Executive Summary

IRT delivered a solid Q4 with same‑store NOI up 5.3% YoY and NOI margin up 180 bps to 66.3% as lower taxes/insurance and repairs offset top‑line pressure; Core FFO/share was $0.32 (+6.7% YoY) and at the high end of full‑year guidance ($1.16) .
GAAP showed a small net loss ($1.0M; $0.00/share) driven by a $21.0M impairment on a Birmingham asset held for sale; excluding this, FFO/share was $0.33 and CFFO/share $0.32 .
2025 guide introduced: CFFO/share $1.16–$1.19, EPS $0.19–$0.22, same‑store NOI +0.8% to +3.3%; management expects blended rent growth ~1.6%, back‑half weighted, and plans 2,500–3,000 value‑add renovations (mid‑ to high‑teens ROI) .
Balance sheet improved to investment‑grade; net debt/Adj. EBITDA fell to 5.9x; revolver upsized to $750M and borrowing spreads cut ~~34 bps—expanding liquidity (~~$0.75B) and supporting accretive acquisitions at mid‑5% cap rates .
Street consensus (S&P Global) for Q4 2024 EPS/revenue was unavailable at time of request due to data limits; estimate beat/miss vs. consensus cannot be determined at this time (S&P Global) .

What Went Well and What Went Wrong

What Went Well

Same‑store operating leverage: Q4 same‑store NOI +5.3% on +2.3% revenue and a 3.0% expense decline; NOI margin rose 180 bps to 66.3% on higher occupancy (+100 bps to 95.5%) and lower taxes/insurance and R&M .
Cash flow resilience: CFFO/share grew to $0.32 in Q4 (FY $1.16 at high‑end of guide) despite asset sales; management emphasized “high‑end of our guidance” and confidence in 2025 growth .
Balance sheet and capital access: Investment‑grade ratings (S&P, Fitch) reduced borrowing margins (~34 bps) and revolver capacity was increased to $750M, extending maturities to 2029, supporting an active acquisition pipeline at ~5.7% “going‑in” cap rates .

Management quote: “2024 was another strong year for IRT as we achieved the high‑end of our guidance… Looking ahead to 2025, we believe we are well‑positioned to grow CFFO as we capitalize on rebounding market fundamentals” — Scott Schaeffer, CEO .

What Went Wrong

GAAP impact from asset recycling: Q4 GAAP net loss driven by a $21.0M impairment on a Birmingham property classified as held for sale ahead of a February 2025 closing for $111.0M .
New lease rate pressure: Q4 blended lease‑over‑lease growth was 0.0%, with new lease rates down 4.6% (renewals +5.4%); management noted continued early‑2025 pressure on new leases, improving into spring .
Expense normalization ahead: 2025 same‑store expenses guided +2.8% to +4.1% (midpoint +3.5%), with controllables up ~3.8%; though property taxes assumed ~0% y/y, controllable costs are expected to run a bit hotter .

Financial Results

Consolidated P&L and Cash Flow (Quarterly)

Metric	Q4 2023	Q1 2024	Q2 2024	Q3 2024	Q4 2024
Rental & Other Property Revenue ($000)	$166,730	$160,331	$158,104	$159,860	$160,617
Net (Loss)/Income to Common ($000)	$(40,515)	$17,577	$10,354	$12,365	$(1,001)
Diluted EPS ($)	$(0.18)	$0.08	$0.05	$0.05	$0.00
NOI ($000)	$107,027	$100,360	$97,221	$99,322	$106,422
NOI Margin (%)	64.2%	62.6%	61.5%	62.1%	66.3%
Adjusted EBITDA ($000)	$95,640	$84,683	$83,609	$87,453	$94,533
FFO/Share ($)	$0.31	$0.27	$0.28	$0.30	$0.33
CFFO/Share ($)	$0.30	$0.27	$0.28	$0.29	$0.32

Notes: Q4 GAAP net loss reflects $20.9M impairment on asset held for sale . Same‑store NOI up 5.3% y/y; blended lease growth flat as lower new lease rates offset renewals .

Same‑Store vs. Non‑Same‑Store (Q4 2024 vs. Q4 2023)

Metric	Q4 2023	Q4 2024
Same‑Store Rental & Other Revenue ($000)	$147,880	$151,326
Non‑Same‑Store Rental & Other Revenue ($000)	$18,850	$9,291
Same‑Store Property OpEx ($000)	$52,517	$50,928
Non‑Same‑Store Property OpEx ($000)	$7,186	$3,267
Same‑Store NOI ($000)	$95,363	$100,398
Non‑Same‑Store NOI ($000)	$11,664	$6,024

KPIs and Operating Metrics

KPI	Q3 2024	Q4 2024
Same‑Store Avg. Occupancy (%)	95.5%	95.5%
Lease‑over‑lease: New (%)	(3.5%)	(4.6%)
Lease‑over‑lease: Renewal (%)	3.8%	5.4%
Lease‑over‑lease: Blended (%)	0.8%	0.0%
Resident Retention Rate (%)	57.0%	51.6%
Same‑Store Avg. Effective Rent/Unit ($/mo)	$1,570	$1,570
Portfolio Avg. Effective Rent/Unit ($/mo)	$1,571	$1,572

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS ($)	FY 2025	N/A	0.19 – 0.22	New
CFFO/Share ($)	FY 2025	N/A	1.16 – 1.19	New
Same‑Store NOI Growth (%)	FY 2025	N/A	0.8% – 3.3%	New
G&A + Property Mgmt Expense ($M)	FY 2025	N/A	$55 – $57	New
Interest Expense ($M)	FY 2025	N/A	$88 – $90	New
Acquisition Volume ($M)	FY 2025	N/A	$280 – $320	New
Disposition Volume ($M)	FY 2025	N/A	$110 – $112	New
Capex: Recurring ($M)	FY 2025	N/A	$25 – $27	New
Capex: Value‑Add ($M)	FY 2025	N/A	$48 – $58	New
Capex: Non‑recurring/Revenue Enh. ($M)	FY 2025	N/A	$47 – $51	New
Capex: Development ($M)	FY 2025	N/A	$5 – $6	New
Dividend/Share ($)	Q4 2024	Prior $0.16	$0.16 declared for Q4 (paid Jan 17, 2025)	Maintained

Management expects blended rent growth of ~1.6% for 2025, with most benefit 2H weighting; occupancy guide 95.5% midpoint and bad debt ~1.4% of revenue .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Supply/Demand & New Deliveries	New lease growth modest; focus on occupancy; blended 1.6%–3.0% expected in Q3	S&P “BBB”; raised equity; highlighted heavy supply; occupancy +90 bps	New supply in same‑store markets cut ~60% in 2025 vs 2024; stronger pricing power expected esp. 2H25	Improving fundamentals
Pricing/Leasing	Q2 new leases ~‑1%; renewals +3.5%	Q3 new leases (3.6)%, renewals +3.8%	Q4 new (4.6)%, renewals +5.4%; blended 0%; early‑2025 new lease pressure improving into spring	Bottoming/turning
Value‑Add Program	378 units; ~15.7% ROI	578 units; ~14.9% ROI	395 units Q4; 1,671 in 2024; ~15%+ ROI; plan 2,500–3,000 units in 2025	Re‑accelerating
Balance Sheet & Liquidity	Deleveraging via dispos; net debt/EBITDA ~6.5x	IG rating from S&P; private notes; forward equity	IG from S&P & Fitch; revolver to $750M; liquidity ~$0.75B; margins lower by ~34 bps	Strengthened
Acquisitions/Cap Rates	Tampa acquisition; capital recycling	Pipeline to deploy forward equity; under contract	Mid‑5% cap rate deals (5.7% going‑in); pipeline includes lease‑up and distressed sellers; Indy closing ~$59.5M	Accretive pipeline
Bad Debt & Fraud Controls	N/A	N/A	Bad debt 1.9% in 2024 (2.2% in 2023); targeting ~1.4% in 2025 as controls take hold	Improving

Management Commentary

Strategy and 2025 setup: “We entered 2025 with high sustainable occupancies, strong leasing momentum and a balance sheet geared for growth… drive NOI and core FFO growth by delivering rental rate growth… and deploying capital into new strategic investments.” — Scott Schaeffer .
Supply outlook: “New supply… increased 6.2% in 2024 with 2025 now forecasted to increase by only 2.1%… In 2026, the pace… is forecasted to further decrease to 1.5%” — Scott Schaeffer .
Rent trajectory: “Blended rental rate growth [for 2025] of 1.6%… renewal growth of 3%… effectively 0% new lease growth over the year… starting slightly negative… move north to 0 by early leasing season in April… end the year positive.” — James Sebra .
Capital access: “Investment‑grade… resulted in an immediate reduction of our interest rate on our unsecured bank borrowings of 34 basis points.” — James Sebra .
Value‑add cadence: “We intend on doing more value‑add units [in 2025]… supply pressure waning… rents going up… target 2,500 to 3,000 units.” — Scott Schaeffer/James Sebra .

Q&A Highlights

New lease pressure and trajectory: Guidance assumes 0% new lease growth for 2025, improving from negative in early 2025 to flat by spring and positive by year‑end; renewals guided ~3% with ~55% retention .
Investment pipeline: Seeing opportunities in lease‑up assets and from financing maturities creating distress; cap rates fairly static in mid‑5% range; Charlotte/Orlando and Indianapolis examples at ~5.7% going‑in .
Value‑add and occupancy: Plans to start 15 new value‑add communities in 2025 to disperse downtime, supporting guided occupancy gains despite higher renovation volume .
Bad debt: Q4 bad debt timing effects in Atlanta/Memphis; expecting normalization and ~1.4% of revenue in 2025 as fraud controls improve (2024 was 1.9%; 2023 2.2%) .
Expenses: Same‑store 2025 expense growth midpoint ~3.5%; taxes assumed 0% growth; controllables slightly higher; procurement processes to “control the controllables” while protecting resident experience .

Estimates Context

S&P Global consensus for Q4 2024 EPS and revenue was unavailable at time of request due to API limits; as a result, a beat/miss analysis versus Street consensus could not be completed (Values would be retrieved from S&P Global).
Internal guide framing: 2025 CFFO/share $1.16–$1.19 and same‑store NOI +0.8%–3.3% imply modest growth with rent acceleration weighted to 2H 2025; acquisitions modeled mid‑year at mid‑5% cap rates .

Key Takeaways for Investors

Operating momentum: Q4 showed healthy same‑store NOI (+5.3%) and margin expansion (66.3%), driven by occupancy and expense controls; watch for new‑lease trade‑out to inflect from negative in 1H to positive by year‑end .
2025 playbook: Management is prioritizing occupancy stability (~95.5%) and modest blended rent growth (~1.6%) while re‑accelerating value‑add (2,500–3,000 units) to drive NOI and CFFO growth .
Capital deployment: With ~$0.75B liquidity and IG spreads, IRT is positioned to execute on mid‑5% cap rate acquisitions and recycle capital from noncore assets into higher‑quality markets .
Balance‑sheet de‑risking: Net debt/Adj. EBITDA improved to 5.9x with a line‑of‑sight to mid‑5x in 2025; extended maturities and lower borrowing margins reduce rate sensitivity .
Watch list: New lease trade‑outs (monthly cadence), bad debt trajectory toward ~1.4%, controllable expense growth, and acquisition pacing at guided economics .
Dividend supported by cash flows: CFFO payout at 50% in Q4 on a $0.16/quarter dividend, providing cushion as growth initiatives ramp .
Potential stock catalysts: Evidence of rent acceleration (2H25), accretive deal announcements at mid‑5% caps, and continued deleveraging toward mid‑5x leverage could support multiple expansion .

INDEPENDENCE REALTY TRUST, INC. (IRT)·Q4 2024 Earnings Summary