(Former name, former address and former fiscal year, if changed since last report)

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.

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 ~~October 28, 2019~~May 4, 2020 there were ~~90,894,656~~94,708,263 shares of the Registrant’s common stock issued and outstanding.

	As of September 30, 2019			As of December 31, 2018			As of March 31, 2020			As of December 31, 2019
ASSETS:
Investments in real estate:
Investments in real estate, at cost	$	1,732,392		$	1,660,423		$	1,856,760		$	1,796,365
Accumulated depreciation		(145,075	)		(112,270	)		(172,789	)		(158,435	)
Investments in real estate, net		1,587,317			1,548,153			1,683,971			1,637,930
Real estate held for sale		32,381			77,285
Cash and cash equivalents		6,587			9,316			57,436			9,888
Restricted cash		8,960			6,729			4,740			4,545
Other assets		16,439			8,802			10,731			10,380
Derivative assets		982			8,307			—			953
Intangible assets, net of accumulated amortization of $412 and $787, respectively		351			744
Intangible assets, net of accumulated amortization of $464 and $540, respectively								260			410
Total Assets	$	1,653,017		$	1,659,336		$	1,757,138		$	1,664,106
LIABILITIES AND EQUITY:
Indebtedness, net of unamortized deferred financing costs of $5,686 and $5,927, respectively	$	979,330		$	985,488
Indebtedness, net of unamortized deferred financing costs of $5,294 and $5,606, respectively							$	1,049,541		$	985,572
Accounts payable and accrued expenses		32,249			22,815			21,250			25,399
Accrued interest payable		794			719			2,099			2,196
Dividends payable		16,460			16,162			17,128			16,491
Derivative liabilities		12,415			—			30,937			7,769
Other liabilities		7,399			4,107			7,012			6,922
Total Liabilities		1,048,647			1,029,291			1,127,967			1,044,349
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; 300,000,000 shares authorized, 90,894,656 and 89,184,443 shares issued and outstanding, including 328,875 and 303,819 unvested restricted common share awards, respectively		909			892
Common stock, $0.01 par value; 300,000,000 shares authorized, 94,691,806 and 91,070,637 shares issued and outstanding, including 326,577 and 326,541 unvested restricted common share awards, respectively								947			911
Additional paid-in capital		762,933			742,429			817,501			765,992
Accumulated other comprehensive income (loss)		(17,097	)		2,016			(35,750	)		(12,099	)
Retained earnings (accumulated deficit)		(148,977	)		(122,342	)		(159,045	)		(141,525	)
Total stockholders’ equity		597,768			622,995			623,653			613,279
Noncontrolling interests		6,602			7,050			5,518			6,478
Total Equity		604,370			630,045			629,171			619,757
Total Liabilities and Equity	$	1,653,017		$	1,659,336		$	1,757,138		$	1,664,106

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

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended March 31,
	2019			2018			2019			2018			2020			2019
REVENUE:
Rental and other property revenue	$	51,057		$	48,644		$	151,370		$	140,994		$	51,156		$	49,465
Other revenue		242			135			425			429			194			75
Total revenue		51,299			48,779			151,795			141,423			51,350			49,540
EXPENSES:
Property operating expenses		20,546			19,792			60,504			56,913			19,737			19,886
Property management expenses		1,901			1,661			5,776			4,936			2,156			1,813
General and administrative expenses		3,113			2,578			9,758			8,184			5,376			3,107
Depreciation and amortization expense		13,434			10,783			38,602			33,590			14,828			12,447
Abandoned deal costs														130			—
Total expenses		38,994			34,814			114,640			103,623			42,227			37,253
Interest expense		(9,783	)		(9,129	)		(29,353	)		(26,063	)		(9,497	)		(9,721	)
Other income		—			—			—			144
Gain on sale of assets		2,390			—			14,532			—
Net income:		4,912			4,836			22,334			11,881
Net income (loss):														(374	)		2,566
Income allocated to noncontrolling interest		(49	)		(49	)		(222	)		(173	)		2			(26	)
Net income allocable to common shares	$	4,863		$	4,787		$	22,112		$	11,708
Net income (loss) allocable to common shares													$	(372	)	$	2,540
Earnings per share:
Basic	$	0.05		$	0.05		$	0.25		$	0.14		$ 0.00			$	0.03
Diluted	$	0.05		$	0.05		$	0.25		$	0.13		$ 0.00			$	0.03
Weighted-average shares:
Basic		90,027,540			87,702,078			89,513,834			86,559,294			90,895,488			88,989,450
Diluted		90,691,368			88,046,311			90,234,840			86,818,337			90,895,488			89,516,224

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

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended March 31,
	2019			2018			2019			2018			2020			2019
Net income	$	4,912		$	4,836		$	22,334		$	11,881
Net income (loss)													$	(374	)	$	2,566
Other comprehensive income (loss):
Change in fair value of interest rate hedges		(5,633	)		1,072			(20,583	)		5,959			(23,422	)		(4,927	)
Realized (gains) losses on interest rate hedges reclassified to earnings		251			(382	)		1,277			(862	)		(418	)		559
Total other comprehensive income (loss)		(5,382	)		690			(19,306	)		5,097			(23,840	)		(4,368	)
Comprehensive income (loss) before allocation to noncontrolling interests		(470	)		5,526			3,028			16,978			(24,214	)		(1,802	)
Allocation to noncontrolling interests		5			(54	)		(29	)		(108	)		191			18
Comprehensive income (loss)	$	(465	)	$	5,472		$	2,999		$	16,870		$	(24,023	)	$	(1,784	)

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

	Common Shares			Par Value Common Shares		Additional Paid In Capital			Accumulated Other Comprehensive Income (loss)			Retained Earnings (Deficit)			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity			Common Shares			Par Value Common Shares			Additional Paid In Capital			Accumulated Other Comprehensive Income (loss)			Retained Earnings (Deficit)			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balance, December 31, 2018		89,184,443		$	892	$	742,429		$	2,016		$	(122,342	)	$	622,995		$	7,050		$	630,045
Net income		—			—		—			—			2,540			2,540			26			2,566
Other comprehensive income		—			—		—			(4,324	)		—			(4,324	)		(44	)		(4,368	)
Balance, December 31, 2019																									91,070,637		$	911		$	765,992		$	(12,099	)	$	(141,525	)	$	613,279		$	6,478		$	619,757
Net income (loss)																									—			—			—			—			(372	)		(372	)		(2	)		(374	)
Other comprehensive income (loss)																									—			—			—			(23,651	)		—			(23,651	)		(189	)		(23,840	)
Stock compensation expense		189,986			1		633			—			—			634			—			634			183,940			2			2,642			—			—			2,644			—			2,644
Issuance of common shares		510,000			5		5,304			—			—			5,309			—			5,309			3,406,000			35			49,729			—			—			49,764			—			49,764
Repurchase of shares related to equity award tax withholding		(49,636	)		—		(635	)		—			—			(635	)		—			(635	)		(51,128	)		(1	)		(1,489	)		—			—			(1,490	)		—			(1,490	)
Conversion of noncontrolling interest to common shares																									82,357			—			627			—			—			627			(627	)		—
Common dividends declared ($0.18 per share)		—			—		—			—			(16,318	)		(16,318	)		—			(16,318	)		—			—			—			—			(17,148	)		(17,148	)		—			(17,148	)
Distribution to noncontrolling interest declared ($0.18 per unit)		—			—		—			—			—			—			(159	)		(159	)		—			—			—			—			—			—			(142	)		(142	)
Balance, March 31, 2019		89,834,793		$	898	$	747,731		$	(2,308	)	$	(136,120	)	$	610,201		$	6,873		$	617,074
Net income		—			—		—			—			14,709			14,709			147			14,856
Other comprehensive income		—			—		—			(9,461	)		—			(9,461	)		(95	)		(9,556	)
Stock compensation expense		32,155			—		1,099			—			—			1,099			—			1,099
Issuance of common shares		65,704			1		722			—			—			723			—			723
Repurchase of shares related to equity award tax withholding		(234	)		—		—			—			—			—			—			—
Common dividends declared ($0.18 per share)		—			—		—			—			(16,128	)		(16,128	)		—			(16,128	)
Distribution to noncontrolling interest declared ($0.18 per unit)		—			—		—			—			—			—			(159	)		(159	)
Balance, June 30, 2019		89,932,418		$	899	$	749,552		$	(11,769	)	$	(137,539	)	$	601,143		$	6,766		$	607,909
Net income		—			—		—			—			4,863			4,863			49			4,912
Other comprehensive income		—			—		—			(5,328	)		—			(5,328	)		(54	)		(5,382	)
Stock compensation expense		(10,591	)		—		704			—			—			704			—			704
Issuance of common shares		972,887			10		12,684			—			—			12,694			—			12,694
Repurchase of shares related to equity award tax withholding		(58	)		—		(7	)		—			—			(7	)		—			(7	)
Common dividends declared ($0.18 per share)		—			—		—			—			(16,301	)		(16,301	)		—			(16,301	)
Distribution to noncontrolling interest declared ($0.18 per unit)		—			—		—			—			—			—			(159	)		(159	)
Balance, September 30, 2019		90,894,656		$	909	$	762,933		$	(17,097	)	$	(148,977	)	$	597,768		$	6,602		$	604,370

Balance, March 31, 2020																									94,691,806		$	947		$	817,501		$	(35,750	)	$	(159,045	)	$	623,653		$	5,518		$	629,171

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

	Common Shares			Par Value Common Shares		Additional Paid In Capital			Accumulated Other Comprehensive Income		Retained Earnings (Deficit)			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity			Common Shares			Par Value Common Shares		Additional Paid In Capital			Accumulated Other Comprehensive Income (loss)			Retained Earnings (Deficit)			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balance, December 31, 2017		84,708,551		$	846	$	703,849		$	4,626	$	(85,221	)	$	624,100		$	22,019		$	646,119
Balance, December 31, 2018																								89,184,443		$	892	$	742,429		$	2,016		$	(122,342	)	$	622,995		$	7,050		$	630,045
Net income		—			—		—			—		3,412			3,412			88			3,500			—			—		—			—			2,540			2,540			26			2,566
Other comprehensive income		—			—		—			3,264		—			3,264			(83	)		3,181
Stock compensation expense		194,622			1		469			—		—			470			—			470
Repurchase of shares related to equity award tax withholding		(41,912	)		-		(345	)		—		—			(345	)		—			(345	)
Conversion of noncontrolling interest to common shares		2,112,136			21		14,287			—		—			14,308			(14,308	)		—
Common dividends declared ($0.18 per share)		—			—		—			—		(15,772	)		(15,772	)		—			(15,772	)
Distribution to noncontrolling interest declared ($0.18 per unit)		—			—		—			—		—			—			(163	)		(163	)
Balance, March 31, 2018		86,973,397		$	868	$	718,260		$	7,890	$	(97,581	)	$	629,437		$	7,553		$	636,990
Net income (loss)		—			—		—			—		3,509			3,509			36			3,545
Other comprehensive income		—			—		—			1,213		—			1,213			13			1,226
Other comprehensive income (loss)																								—			—		—			(4,324	)		—			(4,324	)		(44	)		(4,368	)
Stock compensation expense		5,868			1		933			—		—			934			—			934			189,986			1		633			—			—			634			—			634
Issuance of common shares		61,656			1		455			—		—			456			—			456			510,000			5		5,304			—			—			5,309			—			5,309
Repurchase of shares related to equity award tax withholding		3,200			—		8			—		—			8			—			8			(49,636	)		—		(635	)		—			—			(635	)		—			(635	)
Common dividends declared ($0.18 per share)		—			—		—			—		(15,690	)		(15,690	)		—			(15,690	)		—			—		—			—			(16,318	)		(16,318	)		—			(16,318	)
Distribution to noncontrolling interest declared ($0.18 per unit)		—			—		—			—		—			—			(162	)		(162	)		—			—		—			—			—			—			(159	)		(159	)
Balance, June 30, 2018		87,044,121		$	870	$	719,656		$	9,103	$	(109,762	)	$	619,867		$	7,440		$	627,307
Net income (loss)		—			—		—			—		4,787			4,787			49			4,836
Other comprehensive income		—			—		—			685		—			685			5			690
Stock compensation expense		(2,858	)		—		586			—		—			586			—			586
Issuance of common shares		1,861,508			19		18,729			—		—			18,748			—			18,748
Repurchase of shares related to equity award tax withholding		—			—		(17	)		—		—			(17	)		—			(17	)
Conversion of noncontrolling interest to common shares		18,108			—		198			—		—			198			(198	)		—
Common dividends declared		—			—		—			—		(15,949	)		(15,949	)		—			(15,949	)
Distribution to noncontrolling interest declared		—			—		—			—		—			—			(158	)		(158	)
Balance, September 30, 2018		88,920,879			889		739,152			9,788		(120,924	)		628,905			7,138			636,043
Balance, March 31, 2019																								89,834,793		$	898	$	747,731		$	(2,308	)	$	(136,120	)	$	610,201		$	6,873		$	617,074

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

	For the Nine Months Ended September 30,						For the March 31,
	2019			2018			2020			2019
Cash flows from operating activities:
Net income	$	22,334		$	11,881
Net income (loss)							$	(374	)	$	2,566
Adjustments to reconcile net income to cash flow from operating activities:
Depreciation and amortization		38,602			33,590			14,828			12,447
Amortization of deferred financing costs		1,052			1,078			361			339
Stock compensation expense		2,400			1,966			2,627			622
Gain on sale of assets		(14,532	)		—
Amortization related to derivative instruments		495			(52	)		280			76
Changes in assets and liabilities:
Other assets		460			59			(875	)		722
Accounts payable and accrued expenses		8,476			8,659			(5,171	)		(2,607	)
Accrued interest payable		63			291			(59	)		(37	)
Other liabilities		7			(157	)		67			76
Net cash provided by (used in) operating activities		59,357			57,315
Net cash provided by operating activities								11,684			14,204
Cash flows from investing activities:
Acquisition of real estate properties		(80,079	)		(154,082	)		(50,598	)		(520	)
Disposition of real estate properties		38,731			—			—			1,081
Capital expenditures		(33,825	)		(28,348	)		(8,572	)		(8,688	)
Cash flow (used in) provided by investing activities		(75,173	)		(182,430	)
Cash flow used in investing activities								(59,170	)		(8,127	)
Cash flows from financing activities:
Proceeds from unsecured credit facility and term loans		161,060			169,000			65,501			64,000
Unsecured credit facility repayments		(110,500	)		(22,000	)		—			(58,000	)
Mortgage principal repayments		(3,347	)		(2,402	)		(1,843	)		(907	)
Payments for deferred financing costs		(1,054	)		(16	)		(50	)		—
Proceeds from issuance of common stock		18,726			19,204			49,764			5,309
Distributions on common stock		(48,443	)		(36,527	)		(16,493	)		(16,208	)
Distributions to noncontrolling interests		(482	)		(499	)		(160	)		(164	)
Repurchase of shares related to equity award tax withholding		(642	)		(354	)		(1,490	)		—
Cash flow provided by (used in) financing activities		15,318			126,406			95,229			(5,970	)
Net change in cash and cash equivalents, and restricted cash		(498	)		1,291			47,743			107
Cash and cash equivalents, and restricted cash, beginning of period		16,045			14,619			14,433			16,045
Cash and cash equivalents, and restricted cash, end of the period	$	15,547		$	15,910		$	62,176		$	16,152
Reconciliation of cash, cash equivalents, and restricted cash to the Consolidated Balance Sheet
Cash and cash equivalents	$	6,587		$	7,645		$	57,436		$	9,030
Restricted cash		8,960			8,265			4,740			7,122
Total cash, cash equivalents, and restricted cash, end of period	$	15,547		$	15,910		$	62,176		$	16,152

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

Independence Realty Trust, Inc. (“IRT”), is a self-administered and self-managed Maryland real estate investment trust ~~or REIT,~~(“REIT”) which was formed on March 26, 2009. Our primary purposes are to acquire, own, operate, improve and manage multifamily apartment communities in non-gateway markets. As of ~~September 30, 2019,~~March 31, 2020, we owned and operated 5758 multifamily apartment properties, ~~totaling 15,536~~that contain 15,805 units across non-gateway U.S markets, including Atlanta, Louisville, Memphis, and Raleigh. We own ~~substantially~~ all of our assets and conduct substantially all of our operations through Independence Realty Operating Partnership, LP (“IROP”), of which we are the sole general partner.

As used herein, the terms “we,” “our” and “us” refer to ~~IRT~~Independence Realty Trust, Inc. and, as required by context, IROP and their subsidiaries.

The accompanying unaudited interim 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 consolidated financial statements should be read in conjunction with our audited financial statements as of and for the year ended December 31, ~~2018~~2019 included in our ~~2018~~2019 Annual Report on Form 10-K. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position and 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 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 ~~FASB~~the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Topic 810, “Consolidation”, IROP is considered a variable interest ~~entity.~~entity to 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.

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.

Cash and cash equivalents include cash held in banks and highly liquid investments with 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.

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 ~~September 30, 2019,~~March 31, 2020 and December 31, ~~2018,~~2019, we had ~~$8,960~~$4,740 and ~~$6,729,~~$4,545, respectively, of restricted cash.

Investments in real estate are recorded at cost less accumulated depreciation. 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 management commits to a plan to sell, an active program to locate a buyer has been initiated, the sale is probable, 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.

The properties we acquire are generally 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 ~~this intangible asset~~in-place lease assets is amortized over the assumed lease up period, typically six months. During the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, we acquired in-place leases with a value of ~~$448 and $764, respectively,~~$221, as part of related property acquisitions that are discussed further in Note 3. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, we recorded ~~$307~~$371 and ~~$1,157,~~$556, respectively, of amortization expense for intangible assets. For the three ~~and nine~~ months ended ~~September 30, 2018, we recorded $567~~March 31, 2020 and ~~$2,900, respectively, of amortization expense for intangible assets. For the three and nine months ended September 30,~~ 2019, we wrote-off fully amortized intangible assets of $0$447 and ~~$1,532, respectively. For the three and nine months ended September 30, 2018, we wrote-off fully amortized intangible assets of $1,641 and $4,155,~~$813, respectively. As of ~~September 30, 2019,~~March 31, 2020, we expect to record additional amortization expense on current in-place intangible assets of ~~$276~~$260 for the remainder of ~~2019.~~2020.

Management evaluates the recoverability of our investment in real estate assets, including related identifiable intangible assets, in accordance with FASB ASC Topic 360, “Property, Plant and Equipment”. This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that recoverability of the assets is not assured.

Management reviews ~~its~~our long-lived assets on an ongoing basis and evaluates the recoverability of the carrying value when there is an indicator of impairment. An impairment charge is recorded when it is determined that the carrying value of the asset exceeds the fair value. The estimated cash flows used for the impairment analysis and the determination of estimated fair value are based on our plans for the respective assets and our views of market and economic conditions. The estimates consider matters such as current and historical rental rates, occupancies for the respective and/or comparable properties, and recent sales data for comparable properties. Changes in estimated future cash flows due to changes in our plans or views of market and economic conditions could result in recognition of impairment losses, which, under the applicable accounting guidance, could be substantial.

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 equipment and fixtures. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, we recorded ~~$13,127~~$14,457 and ~~$37,445 of depreciation expense, respectively. For the three and nine months ended September 30, 2018, we recorded $10,216 and $30,690~~$11,891 of depreciation expense, respectively.

~~We apply~~Management accounts for rental income in accordance with FASB ASC Topic 842, ~~“Leases” with respect to our accounting for rental income.~~“Leases.” We primarily lease ~~apartment~~apartments 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 other certain 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 and (2) the lease component is the predominant element and (3) the combined single lease component would be classified as an operating lease. As a result of this treatment, certain amounts classified within prior revenue captions tenant reimbursement income and other property income have been combined into rental and other property revenue in the consolidated statements of operations and prior period amounts have been adjusted to conform to current period presentation.

WeWe make ongoing estimates of the collectability of our base rents, tenant reimbursements, and other service fees included within rental and other property revenue. ~~Effective January 1, 2019, if~~If collectability is not probable, we adjust rental and other property income for the amount of uncollectible revenue. For the three and nine months ended September 30, 2019, we adjusted rental and other property income by $285 and $819, respectively, for uncollectible rental revenue. Prior to January 1, 2019, we maintained an allowance for doubtful accounts based on an ongoing analysis of collectability and recorded changes in the allowance for doubtful accounts as bad debt expense within property operating expenses. For the three and nine months ended September 30, 2018, we recorded bad debt expense of $236 and $286, respectively, within property operating expenses in the consolidated statements of operations.

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, we recognized ~~revenues~~gains of ~~$80~~$3 and $103, respectively, related to recoveries of lost rental revenue due to natural disasters and other insurable events from our insurance providers. For the three and nine months ended September 30, 2018, we recognized revenues of $65 and $171,$6, respectively, related to recoveries of lost rental revenue due to natural disasters and other insurable events from our insurance providers.

~~In accordance with FASB ASC Topic 720, “Other Expenses”, we expense the costs of advertising as incurred.~~ For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, we incurred ~~$612~~$608 and ~~$1,763 of advertising expenses, respectively. For the three and nine months ended September 30, 2018, we incurred $577 and $1,674~~$548 of advertising expenses, respectively.

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 ~~(including certain derivative instruments embedded in other contracts)~~ at fair value and record such amounts in our 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 (or designated as fair value 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.

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 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:

The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of investment, whether the investment is new, whether the investment is traded on an active exchange or in the secondary market, and the current market condition. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in Level 3.

Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, our own assumptions are set to reflect those that management believes market participants would use in pricing the asset or liability at the measurement date. We use prices and inputs that management believes are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be transferred from Level 1 to Level 2 or Level 2 to Level 3.

Fair value for certain of our Level 3 financial instruments is derived using internal valuation models. These internal valuation models include discounted cash flow analyses developed by management using current interest rates, estimates of the term of the particular instrument, specific issuer information and other market data for securities without an active market. In accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures”, the impact of our own credit spreads is also considered when measuring the fair value of financial assets or liabilities, including derivative contracts. Where appropriate, valuation adjustments are made to account for various factors, including bid-ask spreads, credit quality and market liquidity. These adjustments are applied on a consistent basis and are based on observable inputs where available. Management’s estimate of fair value requires significant management judgment and is subject to a high degree of variability based upon market conditions, the availability of specific issuer information and management’s assumptions.

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 the derivatives is classified as a Level 2 fair value measurement within the fair value hierarchy. The fair value inputs for our unsecured credit facility and term loans are classified as Level 2 fair value measurements within the fair value hierarchy. The fair value of 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 0 transfers between levels in the fair value hierarchy for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. The following table summarizes the carrying amount and the fair value of our financial instruments as of the periods indicated:

	As of September 30, 2019				As of December 31, 2018				As of March 31, 2020				As of December 31, 2019
Financial Instrument	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Cash and cash equivalents	$	6,587	$	6,587	$	9,316	$	9,316	$	57,436	$	57,436	$	9,888	$	9,888
Restricted cash		8,960		8,960		6,729		6,729		4,740		4,740		4,545		4,545
Derivative assets		982		982		8,307		8,307		—		—		953		953

Liabilities
Debt:
Unsecured credit facility		153,915		156,303		153,983		155,743		249,593		251,802		183,966		186,302
Term loans		298,594		300,000		248,380		250,000		298,502		300,000		298,418		300,000
Mortgages		526,821		528,140		583,125		577,112		501,446		518,180		503,188		505,510
Derivative liabilities		12,415		12,415		—		—		30,937		30,937		7,769		7,769

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.

~~We apply~~In accordance with FASB ASC Topic 842, “Leases”, ~~which requires a lessee~~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 ~~September 30, 2019,~~March 31, 2020, we ~~had $2,928~~have $2,753 of operating lease right-of-use assets and ~~$3,206~~$3,116 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 consolidated balance sheet. We recorded ~~$154 and $433, respectively,~~$139 of total operating lease expense during the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, which is recorded within property management expense and general and administrative expenses in our consolidated statements of operations.

We have elected to be taxed as a REIT beginning with the taxable year ended December 31, 2011. Accordingly, we recorded 0 income tax expense for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.

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.

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

In February 2016, the FASB issued an accounting standard classified under FASB ASC Topic 842, “Leases”. For lessees, this accounting standard amends lease accounting by requiring (1) the recognition of lease assets and lease liabilities for those leases classified as operating leases on the balance sheet and (2) additional disclosure about leasing arrangements. For lessors, the guidance under the new lease standard is substantially similar to legacy lease accounting standards. This standard is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. In July 2018, the FASB issued an amendment to the new standard, which provides a package of practical expedients that (1) allows lessors to not separate lease and non-lease components in a contract and allocate the consideration in the contract to the separate components if both (i) the timing and pattern of revenue recognition for the non-lease component and the related lease component are the same and (ii) the combined single lease component would be classified as an operating lease and (2) provides a transition option that permits entities to not recast the comparative periods presented when transitioning to the standard. We adopted the new standard on January 1, 2019 using the modified retrospective approach and the package of practical expedients. We did 0t record a cumulative-effect adjustment on the effective date and all prior comparative periods are presented in accordance with legacy lease accounting standards. Our apartment leases, where we are lessor, continued to be accounted for as operating leases under the new standard and, therefore, there were not significant changes in accounting for these leases. For our various corporate office leases, where we are lessee, we recorded a $308 right of use asset and a lease liability on our consolidated balance sheets upon adoption.

In June 2016, the FASB issued an accounting standard classified under FASB ASC Topic 326, “Financial Instruments – Credit Losses.” The amendments in this update revise the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities and other financial instruments. The amendments require entities to estimate a lifetime expected credit loss for certain financial instruments, including trade receivable. This standard is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early application of the amendments in this standard is permitted. We adopted the new standard on January 1, 2020. The adoption of this standard has not had an effect on our consolidated financial statements.

In June 2018, the FASB issued an accounting standard classified under FASB ASC Topic 718, “Compensation – Stock Compensation.” The amendments in this update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. As a result, the accounting for share-based payment award transactions could be impacted. This standard is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early application of the amendments in this standard is permitted. We adopted the new standard on January 1, 2019. As we have not issued share-based payments to non-employees since prior to our management internalization, the adoption of this standard has not had an effect on our consolidated financial statements.

In March 2020, the FASB issued an accounting standard classified under FASB ASC Topic 848, “Reference Rate Reform.” The amendments in this update contain practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASC 848 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, we have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

As of ~~September 30, 2019,~~March 31, 2020, our investments in real estate ~~portfolio~~ consisted of 5758 apartment properties ~~with 15,536~~that contain 15,805 units. The following table ~~below~~ summarizes our investments in real estate:

	As of September 30, 2019			As of December 31, 2018			Depreciable Lives (In years)		As of March 31, 2020			As of December 31, 2019			Depreciable Lives (In years)
Land	$	221,767		$	209,111			—	$	238,723		$	234,050			—
Building		1,412,855			1,384,810			40		1,499,441			1,453,052			40
Furniture, fixtures and equipment		97,770			66,502		5-10			118,596			109,263		5-10
Total investment in real estate	$	1,732,392		$	1,660,423				$	1,856,760		$	1,796,365
Accumulated depreciation		(145,075	)		(112,270	)				(172,789	)		(158,435	)
Investments in real estate, net	$	1,587,317		$	1,548,153				$	1,683,971		$	1,637,930

~~As of September 30, 2019,~~In February 2020, we ~~owned 1~~acquired a 251-unit property ~~that was classified as held for sale. The 300-unit property held for sale, Iron Rock, is~~ located in ~~Austin,~~McKinney, TX ~~and had a net carrying value of $32,381 as of September 30, 2019.~~

~~We had 3 properties classified as held~~ for ~~sale as of December 31, 2018.~~

~~The below table summarizes our acquisitions for the nine months ended September 30, 2019.~~

The following table summarizes the aggregate relative fair value of the assets and liabilities associated with the ~~properties~~property acquired during the ~~nine-month~~three-month period ended ~~September 30, 2019,~~March 31, 2020, on the date of acquisition, accounted for under FASB ASC Topic 805-50-15-3.

Description	Fair Value of Assets Acquired During The Nine Months Ended September 30, 2019		Fair Value of Assets Acquired During The Three Months Ended March 31, 2020
Assets acquired:
Investments in real estate (a)	$	75,429	$	51,052
Other assets		128		35
Intangible assets		764		221
Total assets acquired	$	76,321	$	51,308
Liabilities assumed:
Accounts payable and accrued expenses	$	345	$	126
Other liabilities		166		83
Total liabilities assumed		511		209
Estimated fair value of net assets acquired	$	75,810	$	51,099

~~In October 2019, we acquired a 318-unit property located in Raleigh, NC for a purchase price of $52,925.~~

~~The below table summarizes our dispositions for the nine months ended September 30, 2019.~~

The following tables contain summary information concerning our indebtedness as of ~~September 30, 2019:~~

Debt:	Outstanding Principal		Unamortized Debt Issuance Costs			Carrying Amount		Type	Weighted Average Rate	Weighted Average Maturity (in years)		Outstanding Principal		Unamortized Debt Issuance Costs			Carrying Amount		Type	Weighted Average Rate	Weighted Average Maturity (in years)
Unsecured credit facility (1)	$	156,303	$	(2,388	)	$	153,915	Floating	3.5%		3.6	$	251,802	$	(2,209	)	$	249,593	Floating	2.3%		3.1
Unsecured term loans		300,000		(1,406	)		298,594	Floating	3.5%		4.6		300,000		(1,498	)		298,502	Floating	2.2%		4.1
Mortgages		528,713		(1,892	)		526,821	Fixed	3.8%		4.3		503,033		(1,587	)		501,446	Fixed	3.9%		3.7
Total Debt	$	985,016	$	(5,686	)	$	979,330		3.7%		4.3	$	1,054,835	$	(5,294	)	$	1,049,541		3.0%		3.7

~~As of September 30, 2019,~~March 31, 2020, we were in compliance with all financial covenants contained in the documents governing our indebtedness.

The following table contains summary information concerning our indebtedness as of December 31, ~~2018:~~2019:

Debt:	Outstanding Principal		Unamortized Debt Issuance Costs			Carrying Amount		Type	Weighted Average Rate	Weighted Average Maturity (in years)		Outstanding Principal		Unamortized Debt Issuance Costs			Carrying Amount		Type	Weighted Average Rate	Weighted Average Maturity (in years)
Unsecured credit facility (1)	$	155,743	$	(1,760	)	$	153,983	Floating	3.9%		2.7	$	186,302	$	(2,336	)	$	183,966	Floating	3.2%		3.4
Unsecured term loans		250,000		(1,620	)		248,380	Floating	4.0%		5.4		300,000		(1,582	)		298,418	Floating	3.1%		4.3
Mortgages		585,672		(2,547	)		583,125	Fixed	3.8%		5.1		504,876		(1,688	)		503,188	Fixed	3.9%		4.0
Total Debt	$	991,415	$	(5,927	)	$	985,488		3.9%		4.8	$	991,178	$	(5,606	)	$	985,572		3.5%		4.0

On May 9, 2019, we closed on a new $350,000 unsecured credit facility that consists entirely of a revolving line of credit (the “Unsecured Revolving Line of Credit”), refinancing and terminating the previous unsecured credit facility. We have the right to increase the aggregate amount of the Unsecured Revolving Line of Credit to up to $600,000. The maturity date on borrowings outstanding under the Unsecured Revolving Line of Credit is May 9, 2023, subject to our option to extend the revolving commitment for two additional 6-month periods under certain circumstances, including the payment of an extension fee. We may prepay the Unsecured Revolving Line of Credit, in whole or in part, at any time without a prepayment fee or penalty. At our option, borrowings under the Unsecured Revolving Line of Credit will bear interest at a rate equal to either (i) the 1-month LIBOR rate plus a margin of 125 to 200 basis points, or (ii) a base rate plus a margin of 25 to 100 basis points. The applicable margin is determined based upon our total consolidated leverage ratio, as defined in the agreements. At the time of closing, based on our leverage ratio, the margin spread to LIBOR was 155 basis points. We recognized the refinance as a modification of our prior unsecured credit facility and incurred deferred financing costs of $1,129 associated with this transaction.

~~On April 30, 2019, we extinguished a property mortgage in the amount of $18,850 in connection with a property disposition.~~

~~On July 18, 2019, we extinguished 2 property mortgages in the amounts of $20,527 and $14,235, respectively, in connection with two property dispositions.~~

We have and may in the future 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.

The following table summarizes the aggregate notional ~~amount~~amounts and estimated net fair ~~value~~values of our derivative instruments as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018:~~2019:

	As of September 30, 2019						As of December 31, 2018						As of March 31, 2020						As of December 31, 2019
	Notional		Fair Value of Assets		Fair Value of Liabilities		Notional		Fair Value of Assets		Fair Value of Liabilities		Notional		Fair Value of Assets		Fair Value of Liabilities		Notional		Fair Value of Assets		Fair Value of Liabilities
Cash flow hedges:
Interest rate swap	$	150,000	$	982	$	—	$	150,000	$	4,751	$	—	$	150,000	$	—	$	1,495	$	150,000	$	953	$	—
Interest rate collars		250,000		—		6,617		250,000		3,556		—		250,000		—		14,875		250,000		—		4,330
Forward interest rate swap		—		—		5,798		—		—		—
Forward interest rate swaps														—		—		14,567		—		—		3,439
Total	$	400,000	$	982	$	12,415	$	400,000	$	8,307	$	—	$	400,000	$	—	$	30,937	$	400,000	$	953	$	7,769

On ~~May 9, 2019,~~March 2, 2020 we entered into a forward-starting interest rate swap ~~contract~~ with a notional value of ~~$150,000~~$150,000 and a strike rate of ~~2.176%~~0.985%. ~~The~~This forward interest rate swap has an effective date of ~~June~~May 17, ~~2021~~2022 and a maturity date of ~~June~~May 17, ~~2026.~~2027. We designated

this forward 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.

Effective interest rate swaps and caps are reported in accumulated other comprehensive income, and the fair value of these hedge agreements is included in other assets or other liabilities.

For our interest rate swap and collars that are considered highly effective hedges, we reclassified realized gains of ~~$251 and $1,277~~$138 to earnings within interest expense for the three ~~and nine~~ months ended ~~September 30, 2019, respectively,~~March 31, 2020, and we expect ~~$370~~$6,585 to be reclassified out of accumulated other comprehensive income tointo earnings over the next 12 months.

On March ~~18, 2019,~~16, 2020, our board of directors declared a ~~distribution~~dividend of $0.18 per share on our common stock, which was paid on April ~~25, 2019~~24, 2020 to common ~~shareholders~~stockholders of record as of ~~March 29, 2019.~~

~~On June 17, 2019, our board of directors declared a distribution of $0.18 per share, which was paid on July 25, 2019 to common shareholders of record as of June 28, 2019.~~

~~On September 12, 2019, our board of directors declared a distribution of $0.18 per share, which was paid on October 25, 2019 to common shareholders of record as of September 27, 2019.~~April 2, 2020.

During the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, we also paid ~~$0 and $209, respectively,~~$160 of dividends on restricted common share awards that vested during the period.

~~During the three months ended September 30, 2019,~~On August 4, 2017, we ~~issued~~entered into an ~~aggregate of 972,887 shares under our~~ At-the-Market Issuance Sales Agreement ~~entered into in August 4, 2017, with various sales agents~~ (the “ATM Sales Agreement”) ~~at a weighted average~~with various sales agents. Pursuant to the ATM Sales Agreement, we may offer and sell shares of our common stock, $0.01 par value per share, having an aggregate offering price of ~~$13.45, resulting~~up to $150,000, from time to time through the sales agents. The sales agents are entitled to compensation in ~~$12,763~~an agreed amount not to exceed 2.0% of ~~net proceeds, after deducting $260~~the gross sales price per share for any shares sold from time to time under the ATM Sales Agreement. We have 0 obligation to sell any of ~~commissions. During~~ the ~~nine months ended September 30, 2019, we issued an aggregate of 1,548,591~~ shares under the ATM Sales Agreement and may at ~~a weighted average price of $12.59, resulting in $18,842 of net proceeds, after deducting $385 of commissions. Pursuant to~~any time suspend solicitations and offers under the ATM Sales Agreement. NaN shares were issued under the ATM Sale Agreement ~~$96,014 remained available~~during the three months ended March 31, 2020.

On February 20, 2020, we entered into an underwriting agreement with KeyBanc Capital Markets Inc. and BMO Capital Markets Corp., as representatives of the several underwriters named therein (collectively, the “Underwriters”), BMO Capital Markets Corp. (the “Forward Seller”), and Bank of Montreal (the “Forward Counterparty”) relating to the offering of an aggregate of 10,350,000 shares of common stock at a price to the Underwriters of $14.688 per share, consisting of 10,350,000 shares of common stock offered by the Forward Seller in connection with the forward sale agreements described below (including 1,350,000 shares offered pursuant to the Underwriter’s option to purchase additional shares, which was exercised in full). We did not initially receive any proceeds from the sale of common stock by the Forward Seller. We completed the offering on February 24, 2020.

In connection with the offering, we also entered into 2 forward sale agreements. The first forward sale agreement (the “Initial Forward Sale Agreement”), dated February 20, 2020, with the Forward Seller and Forward Counterparty, and the second forward sale agreement (the “Additional Forward Sale Agreement”, together with the Initial Forward Sale Agreement, the “Forward Sale Agreements”), dated February 20, 2020, with the Forward Seller and the Forward Counterparty. In connection with the Forward Sale Agreements, the Forward Seller or its affiliate borrowed from third parties and sold to the Underwriters an aggregate of 10,350,000 shares of common stock that was sold in the offering. We expect to physically settle the Forward Sale Agreements and receive proceeds from the sale of those shares upon one or more such physical settlements within approximately twelve months from the date of the prospectus, earlier than February 24, 2021, the scheduled maturity date of the Forward Sale Agreements. Although we expect to settle the Forward Sale Agreements entirely by the physical delivery of shares of common stock for ~~issuance~~cash proceeds, we may also elect to cash or net share settle all or a portion of its obligations under the Forward Sale Agreements, in which case, we may receive or owe cash or shares of common stock from or to the Forward Seller. The Forward Sale Agreements provide for an initial forward sale price of $14.688 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.

We evaluated the accounting for the 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 815-40-25, the Forward Sale Agreements have been classified as equity.

On March 31, 2020, we physically settled $50,000 under the Forward Sale Agreements by issuing 3,406,000 shares. As of March 31, 2020, 6,944,000 shares remain to be settled under the Forward Sale Agreements, which if physically settled would provide proceed to us of $100,753 based on the forward price as of ~~September 30, 2019.~~May 4, 2020.

During the three ~~and nine~~ months ended ~~September 30, 2019, 0~~March 31, 2020, holders of IROP ~~unitholders~~units exchanged ~~any~~82,357 units for 82,357 shares of our common ~~stock or cash.~~

stock. As of ~~September 30, 2019, 881,107~~March 31, 2020, 789,134 IROP units held by unaffiliated third parties remain outstanding.

On March ~~18, 2019,~~16, 2020, our board of directors declared a ~~distribution~~dividend of $0.18 per unit, which was paid on April ~~25, 2019~~24, 2020 to IROP LP unitholders of record as of ~~March 29, 2019.~~April 2, 2020.

~~On June 17, 2019, our board of directors declared a distribution of $0.18 per unit, which was paid on July 25, 2019 to IROP unitholders of record as of June 28, 2019.~~

~~On September 12, 2019, our board of directors declared a distibution of $0.18 per unit, which was paid on October 25, 2019 to IROP unitholders of record as of September 27, 2019.~~

In May 2016, our shareholders approved and our board of directors adopted an amended and restated Long Term Incentive Plan (the “Incentive Plan”), which provides for the grants of awards to our employees, officers, directors, trustees, consultants or advisors (and those of our affiliates). The Incentive Plan authorizes the grant of restricted or unrestricted shares of our common stock, performance-based restricted share units (“PSUs”), non-qualified and incentive stock options, restricted stock units (“RSUs”), stock appreciation rights (“SARs”), dividend equivalents and other stock- or cash-based awards. In conjunction with the amendment, the number of shares of common stock issuable under the Incentive Plan was increased to 4,300,000 shares and the term of the incentive plan was extended to May 12, 2026.

Under the Incentive Plan, ~~or predecessor incentive plans,~~ we have granted restricted shares, RSUs, and PSUs to our ~~employees and employees of our former advisor.~~employees. These awards generally vest or vested over a ~~three or four year~~two- to four-year period. In addition, we have granted unrestricted shares to our non-employee directors. These awards generally vest or vested immediately.

On ~~February 6, 2019,~~January 2, 2020, our compensation committee awarded, to our ~~non-executive officer~~community-level employees, ~~92,925~~71,604 restricted stock awards, valued at ~~$10.35~~$13.86 per share, or ~~$962~~$993 in the aggregate. These restricted stock awards vest over a two-year period. On February 4, 2020, our compensation committee awarded, to our non-executive corporate employees, 62,483 restricted stock awards, valued at $14.88 per share, or $930 in the aggregate. These restricted stock awards vest over a three-year period. On March ~~7, 2019,~~2, 2020, our compensation committee awarded, to our named executive officers, ~~87,975 restricted stock awards~~67,381 RSUs and ~~263,929~~202,145 PSUs. The ~~restricted stock awards~~RSUs vest over a four-year period and were valued at ~~$10.23~~$13.87 per share, or ~~$900~~$935 in the aggregate. 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%0 and 150% of the 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. The aggregate grant date fair value of the PSUs was ~~$2,203.~~$2,379.

~~On May 23, 2019, our~~During the three months ended March 31, 2020, a portion of the RSUs and PSUs granted were issued to employees who are retirement eligible. While the terms of the awards still provide for three-to-four years of time vesting, the fact that the grantees are retirement eligible results in immediate recognition of the associated stock-based compensation committee granted stock under the Incentive Plan such that our non-employee directors received an aggregate of 32,844 shares of our common stock, valued at $360 using out closing stock price of $10.96. These awards vested immediately.expense totaling $1,667.

The following table presents a reconciliation of basic and diluted earnings (loss) per share for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018:~~2019:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended March 31,
	2019			2018			2019			2018			2020			2019
Net income	$	4,912		$	4,836		$	22,334		$	11,881		$	(374	)	$	2,566
Income allocated to noncontrolling interest		(49	)		(49	)		(222	)		(173	)		2			(26	)
Net income allocable to common shares		4,863			4,787			22,112			11,708			(372	)		2,540
Weighted-average shares outstanding—Basic		90,027,540			87,702,078			89,513,834			86,559,294			90,895,488			88,989,450
Weighted-average shares outstanding—Diluted		90,691,368			88,046,311			90,234,840			86,818,337			90,895,488			89,516,224
Earnings per share—Basic	$	0.05		$	0.05		$	0.25		$	0.14		$ 0.00			$	0.03
Earnings per share—Diluted	$	0.05		$	0.05		$	0.25		$	0.13		$ 0.00			$	0.03

Certain IROP units, restricted stock awards, RSUs, PSUs, and ~~unvested shares~~forward sale agreements were excluded from the earnings (loss) per share computation because their effect would have been anti-dilutive, totaling ~~881,107~~9,009,167 and 904,567 for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 881,107 and 962,066 for the three and nine months ended September 30, 2018,~~ respectively.

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.

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.

During and subsequent to the first quarter of 2020, the outbreak of COVID-19 has disrupted businesses and has slowed economic activity. IRT has been impacted by the COVID-19 pandemic and, in response, we have made numerous operational and policy changes to: (1) comply with governmental mandates on a jurisdiction by jurisdiction basis; (2) protect our employees, residents, and prospective residents; and (3) minimize the financial impact to IRT. The extent to which COVID-19 impacts our business, operations and financial results will depend on numerous evolving factors that are out of management’s control and that we are not able to predict at this time, including but not limited to: (1) the duration and scope of the COVID-19 outbreak; (2) the pandemic’s impact on current and future economic activity; and (3) the actions of governments, businesses and individuals in response to the COVID-19 pandemic.

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 of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

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.

We claim the protection of the safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995. These statements may be made directly in this report and they may also be incorporated by reference in this report to other documents filed with the SEC, and include, without limitation, statements about future financial and operating results and performance, statements about our plans, objectives, expectations and intentions with respect to future operations, products and services, and other statements that are not historical facts. These forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements.

The risk factors discussed and identified in Item 1A of our ~~2018~~2019 Annual Report on Form 10-K and in Part II, Item 1A of this Quarterly Report, and in other of our public filings with the SEC, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this filing or to reflect the occurrence of unanticipated events.

We are a self-administered and self-managed Maryland real estate investment trust (“REIT”), that acquires, owns, operates, improves and manages multifamily apartment communities across non-gateway U.S. markets. As of ~~September 30, 2019,~~March 31, 2020, we owned and operated 5758 multifamily apartment properties that contain ~~15,536~~15,805 units. Our properties are located in Georgia, North Carolina, Tennessee, Kentucky, Ohio, Oklahoma, Indiana, Texas, Florida, South Carolina, Missouri, Louisiana, and Alabama. We do not have any foreign ~~operations.~~operations and our business is not seasonal. Our executive offices are located at 1835 Market Street, Suite 2601, Philadelphia, PA 19103 and our telephone number is (267) 270-4800. We have offices in Philadelphia, Pennsylvania and Chicago, Illinois. ~~As of September 30, 2019, we had approximately 444 employees who provided real estate operations, leasing, financial, accounting, acquisition, disposition, development, and other support functions.~~

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:

As of ~~September 30, 2019,~~March 31, 2020, we owned 5758 multifamily apartment properties, totaling ~~15,536 units, as summarized below~~15,805 units. Below is a summary of our property portfolio by market.

(Dollars in thousands, except per unit data)

As of September 30, 2019

For the Three Months Ended September 30, 2019

Market

Number of Properties

Units

Gross Real
Estate
Assets

Period End
Occupancy

Average
Effective
Monthly Rent
per Unit

Net Operating
Income

% of NOI

Atlanta, GA

6

2,020

$
253,062

93.4
%

$
1,163

$
4,495

14.8
%
Raleigh - Durham, NC

5

1,372

190,618

92.8
%

1,199

3,175

10.4
%
Louisville, KY

6

1,710

196,882

88.9
%

1,004

3,027

10.0
%
Memphis, TN

4

1,383

144,311

90.5
%

1,143

2,941

9.7
%
Columbus, OH

6

1,547

152,162

92.5
%

1,011

2,603

8.6
%
Tampa-St. Petersburg, FL

4

1,104

171,537

90.2
%

1,212

2,331

7.7
%
Oklahoma City, OK

5

1,658

77,369

96.2
%

671

1,950

6.4
%
Indianapolis, IN

4

916

91,010

94.4
%

1,014

1,571

5.2
%
Dallas, TX

3

734

86,952

94.8
%

1,206

1,503

4.9
%
Myrtle Beach, SC - Wilmington, NC

3

628

63,301

93.3
%

1,053

1,363

4.5
%
Charleston, SC

2

518

79,852

94.0
%

1,314

1,128

3.7
%
Orlando, FL

1

297

48,613

93.9
%

1,488

853

2.8
%
Charlotte, NC

1

208

42,139

95.7
%

1,573

687

2.3
%
Asheville, NC

1

252

28,615

97.6
%

1,152

615

2.0
%
Austin, TX (a)

1

300

36,230

93.0
%

1,329

556

1.8
%
Chattanooga, TN

2

295

27,195

97.6
%

980

467

1.5
%
St. Louis, MO

1

152

33,548

92.8
%

1,472

463

1.5
%
Huntsville, AL

1

178

16,422

98.3
%

974

359

1.2
%
Baton Rouge, LA

1

264

28,804

84.9
%

901

326

1.1
%
Total/Weighted Average

57

15,536

$
1,768,622

92.8
%

$
1,084

$
30,413

100.0
%

~~(a)~~

~~Market includes one property which has been classified as held for sale as of September 30, 2019.~~


(Dollars in thousands, except per unit data)	As of March 31, 2020									For the Three Months Ended March 31, 2020
Market	Number of Properties		Units		Gross Real Estate Assets		Period End Occupancy			Average Effective Monthly Rent per Unit		Net Operating Income		% of NOI
Atlanta, GA		6		2,020	$	256,395		93.1	%	$	1,194	$	4,720		15.0	%
Raleigh - Durham, NC		6		1,690		244,133		93.4	%		1,181		3,842		12.2	%
Louisville, KY		6		1,710		199,428		89.2	%		1,009		3,056		9.7	%
Memphis, TN		4		1,383		146,932		89.1	%		1,151		2,699		8.6	%
Columbus, OH		6		1,547		153,819		93.5	%		1,032		2,703		8.6	%
Tampa-St. Petersburg, FL		4		1,104		176,353		89.8	%		1,252		2,373		7.5	%
Oklahoma City, OK		5		1,658		78,628		97.2	%		681		2,108		6.7	%
Indianapolis, IN		4		916		91,375		95.9	%		1,030		1,740		5.5	%
Dallas, TX		4		985		139,320		91.8	%		1,298		1,806		5.7	%
Myrtle Beach, SC - Wilmington, NC		3		628		64,118		90.0	%		1,037		1,234		3.9	%
Charleston, SC		2		518		80,036		94.4	%		1,316		1,223		3.9	%
Orlando, FL		1		297		48,829		96.0	%		1,496		868		2.8	%
Charlotte, NC		1		208		42,194		95.7	%		1,564		740		2.4	%
Asheville, NC		1		252		28,738		96.4	%		1,157		620		2.0	%
Chattanooga, TN		2		295		27,455		96.6	%		994		497		1.6	%
St. Louis, MO		1		152		33,602		98.0	%		1,466		463		1.5	%
Huntsville, AL		1		178		16,495		98.9	%		1,010		383		1.2	%
Baton Rouge, LA		1		264		28,910		84.1	%		908		377		1.2	%
Total/Weighted Average		58		15,805	$	1,856,760		92.7	%	$	1,100	$	31,452		100.0	%

As of ~~September 30, 2019,~~March 31, 2020, our same-store portfolio consisted of 4954 multifamily apartment properties, totaling ~~13,397~~14,748 units. See “Non-GAAP Financial Measures – Same Store Portfolio Net Operating Income” below for our ~~methodology for determining our~~definition of same store ~~portfolio~~ and definitions and reconciliations related to our net operating income and net operating income margin.

During and subsequent to the first quarter of 2020, the outbreak of COVID-19 has disrupted businesses and has slowed economic activity. We have been impacted by the COVID-19 pandemic and, in response, have made numerous operational and policy changes to: (1) comply with governmental mandates on a jurisdiction by jurisdiction basis; (2) protect our employees, residents, and prospective residents; and (3) minimize the financial impact to us. The extent to which COVID-19 impacts our business, operations and financial results will depend on numerous evolving factors that are out of management’s control and that we are not able to predict at this time, including but not limited to: (1) the duration and scope of the COVID-19 outbreak; (2) the pandemic’s impact on current and future economic activity; and (3) the actions of governments, businesses and individuals in response to the COVID-19 pandemic.

Some of the specific operational and policy changes we have made in response to the COVID-19 pandemic include: (1) delaying or canceling capital recycling activity in order to focus on current operations; (2) delaying or canceling capital spending, including pausing or otherwise delaying spending under our value-add program; and (3) working to support residents impacted by COVID-19 while maximizing occupancy and rent collections.

Our capital recycling program consists of disposing of assets in markets where we lack scale and/or markets where management believes that growth is slowing.

In February 2020, we purchased a 251-unit located in McKinney, TX for $51.2 million. This acquisition was a part of our previously announced 2019 capital recycling program.

In April 2020, we allowed a previously announced non-binding letter of intent related to the acquisition of three Class A communities in Atlanta, GA to expire, without realizing any financial penalty. This decision provides us with greater financial flexibility given the uncertainties surrounding the COVID-19 pandemic.

In connection with the offering, we also entered into two forward sale agreements (collectively, the “Forward Sale Agreements”) with the Forward Seller and the Forward Counterparty. In connection with the Forward Sale Agreements, the Forward Seller or its affiliate borrowed from third parties and sold to the Underwriters an aggregate of 10.4 million shares of common stock that was sold in the offering. We expect to physically settle the Forward Sale Agreements and receive proceeds from the sale of those shares upon one or more such physical settlements within approximately twelve months from the date of the prospectus, earlier than February 24, 2021, the scheduled maturity date of the Forward Sale Agreements. Although we expect to settle the Forward Sale Agreements entirely by the physical delivery of shares of common stock for cash proceeds, we may also elect to cash or net share settle all or a portion of its obligations under the Forward Sale Agreements, in which case, we may receive or owe cash or shares of common stock from or to the Forward Seller. The Forward Sale Agreements provide for an initial forward sale price of $14.688 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.

On March 31, 2020, we settled $50 million under the Forward Sale Agreements by issuing 3.4 million shares. As of March 31, 2020, 6.9 million shares remain to be settled under the forward sale agreement, which if physically settled would provide proceed to us of $100 million based on the forward price as of May 4, 2020. The offering and forward sale agreements provide us with further financial resources and flexibility considering the ongoing COVID-19 pandemic.

Value add initiatives, comprised of renovations and upgrades at selected communities to drive increased rental rates, remain a core component of our longer-term growth ~~strategy for 2019 and beyond. In 2018, we~~strategy. We have identified ~~3,929~~7,136 units across 1223 properties for renovations and upgrades as part of ~~our Phase I~~this initiative. As of March 31, 2020, we had completed renovations and IIupgrades at 3,025 of the 7,136 units. Given the COVID-19 pandemic, we are actively monitoring the markets where these value add ~~initiative. In July 2019, we identified eight additional properties totaling 2,402 units to represent Phase III~~renovations are occurring and have paused or otherwise delayed the volume of renovations where warranted.

Given our track record of NOI growth delivered through a combination of organic rent growth and the continued execution of our value add ~~initiative. In total,~~initiative, we ~~are renovating 20~~were well positioned to achieve a normalized dividend payout ratio over time. Given market uncertainty, along with our decision to pause a portion of our ~~properties comprising 6,331 units or 41% of our total units as of September 30, 2019.~~

~~As of September 30, 2019,~~value add program, we ~~were renovating 14 properties and had completed 2,364 of the 4,553 units at these 14 properties. We~~announced on May 6, 2020 that we expect to ~~substantially complete~~reduce our quarterly common stock dividend paid to common shareholders and IROP LP unitholders from $0.18 per share to $0.12 per share beginning with the ~~remaining Phase I and II unit renovations in~~dividend for the ~~first half~~second quarter of 2020. ~~We expect~~The resulting dividend payout ratio is more in line with our peers and the reduced dividend will allow us to ~~commence renovations at the Phase III units during the remainder of 2019 and first half of 2020.~~

~~Our capital recycling program consists of disposing of assets in markets where we lack scale and/or markets where management believes that long term growth outlook is not as attractive relative~~retain approximately $23 million annually, which can be used to ~~other markets.~~

In April 2019, we sold a 370-unit property located in Chicago, IL for $42.0 million. We recorded a gain of $12.3 million for this property, which is net of $2.0 million of debt extinguishment costs. In July 2019, we sold two properties in Little Rock, AR for $56.5 million. We recorded a gain of $2.2 million associated with these properties, which is net of $3.2 million of debt extinguishment costs.

~~In April 2019, we purchased a 224-unit property located in Atlanta, GA for $28.0 million. In July 2019, we purchased a 264-unit property located in Tampa, FL for $48.0 million.~~

~~In October 2019, we purchased a 318-unit property located in Raleigh, NC for $52.9 million.~~

On May 9, 2019, we closed on a new $350.0 million unsecured credit facility that consists entirely of a revolving line of credit (the “Unsecured Revolving Line of Credit”), refinancing and terminating the previous unsecured credit facility and term loan agreement. We have the right to increase the aggregate amount of the unsecured revolving line of credit to up to $600.0 million. The maturity date on borrowings outstanding under the Unsecured Revolving Line of Credit is May 9, 2023, subject toaccelerate our option to extend the revolving commitment for two additional 6-month periods under certain circumstances, including the payment of an extension fee. We may prepay the Unsecured Revolving Line of Credit, in whole or in part, at any time without a prepayment fee or penalty. At our option, borrowings under the Unsecured Revolving Line of Credit will bear interest at a rate equal to either (i) the 1-month LIBOR rate plus a margin of 125 to 200 basis points, or (ii) a base rate plus a margin of 25 to 100 basis points. The applicable margin is determined based upon our total consolidated leverage ratio. At the time of closing and at September 30, 2019, based on our leverage ratio, the margin spread to LIBOR was 155 basis points.deleveraging efforts.

Three Months Ended ~~September 30, 2019~~March 31, 2020 compared to the Three Months Ended ~~September 30, 2018~~March 31, 2019

		SAME STORE PROPERTIES												NON SAME STORE PROPERTIES												CONSOLIDATED													SAME STORE PROPERTIES												NON SAME STORE PROPERTIES												CONSOLIDATED
(Dollars in thousands)		Three Months Ended September 30,												Three Months Ended September 30,												Three Months Ended September 30,													Three Months Ended March 31,												Three Months Ended March 31,												Three Months Ended March 31,
		2019			2018			Increase (Decrease)			% Change			2019			2018			Increase (Decrease)			% Change			2019			2018			Increase (Decrease)			% Change				2020			2019			Increase (Decrease)			% Change			2020			2019			Increase (Decrease)			% Change			2020			2019			Increase (Decrease)			% Change
Property Data:
Number of properties		49			49									8			9				(1	)		-11.1	%	57			58				(1	)		-1.7	%		54			54									4			4				-			0.0	%	58			58				-			0.0	%
Number of units			13,397			13,397									2,139			2,463			(324	)		-13.2	%		15,536			15,860			(324	)		-2.0	%			14,748			14,748									1,057			1,132			(75	)		-6.6	%		15,805			15,880			(75	)		-0.5	%
Average occupancy			93.4	%		93.4	%		0.0	%	n/a				94.3	%		93.9	%		0.4	%	n/a				93.5	%		93.5	%		0.0	%	n/a					92.7	%		92.8	%		-0.1	%	n/a				90.7	%		94.5	%		-3.8	%	n/a				92.5	%		92.9	%		-0.3	%	n/a
Average effective monthly rent, per unit			1,078			1,020			58			5.7	%		1,126			1,043			83			8.0	%		1,084			1,024			61			5.9	%			1,089			1,038			51			4.9	%		1,259			1,084			175			16.1	%		1,100			1,042			58			5.6	%
Revenue:
Rental and other property revenue		$	43,686		$	40,975		$	2,711			6.6	%	$	7,371		$	7,669		$	(298	)		-3.9	%	$	51,057		$	48,644		$	2,413			5.0	%		$	47,893		$	45,746		$	2,147			4.7	%	$	3,263		$	3,719		$	(456	)		-12.3	%	$	51,156		$	49,465		$	1,691			3.4	%
Expenses:
Property operating expenses			17,268			16,547			721			4.4	%		3,278			3,245			33			1.0	%		20,546			19,792			754			3.8	%			18,438			18,210			228			1.3	%		1,299			1,676			(377	)		-22.5	%		19,737			19,886			(149	)		-0.7	%
Net Operating Income		$	26,418		$	24,428		$	1,990			8.1	%	$	4,093		$	4,424		$	(331	)		-7.5	%	$	30,511		$	28,852		$	1,659			5.8	%		$	29,455		$	27,536		$	1,919			7.0	%	$	1,964		$	2,043		$	(79	)		-3.9	%	$	31,419		$	29,579		$	1,840			6.2	%

Other Revenue:	Other Revenue:																																					Other Revenue:
Other revenue	Other revenue																									$	242		$	135		$	107			79.3	%	Other revenue																									$	194		$	75		$	119			158.7	%
Corporate and other expenses:	Corporate and other expenses:																																					Corporate and other expenses:
Property management expenses	Property management expenses																										1,901			1,661			240			14.4	%	Property management expenses																										2,156			1,813			343			18.9	%
General and administrative expenses	General and administrative expenses																										3,113			2,578			535			20.8	%	General and administrative expenses																										5,376			3,107			2,269			73.0	%
Depreciation and amortization expense	Depreciation and amortization expense																										13,434			10,783			2,651			24.6	%	Depreciation and amortization expense																										14,828			12,447			2,381			19.1	%
Abandoned deal costs																																						Abandoned deal costs																										130			-			130		nm
Total corporate and other expenses	Total corporate and other expenses																										18,448			15,022			3,426			22.8	%	Total corporate and other expenses																										22,490			17,367			4,993			28.7	%
Interest expense	Interest expense																										(9,783	)		(9,129	)		(654	)		7.2	%	Interest expense																										(9,497	)		(9,721	)		224			2.3	%
Gains on sale of assets																											2,390			—			2,390		nm
Net income	Net income																										4,912			4,836			76			1.6	%	Net income																										(374	)		2,566			(2,810	)		-109.5	%
Income allocated to noncontrolling interests	Income allocated to noncontrolling interests																										(49	)		(49	)		—			0.0	%	Income allocated to noncontrolling interests																										2			(26	)		28			107.7	%
Net income available to common shares	Net income available to common shares																									$	4,863		$	4,787		$	76			1.6	%	Net income available to common shares																									$	(372	)	$	2,540		$	(2,782	)		-109.5	%

Rental and other property revenue. ~~Rental~~Revenue from rental and other property revenue of the consolidated portfolio increased ~~$2.5~~$1.7 million to ~~$51.1~~$51.2 million for the three months ended ~~September 30, 2019~~March 31, 2020 from ~~$48.6~~$49.5 million for the three months ended ~~September 30, 2018.~~March 31, 2019. The increase was primarily attributable to a ~~$2.7~~$2.1 million increase in same store rental and other property revenue driven by a ~~5.7%~~4.9% increase in average effective monthly rents compared to the prior year period. This was partially offset by a ~~$0.2~~$0.5 million decrease in non same store rental and other property ~~revenue compared to the prior year period.~~revenue. The non same store rental and other property revenue decrease was due to the difference in the number of properties included in each period as a result of the timing of property sales and acquisitions.

Property operating expenses. Property operating expenses decreased $0.2 million to $19.7 million for the three months ended March 31, 2020 from $19.9 million for the three months ended March 31, 2019. The decrease was primarily due to a $0.4 million decrease in non same store property operating expenses partially offset by a $0.2 million increase in the same store property operating expenses. The non same store property operating expense decrease was due to the number of properties included in each period being different as a result of the timing of property sales and acquisitions.

~~Other revenue.~~ ~~Other revenue increased $0.1 million to $0.2 million for the three months ended September 30, 2019 compared to $0.1 million for the three months ended September 30, 2018.~~

~~Property operating expenses~~. Property operating expenses increased $0.7 million to $20.5 million for the three months ended September 30, 2019 from $19.8 million for the three months ended September 30, 2018. The increase was due to a $0.7 million increase in same store property operating expenses primarily driven by higher property taxes.

Property management expenses. Property management expenses increased ~~$0.2~~$0.4 million to ~~$1.9~~$2.2 million for the three months ended ~~September 30, 2019~~March 31, 2020 from ~~$1.7~~$1.8 million for the three months ended ~~September 30, 2018.~~March 31, 2019. This increase was primarily due to an increase in ~~compensation expense, software~~

personnel costs ~~and travel costs for~~as the size of our property management ~~function as we have increased both the number of personnel and the use of technology~~team has grown to ~~drive future operating efficiencies.~~support our management platform.

General and administrative expenses. General and administrative expenses increased ~~$0.5~~$2.3 million to $5.4 million for the three months ended March 31, 2020 from $3.1 million for the three months ended ~~September 30, 2019 from $2.6 million for the three months ended September 30, 2018.~~March 31, 2019. This increase was primarily due to ~~an increase~~$1.7 million in stock based compensation ~~expense as the size of our corporate office has grown~~related to ~~support asset management functions including the oversight of our value add initiative~~performance share units and ~~general portfolio optimization.~~restricted stock units granted to employees who are retirement eligible.

Depreciation and amortization expense. Depreciation and amortization expense increased ~~$2.6~~$2.4 million to ~~$13.4~~$14.8 million for the three months ended ~~September 30, 2019~~March 31, 2020 from ~~$10.8~~$12.4 million for the three months ended September 30, 2018. The increase was attributable to a $1.5 million increase in depreciation expense from capital expenditures related to our value add program for the three months ended September 30, 2019 compared to the three months ended September 30, 2018 and an increase of $0.9 million related to six property acquisitions since the beginning of the three month period beginning September 30, 2018.

~~Interest expense~~. Interest expense increased $0.7 million to $9.8 million for the three months ended September 30, 2019 from $9.1 million for the three months ended September 30, 2018. This is primarily due to a $105.3 million increase in the balance of our unsecured credit facility and term loans from September 30, 2018 to September 30, 2019, which related to our investments in additional property acquisitions and value add related capital expenditures.

~~Nine Months Ended September 30, 2019 compared to the Nine Months Ended September 30, 2018~~

SAME STORE PROPERTIES

NON SAME STORE PROPERTIES

CONSOLIDATED

(Dollars in thousands)

Nine Months Ended September 30,

Nine Months Ended September 30,

Nine Months Ended September 30,

2019

2018

Increase (Decrease)

% Change

2019

2018

Increase (Decrease)

% Change

2019

2018

Increase (Decrease)

% Change

Property Data:

Number of properties

49

49

8

9

(1
)

-11.1
%

57

58

(1
)

-1.7
%
Number of units

13,397

13,397

2,139

2,463

(324
)

-13.2
%

15,536

15,860

(324
)

-2.0
%
Average occupancy

93.3
%

93.7
%

-0.4
%

n/a

95.1
%

94.2
%

0.8
%

n/a

93.6
%

93.8
%

-0.2
%

n/a

Average effective monthly rent, per unit

1,058

1,005

52

5.2
%

1,083

1,052

31

3.0
%

1,061

1,011

50

4.9
%
Revenue:

Rental and other property revenue

$
128,280

$
121,626

$
6,654

5.5
%

$
23,090

$
19,368

$
3,722

19.2
%

$
151,370

$
140,994

$
10,376

7.4
%
Expenses:

Property operating expenses

50,510

48,956

1,554

3.2
%

9,994

7,957

2,037

25.6
%

60,504

56,913

3,591

6.3
%
Net Operating Income

$
77,770

$
72,670

$
5,100

7.0
%

$
13,096

$
11,411

$
1,685

14.8
%

$
90,866

$
84,081

$
6,785

8.1
%

Other Revenue:

Other revenue

$
425

$
429

$
(4
)

-0.9
%
Corporate and other expenses:

Property management expenses

5,776

4,936

840

17.0
%
General and administrative expenses

9,758

8,184

1,574

19.2
%
Depreciation and amortization expense

38,602

33,590

5,012

14.9
%
Total corporate and other expenses

54,136

46,710

7,426

15.9
%
Interest expense

(29,353
)

(26,063
)

(3,290
)

12.6
%
Other income

—

144

(144
)

nm

Gains on sale of assets

14,532

—

14,532

nm

Net income

22,334

11,881

10,453

88.0
%
Income allocated to noncontrolling interests

(222
)

(173
)

(49
)

-28.3
%
Net income available to common shares

$
22,112

$
11,708

$
10,404

88.9
%

~~Rental and other property revenue.~~ ~~Rental and other property revenue increased $10.4 million to $151.4 million for the nine months ended September 30, 2019 from $141.0 million for the nine months ended September 30, 2018.~~March 31, 2019. The increase was primarily attributable to a $6.7 million increase in same store rental and other property revenue driven by a 5.2% increase in average effective monthly rents compared to the prior year period partially offset by a 30 basis point decrease in average occupancy compared to the prior year and a $3.7 million increase in non same store rental and other property revenue. The non same store rental and other property revenue increase was due to the number of properties included in each period being different as a result of the timing of property sales and acquisitions.

~~Other revenue.~~ ~~Other revenue remained consistent at $0.4 million for the nine months ended September 30, 2019 and 2018.~~

~~Property operating expenses.~~ Property operating expenses increased $3.6 million to $60.5 million for the nine months ended September 30, 2019 from $56.9 million for the nine months ended September 30, 2018. The increase was due to a $1.6 million increase in same store property operating expenses primarily driven by higher property taxes and a $2.0 ~~million increase in our non~~

same store property operating expenses. The non same store property operating expenses increase was due to the number of properties included in each period being different as a result of the timing of property sales and acquisitions.

~~Property management expenses:~~ Property management expenses increased $0.9 million to $5.8 million for the nine months ended September 30, 2019 from $4.9 million for the nine months ended September 30, 2018. This was primarily due to an increase in compensation expense, software costs, and travel costs for our property management function as we have increased both the number of personnel and the use of technology to drive future operating efficiencies.

~~General and administrative expenses~~. General and administrative expenses increased $1.6 million to $9.8 million for the nine months ended September 30, 2019 from $8.2 million for the nine months ended September 30, 2018. This increase was primarily due to an increase in compensation expense as the size of our corporate office has grown to support asset management functions including the oversight of our value add initiative and general portfolio optimization.

~~Depreciation and amortization expense~~. Depreciation and amortization expense increased $5.0 million to $38.6 million for the nine months ended September 30, 2019 from $33.6 million for the nine months ended September 30, 2018. The increase was attributable to a $4.2 million increase in depreciation expense ~~driven by capital expenditures from~~at our value add ~~program~~properties for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 compared to the ~~nine~~three months ended ~~September 30, 2018 and a $1.0 million increase in depreciation expense due to 2019 capital recycling activity.~~March 31, 2019.

Interest expense. Interest expense ~~increased $3.3~~decreased $0.2 million to ~~$29.4~~$9.5 million for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 from ~~$26.1~~$9.7 million for the ~~nine~~three months ended ~~September 30, 2018. This is~~March 31, 2019. The decrease was primarily due to ~~a $105.3 million increase in~~lower interest rates during the ~~balance of our unsecured credit facility and term loans from September 30, 2018~~three months ended March 31, 2020 compared to ~~September 30, 2019, which related to our investments in additional property acquisitions and value add related capital expenditures.~~the three months ended March 31, 2019.

We believe that FFO and CFFO, each of which is a non-GAAP financial measure, are appropriate supplemental measures of the operating performance of a REIT and IRT in particular.

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net income or loss (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. We calculate CFFO as FFO, adjusted for stock compensation expense, depreciation and amortization of items that are not added back in the computation of FFO, amortization of deferred financing costs, and other non-cash or non-operating gains or losses related to items such as casualty related costs, defeasance costs that we incur when we sell a property subject to secured debt, asset sales, debt extinguishments, and acquisition-related debt extinguishment expenses.

Our calculations of FFO and CFFO may differ from the methodology for calculating FFO, CFFO and similar supplemental measures utilized by other REITs and, accordingly, may not be comparable to FFO, CFFO or similar measures as calculated by other REITs. Our management utilizes FFO and CFFO as measures of our operating performance, and we believe they are also useful to investors because they facilitate an understanding of our operating performance after adjustment for certain non-cash or non-operating items that are required by GAAP to be expensed and facilitate comparison of our current operating performance to prior reporting 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 provide investors with additional useful measures to compare our financial performance to the performance of 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. Neither FFO nor CFFO should be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity.

Set forth below is a reconciliation of net income (loss) to FFO and CFFO for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ (in thousands, except share and per share information):

	For the Nine Months Ended September 30, 2019						For the Nine Months Ended September 30, 2018					For the Three Months Ended March 31, 2020					For the Three Months Ended March 31, 2019
	Amount			Per Share (1)			Amount			Per Share (2)		Amount			Per Share (1)		Amount		Per Share (2)
Funds From Operations (FFO):
Net income (loss)	$	22,334		$	0.25		$	11,881		$	0.14	$	(374	)	$ 0.00		$	2,566	$	0.03
Adjustments:
Real estate depreciation and amortization		38,306			0.42			33,489			0.38		14,725			0.16		12,318		0.14
Net (gains) losses on sale of assets excluding debt extinguishment costs		(19,765	)		(0.22	)		—			—		—			—		—		—
FFO	$	40,875		$	0.45		$	45,370		$	0.52	$	14,351		$	0.16	$	14,884	$	0.17
Core Funds From Operations (CFFO):
FFO	$	40,875		$	0.45		$	45,370		$	0.52	$	14,351		$	0.16	$	14,884	$	0.17
Adjustments:
Stock compensation expense		2,400			0.03			1,966			0.02		2,627			0.03		622		0.01
Amortization of deferred financing costs		1,052			0.01			1,078			0.01		361			—		339		—
Other depreciation and amortization		296			—			101			—		103			—		129		—
Other expense (income)		—			—			(52	)		—
Debt extinguishment costs included in net gains (losses) on sale of assets		5,233			0.06			—			—
Abandoned deal costs													130			—		—		—
CFFO	$	49,856		$	0.55		$	48,463		$	0.55	$	17,572		$	0.19	$	15,974	$	0.18

We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is an additional 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, ~~acquisition expenses,~~casualty related costs, property management expenses, and general and administrative expenses. 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 operating income and net income as determined in accordance with GAAP. 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 supplemental measure of our financial performance.

We review our same store properties or portfolio at the beginning of each calendar year. Properties are added into the same store portfolio if they were owned at the beginning of the previous year. Properties that have been sold or are classified as held for sale are excluded from the same store portfolio.

Set forth below is a reconciliation of same store net operating income to net income (loss) available to common shares for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ (in thousands, except per unit data):

	Three Months Ended March 31, (a)
	2020			2019			% change
Revenue:
Rental and other property revenue	$	47,893		$	45,746			4.7	%
Property Operating Expenses
Real estate taxes		5,921			6,092			-2.8	%
Property insurance		917			953			-3.8	%
Personnel expenses		4,385			4,308			1.8	%
Utilities		2,766			2,578			7.3	%
Repairs and maintenance		1,500			1,499			0.1	%
Contract services		1,751			1,652			6.0	%
Advertising expenses		535			464			15.3	%
Other expenses		663			664			-0.2	%
Total property operating expenses		18,438			18,210			1.3	%
Net operating income	$	29,455		$	27,536			7.0	%
NOI Margin		61.5	%		60.2	%		1.3	%
Average Occupancy		92.7	%		92.8	%		-0.1	%
Average effective monthly rent, per unit	$	1,089		$	1,038			4.9	%
Reconciliation of Same-Store Net Operating Income to Net Income (Loss)
Same-store portfolio net operating income (a)	$	29,455		$	27,536
Non same-store net operating income		1,964			2,043
Other revenue		194			75
Property management expenses		(2,156	)		(1,813	)
General and administrative expenses		(5,376	)		(3,107	)
Depreciation and amortization		(14,828	)		(12,447	)
Interest expense		(9,497	)		(9,721	)
Abandoned deal costs		(130	)		—
Net income (loss)	$	(374	)	$	2,566

Three Months Ended September 30, (a)

Nine Months Ended September 30, (a)

2019

2018

% change

2019

2018

% change

Revenue:

Rental and other property revenue
$
43,686

$
40,975

6.6
%

$
128,280

$
121,626

5.5
%
Property Operating Expenses

Real estate taxes

5,299

4,749

11.6
%

16,034

14,592

9.9
%
Property insurance

865

820

5.5
%

2,537

2,626

-3.4
%
Personnel expenses

4,282

4,188

2.2
%

12,315

12,176

1.1
%
Utilities

2,860

2,621

9.1
%

8,148

7,803

4.4
%
Repairs and maintenance

1,812

1,714

5.7
%

4,869

4,357

11.8
%
Contract services

1,099

1,223

-10.1
%

3,452

3,709

-6.9
%
Advertising expenses

466

460

1.3
%

1,362

1,363

-0.1
%
Other expenses

585

772

-24.2
%

1,793

2,330

-23.0
%
Total property operating expenses

17,268

16,547

4.4
%

50,510

48,956

3.2
%
Net operating income
$
26,418

$
24,428

8.1
%

$
77,770

$
72,670

7.0
%
NOI Margin

60.5
%

59.6
%

0.9
%

60.6
%

59.7
%

0.9
%
Average Occupancy

93.4
%

93.4
%

0.0
%

93.3
%

93.7
%

-0.4
%
Average effective monthly rent, per unit
$
1,078

$
1,020

5.7
%

$
1,058

$
1,005

5.2
%
Reconciliation of Same-Store Net Operating Income to Net Income (Loss)

Same-store portfolio net operating income (a)
$
26,418

$
24,428

$
77,770

$
72,670

Non same-store net operating income

4,093

4,424

13,096

11,411

Other revenue

242

135

425

429

Property management expenses

(1,901
)

(1,661
)

(5,776
)

(4,936
)

General and administrative expenses

(3,113
)

(2,578
)

(9,758
)

(8,184
)

Depreciation and amortization

(13,434
)

(10,783
)

(38,602
)

(33,590
)

Interest expense

(9,783
)

(9,129
)

(29,353
)

(26,063
)

Other income (expense)

—

—

—

144

Net gains (losses) on sale of assets

2,390

—

14,532

—

Net income (loss)
$
4,912

$
4,836

$
22,334

$
11,881

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.

We intend to meet our liquidity requirements primarily through a combination of one or more of the following:

As of ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ we maintained cash and cash equivalents, and restricted cash of approximately ~~$15.5~~$62.1 million and ~~$15.9~~$16.2 million, respectively. Our cash and cash equivalents were generated from the following activities (dollars in thousands):

	For the Nine Months Ended September 30,						For the March 31,
	2019			2018			2020			2019
Cash flow from operating activities	$	59,357		$	57,315		$	11,684		$	14,204
Cash flow from investing activities		(75,173	)		(182,430	)		(59,170	)		(8,127	)
Cash flow from financing activities		15,318			126,406			95,229			(5,970	)
Net change in cash and cash equivalents, and restricted cash		(498	)		1,291			47,743			107
Cash and cash equivalents, and restricted cash, beginning of period		16,045			14,619			14,433			16,045
Cash and cash equivalents, and restricted cash, end of the period	$	15,547		$	15,910		$	62,176		$	16,152

~~The increase in our~~Our cash ~~flow~~inflow from operating activities during the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019 ~~was~~were primarily driven by ~~higher net operating income from~~ongoing operations of our ~~property portfolio.~~properties.

Our cash outflow from investing activities during the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 was primarily due to ~~two~~our property ~~acquisitions~~acquisition and our capital ~~expenditures partially offset by three property dispositions.~~expenditures. Our cash outflow from investing activities during the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 was primarily due to ~~six~~four property ~~acquisitions and capital expenditures.~~acquisitions.

Our cash inflow from financing activities during the ~~nine~~three months ended ~~September 30,~~March 31, 2020 was primarily due to $65.5 million of draws on our unsecured credit facility and a $50.0 million settlement on our forward sale agreements, partially offset by the distribution of dividends of our common stock. Our cash inflow from financing activities during the three months ended March 31, 2019 was primarily due to draws on our unsecured credit facility and term loans related to the acquisition of two properties and issuances of common stock under our ATM Sales Agreement, partially offset by repayments of our unsecured credit facility, dividends on our common stock, and distributions on noncontrolling interests. Our cash inflow from financing activities during the nine months ended September 30, 2018 was primarily due to draws on our current and previous credit facilities related to the acquisitions of ~~six properties, partially offset by dividends on our common stock and distributions on noncontrolling interests.~~ four properties.

Our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 filed on February ~~22, 2019~~18, 2020, includes a table of contractual ~~commitments as of December 31, 2018.~~commitments. There were no material changes to these commitments since the filing of our Annual Report on Form 10-K. ~~See the updated debt maturity schedule included in Note 4 in the Notes to the Consolidated Financial Statements.~~

There were no off-balance sheet arrangements during the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 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.

Our ~~2018~~2019 Annual Report on Form 10-K contains a discussion of our critical accounting policies. Effective January 1, 2019, we adopted several new accounting pronouncements and revised our accounting policies as described in Note 2 to the Consolidated Financial Statements included in Part I, Item 1 of this report. 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 sine the filing of our Annual Report on form 10-K.

Our ~~2018~~2019 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 ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 from the disclosures included in our ~~2018~~2019 Annual Report on Form 10-K.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, or 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.

Effective as of ~~September 30, 2019,~~March 31, 2020, 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.

There were no changes in our internal control over financial reporting identified in connection with the evaluation referred to above during the quarter ended ~~September 30, 2019~~March 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The risks set out below represent changes ~~from the~~to risk factors ~~previously~~ disclosed in Part I, Item ~~1A—“Risk Factors” in~~1A of our ~~2018~~ Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2019. The information in this Quarterly Report on Form 10-Q should be read in conjunction with the other factors described in “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

The ongoing COVID-19 pandemic and measures intended to prevent its spread could have a material adverse effect on our business, results of operations, cash flows and financial condition.

In December 2019, COVID-19 was first reported, and in March 2020, the World Health Organization declared COVID-19 a pandemic. The outbreak has led governments and other authorities around the world, including federal, state and local authorities in the United States, including where we own properties and where our corporate headquarters is located, to impose measures intended to

control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, school closures, quarantines and shelter-in-place orders.

The impact of the COVID-19 pandemic and measures to prevent its spread could negatively impact our businesses in a number of ways, including our residents’ ability or willingness to pay rents. In some cases, we may waive fees or restructure residents’ rent obligations including in the form of deferred payment arrangements, and may do so on terms less favorable to us than those currently in place. In the event of resident nonpayment, default or bankruptcy, we may incur costs in protecting our investment and re-leasing our property. Additionally, local and national authorities may expand or extend certain measures imposing restrictions on our ability to enforce tenants’ contractual rental obligations.

Restrictions inhibiting our employees’ ability to meet with existing and potential residents has disrupted and could in the future further disrupt our ability to lease apartments which could adversely impact our rental rate and occupancy levels. In addition, social distancing efforts, including limiting contractors on-site and in residential apartment units, could reduce our ability to operate our properties as effectively and efficiently as we had in the past.

In response to executive orders issued by state and local authorities, most of our employees based at our headquarters are currently working remotely. The effects of these executive orders, including an extended period of remote work arrangements, could strain our business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, and impair our ability to manage our business.

The potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during this disruption.

The COVID-19 pandemic has also caused, and is likely to continue to cause, severe economic, market and other disruptions worldwide. We cannot assure you that conditions will not continue to deteriorate as a result of the pandemic. In addition, the deterioration of global economic conditions as a result of the pandemic may ultimately decrease the demand for multifamily communities within the markets in which we operate and may adversely impact occupancy levels and rental rates across our portfolio.

The extent of the COVID-19 pandemic’s effect on our operational and financial performance will depend on future developments including the duration, spread and intensity of the outbreak, all of which are uncertain and difficult to predict. Due to the speed with which the situation is developing, we are not able at this time to estimate the effect of these factors on our business, but the adverse impact on our business, results of operations, financial condition and cash flows could be material. Moreover, many of the risks described in the risk factors set forth in our 2019 Annual Report on Form 10-K may be more likely to impact us as a result of the COVID-19 pandemic and the responses to curb its spread, including specifically:

~~None.~~During the three months ended March 31, 2020, holders of IROP units exchanged 82,357 units for 82,357 shares of our common

stock. The exchange of the 82,357 units for 82,357 shares occurred on February 29, 2020 and the issuance of the shares was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act.

During the three months ended March 31, 2020, we withheld shares of common stock to satisfy employee tax withholding obligations payable upon the vesting of restricted common stock awards, as follows:

On October 30, 2019, our board of directors amended and restated our Bylaws to provide that our stockholders, by the affirmative vote of a majority of all votes entitled to be cast on the matter, shall have the power to make and adopt new Bylaws or to amend, alter or repeal the Bylaws. The amendment to the Bylaws is effective immediately. Prior to the amendment, our board of directors had the exclusive power to amend the Bylaws. Following the amendment, our board of directors and our stockholders have the concurrent power to amend the Bylaws.

The foregoing summary description of the amendment to the Bylaws is not intended to be complete and is qualified in its entirety by reference to the full text of the amended and restated Bylaws, which is attached as Exhibit ~~3.2 to~~99.1 (Material U.S. Federal Income Tax Considerations) filed with this Form 10-Q replaces Exhibit 99.1 (Material U.S. Federal Income Tax Considerations) to the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 to reflect recent legislative changes under the Coronavirus Aid, Relief, and ~~is incorporated herein by reference~~Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020.

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

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.

Maryland	26-4567130
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1835 Market Street, Suite 2601 Philadelphia, PA	19103
(Address of Principal Executive Offices)	(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock		IRT		NYSE

		Page

PART I—FINANCIAL INFORMATION		3

Item 1.	Financial Statements (unaudited)	3

	Condensed Consolidated Balance Sheets as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019	3

	Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months ended ~~September 30, 2019~~March 31, 2020 and ~~September 30, 2018~~March 31, 2019	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three ~~and Nine~~ Months ended ~~September 30, 2019~~March 31, 2020 and ~~September 30, 2018~~March 31, 2019	5

	Condensed Consolidated Statements of Changes in Equity for the Three ~~and Nine~~ Months ended ~~September 30, 2019~~March 31, 2020 and ~~September 30, 2018~~March 31, 2019	6

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months ended ~~September 30, 2019~~March 31, 2020 and ~~September 30, 2018~~March 31, 2019	87

	Notes to Condensed Consolidated Financial Statements as of ~~September 30, 2019~~March 31, 2020	98

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2017

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2925

Item 4.	Controls and Procedures	2925

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	2925

Item 1A.	Risk Factors	2925

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2927

Item 3.	Defaults Upon Senior Securities	2927

Item 4.	Mine Safety Disclosures	2927

Item 5.	Other Information	3027

Item 6.	Exhibits	3027

Signatures		3129

Property Name	Date of Purchase	Location	Units		Contract Price
North Park	4/30/2019	Atlanta, GA		224	$	28,000
Rocky Creek	7/11/2019	Tampa, FL		264	$	48,000
Total				488	$	76,000

Property Name	Date of Sale	Sale Price		Gain (loss) on sale (1)
Reserve at Eagle Ridge	4/30/2019	$	42,000	$	12,294
Little Rock, AR Portfolio	7/18/2019	$	56,500	$	2,230
Total		$	98,500	$	14,524


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Large Accelerated filer	☒	Accelerated filer	☐

Non-Accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

	Original maturities on or before December 31,
Debt:	2019		2020		2021		2022		2023		Thereafter
Unsecured credit facility	$	—	$	—	$	—	$	—	$	156,303	$	—
Unsecured term loans		—		—		—		—		—		300,000
Mortgages		1,602		8,135		76,033		70,700		107,202		265,041
Total	$	1,602	$	8,135	$	76,033	$	70,700	$	263,505	$	565,041

	Scheduled maturities on or before December 31,
Debt:	2020		2021		2022		2023		2024		Thereafter
Unsecured credit facility	$	—	$	—	$	—	$	251,802	$	—	$	—
Unsecured term loans		—		—		—		—		300,000		—
Mortgages		6,094		76,174		70,798		107,479		58,028		184,460
Total	$	6,094	$	76,174	$	70,798	$	359,281	$	358,028	$	184,460

	Three Months Ended September 30, (a)									Nine Months Ended September 30, (a)
	2019			2018			% change			2019			2018			% change
Revenue:
Rental and other property revenue	$	43,686		$	40,975			6.6	%	$	128,280		$	121,626			5.5	%
Property Operating Expenses
Real estate taxes		5,299			4,749			11.6	%		16,034			14,592			9.9	%
Property insurance		865			820			5.5	%		2,537			2,626			-3.4	%
Personnel expenses		4,282			4,188			2.2	%		12,315			12,176			1.1	%
Utilities		2,860			2,621			9.1	%		8,148			7,803			4.4	%
Repairs and maintenance		1,812			1,714			5.7	%		4,869			4,357			11.8	%
Contract services		1,099			1,223			-10.1	%		3,452			3,709			-6.9	%
Advertising expenses		466			460			1.3	%		1,362			1,363			-0.1	%
Other expenses		585			772			-24.2	%		1,793			2,330			-23.0	%
Total property operating expenses		17,268			16,547			4.4	%		50,510			48,956			3.2	%
Net operating income	$	26,418		$	24,428			8.1	%	$	77,770		$	72,670			7.0	%
NOI Margin		60.5	%		59.6	%		0.9	%		60.6	%		59.7	%		0.9	%
Average Occupancy		93.4	%		93.4	%		0.0	%		93.3	%		93.7	%		-0.4	%
Average effective monthly rent, per unit	$	1,078		$	1,020			5.7	%	$	1,058		$	1,005			5.2	%
Reconciliation of Same-Store Net Operating Income to Net Income (Loss)
Same-store portfolio net operating income (a)	$	26,418		$	24,428					$	77,770		$	72,670
Non same-store net operating income		4,093			4,424						13,096			11,411
Other revenue		242			135						425			429
Property management expenses		(1,901	)		(1,661	)					(5,776	)		(4,936	)
General and administrative expenses		(3,113	)		(2,578	)					(9,758	)		(8,184	)
Depreciation and amortization		(13,434	)		(10,783	)					(38,602	)		(33,590	)
Interest expense		(9,783	)		(9,129	)					(29,353	)		(26,063	)
Other income (expense)		—			—						—			144
Net gains (losses) on sale of assets		2,390			—						14,532			—
Net income (loss)	$	4,912		$	4,836					$	22,334		$	11,881

Period	Total Number of Shares Purchased		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
01/01/2020 to 01/31/2020		—		—		—		—
02/01/2020 to 02/29/2020		30,591	$	14.62		30,591		—
03/01/2020 to 03/31/2020		20,537	$	12.83		20,537		—
Total		51,128	$	13.90		51,128		—

~~3.2~~10.1		~~Amended~~Confirmation of Issuer Forward Sale Transaction, dated February 20, 2020, by and ~~Restated Bylaws of~~among Independence Realty Trust, Inc. (“IRT”), Bank of Montreal and BMO Capital Markets Inc. (Incorporated by reference to Exhibit 1.2 to Current Report on Form 8-K filed ~~herewith.~~on February 24, 2020.

10.1*10.2		~~Amendment No. 2~~Confirmation of Issuer Forward Sale Transaction, dated asFebruary 20, 2020, by and among IRT, Bank of ~~October 23, 2019~~Montreal and BMO Capital Markets Inc. (Incorporated by reference to ~~the Independence Realty Trust, Inc. Long Term Incentive Plan (Amended~~Exhibit 1.3 to Current Report on Form 8-K filed on February 24, 2020.

10.3		Employment Agreement, dated March 1, 2020, by and ~~Restated as of May 12, 2016),~~between IRT and Jessica Norman, filed herewith.*

10.4		Employment Agreement, dated March 1, 2020, by and between IRT and Jason R. Delozier, filed herewith.*

31.1		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

99.1		Material U.S. Federal Income Tax Considerations filed herewith.

101		~~The following materials, formatted in~~ iXBRL (Inline eXtensible Business Reporting Language):. The following materials, formatted in iXBRL: (i) ~~Condensed~~ Consolidated Balance Sheets as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, (ii) ~~Condensed~~ Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ (iii) ~~Condensed~~ Consolidated Statement of Comprehensive Income (Loss) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ (iv) ~~Condensed~~ Consolidated Statements of Changes in Equity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, (v) ~~Condensed~~ Consolidated Statements of Cash Flows for the ~~nine~~three months ~~ended September 30,~~March 31, 2020 and 2019 ~~and 2018~~ and (vi) notes to the ~~condensed~~ consolidated financial statements as of ~~September 30, 2019.~~March 31, 2020.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document). *Management contract or compensatory plan or arrangement.

	Independence Realty Trust, Inc.

Date: ~~October 31, 2019~~May 7, 2020	By:	/s/ Scott f. Schaeffer
		Scott F. Schaeffer
		Chairman of the Board and Chief Executive Officer
		(Principal Executive Officer)

Date: ~~October 31, 2019~~May 7, 2020	By:	/s/ James J. Sebra
		James J. Sebra
		Chief Financial Officer and Treasurer
		(Principal Financial Officer)

Date: ~~October 31, 2019~~May 7, 2020	By:	/s/ Jason R. Delozier
		Jason R. Delozier
		Chief Accounting Officer
		(Principal Accounting Officer)