0001466085 12-31 2023 Q2 false P5Y P2Y 0001466085 2023-01-01 2023-06-30 0001466085 2023-07-21 xbrli:shares 0001466085 2023-06-30 iso4217:USD 0001466085 2022-12-31 iso4217:USD xbrli:shares 0001466085 2023-04-01 2023-06-30 0001466085 2022-04-01 2022-06-30 0001466085 2022-01-01 2022-06-30 0001466085 us-gaap:CommonStockMember 2022-12-31 0001466085 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001466085 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0001466085 us-gaap:RetainedEarningsMember 2022-12-31 0001466085 us-gaap:ParentMember 2022-12-31 0001466085 us-gaap:NoncontrollingInterestMember 2022-12-31 0001466085 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0001466085 us-gaap:ParentMember 2023-01-01 2023-03-31 0001466085 us-gaap:NoncontrollingInterestMember 2023-01-01 2023-03-31 0001466085 2023-01-01 2023-03-31 0001466085 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-01-01 2023-03-31 0001466085 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0001466085 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0001466085 us-gaap:CommonStockMember 2023-03-31 0001466085 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0001466085 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-03-31 0001466085 us-gaap:RetainedEarningsMember 2023-03-31 0001466085 us-gaap:ParentMember 2023-03-31 0001466085 us-gaap:NoncontrollingInterestMember 2023-03-31 0001466085 2023-03-31 0001466085 us-gaap:RetainedEarningsMember 2023-04-01 2023-06-30 0001466085 us-gaap:ParentMember 2023-04-01 2023-06-30 0001466085 us-gaap:NoncontrollingInterestMember 2023-04-01 2023-06-30 0001466085 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-04-01 2023-06-30 0001466085 us-gaap:CommonStockMember 2023-04-01 2023-06-30 0001466085 us-gaap:AdditionalPaidInCapitalMember 2023-04-01 2023-06-30 0001466085 us-gaap:CommonStockMember 2023-06-30 0001466085 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0001466085 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-06-30 0001466085 us-gaap:RetainedEarningsMember 2023-06-30 0001466085 us-gaap:ParentMember 2023-06-30 0001466085 us-gaap:NoncontrollingInterestMember 2023-06-30 0001466085 us-gaap:CommonStockMember 2021-12-31 0001466085 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001466085 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31 0001466085 us-gaap:RetainedEarningsMember 2021-12-31 0001466085 us-gaap:ParentMember 2021-12-31 0001466085 us-gaap:NoncontrollingInterestMember 2021-12-31 0001466085 2021-12-31 0001466085 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0001466085 us-gaap:ParentMember 2022-01-01 2022-03-31 0001466085 us-gaap:NoncontrollingInterestMember 2022-01-01 2022-03-31 0001466085 2022-01-01 2022-03-31 0001466085 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-03-31 0001466085 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0001466085 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0001466085 us-gaap:CommonStockMember 2022-03-31 0001466085 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0001466085 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-03-31 0001466085 us-gaap:RetainedEarningsMember 2022-03-31 0001466085 us-gaap:ParentMember 2022-03-31 0001466085 us-gaap:NoncontrollingInterestMember 2022-03-31 0001466085 2022-03-31 0001466085 us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0001466085 us-gaap:ParentMember 2022-04-01 2022-06-30 0001466085 us-gaap:NoncontrollingInterestMember 2022-04-01 2022-06-30 0001466085 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-04-01 2022-06-30 0001466085 us-gaap:CommonStockMember 2022-04-01 2022-06-30 0001466085 us-gaap:AdditionalPaidInCapitalMember 2022-04-01 2022-06-30 0001466085 us-gaap:CommonStockMember 2022-06-30 0001466085 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001466085 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30 0001466085 us-gaap:RetainedEarningsMember 2022-06-30 0001466085 us-gaap:ParentMember 2022-06-30 0001466085 us-gaap:NoncontrollingInterestMember 2022-06-30 0001466085 2022-06-30 irt:property irt:unit 0001466085 irt:DenverColoradoMember 2023-06-30 irt:jointVenture 0001466085 us-gaap:LeasesAcquiredInPlaceMember 2022-01-01 2022-06-30 0001466085 us-gaap:LeasesAcquiredInPlaceMember 2022-04-01 2022-06-30 0001466085 us-gaap:BuildingAndBuildingImprovementsMember 2023-06-30 0001466085 us-gaap:OtherMachineryAndEquipmentMember srt:MinimumMember 2023-06-30 0001466085 srt:MaximumMember us-gaap:OtherMachineryAndEquipmentMember 2023-06-30 0001466085 us-gaap:RealEstateInvestmentMember irt:DenverColoradoMember 2022-12-31 0001466085 us-gaap:RealEstateInvestmentMember irt:DenverColoradoMember 2023-06-30 0001466085 us-gaap:RealEstateInvestmentMember 2023-06-30 0001466085 us-gaap:RealEstateInvestmentMember 2022-12-31 0001466085 stpr:TN irt:ViewsOfMusicCityTheCrockettMember 2023-06-30 xbrli:pure 0001466085 irt:LakelineStationMember stpr:TX 2023-06-30 0001466085 irt:InvestmentsInUnconsolidatedRealEstateEntitiesMember 2023-04-01 2023-06-30 0001466085 irt:InvestmentsInUnconsolidatedRealEstateEntitiesMember 2023-01-01 2023-06-30 0001466085 irt:InvestmentsInUnconsolidatedRealEstateEntitiesMember 2022-04-01 2022-06-30 0001466085 irt:InvestmentsInUnconsolidatedRealEstateEntitiesMember 2022-01-01 2022-06-30 0001466085 irt:UnsecuredCreditFacilityMember 2023-06-30 0001466085 irt:UnsecuredCreditFacilityMember 2022-12-31 0001466085 irt:UnsecuredTermLoanFacilityMember 2023-06-30 0001466085 irt:UnsecuredTermLoanFacilityMember 2022-12-31 0001466085 irt:SecuredCreditFacilityMember 2023-06-30 0001466085 irt:SecuredCreditFacilityMember 2022-12-31 0001466085 us-gaap:MortgagesMember 2023-06-30 0001466085 us-gaap:MortgagesMember 2022-12-31 0001466085 srt:MaximumMember 2023-06-30 0001466085 2022-07-01 2022-12-31 0001466085 irt:DirectCostsOfLeasedAndRentedPropertyOrEquipmentMember 2023-04-01 2023-06-30 0001466085 irt:DirectCostsOfLeasedAndRentedPropertyOrEquipmentMember 2023-01-01 2023-06-30 0001466085 irt:CostOfPropertyRepairsAndMaintenanceMember 2023-04-01 2023-06-30 0001466085 irt:CostOfPropertyRepairsAndMaintenanceMember 2023-01-01 2023-06-30 0001466085 us-gaap:GeneralAndAdministrativeExpenseMember 2023-04-01 2023-06-30 0001466085 us-gaap:GeneralAndAdministrativeExpenseMember 2023-01-01 2023-06-30 0001466085 us-gaap:BuildingMember 2023-06-30 0001466085 srt:MinimumMember us-gaap:FurnitureAndFixturesMember 2023-06-30 0001466085 srt:MaximumMember us-gaap:FurnitureAndFixturesMember 2023-06-30 0001466085 us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember 2023-06-30 0001466085 us-gaap:MortgagesMember srt:ScenarioForecastMember 2023-07-01 2023-12-31 0001466085 irt:EagleLakeLandingApartmentsMember 2023-02-28 2023-02-28 0001466085 stpr:VA irt:MetropolisAtInnsbrookMember 2023-01-01 2023-06-30 0001466085 stpr:VA irt:MetropolisAtInnsbrookMember 2023-06-30 0001466085 stpr:VA irt:MetropolisAtInnsbrookMember 2022-12-31 0001466085 stpr:TN irt:ViewsOfMusicCityTheCrockettMember 2023-01-01 2023-06-30 0001466085 stpr:TN irt:ViewsOfMusicCityTheCrockettMember 2022-12-31 0001466085 stpr:AL irt:VirtuosoMember 2023-01-01 2023-06-30 0001466085 stpr:AL irt:VirtuosoMember 2023-06-30 0001466085 stpr:AL irt:VirtuosoMember 2022-12-31 0001466085 irt:LakelineStationMember stpr:TX 2023-01-01 2023-06-30 0001466085 irt:LakelineStationMember stpr:TX 2022-12-31 0001466085 irt:TheMustangMember stpr:TX 2023-01-01 2023-06-30 0001466085 irt:TheMustangMember stpr:TX 2023-06-30 0001466085 irt:TheMustangMember stpr:TX 2022-12-31 0001466085 irt:MetropolisAtInnsbrookMember 2023-06-30 0001466085 irt:ViewsOfMusicCityTheCrockettMember 2023-06-30 0001466085 irt:ViewsOfMusicCityTheCrockettMember 2023-01-01 2023-06-30 0001466085 irt:VirtuosoMember 2023-06-30 0001466085 irt:UnsecuredCreditFacilityMember 2023-01-01 2023-06-30 0001466085 irt:UnsecuredTermLoanFacilityMember 2023-01-01 2023-06-30 0001466085 irt:SecuredCreditFacilityMember 2023-01-01 2023-06-30 0001466085 us-gaap:MortgagesMember 2023-01-01 2023-06-30 0001466085 irt:PNCMasterCreditFacilityMember irt:SecuredCreditFacilityMember 2023-06-30 0001466085 irt:NewmarkMasterCreditFacilityMember irt:SecuredCreditFacilityMember 2023-06-30 0001466085 irt:UnsecuredCreditFacilityMember 2022-01-01 2022-12-31 0001466085 irt:UnsecuredTermLoanFacilityMember 2022-01-01 2022-12-31 0001466085 irt:SecuredCreditFacilityMember 2022-01-01 2022-12-31 0001466085 us-gaap:MortgagesMember 2022-01-01 2022-12-31 0001466085 2022-01-01 2022-12-31 0001466085 irt:PNCMasterCreditFacilityMember irt:SecuredCreditFacilityMember 2022-12-31 0001466085 irt:NewmarkMasterCreditFacilityMember irt:SecuredCreditFacilityMember 2022-12-31 0001466085 us-gaap:CashFlowHedgingMember us-gaap:InterestRateSwapMember 2023-06-30 0001466085 us-gaap:CashFlowHedgingMember us-gaap:InterestRateSwapMember 2022-12-31 0001466085 us-gaap:CashFlowHedgingMember irt:InterestRateCollarMember 2023-06-30 0001466085 us-gaap:CashFlowHedgingMember irt:InterestRateCollarMember 2022-12-31 0001466085 us-gaap:CashFlowHedgingMember irt:ForwardInterestRateSwapMember 2023-06-30 0001466085 us-gaap:CashFlowHedgingMember irt:ForwardInterestRateSwapMember 2022-12-31 0001466085 us-gaap:CashFlowHedgingMember 2023-06-30 0001466085 us-gaap:CashFlowHedgingMember 2022-12-31 0001466085 us-gaap:CashFlowHedgingMember irt:InterestRateSwapAndCollarsMember 2023-04-01 2023-06-30 0001466085 us-gaap:CashFlowHedgingMember irt:InterestRateSwapAndCollarsMember 2023-01-01 2023-06-30 0001466085 us-gaap:CashFlowHedgingMember irt:InterestRateSwapAndCollarsMember 2022-04-01 2022-06-30 0001466085 us-gaap:CashFlowHedgingMember irt:InterestRateSwapAndCollarsMember 2022-01-01 2022-06-30 0001466085 us-gaap:CashFlowHedgingMember us-gaap:InterestRateSwapMember 2023-03-16 0001466085 us-gaap:CashFlowHedgingMember 2023-03-16 0001466085 us-gaap:DividendDeclaredMember 2023-05-10 2023-05-10 0001466085 us-gaap:DividendDeclaredMember 2023-03-14 2023-03-14 0001466085 2022-05-18 0001466085 2020-11-13 0001466085 irt:AtMarketProgramMember 2023-06-30 0001466085 us-gaap:CommonStockMember 2023-01-01 2023-06-30 0001466085 irt:LongTermIncentivePlanMember srt:MinimumMember 2023-01-01 2023-06-30 0001466085 srt:MaximumMember irt:LongTermIncentivePlanMember 2023-01-01 2023-06-30 0001466085 irt:RestrictedStockAndRestrictedStockUnitsMember 2022-12-31 0001466085 irt:RestrictedStockAndRestrictedStockUnitsMember 2023-01-01 2023-06-30 0001466085 irt:RestrictedStockAndRestrictedStockUnitsMember 2023-06-30 0001466085 us-gaap:RestrictedStockUnitsRSUMember 2023-06-30 0001466085 us-gaap:RestrictedStockUnitsRSUMember 2022-12-31 0001466085 us-gaap:PerformanceSharesMember srt:ExecutiveOfficerMember 2023-02-07 2023-02-07 0001466085 us-gaap:PerformanceSharesMember 2023-02-07 2023-02-07 0001466085 us-gaap:PerformanceSharesMember srt:MinimumMember 2023-02-07 2023-02-07 0001466085 srt:MaximumMember us-gaap:PerformanceSharesMember 2023-02-07 2023-02-07 0001466085 us-gaap:PerformanceSharesMember irt:LongTermIncentivePlanMember 2023-02-07 2023-02-07 0001466085 irt:EmployeeMember irt:RestrictedStockAwardsAndPerformanceShareUnitsMember 2023-01-01 2023-06-30 0001466085 irt:EmployeeMember irt:RestrictedStockAwardsAndPerformanceShareUnitsMember 2022-01-01 2022-06-30
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 June 30, 2023

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 July 21, 2023 there were 224,708,186 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 June 30, 2023 and December 31, 2022 | 3
| Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2023 and June 30, 2022 | 4
| Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months ended June 3 0, 2023 and June 3 0, 2022 | 5
| Condensed Consolidated Statements of Changes in Equity for the Three an d Six Months ended June 3 0, 2023 and June 3 0, 2022 | 6
| Condensed Consolidated Statements of Cash Flows for the Six Months ended June 3 0, 2023 and June 3 0, 2022 | 8
| Notes to Condensed Consolidated Financial Statements as of June 3 0, 2023 | 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 | 35
Item 4. | Controls and Procedures | 35
PART II—OTHER INFORMATION |
Item 1. | Legal Proceedings | 36
Item 1A. | Risk Factors | 36
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 36
Item 3. | Defaults Upon Senior Securities | 36
Item 4. | Mine Safety Disclosures | 36
Item 5. | Other Information | 37
Item 6. | Exhibits | 37
Signatures | 38

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 June 30, 2023 |  | As of December 31, 2022
ASSETS: |  |  |
Investments in real estate: |  |  |
Investments in real estate, at cost | $ | 6,610,233 |  |  | $ | 6,615,243 |
Accumulated depreciation | (519,680) |  |  | (425,034) |
Investments in real estate, net | 6,090,553 |  |  | 6,190,209 |
Real estate held for sale | 86,576 |  |  | 35,777 |
Investments in real estate under development | 121,733 |  |  | 105,518 |
Cash and cash equivalents | 14,349 |  |  | 16,084 |
Restricted cash | 28,163 |  |  | 27,933 |
Investments in unconsolidated real estate entities | 99,968 |  |  | 80,220 |
Other assets | 31,799 |  |  | 34,846 |
Derivative assets | 44,259 |  |  | 41,109 |
Intangible assets, net of accumulated amortization of $0 and $700, respectively | — |  |  | 399 |
Total Assets | $ | 6,517,400 |  |  | $ | 6,532,095 |
LIABILITIES AND EQUITY: |  |  |
Indebtedness, net | $ | 2,609,903 |  |  | $ | 2,631,645 |
Indebtedness associated with real estate held for sale | 40,902 |  |  | — |
Accounts payable and accrued expenses | 115,664 |  |  | 109,677 |
Accrued interest payable | 7,986 |  |  | 7,713 |
Dividends payable | 36,856 |  |  | 32,189 |
Other liabilities | 11,172 |  |  | 13,004 |
Total Liabilities | 2,822,483 |  |  | 2,794,228 |
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, 224,697,889 and 224,064,940 shares issued and outstanding, including 293,429 and 232,134 unvested restricted common share awards, respectively | 2,247 |  |  | 2,241 |
Additional paid-in capital | 3,754,839 |  |  | 3,751,056 |
Accumulated other comprehensive income | 38,823 |  |  | 35,102 |
Accumulated deficit | (239,972) |  |  | (191,735) |
Total stockholders’ equity | 3,555,937 |  |  | 3,596,664 |
Noncontrolling interests | 138,980 |  |  | 141,203 |
Total Equity | 3,694,917 |  |  | 3,737,867 |
Total Liabilities and Equity | $ | 6,517,400 |  |  | $ | 6,532,095 |

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 June 30, |  | For the Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
REVENUE: |  |  |  |  |  |  |
Rental and other property revenue | $ | 163,601 |  |  | $ | 154,643 |  |  | $ | 324,736 |  |  | $ | 304,621 |
Other revenue | 354 |  |  | 120 |  |  | 594 |  |  | 505 |
Total revenue | 163,955 |  |  | 154,763 |  |  | 325,330 |  |  | 305,126 |
EXPENSES: |  |  |  |  |  |  |
Property operating expenses | 62,071 |  |  | 58,976 |  |  | 121,327 |  |  | 114,858 |
Property management expenses | 6,818 |  |  | 6,139 |  |  | 13,189 |  |  | 11,696 |
General and administrative expenses | 5,910 |  |  | 6,968 |  |  | 14,063 |  |  | 14,896 |
Depreciation and amortization expense | 53,984 |  |  | 72,793 |  |  | 107,520 |  |  | 150,966 |
Casualty losses (gains), net | 680 |  |  | (5,592) |  |  | 831 |  |  | (6,985) |
Total expenses | 129,463 |  |  | 139,284 |  |  | 256,930 |  |  | 285,431 |
Interest expense | (22,227) |  |  | (20,994) |  |  | (44,351) |  |  | (41,525) |
Gain on sale of real estate assets, net | — |  |  | — |  |  | 985 |  |  | 94,712 |
Merger and integration costs | — |  |  | (1,307) |  |  | — |  |  | (3,202) |
Other (loss) income, net | (72) |  |  | 294 |  |  | 21 |  |  | 736 |
Loss from investments in unconsolidated real estate entities | (1,205) |  |  | (871) |  |  | (1,981) |  |  | (934) |
Restructuring costs | — |  |  | — |  |  | (3,213) |  |  | — |
Net income (loss): | 10,988 |  |  | (7,399) |  |  | 19,861 |  |  | 69,482 |
(Income) loss allocated to noncontrolling interest | (279) |  |  | 194 |  |  | (503) |  |  | (2,087)
Net income (loss) allocable to common shares | $ | 10,709 |  |  | $ | (7,205) |  |  | $ | 19,358 |  |  | $ | 67,395 |
Earnings (loss) per share: |  |  |  |  |  |  |
Basic | $ | 0.05 |  |  | $ | (0.03) |  |  | $ | 0.09 |  |  | $ | 0.30 |
Diluted | $ | 0.05 |  |  | $ | (0.03) |  |  | $ | 0.09 |  |  | $ | 0.30 |
Weighted-average shares: |  |  |  |  |  |  |
Basic | 224,422,515 |  |  | 221,164,284 |  |  | 224,325,246 |  |  | 220,982,714 |
Diluted | 225,073,890 |  |  | 221,164,284 |  |  | 225,088,261 |  |  | 222,033,857 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
4

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 June 30, |  | For the Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net income (loss) | $ | 10,988 |  |  | $ | (7,399) |  |  | $ | 19,861 |  |  | $ | 69,482 |
Other comprehensive income (loss): |  |  |  |  |  |  |
Change in fair value of interest rate hedges | 9,336 |  |  | 10,169 |  |  | (4,333) |  |  | 34,879 |
Realized gains (losses) on interest rate hedges reclassified to earnings | 4,749 |  |  | (1,502) |  |  | 8,126 |  |  | (3,622) |
Total other comprehensive income | 14,085 |  |  | 8,667 |  |  | 3,793 |  |  | 31,257 |
Comprehensive income before allocation to noncontrolling interests | 25,073 |  |  | 1,268 |  |  | 23,654 |  |  | 100,739 |
Allocation to noncontrolling interests | (642) |  |  | (1) |  |  | (576) |  |  | (2,974) |
Comprehensive income | $ | 24,431 |  |  | $ | 1,267 |  |  | $ | 23,078 |  |  | $ | 97,765 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
5

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, 2022 |  |  |  |  | 224,064,940 |  |  | $ | 2,241 |  |  | $ | 3,751,056 |  |  | $ | 35,102 |  |  | $ | (191,735) |  |  | $ | 3,596,664 |  |  | $ | 141,203 |  |  | $ | 3,737,867 |
Net income |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8,648 |  |  | 8,648 |  |  | 224 |  |  | 8,872 |
Common dividends declared ($0.14 per share) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (31,688) |  |  | (31,688) |  |  | — |  |  | (31,688) |
Other comprehensive loss |  |  |  |  | — |  |  | — |  |  | — |  |  | (10,001) |  |  | — |  |  | (10,001) |  |  | (289) |  |  | (10,290) |
Stock compensation |  |  |  |  | 383,439 |  |  | 4 |  |  | 4,774 |  |  | — |  |  | — |  |  | 4,778 |  |  | — |  |  | 4,778 |
Repurchase of shares related to equity award tax withholding |  |  |  |  | (36,109) |  |  | — |  |  | (3,757) |  |  | — |  |  | — |  |  | (3,757) |  |  | — |  |  | (3,757) |
Conversion of noncontrolling interest to common shares |  |  |  |  | 144,600 |  |  | 1 |  |  | 1,014 |  |  | — |  |  | — |  |  | 1,015 |  |  | (1,015) |  |  | — |
Issuance of common shares, net |  |  |  |  | — |  |  | — |  |  | (13) |  |  | — |  |  | — |  |  | (13) |  |  | — |  |  | (13) |
Distribution to noncontrolling interest declared ($0.14 per unit) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (834) |  |  | (834) |
Balance, March 31, 2023 |  |  |  |  | 224,556,870 |  |  | $ | 2,246 |  |  | $ | 3,753,074 |  |  | $ | 25,101 |  |  | $ | (214,775) |  |  | $ | 3,565,646 |  |  | $ | 139,289 |  |  | $ | 3,704,935 |
Net income |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 10,709 |  |  | 10,709 |  |  | 279 |  |  | 10,988 |
Common dividends declared ($0.16 per share) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (35,906) |  |  | (35,906) |  |  | — |  |  | (35,906) |
Other comprehensive income |  |  |  |  | — |  |  | — |  |  | — |  |  | 13,722 |  |  | — |  |  | 13,722 |  |  | 363 |  |  | 14,085 |
Stock compensation |  |  |  |  | 142,206 |  |  | 1 |  |  | 1,784 |  |  | — |  |  | — |  |  | 1,785 |  |  | — |  |  | 1,785 |
Repurchase of shares related to equity award tax withholding |  |  |  |  | (1,187) |  |  | — |  |  | (19) |  |  | — |  |  | — |  |  | (19) |  |  | — |  |  | (19) |
Distribution to noncontrolling interest declared ($0.16 per unit) |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (951) |  |  | (951) |
Balance, June 30, 2023 |  |  |  |  | 224,697,889 |  |  | $ | 2,247 |  |  | $ | 3,754,839 |  |  | $ | 38,823 |  |  | $ | (239,972) |  |  | $ | 3,555,937 |  |  | $ | 138,980 |  |  | $ | 3,694,917 |

6

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) |
Issuance of common shares, net |  |  |  |  | — |  |  | — |  |  | (116) |  |  | — |  |  | — |  |  | (116) |  |  | — |  |  | (116) |
Conversion of noncontrolling interest to common shares |  |  |  |  | 879,821 |  |  | 9 |  |  | 21,384 |  |  | — |  |  | — |  |  | 21,393 |  |  | (21,393) |  |  | — |
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 |

The accompanying notes are an integral part of these condensed consolidated financial statements
7

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited and dollars in thousands)

| For the Six Months Ended June 30,
| 2023 |  | 2022
Cash flows from operating activities: |  |  |
Net income | $ | 19,861 |  |  | $ | 69,482 |
Adjustments to reconcile net income to cash flow from operating activities: |  |  |
Depreciation and amortization | 107,520 |  |  | 150,966 |
Accretion of loan discounts and premiums, net | (5,493) |  |  | (5,495) |
Amortization of deferred financing costs, net | 1,763 |  |  | 1,824 |
Stock compensation expense | 6,462 |  |  | 5,178 |
Gain on sale of real estate assets, net | (985) |  |  | (94,712) |
Amortization related to derivative instruments | 644 |  |  | 634 |
Casualty losses (gains), net | 831 |  |  | (6,985) |
Equity in loss from investments in unconsolidated real estate entities | 1,981 |  |  | 934 |
Other loss (income) | 891 |  |  | (736) |
Changes in assets and liabilities: |  |  |
Other assets | 4,186 |  |  | 6,829 |
Accounts payable and accrued expenses | (9,308) |  |  | (13,775) |
Accrued interest payable | 273 |  |  | (284) |
Other liabilities | (1,432) |  |  | (2,273) |
Cash flow provided by operating activities | 127,194 |  |  | 111,587 |
Cash flows from investing activities: |  |  |
Acquisition of real estate properties | — |  |  | (25,957) |
Investments in unconsolidated real estate entities | (21,729) |  |  | (33,519) |
Return of investment in unconsolidated real estate entities | — |  |  | 3,406 |
Disposition of real estate properties, net | 35,557 |  |  | 155,639 |
Capital expenditures | (67,199) |  |  | (29,139) |
Additions to real estate under development | (30,588) |  |  | (20,723) |
Proceeds from insurance claims | — |  |  | 15,462 |
Cash flow (used in) provided by investing activities | (83,959) |  |  | 65,169 |
Cash flows from financing activities: |  |  |
Costs from issuance of common stock, net | (13) |  |  | (960) |
Proceeds from unsecured credit facility and term loans | 125,000 |  |  | 81,000 |
Unsecured credit facility, secured credit facility and term loan repayments | (97,513) |  |  | (226,000) |
Mortgage principal repayments | (3,666) |  |  | (3,680) |
Payments for deferred financing costs | (60) |  |  | (49) |
Distributions on common stock | (63,026) |  |  | (43,425) |
Distributions to noncontrolling interests | (1,686) |  |  | (1,037) |
Repurchase of shares related to equity award tax withholding | (3,776) |  |  | (5,881) |
Cash flow used in financing activities | (44,740) |  |  | (200,032) |
Net change in cash and cash equivalents, and restricted cash | (1,505) |  |  | (23,276) |
Cash and cash equivalents, and restricted cash, beginning of period | 44,017 |  |  | 65,671 |
Cash and cash equivalents, and restricted cash, end of the period | $ | 42,512 |  |  | $ | 42,395 |
Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Balance Sheets |  |
Cash and cash equivalents | $ | 14,349 |  |  | $ | 11,378 |
Restricted cash | 28,163 |  |  | 31,017 |
Total cash, cash equivalents, and restricted cash, end of period | $ | 42,512 |  |  | $ | 42,395 |

The accompanying notes are an integral part of these condensed consolidated financial statements
8

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(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 June 30, 2023, we owned and operated 119 (unaudited) multifamily apartment properties that contain 35,249 (unaudited) units across non-gateway U.S. markets including Atlanta, Columbus, Dallas, Denver, Houston, Indianapolis, Nashville, Oklahoma City, Raleigh-Durham, and Tampa. In addition, as of June 30, 2023, we owned two investments in real estate under development in Denver, Colorado and owned interests in five unconsolidated joint ventures, four that are developing multifamily apartment communities and one that is an operating property. 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 IRT and, as required by context, IROP and their subsidiaries.
NOTE 2: Summary of Significant Accounting Policies
a. Basis of Presentation
The accompanying unaudited interim condensed 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 condensed consolidated financial statements should be read in conjunction with our audited financial statements as of and for the year ended December 31, 2022 included in our 2022 Annual Report on Form 10-K. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our condensed consolidated financial position and condensed 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 condensed 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.
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.
9

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(Unaudited and dollars in thousands, except share and per share data)
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 June 30, 2023 and December 31, 2022, we had $28,163 and $27,933, 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 (“ASC 805”), we evaluate our real estate acquisitions to determine if they should be accounted for as a business or as a group of assets. The evaluation includes an initial screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If the screen is met, the acquisition is not a business. The properties we have acquired met the screen test and are 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 these intangible assets is amortized over the assumed lease up period, typically six months. During the three and six months ended June 30, 2023 we did not acquire any in-place leases. During the three and six months ended June 30, 2022 we acquired in-place leases of $37 related to our acquisition of real estate from one of our unconsolidated joint ventures. For the three and six months ended June 30, 2023, we recorded $0 and $399, respectively, of amortization for intangible assets. For the three and six months ended June 30, 2022, we recorded $24,206 and $53,288, respectively, of amortization for intangible assets. For the three and six months ended June 30, 2023, we wrote-off fully amortized intangible assets of $0 and $1,099, respectively. For each of the three and six months ended June 30, 2022, we wrote-off fully amortized intangible assets of $58,048.
Business Combinations
For properties we acquire or transactions we enter 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 of the acquisition 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. Our merger with Steadfast Apartment REIT, Inc. on December 16, 2021 was accounted for as a business combination. For the three and six months ended June 30, 2022, we incurred merger and integration costs of $1,307 and $3,202, respectively. These amounts were expensed as incurred, and are included in the condensed consolidated statements of operations in the item titled “Merger and integration costs”, and primarily consist of technology migration and implementation, consulting and professional fees. We incurred no merger and integration costs for the three and six months ended June 30, 2023.
10

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(Unaudited and dollars in thousands, except share and per share data)
Impairment of Long-Lived Assets
Management evaluates the recoverability of our investments 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 (e.g., hold period) 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. For the three and six months ended June 30, 2023 and 2022, we did not incur an impairment charge.
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 six months ended June 30, 2023, we recorded $53,700 and $106,587 of depreciation expense, respectively. For the three and six months ended June 30, 2022, we recorded $48,092 and $96,954 of depreciation expense, respectively. During the three and six months ended June 30, 2023, we wrote-off fully depreciated fixed assets of $5,114 and $8,033, respectively. During the three and six months ended June 30, 2022, we wrote-off fully depreciated fixed assets of $1,932 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 losses (gains), net when the proceeds are received. During the three and six months ended June 30, 2023, we recorded $680 and $831 of net casualty losses, respectively. During the three and six months ended June 30, 2022, we recorded $5,592 and $6,985 of net casualty gains, 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. For the three and six months ended June 30, 2023, we recorded $1,715 and $3,168, respectively, of capitalized interest expense, on our investments in real estate under development. For the three and six months ended June 30, 2022, we recorded $486 and $786, respectively, of capitalized interest expense, on our investments in real estate under development.
As of June 30, 2023 and December 31, 2022, the carrying value of our two investments in real estate under development in Denver, Colorado totaled $121,733 and $105,518, respectively, net of $19,372 and $0 placed in service, respectively, and was recorded as a separate line item in our condensed consolidated balance sheets.
h. Investments in Unconsolidated Real Estate Entities
We have entered into joint ventures with unrelated third parties to acquire, develop, own, operate, and manage real estate assets. Our joint ventures are funded with a combination of debt and equity. We will consolidate entities that we
11

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(Unaudited and dollars in thousands, except share and per share data)
control as well as any variable interest entity ("VIE") 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 of our investments in unconsolidated real estate entities and concluded that each is a voting interest entity and is not a VIE. Our equity interest varies for each joint venture between 50% and 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, and are included in investments in unconsolidated real estate entities on the condensed consolidated balance sheets. Under the equity method of accounting, the investments are carried at cost plus our share of net earnings or losses. For the three months ended June 30, 2023, we recorded $1,089 and $2,095 of capitalized interest expense, on our investments in unconsolidated real estate entities in our condensed consolidated balance sheets. For the three months ended June 30, 2022, we recorded $276 and $486 of capitalized interest expense, on our investments in unconsolidated real estate entities in our condensed consolidated balance sheets.
i. Revenue and Expenses
Rental and Other Property Revenue
We apply FASB ASC Topic 842, “Leases” (“ASC 842”) 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 condensed 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, 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.
12

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(Unaudited and dollars in thousands, except share and per share data)
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 condensed 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.
•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 derivatives is classified as a Level 2 fair value measurement within the fair value hierarchy. The fair value of our unsecured credit facility, term loans, and 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 six months ended June 30, 2023. The following table summarizes the carrying amount and the fair value of our financial instruments as of the periods indicated:
13

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(Unaudited and dollars in thousands, except share and per share data)

|  | As of June 30, 2023 |  | As of December 31, 2022
Financial Instrument |  | Carrying Amount |  | Estimated Fair Value |  | Carrying Amount |  | Estimated Fair Value
Assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 14,349 |  |  | $ | 14,349 |  |  | $ | 16,084 |  |  | $ | 16,084 |
Restricted cash |  | 28,163 |  |  | 28,163 |  |  | 27,933 |  |  | 27,933 |
Derivative assets |  | 44,259 |  |  | 44,259 |  |  | 41,109 |  |  | 41,109 |
Liabilities |  |  |  |  |  |  |  |
Debt: |  |  |  |  |  |  |  |
Unsecured Revolver |  | 210,106 |  |  | 212,631 |  |  | 164,283 |  |  | 169,842 |
Unsecured Term loans |  | 597,237 |  |  | 602,528 |  |  | 596,612 |  |  | 611,265 |
Secured credit facilities |  | 639,280 |  |  | 574,716 |  |  | 660,542 |  |  | 580,332 |
Mortgages (1) |  | 1,204,182 |  |  | 1,094,323 |  |  | 1,210,208 |  |  | 1,088,579 |

(1)Includes indebtedness associated with real estate held for sale.
l. Deferred Financing Costs
Under the effective interest method, 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.
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 options, but that do not include any residual value guarantees or restrictive covenants. As of June 30, 2023 and December 31, 2022, we had $2,748 and $3,079, respectively, of operating lease right-of-use assets and $3,061 and $3,401, respectively, 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 condensed consolidated balance sheets. During the three and six months ended June 30, 2023, we recorded $202 and $412, respectively, of total operating lease expense which was recorded within property management expenses and general and administrative expenses in our condensed consolidated statements of operations. During the three and six months ended June 30, 2022, we recorded $383 and $844, respectively, of total operating lease expense which was recorded within property management expenses 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 six months ended June 30, 2023 and 2022.
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.
14

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(Unaudited and dollars in thousands, except share and per share data)
o. Employee Retention Credit
Under the terms of the March 27, 2020 Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), we were 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, in accordance with GAAP, 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 six months ended December 31, 2022, we received employee retention credit refunds totaling $6,238 and recognized $3,006 in reimbursements of previously paid employer payroll taxes and retention costs in our condensed consolidated statements of operations. The remainder is included in accounts payable and accrued expenses in our condensed consolidated balance sheets and will be 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. During the three and six months ended June 30, 2023, we recognized reimbursements of payroll related expenses of $788 and $1,576, respectively, in property operating expenses, $195 and $390, respectively, in property management expenses and $74 and $147, respectively, in general and administrative expenses.
p. Restructuring Costs
During the three months ended March 31, 2023, we reorganized certain departments in the organization impacting a limited number of employees. The impacted employees were provided severance packages that included cash severance payments and the accelerated vesting of performance share units and restricted stock awards, as applicable. In accordance with ASC 712 “Compensation – Nonretirement Postemployment Benefits”, we recognized the full amount of restructuring costs of $3,213 during the three months ended March 31, 2023, which was presented in the restructuring costs line on the condensed consolidated statement of operations. No restructuring costs were recognized during the three months ended June 30, 2023.
q. Recent Accounting Pronouncements
Below is a brief description of recent accounting pronouncements that could have a material effect on our condensed consolidated financial statements.
Adopted Within these Condensed Consolidated Financial Statements
In March 2020, the FASB issued an accounting standard classified under FASB ASC Topic 848, “Reference Rate Reform.” The amendments in this update contain practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASC 848 is optional and may be elected over time as reference rate reform activities occur. Beginning in the first quarter of 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”) which was issued to defer the sunset date of Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform to December 31, 2024. ASU 2022-06 is effective immediately for all companies. ASU 2022-06 has no impact on the Company’s condensed consolidated financial statements for the three and six months ended June 30, 2023. R
15

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(Unaudited and dollars in thousands, except share and per share data)
NOTE 3: Investments in Real Estate
As of June 30, 2023, our investments in real estate consisted of 119 apartment properties (unaudited) that contain 35,249 units (unaudited). The following table summarizes our investments in real estate, excluding one property we classified as held for sale:

| As of June 30, 2023 |  | As of December 31, 2022 |  | Depreciable Lives (In years)
Land | $ | 575,936 |  |  | $ | 579,094 |  |  | —
Building | 5,631,952 |  |  | 5,695,711 |  |  | 40
Furniture, fixtures and equipment | 402,345 |  |  | 340,438 |  |  | 5-10
Total investments in real estate | $ | 6,610,233 |  |  | $ | 6,615,243 |  |  |
Accumulated depreciation | (519,680) |  |  | (425,034) |  |  |
Investments in real estate, net | $ | 6,090,553 |  |  | $ | 6,190,209 |  |  |

As of June 30, 2023, we owned one property, The Meadows at River Run, with 374 units (unaudited) in Chicago, Illinois that we classified as held for sale. We expect the sale to close in the second half of 2023. In connection with the sale of this property we expect to extinguish $40,033 of mortgage debt.
Dispositions
On February 28, 2023, we sold Eagle Lake Landing apartments located in Indianapolis, Indiana for $37,300 and recognized a gain on sale of $985.
NOTE 4: Investments in Unconsolidated Real Estate
As of June 30, 2023, our investments in unconsolidated real estate entities had aggregate land, building, and construction in progress costs capitalized of $273,921 and aggregate construction debt of $143,638. 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. We recognized losses of $1,205 and $1,981, respectively, from equity method investments during the three and six months ended June 30, 2023 and $871 and $934, respectively, during the three and six months ended June 30, 2022, and these losses were recorded in loss from investments in unconsolidated real estate entities in our condensed consolidated statements of operations.
The following table summarizes our investments in unconsolidated real estate entities as of June 30, 2023 and December 31, 2022:

|  |  |  |  |  |  |  | Carrying Value As Of
Investments in Unconsolidated Real Estate Entities |  | Location |  | Units (1) (Unaudited) |  | IRT Ownership Interest |  | June 30, 2023 |  | December 31, 2022
Metropolis at Innsbrook (2) |  | Richmond, VA |  | 402 |  | 84.8 | % |  | $ | 18,395 |  |  | $ | 17,331 |
Views of Music City II/The Crockett (3) |  | Nashville, TN |  | 408 |  | 50.0 | % |  | 11,555 |  |  | 11,363 |
Virtuoso (4) |  | Huntsville, AL |  | 178 |  | 90.0 | % |  | 12,860 |  |  | 14,422 |
Lakeline Station |  | Austin, TX |  | 378 |  | 90.0 | % |  | 31,061 |  |  | 25,292 |
The Mustang |  | Dallas, TX |  | 275 |  | 85.0 | % |  | 26,097 |  |  | 11,812 |
Total |  |  |  | 1,641 |  |  |  | $ | 99,968 |  |  | $ | 80,220 |

(1)Represents the total number of units after development is complete and each property is placed in service.
(2)Operations commenced during the three months ended June 30, 2023 with 172 units (unaudited) placed in service. The remaining 230 units (unaudited) will be placed in service throughout the second half of 2023.
16

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(Unaudited and dollars in thousands, except share and per share data)
(3)As of June 30, 2023, all 199 units (unaudited) at The Crockett were complete and had ongoing operations. We have one year from the delivery date to exercise our purchase option on The Crockett.
(4)As of June 30, 2023, all 178 units (unaudited) at the Virtuoso investment’s development were complete and had ongoing operations.
NOTE 5: Indebtedness
The following tables contain summary information concerning our consolidated indebtedness as of June 30, 2023:

Debt: |  | Outstanding Principal |  | Unamortized Debt Issuance Costs |  | Unamortized Loan (Discount)/Premiums |  | Carrying Amount |  | Type |  | Weighted Average Rate (4) |  | Weighted Average Maturity (in years)
Unsecured revolver (1) |  | $ | 211,478 |  |  | $ | (1,372) |  |  | $ | — |  |  | $ | 210,106 |  |  | Floating |  | 6.3% |  | 2.6
Unsecured term loans |  | 600,000 |  |  | (2,763) |  |  | — |  |  | 597,237 |  |  | Floating |  | 6.2% |  | 4.0
Secured credit facilities (2) |  | 617,114 |  |  | (2,249) |  |  | 24,415 |  |  | 639,280 |  |  | Floating/Fixed |  | 4.3% |  | 5.4
Mortgages (3) |  | 1,181,581 |  |  | (6,504) |  |  | 29,105 |  |  | 1,204,182 |  |  | Fixed |  | 3.9% |  | 4.7
Total Debt |  | $ | 2,610,173 |  |  | $ | (12,888) |  |  | $ | 53,520 |  |  | $ | 2,650,805 |  |  |  |  | 4.7% |  | 4.5

(1)The unsecured revolver total capacity is $500,000, of which $211,478 was outstanding as of June 30, 2023.
(2)The secured credit facilities include the PNC secured credit facility ("PNC MCFA") and the Newmark secured credit facility ("Newmark MCFA") of which $76,248 and $540,866 was outstanding as of June 30, 2023, respectively.
(3)Includes indebtedness associated with real estate held for sale.
(4)Represents the weighted average of the contractual interest rates in effect as of quarter end without regard to any interest rate swaps or collars. Our total weighted average effective interest rate for the three months ended June 30, 2023, after giving effect to the impact of interest rate swaps and collars, and excluding the impact of loan premium amortization, discount accretion, and interest capitalization was 4.2%.
The following table contains summary information concerning our consolidated indebtedness as of June 30, 2023:

|  | Scheduled maturities on our indebtedness outstanding as of June 30, 2023
Debt: |  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | Thereafter |
Unsecured revolver |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 211,478 |  |  | $ | — |  |  | $ | — |  |
Unsecured term loans |  | — |  |  | — |  |  | — |  |  | 200,000 |  |  | — |  |  | 400,000 |  |
Secured credit facilities |  | — |  |  | — |  |  | 3,525 |  |  | 10,493 |  |  | 11,462 |  |  | 591,634 |  |
Mortgages (1) |  | 7,262 |  |  | 69,014 |  |  | 173,363 |  |  | 144,289 |  |  | 15,946 |  |  | 771,707 |  |
Total |  | $ | 7,262 |  |  | $ | 69,014 |  |  | $ | 176,888 |  |  | $ | 566,260 |  |  | $ | 27,408 |  |  | $ | 1,763,341 |  |

(1)Includes indebtedness associated with real estate held for sale.
17

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(Unaudited and dollars in thousands, except share and per share data)
The following table contains summary information concerning our consolidated indebtedness as of December 31, 2022:

Debt: |  | Outstanding Principal |  | Unamortized Debt Issuance Costs |  | Unamortized Loan (Discount)/Premiums |  | Carrying Amount |  | Type |  | Weighted Average Rate (4) |  | Weighted Average Maturity (in years)
Unsecured revolver (1) |  | $ | 165,978 |  |  | $ | (1,695) |  |  | $ | — |  |  | $ | 164,283 |  |  | Floating |  | 4.9% |  | 3.1
Unsecured term loans |  | 600,000 |  |  | (3,388) |  |  | — |  |  | 596,612 |  |  | Floating |  | 5.1% |  | 4.5
Secured credit facilities (2) |  | 635,128 |  |  | (2,256) |  |  | 27,670 |  |  | 660,542 |  |  | Floating/Fixed |  | 4.3% |  | 5.9
Mortgages (3) |  | 1,185,246 |  |  | (7,305) |  |  | 32,267 |  |  | 1,210,208 |  |  | Fixed |  | 3.9% |  | 5.2
Total Debt |  | $ | 2,586,352 |  |  | $ | (14,644) |  |  | $ | 59,937 |  |  | $ | 2,631,645 |  |  |  |  | 4.5% |  | 5.1

(1)The unsecured revolver total capacity was $500,000, of which $165,978 was outstanding as of December 31, 2022.
(2)The secured credit facilities include the PNC MCFA and the Newmark MCFA of which $76,248 and $558,880 was outstanding as of December 31, 2022, respectively.
(3)Includes indebtedness associated with real estate held for sale.
(4)Represents the weighted average of the contractual interest rates in effect as of quarter end without regard to any interest rate swaps or collars. Our total weighted average effective interest rate as of the year ended December 31, 2022, after giving effect to the impact of interest rate swaps and collars, and excluding the impact of loan premium amortization and discount accretion was 4.1%.
As of June 30, 2023, 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 June 30, 2023 and December 31, 2022:

|  | As of June 30, 2023 |  | As of December 31, 2022
|  | Notional |  | Fair Value of Assets |  | Fair Value of Liabilities |  | Notional |  | Fair Value of Assets |  | Fair Value of Liabilities
Cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | $ | 500,000 |  |  | $ | 29,567 |  |  | $ | — |  |  | $ | 300,000 |  |  | $ | 26,099 |  |  | $ | — |
Interest rate collars |  | 250,000 |  |  | 6,638 |  |  | — |  |  | 250,000 |  |  | 8,317 |  |  | — |
Forward interest rate collars |  | 200,000 |  |  | 8,054 |  |  | — |  |  | 200,000 |  |  | 6,693 |  |  | — |
Total |  | $ | 950,000 |  |  | $ | 44,259 |  |  | — |  |  | $ | 750,000 |  |  | $ | 41,109 |  |  | $ | — |

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 condensed consolidated balance sheets.
For our interest rate swaps and collars that are considered highly effective hedges, we reclassified realized gains of $4,749 and $8,126 to earnings within interest expense for the three and six months ended June 30, 2023, and we expect gains of $20,261 to be reclassified out of accumulated other comprehensive (loss) income to earnings over the next 12 months. For the three and six months ended June 30, 2022, we reclassified realized losses of $1,502 and $3,622 to earnings within interest expense.
18

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(Unaudited and dollars in thousands, except share and per share data)
On March 16, 2023, we entered into an interest rate swap contract with a notional value of $200,000, a strike rate of 3.39% and a maturity date of March 17, 2030. We designated this interest rate swap as a cash flow hedge at inception and determined that the hedge is highly effective in offsetting interest rate fluctuations associated with the identified indebtedness.
NOTE 7: Stockholders' Equity and Noncontrolling Interests
Stockholders’ Equity
On May 10, 2023, our board of directors declared a dividend of $0.16 per share on our common stock, which was paid on July 21, 2023 to common stockholders of record as of June 30, 2023.
On March 14, 2023, our board of directors declared a dividend of $0.14 per share on our common stock, which was paid on April 21, 2023 to common stockholders of record as of March 31, 2023.
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 six months ended June 30, 2023, and 2022, we had no repurchases of shares under the Stock Repurchase Program. As of June 30, 2023, we had $250,000 in shares of our common stock remaining authorized for purchase under the Stock Repurchase Program.
On November 13, 2020, we entered into an equity distribution agreement pursuant to which we may have from time to time offered and sold shares of our common stock under our previous shelf registration statement having an aggregate offering price of up to $150,000 (the “Previous 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 (the "Securities Act"). Under the Previous ATM Program, we may also have entered into one or more forward sale transactions for the sale of shares of our common stock on a forward basis. There were no forward sale transactions that had not settled as of June 30, 2023 and no shares of our common stock were sold under the Previous ATM Program in the six months ended June 30, 2023.
On June 14, 2023, we replaced our previous shelf registration statement with our new shelf registration statement. Subject to market conditions, we intend to implement a new ATM program under the new shelf registration statement that would provide for offers and sales of shares of our common stock (including potentially on a forward sale basis) under our new shelf registration statement in negotiated transactions or transactions that are deemed to be "at the market" offerings as defined in Rule 415 under the Securities Act.
Noncontrolling Interest
During the three and six months ended June 30, 2023, holders of IROP units exchanged 0 and 144,600 units for 0 and 144,600 shares of our common stock, respectively. As of June 30, 2023, 5,946,571 IROP units held by unaffiliated third parties remain outstanding.
On May 10, 2023, our board of directors declared a dividend of $0.16 per IROP unit, which was paid on July 21, 2023 to IROP unit holders of record as of June 30, 2023.
On March 14, 2023, our board of directors declared a dividend of $0.14 per IROP unit, which was paid on April 21, 2023 to IROP unit holders of record as of March 31, 2023.
19

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(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 "Incentive Plan") which 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, 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 2016 Long Term Incentive Plan, (the "Prior Plan") are recycled into the 2022 Incentive Plan) may be awarded, subject to customary adjustment for stock splits, reverse stock splits and similar corporate events or transactions affecting shares of our common stock.
Under the Incentive Plan and the Prior Plan, we have granted restricted shares, RSUs, and PSUs. 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 and unrestricted common share awards and RSU activity is presented below.

| 2023
| Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
Balance, January 1, | 395,482 |  |  | $ | 18.67 |
Granted | 314,165 |  |  | 18.47 |
Vested | (242,740) |  |  | 17.59 |
Forfeited | (31,501) |  |  | 18.82 |
Balance, June 30,(1) | 435,406 |  |  | $ | 19.12 |

(1) | The outstanding award balances above include 141,977 and 163,348 RSUs as of June 30, 2023 and December 31, 2022, respectively.

On February 7, 2023, our compensation committee awarded 216,795 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 six months ended June 30, 2023 and 2022, 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 $2,677 and $2,422, respectively.
20

Table of Contents
Independence Realty Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2023
(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 six months ended June 30, 2023 and 2022:

| For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net income (loss) | $ | 10,988 |  |  | $ | (7,399) |  |  | $ | 19,861 |  |  | $ | 69,482 |
(Income) loss allocated to noncontrolling interest | (279) |  |  | 194 |  |  | (503) |  |  | (2,087) |
Net income (loss) allocable to common shares | $ | 10,709 |  |  | $ | (7,205) |  |  | $ | 19,358 |  |  | $ | 67,395 |
Weighted-average shares outstanding—Basic | 224,422,515 |  |  | 221,164,284 |  |  | 224,325,246 |  |  | 220,982,714 |
Weighted-average shares outstanding—Diluted | 225,073,890 |  |  | 221,164,284 |  |  | 225,088,261 |  |  | 222,033,857 |
Earnings (loss) per share—Basic | $ | 0.05 |  |  | $ | (0.03) |  |  | $ | 0.09 |  |  | $ | 0.30 |
Earnings (loss) per share—Diluted | $ | 0.05 |  |  | $ | (0.03) |  |  | $ | 0.09 |  |  | $ | 0.30 |

Certain IROP units, restricted stocks awards, and forward sale agreements were excluded from the earnings (loss) per share computation because their effect would have been anti-dilutive, totaling 5,946,571 and 5,946,571 for the three and six months ended June 30, 2023, respectively, and 8,112,835 and 8,112,835 for each of the three and six months ended June 30, 2022.
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.
21

Table of Contents
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 2022 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 June 30, 2023, we owned and operated 119 multifamily apartment properties that contain 35,249 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 June 30, 2023, we owned interests in five unconsolidated joint ventures, four that are developing multifamily apartment communities and one that is an operating property that will contain, in aggregate, 1,641 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.
22

Table of Contents
Property Portfolio (1)
As of June 30, 2023, we owned and consolidated 119 multifamily apartment properties, totaling 35,249 units. Below is a summary of our consolidated property portfolio by market.

(Dollars in thousands, except per unit data) |  | As of June 30, 2023 |  | For the Three Months Ended June 30, 2023
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 |  |  | $ | 1,077,820 |  |  | 93.0 | % |  | $ | 1,619 |  |  | $ | 14,561 |  |  | 14.3 | %
Dallas, TX |  | 14 |  | 4,007 |  |  | 859,084 |  |  | 95.1 | % |  | 1,791 |  |  | 13,235 |  |  | 13.0 | %
Denver, CO |  | 9 |  | 2,292 |  |  | 608,291 |  |  | 95.5 | % |  | 1,704 |  |  | 8,041 |  |  | 8.2 | %
Columbus, OH |  | 10 |  | 2,510 |  |  | 371,454 |  |  | 94.2 | % |  | 1,378 |  |  | 6,503 |  |  | 6.4 | %
Raleigh - Durham, NC |  | 6 |  | 1,690 |  |  | 255,412 |  |  | 94.5 | % |  | 1,533 |  |  | 5,212 |  |  | 5.1 | %
Indianapolis, IN |  | 7 |  | 1,979 |  |  | 291,958 |  |  | 95.0 | % |  | 1,347 |  |  | 5,145 |  |  | 5.1 | %
Oklahoma City, OK |  | 8 |  | 2,147 |  |  | 324,174 |  |  | 94.8 | % |  | 1,166 |  |  | 5,074 |  |  | 5.0 | %
Tampa-St. Petersburg, FL |  | 5 |  | 1,452 |  |  | 298,825 |  |  | 93.0 | % |  | 1,808 |  |  | 4,800 |  |  | 4.7 | %
Houston, TX |  | 7 |  | 1,932 |  |  | 324,020 |  |  | 96.0 | % |  | 1,431 |  |  | 4,585 |  |  | 4.5 | %
Nashville, TN |  | 5 |  | 1,508 |  |  | 369,769 |  |  | 95.1 | % |  | 1,599 |  |  | 4,569 |  |  | 4.5 | %
Memphis, TN |  | 4 |  | 1,383 |  |  | 161,022 |  |  | 93.8 | % |  | 1,501 |  |  | 4,144 |  |  | 4.1 | %
Charlotte, NC |  | 3 |  | 714 |  |  | 189,428 |  |  | 95.1 | % |  | 1,761 |  |  | 2,653 |  |  | 2.6 | %
Huntsville, AL |  | 3 |  | 873 |  |  | 191,079 |  |  | 96.5 | % |  | 1,548 |  |  | 2,611 |  |  | 2.6 | %
Birmingham, AL |  | 2 |  | 1,074 |  |  | 233,055 |  |  | 92.9 | % |  | 1,465 |  |  | 2,586 |  |  | 2.5 | %
Lexington, KY |  | 3 |  | 886 |  |  | 160,351 |  |  | 98.5 | % |  | 1,274 |  |  | 2,557 |  |  | 2.5 | %
Louisville, KY |  | 4 |  | 1,150 |  |  | 148,009 |  |  | 94.3 | % |  | 1,271 |  |  | 2,499 |  |  | 2.5 | %
Myrtle Beach, SC - Wilmington, NC |  | 3 |  | 628 |  |  | 68,775 |  |  | 93.8 | % |  | 1,414 |  |  | 1,846 |  |  | 1.8 | %
Greenville, SC |  | 1 |  | 702 |  |  | 123,652 |  |  | 96.7 | % |  | 1,268 |  |  | 1,711 |  |  | 1.7 | %
Cincinnati, OH |  | 2 |  | 542 |  |  | 122,689 |  |  | 93.7 | % |  | 1,548 |  |  | 1,684 |  |  | 1.7 | %
Charleston, SC |  | 2 |  | 518 |  |  | 81,331 |  |  | 94.2 | % |  | 1,634 |  |  | 1,427 |  |  | 1.4 | %
Chicago, IL (2) |  | 1 |  | 374 |  |  | 90,341 |  |  | 95.4 | % |  | 1,801 |  |  | 1,235 |  |  | 1.2 | %
Orlando, FL |  | 1 |  | 297 |  |  | 50,268 |  |  | 90.9 | % |  | 1,801 |  |  | 860 |  |  | 0.8 | %
Asheville, NC |  | 1 |  | 252 |  |  | 29,290 |  |  | 94.4 | % |  | 1,512 |  |  | 825 |  |  | 0.8 | %
San Antonio, TX |  | 1 |  | 306 |  |  | 57,214 |  |  | 96.4 | % |  | 1,489 |  |  | 759 |  |  | 0.7 | %
Austin, TX |  | 1 |  | 256 |  |  | 58,009 |  |  | 94.9 | % |  | 1,767 |  |  | 743 |  |  | 0.7 | %
Norfolk, VA |  | 1 |  | 183 |  |  | 54,203 |  |  | 97.3 | % |  | 1,893 |  |  | 653 |  |  | 0.6 | %
Fort Wayne, IN |  | 1 |  | 222 |  |  | 44,379 |  |  | 96.8 | % |  | 1,430 |  |  | 652 |  |  | 0.6 | %
Chattanooga, TN |  | 1 |  | 192 |  |  | 37,251 |  |  | 95.3 | % |  | 1,385 |  |  | 414 |  |  | 0.4 | %
Total/Weighted Average |  | 119 |  | 35,249 |  |  | $ | 6,681,153 |  |  | 94.6 | % |  | $ | 1,538 |  |  | $ | 101,584 |  |  | 100.0 | %

(1)Excludes our development projects. See Non-GAAP financial measures for the definition of a development property.
(2)Property held for sale as of June 30, 2023.
23

Table of Contents
Current Developments
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.
During the three months ended March 31, 2023, we sold one multifamily apartment community for a gross sales price of $37.3 million and recognized a gain on sale of $1.0 million. Proceeds from the sale were used to reduce indebtedness.
As of June 30, 2023, we had one community held for sale, totaling 374 units. We expect the disposition to close in the second half of 2023.
Investments 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.
No new investments in unconsolidated real estate entities were made during the three and six months ended June 30, 2023. However, we continued to fund commitments to our existing investments in unconsolidated real estate entities. The 199-unit development at The Crockett was completed during the three months ended March 31, 2023, and we have one year from the delivery date to exercise our purchase option on The Crockett. As of June 30, 2023 and December 31, 2022, we had investments in unconsolidated real estate of $99,968 and $80,220, respectively.
Investments in Real Estate Under Development
As part of our merger with Steadfast Apartment REIT, Inc. ("STAR Merger") on December 16, 2021, we acquired two land parcels in Denver, Colorado that are being developed into multifamily properties that will contain 621 units, in the aggregate, upon completion. As of June 30, 2023 and December 31, 2022, we had investments in real estate under development of $121,733 and $105,518, respectively, net of $19,372 and $0 placed in service, respectively.
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 625 units during the quarter ended June 30, 2023. From inception of our value add program in January 2018 through June 30, 2023, we completed renovations on 6,576 of the 11,856 ongoing and completed units currently in our value add program, achieving a return on investment of 18.5% (and approximately 20.2% on the interior portion of such renovation costs). We compute return on cost by using the rent premium per unit per month, multiplied by 12, divided by the applicable renovation costs per unit and we compute the rent premium as the difference between the rental rate on the renovated unit and the market rent for a comparable unrenovated unit as of the date presented, as determined by management consistent with its customary rent-setting and evaluation procedures.
Capital Markets
Shelf Registration Statement
On June 14, 2023, we replaced our previous shelf registration statement with our new shelf registration statement. Subject to market conditions, we intend to implement a new ATM program under the new shelf registration statement that would provide for offers and sales of shares of our common stock (including potentially on a forward sale basis) under our new shelf registration statement in negotiated transactions or transactions that are deemed to be "at the market" offerings as defined in Rule 415 under the Securities Act.
24

Table of Contents
Swap Agreement
On March 16, 2023, we entered into an interest rate swap contract with a notional value of $200,000, a strike rate of 3.39% and a maturity date of March 17, 2030. We designated this interest rate swap as a cash flow hedge at inception and determined that the hedge is highly effective in offsetting interest rate fluctuations associated with the identified indebtedness.
25

Table of Contents
Results of Operations
As of June 30, 2023, we owned and consolidated 119 multifamily apartment properties, of which 115 comprised the Same-Store Portfolio.
Three Months Ended June 30, 2023 compared to the Three Months Ended June 30, 2022

| SAME-STORE PORTFOLIO |  | NON SAME-STORE PORTFOLIO |  | CONSOLIDATED
(Dollars in thousands) | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Three Months Ended June 30,
| 2023 |  | 2022 |  | Increase (Decrease) |  | % Change |  | 2023 |  | 2022 |  | Increase (Decrease) |  | % Change |  | 2023 |  | 2022 |  | Increase (Decrease) |  | % Change
Property Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Number of properties (1) | 115 |  | 115 |  | — |  | —% |  | 4 |  | 5 |  | (1) |  | (20.0)% |  | 119 |  | 120 |  | (1) |  | -0.8%
Number of units (1) | 34,197 |  | 34,197 |  | — |  | —% |  | 1,052 |  | 1,397 |  | (345) |  | (24.7)% |  | 35,249 |  | 35,594 |  | (345) |  | (1.0)%
Average occupancy (1) | 94.2% |  | 95.5% |  | (1.3)% |  | — |  | 93.1% |  | 94.1% |  | (1.0)% |  | — |  | 94.1% |  | 95.5% |  | (1.4)% |  | —
Average effective monthly rent, per unit (1) | $1,531 |  | $1,417 |  | $114 |  | 8.0% |  | $1,774 |  | $1,441 |  | $333 |  | 23.1% |  | $1,538 |  | $1,412 |  | $126 |  | 8.9%
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental and other property revenue | $ | 158,124 |  |  | $ | 148,927 |  |  | $ | 9,197 |  |  | 6.2 | % |  | $ | 5,477 |  |  | $ | 5,716 |  |  | $ | (239) |  |  | (4.2) | % |  | $ | 163,601 |  |  | $ | 154,643 |  |  | $ | 8,958 |  |  | 5.8 | %
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property operating expenses | 59,994 |  |  | 56,644 |  |  | 3,350 |  |  | 5.9 | % |  | 2,077 |  |  | 2,332 |  |  | (255) |  |  | (10.9) | % |  | 62,071 |  |  | 58,976 |  |  | 3,095 |  |  | 5.2 | %
Net Operating Income | $ | 98,130 |  |  | $ | 92,283 |  |  | $ | 5,847 |  |  | 6.3 | % |  | $ | 3,400 |  |  | $ | 3,384 |  |  | $ | 16 |  |  | 0.5 | % |  | $ | 101,530 |  |  | $ | 95,667 |  |  | $ | 5,863 |  |  | 6.1 | %
Other Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 354 |  |  | $ | 120 |  |  | $ | 234 |  |  | 195.0 | %
Corporate and other expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property management expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6,818 |  |  | 6,139 |  |  | 679 |  |  | 11.1 | %
General and administrative expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,910 |  |  | 6,968 |  |  | (1,058) |  |  | (15.2) | %
Depreciation and amortization expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 53,984 |  |  | 72,793 |  |  | (18,809) |  |  | (25.8) | %
Casualty losses (gains), net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 680 |  |  | (5,592) |  |  | 6,272 |  |  | (112.2) | %
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (22,227) |  |  | (20,994) |  |  | (1,233) |  |  | 5.9 | %
Merger and integration costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  | (1,307) |  |  | 1,307 |  |  | (100.0) | %
Other (loss) income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (72) |  |  | 294 |  |  | (366) |  |  | (124.5) | %
Loss from investments in unconsolidated real estate entities |  |  |  |  |  |  |  |  |  |  |  | (1,205) |  |  | (871) |  |  | (334) |  |  | 38.3 | %
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 10,988 |  |  | $ | (7,399) |  |  | $ | 18,387 |  |  | (248.5) | %
(Income) loss allocated to noncontrolling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (279) |  |  | 194 |  |  | (473) |  |  | (243.8) | %
Net income (loss) available to common shares |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 10,709 |  |  | $ | (7,205) |  |  | $ | 17,914 |  |  | (248.6) | %

(1)Excludes our development projects. See Non-GAAP Financial Measures for the definition of a development property.
26

Table of Contents
Revenue
Rental and other property revenue. Revenue from rental and other property revenue of the consolidated portfolio increased $9.0 million to $163.6 million for the three months ended June 30, 2023 from $154.6 million for the three months ended June 30, 2022. The increase was primarily attributable to a $9.2 million increase in same-store rental and other property revenue driven by an 8.0% increase in average effective monthly rents compared to the prior year period.
Expenses
Property operating expenses. Property operating expenses increased $3.1 million to $62.1 million for the three months ended June 30, 2023 from $59.0 million for the three months ended June 30, 2022. The increase was due to a $3.4 million increase in same-store property operating expense, primarily due to increases in contract landscaping services, insurance, utilities, advertising, and repairs and maintenance.
Property management expenses. Property management expenses increased $0.7 million to $6.8 million for the three months ended June 30, 2023 from $6.1 million for the three months ended June 30, 2022 primarily due to inflationary pressures which led to increases in salaries, employee stock compensation, IT support services, and software licenses compared to the prior year.
General and administrative expenses. General and administrative expenses decreased $1.1 million to $5.9 million for the three months ended June 30, 2023 from $7.0 million for the three months ended June 30, 2022. The decrease was primarily due to reduced personnel expenses and corporate performance based incentives compared to prior year.
Depreciation and amortization expense. Depreciation and amortization expense decreased $18.8 million to $54.0 million for the three months ended June 30, 2023 from $72.8 million for the three months ended June 30, 2022. The decrease was primarily attributable to lower intangible asset amortization expenses during the three months ended June 30, 2023 compared to the three months ended June 30, 2022 as a result of the intangible assets acquired in the STAR Merger being fully amortized.
Casualty losses (gains), net. During the three months ended June 30, 2023, we incurred $0.7 million in casualty losses due to fires at two properties where the carrying value of the damage exceeded insurance proceeds due to policy deductible levels. During the three months ended June 30, 2022, we recognized net casualty gains of $5.6 million as a result of receiving insurance proceeds in excess of losses incurred.
Interest expense. Interest expense increased $1.2 million to $22.2 million for the three months ended June 30, 2023 from $21.0 million for the three months ended June 30, 2022 primarily due to higher interest rates impacting our variable rate loans.
Merger and integration costs. We incurred approximately $1.3 million of STAR Merger-related integration costs during the three months ended June 30, 2022. These costs primarily consist of technology migration and implementation, consulting and professional fees.
Loss from investments in unconsolidated real estate entities. During the three months ended June 30, 2023, we recognized $1.2 million of losses on investments in unconsolidated real estate, which was primarily driven by our $0.6 million and $0.4 million portion of interest and depreciation and amortization recognized by the unconsolidated real estate entities.
27

Table of Contents
Results of Operations
Six Months Ended June 30, 2023 compared to the Six Months Ended June 30, 2022

| SAME-STORE PORTFOLIO |  | NON SAME-STORE PORTFOLIO |  | CONSOLIDATED
(Dollars in thousands) | Six Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | Increase (Decrease) |  | % Change |  | 2023 |  | 2022 |  | Increase (Decrease) |  | % Change |  | 2023 |  | 2022 |  | Increase (Decrease) |  | % Change
Property Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Number of properties (1) | 115 |  | 115 |  | — |  | —% |  | 4 |  | 5 |  | (1) |  | (20.0)% |  | 119 |  | 120 |  | (1) |  | -0.8%
Number of units (1) | 34,197 |  | 34,197 |  | — |  | —% |  | 1,052 |  | 1,397 |  | (345) |  | (24.7)% |  | 35,249 |  | 35,594 |  | (345) |  | (1.0)%
Average occupancy (1) | 93.6% |  | 95.4% |  | (1.8)% |  | —% |  | 94.2% |  | 93.5% |  | 0.7% |  | —% |  | 93.6% |  | 95.3% |  | (1.7)% |  | —%
Average effective monthly rent, per unit (1) | $1,530 |  | $1,398 |  | $132 |  | 9.4% |  | $1,777 |  | $1,354 |  | $423 |  | 31.3% |  | $1,545 |  | $1,392 |  | $153 |  | 11.0%
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental and other property revenue | $ | 312,940 |  |  | $ | 292,876 |  |  | $ | 20,064 |  |  | 6.9% |  | $ | 11,796 |  |  | $ | 11,745 |  |  | $ | 51 |  |  | 0.4% |  | $ | 324,736 |  |  | $ | 304,621 |  |  | $ | 20,115 |  |  | 6.6%
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property operating expenses | 116,734 |  |  | 109,934 |  |  | 6,800 |  |  | 6.2% |  | 4,593 |  |  | 4,924 |  |  | (331) |  |  | (6.7)% |  | 121,327 |  |  | 114,858 |  |  | 6,469 |  |  | 5.6%
Net Operating Income | $ | 196,206 |  |  | $ | 182,942 |  |  | $ | 13,264 |  |  | 7.3% |  | $ | 7,203 |  |  | $ | 6,821 |  |  | $ | 382 |  |  | 5.6% |  | $ | 203,409 |  |  | $ | 189,763 |  |  | $ | 13,646 |  |  | 7.2%
Other Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $594 |  | $505 |  | $89 |  | 17.6%
Corporate and other expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property management expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 13,189 |  |  | 11,696 |  |  | 1,493 |  |  | 12.8 | %
General and administrative expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 14,063 |  |  | 14,896 |  |  | (833) |  |  | (5.6) | %
Depreciation and amortization expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 107,520 |  |  | 150,966 |  |  | (43,446) |  |  | (28.8) | %
Casualty losses (gains), net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 831 |  |  | (6,985) |  |  | 7,816 |  |  | (111.9) | %
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (44,351) |  |  | (41,525) |  |  | (2,826) |  |  | 6.8 | %
Gain on sale of real estate assets, net |  |  |  |  |  |  |  |  |  |  |  | 985 |  |  | 94,712 |  |  | (93,727) |  |  | (99.0) | %
Merger and integration costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  | (3,202) |  |  | 3,202 |  |  | (100.0) | %
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 21 |  |  | 736 |  |  | (715) |  |  | (97.1) | %
Loss from investments in unconsolidated real estate entities |  |  |  |  |  |  |  |  |  |  |  | (1,981) |  |  | (934) |  |  | (1,047) |  |  | 112.1 | %
Restructuring costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (3,213) |  |  | — |  |  | (3,213) |  |  | 100.0 | %
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $19,861 |  | $69,482 |  | $(49,621) |  | (71.4)%
Income allocated to noncontrolling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (503) |  | (2,087) |  | 1,584 |  | (75.9)%
Net income available to common shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $19,358 |  | $67,395 |  | $(48,037) |  | (71.3)%

(1)Excludes our development projects. See Non-GAAP Financial Measures for the definition of a development property.
28

Table of Contents
Revenue
Rental and other property revenue. Revenue from rental and other property revenue of the consolidated portfolio increased $20.1 million to $324.7 million for the six months ended June 30, 2023 from $304.6 million for the six months ended June 30, 2022. The increase was primarily attributable to a $20.1 million increase in same-store rental and
other property revenue driven by a 9.4% increase in average effective monthly rents compared to the prior year period.
Expenses
Property operating expenses. Property operating expenses increased $6.5 million to $121.3 million for the six months ended June 30, 2023 from $114.9 million for the six months ended June 30, 2022. The increase was due to $6.8 million increase in same-store property operating expense, primarily due to increases in insurance, contract landscaping services, turnover costs, advertising and utilities.
Property management expenses. Property management expenses increased $1.5 million to $13.2 million for the six months ended June 30, 2023 from $11.7 million for the six months ended June 30, 2022 primarily due to inflationary pressures which led to increases in salaries, employee stock compensation, IT support services, and software licenses compared to the prior year.
General and administrative expenses. General and administrative expenses decreased $0.8 million to $14.1 million for the six months ended June 30, 2023 from $14.9 million for the six months ended June 30, 2022. The decrease was primarily due to reduced performance based incentives compared to prior year.
Depreciation and amortization expense. Depreciation and amortization expense decreased $43.4 million to $107.5 million for the six months ended June 30, 2023 from $151.0 million for the six months ended June 30, 2022. The decrease was primarily attributable to lower intangible asset amortization expenses during the six months ended June 30, 2023 compared to the six months ended June 30, 2022 as a result of the intangible assets acquired in the STAR Merger being fully amortized.
Casualty losses (gains), net. During the six months ended June 30, 2023, we incurred $0.8 million in casualty losses due to fires at three properties where the carrying value of the damage exceeded insurance proceeds due to policy deductible levels. During the six months ended June 30, 2022, we recognized net casualty gains of $7.0 million as a result of receiving insurance proceeds in excess of losses incurred.
Interest expense. Interest expense increased $2.8 million to $44.4 million for the six months ended June 30, 2023 from $41.5 million for the six months ended June 30, 2022 primarily due to higher interest rates impacting our
variable rate loans.
Gain on sale of real estate assets, net. During the six months ended June 30, 2023, one multi-family property was sold resulting in gains of $1.0 million. During the six months ended June 30, 2022, four multi-family properties were sold resulting in a gain of $94.7 million.
Merger and integration costs. We incurred approximately $3.2 million of STAR merger-related integration costs during the six months ended June 30, 2022. These costs primarily consist of technology migration and implementation, consulting and professional fees.
Loss from investments in unconsolidated real estate entities. During the six months ended June 30, 2023, we recognized $2.0 million of loss on investments in unconsolidated real estates, which consisted primarily of our $1.3 million and $1.0 million portions of interest and depreciation and amortization recognized by the unconsolidated real estate entities.
Restructuring costs. During the six months ended June 30, 2023, we incurred approximately $3.2 million of severance costs related to the reorganization of certain departments that impacted a limited number of employees.
29

Table of Contents
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, merger and integration costs, and restructuring 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.
30

Table of Contents
Set forth below is a reconciliation of net income to FFO and CFFO for the three and six months ended June 30, 2023 and 2022 (in thousands, except share and per share information):

|  | For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
|  | Amount |  | Per Share(1) |  | Amount |  | Per Share(2) |  | Amount |  | Per Share(2) |  | Amount |  | Per Share(2)
Funds From Operations (FFO): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) |  | $ | 10,988 |  |  | $ | 0.05 |  |  | $ | (7,399) |  |  | $ | (0.03) |  |  | $ | 19,861 |  |  | $ | 0.09 |  |  | $ | 69,482 |  |  | $ | 0.30 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate depreciation and amortization |  | 53,701 |  |  | 0.23 |  |  | 72,298 |  |  | 0.32 |  |  | 106,989 |  |  | 0.46 |  |  | 150,241 |  |  | 0.66 |
Our share of real estate depreciation and amortization from investments in unconsolidated real estate entities |  | 575 |  |  | — |  |  | 515 |  |  | — |  |  | 994 |  |  | — |  |  | 515 |  |  | — |
Gain on sale of real estate assets net, excluding prepayment gains |  | — |  |  | — |  |  | — |  |  | — |  |  | (314) |  |  | — |  |  | (94,712) |  |  | (0.41) |
FFO |  | $ | 65,264 |  |  | $ | 0.28 |  |  | $ | 65,414 |  |  | $ | 0.29 |  |  | $ | 127,530 |  |  | $ | 0.55 |  |  | $ | 125,526 |  |  | $ | 0.55 |
Core Funds From Operations (CFFO): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FFO |  | $ | 65,264 |  |  | $ | 0.28 |  |  | $ | 65,414 |  |  | $ | 0.29 |  |  | $ | 127,530 |  |  | $ | 0.55 |  |  | $ | 125,526 |  |  | $ | 0.55 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other depreciation and amortization |  | 283 |  |  | — |  |  | 495 |  |  | — |  |  | 531 |  |  | — |  |  | 725 |  |  | — |
Casualty losses (gains), net |  | 680 |  |  | 0.01 |  |  | (5,592) |  |  | (0.02) |  |  | 831 |  |  | 0.01 |  |  | (6,985) |  |  | (0.03) |
Loan (premium accretion) discount amortization, net |  | (2,737) |  |  | (0.01) |  |  | (2,741) |  |  | (0.01) |  |  | (5,493) |  |  | (0.02) |  |  | (5,495) |  |  | (0.02) |
Prepayment (gains) losses on asset dispositions |  | — |  |  | — |  |  | — |  |  | — |  |  | (670) |  |  | — |  |  | — |  |  | — |
Other expense (income) |  | 192 |  |  | — |  |  | (294) |  |  | — |  |  | 234 |  |  | — |  |  | (673) |  |  | — |
Merger and integration costs |  | — |  |  | — |  |  | 1,307 |  |  | — |  |  | — |  |  | — |  |  | 3,202 |  |  | 0.01 |
Restructuring costs |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,213 |  |  | 0.01 |  |  | — |  |  | — |
CFFO |  | $ | 63,682 |  |  | $ | 0.28 |  |  | $ | 58,589 |  |  | $ | 0.26 |  |  | $ | 126,176 |  |  | $ | 0.55 |  |  | $ | 116,300 |  |  | $ | 0.51 |

(1)Based on 230,369,086 and 230,278,208 weighted-average shares and units outstanding for the three and six months ended June 30, 2023.
(2)Based on 227,966,261 and 227,873,108 weighted-average shares and units outstanding for the three and six months ended June 30, 2022.
Same-Store Portfolio Net Operating Income
We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful supplemental measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding interest expenses, depreciation and amortization, casualty related costs and gains, property management expenses, general and administrative expense, net gains on sale of assets, merger and integration costs, and restructuring costs. 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 and not a development property at the beginning of the previous year. Properties that are held for sale or have been sold are excluded from the same-store portfolio.
31

Table of Contents
Non Same-Store Properties and Non Same-Store Portfolio
Properties that did not meet the definition of a same-store property as of the beginning of the previous year are added into the non same-store portfolio.
Development Property
A development property is a property that is either currently under development or is in lease-up prior to reaching overall occupancy of 90%.
Set forth below is a reconciliation of GAAP net income (loss) to Same-Store Portfolio NOI for the three and six months ended June 30, 2023 and 2022 (in thousands):

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | % change |  | 2023 |  | 2022 |  | % change
Net income (loss) | $ | 10,988 |  |  | $ | (7,399) |  |  | (248.5) | % |  | $ | 19,861 |  |  | $ | 69,482 |  |  | (71.4) | %
Other revenue | (354) |  |  | (120) |  |  | 195.0 | % |  | (594) |  |  | (505) |  |  | 17.6 | %
Property management expenses | 6,818 |  |  | 6,139 |  |  | 11.1 | % |  | 13,189 |  |  | 11,696 |  |  | 12.8 | %
General and administrative expenses | 5,910 |  |  | 6,968 |  |  | (15.2) | % |  | 14,063 |  |  | 14,896 |  |  | (5.6) | %
Depreciation and amortization expense | 53,984 |  |  | 72,793 |  |  | (25.8) | % |  | 107,520 |  |  | 150,966 |  |  | (28.8) | %
Casualty losses (gains), net | 680 |  |  | (5,592) |  |  | (112.2) | % |  | 831 |  |  | (6,985) |  |  | (111.9) | %
Interest expense | 22,227 |  |  | 20,994 |  |  | 5.9 | % |  | 44,351 |  |  | 41,525 |  |  | 6.8 | %
Gain on sale of real estate assets, net | — |  |  | — |  |  | — | % |  | (985) |  |  | (94,712) |  |  | (99.0) | %
Other (loss) income, net | 72 |  |  | (294) |  |  | (124.5) | % |  | (21) |  |  | (736) |  |  | (97.1) | %
Loss from investments in unconsolidated real estate entities | 1,205 |  |  | 871 |  |  | 38.3 | % |  | 1,981 |  |  | 934 |  |  | 112.1 | %
Merger and integration costs | — |  |  | 1,307 |  |  | (100.0) | % |  | — |  |  | 3,202 |  |  | (100.0) | %
Restructuring costs | — |  |  | — |  |  | — | % |  | 3,213 |  |  | — |  |  | 100.0 | %
NOI | 101,530 |  |  | 95,667 |  |  | 6.1 | % |  | 203,409 |  |  | 189,763 |  |  | 7.2 | %
Less: Non same-store portfolio NOI | 3,400 |  |  | 3,384 |  |  | 0.5 | % |  | 7,204 |  |  | 6,819 |  |  | 5.6 | %
Same-store portfolio NOI (a) | $ | 98,130 |  |  | $ | 92,283 |  |  | 6.3 | % |  | $ | 196,205 |  |  | $ | 182,944 |  |  | 7.2 | %

(a)Same-Store Portfolio for the three and six months ended June 30, 2023 and 2022 included 115 properties containing 34,197 units.
32

Table of Contents
Set forth below is Same-Store Portfolio NOI for the three and six months ended June 30, 2023 and 2022 (in thousands, except per unit data):

| Three Months Ended June 30,(a) |  | Six Months Ended June 30,(a)
| 2023 |  | 2022 |  | % change |  | 2023 |  | 2022 |  | % change
Revenue: |  |  |  |  |  |  |  |  |  |  |
Rental and other property revenue | $ | 158,124 |  |  | $ | 148,927 |  |  | 6.2 | % |  | $ | 312,940 |  |  | $ | 292,876 |  |  | 6.9 | %
Property Operating Expenses |  |  |  |  |  |  |  |  |  |  |
Real estate taxes | 19,584 |  |  | 19,769 |  |  | (0.9) | % |  | 38,944 |  |  | 38,903 |  |  | 0.1 | %
Property insurance | 3,857 |  |  | 3,008 |  |  | 28.2 | % |  | 7,007 |  |  | 5,807 |  |  | 20.7 | %
Personnel expenses | 12,609 |  |  | 12,442 |  |  | 1.3 | % |  | 24,485 |  |  | 24,649 |  |  | (0.7) | %
Utilities | 7,523 |  |  | 7,074 |  |  | 6.3 | % |  | 15,411 |  |  | 14,397 |  |  | 7.0 | %
Repairs and maintenance | 6,536 |  |  | 6,092 |  |  | 7.3 | % |  | 12,337 |  |  | 10,302 |  |  | 19.8 | %
Contract services | 6,303 |  |  | 5,201 |  |  | 21.2 | % |  | 11,694 |  |  | 9,971 |  |  | 17.3 | %
Advertising expenses | 1,688 |  |  | 1,252 |  |  | 34.8 | % |  | 3,045 |  |  | 2,460 |  |  | 23.8 | %
Other expenses | 1,894 |  |  | 1,806 |  |  | 4.9 | % |  | 3,811 |  |  | 3,445 |  |  | 10.6 | %
Total property operating expenses | 59,994 |  |  | 56,644 |  |  | 5.9 | % |  | 116,734 |  |  | 109,934 |  |  | 6.2 | %
Same-store portfolio NOI | $ | 98,130 |  |  | $ | 92,283 |  |  | 6.3 | % |  | $ | 196,206 |  |  | $ | 182,942 |  |  | 7.3 | %

Same-store portfolio NOI Margin | 62.1 | % |  | 62.0 | % |  | 0.1 | % |  | 62.7 | % |  | 62.5 | % |  | 0.2 | %
Average Occupancy | 94.2 | % |  | 95.5 | % |  | (1.3) | % |  | 93.6 | % |  | 95.4 | % |  | (1.8) | %

Average effective monthly rent, per unit | $ | 1,531 |  |  | $ | 1,417 |  |  | 8.0 | % |  | $ | 1,530 |  |  | $ | 1,398 |  |  | 9.4 | %

(a)Same-Store Portfolio for the three and six months ended June 30, 2023 and 2022 included 115 properties containing 34,197 units.
Liquidity and Capital Resources
Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain investments, pay distributions and other general business needs. We believe our available cash balances, financing arrangements and cash flows from operations will be sufficient to fund our liquidity requirements with respect to our existing portfolio for the next twelve months and the foreseeable future.
Our primary cash requirements are to:
•make investments to continue our value add initiatives to improve the quality and performance of our properties;
•repay our indebtedness;
•fund costs necessary to maintain our properties;
•continue funding our current real estate developments until completion;
•pay our operating expenses; and
•distribute a minimum of 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gain) and to make investments in a manner that enables us to maintain our qualification as a REIT.
We intend to meet our liquidity requirements primarily through a combination of one or more of the following:
•the use of our cash and cash equivalents of $14.3 million as of June 30, 2023;
•existing and future unsecured financing, including advances under our unsecured credit facility, and financing secured directly or indirectly by the apartment properties in our portfolio;
33

Table of Contents
•cash generated from operating activities;
•net cash proceeds from property sales, including sales undertaken as part of our capital recycling strategy and other sales; and
•proceeds from the sales of our common stock and other equity securities, including common stock that may be sold under our ATM program.
Cash Flows
As of June 30, 2023 and 2022, we maintained cash and cash equivalents, and restricted cash of approximately $42.5 million and $42.4 million, respectively. Our cash and cash equivalents were generated from the following activities (dollars in thousands):

| For the Six Months Ended June 30,
| 2023 |  | 2022
Cash flow provided by operating activities | $ | 127,194 |  |  | $ | 111,587 |
Cash flow (used in) provided by investing activities | (83,959) |  |  | 65,169 |
Cash flow used in financing activities | (44,740) |  |  | (200,032) |
Net change in cash and cash equivalents, and restricted cash | (1,505) |  |  | (23,276) |
Cash and cash equivalents, and restricted cash, beginning of period | 44,017 |  |  | 65,671 |
Cash and cash equivalents, and restricted cash, end of the period | $ | 42,512 |  |  | $ | 42,395 |

Our cash inflows from operating activities during the six months ended June 30, 2023 and 2022 were primarily driven by ongoing operations of our properties.
Our cash outflows from investing activities during the six months ended June 30, 2023 were primarily due to $67.2 million of capital expenditures, $21.7 million of investments in unconsolidated real estate entities, and $30.6 million of investments in real estate under development, partially offset by $35.6 million of proceeds from one property disposition. Our cash inflows from investing activities during the six months ended June 30, 2022 were primarily due to $155.6 million of proceeds from four property dispositions and proceeds from insurance claims of $15.5 million, partially offset by $33.5 million of investments in unconsolidated real estate entities, $29.1 million of capital expenditures, $26.0 million of acquisitions of real estate properties, and $20.7 million of investments in real estate under development.
Our cash outflows from financing activities during the six months ended June 30, 2023 were primarily due to payment of dividends on our common stock and noncontrolling interests of $64.7 million partially offset by $27.5 million of net draws on our unsecured revolver. Our cash outflows from financing activities during the six months ended June 30, 2022 were primarily due to $145.0 million of net pay downs on our unsecured revolver and $44.5 million payment of dividends on our common stock and noncontrolling interests.
Contractual Commitments
Our 2022 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.
Off-Balance Sheet Arrangements
There were no off-balance sheet arrangements during the six months ended June 30, 2023 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 2022 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.
34

Table of Contents
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Our 2022 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 six months ended June 30, 2023 from the disclosures included in our 2022 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 June 30, 2023, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation referred to above during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
35

Table of Contents
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.
The Company has been named as a party in certain litigation filed in the U.S. District Court for the Middle District of Tennessee on behalf of putative classes of consumers alleging collusion among RealPage, Inc. ("RealPage"), us, and 46 other defendants who own or manage multifamily rental housing, to fix, raise, maintain, and stabilize multifamily rental housing pricing in violation of Section 1 of the Sherman Act. We deny all allegations of wrongdoing and will vigorously defend the action.
Item 1A. Risk Factors.
There have not been any material changes from the risk factors disclosed in Part 1, Item 1A of our 2022 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the three and six months ended June 30, 2023, holders of IROP units exchanged 0 and 144,600 units, respectively, for 0 and 144,600 shares, respectively, of our common stock. 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 June 30, 2023, 5,946,571 IROP units held by unaffiliated third parties remained outstanding.
During the three months ended June 30, 2023, 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)
April 2023 |  | 1,187 |  |  | $ | 16.15 |  |  | — |  |  | $ | 250,000 |
May 2023 |  | — |  |  | — |  |  | — |  |  | 250,000 |
June 2023 |  | — |  |  | — |  |  | — |  |  | 250,000 |
Total |  | 1,187 |  |  | $ | 16.15 |  |  | — |  |  |

(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.
36

Table of Contents
Item 5. Other Information.
During the three months ended June 30, 2023, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).
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.*
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) Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022, (iv) Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2023 and 2022, (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 and (vi) notes to the condensed consolidated financial statements as of June 30, 2023.
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.
37

Table of Contents
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: July 27, 2023 | By: | /s/ SCOTT F. SCHAEFFER
|  | Scott F. Schaeffer
|  | Chairman of the Board and Chief Executive Officer
|  | (Principal Executive Officer)
Date: July 27, 2023 | By: | /s/ JAMES J. SEBRA
|  | James J. Sebra
|  | Chief Financial Officer and Treasurer
|  | (Principal Financial Officer)
Date: July 27, 2023 | By: | /s/ JASON R. DELOZIER
|  | Jason R. Delozier
|  | Chief Accounting Officer
|  | (Principal Accounting Officer)

38