Independence Realty Trust Inc (IRT) 2023 Q2 法說會逐字稿

Thank you for standing by. My name is Briana, and I will be your conference operator today. At this time, I would like to welcome everyone to the Independence Realty Trust Second Quarter 2023 Conference Call. (Operator Instructions)

謝謝你的支持。我叫 Briana，今天我將擔任你們的會議操作員。此時，我謹歡迎大家參加獨立房地產信託 2023 年第二季度電話會議。 （操作員說明）

I will now turn the call over to Lauren Torres. You may begin your conference.

我現在將把電話轉給勞倫·托雷斯。您可以開始您的會議了。

Thank you, and good morning, everyone. Thank you for joining us to review Independence Realty Trust's Second Quarter 2023 financial results. On the call with me today are Scott Schaeffer, Chief Executive Officer; Mike Daley, EVP of Operations and People; Jim Sebra, Chief Financial Officer; and Janice Richards, SVP of Operations.

謝謝大家，大家早上好。感謝您與我們一起回顧 Independence Realty Trust 2023 年第二季度的財務業績。今天與我通話的是首席執行官 Scott Schaeffer； Mike Daley，運營和人員執行副總裁；吉姆·塞布拉，首席財務官；和運營高級副總裁 Janice Richards。

Today's call is being webcast on our website at irtliving.com. There will be a replay of the call available via webcast on our Investor Relations website and telephonically beginning at approximately 12:00 p.m. Eastern Time today.

今天的電話會議正在我們的網站 irtliving.com 上進行網絡直播。電話會議將於中午 12:00 左右開始通過我們的投資者關係網站上的網絡廣播和電話重播。今天東部時間。

Before I turn the call over to Scott, I'd like to remind everyone that there may be forward-looking statements made on this call. These forward-looking statements reflect IRT's current views with respect to future events and financial performance. Actual results could differ substantially and materially from what IRT has projected. Such statements are made in good faith pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to IRT's press release, supplemental information and filings with the SEC for factors that could affect the accuracy of our expectations or cause our future results to differ materially from those expectations.

在我將電話轉給斯科特之前，我想提醒大家，本次電話會議可能包含前瞻性陳述。這些前瞻性陳述反映了 IRT 目前對未來事件和財務業績的看法。實際結果可能與 IRT 的預測存在重大差異。此類聲明是根據1995 年《私人證券訴訟改革法案》的安全港條款善意做出的。請參閱IRT 的新聞稿、補充信息以及向SEC 提交的文件，了解可能影響我們預期的準確性或導致我們的預期準確性的因素。未來的結果與這些預期存在重大差異。

Participants may discuss non-GAAP financial measures during this call. A copy of IRT's earnings press release and supplemental information containing financial information, other statistical information and a reconciliation of non-GAAP financial measures to the most direct comparable GAAP financial measure is attached to IRT's current report on the Form 8-K available at IRT's website under Investor Relations. IRT's other SEC filings are also available through this link.

參與者可以在本次電話會議期間討論非公認會計原則財務措施。 IRT 的收益新聞稿和補充信息（包含財務信息、其他統計信息以及非 GAAP 財務指標與最直接可比 GAAP 財務指標的調節表）附在 IRT 網站上的 8-K 表格中的當前報告中。在投資者關係下。 IRT 的其他 SEC 備案文件也可通過此鏈接獲取。

IRT does not undertake to update forward-looking statements on this call or with respect to matters described herein, except as may be required by law.

IRT 不承諾更新本次電話會議或本文所述事項的前瞻性陳述，除非法律要求。

With that, it's my pleasure to turn the call over to Scott Schaeffer.

至此，我很高興將電話轉給斯科特·謝弗。

Thank you, Lauren, and thank you all for joining us this morning. It's now been 2 years since we announced our merger with Steadfast Apartment REIT and 18 months since the merger transaction closed. After a number of changes during the integration process, we are confident that we have the right team in place to lead IRT into the future.

謝謝勞倫，也謝謝大家今天早上加入我們。自我們宣布與 Steadfast Apartment REIT 合併以來已經過去了 2 年，距離合併交易結束也已經過去了 18 個月。經過整合過程中的一系列變化後，我們相信我們擁有合適的團隊來帶領 IRT 走向未來。

Before getting into second quarter operating results, I want to share that IRT has delivered the best FFO per share growth across the large public apartment peer group with a 106% cumulative growth over the last 5 years. This growth and improvement in our business can also be seen in various other metrics that we will cover throughout this call.

在進入第二季度運營業績之前，我想跟大家分享的是，IRT 在大型公共公寓同行中實現了最佳的 FFO 每股增長，在過去 5 年中累計增長了 106%。我們業務的這種增長和改進也可以從我們將在本次電話會議中討論的各種其他指標中看到。

We are proud of the business that we've built and the shareholder returns we've delivered, but we're not done, and we continue to execute on our business plan in a disciplined manner.

我們為我們所建立的業務和我們為股東帶來的回報感到自豪，但我們還沒有完成，我們將繼續以嚴格的方式執行我們的業務計劃。

Now on to the quarterly results. In the second quarter, we delivered a 6.3% same-store portfolio NOI growth and 8.7% core FFO growth on a year-over-year basis, reflecting the strength and resiliency of our portfolio across key Sunbelt and Midwest markets. We delivered operational improvements that drove increased same-store occupancy of 94.2% in the second quarter, reflecting a sequential 110 basis point improvement compared to last quarter.

現在來看季度業績。第二季度，我們的同店投資組合 NOI 同比增長 6.3%，核心 FFO 增長 8.7%，反映了我們在主要陽光地帶和中西部市場的投資組合的實力和彈性。我們實現了運營改進，推動第二季度同店入住率提高了 94.2%，與上季度相比環比提高了 110 個基點。

As of July 24, our same-store occupancy reached 94.8% with our same-store non-value-add portfolio at 95.3%. We expect continued occupancy growth in the second half of this year. Lead volume and conversion to leases remain strong, and the sustainable occupancy enables us to drive rental rate increases in many of our submarkets.

截至 7 月 24 日，我們的同店入住率達到 94.8%，同店非增值組合達到 95.3%。我們預計今年下半年入住率將持續增長。潛在客戶數量和租賃轉化率仍然強勁，可持續的入住率使我們能夠推動許多子市場的租金上漲。

Our key performance metrics in the second quarter include: average rental rate increased 8% year-over-year, supporting a 6.2% increase in revenue. NOI margin improved to 62.1% year-over-year, up from 60.1% 3 years ago. We continue to invest in our communities, particularly through our value-add renovation program, where we renovated 625 units in the second quarter and 1,260 in the first half of 2023, achieving an unlevered return on investment of 17%.

我們第二季度的關鍵績效指標包括：平均租金同比增長8%，支持收入增長6.2%。 NOI 利潤率同比提高至 62.1%，高於 3 年前的 60.1%。我們繼續投資於我們的社區，特別是通過我們的增值翻新計劃，我們在2023 年第二季度翻新了625 個單元，在2023 年上半年翻新了1,260 個單元，實現了17% 的無槓桿投資回報率。

With the first half of the year behind us and a higher resident retention rate than anticipated, we now expect to deliver between 2,500 and 2,700 renovated units in 2023.

隨著上半年的過去，居民保留率高於預期，我們現在預計在 2023 年交付 2,500 至 2,700 套翻新單元。

As we enter the third quarter, our team remains confident that we will deliver on our full year operational and leverage targets through the continuation of our thoughtful and paced approach. Demand fundamentals in our key markets remain favorable, and we continue to benefit from positive migration, demographic and employment trends.

隨著我們進入第三季度，我們的團隊仍然有信心，我們將通過繼續深思熟慮和有節奏的方法來實現全年運營和槓桿目標。我們主要市場的需求基本面仍然有利，我們繼續受益於積極的移民、人口和就業趨勢。

In a recent report by Bank of America titled the great migration continues, they note that pandemic migration trends are not reversing. Data as of the first quarter of 2023 suggests that cities that saw a large influx of people during the Pandemic continue to grow faster than other cities in recent quarters. A number of these cities, including Dallas, Tampa, Houston, Charlotte, Orlando and Austin saw the largest net inflow of population during 2020 through 2022.

美國銀行在最近一份題為“大移民仍在繼續”的報告中指出，大流行的移民趨勢並未逆轉。截至 2023 年第一季度的數據表明，疫情期間人口大量湧入的城市近幾個季度的增長速度繼續快於其他城市。其中包括達拉斯、坦帕、休斯頓、夏洛特、奧蘭多和奧斯汀在內的許多城市在 2020 年至 2022 年期間人口淨流入量最大。

IRT has a notable presence in these markets, and we are currently seeing this dynamic play out across our portfolio, having achieved mid-teen NOI growth during the first half of 2023 in key markets such as Dallas, Raleigh-Durham, Tampa, Charlotte and Myrtle Beach. This strength isn't limited to the Sunbelt as our Midwest markets, including Indianapolis and Columbus also continued to deliver strong NOI growth.

IRT 在這些市場中佔有重要地位，我們目前看到這種動態在我們的投資組合中發揮作用，2023 年上半年在達拉斯、羅利-達勒姆、坦帕、夏洛特和默特爾海灘。這種優勢不僅限於陽光地帶，包括印第安納波利斯和哥倫佈在內的中西部市場也繼續實現強勁的 NOI 增長。

In total, these markets have shown double-digit increases in average monthly rent, benefiting from job growth and increasing wages. We remain focused on increasing scale in these attractive markets, while also recycling capital out of less attractive markets when conditions warrant.

總的來說，受益於就業增長和工資上漲，這些市場的平均月租金出現了兩位數的增長。我們仍然專注於擴大這些有吸引力的市場的規模，同時在條件允許時從吸引力較小的市場回收資本。

To that point, we have one property held for sale, our only asset in Illinois, which we expect the sale to close early in the fourth quarter of 2023 with an anticipated economic cap rate of 5%. This location isn't a fit for IRT's footprint and makes economic and strategic sense to exit. Our primary use of sale proceeds will be to reduce debt.

到目前為止，我們有一處待售房產，這是我們在伊利諾伊州的唯一資產，我們預計出售將於 2023 年第四季度初完成，預計經濟上限為 5%。該地點不適合 IRT 的足跡，但退出具有經濟和戰略意義。我們銷售所得款項的主要用途將是減少債務。

Lastly, on the development side, we have made advancements with our properties under development in Denver. Our destination at Arista community is now 44% complete and those completed units are 42% leased. We expect this development to be stabilized by the first quarter of 2025. These results are ahead of our original plan, and we now expect a 6.9% unlevered yield on cost.

最後，在開發方面，我們在丹佛開發的物業取得了進步。我們在 Arista 社區的目的地現已完成 44%，這些已完成的單元已出租 42%。我們預計這一發展將在 2025 年第一季度穩定下來。這些結果超出了我們最初的計劃，我們現在預計無槓桿成本收益率為 6.9%。

We are pleased to increase the midpoints of our full year 2023 EPS and core FFO guidance ranges. We will remain focused on driving occupancy, delivering planned value-add improvements, further managing our cost structure through technology initiatives and further reducing leverage.

我們很高興提高 2023 年全年 EPS 和核心 FFO 指導範圍的中點。我們將繼續專注於提高入住率、實現計劃中的增值改進、通過技術舉措進一步管理我們的成本結構並進一步降低杠桿率。

I would like to now turn the call over to Mike.

我現在想把電話轉給邁克。

Thanks, Scott. As Scott mentioned, we've made significant improvements in our operations over the past 7 months, which have led to increased overall performance as well as sustainable occupancy gains. These improvements have included completing the implementation of a 24/7 call center to capture close to 100% of leads, expanding and enhancing our sales training program and improving the communication and information exchange between our on-site teams and our revenue management group.

謝謝，斯科特。正如 Scott 提到的，過去 7 個月我們的運營取得了重大改進，從而提高了整體績效並實現了可持續的入住率增長。這些改進包括完成 24/7 呼叫中心的實施，以捕獲接近 100% 的銷售線索，擴大和加強我們的銷售培訓計劃，以及改善我們的現場團隊和收入管理團隊之間的溝通和信息交換。

As of July 24, performance improvements have led to a same-store nonvalue-add occupancy rate of 95.3%, which is a 60 basis point increase compared to the second quarter average and in line with our targeted goal.

截至 7 月 24 日，業績改善導致同店非增值入住率達到 95.3%，較第二季度平均水平提高 60 個基點，符合我們的既定目標。

Looking ahead, our focus remains on driving occupancy across the portfolio with Q2 and Q3 today's results validating the success of these efforts.

展望未來，我們的重點仍然是提高整個投資組合的入住率，今天第二季度和第三季度的業績證明了這些努力的成功。

Through today, our lead-to-lease conversion has improved 110 basis points from 7.9% last year to 9% year-to-date in 2023. For all of these new leases signed, the average rent-to-income ratio was 22% and lease-over-lease effective rent growth was 2.8% in Q2.

截至今天，我們的潛在客戶租賃轉化率已從去年的 7.9% 提高到 2023 年迄今為止的 9%，提高了 110 個基點。對於所有簽署的新租賃，平均租金收入比為 22%第二季度租賃有效租金增長率為2.8%。

From a resident retention standpoint, our retention rate was 54.2% in Q2 and has increased to 54.4% for Q3 to date. This strong performance is attributable to enhancements made to our renewal process as part of our comprehensive sales and leasing improvements.

從居民保留率的角度來看，第二季度我們的保留率為 54.2%，第三季度迄今為止已增加至 54.4%。這一強勁的業績歸功於我們對續約流程的改進，這是我們全面銷售和租賃改進的一部分。

Sales excellence has been and will continue to be a critical driver of robust and sustainable occupancy at IRT. Lease-over-lease rent growth for renewals in Q2 2023 was 2.3% as we prioritize driving occupancy. Based on that foundation, our renewal rent growth increased in Q3 2023 to date to 4.5%, reflecting increased pricing power.

卓越的銷售一直並將繼續成為 IRT 強勁且可持續入住率的關鍵驅動力。由於我們優先考慮提高入住率，2023 年第二季度續租的租賃租金增長率為 2.3%。在此基礎上，我們的續租租金增長在 2023 年第三季度迄今達到 4.5%，反映出定價能力的增強。

We are optimistic about our operational performance for the remainder of 2023 and expect to continue to benefit from overall high demand for our middle market communities. We are confident in our ability to deliver sustainable operating performance and create long-term value.

我們對 2023 年剩餘時間的運營業績感到樂觀，並預計將繼續受益於中間市場社區的整體高需求。我們對實現可持續經營業績和創造長期價值的能力充滿信心。

With that, I will now turn the call over to Jim.

現在，我將把電話轉給吉姆。

Thanks, Mike, and good morning, everyone. Beginning with our second quarter 2023 performance update, net income available to common shareholders was $10.7 million compared to a loss of $7.2 million in the second quarter of 2022, the latter of which was reflective of higher depreciation and amortization expense related to YieldStar merger.

謝謝邁克，大家早上好。從我們的2023 年第二季度業績更新開始，普通股股東可獲得的淨利潤為1070 萬美元，而2022 年第二季度虧損720 萬美元，後者反映出與YieldStar 合併相關的折舊和攤銷費用較高。

During the second quarter, core FFO increased 8.7% to $63.7 million, and core flow per share grew 7.7% to $0.28 per share from a year ago. This growth reflects the organic rent and NOI growth that we experienced in the quarter on a year-over-year basis.

第二季度，核心 FFO 增長 8.7%，達到 6,370 萬美元，每股核心流量較去年同期增長 7.7%，達到每股 0.28 美元。這一增長反映了我們在本季度經歷的有機租金和 NOI 同比增長。

IRT same-store NOI growth in the second quarter was 6.3%, driven by revenue growth of 6.2%. This growth was led by an 8% increase in average monthly rental rates to $1,531 per month. On the operating expense side, IRT same-store operating expenses increased 5.9% during the second quarter, led by higher property insurance and contract services as well as advertising expenses.

在收入增長 6.2% 的推動下，第二季度 IRT 同店 NOI 增長 6.3%。這一增長是由平均月租金上漲 8% 至每月 1,531 美元帶動的。在運營費用方面，IRT第二季度同店運營費用增長了5.9%，主要是財產保險和合同服務以及廣告費用增加。

Inflationary pressures continue to have an impact on operating costs, causing higher-than-normal increases. We continue to use our procurement teams to read the contracts and technology solutions to help reduce costs wherever possible.

通脹壓力繼續對運營成本產生影響，導致運營成本增幅高於正常水平。我們繼續讓我們的採購團隊閱讀合同和技術解決方案，以幫助盡可能降低成本。

In particular, over the past year, we generated approximately $2.5 million in annual savings associated with the centralization of resident services and sales performance management teams. This effort has reduced complexity, consolidated support responsibilities, empowered our community teams and improved our response times to better service existing and new residents.

特別是，在過去的一年裡，我們通過駐場服務和銷售績效管理團隊的集中化，每年節省了約 250 萬美元。這項工作降低了複雜性，鞏固了支持責任，增強了我們的社區團隊的能力，並縮短了我們的響應時間，以更好地為現有和新居民提供服務。

On the technology front, we continue to invest in an advance our initiatives across the business, helping us improve operational effectiveness and resident services. This has included implementing a value-add ERP platform, mobile apps for our maintenance teams and an improved procurement and vendor portal.

在技​​術方面，我們繼續投資推進整個業務的計劃，幫助我們提高運營效率和居民服務。這包括實施增值 ERP 平台、為我們的維護團隊提供的移動應用程序以及改進的採購和供應商門戶。

Going forward, we are actively evaluating new technology to help drive better bottom line growth. We view technology innovation as more than just automation or movement of roles to centralize and specialized teams, but rather a driver to improve the day-to-day lives of our team members and our residents, all while driving (inaudible) value. In our commitment to continue to work to optimize our cost structure and reduce costs where possible, there are 2 key metrics that we closely benchmark, I guess. One metric is the ratio of total employees to units managed, which currently stands at 2.6 employees per 100 units for IRT and ranked IRT third out of our 8 larger public apartment peers.

展望未來，我們正在積極評估新技術，以幫助推動更好的利潤增長。我們認為技術創新不僅僅是自動化或角色轉移以集中和專業化團隊，而是改善團隊成員和居民日常生活的驅動力，同時推動（聽不清）價值。我認為，在我們致力於繼續優化成本結構並儘可能降低成本的承諾中，我們密切關注了兩個關鍵指標。其中一項指標是員工總數與所管理單位的比率，目前 IRT 的每 100 個單位有 2.6 名員工，IRT 在 8 個較大的公共公寓同行中排名第三。

A second metric we benchmark is our annual G&A as compared to our gross assets, which is approximately 34 basis points and puts us in line with our large public peers, which have an average of 33 basis points.

我們衡量的第二個指標是我們的年度管理費用與總資產的比較，約為 34 個基點，這使我們與大型上市同行保持一致，後者的平均水平為 33 個基點。

Turning to our balance sheet. As of June 30, our liquidity position was $303 million. We had approximately $14 million of unrestricted cash and $289 million of additional capacity through our unsecured credit facility. Today, our exposure to floating interest rates is only 4% of our total indebtedness and the weighted average maturity of our hedges is nearly 4.5 years.

轉向我們的資產負債表。截至 6 月 30 日，我們的流動性頭寸為 3.03 億美元。我們擁有大約 1,400 萬美元的無限制現金和通過無擔保信貸安排獲得的 2.89 億美元的額外能力。如今，我們的浮動利率風險僅佔總債務的 4%，而我們對沖的加權平均期限接近 4.5 年。

It is also important to note that we only have $7 million of debt maturities in 2023 and $69 million of maturities in 2024 and our maturity exposure through year-end 2025 is the lowest of our public peers at only 9.7% of our debt. We ended the second quarter at 7.2x net debt to EBITDA, down from 7.4x a year ago, with the improvement in occupancy and our forward expectations for the remainder of the year, we still expect to achieve our leverage target of the fixes by year-end 2023.

同樣重要的是要注意，我們在2023 年只有700 萬美元的債務到期，在2024 年只有6,900 萬美元的債務到期，到2025 年底，我們的到期風險敞口是公共同行中最低的，僅佔債務的9.7%。第二季度結束時，我們的淨債務與EBITDA 之比為7.2 倍，低於一年前的7.4 倍，隨著入住率的改善以及我們對今年剩餘時間的預期，我們仍然預計到今年能夠實現修復的槓桿目標。 2023 年底。

We also have a clear line of sight to achieve a mid-5x net debt-to-EBITDA target by year-end 2025.

我們還制定了到 2025 年底實現 5 倍淨債務與 EBITDA 目標的明確目標。

With respect to our full year 2023 outlook, we are raising the midpoint of our EPS and core per share guidance. Our EPS guidance is now a range of $0.25 to $0.27 per diluted share and for core FFO a range of $1.14 to $1.16 per share, an increase of $0.01 at the midpoint. We are narrowing the range of our same-store operational guidance with the midpoint of revenue growth and NOI growth unchanged at 6.35% and 6.5%, respectively. This same-store revenue growth of 6.35% reflects the following assumptions for the second half of 2023, average occupancy of 95.1% and a blended net effective rental rate increase of 4.2%.

對於 2023 年全年展望，我們正在上調每股收益和核心每股指引的中點。目前，我們的每股攤薄每股收益指導範圍為 0.25 美元至 0.27 美元，核心 FFO 指導範圍為每股 1.14 美元至 1.16 美元，中值增加了 0.01 美元。我們正在縮小同店經營指導範圍，收入增長和 NOI 增長的中點保持不變，分別為 6.35% 和 6.5%。同店收入增長 6.35% 反映了 2023 年下半年的以下假設：平均入住率為 95.1%，混合淨有效租金增長率為 4.2%。

On the expense side, our guidance for full year 2023 total operating expense growth is unchanged at 6.1% at the midpoint of our range, with controllable operating expenses up 5.1% and real estate tax and insurance expense up 7.8%, each also by the midpoint.

在費用方面，我們對 2023 年全年總運營費用增長的指引保持在 6.1% 的範圍中點不變，其中可控運營費用增長 5.1%，房地產稅和保險費用增長 7.8%，均為中點。

With more clarity now on our expenses for the full year, we are now factoring in lower growth in real estate taxes, increased insurance expense now that we renewed our policies and higher inflationary pressure on certain operating expenses, including contract services, repairs and maintenance.

隨著我們全年的支出更加清晰，我們現在考慮到房地產稅增長放緩、保險費用因我們更新保單而增加以及某些運營支出（包括合同服務、維修和保養）的通脹壓力上升。

We are taking down the high end of our previously guided G&A and property management expense range to a midpoint of $51 million versus $52.5 million previously to reflect the savings from our reorganization earlier this year. We're also reducing the range and midpoint for full year interest expense to $103 million, down from $105.5 million as a result of the new 7-year interest rate swap we put in place in March of 2023.

我們將之前指導的一般管理費用和物業管理費用範圍的上限從之前的 5250 萬美元下調至 5100 萬美元的中點，以反映今年早些時候重組帶來的節省。由於我們於 2023 年 3 月實施了新的 7 年期利率掉期，我們還將全年利息支出的範圍和中點從 1.055 億美元下調至 1.03 億美元。

While we are still not assuming any acquisition volume for this year, we are increasing our disposition volume from $37.5 million, up to $124.5 million at the midpoint to reflect the additional Illinois property sale in Q4 that Scott mentioned earlier.

雖然我們仍然沒有假設今年會有任何收購量，但我們將我們的處置量從3750 萬美元增加到中間值1.245 億美元，以反映斯科特之前提到的第四季度伊利諾伊州房產銷售量的增加。

And lastly, regarding CapEx, we expect $21 million in recurring maintenance CapEx at the midpoint, up from $20 million previously due to inflationary pressures. We still expect $80 million value-add and nonrecurring spend and $85 million in development CapEx in 2023, each at the midpoint of our guided ranges. These capital expenditures are funded primarily through our excess cash flow of $133 million that we expect to generate during 2022. This is after paying our current dividend of $0.16 per quarter, which we raised earlier this year by 14%, beginning in the second quarter of 2023.

最後，關於資本支出，由於通脹壓力，我們預計經常性維護資本支出將達到 2100 萬美元，高於之前的 2000 萬美元。我們仍然預計 2023 年增值和非經常性支出為 8000 萬美元，開發資本支出為 8500 萬美元，均處於我們指導範圍的中點。這些資本支出主要通過我們預計在2022 年產生的1.33 億美元的超額現金流提供資金。這是在支付每季度0.16 美元的當前股息之後，我們從今年早些時候開始，從2020 年第二季度開始將股息提高了14%。 2023 年。

Now I'll turn the call back to Scott. Scott?

現在我將把電話轉回給斯科特。斯科特？

Thanks, Jim. As we look ahead to the second half of 2023 and beyond, we're excited for the opportunities that lie ahead for IRT. We will remain patient and disciplined in our capital allocation efforts, which will be focused on continued debt reduction and investments in our value-add program.

謝謝，吉姆。展望 2023 年下半年及以後，我們對 IRT 面臨的機遇感到興奮。我們將在資本配置工作中保持耐心和紀律，重點是持續減少債務和投資增值計劃。

We are also committed to driving shareholder value and returning capital to our shareholders while delivering outsized growth rates as real estate fundamentals remain strong in our well-positioned markets.

我們還致力於推動股東價值並向股東返還資本，同時實現超額增長率，因為在我們定位良好的市場中，房地產基本面依然強勁。

We thank you for joining us today and look forward to speaking with you again. Operator, we can now open the call to questions.

我們感謝您今天加入我們，並期待再次與您交談。接線員，我們現在可以開始提問。

(Operator Instructions) Your first question comes from Eric Wolfe with Citi.

（操作員說明）您的第一個問題來自花旗銀行的 Eric Wolfe。

You mentioned in your remarks that you're expecting blended growth to accelerate to 4.2% in the back half of the year. Based on your recent trends, I would assume that the spreads probably would stay consistent to the fourth quarter, even though you would kind of normally see a seasonal decline there. So what gives you the confidence, I guess, this year that you're not going to see that decline and spreads can actually accelerate in the back half.

您在講話中提到，預計下半年混合增長將加速至 4.2%。根據您最近的趨勢，我認為利差可能會與第四季度保持一致，儘管您通常會看到第四季度的季節性下降。所以，我想，是什麼給了你信心，讓你相信今年下半年你不會看到下滑和利差實際上會加速。

Yes. Eric, thanks for the question. I appreciate it. Our guidance does include an average net effective rent growth of 4.2% in the second half of this year. That effective rent growth kind of has a base case blended, so just base rental rate growth of roughly 3.5% plus an additional kind of 75 basis points coming from the impact of the additional roughly 1,300 value-add units that will deliver in the second half of 2023.

是的。埃里克，謝謝你的提問。我很感激。我們的指導確實包括今年下半年 4.2% 的平均淨有效租金增長。這種有效的租金增長有點混合了基本情況，因此基本租金增長率約為 3.5%，加上下半年將交付的約 1,300 個增值單位的影響帶來的額外 75 個基點2023 年。

I'll remind everyone that our current loss to lease is 5%, and we think that loss to lease will help support that base 3.5% on the rent growth. And then also to date for Q3, the lease-over-lease growth is 3.9%, and we're sending renewals out for October in the 4% to 5% range. So we definitely see progress as we -- as well as just strength now that occupancies return to that normal level. So we'll be able to kind of match us grow rents a little bit, but also maintain them through the back part of this year.

我要提醒大家的是，我們目前的租賃損失為 5%，我們認為租賃損失將有助於支撐 3.5% 的租金增長。迄今為止，第三季度的租賃增長率為 3.9%，我們將在 4% 到 5% 的範圍內發送 10 月份的續約。因此，我們確實看到了進步，以及現在入住率恢復到正常水平的實力。因此，我們將能夠稍微增加租金，但也能在今年下半年維持租金不變。

That's helpful. And then I guess just based on what you said, it also sounds like you're expecting around sort of mid-3s, call it, 3.6%, 3.7% blended growth for the full year, that's just sort of averaging out the year. Given that, I mean, should you be entering 2024 with like the earn-in of around 1.7%. I'm basically just taking 45% of your blend for the year. Just curious (inaudible) thoughts on 2024.

這很有幫助。然後我想，根據你所說的，聽起來你也預計全年的混合增長率約為 3%，即 3.6%、3.7%，這只是全年的平均增長率。鑑於此，我的意思是，進入 2024 年，您的收益是否應該達到 1.7% 左右。我今年基本上只拿了你們混合酒的 45%。只是對 2024 年的好奇（聽不清）想法。

Yes. I mean it's a little bit early for us to put out an earnings number for next year. But certainly, it's just maths at this point and you can certainly do it, but that would be a rough kind of approximation of it.

是的。我的意思是，我們現在公佈明年的盈利數據還為時過早。但當然，這只是數學，你當然可以做到，但這將是它的粗略近似。

Okay. So the 1.7 would be like a rough approximation around there.

好的。所以 1.7 是一個粗略的近似值。

Rough.

粗糙的。

Your next question comes from Brad Heffern with RBC Capital Markets.

您的下一個問題來自加拿大皇家銀行資本市場的 Brad Heffern。

You're back above the 95% occupancy level in the nonvalue-add bucket, I think that's historically been the target. But I know in the prepared comments, you also said occupancy should continue to rise. So I'm curious, is there a new sort of occupancy level that you're targeting? And at what point will you be satisfied with keeping it flat and maybe pushing more on the rent side?

非增值領域的入住率又回到了 95% 以上，我認為這一直是目標。但我知道在準備好的評論中，您也說過入住率應該繼續上升。所以我很好奇，你們的目標是否有一種新的入住率水平？什麼時候你會滿足於保持平穩並可能在租金方面推動更多？

Thanks for the question, Brad. It's -- this is Scott, as you know. It's always been a balance for us to generate the highest total revenue between occupancy and rent growth. You've heard me say over the years that for me, full occupancy is 95%. The value add does put a little bit of pressure on that full occupancy, but we're confident with the lead volume that we're seeing and the conversion rate of leads to leases that the nonvalue-add occupancy will continue to grow through the third quarter, which will allow the whole occupancy for the combined portfolio to be in that 95% range.

謝謝你的提問，布拉德。如你所知，這是斯科特。我們始終在入住率和租金增長之間取得最高總收入之間的平衡。多年來你聽我說過，對我來說，滿員率是 95%。增值確實給滿員入住率帶來了一點壓力，但我們對我們看到的潛在客戶量以及潛在客戶到租賃的轉化率充滿信心，非增值入住率將在第三季度繼續增長季度，這將使合併後的投資組合的整體入住率保持在95% 的範圍內。

Okay. Got it. And then, Jim, you mentioned in your prepared comments the mid-5s line of sight on leverage by year-end '25. I think that's new. But should we take that as a goal? And ultimately, is the point there getting the leverage profile more in line with the larger public peers? Or are you also choosing that figure in order to maybe go down the investment-grade path at some point?

好的。知道了。然後，吉姆，您在準備好的評論中提到了到 25 年底的 5 世紀中期對槓桿的看法。我認為這是新的。但我們應該以此為目標嗎？最終，讓槓桿狀況與較大的公眾同行更加一致是否有意義？或者您選擇這個數字也是為了在某個時候走上投資級道路？

Yes. The mid-5s, it's a number that we've kind of talked about in the past a little bit with the individual meetings. I think we even talked about it in AREIT meetings. It is something that is on our kind of target as we go down this path of investment grade. And while certainly, we kind of always comp ourselves against our larger public peers, it is certainly something that's kind of right now more driven by just the goal of becoming investment grade. And we think we have the trajectory to do so.

是的。 5 歲左右，這是我們過去在個別會議上討論過的一個數字。我想我們甚至在 AREIT 會議上討論過這個問題。當我們沿著投資級別的道路前進時，這正是我們的目標。當然，我們總是將自己與更大的公共同行進行比較，但這肯定是現在更多地受到成為投資級目標的驅動。我們認為我們有能力做到這一點。

Your next question comes from Austin Wurschmidt with KeyBanc Capital Markets.

您的下一個問題來自 KeyBanc Capital Markets 的 Austin Wurschmidt。

I was hoping you could provide some additional detail around how new lease rate growth trended in 2Q and into July, specifically across the nonvalue-add pool of assets just to remove some of that volatility caused by value-add renovations. And then should we think about the 4% to 5% asking rate on renewals kind of through the balance of the back half of the year to back into, I guess, what new lease rate growth assumption is from that 4.2% back half blended lease rate growth.

我希望您能提供一些有關第二季度和 7 月份新租賃率增長趨勢的更多詳細信息，特別是在非增值資產池中，只是為了消除增值翻新造成的一些波動。然後，我們是否應該考慮 4% 至 5% 的續約率，通過今年下半年的餘額來回溯，我猜，新的租賃率增長假設來自於 4.2% 的下半年混合租賃率增長。

Yes, it's a good question. For July, we continue to focus on driving occupancy. The July data that we presented on new leases in early June, as you know, or as you kind of highlighted, it was definitely a small sample size as it was kind of still early in July -- still early for July to have new leases and it had a higher weighting of the value-add units. These generally value-add units are previous generally 4 to 6 weeks before occupancy. The July -- the new leases are continuing to kind of trend up in the back half of July for the non-value add portfolio. And as you kind of think about that 4.2% blended lease growth, the new lease -- I'm sorry, the 4 to 5 -- 4.2% of blended lease growth, the new lease component of that is in that kind of upper 3s percent range, given the October renewals going out of 4% to 5%.

是的，這是一個好問題。 7 月份，我們繼續關注提高入住率。正如您所知，或者正如您所強調的，我們在 6 月初提供的有關新租約的 7 月數據絕對是一個小樣本，因為 7 月還為時過早——7 月新租約還為時過早並且其增值單位的權重較高。這些增值單位通常在入住前 4 至 6 週交付。 7 月——非增值投資組合的新租賃在 7 月後半段繼續呈上升趨勢。當你想到 4.2％ 的混合租賃增長時，新租賃 - 對不起，4 到 5 - 4.2％ 的混合租賃增長，其中新租賃部分處於 3 左右的水平考慮到10 月份的續訂量超出了4% 到5 %，這一百分比範圍。

Okay. Got it. No, that's helpful detail. And then I wasn't sure if you highlighted what's driving sort of the small downtick in the value-add renovations you expect to complete this year? And then how are you thinking about the size of renovations in 2024 at this time?

好的。知道了。不，這是有用的細節。然後我不確定您是否強調了是什麼導致了您預計今年完成的增值翻新工程的小幅下降？那麼此時您如何考慮2024年的改造規模？

Yes. Good question. For the renovation properties, we've just seen higher retention of tenants. Therefore, as you know, we only do the renovations on turn and if folks decide to stay through the renewals, and there's obviously less units we can value add. We'll still value add the units. It will just be kind of next year. And right now, our expectation for next year is still roughly that 2,500 to 3,000 units continue volume for 2024.

是的。好問題。對於翻新物業，我們剛剛看到租戶的保留率更高。因此，如您所知，我們只會輪流進行翻修，如果人們決定留下來完成翻修，那麼我們可以增值的單位顯然會減少。我們仍然會增值這些單位。明年就這樣了。目前，我們對明年的預期仍然大致是 2024 年繼續保持 2,500 至 3,000 輛的銷量。

And just a follow-up on that piece. I guess, with occupancy reramping now broadly for value-add and non-value-add. I mean, should we expect some of the returns in that segment to improve? Or has the slowdown in returns? Has that been just a function of what's happening in your markets today?

這只是那篇文章的後續。我想，現在增值和非增值的入住率都在重新調整。我的意思是，我們是否應該期望該領域的一些回報會有所改善？還是回報率放緩？這是否只是當今市場所發生情況的結果？

No, we definitely expect the returns and the rent premiums to improve as occupancies now stabilize or stabilizing, yes.

不，我們肯定預計隨著入住率現在穩定或穩定，回報和租金溢價將會改善，是的。

Your next question comes from John Kim with BMO Capital Markets.

您的下一個問題來自 BMO 資本市場的 John Kim。

Scott, you mentioned the strong net migration trends that are continuing in your markets. I was wondering how you plan on addressing new supply as far as being more aggressive with concessions potentially or offering longer-term leases or any other practices that you may use.

斯科特，您提到了您所在市場持續出現的強勁淨移民趨勢。我想知道你們計劃如何解決新的供應問題，包括更積極地做出可能的讓步或提供長期租賃或您可能使用的任何其他做法。

Thanks, John. We've used some targeted concessions where we feel that we need a little bit more of an occupancy push. But it's been relatively rare. As I've said in the past, the new supply really doesn't affect us and not nearly to the level that you might think it would. And as you read about, our units, generally speaking, are B-class we're at a much different price point on rent. And since we're on average 12 to 15 years old in our communities, we're in a better and more infill location that a lot of the new construction that everyone is focused on.

謝謝，約翰。我們已經採取了一些有針對性的讓步，我們認為我們需要更多地推動入住率。但這種情況相對較少。正如我過去所說，新的供應確實不會影響我們，也不會達到您可能認為的水平。正如您所讀到的，我們的單位一般來說是 B 級的，我們的租金價格有很大不同。由於我們社區的平均年齡為 12 至 15 歲，因此我們處於一個更好、更填充的位置，每個人都關注許多新建築。

So in a limited range, again, we've used targeted concessions. But generally speaking, the new supply has not really affected us. Even in the renovated units, our renovated units with the premium that we're receiving, we're still a good $300, maybe even $400 below the new Class A rents that are being delivered. So we have just a benefit from the pricing point.

因此，我們再次在有限的範圍內進行了有針對性的讓步。但總體來說，新增供應並沒有對我們產生真正的影響。即使在翻新的單位中，我們的翻新單位與我們收到的溢價相比，我們仍然比正在交付的新 A 級租金低 300 美元，甚至可能低 400 美元。所以我們只是從定價點上得到了好處。

Okay. And this market -- sorry, this period you exited Chicago. When can we expect IRT to sell other markets out of other markets where you only own one asset? And conversely, where do you see redeploying capital?

好的。而這個市場——抱歉，這段時間你離開了芝加哥。我們什麼時候可以期望 IRT 將您只擁有一項資產的其他市場出售給其他市場？相反，您認為在哪裡重新部署資本？

We're constantly looking at the portfolio and determining when it is appropriate to dispose off assets. There are some limitations. For example, in the Star portfolio was financed with fixed rate loans, first mortgages, and they have prepayment penalties. So we have to throw that into the equation as to when it's appropriate to sell a property. We don't want to just give away some of our value through large prepayments.

我們不斷地審視投資組合併確定何時適合處置資產。有一些限制。例如，在明星投資組合中，通過固定利率貸款、第一抵押貸款進行融資，並且有提前還款罰款。因此，我們必須將其納入考慮何時適合出售房產的等式中。我們不想通過大額預付款而放棄我們的一些價值。

But we're constantly looking at the portfolio. We do recognize that it should be more concentrated than it is, and we have some single markets that we're going to want to exit. But at this point, I don't have an answer that I can give you on a specific time frame.

但我們一直在關注投資組合。我們確實認識到它應該比現在更加集中，而且我們有一些我們想要退出的單一市場。但目前我無法在具體時間範圍內向您提供答案。

And when we do as far as use of proceeds, it will be determined again at that time. Is it better to just continue to delever? Or would it be more accretive and better in the long term to redeploy, again, depending on where cap rates are at the time.

至於收益的用途，到時候我們再決定。繼續去槓桿是不是更好？或者從長遠來看，重新部署是否會更具增值性和更好的效果，這取決於當時的資本化率。

Your next question comes from Anthony Powell with Barclays.

你的下一個問題來自巴克萊銀行的安東尼·鮑威爾。

I guess a question on the lease spreads going up to 4% to 5% in October. What gives you the confidence that you'll be able to achieve those higher newly spreads, if later in the year, less foot traffic, economic uncertainty, I guess what are you looking at that gives you that confidence to go after that pricing?

我猜想一個問題是 10 月份的租賃價差將達到 4% 至 5%。是什麼讓您有信心能夠實現更高的新價差，如果在今年晚些時候，人流量減少，經濟不確定性，我想您在看什麼讓您有信心追求這個定價？

Yes. So good question. The 4% to 5% in October is what we're sending renewals out for currently. Yes. The blended rent growth, as I kind of went through in one of my earlier questions, the base blended rent growth that we've assumed for the entire second half of the year is at 3.5%, plus an additional 75 basis points coming from that incremental value-add units that we'll deliver, 1,300 value add units that we'll deliver.

是的。好問題。我們目前發送續訂的金額是 10 月份的 4% 到 5%。是的。混合租金增長，正如我在之前的一個問題中所提到的，我們假設整個下半年的基本混合租金增長為 3.5%，再加上由此產生的額外 75 個基點我們將交付的增量增值單位，我們將交付的1,300 個增值單位。

And our loss to lease today is 5%. So when you really kind of think about, okay, you're achieving this 4% to 5% renewals, we've got baked in 4.2. So you really only need to kind of achieve that 3.5%, if not a little upper 3s on our loss to lease supports that. We feel quite confident given the occupancy push we've done year-to-date and kind of having that strength heading into the back part of the year or the [shoulder] season -- post leasing season.

今天我們的租賃損失是 5%。因此，當您真正考慮一下，好吧，您實現了 4% 到 5% 的續訂時，我們就在 4.2 中完成了。因此，你實際上只需要達到 3.5%，如果我們的租賃損失沒有達到 3% 以上的話，就可以支持這一點。考慮到我們今年迄今所做的入住率推動，並且在今年下半年或[平]季節（租賃季節後）中擁有這種實力，我們感到非常有信心。

And maybe one more on just transaction activity. You're selling asset in Chicago. Some of your peers are doing some acquisitions. What are you seeing out there in terms of assets out for sale? What are sellers being motivated by at this point? How cap rates going to trend in the past few months?

也許還有一個關於交易活動的問題。您正在出售芝加哥的資產。你的一些同行正在進行一些收購。您對待售資產有何看法？此時賣家的動機是什麼？過去幾個月資本化率的趨勢如何？

So it appears to us that there still is a gap between the bid and the ask on transactions. When -- for our Chicago transaction or the Chicago property, we had a number of bids. They were from, generally speaking, more local, smaller type investors, not the public REITs. We are seeing more transactions come to market. I'm not confident yet that those additional transactions will actually make it full circle and close because of that bid-ask spread and still the volatility in interest rates.

因此，在我們看來，交易的買價和賣價之間仍然存在差距。對於我們在芝加哥的交易或芝加哥房產，我們收到了很多出價。一般來說，它們來自本地、規模較小的投資者，而不是公共房地產投資信託基金。我們看到更多的交易進入市場。由於買賣差價和利率的波動性，我還不相信這些額外的交易實際上會完成完整的循環並結束。

Cap rates, we seem to have stabilized a little bit for the moment. And I would tell you, in the 5.25% to 5.5% range, generally speaking. We were very, very happy with our Chicago transaction.

資本化率目前似乎已經穩定了一些。我會告訴你，一般來說，在 5.25% 到 5.5% 的範圍內。我們對芝加哥的交易非常非常滿意。

There are no further questions at this time. I will now turn the call back to Scott Schaeffer for closing remarks.

目前沒有其他問題。現在我將把電話轉回給斯科特·謝弗（Scott Schaeffer），讓其致閉幕詞。

Thank you all for joining us this morning, and we look forward to speaking with you again next quarter.

感謝大家今天早上加入我們，我們期待下個季度再次與您交談。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連接。