Navigating Contradictions: Insights from the Latest Earnings Call on Lease Growth, Tariffs, and Acquisition Strategies

Revenue and Occupancy Trends:
- Independence Realty Trust reported a same-store revenue increase of 1% over the prior year in Q2 2025, with average occupancy rising modestly versus a year ago.
- Blended rent growth in the quarter lagged expectations due to market conditions, such as lingering supply pressures in some markets and potential residents being more discerning due to macroeconomic uncertainties.

Operating Expense Decline:
- Same-store operating expenses decreased by 60 basis points over the prior year quarter, fully offsetting softer revenue growth.
- This was attributed to lower repair and maintenance costs, lower real estate taxes, and a reduction in property insurance premium renewals.

Capital Recycling and Acquisition Strategy:
- The company has identified 3 assets to sell during the fourth quarter, with an additional $315 million of acquisitions planned before year-end.
- This strategy involves trading out of older vintage assets with higher future CapEx needs and into newer communities with lower CapEx profiles, improving operating synergies and efficiency.

Supply and Market Dynamics:
- Deliveries across the portfolio are tapering off, with supplies expected to settle at less than 2% growth in 2026, representing a 43% reduction from 2024 deliveries.
- This reduction in supply growth is anticipated to support a stronger leasing environment in 2026, driven by continued strong demand for apartments in their markets.

Financial Performance and Guidance:
- Core FFO per share for the second quarter of 2025 was $0.28, up from $0.27 in Q1, with same-store NOI growing 2%.
- Guidance for the full year 2025 assumes full-year same-store revenue growth between 1.5% to 1.9%, reflecting a reduction in new lease growth offset by better occupancy and reduced expense growth.