Filing of Certain Prospectuses and Communications in Connection With Business Combination Transactions (425)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant To Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 11, 2015

 

 

Independence Realty Trust, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland		001-36041		26-4567130
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

Cira Centre, 2929 Arch Street, 17th Floor, Philadelphia, Pennsylvania		19104
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number, including area code): [phone]

Not Applicable

Former name or former address, if changed since last report

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

x	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 8.01

Other Events.

On May 11, 2015, Independence Realty Trust, Inc. (“IRT”) issued a press release announcing that it has entered into a definitive merger agreement (the “Merger Agreement”) with Trade Street Residential, Inc. (“TSRE”), a Maryland corporation, pursuant to which, among other things, TSRE will merge with and into IRT (the “Merger”) creating a leading, regional market focused, multifamily real estate investment trust (“REIT”). A copy of the press release is attached as Exhibit 99.1 hereto.

IRT also prepared a slide presentation for investors regarding the Merger. A copy of the slide presentation is attached as Exhibit 99.2 hereto.

Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K may include “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which IRT and TSRE operate and beliefs of and assumptions made by IRT management and TSRE management, involve uncertainties that could significantly affect the financial results of IRT or TSRE or the combined company. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although IRT believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, IRT can give no assurance that its expectations will be attained and, therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (ii) the inability to complete the Merger or failure to satisfy other conditions to completion of the Merger, (iii) the inability to complete the Merger within the expected time period or at all, including due to the failure to obtain the approval of TSRE’s stockholders or IRT’s stockholders, or the failure to satisfy other conditions to completion of the Merger, (iv) risks related to disruption of management’s attention from the ongoing business operations due to the proposed Merger, (v) the effect of the announcement of the proposed merger on IRT’s or TSRE’s relationships with their respective customers, tenants, lenders, operating results and businesses generally, (vi) changes in financial markets and interest rates, or to the business or financial condition of either company or business, (vii) availability of financing and capital, (viii) risks associated with acquisitions, including the integration of the combined companies’ businesses, (ix) maintenance of REIT Status, (x) the performance of TSRE’s portfolio and IRT’s portfolio, and (xi) those additional risks and factors discussed in reports filed with the Securities and Exchange Commission (“SEC”) by IRT and TSRE from time to time, including those discussed under the heading “Risk Factors” in their respective most recently filed reports on Forms 10-K and 10-Q. Neither IRT nor TSRE undertakes any duty to update any forward-looking statements contained herein, except as may be required by law.

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Important Information For Investors And Stockholders

This communication does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities or a solicitation of any vote or approval. This communication relates to a proposed business combination between IRT and TSRE. In connection with this proposed business combination, IRT and/or TSRE may file one or more proxy statements, registration statements, proxy statement/prospectus or other documents with the SEC. This communication is not a substitute for any proxy statement, registration statement, proxy statement/prospectus or other document IRT and/or TSRE may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF IRT AND TRADE STREET ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT(S), PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Any definitive proxy statement(s) (if and when available) will be mailed to stockholders of TSRE and/or IRT, as applicable. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by IRT and/or TSRE through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by IRT will be available free of charge on IRT’s internet website at http://www.irtreit.com or by contacting IRT’s Investor Relations Department by email at [e-mail] or by phone at [phone]. Copies of the documents filed with the SEC by TSRE will be available free of charge on TSRE’s internet website at http://www.tradestreetresidential.com or by contacting TSRE’s Investor Relations Department by email at [e-mail] or by phone at [phone].

Participants in Solicitation

IRT, TSRE, their respective directors and certain of their respective executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of IRT is set forth in its Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 16, 2015, and its proxy statement for its 2015 annual meeting of stockholders, which was filed with the SEC on April 7, 2015. Information about the directors and executive officers of TSRE is set forth in its Annual Report on Form 10-K/A for the year ended December 31, 2014, which was filed with the SEC on March 25, 2015. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

 

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Item 9.01.

Financial Statements and Exhibits

(d) Exhibits.

 

99.1		Press Release of Independence Realty Trust, Inc., dated May 11, 2015.
99.2		Presentation of Independence Realty Trust, Inc., dated May 11, 2015.

 

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SIGNATURES

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

 

				Independence Realty Trust, Inc.
May 11, 2015				By:		/s/ James J. Sebra
						Name:		James J. Sebra
						Title:		Chief Financial Officer and Treasurer

 

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Exhibit Index

 

Exhibit No.		Description
99.1		Press Release of Independence Realty Trust, Inc., dated May 11, 2015.
99.2		Presentation of Independence Realty Trust, Inc., dated May 11, 2015.

Exhibit 99.1

INDEPENDENCE REALTY TRUST ANNOUNCES DEFINITIVE MERGER AGREEMENT TO ACQUIRE TRADE STREET RESIDENTIAL

PHILADELPHIA, PA and AVENTURA, FL, May 11, 2015 – Independence Realty Trust, Inc. (“IRT”) (NYSE MKT: IRT) and Trade Street Residential, Inc. (“Trade Street”) (NASDAQ: TSRE) jointly announced that IRT and TSRE have signed a definitive merger agreement pursuant to which IRT has agreed to acquire all of the outstanding common stock of Trade Street for a mix of cash and stock, creating a leading, regional market focused, multifamily REIT.

Under the terms of the definitive merger agreement, IRT will pay each Trade Street stockholder $3.80 in cash and 0.4108 of newly issued IRT common stock, subject to adjustment as described below. Based on the agreed upon “Reference Price” of $9.25 for IRT shares, this offer represents the equivalent of $7.60 in value to Trade Street stockholders. The transaction is expected to close in the third quarter of 2015, subject to customary closing conditions including the approval of both IRT and Trade Street stockholders.

Upon consummation of the merger, IRT will significantly increase its scale and improve the quality of its portfolio while accelerating its market penetration in key regional markets and realizing immediate financial benefits.

 

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Increased scale – IRT’s number of properties will increase from 31 to 50* resulting in a 55% increase in units to 14,044*. The combined scale will provide an enhanced platform to continue to pursue accretive acquisitions and transformational opportunities.

 

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Improved portfolio quality – the addition of Trade’s Street’s high-quality Class A apartment communities will reduce IRT’s average property age from 25 years to 20 years while improving average base rents, occupancy levels and operating margins on the expanded platform.

 

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Accelerates market penetration – the addition of Trade Street’s highly-complementary portfolio will expand IRT’s geographic diversity into targeted regions in eight new markets, and also enhance IRT’s presence in three existing markets, to create a leading non-gateway multifamily platform in select regional markets in the United States.

 

•

Immediate financial benefits – the transaction is expected to be accretive to 2016 Core FFO and AFFO per share, with meaningful identified run-rate cost savings and NOI upside from value-add capex. Additionally, with a stronger balance sheet and lower cost of capital, IRT will be better positioned to drive future growth and increase its current quarterly dividend.

Upon completion of the transaction, Scott Schaeffer will continue to serve as Chairman and CEO of IRT. Mack Pridgen, Chairman of Trade Street, and Richard Ross, CEO of Trade Street, will join IRT’s board of directors, which will be expanded from five members to seven members.

 

*	Pro forma for IRT’s acquisition of 236-unit multifamily property in Indianapolis, Indiana on May 1, 2015.

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Scott Schaeffer, Chairman and CEO of IRT, stated, “We are pleased to announce the acquisition of Trade Street, which will accelerate our expansion strategy and significantly strengthen our position as a leading regional multifamily operator across select target markets in the United States. This high quality portfolio of luxury, class A apartment communities will immediately increase our average occupancy levels and average base rents, and we have additional value-creating opportunities in progress to drive further improvement in our operating results. We also expect to generate increased operating efficiencies and achieve synergies on our larger platform which should result in stronger margins and cash flows. Upon completion of the deal, our expanded business will be even better situated to continue to pursue accretive acquisitions and transformational opportunities to create additional shareholder value.”

Richard Ross, CEO of Trade Street, commented, “Building on our successful accomplishments since our IPO in May 2013, we are also pleased to have reached this agreement with IRT. We believe our combined business will be better positioned to further expand our modern portfolio of well-located apartment communities and capitalize on the improving fundamentals in our attractive markets across the Southeast and Texas.”

The transaction has been approved by the board of directors of both IRT and Trade Street. In addition, in connection with the merger agreement, RAIT Financial Trust (NYSE: RAS), which, with is affiliates and subsidiaries, collectively own approximately 23% of IRT’s commons stock, has entered into a voting agreement pursuant to which it has committed to support the transaction. Also in connection with the merger agreement, certain affiliates of Senator Investment Group LP and Monarch Alternative Capital LP, which own approximately 25.4% and 23.0%, respectively, of Trade Street’s common stock, have entered into voting agreements pursuant to which they have committed to support the transaction. Under the definitive merger agreement, IRT’s shares of common stock have been valued at the Reference Price of $9.25 per share, representing a fixed exchange ratio of 0.4108 shares of IRT’s common stock for each share of Trade Street common stock. The Reference Price represents a 1% premium to the 45-day VWAP of IRT’s stock price. Based on the Reference Price, IRT expects to issue approximately 16.1 million shares of IRT common stock and OP units to Trade Street common stockholders and unit holders.

IRT has secured $500 million of committed financing for this transaction.

IRT has the option to increase the cash portion of the consideration from $3.80 per share of Trade Street common stock up to $4.56 per share of Trade Street common stock with a corresponding decrease in the stock portion of the merger consideration as provided for under the terms of the merger agreement, in which case the exchange ratio will be adjusted to reflect the new consideration mix.

Upon completion of the merger, the company will retain the Independence Realty Trust name and will trade under the ticker symbol IRT (NYSE MKT). Following the close of the transaction, the combined company’s corporate headquarters will be located in Philadelphia, PA.

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Deutsche Bank acted as exclusive financial advisor, and Pepper Hamilton acted as legal advisor to Independence Realty Trust. JP Morgan acted as exclusive financial advisor and Morrison & Foerster LLP and Venable LLP acted as legal advisors to Trade Street Residential.

About Independence Realty Trust, Inc.

Independence Realty Trust, Inc. (NYSE MKT: IRT) is a real estate investment trust that seeks to own well-located apartment properties in non-gateway markets that support strong occupancy and the potential for growth in rental rates. IRT seeks to provide stockholders with attractive risk-adjusted returns, with an emphasis on distributions and capital appreciation. Subsidiaries of RAIT Financial Trust (NYSE: RAS) serve as IRT’s external advisor and property manager and RAIT affiliates collectively own approximately 23% of IRT’s outstanding common stock.

About Trade Street Residential, Inc.

Trade Street Residential, Inc. is a vertically integrated and self-managed real estate investment trust focused on acquiring, owning, operating and managing conveniently located, garden-style and mid-rise apartment communities in mid-sized cities and suburban submarkets of larger cities primarily in the southeastern United States, including Texas.

Important Information Will be Filed with the SEC

IRT plans to file with the SEC a Registration Statement on Form S-4 in connection with the transaction. IRT and Trade Street plan to file with the SEC and mail to their respective stockholders a Joint Proxy Statement/Prospectus in connection with the transaction. The Registration Statement and the Joint Proxy Statement/Prospectus will contain important information about IRT, Trade Street, the transaction and related matters. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN THEY ARE AVAILABLE.

Investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus and other documents filed with the SEC by IRT and Trade Street through the web site maintained by the SEC at www.sec.gov or by phone, email or written request by contacting the investor relations department of IRT or Trade Street at the following:

 

IRT		Trade Street
Cira Centre		19950 W. Country Club Drive
2929 Arch Street, 17th Floor		Suite 800
Philadelphia, PA 19104		Aventura, Florida 33180
Attention: Investor Relations		Attention: Investor Relations
215-243-9000		786-248-6099
[e-mail]		[e-mail]

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IRT and Trade Street, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the merger agreement. Information regarding the directors and executive officers of IRT is contained in IRT’s Form 10-K for the year ended December 31, 2014 and its proxy statement filed on April 7, 2015, which are filed with the SEC. Information regarding Trade Street’s directors and executive officers is contained in Trade Street’s Form 10-K/A for the year ended December 31, 2014, which is filed with the SEC. A more complete description will be available in the Registration Statement and the Joint Proxy Statement/Prospectus.

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Forward-Looking Statements

This press release may contain certain 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. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “trend”, “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek” or other similar words. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, those disclosed in IRT’s filings with the Securities and Exchange Commission. IRT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

Independence Realty Trust, Inc.

Investor Relations

Andres Viroslav

215-243-9000

[e-mail]

Trade Street Residential, Inc.

Investor Relations

Stephen Swett

786-248-6099

[e-mail]

Creating a leading regional market multifamily platform May 2015 Exhibit 99.2

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2 Disclaimer This presentation may include “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. These forward-looking statements which are based on current expectations, estimates and projections about the industry and markets in which Independence Realty Trust, Inc. (“IRT”) and Trade Street Residential, Inc. (“TSRE”) operate and beliefs of and assumptions made by IRT management and TSRE management, involve uncertainties that could significantly affect the financial results of IRT or TSRE or the combined company. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. Such forward-looking statements include, but are not limited to, statements about the anticipated benefits of the business combination transaction involving IRT and TSRE, including future financial and operating results (such as FFO), and the combined company’s plans, objectives, expectations and intentions. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future – including statements relating to expected synergies, improved liquidity and balance sheet strength – are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained and therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) national, regional and local economic climates, (ii) changes in financial markets and interest rates, or to the business or financial condition of either company or business (iii) changes in market demand for rental apartment homes and competitive pricing, (iv) risks associated with acquisitions, including the integration of the combined companies’ businesses, (v) maintenance of real estate investment trust (“REIT”) status, (vi) availability of financing and capital, (vii) risks associated with achieving expected revenue synergies or cost savings, (viii) risks associated with the companies’ ability to consummate the merger on the terms described or at all and the timing of the closing of the merger; (ix) dividends are subject to the discretion of our Board of Directors, and will depend on our financial condition, results of operations, capital requirements, compliance with applicable laws and agreements and any other factors deemed relevant by our Board, (x) risks associated with pursuing additional strategic acquisitions, including risks associated with the need to raise large amounts of additional capital to fund the acquisitions, and (xi) those additional risks and factors discussed in reports filed with the Securities and Exchange Commission (“SEC”) by IRT and TSRE from time to time, including those discussed under the heading “Risk Factors” in their respective most recently filed reports on Forms 10-K and 10-Q. Neither IRT nor TSRE undertakes any duty to update any forward-looking statements appearing in this presentation. This communication does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities or a solicitation of any vote or approval. This communication relates to a proposed business combination between Independence Realty Trust, Inc. (“IRT”) and Trade Street Residential, Inc. (“Trade Street”). In connection with this proposed business combination, IRT and/or Trade Street may file one or more proxy statements, registration statements, proxy statement/prospectus or other documents with the SEC. This communication is not a substitute for any proxy statement, registration statement, proxy statement/prospectus or other document IRT and/or Trade Street may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF IRT AND TRADE STREET ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT(S), PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Any definitive proxy statement(s) (if and when available) will be mailed to stockholders of Trade Street and/or IRT, as applicable. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by IRT and/or Trade Street through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by IRT will be available free of charge on IRT’s internet website at http://www.irtreit.com or by contacting IRT’s Investor Relations Department by email at [e-mail] or by phone at [phone]. Copies of the documents filed with the SEC by Trade Street will be available free of charge on Trade Street’s internet website at http://www.tradestreetresidential.com or by contacting Trade Street’s Investor Relations Department by email at [e-mail] or by phone at [phone]. IRT, Trade Street, their respective directors and certain of their respective executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of IRT is set forth in its Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 16, 2015, and its proxy statement for its 2015 annual meeting of stockholders, which was filed with the SEC on April 7, 2015.  Information about the directors and executive officers of Trade Street is set forth in its Annual Report on Form 10-K/A for the year ended December 31, 2014, which was filed with the SEC on March 25, 2015. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. SAFE HARBOR STATEMENT UNDER THE PRIVATE LITIGATION REFORM ACT OF 1995 IMPORTANT INFORMATION FOR INVESTORS AND STOCKHOLDERS PARTICIPANTS IN SOLICITATIONS

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Transformative combination IRT has entered into a definitive merger agreement to acquire TSRE – Accelerates IRT’s regional market expansion strategy, creating one of the leading regional market multifamily platforms – TSRE assets provide enhanced geographic diversity within targeted regions; exposure to 8 new high quality regional markets and increased presence in 3 existing markets (a)  Pro forma for acquisition of 236-unit property in Indianapolis, Indiana on May 1, 2015. (b)  Based on LTM 3/31/2015 financials. (c)  Based on 2015E NOI. (d)  Based on monthly dividend of $0.06 per month. Source: Company filings – Combined scale will provide an enhanced platform to pursue accretive acquisitions and transformational opportunities – Number of properties increase from 31 to 50 (a) – Number of units increase 55% from 9,055 to 14,044 (a) – Increased market capitalization will improve liquidity to shareholders – TSRE assets amongst the newest in the multifamily REIT space with average property age of 11 years – Increases operating efficiency with pro forma NOI margin of 55% (b) – Improves portfolio diversification with class A assets now constituting 45% of combined company (c) – Improves average base rents from $827 to $902 with additional upside from strong leasing momentum and positive releasing spreads – TSRE same store NOI growth of 9% quarter-over-quarter for Q1 2015 – Expected to be accretive to 2016 Core FFO and AFFO per share, based on management estimates – Significant identified run-rate cost savings and NOI upside from value-add capex – Strong balance sheet and lower cost of capital to drive future accretive growth – Well positioned to continue to grow current quarterly dividend of $0.18 per share (d) 1 2 3 4 Enhanced scale Improved portfolio quality Accelerates market penetration Immediate financial benefit 3

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4 Transaction overview Transaction – Independence Realty Trust, Inc. (“IRT”) has entered into a definitive agreement to acquire all outstanding shares of Trade Street Residential, Inc. (“TSRE”) – Senator Investment Group LP and Monarch Alternative Capital LP, who own ~25% and ~23% of TSRE, respectively, and RAIT Financial Trust, who owns ~23% of IRT, have entered into a voting agreement supporting the transaction – IRT will expand its Board of Directors from 5 to 7 with the inclusion of Mack Pridgen, Chairman of the TSRE Board, and Richard Ross, President and CEO of TSRE Consideration – Cash consideration between $3.80 per share (50% cash) and $4.56 per share (60% cash) (“Cash Consideration”) at IRT’s election – Exchange ratio of 0.411x and 0.329x for 50% and 60% Cash Consideration, respectively, based on the quotient of (i) $7.60 minus the Cash Consideration over (ii) the $9.25 fixed exchange price Financing commitments – IRT has secured $500 million of committed financing for this transaction Dividend and financial benefits – IRT expects to maintain its current quarterly dividend of $0.18 per share (a) – Transaction is expected to be accretive to 2016E Core FFO and AFFO per share, based on management estimates – Pro forma leverage of the combined company expected to be in-line with target leverage levels – Potential to delever post transaction from organic growth and asset sales Improved asset management fee structure – In conjunction with the transaction, the IRT and RAIT Boards have approved a new asset management fee construct – Base asset management fee changed from 0.75% of total assets to 1.5% of cumulative equity issued; expects to result in meaningful savings for the combined company Synergy potential – Significant identified run-rate cost savings and NOI upside from value-add capex Timing – Transaction expected to close during Q3 2015, subject to customary closing conditions including shareholder approval of both IRT and TSRE shareholders (a)  Based on monthly dividend of $0.06 per month.

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5 The combination will provide enhanced scale… ($ in millions) Properties (a) 31 19 50 Units (a) 9,055 4,989 14,044 Markets 16 11 24 LTM Revenues $63 $61 $124 LTM NOI (b) $33 $35 $68 Note:  Market data as of 5/8/2015; financial and operating metrics as of 3/31/2015. (a)  Portfolio data pro forma for the acquisition of 236-unit property in Indianapolis, Indiana announced on May 1, 2015. (b)  NOI defined as as-reported property operating revenues less property level expenses. Source: Company filings Combined company expected to have over $1.4 billion of total capitalization and over $500 million of equity market capitalization 1

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6 …and is a continuation of IRT’s regional market expansion strategy Oklahoma Portfolio Purchase Date February 28, 2014 MSA Oklahoma City, OK Average age (b) 31 years Number of Units 1,658 Acquisition Price $65 million Average Base Rent (c) $642 Occupancy (c) 92% Louisville Portfolio Purchase Date December 8, 2014 MSA Louisville, KY Average age (b) 29 years Number of Units 1,549 Acquisition Price $162 million Average Base Rent (c) $879 Occupancy (c) 95% Trade Street Residential Announce Date May 11, 2015 MSA Various Average age (b) 11 years Number of Units 4,989 Acquisition Price ~$650 million Average Base Rent (c) $1,034 Occupancy (c) 96% 1 (a)  Pro forma for TSRE acquisition announced on May 11, 2015 and acquisition of 236-unit property in Indianapolis, Indiana on May 1, 2015. (b)  Weighted average based on units. (c)  As of 3/31/2015. Source: Company filings, Real Capital Analytics Since January 2014, IRT has acquired 40 properties totaling 11,254 units, representing ~4x unit growth (a)

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7 Average portfolio age of public multifamily universe (b) The combination will result in improved operating margins, portfolio quality and average age Note:  Financial and operating metrics as of 3/31/2015, unless otherwise noted. (a)  Based on 2015E NOI. (b)  Weighted average years based on units. Source: Company filings, CoStar, Real Capital Analytics 2 A 73% B 27% B 47% A 45% C 8% B 62% A 25% C 13% 39 31 25 20 17 14 13 12 11 Property class breakdown (a) Average base rent $827 $1,034 $902 Occupancy 94.0% 95.5% 94.5% LTM NOI margin 52.9% 57.7% 55.3%

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TSRE’s assets have high occupancy and ABR… Fountains Southend Millenia 700 Location Orlando, FL Year Built / Renovated 2012 Number of units 297 Year completed 2012 Average base rent $1,226 Occupancy 97.0% Average unit size (square feet) 952 Class A apartment building developed in 2012 and located in the South Central submarket of Orlando Strategically located just off Interstate 4, on the ring road of The Mall at Millenia, which consistently ranks as one of the top 10 malls by sales per square foot in North America Orlando is ranked by Forbes as the fourth fastest growing city in America, with record population gains of nearly 34.2% since 2000 (national average less than 10%) 2 Location Charlotte, NC Year Built / Renovated 2013 Number of units 208 Year completed 2013 Average base rent $1,247 Occupancy 97.9 % Average unit size (square feet) 844 Class A multifamily community located just outside of downtown Charlotte, which boasts 65,000 employees and many entertainment destinations Located in one of the most favorable submarkets in the Charlotte MSA Key highlights Key highlights Note: Operating metrics as of 3/31/2015. 8

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9 …and will significantly enhance IRT’s portfolio quality Talison Row at Daniel Island Miller Creek at Germantown Location Daniel Island, SC Year Built / Renovated 2013 Number of units 274 Year completed 2013 Average base rent $1,383 Occupancy 95.6% Average unit size (square feet) 989 Class A apartment building developed in 2013 and located in Daniel Island Island town with traditional neighborhoods integrated with green spaces, open water access, highly acclaimed golf courses and a vibrant downtown core filled with fine dining and office space Desirable neighborhood demographics with average household income exceeding $100,000, and an average housing value of $575,000 2 Location Memphis, TN Year Built / Renovated 2012 / 2013 Number of units 330 Year completed 2013 Average base rent $1,117 Occupancy 97.9% Average unit size (square feet) 1,049 Class A apartment community developed in 2013, located in Memphis Widely considered to be one of the most affluent and best performing submarkets of Memphis Strong demographics are driven by Nonchonnah Office Corridor (which includes the FedEx world headquarters), Baptist Medical Complex, and numerous retail locations Great visibility from Winchester Road, with immediate access to Bill Morris Parkway Key highlights Key highlights Note: Operating metrics as of 3/31/2015.

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10 TSRE’s complementary portfolio increases IRT’s geographic diversification, adding exposure to 8 new high quality regional markets and increasing presence in 3 existing markets Accelerates penetration of high-growth regional markets TSRE market statistics 2015E – 2019E CAGR Market Units Pop. growth Job growth Asheville (a) 252 2.1% 2.2% Atlanta (b) 864 1.8% 2.0% Charleston 518 1.5% 1.1% Charlotte 208 2.3% 2.0% Chattanooga 295 0.9% 1.3% Dallas 734 2.0% 2.4% Greenville 346 1.4% 1.2% Huntsville 178 1.4% 2.1% Memphis (b) 521 0.7% 1.1% Orlando 297 2.7% 2.3% Raleigh-Durham (b) 776 2.1% 2.2% Total 4,989 1.7% 1.8% US average 1.0% 1.4% 3 Note:  Portfolio data as of 3/31/2015. (a)  Data not available through REIS market research; Raleigh-Durham, closest TSRE existing market, statistics applied. (b)  Market with existing IRT properties. (c)  IRT markets not shown: Phoenix, Tucson, and Denver. Source: Company filings, REIS Existing Independence Realty Trust properties (c) Trade Street Residential

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11 The combined company will have one of the lowest G&A costs in the multifamily industry Note: New IRT G&A includes asset management fees. (a)  Based on 2014A financial data, except for New IRT, which is pro forma 2015E. Source: Company filings 4 G&A as % of total assets (a) Average: 0.6% As a part of the transaction, IRT and RAIT have agreed to change the base asset management construct from 0.75% of total assets to 1.5% of cumulative equity issued – Expected to result in meaningful cost savings for the combined company Significant identified run-rate cost savings and NOI upside from value-add capex Potential for additional upside from strong leasing momentum, positive re-leasing spreads, and property management efficiencies – TSRE same-store NOI growth of 9% quarter-over-quarter for Q1 2015 1.4% 0.8% 0.8% 0.7% 0.7% 0.6% 0.4% 0.3% 0.3% 0.2% 0.6% TSRE CPT PPS AIV UDR HME ESS MAA AVB EQR New IRT Embedded growth opportunities and meaningful synergy potential

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12 Enhanced scale Improved portfolio quality Accelerates market penetration Immediate financial benefit Transformative combination