# EDGAR Filing Document

**Accession Number:** 0001466085
**File Stem:** 0001437749-25-024203
**Filing Date:** 2025-7
**Character Count:** 249380
**Document Hash:** 501b56e43f89243f808721f913cc8ee9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-024203.hdr.sgml**: 20250731

**ACCESSION NUMBER**: 0001437749-25-024203

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 70

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250731

**DATE AS OF CHANGE**: 20250731

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** INDEPENDENCE REALTY TRUST, INC.
- **CENTRAL INDEX KEY:** 0001466085
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 264567130
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36041
- **FILM NUMBER:** 251171874

**BUSINESS ADDRESS:**
- **STREET 1:** 1835 MARKET STREET
- **STREET 2:** SUITE 2601
- **CITY:** PHILADELPHIA
- **STATE:** PA
- **ZIP:** 19103
- **BUSINESS PHONE:** 267-270-4800

**MAIL ADDRESS:**
- **STREET 1:** 1835 MARKET STREET
- **STREET 2:** SUITE 2601
- **CITY:** PHILADELPHIA
- **STATE:** PA
- **ZIP:** 19103

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** INDEPENDENCE REALTY TRUST, INC
- **DATE OF NAME CHANGE:** 20110218

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** INDEPENDENCE REALTY TRUST INC
- **DATE OF NAME CHANGE:** 20110211

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** EMPIRE AMERICAN REALTY TRUST INC
- **DATE OF NAME CHANGE:** 20090610

?xml version='1.0' encoding='ASCII'? irt20250630_10q.htm

[**Table of Contents**](#toc)

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**FORM 10-Q**

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**(Mark One)**

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

**For the quarterly period ended June 30, 2025**

**or**

☐ **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**

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## INDEPENDENCE REALTY TRUST, INC.
**(Exact Name of Registrant as Specified in Its Charter)**<br>

---

| | |
|:---|:---|
| **Maryland** | **26-4567130** |
| **(State or Other Jurisdiction of**<br> **Incorporation or Organization)** | **(I.R.S. Employer**<br> **Identification No.)** |
| **1835 Market Street, Suite 2601**<br> **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)**

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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, $0.01 par value per share | 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 ☒ No ☐

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 ☒ No ☐

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 | ☒ | Accelerated filer | ☐ |
| Non-Accelerated filer | ☐ | Smaller reporting company | ☐ |
| Emerging growth company | ☐ |  |  |

---

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 25, 2025 there were 233,817,113 shares of the Registrant's common stock issued and outstanding.

------

[**Table of Contents**](#toc)

**INDEPENDENCE REALTY TRUST, INC.**

**INDEX**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| [**<u>PART I</u>**<u>—</u>**<u>FINANCIAL INFORMATION</u>**](#part1) | [**<u>PART I</u>**<u>—</u>**<u>FINANCIAL INFORMATION</u>**](#part1) | [3](#part1) |
| Item 1. | [<u>Financial Statements (unaudited)</u>](#finstmts) | [3](#finstmts) |
|  | [<u>Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024</u>](#bs) | [3](#bs) |
|  | [<u>Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2025 and June 30, 2024</u>](#ops) | [4](#ops) |
|  | [<u>Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months ended June 30, 2025 and June 30, 2024</u>](#compinc) | [5](#compinc) |
|  | [<u>Condensed Consolidated Statements of Changes in Equity for the Three and Six Months ended June 30, 2025 and June 30, 2024</u>](#equity) | [6](#equity) |
|  | [<u>Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2025 and June 30, 2024</u>](#cf) | [7](#cf) |
|  | [<u>Notes to Condensed Consolidated Financial Statements as of June 30, 2025</u>](#notes) | [8](#notes) |
| Item 2. | [<u>Management</u><u>'</u><u>s Discussion and Analysis of Financial Condition and Results of Operations</u>](#mda) | [19](#mda) |
| Item 3. | [<u>Quantitative and Qualitative Disclosures About Market Risk</u>](#quant) | [27](#quant) |
| Item 4. | [<u>Controls and Procedures</u>](#controls) | [27](#controls) |
| [**<u>PART II</u>**<u>—</u>**<u>OTHER INFORMATION</u>**](#part2) | [**<u>PART II</u>**<u>—</u>**<u>OTHER INFORMATION</u>**](#part2) |  |
| Item 1. | [<u>Legal Proceedings</u>](#legal) | [28](#legal) |
| Item 1A. | [<u>Risk Factors</u>](#risk) | [28](#risk) |
| Item 2. | [<u>Unregistered Sales of Equity Securities and Use of Proceeds</u>](#unregistered) | [28](#unregistered) |
| Item 3. | [<u>Defaults Upon Senior Securities</u>](#defaults) | [29](#defaults) |
| Item 4. | [<u>Mine Safety Disclosures</u>](#mine) | [29](#mine) |
| Item 5. | [<u>Other Information</u>](#otherinfo) | [29](#otherinfo) |
| Item 6. | [<u>Exhibits</u>](#exhibits) | [29](#exhibits) |
| [<u>Signatures</u>](#sigs) | [<u>Signatures</u>](#sigs) | [30](#sigs) |

---

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[**Table of Contents**](#toc)

**PART I**—**FINANCIAL INFORMATION**

**Item 1.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **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*** | ***As of*** |
|  | ***June 30, 2025*** | ***December 31, 2024*** |
| **ASSETS:** |  |  |
| Investments in real estate: |  |  |
| Investments in real estate, at cost | $6356830 | $6363936 |
| Accumulated depreciation | (810042) | (740957) |
| Investments in real estate, net | 5546788 | 5622979 |
| Real estate held for sale | 119875 | 110112 |
| Investments in real estate under development | 91849 | 116861 |
| Cash and cash equivalents | 19491 | 21228 |
| Restricted cash | 23035 | 22224 |
| Investments in unconsolidated real estate entities | 106920 | 91975 |
| Other assets | 38389 | 39596 |
| Derivative assets | 14635 | 29300 |
| Intangible assets, net of accumulated amortization of $3,550 and $1,305, respectively | 1644 | 3644 |
| Total Assets | $5962626 | $6057919 |
| **LIABILITIES AND EQUITY:** |  |  |
| Indebtedness, net | $2249801 | $2274651 |
| Indebtedness associated with real estate held for sale |  | 59032 |
| Accounts payable and accrued expenses | 105576 | 94670 |
| Accrued interest payable | 7815 | 8630 |
| Dividends payable | 40691 | 37827 |
| Derivative liabilities | 233 |  |
| Other liabilities | 7550 | 8035 |
| Total Liabilities | 2411666 | 2482845 |
| 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, 233,809,823 and 230,838,006 shares issued and outstanding, including 393,271 and 360,561 unvested restricted common share awards, respectively | 2338 | 2308 |
| Additional paid-in capital | 3920436 | 3868006 |
| Accumulated other comprehensive income | 12038 | 26065 |
| Accumulated deficit | (514623) | (454104) |
| Total stockholders' equity | 3420189 | 3442275 |
| Noncontrolling interests | 130771 | 132799 |
| Total Equity | 3550960 | 3575074 |
| Total Liabilities and Equity | $5962626 | $6057919 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3

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[**Table of Contents**](#toc)

**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*** | ***For the Three Months Ended*** | ***For the Six Months Ended*** | ***For the Six Months Ended*** |
|  | ***June 30,*** | ***June 30,*** | ***June 30,*** | ***June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| **REVENUE:** |  |  |  |  |
| Rental and other property revenue | $161891 | $158104 | $322796 | $318436 |
| Other revenue | 297 | 298 | 635 | 501 |
| Total revenue | 162188 | 158402 | 323431 | 318937 |
| **EXPENSES:** |  |  |  |  |
| Property operating expenses | 60935 | 60883 | 120198 | 120854 |
| Property management expenses | 7715 | 7666 | 15541 | 15165 |
| General and administrative expenses | 5982 | 6244 | 14388 | 14624 |
| Depreciation and amortization expense | 59794 | 54127 | 118521 | 107850 |
| Casualty losses | 255 | 465 | 139 | 2767 |
| Total expenses | 134681 | 129385 | 268787 | 261260 |
| Interest expense | (18773) | (17460) | (38121) | (38063) |
| (Loss on impairment) gain on sale of real estate assets, net |  | (152) | 1496 | 10378 |
| (Loss) gain on extinguishment of debt |  |  | (67) | 203 |
| Other loss |  |  | (103) | (1) |
| Loss from investments in unconsolidated real estate entities | (562) | (850) | (1151) | (1679) |
| **Net income:** | 8172 | 10555 | 16698 | 28515 |
| Income allocated to noncontrolling interest | (126) | (201) | (298) | (585) |
| **Net income allocable to common shares** | $8046 | $10354 | $16400 | $27930 |
| **Earnings per share:** |  |  |  |  |
| Basic | $0.03 | $0.05 | $0.07 | $0.12 |
| Diluted | $0.03 | $0.05 | $0.07 | $0.12 |
| **Weighted-average shares:** |  |  |  |  |
| Basic | 233496633 | 224793229 | 232117768 | 224710259 |
| Diluted | 234131752 | 225418825 | 233041087 | 225403082 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4

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[**Table of Contents**](#toc)

**Independence Realty Trust, Inc. and Subsidiaries**

**Condensed Consolidated Statements of Comprehensive (Loss) Income**

**(Unaudited and dollars in thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended*** | ***For the Three Months Ended*** | ***For the Six Months Ended*** | ***For the Six Months Ended*** |
|  | ***June 30,*** | ***June 30,*** | ***June 30,*** | ***June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| **Net income** | $8172 | $10555 | $16698 | $28515 |
| Other comprehensive (loss) income: |  |  |  |  |
| Change in fair value of interest rate hedges | (2002) | 5065 | (7681) | 19527 |
| Realized gains on interest rate hedges reclassified to earnings | (3402) | (5189) | (6711) | (10428) |
| Total other comprehensive (loss) income | (5404) | (124) | (14392) | 9099 |
| Comprehensive income before allocation to noncontrolling interests | 2768 | 10431 | 2306 | 37614 |
| Allocation to noncontrolling interests | 8 | (198) | 67 | (817) |
| **Comprehensive income** | $2776 | $10233 | $2373 | $36797 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5

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[**Table of Contents**](#toc)

**Independence Realty Trust, Inc. and Subsidiaries**

**Condensed Consolidated Statements of Changes in Equity**

**(Unaudited and dollars in thousands, except share and per share data)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | ***Accumulated*** | ***Retained*** |  |  |  |
|  |  | ***Par Value*** | ***Additional*** | ***Other*** | ***Earnings*** | ***Total*** |  |  |
|  | ***Common*** | ***Common*** | ***Paid In*** | ***Comprehensive*** | ***(Accumulated*** | ***Stockholders'*** | ***Noncontrolling*** | ***Total*** |
|  | ***Shares*** | ***Shares*** | ***Capital*** | ***Income (Loss)*** | ***Deficit)*** | ***Equity*** | ***Interests*** | ***Equity*** |
| Balance, December 31, 2024 | 230838006 | $2308 | $3868006 | $26065 | $(454104) | $3442275 | $132799 | $3575074 |
| Net income | *—* |  |  |  | 8354 | 8354 | 172 | 8526 |
| Common dividends declared ($0.16 per share) | *—* |  |  |  | (37223) | (37223) |  | (37223) |
| Other comprehensive loss | *—* |  |  | (8757) |  | (8757) | (231) | (8988) |
| Stock compensation | 321828 | 3 | 4048 |  |  | 4051 |  | 4051 |
| Repurchase of shares related to equity award tax withholding | (46654) |  | (3322) |  |  | (3322) |  | (3322) |
| Issuance of common shares, net | 2650000 | 26 | 49986 |  |  | 50012 |  | 50012 |
| Distribution to noncontrolling interest declared ($0.16 per share) | *—* |  |  |  |  |  | (951) | (951) |
| **Balance, March 31, 2025** | 233763180 | $2337 | $3918718 | $17308 | $(482973) | $3455390 | $131789 | $3587179 |
| Net income | *—* |  |  |  | 8046 | 8046 | 126 | 8172 |
| Common dividends declared ($0.17 per share) | *—* |  |  |  | (39696) | (39696) |  | (39696) |
| Other comprehensive loss | *—* |  |  | (5270) |  | (5270) | (134) | (5404) |
| Stock compensation | 51238 | 1 | 1946 |  |  | 1947 |  | 1947 |
| Repurchase of shares related to equity award tax withholding | (4595) |  | (98) |  |  | (98) |  | (98) |
| Issuance of common shares, net |  |  | (130) |  |  | (130) |  | (130) |
| Distribution to noncontrolling interest declared ($0.17 per share) | *—* |  |  |  |  |  | (1010) | (1010) |
| **Balance, June 30, 2025** | 233809823 | $2338 | $3920436 | $12038 | $(514623) | $3420189 | $130771 | $3550960 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | ***Accumulated*** | ***Retained*** |  |  |  |
|  |  | ***Par Value*** | ***Additional*** | ***Other*** | ***Earnings*** | ***Total*** |  |  |
|  | ***Common*** | ***Common*** | ***Paid In*** | ***Comprehensive*** | ***(Accumulated*** | ***Stockholders'*** | ***Noncontrolling*** | ***Total*** |
|  | ***Shares*** | ***Shares*** | ***Capital*** | ***Income (Loss)*** | ***Deficit)*** | ***Equity*** | ***Interests*** | ***Equity*** |
| Balance, December 31, 2023 | 224706731 | $2247 | $3751942 | $25513 | $(348405) | $3431297 | $135897 | $3567194 |
| Net income | *—* |  |  |  | 17577 | 17577 | 384 | 17961 |
| Common dividends declared ($0.16 per share) | *—* |  |  |  | (36187) | (36187) |  | (36187) |
| Other comprehensive income | *—* |  |  | 8988 |  | 8988 | 236 | 9224 |
| Stock compensation | 391667 | 4 | 3456 |  |  | 3460 |  | 3460 |
| Repurchase of shares related to equity award tax withholding | (32930) |  | (1598) |  |  | (1598) |  | (1598) |
| Conversion of noncontrolling interest to common shares | 4928 |  | 33 |  |  | 33 | (33) |  |
| Distribution to noncontrolling interest declared ($0.16 per unit) | *—* |  |  |  |  |  | (951) | (951) |
| **Balance, March 31, 2024** | 225070396 | $2251 | $3753833 | $34501 | $(367015) | $3423570 | $135533 | $3559103 |
| Net income | *—* |  |  |  | 10354 | 10354 | 201 | 10555 |
| Common dividends declared ($0.16 per share) | *—* |  |  |  | (35966) | (35966) |  | (35966) |
| Other comprehensive loss | *—* |  |  | (121) |  | (121) | (3) | (124) |
| Stock compensation | 56560 |  | 1940 |  |  | 1940 |  | 1940 |
| Repurchase of shares related to equity award tax withholding | (4721) |  | (945) |  |  | (945) |  | (945) |
| Issuance of common shares, net |  |  | (72) |  |  | (72) |  | (72) |
| Distribution to noncontrolling interest declared ($0.16 per unit) | *—* |  |  |  |  |  | (951) | (951) |
| **Balance, June 30, 2024** | 225122235 | $2251 | $3754756 | $34380 | $(392627) | $3398760 | $134780 | $3533540 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6

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[**Table of Contents**](#toc)

**Independence Realty Trust, Inc. and Subsidiaries**

**Condensed Consolidated Statements of Cash Flows**

**(Unaudited and dollars in thousands)**

---

| | | |
|:---|:---|:---|
|  | ***For the Six Months Ended*** | ***For the Six Months Ended*** |
|  | ***June 30,*** | ***June 30,*** |
|  | ***2025*** | ***2024*** |
| Cash flows from operating activities: |  |  |
| Net income | $16698 | $28515 |
| Adjustments to reconcile net income to cash flow from operating activities: |  |  |
| Depreciation and amortization | 118521 | 107850 |
| Accretion of loan discounts and premiums, net | (4014) | (4679) |
| Amortization of deferred financing costs, net | 1809 | 1379 |
| Stock compensation expense | 5797 | 5250 |
| (Gain on sale) loss on impairment of real estate assets, net | (1496) | (10378) |
| Loss (gain) on extinguishment of debt | 67 | (203) |
| Amortization related to derivative instruments | 506 | 614 |
| Non-cash casualty losses | 400 | 1510 |
| Equity in loss from investments in unconsolidated real estate entities | 1151 | 1679 |
| Other non-cash loss | 103 | 1 |
| Changes in assets and liabilities: |  |  |
| Other assets | 3077 | 5145 |
| Accounts payable and accrued expenses | 1379 | (7827) |
| Accrued interest payable | (815) | (1122) |
| Other liabilities | (569) | (654) |
| Cash flow provided by operating activities | 142614 | 127080 |
| Cash flows from investing activities: |  |  |
| Acquisition of real estate properties | (58637) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Escrow deposits for pending real estate acquisitions | (3818) |  |
| Investments in unconsolidated real estate entities | (16096) | (2982) |
| Proceeds from dispositions of real estate properties, net | 109203 | 320606 |
| Capital expenditures | (53677) | (55698) |
| Real estate development expenditures | (12242) | (26884) |
| Proceeds from insurance claims | 925 | 3511 |
| Cash flow (used in) provided by investing activities | (34342) | 238553 |
| Cash flows from financing activities: |  |  |
| Proceeds (costs) from issuance of common stock, net | 49883 | (72) |
| Proceeds from unsecured revolver | 243414 | 131000 |
| Unsecured revolver and secured credit facility repayments | (223000) | (262652) |
| Mortgage principal repayments and payoffs | (94423) | (159675) |
| Payment for deferred financing costs | (5636) | (357) |
| Distributions on common stock | (74113) | (72104) |
| Distributions to noncontrolling interests | (1902) | (1901) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payment for debt extinguishment | (1) | (663) |
| Repurchase of shares related to equity award tax withholding | (3420) | (2543) |
| Cash flow used in financing activities | (109198) | (368967) |
| **Net change in cash and cash equivalents, and restricted cash** | (926) | (3334) |
| **Cash and cash equivalents, and restricted cash, beginning of period** | 43452 | 50732 |
| **Cash and cash equivalents, and restricted cash, end of the period** | $42526 | $47398 |
| **Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Balance Sheets** |  |  |
| Cash and cash equivalents | $19491 | $21034 |
| Restricted cash | 23035 | 26364 |
| Total cash, cash equivalents, and restricted cash, end of period | $42526 | $47398 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7

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[**Table of Contents**](#toc)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; June 30, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (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.* We are primarily engaged in the ownership, operation, management, improvement, and acquisition of multifamily apartment communities in non-gateway markets. As of *June 30, 2025*, we owned and operated 113 multifamily apartment properties (including one owned through a consolidated joint venture) that contain an aggregate of 33,175 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, 2025*, we owned oneinvestment in real estate under development in Denver, Colorado that will, upon completion, contain 296 units. As of *June 30, 2025*, we also owned interests in five unconsolidated joint ventures, three of which own and operate multifamily apartment communities that contain an aggregate of 886 units and two of which are developing multifamily apartment properties that will, upon completion, contain an aggregate of 702 units. We own all of our assets and conduct substantially all of our operations through Independence Realty Operating Partnership, LP, a Delaware limited partnership ("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 its subsidiaries.

**NOTE *2:* Summary of Significant Accounting Policies**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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, 2024* included in our *2024* 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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, 2025* and *December 31, 2024*, we had $23,035 and $22,224, respectively, of restricted cash.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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, necessary approvals are obtained, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *8*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *June 30, 2025*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited and dollars in thousands, except share and per share data)

*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 *nine* months. During the *three* and *six* months ended *June 30, 2025*, we acquired in-place leases with a value of $0 and $1,829, respectively, related to our acquisitions that are discussed further in Note *3:* Investments in Real Estate. During the *three* and *six* months ended *June 30, 2024*, we did not acquire any in-place leases. During the *three* and *six* months ended *June 30, 2025*, we recorded $1,976 and $3,829, respectively, of amortization for intangible assets. During the *three* and *six* months ended *June 30, 2024*, we recorded $0 and $66, respectively, of amortization for intangible assets. For the *six* months ended *June 30, 2025* and *2024*, we wrote-off fully amortized intangible assets of $1,584 and $398, respectively. As of *June 30, 2025*, we expect to record additional amortization expense on current in-place intangible assets of $1,644 for the remainder of *2025*.

*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 accounting standard requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that recoverability of the assets is *not* assured.

We review our long-lived assets on an ongoing basis and evaluate the recoverability of the carrying value when there is an indicator of impairment. An impairment charge is recognized when it is determined that the carrying value of the asset exceeds the fair value. The estimated cash flows and estimated fair value used in the impairment analysis are determined based on our plans for the respective assets, including the expected hold period, and our assessment of market and economic conditions. The estimates consider matters such as current and historical rental rates and collection levels, occupancies for the respective and/or comparable properties, and recent sales data for comparable properties. Changes in our plans or views of market and economic conditions *may* result in adjustments to estimated future cash flows, which could lead to recognition of impairment losses. These losses, as guided by the applicable accounting standards, could be significant. For the *three* and *six* months ended *June 30, 2025,* we did not incur an impairment charge. For the *three* and *six* months ended *June 30, 2024,* we recorded impairment charges of $0 and $15,107, respectively, on account of real estate classified as held for sale and sold properties.

*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, 2025*, we recorded $57,396 and $113,850 of depreciation expense, respectively. For the *three* and *six* months ended *June 30, 2024*, we recorded $53,757 and $107,080 of depreciation expense, respectively. During the *three* and *six* months ended *June 30, 2025*, we wrote-off fully depreciated fixed assets of $8,296 and $16,088, respectively. During the *three* and *six* months ended *June 30, 2024*, we wrote-off fully depreciated fixed assets of $8,328 and $15,604, respectively.

*Casualty Related Costs*

Occasionally, we incur losses at our communities from wind storms, floods, fires and similar hazards. 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, if any. 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, 2025*, we recorded $255 and $139 of net casualty losses, respectively. During the *three* and *six* months ended *June 30, 2024*, we recorded $465 and $2,767 of net casualty losses, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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, 2025*, we recorded $1,587 and $3,147, respectively, of capitalized interest expense on our investments in real estate under development. For the *three* and *six* months ended *June 30, 2024*, we recorded $1,771 and $3,341, respectively, of capitalized interest expense on our investments in real estate under development.

As of *June 30, 2025* and *December 31, 2024*, the carrying value of our investment in real estate under development in Denver, Colorado totaled $91,849 and $116,861 respectively, net of $33,972 and $0 placed in service, respectively, and was recorded as a separate line item in our condensed consolidated balance sheets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *9*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *June 30, 2025*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited and dollars in thousands, except share and per share data)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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 control as well as any variable interest entity ("VIE") where we are the primary beneficiary. Under the VIE model, we 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 investment is a voting interest entity. Our equity interest varies for each of our investments in unconsolidated real estate entities 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* and *six* months ended *June 30, 2025*, we recorded $1,014 and $1,969, respectively, of capitalized interest expense on our investments in unconsolidated real estate entities in our condensed consolidated balance sheets. For the *three* and *six* months ended *June 30, 2024*, we recorded $1,190 and $2,462, respectively, of capitalized interest expense on our investments in unconsolidated real estate entities in our condensed consolidated balance sheets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *10*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *June 30, 2025*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited and dollars in thousands, except share and per share data)

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 revolver, 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, 2025*. The following table summarizes the carrying amount and the fair value of our financial instruments as of the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***As of June 30, 2025*** | ***As of June 30, 2025*** | ***As of December 31, 2024*** | ***As of December 31, 2024*** |
|  | ***Carrying*** | ***Estimated*** | ***Carrying*** | ***Estimated*** |
| **Financial Instrument** | ***Amount*** | ***Fair Value*** | ***Amount*** | ***Fair Value*** |
| Assets |  |  |  |  |
| Cash and cash equivalents | $19491 | $19491 | $21228 | $21228 |
| Restricted cash | 23035 | 23035 | 22224 | 22224 |
| Derivative assets | 14635 | 14635 | 29300 | 29300 |
| Liabilities |  |  |  |  |
| Debt: |  |  |  |  |
| Unsecured revolver | 209634 | 215907 | 193952 | 194249 |
| Unsecured term loans | 598512 | 601989 | 598169 | 599375 |
| Secured credit facilities | 598549 | 569107 | 600768 | 554238 |
| Mortgages | 694600 | 659452 | 792306 | 733050 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unsecured notes | 148506 | 150307 | 148488 | 150343 |
| Derivative liabilities | 233 | 233 |  |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***l. Deferred Financing Costs***

Costs incurred in connection with debt financing are deferred and classified within indebtedness and charged to interest expense over the terms of the related debt agreements, under the effective interest method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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, 2025* and *December 31, 2024*, we had $1,923 and $1,877, respectively, of operating lease right-of-use assets and $2,180 and $2,123, 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, 2025*, we recorded $117 and $237, respectively, of total operating lease expense which is recorded within property management expense and general and administrative expenses in our condensed consolidated statements of operations. During the *three* and *six* months ended *June 30, 2024*, we recorded $189 and $409, respectively, of total operating lease expense which is recorded within property management expense and general and administrative expenses in our condensed consolidated statements of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***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, 2025* and *2024*.

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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***o. Recent Accounting Pronouncements***

Below is a brief description of recent accounting pronouncements that could have a material effect on our condensed consolidated financial statements.

In *November 2024,* the FASB issued ASU *No. 2024*-*03* "Income Statement —Reporting Comprehensive Income —Expense Disaggregation Disclosures (Subtopic *220*-*40*): Disaggregation of Income Statement Expenses", and in *January 2025,* the FASB issued ASU *No. 2025*-*01* "Income Statement —Reporting Comprehensive Income —Expense Disaggregation Disclosures (Subtopic *220*-*40*): Clarifying the Effective Date." ASU *2024*-*03* requires disaggregated information for specified categories of expenses, including employee compensation and depreciation and amortization, to be presented in certain expense captions on the face of the income statement. ASU *2024*-*03,* as clarified by ASU *2025*-*01,* is effective for annual periods beginning *January 1, 2027* and interim periods beginning *January 1, 2028.* Early adoption is permitted. The new standards *may* be applied either prospectively, to financial statements issued after the effective date, or retrospectively, to all prior periods presented. The Company is currently evaluating the impact of this standard on its financial statement disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *11*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *June 30, 2025*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited and dollars in thousands, except share and per share data)

In *March 2024,* the SEC issued rules on the enhancement and standardization of climate-related disclosures. The rules, require disclosure of material climate-related risks; activities to mitigate or adapt to such risks; governance and management of such risks; and material greenhouse gas emissions from operations owned or controlled and or indirect emissions from purchased energy consumed in operations. Additionally, the rules require disclosure in the notes to the financial statements of the effects of severe weather events and other natural conditions, subject to certain materiality thresholds. The rules were scheduled to become effective for the Company beginning with the year ended *December 31, 2025.* However, the SEC has voluntarily stayed the rules and ended its defense of the rules in response to pending legal challenges. The Company is evaluating the effect that the rules will have on its financial statement disclosures if the rules were to ultimately be implemented.

**NOTE *3:* Investments in Real Estate**

As of *June 30, 2025*, our investments in real estate consisted of 113 operating apartment properties, including one owned through a consolidated joint venture that contain an aggregate of 33,175 units. The following table summarizes our investments in real estate except for *three* properties that we classified as held for sale as of *June 30, 2025:*

---

| | | | |
|:---|:---|:---|:---|
|  | ***As of June 30, 2025*** | ***As of December 31, 2024*** | ***Depreciable Lives (In years)*** |
| Land | $554886 | $564966 | *—* |
| Building | 5292690 | 5323105 | 40 |
| Furniture, fixtures and equipment | 509254 | 475865 | 5 - 10 |
| Total investments in real estate | $6356830 | $6363936 |  |
| Accumulated depreciation | (810042) | (740957) |  |
| Investments in real estate, net | $5546788 | $5622979 |  |

---

The following table summarizes our properties held for sale as of *June 30, 2025.*

---

| | | | |
|:---|:---|:---|:---|
| **Property** | ***Market*** | ***Units*** | ***Carrying Value*** |
| Bella Terra at City Center | *Denver, CO* | 304 | $61927 |
| Jamestown at St. Matthews | *Louisville, KY* | 356 | 31286 |
| Stonebridge Crossing | *Memphis, TN* | 500 | 26662 |
|  |  | 1160 | $119875 |

---

***Acquisitions***

The following table summarizes our acquisitions for the *six* months ended *June 30, 2025*:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Property** | ***Date Acquired*** | ***Market*** | ***Units*** | ***Purchase Price*** |
| Autumn Breeze | *2/27/2025* | *Indianapolis, IN* | 280 | $59500 |

---

The following table summarizes the relative fair value of the assets and liabilities associated with acquisitions during the *six* months ended *June 30, 2025*, on the date of acquisition accounted for under FASB ASC Topic *805*-*50*-*15*-*3.*

---

| | |
|:---|:---|
|  | ***Fair Value of Assets Acquired During the*** |
|  | ***Six Months Ended*** |
|  | ***June 30, 2025*** |
| Assets acquired: |  |
| Investments in real estate | $57854 |
| Other assets | 48 |
| Intangible assets | 1829 |
| Total assets acquired | 59731 |
| Liabilities assumed: |  |
| Accounts payable and accrued expenses | 1002 |
| Other liabilities | 92 |
| Total liabilities assumed | 1094 |
| Estimated fair value of net assets acquired | $58637 |

---

On *July 31, 2025,* we acquired a 240-unit multifamily apartment community in Orlando, FL for $60,250.

***Dispositions***

The following table summarizes our dispositions for the *six* months ended *June 30, 2025*:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Property** | ***Market*** | ***Units*** | ***Sale Date*** | ***Sale Price*** | ***Gain on Sale (Loss) on Impairment), Net*** |
| Ridge Crossings (1) | *Birmingham, AL* | 720 | *2/14/2025* | $111000 | $1496 |

---

(*1*) During the *three* months ended *December 31, 2024,* we recognized a loss on impairment of $20,928.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *12*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *June 30, 2025*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited and dollars in thousands, except share and per share data)

**NOTE *4:* Investments in Unconsolidated Real Estate**

As of *June 30, 2025*, our investments in unconsolidated real estate entities had aggregate land, building, and capitalized construction in progress costs of $347,756 and aggregate construction debt of $226,910. We do *not* guarantee any debt, capital payout or other obligations associated with these entities. 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 $562 and $1,151 from equity method investments during the *three* and *six* months ended *June 30, 2025*, respectively, and $850 and $1,679, respectively, during the *three* and *six* months ended *June 30, 2024,* 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, 2025* and *December 31, 2024*:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | ***Carrying Value As Of*** | ***Carrying Value As Of*** |
| **Investments in Unconsolidated Real Estate Entities** | ***Location*** | ***Units (1)*** | ***IRT Ownership Interest*** | ***June 30, 2025*** | ***December 31, 2024*** |
| Metropolis at Innsbrook (2) | *Richmond, VA* | 402 | 84.8% | $20681 | $21163 |
| Views of Music City II (3) | *Nashville, TN* | 209 | 50.0% | 5912 | 5905 |
| Lakeline Station | *Austin, TX* | 378 | 90.0% | 39011 | 36106 |
| The Mustang (4) | *Dallas, TX* | 275 | 85.0% | 30577 | 28801 |
| Nexton Pine Hollow | *Charleston, SC* | 324 | 90.0% | 10739 |  |
| *Total* | *Total* | 1588 |  | $106920 | $91975 |

---

(*1*) Represents the total number of units after development is complete and each property is placed in service.

(*2*) The Metropolis at Innsbrook is an operating property that was listed for sale during the *three* months ended *March 31, 2025* and sold on *July 21, 2025.* We received $31,085 in proceeds from the sale, comprised of a return of our initial investment of $24,501 and equity proceeds of $6,584. We expect to recognize a gain of approximately $10,404 from this sale during the *three* months ended *September 30, 2025.*

(*3*) Views of Music City II is an operating property. Our joint venture partner has provided us with a notice of intent to redeem our investment comprised of a return of our initial capital of $5,453 and preferred return in the amount of approximately $3,549 in *September 2025.* We expect to recognize the preferred return in income (loss) from investments in unconsolidated real estate entities in our condensed consolidated statements of operations during the *three* months ended *September 30, 2025.*

(*4*) The Mustang is an operating property consisting of 275 total units. We have a call option that gives us the right to buy the property upon the earlier of the date upon which the property achieves 85% occupancy or *August 15, 2025.*

**NOTE *5:* Indebtedness**

*Unsecured Revolver and Term Loans*

On *January 8, 2025,* IROP entered into the Fifth Amended and Restated Credit Agreement (the "Fifth Restated Credit Agreement"), which amended and restated in its entirety the Fourth Amended and Restated Credit Agreement dated as of *July 25, 2022.* The Fifth Restated Credit Agreement increased the maximum principal amount of the unsecured revolver to $750,000, which represents an increase of $250,000 over the prior credit agreement, extended its maturity date until *January 8, 2029* and reduced the margin on our unsecured revolver and existing $200,000 term loan while leaving the terms of our existing $400,000 term loan unchanged. In summary, the Fifth Restated Credit Agreement provides for a $750,000 unsecured revolving credit facility (the "Unsecured Revolver") with a *January 8, 2029* maturity date and *two* unsecured term loans, specifically: (i) a $200,000 term loan with a *May 18, 2026* maturity date and (ii) a $400,000 term loan with a *January 28, 2028* maturity date.

The Fifth Restated Credit Agreement increased the aggregate amount of borrowings under the credit agreement to $1,350,000 and permits IROP to request an increase in such aggregate amount to up to $2,000,000 subject to certain terms and conditions, including receipt of commitments from *one* or more lenders, whether or *not* currently parties to the Fifth Restated Credit Agreement, to provide such increased amounts, which increase *may* be allocated, at IROP's option, to the Unsecured Revolver and/or to *one* or more of the term loans, in accordance with the Fifth Restated Credit Agreement. Refer to our *2024* Annual Report on Form *10*-K for additional borrowing terms and financial covenant details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *13*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *June 30, 2025*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited and dollars in thousands, except share and per share data)

The following tables contain summary information concerning our consolidated indebtedness, as of *June 30, 2025*:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Consolidated Debt:** | ***Outstanding Principal*** | ***Unamortized Debt Issuance Costs*** | ***Unamortized Loan (Discount)/Premiums*** | ***Carrying Amount*** | ***Type*** | ***Weighted Average Contractual Rate (2)*** | ***Weighted Average Effective Rate (3)*** | ***Weighted Average Maturity (in years)*** |
| Unsecured revolver <sup>(1)</sup> | $214892 | $(5258) | $— | $209634 | *Floating* | 5.1% | 4.8% | 3.5 |
| Unsecured term loans | 600000 | (1488) |  | 598512 | *Floating* | 5.1% | 3.6% | 2.0 |
| Secured credit facilities | 585635 | (1699) | 14613 | 598549 | *Fixed* | 4.2% | 4.4% | 3.4 |
| Mortgages | 686370 | (2626) | 10856 | 694600 | *Fixed* | 3.8% | 4.0% | 3.4 |
| Unsecured notes | 150000 | (1494) |  | 148506 | *Fixed* | 5.4% | 5.6% | 7.8 |
| **Total Consolidated Debt** | $2236897 | $(12565) | $25469 | $2249801 |  | 4.5% | 4.2% | 3.4 |

---

(*1*) The unsecured revolver total capacity is $750,000, of which $214,892 was outstanding as of *June 30, 2025*.

(*2*) Represents the weighted average of the contractual interest rates in effect as of *June 30, 2025*, without regard to any interest rate swaps or collars.

(*3*) Represents the weighted average effective interest rates for the *three* months ended *June 30, 2025*, including the impact of interest rate swaps and collars, the amortization of hedging costs, and deferred financing costs, but excluding the impact of loan premium amortization, discount accretion, and interest capitalization.

The following table contains summary information concerning our consolidated indebtedness as of *June 30, 2025*:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | ***Scheduled maturities on our consolidated indebtedness outstanding as of June 30, 2025*** | ***Scheduled maturities on our consolidated indebtedness outstanding as of June 30, 2025*** | ***Scheduled maturities on our consolidated indebtedness outstanding as of June 30, 2025*** | ***Scheduled maturities on our consolidated indebtedness outstanding as of June 30, 2025*** | ***Scheduled maturities on our consolidated indebtedness outstanding as of June 30, 2025*** | ***Scheduled maturities on our consolidated indebtedness outstanding as of June 30, 2025*** |
| **Consolidated Debt:** | ***2025*** | ***2026*** | ***2027*** | ***2028*** | ***2029*** | ***Thereafter*** |
| Unsecured revolver | $— | $— | $— | $— | $214892 | $— |
| Unsecured term loans |  | 200000 |  | 400000 |  |  |
| Secured credit facilities | 3065 | 9111 | 10081 | 453937 | 2669 | 106772 |
| Mortgages | 6835 | 126201 | 11281 | 126018 | 416035 |  |
| Unsecured notes |  |  |  |  |  | 150000 |
| **Total** | $9900 | $335312 | $21362 | $979955 | $633596 | $256772 |

---

The following table contains summary information concerning our consolidated indebtedness, including indebtedness secured by real estate held for sale, as of *December 31, 2024*:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Consolidated Debt:** | ***Outstanding Principal*** | ***Unamortized Debt Issuance Costs*** | ***Unamortized Loan (Discount)/Premiums*** | ***Carrying Amount*** | ***Type*** | ***Weighted Average Contractual Rate (3)*** | ***Weighted Average Effective Rate (4)*** | ***Weighted Average Maturity (in years)*** |
| Unsecured revolver (1) | $194478 | $(526) | $— | $193952 | *Floating* | 5.5% | 4.8% | 4.0 |
| Unsecured term loans | 600000 | (1831) |  | 598169 | *Floating* | 5.6% | 4.0% | 2.5 |
| Secured credit facilities | 585635 | (1901) | 17034 | 600768 | *Fixed* | 4.2% | 4.4% | 3.9 |
| Mortgages (2) | 780794 | (3175) | 14687 | 792306 | *Fixed* | 3.8% | 4.0% | 3.7 |
| Unsecured notes | 150000 | (1512) |  | 148488 | *Fixed* | 5.4% | 5.6% | 8.3 |
| **Total Consolidated Debt** | $2310907 | $(8945) | $31721 | $2333683 |  | 4.6% | 4.3% | 3.8 |

---

(*1*) The unsecured revolver total capacity was $500,000, of which $194,478 was outstanding as of *December 31, 2024*.

(*2*) Includes indebtedness secured by real estate held for sale of $59,032.

(*3*) Represents the weighted average of the contractual interest rates in effect as of year-end *December 31, 2024*, without regard to any interest rate swaps or collars.

(*4*) Represents the total weighted average effective interest rates for the full year ended *December 31, 2024*, after giving effect to all components of interest expense including the impact of interest rate swaps and collars, but excluding the impact of loan premium amortization, discount accretion, and interest capitalization.

As of *June 30, 2025*, we were in compliance with all financial covenants contained in our consolidated indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *14*

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[**Table of Contents**](#toc)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *June 30, 2025*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited and dollars in thousands, except share and per share data)

**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, 2025* and *December 31, 2024*:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | ***As of June 30, 2025*** | ***As of June 30, 2025*** | ***As of June 30, 2025*** | ***As of December 31, 2024*** | ***As of December 31, 2024*** | ***As of December 31, 2024*** |
|  | ***Notional*** | ***Fair Value of Assets*** | ***Fair Value of Liabilities*** | ***Notional*** | ***Fair Value of Assets*** | ***Fair Value of Liabilities*** |
| Cash flow hedges: |  |  |  |  |  |  |
| Interest rate swaps | $600000 | $9676 | $233 | $500000 | $20328 | $— |
| Interest rate collars | 200000 | 4959 |  | 200000 | 8972 |  |
| Total | $800000 | $14635 | $233 | $700000 | $29300 | $— |

---

Effective interest rate swaps and collars 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 $3,402 and $6,711 to earnings within interest expense for the *three* and *six* months ended *June 30, 2025*, respectively, and we expect gains of $9,425 to be reclassified out of accumulated other comprehensive income to earnings over the next 12 months. For the *three* and *six* months ended *June 30, 2024*, we reclassified realized gains of $5,189 and $10,428, respectively, to earnings within interest expense.

On *March 14, 2025,* we entered into an interest rate swap contract with a notional value of $100,000, a strike rate of 3.96% and a maturity date of *March 17, 2026.* The interest rate swap has an effective date of *March 17, 2025.* 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 14, 2025,* our board of directors declared a dividend of $0.17 per share on our common stock, which represented a 6.3% increase over the prior quarterly rate of $0.16 per share. The *second* quarter dividend was paid on *July 18, 2025* to stockholders of record as of *June 27, 2025.*

On *March 10, 2025*, our board of directors declared a dividend of $0.16 per share on our common stock, which was paid on *April 21, 2025* to common stockholders of record as of *March 28, 2025*.

*Public Offering of *11,500,000* Shares of Common Stock*

On *September 3, 2024,* we entered into an underwriting agreement with Citigroup Global Markets Inc., KeyBanc Capital Markets Inc. and RBC Capital Markets LLC as representatives of the several underwriters named therein, (collectively, the "Underwriters"), and Citigroup Global Markets Inc. in its capacity as agent (in such capacity, the "Forward Seller") for Citibank N.A., as forward counterparty (the "Forward Counterparty") and the Forward Counterparty related to the offering of an aggregate of 11,500,000 shares of our common stock, par value $0.01 per share, at a price of $18.96 per share consisting of 11,500,000 shares of our common stock (including 1,500,000 shares offered pursuant to the underwriter's option to purchase additional shares, which was exercised in full) offered by the Forward Seller in connection with the forward sale agreements described below. We did *not* initially receive any proceeds from the sale of our common stock by the Forward Seller and we completed the offering on *September 5, 2024.*

In connection with the offering, we also entered into two forward sale agreements (the "Forward Sale Agreements") pursuant to which the Forward Seller (or its affiliate) borrowed from *third* parties and sold to the Underwriters an aggregate of 11,500,000 shares of our common stock that was sold in the offering.

On *March 31, 2025,* we physically settled 2,650,000 of those shares at a weighted average price of $18.89 per share and we received proceeds of $50,059. All of the net proceeds were used to fund new acquisitions. As of *June 30, 2025,* 5,600,000 shares of our common stock remained to be settled under the Forward Sale Agreements, which if physically settled would provide additional proceeds to us of $105,780 based on the forward sale price as of *June 30, 2025.* We expect to physically settle the remaining Forward Sale Agreements and receive proceeds, subject to certain adjustments, from the sale of those shares upon *one* or more such physical settlements within approximately *twelve* months from the date of the prospectus supplement, *no* later than *September 5, 2025,* the scheduled maturity date of the Forward Sale Agreements. Although we expect to settle the remaining Forward Sale Agreements entirely by the physical delivery of shares of our common stock for cash proceeds, we *may* also elect to cash or net share settle all or a portion of our obligations under the Forward Sale Agreements, in which case, we *may* receive or owe cash or shares of our common stock from or to the Forward Seller. The Forward Sale Agreements provided for an initial forward sale price of $18.96 per share, subject to certain adjustments pursuant to the terms of each of the Forward Sale Agreements. The Forward Sale Agreements are subject to early termination or settlement under certain circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *15*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *June 30, 2025*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited and dollars in thousands, except share and per share data)

*ATM Program*

On *July 28, 2023,* we entered into an equity distribution agreement pursuant to which we *may* from time to time offer and sell shares of our common stock under our shelf registration statement having an aggregate offering price of up to $450,000 (the "ATM Program") in negotiated transactions or transactions that are deemed to be "at the market" offerings as defined in Rule *415* under the Securities Act of *1933,* as amended (the "Securities Act"). Under the ATM Program, we *may* also enter into *one* or more forward sale transactions for the sale of shares of our common stock on a forward basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the *three* months ended *March 31, 2025,* we entered into forward sales transactions under our ATM Program for the forward sale of an aggregate of 2,681,600 shares of our common stock. The forward sales transactions had *not* settled as of *June 30, 2025,* and we had *not* received any net proceeds from these transactions as of *June 30, 2025.* Subject to our right to elect net share settlement, we expect to physically settle the forward sales transactions by the maturity date of *March 31, 2026.* Assuming the forward sales transactions are physically settled in full utilizing the current forward sales price of $20.88 per share, we expect to receive proceeds, net of sales commissions of approximately $55,993, subject to adjustment in accordance with the forward sales transactions. We intend to use substantially all of the net proceeds to fund potential acquisitions and other investment opportunities or for general corporate purposes, including the reduction of outstanding borrowings under our unsecured revolver.

We evaluated the accounting for forward sale agreements under FASB ASC Topic *480* "Distinguishing Liabilities from Equity" and FASB ASC Topic *815* "Derivatives and Hedging". As the Forward Sale Agreements are considered indexed to our own equity and since they meet the equity classification conditions in ASC *815,* the Forward Sale Agreements have been classified as equity.

*Stock Repurchase Program*

On *May 18, 2022,* our board of directors authorized a common stock repurchase program (the "Stock Repurchase Program") covering up to $250,000 in shares of our common stock. Under the Stock Repurchase Program, we, in our discretion, *may* purchase our shares from time to time in the open market or in privately negotiated transactions. The amount and timing of the purchases will depend on a number of factors, including the price and availability of our shares, trading volumes and general market conditions. The Stock Repurchase Program has *no* time limit and *may* be suspended or discontinued at any time. During the *three* and *six* months ended *June 30, 2025*, and *2024*, we had no repurchases of shares under the Stock Repurchase Program. As of *June 30, 2025*, we had $250,000 in shares of our common stock remaining authorized for purchase under the Stock Repurchase Program.

*Noncontrolling Interest*

During the *six* months ended *June 30, 2025*, *no* holders of IROP units exchanged units for shares of our common stock. As of *June 30, 2025*, 5,941,643 IROP units held by unaffiliated *third* parties remain outstanding.

On *May 14, 2025,* our board of directors declared a dividend of $0.17 per IROP unit, which was paid on *July 18, 2025* to IROP unit holders of record as of *June 27, 2025.*

On *March 10, 2025*, our board of directors declared a dividend of $0.16 per IROP unit, which was paid on *April 21, 2025* to IROP unit holders of record as of *March 28, 2025*.

**NOTE *8:* Equity Compensation Plans**

*Long Term Incentive Plan*

On *May 18, 2022,* our stockholders approved our *2022* Long Term Incentive Plan (the "*2022* Incentive Plan"). The *2022* Incentive Plan provides for grants of equity and equity-based awards to our employees, officers, directors, consultants and other service providers, and such awards *may* take the form of restricted or unrestricted shares of common stock, non-qualified stock options, incentive stock options, restricted stock units ("RSUs"), stock appreciation rights ("SARs"), dividend equivalents and other equity and cash-based awards. A maximum of 8,000,000 shares of our common stock (plus up to an additional 1,280,610 shares of our common stock, to the extent that shares subject to outstanding awards under a prior plan are recycled into the *2022* Incentive Plan) *may* be issued under the *2022* Incentive Plan, subject to customary adjustment for stock splits, reverse stock splits and similar corporate events or transactions affecting shares of our common stock.

The restricted shares and RSUs granted under the Incentive Plan 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.

---

| | | |
|:---|:---|:---|
|  | ***2025*** | ***2025*** |
|  | ***Number of Shares*** | ***Weighted Average Grant Date Fair Value Per Share*** |
| Balance, January 1, | 509895 | $16.73 |
| Granted | 320766 | 19.55 |
| Vested | (242789) | 17.51 |
| Forfeited | (37869) | 17.65 |
| Balance, June 30,(1) | 550003 | $17.97 |

---

(*1*) The outstanding award balances above include 156,732 and 149,334 RSUs as of *June 30, 2025* and *December 31, 2024*, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *16*

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[**Table of Contents**](#toc)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *June 30, 2025*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited and dollars in thousands, except share and per share data)

On *February 4, 2025,* our compensation committee awarded 194,237 performance share units ("PSUs") (measured at target) 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 target 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, 2025* and *2024*, 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 $2,826 and $2,525, respectively.

**NOTE *9:* Earnings Per Share**

The following table presents a reconciliation of basic and diluted earnings per share for the *three* and *six* months ended *June 30, 2025* and *2024*:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended*** | ***For the Three Months Ended*** | ***For the Six Months Ended*** | ***For the Six Months Ended*** |
|  | ***June 30,*** | ***June 30,*** | ***June 30,*** | ***June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Net income | $8172 | $10555 | $16698 | $28515 |
| Income allocated to noncontrolling interest | (126) | (201) | (298) | (585) |
| Income allocable to common shares | $8046 | $10354 | $16400 | $27930 |
| Weighted-average shares outstanding—Basic | 233496633 | 224793229 | 232117768 | 224710259 |
| Weighted-average shares outstanding—Diluted | 234131752 | 225418825 | 233041087 | 225403082 |
| Earnings per share—Basic | $0.03 | $0.05 | $0.07 | $0.12 |
| Earnings per share—Diluted | $0.03 | $0.05 | $0.07 | $0.12 |

---

Certain IROP units and shares deliverable under the Forward Sale Agreements were excluded from the earnings per share computation because their effect would have been anti-dilutive, totaling 14,223,243 and 8,623,243 for the *three* and *six* months ended *June 30, 2025*. Certain IROP units, RSUs and restricted stock awards were excluded from the earnings per share computation because their effect would have been anti-dilutive, totaling 6,070,126 and 6,096,634 for the *three* and *six* months ended *June 30, 2024*.

**NOTE *10:* Segment Reporting**

Each of our multifamily properties is considered an operating segment that earns revenues through the leasing of apartment homes and incurs associated expenses. We aggregate our multifamily properties on a same-store and non same-store basis, and as a result, have identified two reportable segments.

• Same-Store includes properties that were owned and *not* a development property as of *January 1, 2024,* and that have *not* been sold or identified as held for sale.

• Non Same-Store includes properties that did *not* meet the definition of a same-store property as of *January 1, 2024.*

GAAP guidance requires that segment disclosures present the measures used by the Chief Operating Decision Maker ("CODM") to decide how to allocate resources and for purposes of assessing segment performance. The CODM uses net operating income ("NOI") as the primary financial measure to evaluate operating results of our multifamily properties, including analyses compared to prior periods and budgeted operating results. NOI is defined 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 and net gains on sale of assets.

Segment assets consist of real estate held for investment, real estate held for sale and investments in real estate under development. Non-segment assets consist of assets in the Company's other non-reportable segments and corporate non-segment assets, which are comprised of cash and cash equivalents, restricted cash, investments in unconsolidated real estate entities, other assets, derivative assets and intangible assets. Reportable segment asset information is *not* provided to the CODM as the CODM does *not* use segment asset information to evaluate the business and allocate resources.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *17*

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[**Table of Contents**](#toc)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Independence Realty Trust, Inc. and Subsidiaries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *June 30, 2025*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited and dollars in thousands, except share and per share data)

The following table details NOI for our two reportable segments for the *three* and *six* months ended *June 30, 2025* and *2024*, and reconciles NOI to net income (loss) on the condensed consolidated statements of operations. The segments are classified as same-store or non same-store based on the individual property's status as of *June 30, 2025*.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended*** | ***For the Three Months Ended*** | ***For the Six Months Ended*** | ***For the Six Months Ended*** |
|  | ***June 30,*** | ***June 30,*** | ***June 30,*** | ***June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| **Revenue:** |  |  |  |  |
| Same store rental and other property revenue | $148113 | $146609 | $294969 | $289929 |
| Non-same store rental and other property revenue | 13778 | 11495 | 27827 | 28507 |
| Total reportable segments revenue | 161891 | 158104 | 322796 | 318436 |
| **Operating Expenses:** |  |  |  |  |
| Same store |  |  |  |  |
| Real estate taxes | 17655 | 17887 | 35994 | 36166 |
| Property insurance | 3381 | 3808 | 7096 | 7742 |
| Personnel expenses | 11891 | 12172 | 23387 | 23754 |
| Utilities | 7063 | 6843 | 14520 | 13922 |
| Repairs and maintenance | 5659 | 6065 | 9845 | 10609 |
| Contract services | 5825 | 5643 | 11325 | 10520 |
| Advertising expenses | 2552 | 1989 | 4387 | 3527 |
| Other property operating expenses (1) | 1620 | 1584 | 3184 | 3180 |
| Total same store operating expenses | 55646 | 55991 | 109738 | 109420 |
| Non-same store |  |  |  |  |
| Total non-same store operating expenses | 5289 | 4892 | 10460 | 11434 |
| Total reportable segments operating expenses | 60935 | 60883 | 120198 | 120854 |
| **Net Operating Income:** |  |  |  |  |
| Same store NOI | 92467 | 90618 | 185231 | 180509 |
| Non-same store NOI | 8489 | 6603 | 17367 | 17073 |
| Total reportable segments NOI | 100956 | 97221 | 202598 | 197582 |
| **Adjustments:** |  |  |  |  |
| Other revenue | 297 | 298 | 635 | 501 |
| Property management expenses | (7715) | (7666*)* | (15541) | (15165*)* |
| General and administrative expenses | (5982) | (6244*)* | (14388) | (14624*)* |
| Depreciation and amortization | (59794) | (54127*)* | (118521) | (107850*)* |
| Casualty losses | (255) | (465*)* | (139) | (2767*)* |
| Interest expense | (18773) | (17460*)* | (38121) | (38063*)* |
| (Loss on impairment) gain on sale of real estate assets, net |  | (152*)* | 1496 | 10378 |
| (Loss) gain on extinguishment of debt |  |  | (67) | 203 |
| Other loss |  |  | (103) | (1*)* |
| Loss from investments in unconsolidated real estate entities | (562) | (850*)* | (1151) | (1679*)* |
| **Net income** | $8172 | $10555 | $16698 | $28515 |

---

(*1*) Other property operating expenses includes property office, administrative and legal costs.

**NOTE *11:* 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. See Part II, Item *1, Legal Proceedings*, for additional information regarding our legal proceedings.

***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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *18*

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**Item 2.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **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, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

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.

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act. Such forward-looking statements include, but are not limited to, our planned use of remaining proceeds from our sales of common stock on a forward basis, our expectations with respect to the one property which we are under contract to acquire, our expectations with respect to the three properties which are classified as held for sale and our expectations with respect to future acquisitions and dispositions. All statements in this Quarterly Report on Form 10-Q 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.

Our forward-looking statements are not guarantees of future performance and involve estimates, projections, forecasts 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, and our planned use of remaining proceeds from our sales of common stock on a forward basis, 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, inability or failure to achieve anticipated benefits from future acquisitions and dispositions, 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, economic conditions, including inflation and recessionary conditions and their related impacts on the real estate industry, U.S. and global trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, 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, including but not limited to a third party's unauthorized access to our data or the data of our residents, 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, 2024 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, 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.

These forward-looking statements are based upon the beliefs and expectations of our management at the time of this Quarterly Report on Form 10-Q and our actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. We undertake 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.

**Overview**

***Our Company***

We are a self-administered and self-managed Maryland corporation that has elected to be taxed as a real estate investment trust ("REIT"). We are primarily engaged in the ownership, operation, management, improvement, and acquisition of multifamily apartment communities in non-gateway markets. As of June 30, 2025, we owned and operated 113 multifamily apartment properties (including one owned through a consolidated joint venture) that contain an aggregate of 33,175 units. Our properties are located in Alabama, Colorado, Florida, Georgia, Indiana, Kentucky, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee and Texas. In addition, as of June 30, 2025, we owned and consolidated one investment in real estate under development in Colorado that will, upon completion, contain an aggregate of 296 units. As of June 30, 2025, we also owned interests in five unconsolidated joint ventures, three that own and operate multifamily apartment communities that contain an aggregate of 886 units and two that are developing multifamily apartment communities that will contain, upon completion, an aggregate of 702 units. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 19

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***Consolidated Property Portfolio <sup>(1)</sup>***

As of June 30, 2025, we owned and consolidated 113 multifamily apartment properties, totaling 33,175 units. Below is a summary of our consolidated property portfolio by market.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| (Dollars in thousands, except per unit data) | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** |
| **Market** | **Number of Properties** | **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 | 5180 | $1119499 | 94.0% | $1586 | $14748 | 14.6% |
| Dallas, TX |  | 14 | 4007 | 888913 | 96.3% | 1808 | 13703 | 13.6% |
| Columbus, OH |  | 10 | 2510 | 383967 | 95.2% | 1515 | 7132 | 7.1% |
| Tampa-St. Petersburg, FL |  | 6 | 1791 | 399009 | 94.9% | 1915 | 6769 | 6.7% |
| Indianapolis, IN |  | 8 | 2259 | 355256 | 95.3% | 1475 | 6234 | 6.2% |
| Denver, CO (1)(2)(3) |  | 7 | 1722 | 498674 | 93.5% | 1808 | 6186 | 6.1% |
| Oklahoma City, OK |  | 8 | 2147 | 342339 | 96.4% | 1242 | 5604 | 5.5% |
| Raleigh - Durham, NC |  | 6 | 1690 | 256362 | 95.4% | 1539 | 4951 | 4.9% |
| Nashville, TN |  | 5 | 1508 | 377690 | 95.4% | 1617 | 4846 | 4.8% |
| Memphis, TN (3) |  | 4 | 1383 | 160298 | 92.7% | 1486 | 4085 | 4.0% |
| Charlotte, NC |  | 4 | 1014 | 263063 | 95.0% | 1699 | 3572 | 3.5% |
| Houston, TX |  | 5 | 1308 | 216873 | 95.6% | 1437 | 3385 | 3.4% |
| Louisville, KY (3) |  | 4 | 1150 | 143670 | 96.4% | 1361 | 3070 | 3.0% |
| Huntsville, AL |  | 4 | 1051 | 242335 | 95.9% | 1428 | 2947 | 2.9% |
| Lexington, KY |  | 3 | 886 | 165932 | 96.9% | 1443 | 2935 | 2.9% |
| Orlando, FL |  | 2 | 617 | 133240 | 95.0% | 1857 | 2300 | 2.3% |
| Cincinnati, OH |  | 2 | 542 | 126466 | 98.2% | 1664 | 1854 | 1.8% |
| Myrtle Beach, SC - Wilmington, NC | Myrtle Beach, SC - Wilmington, NC | 3 | 628 | 69202 | 95.5% | 1383 | 1697 | 1.7% |
| Charleston, SC |  | 2 | 518 | 82805 | 95.2% | 1770 | 1672 | 1.7% |
| Greenville, SC |  | 1 | 702 | 127064 | 92.8% | 1276 | 1640 | 1.6% |
| Austin, TX |  | 1 | 256 | 61134 | 96.1% | 1797 | 860 | 0.9% |
| San Antonio, TX |  | 1 | 306 | 57611 | 97.7% | 1447 | 825 | 0.8% |
| Total/Weighted Average |  | 113 | 33175 | $6471402 | 95.2% | $1582 | $101015 | 100.0% |

---

(1) Excludes our development properties. See Non-GAAP financial measures for the definition of a development property.

(2) Includes properties in our Fort Collins, CO and Colorado Springs, CO markets.

(3) Includes one property that was held for sale as of June 30, 2025.

***Current Developments***

***Dispositions***

On February 14, 2025, we sold one multifamily apartment community in Birmingham, AL for a gross sales price of $111.0 million and used the proceeds to fund recent and anticipated property acquisitions as described below.

As of June 30, 2025, we had three properties classified as held for sale. We expect to close the dispositions before year end; however, there can be no assurance that these dispositions will be consummated at expected pricing levels, within expected time frames, or at all. We intend to use the proceeds from the sales, if, and when, they occur to fund future property acquisitions as part of our capital recycling program.

***Acquisitions***

On February 27, 2025, we acquired Autumn Breeze in Indianapolis, IN, a 280-unit multifamily apartment community for $59.5 million. This acquisition expanded our footprint in Indianapolis from 1,979 units to 2,259 units.

On July 31, 2025, we acquired a 240-unit multifamily apartment community in Orlando, FL for $60.25 million. This acquisition expanded our footprint in Orlando from 617 units to 857 units.

We are currently under contract to acquire one property in Orlando, FL for approximately $94.75 million. We expect to fund this acquisition on a leverage neutral basis using remaining proceeds from forward equity sales and draws on our unsecured revolver. This property will expand our footprint in Orlando, FL and we believe it will support enhanced scale and synergies. We expect to close on the acquisition before year end; however, there can be no assurance that this acquisition will be consummated at expected pricing levels, within expected time frames, or at all.

***Investments in Unconsolidated Real Estate Entities***

To create another avenue for accretive capital allocation and to increase our options for capital investment, we have partnered with, and may in the future partner with, developers through preferred equity investments and joint venture relationships focused on new multifamily development.

Metropolis at Innsbrook, a 402-unit property in Richmond, VA, was listed for sale during the three months ended March 31, 2025 and sold on July 21, 2025. We received $31.1 million in proceeds from the sale, comprised of a return of our initial investment of $24.5 million and equity proceeds of $6.6 million. We expect to recognize a gain of approximately $10.4 million from this sale during the third quarter 2025.

As of June 30, 2025 and December 31, 2024, we had investments in unconsolidated real estate entities of $106.9 million and $92.0 million, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 20

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***Investments in Real Estate Under Development***

As part of our merger with Steadfast Apartment REIT, Inc., we acquired two land parcels in Denver, Colorado that were being developed into multifamily properties that will contain 621 units, in the aggregate, upon completion, one of which was completed in 2024. As of June 30, 2025, we had one investment in real estate under development of $91.8 million that is expected to contain 296 units upon completion.

***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 454 units during the three months ended June 30, 2025. From inception of our value add program in January 2018 through June 30, 2025, we completed renovations on 10,171 of the 17,381 units currently in our value add program, achieving a return on investment of 16.5% (and approximately 18.4% on the interior portion of such renovation costs). We compute return on investment 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 (excluding the impact of concessions) 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**

***Unsecured Revolver and Term Loans***

On January 8, 2025, IROP entered into the Fifth Amended and Restated Credit Agreement (the "Fifth Restated Credit Agreement"), which amended and restated in its entirety the Fourth Amended and Restated Credit Agreement dated as of July 25, 2022. The Fifth Restated Credit Agreement increased the maximum principal amount of the unsecured revolver to $750 million, which represents an increase of $250 million over the prior credit agreement, extended its maturity date until January 8, 2029 and reduced the margin on our unsecured revolver and existing $200 million term loan while leaving the terms of our existing $400 million term loan unchanged. In summary, the Fifth Restated Credit Agreement provides for a $750 million unsecured revolving credit facility (the "Unsecured Revolver") with a January 8, 2029 maturity date and two unsecured term loans, specifically: (i) a $200 million term loan with a May 18, 2026 maturity date and (ii) a $400 million term loan with a January 28, 2028 maturity date.

The Fifth Restated Credit Agreement increased the aggregate amount of borrowings under the credit agreement to $1.35 billion and permits IROP to request an increase in such aggregate amount to up to $2.0 billion subject to certain terms and conditions, including receipt of commitments from one or more lenders, whether or not currently parties to the Fifth Restated Credit Agreement, to provide such increased amounts, which increase may be allocated, at IROP's option, to the Unsecured Revolver and/or to one or more of the term loans, in accordance with the Fifth Restated Credit Agreement. Refer to our 2024 Annual Report on Form 10-K for additional borrowing terms and financial covenant details.

***Public Offering of 11.5 Million Shares of Common Stock***

On September 3, 2024, we entered into an underwriting agreement with Citigroup Global Markets Inc., KeyBanc Capital Markets Inc. and RBC Capital Markets LLC as representatives of the several underwriters named therein, (collectively, the "Underwriters"), and Citigroup Global Markets Inc. in its capacity as agent (in such capacity, the "Forward Seller") for Citibank N.A., as forward counterparty (the "Forward Counterparty") and the Forward Counterparty related to the offering of an aggregate of 11.5 million shares of our common stock, par value $0.01 per share, at a price of $18.96 per share consisting of 11.5 million shares of our common stock (including 1.5 million shares offered pursuant to the underwriter's option to purchase additional shares, which was exercised in full) offered by the Forward Seller in connection with the forward sale agreements described below. We did not initially receive any proceeds from the sale of our common stock by the Forward Seller and we completed the offering on September 5, 2024.

In connection with the offering, we also entered into two forward sale agreements (the "Forward Sale Agreements") pursuant to which the Forward Seller (or its affiliate) borrowed from third parties and sold to the Underwriters an aggregate of 11.5 million shares of our common stock that was sold in the offering.

On March 31, 2025, we physically settled 2.65 million of those shares at a weighted average price of $18.89 per share and we received proceeds of $50.1 million. All of the net proceeds were used to fund new acquisitions. As of June 30, 2025, 5.6 million shares of our common stock remained to be settled under the Forward Sale Agreements, which if physically settled would provide additional proceeds to us of $105.8 million based on the forward price as of June 30, 2025. We expect to physically settle the remaining Forward Sale Agreements and receive proceeds, subject to certain adjustments, from the sale of those shares upon one or more such physical settlements within approximately twelve months from the date of the prospectus supplement, no later than September 5, 2025, the scheduled maturity date of the Forward Sale Agreements. Although we expect to settle the remaining Forward Sale Agreements entirely by the physical delivery of shares of our common stock for cash proceeds, we may also elect to cash or net share settle all or a portion of our obligations under the Forward Sale Agreements, in which case, we may receive or owe cash or shares of our common stock from or to the Forward Seller. The Forward Sale Agreements provided for an initial forward sale price of $18.96 per share, subject to certain adjustments pursuant to the terms of each of the Forward Sale Agreements. The Forward Sale Agreements are subject to early termination or settlement under certain circumstances.

***ATM Program***

On July 28, 2023, we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock under our shelf registration statement having an aggregate offering price of up to $450 million (the "ATM Program") in negotiated transactions or transactions that are deemed to be "at the market" offerings as defined in Rule 415 under the Securities Act. Under the ATM Program, we may also enter into one or more forward sale transactions for the sale of shares of our common stock on a forward basis.

During the three months ended March 31, 2025, we entered into forward sales transactions under the ATM Program for the forward sale of an aggregate of 2.7 million shares of our common stock. The forward sales transactions had not settled as of June 30, 2025, and we had not received any net proceeds from these transactions as of June 30, 2025. Subject to our right to elect net share settlement, we expect to physically settle the forward sales transactions by the maturity date of March 31, 2026. Assuming the forward sales transactions are physically settled in full utilizing the current forward sales price of $20.88 per share, we expect to receive proceeds, net of sales commissions of approximately $56.0 million, subject to adjustment in accordance with the forward sales transactions. We intend to use substantially all of the net proceeds to fund potential acquisitions and other investment opportunities or for general corporate purposes, including the reduction of outstanding borrowings under our unsecured revolver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 21

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**Results of Operations**

As of June 30, 2025, we owned and consolidated 113 multifamily apartment properties, of which 105 comprised the Same-Store Portfolio.

*Three Months Ended June 30, 2025 compared to the Three Months Ended June 30, 2024* 

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| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **SAME-STORE PORTFOLIO** | **SAME-STORE PORTFOLIO** | **SAME-STORE PORTFOLIO** | **SAME-STORE PORTFOLIO** | **NON SAME-STORE PORTFOLIO** | **NON SAME-STORE PORTFOLIO** | **NON SAME-STORE PORTFOLIO** | **NON SAME-STORE PORTFOLIO** | **CONSOLIDATED** | **CONSOLIDATED** | **CONSOLIDATED** | **CONSOLIDATED** |
| (Dollars in thousands) | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  | **2025** | **2024** | **Increase (Decrease)** | **% Change** | **2025** | **2024** | **Increase (Decrease)** | **% Change** | **2025** | **2024** | **Increase (Decrease)** | **% Change** |
| **Property Data:** |  |  |  |  |  |  |  |  |  |  |  |  |
| Number of properties (1) | 105 | 105 |  |  | 8 | 5 | 3 | 60.0% | 113 | 110 | 3 | 2.7% |
| Number of units (1) | 30502 | 30502 |  |  | 2673 | 2183 | 490 | 22.4% | 33175 | 32685 | 490 | 1.5% |
| Average occupancy (1) | 95.3% | 95.2% | 0.1% |  | 93.6% | 94.6% | (1.0)% |  | 95.2% | 95.3% | (0.1)% |  |
| Average effective monthly rent, per unit (1) | $1575 | $1561 | $14 | 0.9% | $1697 | $1464 | $233 | 15.9% | $1582 | $1554 | $28 | 1.8% |
| **Revenue:** |  |  |  |  |  |  |  |  |  |  |  |  |
| Rental and other property revenue | $148113 | $146609 | $1504 | 1.0% | $13778 | $11495 | $2283 | 19.9% | $161891 | $158104 | $3787 | 2.4% |
| **Expenses:** |  |  |  |  |  |  |  |  |  |  |  |  |
| Property operating expenses | 55646 | 55991 | (345) | (0.6)% | 5289 | 4892 | 397 | 8.1% | 60935 | 60883 | 52 | 0.1% |
| **Net Operating Income** | $92467 | $90618 | $1849 | 2.0% | $8489 | $6603 | $1886 | 28.6% | $100956 | $97221 | $3735 | 3.8% |
| **Other Revenue:** |  |  |  |  |  |  |  |  |  |  |  |  |
| Other revenue |  |  |  |  |  |  |  |  | $297 | $298 | $(1) | (0.3)% |
| **Corporate and other expenses:** | **Corporate and other expenses:** |  |  |  |  |  |  |  |  |  |  |  |
| Property management expenses | Property management expenses |  |  |  |  |  |  |  | 7715 | 7666 | 49 | 0.6% |
| General and administrative expenses | General and administrative expenses |  |  |  |  |  |  |  | 5982 | 6244 | (262) | (4.2)% |
| Depreciation and amortization expense | Depreciation and amortization expense | Depreciation and amortization expense |  |  |  |  |  |  | 59794 | 54127 | 5667 | 10.5% |
| Casualty losses |  |  |  |  |  |  |  |  | 255 | 465 | (210) | (45.2)% |
| Interest expense |  |  |  |  |  |  |  |  | (18773) | (17460) | (1313) | 7.5% |
| (Loss on impairment) gain on sale of real estate assets, net | (Loss on impairment) gain on sale of real estate assets, net | (Loss on impairment) gain on sale of real estate assets, net | (Loss on impairment) gain on sale of real estate assets, net |  |  |  |  |  |  | (152) | 152 | (100.0)% |
| Loss from investments in unconsolidated real estate entities | Loss from investments in unconsolidated real estate entities | Loss from investments in unconsolidated real estate entities | Loss from investments in unconsolidated real estate entities |  |  |  |  |  | (562) | (850) | 288 | (33.9)% |
| Net income |  |  |  |  |  |  |  |  | $8172 | $10555 | $(2383) | (22.6)% |
| Income allocated to noncontrolling interests | Income allocated to noncontrolling interests | Income allocated to noncontrolling interests |  |  |  |  |  |  | (126) | (201) | 75 | (37.3)% |
| **Net income available to common shares** | **Net income available to common shares** | **Net income available to common shares** |  |  |  |  |  |  | $8046 | $10354 | $(2308) | (22.3)% |

---

(1) Excludes our development projects. See Non-GAAP Financial Measures for our definition of a development property and our methodology for determining same-store properties.

***Revenue***

*Rental and other property revenue*. Revenue from rental and other property revenue of the consolidated portfolio increased $3.8 million to $161.9 million for the three months ended June 30, 2025 from $158.1 million for the three months ended June 30, 2024. The increase was attributable to a $2.3 million increase in non same-store rental and other property revenue driven by the acquisition of four properties, three in the second half of 2024 and one in the first quarter of 2025, and a $1.5 million increase in same-store rental and other property revenue, driven by a 0.9% increase in average effective monthly rents and a 0.1% increase in average occupancy compared to the prior year period.

***Expenses***

*Depreciation and amortization expense.* Depreciation and amortization expense increased $5.7 million to $59.8 million for the three months ended June 30, 2025 from $54.1 million for the three months ended June 30, 2024. The increase was primarily due to depreciation expenses driven by capital expenditures related to our value add program and higher intangible asset amortization expenses from our recent property acquisitions compared to the same prior year period.

*Interest expense*. Interest expense increased $1.3 million to $18.8 million for the three months ended June 30, 2025 from $17.5 million for the three months ended June 30, 2024. The increase in interest expense was primarily driven by an increase in our effective interest rate on consolidated debt from 4.1% for the three months ended June 30, 2024 to 4.2% for the three months ended June 30, 2025, and lower interest capitalization on recently stabilized development in Denver, Colorado.

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**Results of Operations**

As of June 30, 2025, we owned and consolidated 113 multifamily apartment properties, of which 105 comprised the Same-Store Portfolio.

*Six Months Ended June 30, 2025 compared to the Six Months Ended June 30, 2024* 

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| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **SAME-STORE PORTFOLIO** | **SAME-STORE PORTFOLIO** | **SAME-STORE PORTFOLIO** | **SAME-STORE PORTFOLIO** | **SAME-STORE PORTFOLIO** | **NON SAME-STORE PORTFOLIO** | **NON SAME-STORE PORTFOLIO** | **NON SAME-STORE PORTFOLIO** | **NON SAME-STORE PORTFOLIO** | **CONSOLIDATED** | **CONSOLIDATED** | **CONSOLIDATED** | **CONSOLIDATED** |
| (Dollars in thousands) | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **Increase (Decrease)** | **% Change** | **% Change** | **2025** | **2024** | **Increase (Decrease)** | **% Change** | **2025** | **2024** | **Increase (Decrease)** | **% Change** |
| **Property Data:** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Number of properties (1) | 105 | 105 |  |  |  | 8 | 5 | 3 | 60.0% | 113 | 110 | 3 | 2.7% |
| Number of units (1) | 30502 | 30502 |  |  |  | 2673 | 2183 | 490 | 22.4% | 33175 | 32685 | 490 | 1.5% |
| Average occupancy (1) | 95.4% | 94.7% | 0.7% |  |  | 93.4% | 94.5% | (1.1)% |  | 95.0% | 94.9% | 0.1% |  |
| Average effective monthly rent, per unit (1) | $1574 | $1560 | $14 |  | 0.9% | $1701 | $1461 | $240 | 16.4% | $1583 | $1553 | $30 | 1.9% |
| **Revenue:** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Rental and other property revenue | $294969 | $289929 | $5040 |  | 1.7% | $27827 | $28507 | $(680) | (2.4)% | $322796 | $318436 | $4360 | 1.4% |
| **Expenses:** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Property operating expenses | 109738 | 109420 | 318 |  | 0.3% | 10460 | 11434 | (974) | (8.5)% | 120198 | 120854 | (656) | (0.5)% |
| **Net Operating Income** | $185231 | $180509 | $4722 |  | 2.6% | $17367 | $17073 | $294 | 1.7% | $202598 | $197582 | $5016 | 2.5% |
| **Other Revenue:** |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Other revenue |  |  |  |  |  |  |  |  |  | $635 | $501 | $134 | 26.7% |
| **Corporate and other expenses:** | **Corporate and other expenses:** |  |  |  |  |  |  |  |  |  |  |  |  |
| Property management expenses | Property management expenses | Property management expenses |  |  |  |  |  |  |  | 15541 | 15165 | 376 | 2.5% |
| General and administrative expenses | General and administrative expenses | General and administrative expenses |  |  |  |  |  |  |  | 14388 | 14624 | (236) | (1.6)% |
| Depreciation and amortization expense | Depreciation and amortization expense | Depreciation and amortization expense |  |  |  |  |  |  |  | 118521 | 107850 | 10671 | 9.9% |
| Casualty losses |  |  |  |  |  |  |  |  |  | 139 | 2767 | (2628) | (95.0)% |
| Interest expense |  |  |  |  |  |  |  |  |  | (38121) | (38063) | (58) | 0.2% |
| Gain on sale (loss on impairment) of real estate assets, net | Gain on sale (loss on impairment) of real estate assets, net | Gain on sale (loss on impairment) of real estate assets, net | Gain on sale (loss on impairment) of real estate assets, net | Gain on sale (loss on impairment) of real estate assets, net |  |  |  |  |  | 1496 | 10378 | (8882) | (85.6)% |
| (Loss) gain on extinguishment of debt | (Loss) gain on extinguishment of debt | (Loss) gain on extinguishment of debt |  |  |  |  |  |  |  | (67) | 203 | (270) | (133.0)% |
| Other loss |  |  |  |  |  |  |  |  |  | (103) | (1) | (102) | 10200.0% |
| Loss from investments in unconsolidated real estate entities | Loss from investments in unconsolidated real estate entities | Loss from investments in unconsolidated real estate entities | Loss from investments in unconsolidated real estate entities | Loss from investments in unconsolidated real estate entities | Loss from investments in unconsolidated real estate entities |  |  |  |  | (1151) | (1679) | 528 | (31.4)% |
| **Net income** |  |  |  |  |  |  |  |  |  | $16698 | $28515 | $(11817) | 41.4% |
| Income allocated to noncontrolling interests | Income allocated to noncontrolling interests | Income allocated to noncontrolling interests | Income allocated to noncontrolling interests |  |  |  |  |  |  | (298) | (585) | 287 | (49.1)% |
| **Net income available to common shares** | **Net income available to common shares** | **Net income available to common shares** |  |  |  |  |  |  |  | $16400 | $27930 | $(11530) | (41.3)% |

---

(1) Excludes our development projects. See Non-GAAP Financial Measures for our definition of a development property and our methodology for determining same-store properties.

***Revenue***

*Rental and other property revenue*. Revenue from rental and other property revenue of the consolidated portfolio increased $4.4 million to $322.8 million for the six months ended June 30, 2025 from $318.4 million for the six months ended June 30, 2024. The increase was primarily attributable to a $5.0 million increase in same-store rental and other property revenue driven by a 0.9% increase in average effective monthly rents and a 0.7% increase in average occupancy compared to the prior year period.

***Expenses***

*Property operating expenses*. Property operating expenses decreased $0.7 million to $120.2 million for the six months ended June 30, 2025 from $120.9 million for the six months ended June 30, 2024. The decrease was due to a $1.0 million decrease in non same-store property operating expenses due to property sales, partially offset by a $0.3 million increase in same-store operating expenses.

*Property management expenses.* Property management expenses increased $0.3 million to $15.5 million for the six months ended June 30, 2025 from $15.2 million for the six months ended June 30, 2024. The increase was primarily due to higher compensation costs compared to the same prior year period.

*Depreciation and amortization expense.* Depreciation and amortization expense increased $10.7 million to $118.5 million for the six months ended June 30, 2025 from $107.9 million for the six months ended June 30, 2024. The increase was primarily due to depreciation expenses driven by capital expenditures related to our value add program and higher intangible asset amortization expenses from our recent property acquisition compared to the same prior year period.

*Casualty losses.* During the six months ended June 30, 2025 and June 30, 2024, we incurred $0.1 million and $2.8 million in casualty losses, respectively. The loss during the six months ended June 30, 2024 was primarily due to winter storm damage and fire damage at various properties, where the carrying value of the damage exceeded insurance proceeds due to policy deductible levels.

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*Gain on sale (loss on impairment) of real estate assets, net*. During the six months ended June 30, 2025, we sold one multi-family property resulting in a gain on sale of $1.5 million. During the six months ended June 30, 2024, we sold six multi-family properties and recognized a gain on sale of real estate, net of $10.4 million comprised of a $25.5 million gain on sale of real estate, net, partially offset by a loss on impairment of $15.1 million for one property held for sale as of June 30, 2024, as a result of the carrying value of the real estate exceeding the expected sales price less transaction costs.

**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 and debt extinguishment costs from the determination of FFO.

Our calculation of CFFO may differ from the methodology used for calculating CFFO by other REITs and, accordingly, our CFFO may not be comparable to CFFO reported by other REITs. Our management utilizes FFO and CFFO as measures of our operating performance, and believe they are also useful to investors, because they facilitate an understanding of our operating performance after adjustment for certain non-cash or non-recurring items that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and our operating performance between periods. Furthermore, although FFO, CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we believe that FFO and CFFO may provide us and our investors with an additional useful measure to compare our financial performance to certain other REITs. Neither FFO nor CFFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and CFFO do not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Accordingly, FFO and CFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization and capital improvements. Neither FFO nor CFFO should be considered as an alternative to net income or any other GAAP measurement as an indicator of our operating performance or as an alternative to cash flow from operating, investing, and financing activities as a measure of our liquidity.

Set forth below is a reconciliation of net income to FFO and CFFO for the three and six months ended June 30, 2025 and 2024 (in thousands, except share and per share information):

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | **For the Six Months Ended June 30,** | **For the Six Months Ended June 30,** | **For the Six Months Ended June 30,** | **For the Six Months Ended June 30,** |
|  | **2025** | **2025** | **2024** | **2024** | **2025** | **2025** | **2024** | **2024** |
|  | **Amount** | **Per Share(1)** | **Amount** | **Per Share(2)** | **Amount** | **Per Share(1)** | **Amount** | **Per Share(2)** |
| **Net income** | $8172 | $0.03 | $10555 | $0.05 | $16698 | $0.07 | $28515 | $0.12 |
| Adjustments: |  |  |  |  |  |  |  |  |
| Real estate depreciation and amortization | 59372 | 0.25 | 53757 | 0.23 | 117682 | 0.50 | 107149 | 0.46 |
| Our share of real estate depreciation and amortization from investments in unconsolidated real estate entities | 457 |  | 598 |  | 914 |  | 1196 | 0.01 |
| Loss on impairment (gain on sale) of real estate assets net, excluding prepayment gains |  |  | 336 |  | 73 |  | (9273) | (0.04) |
| FFO | $68001 | $0.28 | $65246 | $0.28 | $135367 | $0.57 | $127587 | $0.55 |
| FFO | $68001 | $0.28 | $65246 | $0.28 | $135367 | $0.57 | $127587 | $0.55 |
| Adjustments: |  |  |  |  |  |  |  |  |
| Other depreciation and amortization | 422 |  | 370 |  | 839 |  | 701 |  |
| Casualty losses | 255 |  | 465 | 0.01 | 139 |  | 2767 | 0.01 |
| Loan (premium accretion) discount amortization, net | (1985) |  | (2283) | (0.01) | (4014) | (0.02) | (4679) | (0.02) |
| Prepayment (gains) losses on asset dispositions |  |  | (184) |  | (1570) |  | (1105) |  |
| Loss (gain) on extinguishment of debt |  |  |  |  | 67 |  | (203) |  |
| Other loss |  |  |  |  | 103 |  | 1 |  |
| CFFO | $66693 | $0.28 | $63614 | $0.28 | $130931 | $0.55 | $125069 | $0.54 |

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(1) Based on 239,438,276 and 238,059,411 weighted-average shares and units outstanding for the three and six months ended June 30, 2025.

(2) Based on 230,734,872 and 230,652,876 weighted-average shares and units outstanding for the three and six months ended June 30, 2024.

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***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 and net gains on sale of assets. 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 our 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.

**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.

Set forth below is a reconciliation of GAAP net income to Same-Store Portfolio NOI for the three and six months ended June 30, 2025 and 2024 (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **% change** | **2025** | **2024** | **% change** |
| **Net income** | $8172 | $10555 | (22.6)% | $16698 | $28515 | (41.4)% |
| Other revenue | (297) | (298) | (0.3)% | (635) | (501) | 26.7% |
| Property management expenses | 7715 | 7666 | 0.6% | 15541 | 15165 | 2.5% |
| General and administrative expenses | 5982 | 6244 | (4.2)% | 14388 | 14624 | (1.6)% |
| Depreciation and amortization expense | 59794 | 54127 | 10.5% | 118521 | 107850 | 9.9% |
| Casualty losses | 255 | 465 | (45.2)% | 139 | 2767 | (95.0)% |
| Interest expense | 18773 | 17460 | 7.5% | 38121 | 38063 | 0.2% |
| Loss on impairment (gain on sale) of real estate assets, net |  | 152 | (100.0)% | (1496) | (10378) | (85.6)% |
| Loss (gain) on extinguishment of debt |  |  | 0.0% | 67 | (203) | (133.0)% |
| Other loss |  |  | 0.0% | 103 | 1 | 10200.0% |
| Loss from investments in unconsolidated real estate entities | 562 | 850 | (33.9)% | 1151 | 1679 | (31.4)% |
| **NOI** | 100956 | 97221 | 3.8% | 202598 | 197582 | 2.5% |
| Less: Non same-store portfolio NOI | 8489 | 6603 | 28.6% | 17367 | 17073 | 1.7% |
| **Same-store portfolio (a) NOI** | $92467 | $90618 | 2.0% | $185231 | $180509 | 2.6% |

---

(a) Same-Store Portfolio for the three and six months ended June 30, 2025 and 2024 included 105 properties containing 30,502 units.

Set forth below is Same-Store Portfolio <sup>(a)</sup> NOI for the three and six months ended June 30, 2025 and 2024 (in thousands, except per unit data):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **% change** | **2025** | **2024** | **% change** |
| **Revenue:** |  |  |  |  |  |  |
| Rental and other property revenue | $148113 | $146609 | 1.0% | $294969 | $289929 | 1.7% |
| **Property Operating Expenses** |  |  |  |  |  |  |
| Real estate taxes | 17655 | 17887 | (1.3)% | 35994 | 36166 | (0.5)% |
| Property insurance | 3381 | 3808 | (11.2)% | 7096 | 7742 | (8.3)% |
| Personnel expenses | 11891 | 12172 | (2.3)% | 23387 | 23754 | (1.5)% |
| Utilities | 7063 | 6843 | 3.2% | 14520 | 13922 | 4.3% |
| Repairs and maintenance | 5659 | 6065 | (6.7)% | 9845 | 10609 | (7.2)% |
| Contract services | 5825 | 5643 | 3.2% | 11325 | 10520 | 7.7% |
| Advertising expenses | 2552 | 1989 | 28.3% | 4387 | 3527 | 24.4% |
| Other expenses | 1620 | 1584 | 2.3% | 3184 | 3180 | 0.1% |
| Total property operating expenses | 55646 | 55991 | (0.6)% | 109738 | 109420 | 0.3% |
| **Same-store portfolio NOI** | $92467 | $90618 | 2.0% | $185231 | $180509 | 2.6% |
| **Same-store portfolio NOI Margin** | 62.4% | 61.8% | 0.6% | 62.8% | 62.3% | 0.5% |
| **Average Occupancy** | 95.3% | 95.2% | 0.1% | 95.4% | 94.7% | 0.7% |
| **Average effective monthly rent, per unit** | $1575 | $1561 | 0.9% | $1574 | $1560 | 0.9% |

---

(a) Same-Store Portfolio for the three and six months ended June 30, 2025 and 2024 included 105 properties containing 30,502 units.

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**Average Effective Monthly Rent per Unit**

Average effective rent per unit represents the average of net rent amounts, after concessions amortized over the life of the lease, divided by the average occupancy (in units) for the period presented. We believe average effective rent is a helpful measurement in evaluating average pricing. This metric, when presented, reflects the average effective rent per month.

**Average Occupancy**

Average occupancy represents the average occupied units for the reporting period divided by the average of total units available for rent for the reporting period.

**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%.

**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 $19.5 million as of June 30, 2025;

• existing and future unsecured financing, including advances under our unsecured revolver, and financing secured directly or indirectly by the apartment properties in our portfolio;

• cash generated from operating activities;

• net cash proceeds from property sales, including sales undertaken as part of our capital recycling strategy and other sales; and

• proceeds from the sales of our common stock and other equity securities, including common stock that may be sold under our ATM program.

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***Cash Flows***

As of June 30, 2025 and 2024, we maintained cash and cash equivalents, and restricted cash of approximately $42.5 million and $47.4 million, respectively. Our cash and cash equivalents were generated from the following activities (dollars in thousands):

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended June 30,** | **For the Six Months Ended June 30,** |
|  | **2025** | **2024** |
| Cash flow provided by operating activities | $142614 | $127080 |
| Cash flow (used in) provided by investing activities | (34342) | 238553 |
| Cash flow used in financing activities | (109198) | (368967) |
| Net change in cash and cash equivalents, and restricted cash | (926) | (3334) |
| Cash and cash equivalents, and restricted cash, beginning of period | 43452 | 50732 |
| Cash and cash equivalents, and restricted cash, end of the period | $42526 | $47398 |

---

Our cash inflows from operating activities during the six months ended June 30, 2025 were primarily driven by ongoing operations of our properties. The $15.5 million increase in cash inflows from operating activities during the six months ended June 30, 2025 were primarily driven by the decrease in real estate tax obligations associated with the sale of 10 properties as part of our previously disclosed Portfolio Optimization and Deleveraging Strategy, our recent acquisitions in Charlotte, Indianapolis, Orlando and Tampa-St. Petersburg and successful appeals to lower the assessed values at certain properties. In addition, our cash inflows from operating activities increased during the six months ended June 30, 2025, as a result of improved operations at our portfolio driven primarily by increasing occupancy and average rental rates. Our cash inflows from operating activities during the six months ended June 30, 2024 were primarily driven by ongoing operations of our properties.

Our cash outflows from investing activities during the six months ended June 30, 2025 were primarily due to the acquisition of one multifamily property in the amount of $58.6 million, $53.7 million of capital expenditures, $16.1 million of investments in unconsolidated real estate entities, $12.2 million of investments in real estate under development and $3.8 million in escrow deposits for pending real estate acquisitions, partially offset by $109.2 million of proceeds from the disposition of one property. Our cash inflows from investing activities during the six months ended June 30, 2024 were primarily due to $320.6 million of proceeds from the disposition of six properties under our Portfolio Optimization and Deleveraging Strategy and $3.5 million of proceeds from insurance claims, partially offset by $55.7 million of capital expenditures, $26.9 million of investments in real estate under development and $3.0 million of investments in unconsolidated real estate entities.

Our cash outflows from financing activities during the six months ended June 30, 2025 were primarily due to mortgage principal repayments of $94.4 million and payment of dividends on our common stock and noncontrolling interests of $76.0 million, partially offset by the $49.9 million issuance of common stock from our forward equity transactions. Our cash outflows from financing activities during the six months ended June 30, 2024 were primarily due to unsecured credit facility and mortgage principal repayments of $422.3 million, payment of dividends on our common stock and noncontrolling interests of $74.0 million, partially offset by $131.0 million of draws on our unsecured revolver.

**Contractual Obligations**

Our 2024 Annual Report on Form 10-K includes a table of contractual obligations. There were no material changes to these obligations since the filing of our 2024 Annual Report on Form 10-K.

**Off-Balance Sheet Arrangements**

There were no off-balance sheet arrangements during the six months ended June 30, 2025 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 2024 Annual Report on Form 10-K contains a discussion of our critical accounting policies. Management discusses our critical accounting policies and management's judgments and estimates with the audit committee of our board of directors. There were no material changes to our critical accounting policies since the filing of our Annual Report on Form 10-K.

**Item 3.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Quantitative and Qualitative Disclosure About Market Risk.**

Our 2024 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, 2025 from the disclosures included in our 2024 Annual Report on Form 10-K.

**Item 4.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **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 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.

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Effective as of June 30, 2025, 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, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II**—**OTHER INFORMATION**

**Item 1.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **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.

Starting around November 2022, putative class action representatives began filing complaints in various United States District Courts across the country naming as defendants RealPage, Inc. ("RealPage"), a seller of revenue management products, and approximately 50 defendants who own and/or manage multifamily residential rental housing, alleging that the defendants conspired to fix, raise, maintain, and stabilize rent prices in violation of Section 1 of the Sherman Act. Some of the complaints, including one filed on November 14, 2022, in the U.S. District Court for the Northern District of Illinois, named us as one of the defendants, and others did not. On April 10, 2023, the United States Judicial Panel on Multidistrict Litigation issued an order transferring the cases to the United States District Court for the Middle District of Tennessee for coordinated and consolidated pretrial proceedings, where plaintiffs filed a consolidated complaint. We filed an answer to the consolidated complaint and asserted affirmative defenses. Discovery is ongoing. As these proceedings are still in the early stages, it is not possible for the Company to predict the outcome nor is it possible to estimate the amount of loss, if any, which may be associated with an adverse decision in this matter. We deny all allegations of wrongdoing and intend to defend against these claims vigorously.

On July 2, 2025, the Attorney General of Kentucky filed a complaint against RealPage and 9 other defendants who own and/or manage multifamily residential rental housing, including IRT, on behalf of the Commonwealth of Kentucky also alleging that the defendants conspired to fix, raise, maintain, and stabilize rent prices in violation of Section 1 of the Sherman Act. This proceeding is in the early stages, and it is not possible for the Company to predict the outcome nor is it possible to estimate the amount of loss, if any, which may be associated with an adverse decision in this matter. We deny all allegations of wrongdoing and intend to defend against these claims vigorously.

**Item 1A.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Risk Factors.**

There have not been any material changes from the risk factors disclosed in Part 1, Item 1A of our 2024 Annual Report on Form 10-K, and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, except as described below.

**Item 2.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Unregistered Sales of Equity Securities and Use of Proceeds.**

During the three and six months ended June 30, 2025, no holders of IROP units exchanged units for shares of our common stock. The issuance of shares upon exchange of units is exempt from registration under the Securities Act, pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act. As of June 30, 2025, 5,941,643 IROP units held by unaffiliated third parties remained outstanding.

During the three months ended June 30, 2025, we withheld shares of common stock to satisfy employee tax withholding obligations payable upon the vesting of restricted common stock awards as follow:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total Number of Shares Purchased** | **Average 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 (in thousands) (2)** |
| April 1 - 30, 2025 | 4595 | $21.36 | – $| 250000 |
| May 1 - 31, 2025 |  |  | – | 250000 |
| June 1 - 30, 2025 |  |  | – | 250000 |
| Total | 4595 | $21.36 | – |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 28

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[**Table of Contents**](#toc)

(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 million 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.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Defaults Upon Senior Securities.**

None.

**Item 4.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Mine Safety Disclosures.**

None.

**Item *5.***&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Other Information.**

During the *three* and *six* months ended *June 30, 2025*, none of the Company's directors or officers (as defined in Rule *16a*-*1*(f) of the Exchange Act) 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). During the *three* and *six* months ended *June 30, 2025*, the Company did *not* adopt, terminate or modify a Rule *10b5*-*1* trading arrangement.

On *July 4, 2025,* President Trump signed into law the legislation known as the One Big Beautiful Bill Act (the "OBBBA"). The OBBBA made significant changes to the U.S. federal income tax laws in various areas. These changes include the permanent extension of the *20%* deduction for "qualified REIT dividends" for individuals and other non-corporate taxpayers. The OBBBA also increased the percentage limit under the REIT asset test applicable to taxable REIT subsidiaries ("TRSs") from *20%* to *25%* for taxable years beginning after *December 31, 2025.* As a result, for taxable years beginning after *December 31, 2025,* the aggregate value of all securities of TRSs held by a REIT *may not* exceed *25%* of the value of its gross assets. See "Material U.S. Federal Income Tax Considerations" contained in Exhibit *99.1* to this Quarterly Report on Form *10*-Q.

**Item 6.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Exhibits.** 

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

---

| | |
|:---|:---|
| 2.1 | [<u>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</u><u>'</u><u>s Current Report on Form 8-K filed on July 26, 2021.\*</u>](http://www.sec.gov/Archives/edgar/data/1466085/000156459021037931/irt-ex21_230.htm) |
| 31.1 | [<u>Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.</u>](ex_811451.htm) |
| 31.2 | [<u>Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.</u>](ex_811452.htm) |
| 32.1 | [<u>Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.</u>](ex_811453.htm) |
| 32.2 | [<u>Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.</u>](ex_811454.htm) |
| 99.1 | [Material U.S. Federal Income Tax Considerations, filed herewith.](ex_842739.htm) |
| 101 | iXBRL (Inline eXtensible Business Reporting Language). The following materials, formatted in iXBRL: (i) Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2025 and 2024, (iv) Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2025 and 2024, (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 and (vi) notes to the condensed consolidated financial statements as of June 30, 2025. |
| 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 29

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | Independence Realty Trust, Inc. | Independence Realty Trust, Inc. |
| Date: July 31, 2025 | By: | /s/ SCOTT F. SCHAEFFER |
|  |  | Scott F. Schaeffer |
|  |  | Chairman of the Board and Chief Executive Officer |
|  |  | (Principal Executive Officer) |
| Date: July 31, 2025 | By: | /s/ JAMES J. SEBRA |
|  |  | James J. Sebra |
|  |  | President and Chief Financial Officer |
|  |  | (Principal Financial Officer) |
| Date: July 31, 2025 | By: | /s/ JASON R. DELOZIER |
|  |  | Jason R. Delozier |
|  |  | Chief Accounting Officer |
|  |  | (Principal Accounting Officer) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 30

## Exhibit 31.1

**Exhibit 31.1**

**Certification of Chief Executive Officer Pursuant to**

**Section 302 of the Sarbanes-Oxley Act of 2002**

I, Scott F. Schaeffer, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Independence Realty Trust, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 31, 2025

---

| | |
|:---|:---|
| By: | /s/ Scott F. Schaeffer |
|  | Scott F. Schaeffer |

---

 Chairman of the Board and Chief Executive Officer<br> (Principal Executive Officer)

## Exhibit 31.2

**Exhibit 31.2**

**Certification of Chief Financial Officer Pursuant to**

**Section 302 of the Sarbanes-Oxley Act of 2002**

I, James J. Sebra, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Independence Realty Trust, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 31, 2025

---

| | |
|:---|:---|
| By: | /s/ James J. Sebra |
|  | James J. Sebra |

---

 President and Chief Financial Officer<br> (Principal Financial Officer)

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE**

**SARBANES-OXLEY ACT OF 2002**

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of Independence Realty Trust, Inc. (the "Company") for the period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, the Chairman of the Board, and Chief Executive Officer of the Company, certifies, to his knowledge, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 31, 2025

---

| | |
|:---|:---|
| By: | /s/ Scott F. Schaeffer |
|  | Scott F. Schaeffer |

---

 Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE**

**SARBANES-OXLEY ACT OF 2002**

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of Independence Realty Trust, Inc. (the "Company") for the period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, the Chief Financial Officer and Treasurer of the Company, certifies, to his knowledge, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 31, 2025

---

| | |
|:---|:---|
| By: | /s/ James J. Sebra |
|  | James J. Sebra |

---

 President and Chief Financial Officer<br> (Principal Financial Officer)

## Exhibit 99.1

**Exhibit 99.1**

**MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS**

The following discussion summarizes the material U.S. federal income tax considerations associated with the purchase, ownership and disposition of our shares of common stock, as well as the applicable requirements under U.S. federal income tax laws to maintain REIT status, and the material U.S. federal income tax consequences of maintaining REIT status. This discussion is based upon the laws, regulations, and reported judicial and administrative rulings and decisions in effect as of the date of the filing of this exhibit with the Securities and Exchange Commission, all of which are subject to change, retroactively or prospectively, and to possibly differing interpretations.

This discussion does not purport to deal with all U.S. federal income or other tax consequences applicable to investors in light of their particular investment or other circumstances, or to all categories of investors, some of whom may be subject to special rules (for example, insurance companies, tax-exempt organizations, partnerships, trusts, financial institutions and broker-dealers). No ruling on the U.S. federal, state, or local tax considerations relevant to our operation or to the purchase, ownership or disposition of our shares, has been requested from the United States Internal Revenue Service (the "IRS"), or other tax authority. Prospective investors are urged to consult their tax advisors in order to determine the U.S. federal, state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our shares of common stock, the tax treatment of a REIT and the effect of potential changes in the applicable tax laws.

Beginning with our taxable year ended December 31, 2011, we elected to be taxed as a REIT under the applicable provisions of the Code and the regulations promulgated thereunder and receive the beneficial U.S. federal income tax treatment described below, and we intend to continue operating as a REIT so long as REIT status remains advantageous. We cannot assure you that we will continue to meet the applicable requirements to qualify as a REIT under U.S. federal income tax laws, which are highly technical and complex.

In brief, a corporation that invests primarily in real estate can, if it complies with the provisions in Sections 856 through 860 of the Code, qualify as a REIT and claim U.S. federal income tax deductions for the dividends it pays to its stockholders. Such a corporation generally is not taxed on its REIT taxable income to the extent such income is currently distributed to stockholders, thereby completely or substantially eliminating the "double taxation" that a corporation and its stockholders generally bear together. However, as discussed in greater detail below, a corporation could be subject to U.S. federal income tax in some circumstances even if it qualifies as a REIT and would likely suffer adverse consequences, including reduced cash available for distribution to its stockholders, if it failed to qualify as a REIT.

**General**

In any year in which we qualify as a REIT, we will claim deductions for the dividends we pay to the stockholders, and therefore will not be subject to U.S. federal income tax on that portion of our REIT taxable income or capital gain which is currently distributed to our stockholders. We will, however, be subject to U.S. federal income tax at the corporate rate (currently 21%) on any REIT taxable income or capital gain not distributed.

------

Even though we qualify as a REIT, we nonetheless are subject to U.S. federal tax in the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are taxed at the corporate rate on any REIT taxable income, including undistributed net capital gains that we do not distribute to stockholders during, or within a specified period after, the calendar year in which we recognize such income. We may elect to retain and pay income tax on our net long-term capital gain. In that case, a stockholder would include its proportionate share of our undistributed long-term capital gain (to the extent we make a timely designation of such gain to the stockholder) in its income, would be deemed to have paid the tax that we paid on such gain, would be allowed a credit for its proportionate share of the tax deemed to have been paid, and an adjustment would be made to increase the stockholder's basis in our common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may be subject to the alternative minimum tax for tax years beginning before January 1, 2018.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we have net income from prohibited transactions, such income will be subject to a 100% tax. "Prohibited transactions" are, in general, sales or other dispositions of property held primarily for sale to customers in the ordinary course of business, rather than for investment, other than foreclosure property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we have net income from the sale or disposition of "foreclosure property," as described below, that is held primarily for sale in the ordinary course of business or other non-qualifying income from foreclosure property, we will be subject to corporate tax on such income at the highest applicable rate (currently 21%).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we fail to satisfy the 75% Gross Income Test or the 95% Gross Income Test, as discussed below, but nonetheless maintain our qualification as a REIT because other requirements are met, we will be subject to a 100% tax on an amount equal to (1) the greater of (a) the amount by which we fail the 75% Gross Income Test or (b) the amount by which we fail the 95% Gross Income Test, as the case may be, multiplied by (2) a fraction intended to reflect our profitability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we fail to satisfy any of the Asset Tests, as described below, other than certain de minimis failures, but our failure is due to reasonable cause and not due to willful neglect and we nonetheless maintain our REIT qualification because of specified cure provisions, we will be required to pay a tax equal to the greater of $50,000 or 21% of the net income generated by the nonqualifying assets during the period in which we failed to satisfy the Asset Tests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we fail to satisfy any other REIT qualification requirements (other than a Gross Income or Asset Test) and that violation is due to reasonable cause and not due to willful neglect, we may retain our REIT qualification, but we will be required to pay a penalty of $50,000 for each such failure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we fail to distribute during each calendar year at least the sum of (1) 85% of our REIT ordinary income for such year, (2) 95% of our REIT capital gain net income for such year and (3) any undistributed taxable income from prior periods, we will be subject to a 4% excise tax on the excess of such required distribution over the sum of (a) the amounts actually distributed (taking into account excess distributions from prior years), plus (b) retained amounts on which federal income tax is paid at the corporate level.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet record-keeping requirements intended to monitor our compliance with rules relating to the composition of our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A 100% tax may be imposed on some items of income and expense that are directly or constructively paid between us, our lessee or a taxable REIT subsidiary (a "TRS") (as described in more detail below) if and to the extent that the IRS successfully adjusts the reported amounts of these items.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we acquire appreciated assets from a C corporation (i.e., a corporation generally subject to corporate income tax) in a transaction in which the adjusted tax basis of the assets in our hands is determined by reference to the adjusted tax basis of the assets in the hands of the C corporation, we may be subject to tax on such appreciation at the highest corporate income tax rate then applicable if we subsequently recognize gain on a disposition of such assets during the five-year period following their acquisition from the C corporation. The results described in this paragraph would not apply if the non-REIT corporation elects, in lieu of this treatment, to be subject to an immediate tax when the asset is acquired by us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may have subsidiaries or own interests in other lower-tier entities that are C corporations, such as TRSs, the earnings of which would be subject to federal corporate income tax.

------

In addition, we and our subsidiaries may be subject to a variety of taxes other than U.S. federal income tax, including payroll taxes and state, local, and non-U.S. income, franchise, property and other taxes on assets and operation. We could also be subject to tax in situations and on transactions not presently contemplated.

**REIT Qualification Tests**

The Code defines a REIT as a corporation, trust or association:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that elects to be taxed as a REIT;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that is managed by one or more trustees or directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that would be taxable as a domestic corporation but for its status as a REIT;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that is neither a financial institution nor an insurance company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that meets the gross income, asset and annual distribution requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the beneficial ownership of which is held by 100 or more persons on at least 335 days in each full taxable year, proportionately adjusted for a partial taxable year; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• generally, in which, at any time during the last half of each taxable year, no more than 50% in value of the outstanding stock is owned, directly or indirectly, by five or fewer individuals or entities treated as individuals for this purpose.

The first six conditions must be met during each taxable year for which REIT status is sought, while the last two conditions do not have to be met until after the first taxable year for which a REIT election is made.

**<u>Share Ownership Tests.</u>** Our common stock and any other stock we issue must be held by a minimum of 100 persons (determined without attribution to the owners of any entity owning our stock) for at least 335 days in each full taxable year, proportionately adjusted for partial taxable years. In addition, at all times during the second half of each taxable year, no more than 50% in value of our stock may be owned, directly or indirectly, by five or fewer individuals (determined with attribution to the owners of any entity owning our stock), This is the "five or fewer" test referenced below in "Taxation of Tax-Exempt Stockholders." However, these two requirements do not apply until after the first taxable year for which we elect REIT status.

Our charter contains certain provisions intended to enable us to meet these requirements. First, it contains provisions restricting the transfer of our stock which would result in any person beneficially owning or constructively owning more than 9.8% in value or in number of shares, whichever is more restrictive, of any class or series of our outstanding capital stock, including our common stock, subject to certain exceptions. Our charter also contains provisions requiring each holder of our shares to disclose, upon demand, constructive or beneficial ownership of shares as deemed necessary to comply with the requirements of the Code. Furthermore, stockholders failing or refusing to comply with our disclosure request will be required, under Treasury regulations, to submit a statement of such information to the IRS at the time of filing their annual income tax return for the year in which the request was made.

------

**<u>Subsidiary Entities.</u>** A qualified REIT subsidiary is a corporation that is wholly owned by a REIT and is not a TRS. For purposes of the Asset and Gross Income Tests described below, all assets, liabilities and tax attributes of a qualified REIT subsidiary are treated as belonging to the REIT. A qualified REIT subsidiary is not subject to U.S. federal income tax, but may be subject to state or local tax. Although we expect to hold all of our investments through our operating partnership, we may hold investments through qualified REIT subsidiaries. A TRS is described under "Asset Tests" below. A partnership is not subject to U.S. federal income tax and instead allocates its tax attributes to its partners (see, however, the discussion below about the partnership audit rules). The partners are subject to U.S. federal income tax on their allocable share of the income and gain, without regard to whether they receive distributions from the partnership. Each partner's share of a partnership's tax attributes is determined in accordance with the partnership agreement. For purposes of the Asset and Gross Income Tests, we will be deemed to own a proportionate share of the assets of our operating partnership, and we will be allocated a proportionate share of each item of gross income of our operating partnership.

**<u>Asset Tests.</u>** At the close of each calendar quarter of each taxable year, we must satisfy a series of tests based on the composition of our assets (the "Asset Tests"). After initially meeting the Asset Tests at the close of any quarter, we will not lose our status as a REIT for failure to satisfy the Asset Tests at the end of a later quarter solely due to changes in value of our assets. In addition, if the failure to satisfy the Asset Tests results from an acquisition during a quarter, the failure can be cured by disposing of non-qualifying assets within 30 days after the close of that quarter. We intend to maintain adequate records of the value of our assets to ensure compliance with these tests and will act within 30 days after the close of any quarter as may be required to cure any noncompliance.

At least 75% of the value of our assets must be represented by "real estate assets," cash, cash items (including receivables) and government securities. Real estate assets include (i) real property (including interests in real property and interests in mortgages on real property (including mortgages secured by both real and personal property if the value of such property does not exceed 15% of the total property securing the loan)), (ii) shares in other qualifying REITs and debt instruments issued by publicly-traded REITS (not to exceed 25% of our assets unless secured by interests in real property) and (iii) personal property leased in connection with real property to the extent that rents attributable to such personal property are treated as "rents from real property"; and (iv) any stock or debt instrument (not otherwise a real estate asset) attributable to the temporary investment of "new capital," but only for the one-year period beginning on the date we received the new capital. Property will qualify as being attributable to the temporary investment of new capital if the money used to purchase the stock or debt instrument is received by us in exchange for our stock or in a public offering of debt obligations that have a maturity of at least five years.

If we invest in any securities that do not qualify under the 75% test, such securities may not exceed either: (i) 5% of the value of our assets as to any one issuer; or (ii) 10% of the outstanding securities by vote or value of any one issuer. A partnership interest held by a REIT is not considered a "security" for purposes of these tests; instead, the REIT is treated as owning directly its proportionate share of the partnership's assets. For purposes of the 10% value test, a REIT's proportionate share is based on its proportionate interest in the equity interests and certain debt securities issued by a partnership. For all of the other Asset Tests, a REIT's proportionate share is based on its proportionate interest in the capital of the partnership. In addition, as discussed above, the stock of a qualified REIT subsidiary is not counted for purposes of the Asset Tests.

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Certain securities will not cause a violation of the 10% value test described above. Such securities include instruments that constitute "straight debt." A security does not qualify as "straight debt" where a REIT (or a controlled TRS of the REIT) owns other securities of the issuer of that security which do not qualify as straight debt, unless the value of those other securities constitutes, in the aggregate, 1% or less of the total value of that issuer's outstanding securities. In addition to straight debt, the following securities will not violate the 10% value test:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) any loan made to an individual or an estate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) certain rental agreements in which one or more payments are to be made in subsequent years (other than agreements between a REIT and certain persons related to the REIT),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) any obligation to pay rents from real property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) securities issued by governmental entities that are not dependent in whole or in part on the profits of (or payments made by) a non-governmental entity,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) any security issued by another REIT, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) any debt instrument issued by a partnership if the partnership's income is such that the partnership would satisfy the 75% Gross Income Test described below.

In applying the 10% value test, a debt security issued by a partnership is not taken into account to the extent, if any, of the REIT's proportionate interest in that partnership. Any debt instrument issued by a partnership (other than straight debt or another excluded security) will not be considered a security issued by the partnership if at least 75% of the partnership's gross income is derived from sources that would qualify for the 75% Gross Income Test, and any debt instrument issued by a partnership (other than straight debt or another excluded security) will not be considered a security issued by the partnership to the extent of the REIT's interest as a partner in the partnership.

A REIT may own the stock of a TRS. A TRS is a corporation (other than another REIT) that is owned in whole or in part by a REIT and joins in an election with the REIT to be classified as a TRS. A corporation that is 35%-owned by a TRS will also be treated as a TRS. Securities of a TRS are excepted from the 5% and 10% vote and value limitations on a REIT's ownership of securities of a single issuer. However, no more than 20% (25% for years beginning after December 31, 2025) of the value of a REIT's assets may be represented by securities of one or more TRSs. We have six TRSs, each of which had minimal or no business activity during 2023. If we do have an active TRS or form other TRSs in the future, we will be subject to a 100% excise tax on income from certain transactions with a TRS that are not on an arm's-length basis. Taxpayers are subject to a limitation on their ability to deduct business interest expense in excess of the sum of a taxpayer's business interest income and 30% of the adjusted taxable income of the business, which is its taxable income computed without regard to business interest income or expense, and net operating losses (and for taxable years before 2022 or after 2024, excludes depreciation and amortization). These provisions may limit the ability of our TRSs to deduct interest, which could increase their taxable income.

A REIT is able to cure certain Asset Test violations. As noted above, a REIT cannot own securities of any one issuer representing more than 5% of the total value of the REIT's assets or more than 10% of the outstanding securities, by vote or value, of any one issuer. However, a REIT would not lose its REIT status for failing to satisfy these 5% or 10% Asset Tests in a quarter if the failure is due to the ownership of assets the total value of which does not exceed the lesser of (i) 1% of the total value of the REIT's assets at the end of the quarter for which the measurement is done, or (ii) $10 million; provided in either case that the REIT either disposes of the assets within six months after the last day of the quarter in which the REIT identifies the failure (or such other time period prescribed by the Treasury), or otherwise meets the requirements of those rules by the end of that period.

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If a REIT fails to meet any of the Asset Tests for a quarter and the failure exceeds the de minimis threshold described above, then the REIT still would be deemed to have satisfied the requirements if (i) following the REIT's identification of the failure, the REIT files a schedule with a description of each asset that caused the failure, in accordance with regulations prescribed by the Treasury; (ii) the failure was due to reasonable cause and not to willful neglect; (iii) the REIT disposes of the assets within six months after the last day of the quarter in which the identification occurred or such other time period as is prescribed by the Treasury (or the requirements of the rules are otherwise met within that period); and (iv) the REIT pays a tax on the failure equal to the greater of (1) $50,000 or (2) an amount determined (under regulations) by multiplying (x) the highest rate of tax for corporations under Section 11 of the Code by (y) the net income generated by the assets for the period beginning on the first date of the failure and ending on the date the REIT has disposed of the assets (or otherwise satisfies the requirements).

We believe that our holdings of securities and other assets comply with the foregoing Asset Tests, and we intend to monitor compliance with such tests on an ongoing basis. The values of some of our assets, however, may not be precisely valued, and values are subject to change in the future. Furthermore, the proper classification of an instrument as debt or equity for U.S. federal income tax purposes may be uncertain in some circumstances, which could affect the application of the Asset Tests. Accordingly, there can be no assurance that the IRS will not contend that our assets do not meet the requirements of the Asset Tests.

**<u>Gross Income Tests.</u>** For each calendar year, we must satisfy two separate tests based on the composition of our gross income, as defined under our method of accounting.

***The 75% Gross Income Test.***

At least 75% of our gross income for the taxable year (excluding gross income from prohibited transactions and certain hedging transactions as discussed below under "—Hedging Transactions" and cancellation of indebtedness income) must result from (i) rents from real property, (ii) interest on obligations secured by mortgages on real property or on interests in real property, (iii) gains from the sale or other disposition of real property (including interests in real property and interests in mortgages on real property) other than property held primarily for sale to customers in the ordinary course of our trade or business, (iv) dividends from other qualifying REITs and gain (other than gain from prohibited transactions) from the sale of shares of other qualifying REITs, (v) other specified investments relating to real property or mortgages thereon, and (vi) income attributable to stock or a debt investment that is attributable to a temporary investment of new capital (if the new capital is received by us in exchange for our stock or in a public offering of debt obligations that have a maturity of at least five years and the income is received or accrued within 1 year of our receipt of the new capital) received or earned during the one-year period beginning on the date we receive such new capital. In the case of real estate mortgage loans secured by both real and personal property, if the fair market value of such personal property does not exceed 15% of the total fair market value of all property securing the loan, then the personal property securing the loan will be treated as real property for purposes of determining whether the mortgage is qualifying under the 75% asset test and interest income that qualifies for purposes of the 75% gross income test. We intend to invest funds not otherwise invested in real properties in cash sources or other liquid investments which will allow us to qualify under the 75% Gross Income Test.

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Income attributable to a lease of real property will generally qualify as "rents from real property" under the 75% Gross Income Test (and the 95% Gross Income Test described below), subject to the rules discussed below:

Rent from a particular tenant will not qualify if we, or an owner of 10% or more of our stock, directly or indirectly, owns 10% or more of the voting stock or the total number of shares of all classes of stock in, or 10% or more of the assets or net profits of, the tenant (subject to certain exceptions). The portion of rent attributable to personal property rented in connection with real property will not qualify, unless the portion attributable to personal property is 15% or less of the total rent received under, or in connection with, the lease.

Generally, rent will not qualify if it is based in whole, or in part, on the income or profits of any person from the underlying property. However, rent will not fail to qualify if it is based on a fixed percentage (or designated varying percentages) of receipts or sales, including amounts above a base amount so long as the base amount is fixed at the time the lease is entered into, the provisions are in accordance with normal business practice and the arrangement is not an indirect method for basing rent on income or profits.

Rental income will not qualify if we furnish or render services to tenants or manage or operate the underlying property, other than through a permissible "independent contractor" from whom we derive no revenue, or through a TRS. This requirement, however, does not apply to the extent that the services, management or operations we provide are "usually or customarily rendered" in connection with the rental of space, and are not otherwise considered "rendered to the occupant." With respect to this rule, tenants will receive some services in connection with their leases of the real properties. Our intention is that the services to be provided are those usually or customarily rendered in connection with the rental of space, and therefore, providing these services will not cause the rents received with respect to the properties to fail to qualify as rents from real property for purposes of the 75% Gross Income Test (and the 95% Gross Income Test described below). The board of directors intends to hire qualifying independent contractors or to utilize TRSs to render services which it believes, after consultation with our tax advisors, are not usually or customarily rendered in connection with the rental of space.

In addition, we have represented that, with respect to our leasing activities, we will not (i) charge rent for any property that is based in whole or in part on the income or profits of any person (except by reason of being based on a percentage of receipts or sales, as described above), (ii) charge rent that will be attributable to personal property in an amount greater than 15% of the total rent received under the applicable lease, or (iii) enter into any lease with a related party tenant.

Amounts received as rent from a TRS are not excluded from rents from real property by reason of the related party rules described above, if the activities of the TRS and the nature of the properties it leases meet certain requirements. In addition, taxpayers, including TRSs, are subject to a limitation on their ability to deduct net business interest expense generally equal to 30% of the adjusted taxable income of the business, which is its taxable income computed without regard to business interest income or expense, or net operating losses (and for taxable years before 2022 or after 2024, excludes depreciation and amortization). See "—Annual Distribution Requirements." These provisions may limit the ability of our TRSs to deduct interest, which could increase their taxable income. Further, a 100% excise tax is imposed on transactions between a TRS and its parent REIT or the REIT's tenants whose terms are not on an arm's-length basis.

It is possible that we will be paid interest on loans secured by real property. All interest income qualifies under the 95% Gross Income Test, and interest on loans secured by real property qualifies under the 75% Gross Income Test, provided in both cases, that the interest does not depend, in whole or in part, on the income or profits of any person (other than amounts based on a fixed percentage of receipts or sales). If a loan is secured by both real property and other property, all the interest on it will nevertheless qualify under the 75% Gross Income Test if the amount of the loan does not exceed the fair market value of the real property at the time we commit to make or acquire the loan. We expect that all of our loans secured by real property will be structured this way. Therefore, income generated through any investments in loans secured by real property should be treated as qualifying income under the 75% Gross Income Test.

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***The 95% Gross Income Test.*** In addition to deriving 75% of our gross income from the sources listed above, at least 95% of our gross income (excluding gross income from prohibited transactions and certain hedging transactions as discussed below under "—-Hedging Transactions" and cancellation of indebtedness income) for the taxable year must be derived from (i) sources which satisfy the 75% Gross Income Test, (ii) dividends, (iii) interest, or (iv) gain from the sale or disposition of stock or other securities that are not assets held primarily for sale to customers in the ordinary course of our trade or business. We intend to invest funds not otherwise invested in properties in cash sources or other liquid investments which will allow us to satisfy the 95% Gross Income Test.

Our share of income from the properties primarily gives rise to rental income and gains on sales of the properties, substantially all of which generally qualifies under the 75% Gross Income and 95% Gross Income Tests. Our anticipated operations indicate that it is likely that we will continue to have little or no non-qualifying income.

As described above, we may establish one or more TRSs. The gross income generated by these TRSs would not be included in our gross income. Any dividends from TRSs to us would be included in our gross income and qualify for the 95% Gross Income Test.

If we fail to satisfy either the 75% Gross Income or 95% Gross Income Tests for any taxable year, we may retain our status as a REIT for such year if: (i) the failure was due to reasonable cause and not due to willful neglect, (ii) we attach to our return a schedule describing the nature and amount of each item of our gross income, and (iii) any incorrect information on such schedule was not due to fraud with intent to evade U.S. federal income tax. If this relief provision is available, we would remain subject to tax equal to the greater of the amount by which we failed the 75% Gross Income Test or the 95% Gross Income Test, as applicable, multiplied by a fraction meant to reflect our profitability.

**<u>Annual Distribution Requirements.</u>** We are required to distribute dividends (other than capital gain dividends) to our stockholders each year in an amount at least equal to the excess of: (i) the sum of: (a) 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and by excluding any net capital gain); and (b) 90% of the net income (after tax) from foreclosure property; less (ii) the sum of some types of items of non-cash income. Whether sufficient amounts have been distributed is based on amounts paid in the taxable year to which they relate, or in the following taxable year if we: (1) declared a dividend before the due date of our tax return (including extensions); (2) distribute the dividend within the 12-month period following the close of the taxable year (and not later than the date of the first regular dividend payment made after such declaration); and (3) file an election with our tax return. Additionally, dividends that we declare in October, November or December in a given year payable to stockholders of record in any such month will be treated as having been paid on December 31 of that year so long as the dividends are actually paid during January of the following year. If we fail to meet the annual distribution requirements as a result of an adjustment to our U.S. federal income tax return by the IRS, or under certain other circumstances, we may cure the failure by paying a "deficiency dividend" (plus penalties and interest to the IRS) within a specified period.

Tax law restricts the deductibility of net business interest expense by businesses (generally, to 30% of the adjusted taxable income of the business, which is its taxable income computed without regard to business interest income or expense, or net operating losses (and for taxable years before 2022 or after 2024, excludes depreciation and amortization)) except, among others, real property businesses electing out of such restrictions; generally we expect our business to qualify as such a real property business, but businesses conducted by our taxable REIT subsidiaries may not qualify. We have not made this election, but our Operating Partnership, starting with its 2021 taxable year, elected to not have this interest expense limitation apply to it. If an election out of these restrictions on interest deductions is made, less favorable alternative depreciation system to depreciate certain property must be used. As our Operating Partnership has made this election, it is required to use an alternative depreciation system to depreciate certain property. In addition, U.S. Treasury Regulations could limit the deduction we may claim for our proportionate share of the compensation expense attributable to the remuneration paid by our Operating Partnership for services performed by certain of our highly ranked and highly compensated employees.

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We intend to pay sufficient dividends each year to satisfy the annual distribution requirements and avoid U.S. federal income and excise taxes on our earnings; however, it may not always be possible to do so. It is possible that we may not have sufficient cash or other liquid assets to meet the annual distribution requirements due to tax accounting rules and other timing differences. We will closely monitor the relationship between our REIT taxable income and cash flow and, if necessary to comply with the annual distribution requirements, will borrow funds to fully provide the necessary cash flow.

**<u>Failure to Qualify.</u>** If we fail to qualify, for U.S. federal income tax purposes, as a REIT in any taxable year, we may be eligible for relief provisions if the failures are due to reasonable cause and not willful neglect and if a penalty tax is paid with respect to each failure to satisfy the applicable requirements. If the applicable relief provisions are not available or cannot be met, we will not be able to deduct our dividends and will be subject to U.S. federal income tax on our taxable income at the corporate rate, thereby reducing cash available for distributions. In such event, all distributions to stockholders (to the extent of our current and accumulated earnings and profits) will be taxable as dividends. This "double taxation" results from our failure to qualify as a REIT. In addition, if we fail to qualify as a REIT, we will not be required to distribute any amounts to our stockholders and all distributions to stockholders will be taxable as regular corporate dividends to the extent of our current and accumulated earnings and profits. In such event, corporate distributees may be eligible for the dividends-received deduction. In addition, noncorporate stockholders, including individuals, may be eligible for the preferential tax rates on qualified dividend income. Non-corporate stockholders, including individuals, generally may deduct up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend income for purposes of determining their U.S. federal income tax (but not for purposes of the 3.8% Medicare tax), subject to certain limitations. If we fail to qualify as a REIT, such stockholders may not claim this deduction with respect to dividends paid by us. Unless entitled to relief under specific statutory provisions, we will not be eligible to elect REIT status for the four taxable years following the year during which qualification was lost.

**<u>Prohibited Transactions.</u>** As discussed above, we will be subject to a 100% U.S. federal income tax on any net income derived from "prohibited transactions." Net income derived from prohibited transactions arises from the sale or exchange of property held for sale to customers in the ordinary course of our business which is not foreclosure property. There is an exception to this rule for the sale of real property that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• is a real estate asset under the 75% Asset Test;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• has been held for at least two years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• has aggregate expenditures which are includable in the basis of the property not in excess of 30% of the net selling price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in some cases, was held for production of rental income for at least two years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in some cases, substantially all of the marketing and development expenditures were made through a TRS or an independent contractor from whom we do not derive or receive any income; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• when combined with other sales in the year, either does not cause the REIT to have made more than seven sales of property during the taxable year (excluding sales of foreclosure property or in connection with an involuntary conversion), occurs in a year when the REIT disposes of less than 10% of its assets (measured by U.S. federal income tax basis or fair market value, and ignoring involuntary dispositions and sales of foreclosure property) or occurs in a year when the REIT disposes of less than 20% of its assets as well as 10% or less of its assets based on a three-year average (measured by U.S. federal income tax basis or fair market value, and ignoring involuntary dispositions and sales of foreclosure property). .

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Our intention in acquiring and operating the properties is the production of rental income and we do not expect to hold any property for sale to customers in the ordinary course of our business.

**<u>Foreclosure Property.</u>** Foreclosure property is real property (including interests in real property) and any personal property incident to such real property (1) that is acquired by a REIT as a result of the REIT having bid on the property at foreclosure, or having otherwise reduced the property to ownership or possession by agreement or process of law, after there was a default (or default was imminent) on a lease of the property or a mortgage loan held by the REIT and secured by the property; (2) for which the related loan or lease was made, entered into or acquired by the REIT at a time when default was not imminent or anticipated; and (3) for which such REIT makes an election to treat the property as foreclosure property. REITs generally are subject to tax at the maximum corporate rate (currently 21%) on any net income from foreclosure property, including any gain from the disposition of the foreclosure property, other than income that would otherwise be qualifying income for purposes of the 75% Gross Income Test. Any gain from the sale of property for which a foreclosure property election has been made will not be subject to the 100% tax on gains from prohibited transactions, even if the property is held primarily for sale to customers in the ordinary course of a trade or business.

**<u>Hedging Transactions.</u>** We may enter into hedging transactions with respect to one or more of our assets or liabilities. Hedging transactions could take a variety of forms, including interest rate swaps or cap agreements, options, futures, contracts, forward rate agreements or similar financial instruments. Any income from a hedging transaction, including gain from a disposition of such a transaction, to manage risk of interest rate or price changes or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, by us to acquire or own real estate assets which is clearly identified as such before the close of the day on which it was acquired, originated or entered into and with respect to which we satisfy other identification requirements, will be disregarded for purposes of the 75% and 95% Gross Income Tests. There are also rules for disregarding income for purposes of the 75% and 95% Gross Income Tests with respect to hedges of certain foreign currency risks. In addition, if we entered into a hedging transaction (i) to manage the risk of interest rate, price changes, or currency fluctuations with respect to borrowings made or to be made or (ii) to manage the risk of currency fluctuations, and a portion of the hedged indebtedness or property is disposed of and in connection with such extinguishment or disposition we enter into a new clearly identified hedging transaction (a "Counteracting Hedge"), income from the applicable hedge and income from the Counteracting Hedge (including gain from the disposition of such Counteracting Hedge) will not be treated as gross income for purposes of the 95% and 75% gross income tests. To the extent we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of both the 75% and 95% Gross Income Tests. We intend to structure any hedging transactions in a manner that does not jeopardize our ability to qualify as a REIT.

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**<u>Characterization of Property Leases.</u>** We may purchase either new or existing properties and lease them to tenants. Our ability to claim certain tax benefits associated with ownership of these properties, such as depreciation, would depend on a determination that the lease transactions are true leases, under which we would be the owner of the leased property for U.S. federal income tax purposes, rather than a conditional sale of the property or a financing transaction. A determination by the IRS that we are not the owner of any properties for U.S. federal income tax purposes may have adverse consequences to us, such as the denial of depreciation deductions (which could affect the determination of our REIT taxable income subject to the distribution requirements) or our satisfaction of the Asset Tests or the Gross Income Tests.

**Tax Aspects of Investments in Partnerships**

**<u>General.</u>** We operate as an UPREIT, which is a structure whereby we own a direct interest in our Operating Partnership, and our Operating Partnership, in turn, owns interests in other non-corporate entities that own properties. Such non-corporate entities generally are organized as limited liability companies, partnerships or trusts and are either disregarded for U.S. federal income tax purposes (if our Operating Partnership was the sole owner) or treated as partnerships for U.S. federal income tax purposes. The following is a summary of the U.S. federal income tax consequences of our investment in our operating partnership. This discussion should also generally apply to any investment by us in a property partnership or other non-corporate entity taxed as a partnership.

A partnership (that is not a publicly traded partnership taxed as a corporation) is not subject to tax as an entity for U.S. federal income tax purposes (see, however, the discussion below about the partnership audit rules). Rather, partners are allocated their proportionate share of the items of income, gain, loss, deduction and credit of the partnership, and are potentially subject to tax thereon, without regard to whether the partners receive any distributions from the partnership. We will be required to take into account our allocable share of the foregoing items for purposes of the various Gross Income and Asset Tests, and in the computation of our REIT taxable income and U.S. federal income tax liability. Further, there can be no assurance that distributions from our operating partnership will be sufficient to pay the tax liabilities resulting from an investment in our operating partnership.

We intend that interests in our Operating Partnership (and any partnership or other entity taxed as a partnership invested in by our operating partnership with one or more owners) will fall within one of the "safe harbors" for the partnership to avoid being classified as a publicly traded partnership. However, our ability to satisfy the requirements of some of these safe harbors depends on the results of our actual operations and accordingly no assurance can be given that any such partnership would not be treated as a publicly traded partnership. Even if a partnership qualifies as a publicly traded partnership, it generally will not be treated as a corporation for U.S. federal income tax purposes if at least 90% of its gross income each taxable year is from certain passive sources.

If for any reason our Operating Partnership (or any partnership invested in by our operating partnership) is taxable as a corporation for U.S. federal income tax purposes, the character of our assets and items of gross income would change, and as a result, we would most likely be unable to satisfy the Asset Tests and Gross Income Tests described above. In addition, any change in the status of any partnership may be treated as a taxable event, in which case we could incur a tax liability without a related cash distribution. Further, if any partnership is treated as a corporation, items of income, gain, loss, deduction, expense and credit of such partnership would be subject to corporate income tax, and the partners of any such partnership would be treated as stockholders, with distributions to such partners subject to the rules applicable to distributions by corporations.

Anti-abuse Treasury regulations have been issued under the partnership provisions of the Code that authorize the IRS, in some abusive transactions involving partnerships, to disregard the form of a transaction and recast it as it deems appropriate. The anti-abuse regulations apply where a partnership is utilized in connection with a transaction (or series of related transactions) with a principal purpose of substantially reducing the present value of the partners' aggregate U.S. federal tax liability in a manner inconsistent with the intent of the partnership provisions. The anti-abuse regulations contain an example in which a REIT contributes the proceeds of a public offering to a partnership in exchange for a general partnership interest. The limited partners contribute real property assets to the partnership, subject to liabilities that exceed their respective aggregate bases in such property. The example concludes that the use of the partnership is not inconsistent with the intent of the partnership provisions, and thus, cannot be recast by the IRS. However, the anti-abuse regulations are extraordinarily broad in scope and are applied based on an analysis of all the facts and circumstances. As a result, we cannot assure you that the IRS will not attempt to apply the anti-abuse regulations to us. Any such action could potentially jeopardize our status as a REIT and materially affect the tax consequences and economic return resulting from an investment in us.

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**<u>Income Taxation of the Partnerships and their Partners.</u>**

Although a partnership agreement will generally determine the allocation of a partnership's income and losses among the partners, such allocations may be disregarded for U.S. federal income tax purposes under Section 704(b) of the Code and the Treasury regulations. If any allocation is not recognized for U.S. federal income tax purposes as having "substantial economic effect," the item subject to the allocation will be reallocated in accordance with the partners' economic interests in the partnership. We believe that the allocations of taxable income and loss in our Operating Partnership agreement comply with the requirements of Section 704(b) of the Code and the applicable Treasury regulations.

Among the losses and deductions of the Operating Partnership that would flow to us are the interest deductions of the Operating Partnership and its subsidiary partnerships. A taxpayer's business interest expense deduction is limited to the sum of business interest income, 30% of adjusted taxable income and certain other amounts. Adjusted taxable income does not include items of income or expense not allocable to a trade or business, business interest or expense, the deduction for qualified business income, NOLs, and for years prior to 2022 or after 2024, deductions for depreciation, amortization, or depletion. For partnerships, the interest deduction limitation is applied at the partnership level, subject to certain adjustments to the partners for unused deduction limitation at the partnership level. A real property trade or business may elect out of this interest limitation. Currently, no such election has been made for us, but our Operating Partnership made this election starting with its 2021 taxable year. As a result of making the election, our Operating Partnership must use the less favorable alternative depreciation system to depreciate certain property and, as a result, its depreciation deductions may be reduced.

Pursuant to Section 704(c) of the Code, income, gain, loss and deduction attributable to property contributed to our Operating Partnership in exchange for units must be allocated in a manner so that the contributing partner is charged with, or benefits from, the unrealized gain or loss attributable to the property at the time of contribution. The amount such of unrealized gain or loss is generally equal to the difference between the fair market value and the adjusted basis of the property at the time of contribution. These allocations are designed to eliminate book-tax differences by allocating to contributing partners lower amounts of depreciation deductions and increased taxable income and gain attributable to the contributed property than would ordinarily be the case for economic or book purposes. With respect to any property purchased by our Operating Partnership, such property will generally have an initial tax basis equal to its fair market value, and accordingly, Section 704(c) will not apply, except as described further below in this paragraph. The application of the principles of Section 704(c) in tiered partnership arrangements is not entirely clear. Accordingly, the IRS may assert a different allocation method than the one selected by our operating partnership to cure any book-tax differences. In certain circumstances, we create book-tax differences by adjusting the values of properties for economic or book purposes and generally the rules of Section 704(c) of the Code would apply to such differences as well.

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Some expenses incurred in the conduct of our Operating Partnership's activities may not be deducted in the year they were paid. To the extent this occurs, the taxable income of our Operating Partnership may exceed its cash receipts for the year in which the expense is paid. As discussed above, the costs of acquiring properties must generally be recovered through depreciation deductions over a number of years. Prepaid interest and loan fees, and prepaid management fees are other examples of expenses that may not be deducted in the year they were paid.

**<u>Partnership Audit Rules.</u>** A partnership may be liable for a tax computed by reference to the hypothetical increase in partner-level taxes (including interest and penalties) resulting from an adjustment of partnership tax items on audit, regardless of changes in the composition of the partners (or their relative ownership) between the year under audit and the year of the adjustment. The relevant rules also include an elective alternative method under which the additional taxes resulting from the adjustment are assessed against the affected partners, subject to a higher rate of interest than otherwise would apply. It is possible that partnerships in which we directly or indirectly invest may be required to pay additional taxes, interest and penalties as a result of an audit adjustment, and we, as a direct or indirect partner of those partnerships could be required to bear the economic burden of those taxes, interest and penalties even though we, as a REIT, may not otherwise have been required to pay additional corporate-level taxes as a result of the related audit adjustment. Investors are urged to consult with their tax advisors with respect to those changes and their potential impact on their investment in our shares.

**U.S. Federal Income Taxation of Stockholders**

**<u>Taxation of Taxable Domestic Stockholders.</u>** This section summarizes the taxation of domestic stockholders that are not tax-exempt organizations. For these purposes, a domestic stockholder is a beneficial owner of our common stock that for U.S. federal income tax purposes is:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an individual that is a citizen or resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or of a political subdivision thereof (including the District of Columbia);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds our shares, the U.S. federal income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. A partner of a partnership holding our common stock should consult its tax advisor regarding the U.S. federal income tax consequences to the partner of the purchase, ownership and disposition of our shares by the partnership.

Certain high-income U.S. individuals, estates, and trusts are subject to an additional 3.8% tax on net investment income. Net investment income includes dividends and gains from sales of stock. In the case of an individual, the tax is 3.8% of the lesser of the individual's net investment income, or the excess of the individual's modified adjusted gross income over an amount equal to (1) $250,000 in the case of a married individual filing a joint return or a surviving spouse, (2) $125,000 in the case of a married individual filing a separate return, or (3) $200,000 in the case of a single individual. The 20% deduction allowed by Section 199A of the Code, with respect to ordinary REIT dividends received by non-corporate taxpayers is allowed only for purposes of Chapter 1 of the Code and thus is not allowed as a deduction allocable to such dividends for purposes of determining the amount of net investment income subject to the 3.8% Medicare tax, which is imposed under Chapter 2A of the Code. Prospective investors should consult with their own tax advisors regarding the possible implications of this legislation on their investment in our common stock.

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As long as we qualify as a REIT, a taxable "U.S. stockholder" must generally take into account as ordinary income distributions made out of our current or accumulated earnings and profits that we do not designate as capital gain dividends or retained long-term capital gain. An individual U.S. stockholder will not qualify for the dividends received deduction generally available to corporations. In addition, dividends paid to a U.S. stockholder generally will not qualify as "qualified dividend income" that are taxed at the maximum tax rate accorded to capital gains. Qualified dividend income generally includes dividends paid to individuals, trusts and estates by domestic C corporations and certain qualified foreign corporations. Because we are not generally subject to U.S. federal income tax on the portion of our REIT taxable income distributed to our stockholders, our dividends generally will not be eligible for the 20% rate (in the case of taxpayers whose taxable income exceeds certain thresholds depending on filing status) on qualified dividend income.

However, regular dividends from REITs that are "qualified REIT dividends" are treated as income from a pass-through entity and are eligible for a 20% deduction. As a result, our regular dividends may be taxed at 80% of an individual's marginal tax rate. The current maximum rate is 37%, resulting in a maximum rate of 29.6%. However, the maximum 20% tax rate for qualified dividend income will apply to our ordinary REIT dividends attributable to dividends received by us from non-REIT corporations. Pursuant to the Treasury regulations, in order for a dividend paid by a REIT to be eligible to be treated as a "qualified REIT dividend," the stockholder must meet two holding period-related requirements. First, the stockholder must hold the REIT shares for a minimum of 46 days during the 91-day period that begins 45 days before the date on which the REIT share becomes ex-dividend with respect to the dividend. Second, the qualifying portion of the REIT dividend is reduced to the extent that the stockholder is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. The 20% deduction does not apply to REIT capital gain dividends or to REIT dividends that we designate as "qualified dividend income." Prospective investors should consult their tax advisors concerning these limitations on the ability to deduct all or a portion of dividends received on shares of our common stock.

Distributions that are designated as capital gain dividends will be taxed as long-term capital gains (generally currently taxable at a maximum rate of 20% in the case of non-corporate domestic stockholders, subject to a maximum rate of 25% for certain recapture of real estate depreciation) to the extent they do not exceed our actual net capital gain for the taxable year, without regard to the period for which the stockholder that receives such distribution has held its stock. However, corporate stockholders may be required to treat up to 20% of some types of capital gain dividends as ordinary income. We may also decide to retain, rather than distribute, our net long-term capital gains and pay any tax thereon. In such instances, stockholders would include their proportionate shares of such gains in income, receive a credit on their returns for their proportionate share of our tax payments that may offset the stockholders' tax liability on proportionate income inclusion, and increase the tax basis of their shares of stock by the difference between the amount included in their long-term capital gains and the tax deemed paid with respect to their shares.

The aggregate amount of dividends that we may designate as "capital gain dividends" or "qualified dividend income" with respect to any taxable year may not exceed the dividends paid by us with respect to such year, including dividends that are paid in the following year (if they are declared before we timely file our tax return for the year and if made with or before the first regular dividend payment after such declaration) are treated as paid with respect to such year. A portion of a distribution that is properly designated as qualified dividend income is taxable to non-corporate U.S. shareholders at the rates applicable to capital gain, provided that the shareholder has met certain holding period requirements.

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Dividend income is characterized as "portfolio" income under the passive loss rules and cannot be offset by a stockholder's current or suspended passive losses. Although stockholders generally recognize taxable income in the year that a dividend is received, any dividend we declare in October, November or December of any year that is payable to a stockholder of record on a specific date in any such month will be treated as both paid by us and received by the stockholder on December 31 of the year it was declared if paid by us during January of the following calendar year. Because we are not a pass-through entity for U.S. federal income tax purposes, stockholders may not use any of our operating or capital losses to reduce their tax liabilities.

In certain circumstances, we may have the ability to declare a large portion of a dividend in shares of our stock. In such a case, you would be taxed on 100% of the dividend in the same manner as a cash dividend, even though most of the dividend was paid in shares of our stock.

In general, the sale of our common stock held for more than 12 months will produce long-term capital gain or loss. All other sales will produce short-term gain or loss. In each case, the gain or loss is equal to the difference between the amount of cash and fair market value of any property received from the sale and the stockholder's basis in the common stock sold. However, any loss from a sale or exchange of common stock by a stockholder who has held such stock for six months or less generally will be treated as a long-term capital loss, to the extent that the stockholder treated our distributions as long-term capital gains.

We will report to our domestic stockholders and to the IRS the amount of dividends paid during each calendar year, and the amount (if any) of U.S. federal income tax we withhold. A stockholder may be subject to backup withholding with respect to dividends paid unless such stockholder: (i) is a corporation or comes within other exempt categories; or (ii) provides us with a taxpayer identification number, certifies as to no loss of exemption, and otherwise complies with applicable requirements. A stockholder that does not provide us with its correct taxpayer identification number may also be subject to penalties imposed by the IRS. Any amount paid as backup withholding can be credited against the stockholder's U.S. federal income tax liability. In addition, we may be required to withhold a portion of distributions made to any stockholders who fail to certify their non-foreign status to us. See "Taxation of Non-U.S. Stockholders" below.

Domestic stockholders that hold our common stock through certain foreign financial institutions (including investment funds) may be subject to withholding on dividends in respect of such common stock, as discussed in "Taxation of Non-U.S. Stockholders-FATCA Withholding" below.

**<u>Taxation of Tax-Exempt Stockholders.</u>** Our distributions to a stockholder that is a domestic tax-exempt entity should not constitute UBTI unless the stockholder borrows funds (or otherwise incurs acquisition indebtedness within the meaning of the Code) to acquire its common stock, or the common stock is otherwise used in an unrelated trade or business of the tax-exempt entity. Furthermore, part or all of the income or gain recognized with respect to our stock held by certain domestic tax-exempt entities including social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal service plans (all of which are exempt from U.S. federal income taxation under Sections 501(c)(7), (9), (17) or (20) of the Code), may be treated as UBTI. Special rules apply to the ownership of REIT shares by Section 401(a) tax-exempt pension trusts. If we would fail to satisfy the "five or fewer" share ownership test (discussed above with respect to the share ownership tests), and if Section 401(a) tax-exempt pension trusts were treated as individuals, tax-exempt pension trusts owning more than 10% by value of our stock may be required to treat a percentage of our dividends as UBTI. This rule applies if: (i) at least one tax-exempt pension trust owns more than 25% by value of our shares, or (ii) one or more tax-exempt pension trusts (each owning more than 10% by value of our shares) hold in the aggregate more than 50% by value of our shares. The percentage treated as UBTI is our gross income (less direct expenses) derived from an unrelated trade or business (determined as if we were a tax-exempt pension trust) divided by our gross income from all sources (less direct expenses). If this percentage is less than 5%, however, none of the dividends will be treated as UBTI.

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Prospective tax-exempt purchasers should consult their own tax advisors as to the applicability of these rules and consequences to their particular circumstances.

**Taxation of Non-U.S. Stockholders.**

**<u>General.</u>** The rules governing the U.S. federal income taxation of beneficial owners of our common stock that are nonresident alien individuals, foreign corporations and other foreign investors (collectively, "Non-U.S. Stockholders") are complex, and as such, only a summary of such rules is provided in this exhibit. Non-U.S. investors should consult with their own tax advisors to determine the impact that U.S. federal, state and local income tax or similar laws will have on such investors as a result of an investment in our common stock.

**<u>FATCA Withholding.</u>** Sections 1471 through 1474 of the Code and subsequent guidance ("FATCA") provide that certain payments to nonresident alien individuals, foreign corporations and other foreign investors (collectively, "Non-U.S. Stockholders") will be subject to a 30% withholding tax if the Non-U.S. Stockholder fails to provide the withholding agent with documentation sufficient to show that it is compliant with FATCA or otherwise exempt from withholding under FATCA. Generally, such documentation is provided on an executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. If a payment is subject to the 30% tax under FATCA, it will not be subject to the 30% tax described under "Taxation of Non-U.S. Stockholders—"Distributions—In General" and "—U.S. Federal Income Tax Withholding on Distributions." Based upon proposed Treasury regulations, which may be relied upon by taxpayers until the final Treasury regulations are issued, FATCA withholding does not apply with respect to payments of gross proceeds from the sale or other disposition of our common stock. Prospective investors should consult their tax advisors regarding the possible implications of this legislation on their investment in our shares.

**<u>Distributions - In General.</u>** Distributions paid by us that are not attributable to gain from our sales or exchanges of U.S. real property interests and not designated by us as capital gain dividends will be treated as dividends of ordinary income to the extent that they are made out of our current or accumulated earnings and profits. Such dividends to Non-U.S. Stockholders ordinarily will be subject to a withholding tax equal to 30% of the gross amount of the dividend unless an applicable tax treaty reduces or eliminates that tax. However, if income from the investment in our shares of common stock is treated as effectively connected with the Non-U.S. Stockholder's conduct of a U.S. trade or business, the Non-U.S. Stockholder generally will be subject to a tax at the graduated rates applicable to ordinary income, in the same manner that domestic stockholders are taxed with respect to such dividends (and may also be subject to the 30% branch profits tax in the case of a Non-U.S. Stockholder that is a foreign corporation that is not entitled to any treaty exemption). Dividends in excess of our current and accumulated earnings and profits will not be taxable to a stockholder to the extent they do not exceed the adjusted basis of the stockholder's shares. Instead, they will reduce the adjusted basis of such shares, but not below zero. To the extent that such dividends exceed the adjusted basis of a Non-U.S. Stockholder's shares, they will give rise to tax liability if the Non-U.S. Stockholder would otherwise be subject to tax on any gain from the sale or disposition of his shares, as described in "Sale of Shares" below.

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**<u>Distributions Attributable to Sale or Exchange of Real Property.</u>** Distributions that are attributable to gain from our sales or exchanges of U.S. real property interests will be taxed to a Non-U.S. Stockholder as if such gain were effectively connected with a U.S. trade or business. Non-U.S. Stockholders would thus be required to file U.S. federal income tax returns and would be taxed at the normal capital gain rates applicable to domestic stockholders, and would be subject to applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals. Also, such dividends may be subject to a 30% branch profits tax in the hands of a corporate Non-U.S. Stockholder not entitled to any treaty exemption. However, generally a capital gain dividend from a REIT is not treated as effectively connected income for a foreign investor if (i) the distribution is received with regard to a class of stock that is regularly traded on an established securities market located in the United States; and (ii) the foreign investor does not own more than 10% of the class of stock at any time during the tax year within which the distribution is received. We expect that our common stock will continue to be regularly traded on an established securities market in the United States.

**<u>U.S. Federal Income Tax Withholding on Distributions.</u>** For U.S. federal income tax withholding purposes and subject to the discussion above under "FATCA Withholding," we will generally withhold tax at the rate of 30% on the amount of any distribution (other than distributions designated as capital gain dividends) made to a Non-U.S. Stockholder, unless the Non-U.S. Stockholder provides us with a properly completed IRS (i) Form W-8BEN or IRS Form W-8BEN-E evidencing that such Non-U.S. Stockholder is eligible for an exemption or reduced rate under an applicable income tax treaty (in which case we will withhold at the lower treaty rate) or (ii) Form W-8ECI claiming that the dividend is effectively connected with the Non-U.S. Stockholder's conduct of a trade or business within the U.S. (in which case we will not withhold tax). We are also generally required to withhold tax at the rate of 21% on the portion of any dividend to a Non-U.S. Stockholder that is or could be designated by us as a capital gain dividend, to the extent attributable to gain on a sale or exchange of an interest in U.S. real property. Such withheld amounts of tax do not represent actual tax liabilities, but rather, represent payments in respect of those tax liabilities described in the preceding two paragraphs. Therefore, such withheld amounts are creditable by the Non-U.S. Stockholder against its actual U.S. federal income tax liabilities, including those described in the preceding two paragraphs. The Non-U.S. Stockholder would be entitled to a refund of any amounts withheld in excess of such Non-U.S. Stockholder's actual U.S. federal income tax liabilities, provided that the Non-U.S. Stockholder files applicable returns or refund claims with the IRS.

**<u>Sales of Shares.</u>** Gain recognized by a Non-U.S. Stockholder upon a sale of shares of our common stock generally will not be subject to U.S. federal income taxation, provided that: (i) such gain is not effectively connected with the conduct by such Non-U.S. Stockholder of a trade or business within the United States; (ii) the Non-U.S. Stockholder is not present in the United States for 183 days or more during the taxable year and certain other conditions apply; and (iii) our REIT is "domestically controlled," which generally means that less than 50% in value of our shares was held directly or indirectly by foreign persons during the five year period ending on the date of disposition or, if shorter, during the entire period of our existence.

We cannot assure you that we will qualify as "domestically controlled." If we were not domestically controlled, a Non-U.S. Stockholder's sale of common shares would be subject to tax, unless our common shares were regularly traded on an established securities market and the selling Non-U.S. Stockholder has not directly, or indirectly, owned during a specified testing period more than 10% in value of our shares of common stock. We believe that our common stock will continue to be regularly traded on an established securities market in the United States. If the gain on the sale of shares were subject to taxation, the Non-U.S. Stockholder would be subject to the same treatment as domestic stockholders with respect to such gain, and the purchaser of such common stock may be required to withhold 15% of the gross purchase price.

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If the proceeds of a disposition of common stock are paid by or through a U.S. office of a broker-dealer, the payment is generally subject to information reporting and to backup withholding unless the disposing Non-U.S. Stockholder certifies as to its name, address and non-U.S. status or otherwise establishes an exemption. Generally, U.S. information reporting and backup withholding will not apply to a payment of disposition proceeds if the payment is made outside the United States through a foreign office of a foreign broker-dealer. Under Treasury regulations, if the proceeds from a disposition of common stock paid to or through a foreign office of a U.S. broker-dealer or a non-U.S. office of a foreign broker-dealer that is (i) a "controlled foreign corporation" for U.S. federal income tax purposes, (ii) a person 50% or more of whose gross income from all sources for a three-year period was effectively connected with a U.S. trade or business, (iii) a foreign partnership with one or more partners who are U.S. persons and who, in the aggregate, hold more than 50% of the income or capital interest in the partnership, or (iv) a foreign partnership engaged in the conduct of a trade or business in the United States, then (A) backup withholding will not apply unless the broker-dealer has actual knowledge that the owner is not a Non-U.S. Stockholder, and (B) information reporting will not apply if the Non-U.S. Stockholder certifies its non-U.S. status and further certifies that it has not been, and at the time the certificate is furnished reasonably expects not to be, present in the U.S. for a period aggregating 183 days or more during each calendar year to which the certification pertains. Prospective foreign purchasers should consult their tax advisors concerning these rules.

Additional exemptions from provisions relating to ownership of interests in U.S. real estate by non-U.S. persons are applicable to "qualified shareholders" and "qualified foreign pension plans," as further described below.

**<u>Qualified Shareholders.</u>** Subject to the exception discussed below, any distribution to a "qualified shareholder" who holds REIT stock directly or indirectly (through one or more partnerships) will not be subject to U.S. tax as income effectively connected with a U.S. trade or business and thus will not be subject to special withholding rules under the Foreign Investment in Real Property Act of 1980 ("FIRPTA"). While a "qualified shareholder" will not be subject to FIRPTA withholding on REIT distributions, certain investors of a "qualified shareholder" (i.e., non-U.S. persons who hold interests in the "qualified shareholder" (other than interests solely as a creditor) and hold more than 10% of the stock of such REIT (whether or not by reason of the investor's ownership in the "qualified shareholder")) may be subject to FIRPTA withholding.

In addition, a sale of our stock by a "qualified shareholder" who holds such stock directly or indirectly (through one or more partnerships) will not be subject to U.S. federal income taxation under FIRPTA. As with distributions, certain investors of a "qualified shareholder" (i.e., non-U.S. persons who hold interests in the "qualified shareholder" (other than interests solely as a creditor) and hold more than 10% of the stock of such REIT (whether or not by reason of the investor's ownership in the "qualified shareholder)) may be subject to FIRPTA withholding on a sale of our stock.

A "qualified shareholder" is a foreign person that (i) either is (a) eligible for the benefits of a comprehensive income tax treaty which includes an exchange of information program and whose principal class of interests is listed and regularly traded on one or more recognized stock exchanges (as defined in such comprehensive income tax treaty), or (b) a foreign partnership that is created or organized under foreign law as a limited partnership in a jurisdiction that has an agreement for the exchange of information with respect to taxes with the United States and has a class of limited partnership units representing greater than 50% of the value of all the partnership units that is regularly traded on the NYSE or NASDAQ markets, (ii) is a qualified collective investment vehicle (defined below), and (iii) maintains records on the identity of each person who, at any time during the foreign person's taxable year, is the direct owner of 5% or more of the class of interests or units (as applicable) of the entities described in (i)(a) or (b), above.

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A qualified collective investment vehicle is a foreign person that (i) would be eligible for a reduced rate of withholding under the comprehensive income tax treaty described above, even if such entity holds more than 10% of the stock of such REIT, (ii) is publicly traded, is treated as a partnership under the Code, is a withholding foreign partnership, and would be treated as a "United States real property holding corporation" if it were a domestic corporation, or (iii) is designated as such by the Secretary of the Treasury and is either (a) fiscally transparent within the meaning of Section 894 of the Code, or (b) required to include dividends in its gross income, but is entitled to a deduction for distributions to its investors.

**<u>Qualified Foreign Pension Funds.</u>** Any distribution to a "qualified foreign pension fund" (or an entity all of the interests of which are held by a "qualified foreign pension fund") who holds REIT stock directly or indirectly (through one or more partnerships) will not be subject to U.S. tax as income effectively connected with a U.S. trade or business and thus will not be subject to special withholding rules under FIRPTA. In addition, a sale of our stock by a "qualified foreign pension fund" that holds such stock directly or indirectly (through one or more partnerships) will not be subject to U.S. federal income taxation under FIRPTA.

A qualified foreign pension fund is any trust, corporation or other organization or arrangement (i) which is created or organized under the law of a country other than the United States, (ii) which is established to provide retirement or pension benefits to participants or beneficiaries that are current or former employees (or persons designated by such employees) of one or more employers in consideration for services rendered (iii) which does not have a single participant or beneficiary with a right to more than 5% of its assets or income, (iv) which is subject to government regulation and provides annual information reporting about its beneficiaries to the relevant tax authorities in the country in which it is established or operates, and (v) with respect to which, under the laws of the country in which it is established or operates, (a) contributions to such organization or arrangement that would otherwise be subject to tax under such laws are deductible or excluded from the gross income of such entity or taxed at a reduced rate, or (b) taxation of any investment income of such organization or arrangement is deferred or such income is taxed at a reduced rate.

The tax provisions relating to qualified shareholders and qualified foreign pension funds are complex. Stockholders should consult their tax advisors with respect to the impact of those provisions on them.

**Other Tax Considerations**

**<u>State and Local Taxes.</u>** We and you may be subject to state or local taxation in various jurisdictions, including those in which we transact business or reside. Our and your state and local tax treatment may not conform to the U.S. federal income tax consequences discussed above. Consequently, you should consult your own tax advisors regarding the effect of state and local tax laws on an investment in our shares of common stock.

**<u>Legislative Proposals.</u>** You should recognize that our and your present U.S. federal income tax treatment may be modified by legislative, judicial or administrative actions at any time, which may be retroactive in effect.

The rules dealing with U.S. federal income taxation are constantly under review by Congress, the IRS and the Treasury Department, and statutory changes as well as promulgation of new regulations, revisions to existing statutes, and revised interpretations of established concepts occur frequently. You should consult your advisors concerning the status of legislative proposals that may pertain to the purchase, ownership and disposition of our shares of common stock.