrangers, and KeyBanc Capital Markets, Capital One, National Association, and Regions Capital Markets, as 2021 Term Loan Joint Lead Arrangers, KeyBanc Capital Markets, Capital One, National Association, and The Huntington National Bank, as 2022 Term Loan Joint Lead Arrangers, incorporated by reference to Exhibit 10.1 to IRT's Current Report on Form 8-K filed on July 27, 2022.
31.1 | Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2 | Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
101 | iXBRL (Inline eXtensible Business Reporting Language). The following materials, formatted in iXBRL: (i) Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021, (ii) Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021, (iii) Consolidated Statement of Comprehensive Income (Loss) for the three and nine months ended September 30, 2022 and 2021, (iv) Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2022 and 2021, (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 and (vi) notes to the consolidated financial statements as of September 30, 2022.
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document).

* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. IRT agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request by the SEC.
**Management agreement or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| Independence Realty Trust, Inc.
Date: October 27, 2022 | By: | /s/ SCOTT F. SCHAEFFER
|  | Scott F. Schaeffer
|  | Chair of the Board and Chief Executive Officer
|  | (Principal Executive Officer)
Date: October 27, 2022 | By: | /s/ JAMES J. SEBRA
|  | James J. Sebra
|  | Chief Financial Officer and Treasurer
|  | (Principal Financial Officer)
Date: October 27, 2022 | By: | /s/ JASON R. DELOZIER
|  | Jason R. Delozier
|  | Chief Accounting Officer
|  | (Principal Accounting Officer)

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