Independence Realty Trust Inc (NYSEMKT:IRT) has announced that it sold its 320-unit apartment property in Austin, Texas and that the sale generated $32 million in revenue.
Independence Realty Trust (IRT) bagged $23.7 million in proceeds from the sale of the 320-unit apartment property. This was notably lower than the $32 million which was the price at which the property was sold. The proceeds represent the amount that remained after the transaction costs and the repayment of an underlying debt worth $7 million. IRT expects to make $16.2 million in proceeds from the sale once the transaction costs are considered.
Independent Realty Trust determined to reduce debt
The sale of the property provided an opportunity for IRT to ease its outstanding debt. The company pumped $21 million generated from the sale of its property into its line of credit as part of easing its outstanding debt. The sale of the 320-unit apartment property was also sold as part of the company’s strategy to dispose of its “C” class assets. It also aims to reinvest the proceeds into the “B” class assets which are in the company’s core markets.
The 320-unit apartment property is the first out of four sales that IRT expects to complete within the second quarter this year. This means more revenue from the proceeds which will be used to strengthen the firm’s core market. The sale of the properties will also be advantageous for the firm not only because of the investment in the core market, but also because the company will get to reduce its debt.
The plan to shift its focus into the core market will also align with the core objectives of the firm, mainly to own apartment property in locations that are well situated. IRT only acquires property in areas where it is convinced that there will be strong occupancy and a high rate of growth in rental rates. This plan also works out perfectly for the firm’s investors because they receive attractive risk-adjusted returns. Future growth is also a key focus due to the focus on capital appreciation and distribution.
IRT stock closed the latest trading session on May 26 at $9.56.