Independence Realty Trust Announces Closing of Public Offering of 11,500,000 shares of Common Stock, Including Exercise in Full of Underwriters’ Option to Purchase Additional Shares

Rhea-AI Summary

Independence Realty Trust (NYSE: IRT) has closed its public offering of 11,500,000 shares of common stock at $19.75 per share, including the full exercise of the underwriters' option for 1,500,000 additional shares. The company entered into forward sale agreements with Citigroup. IRT will not initially receive proceeds from the sale but expects to contribute future cash proceeds to its operating partnership, IROP. The funds are intended for potential acquisitions, investment opportunities, or general corporate purposes, including reducing outstanding borrowings under IRT's unsecured credit facility.

Positive

• Successfully closed public offering of 11,500,000 shares at $19.75 per share
• Full exercise of underwriters' option for additional 1,500,000 shares
• Potential to strengthen balance sheet by reducing outstanding borrowings
• Funds available for future acquisitions and investment opportunities

Negative

• Potential dilution of existing shareholders' ownership
• No immediate proceeds received by the company due to forward sale agreements

Insights

Financial Analyst

Independence Realty Trust's successful public offering of 11,500,000 shares at $19.75 per share, including the full exercise of the underwriters' option, signals strong investor confidence. The total capital raised amounts to approximately $227 million, providing significant liquidity for potential acquisitions and debt reduction.

The use of forward sale agreements with Citigroup is a strategic move, allowing IRT to delay the issuance of shares and potentially benefit from future stock price appreciation. This flexibility in timing could be advantageous in a dynamic real estate market.

The company's intention to use the proceeds for acquisitions and debt reduction suggests a balanced approach to growth and financial stability. Reducing borrowings under the unsecured credit facility could improve IRT's debt profile and potentially lead to lower interest expenses, positively impacting future earnings.

Real Estate Investment Analyst

The successful offering by Independence Realty Trust (IRT) demonstrates robust demand for multifamily REIT stocks, reflecting positive sentiment in the apartment sector. With $227 million in potential proceeds, IRT is well-positioned to capitalize on acquisition opportunities in a market that may see distressed sales due to higher interest rates.

The timing of this capital raise is crucial, as it provides IRT with a competitive edge in a potentially buyer-friendly market. The ability to reduce credit facility borrowings also enhances financial flexibility, which is vital in the current high-interest-rate environment.

Investors should monitor IRT's deployment of this capital, as efficient allocation into high-quality assets could drive NAV growth and potentially lead to increased dividends in the long term. However, the dilutive effect of the new shares (~9% increase in share count) may temporarily pressure per-share metrics.

PHILADELPHIA--(BUSINESS WIRE)-- Independence Realty Trust, Inc. (“IRT”) (NYSE: IRT), a multifamily apartment REIT, today announced the closing of its previously announced underwritten public offering of 11,500,000 shares of common stock at a public offering price of $19.75 per share, including 1,500,000 shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares of common stock. In connection with the offering, IRT entered into forward sale agreements with Citigroup.

Citigroup, KeyBanc Capital Markets Inc., RBC Capital Markets, LLC, BofA Securities, Barclays, BMO Capital Markets Corp., Baird, Capital One Securities, Inc., Citizens JMP Securities, LLC, Jefferies LLC, Regions Securities LLC and Truist Securities, Inc. acted as joint book-running managers for the offering.

IRT will not initially receive any proceeds from the sale of shares of its common stock by the forward purchaser or its affiliate in the offering. IRT expects to contribute any cash net proceeds it receives upon the future settlement of the forward sale agreements to IRT’s operating partnership, Independence Realty Operating Partnership, LP (“IROP”), in exchange for common units in IROP. Through IROP, IRT intends to use substantially all of such cash net proceeds to fund potential acquisitions and other investment opportunities or for general corporate purposes, including the reduction of outstanding borrowings under IRT’s unsecured credit facility.

A registration statement relating to the offered securities has been declared effective by the Securities and Exchange Commission. The offering was made only by means of a prospectus supplement and an accompanying prospectus. Copies of the prospectus and the prospectus supplement relating to the offering, may be obtained by visiting EDGAR on the SEC’s website at www.sec.gov or contacting Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 telephone: 800-831-9146, KeyBanc Capital Markets: Attn: Equity Syndicate, 127 Public Square, 7th Floor, Cleveland, OH 44114, telephone: 1.800.859.1783 and RBC Capital Markets, LLC, Brookfield Place, 200 Vesey Street, 8th Floor, New York, New York 10281, Attention: Equity Syndicate Desk.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful before registration or qualification thereof under the securities laws of any such state or jurisdiction.

About Independence Realty Trust, Inc.

Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT’s investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. IRT aims to provide stockholders with attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation. More information may be found on the Company’s website www.irtliving.com.

Forward-Looking Statements

This release contains certain 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. Such forward-looking statements include, but are not limited to, the expected use of proceeds from the equity offering and the settlement of the forward sale agreements. All statements in this release that address financial and operating performance, events or developments that we expect or anticipate will occur or be achieved in the future are forward-looking statements. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions.

Our forward-looking statements are not guarantees of future performance and involve estimates, projections, forecasts, strategies and assumptions, including as to matters that are not within our control, and are subject to risks and uncertainties including, without limitation, risks and uncertainties related to changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could lead to declines in occupancy and rent levels, uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital, unexpected changes in our intention or ability to repay certain debt prior to maturity, increased costs on account of inflation, increased competition in the labor market, failure to realize cost savings, efficiencies and other benefits that we expect to result from our Portfolio Optimization and Deleveraging Strategy, inability to sell certain assets, including those assets designated as held for sale, within the time frames or at the pricing levels expected, failure to achieve expected benefits from the redeployment of proceeds from asset sales, delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve rent increases and occupancy levels on account of the value add initiatives, unexpected impairments or impairments in excess of our estimates, increased regulations generally and specifically on the rental housing market, including legislation that may regulate rents and fees or delay or limit our ability to evict non-paying residents, risks endemic to real estate and the real estate industry generally, the impact of potential outbreaks of infectious diseases and measures intended to prevent the spread or address the effects thereof, the effects of natural and other disasters, unknown or unexpected liabilities, including the cost of legal proceedings, costs and disruptions as the result of a cybersecurity incident or other technology disruption, unexpected capital needs, inability to obtain appropriate insurance coverages at reasonable rates, or at all, or losses from catastrophes in excess of our insurance coverages, and share price fluctuations. Please refer to the documents filed by us with the SEC, including specifically the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2023, and our other filings with the SEC, which identify additional factors that could cause actual results to differ from those contained in forward-looking statements. IRT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240905886255/en/

Independence Realty Trust, Inc.

Edelman Smithfield

Lauren Torres

917-365-7979

IRT@edelman.com

Source: Independence Realty Trust, Inc.

FAQ

How many shares did Independence Realty Trust (IRT) offer in its public offering?

Independence Realty Trust (IRT) offered a total of 11,500,000 shares of common stock in its public offering, including 1,500,000 shares from the full exercise of the underwriters' option.

What was the price per share for IRT's public offering?

The public offering price for Independence Realty Trust's (IRT) shares was $19.75 per share.

How does IRT plan to use the proceeds from the public offering?

IRT plans to use the proceeds for potential acquisitions, investment opportunities, general corporate purposes, and reducing outstanding borrowings under its unsecured credit facility.

Did Independence Realty Trust (IRT) enter into any forward sale agreements for this offering?

Yes, Independence Realty Trust (IRT) entered into forward sale agreements with Citigroup for this public offering.