In 2023, InterRent once again delivered strong operating and financial performance, marking another successful year of value creation. Leveraging the strength of our high-quality, urban portfolio, the effectiveness of our operating platform, and the dedication and expertise of our team, we navigated a year of interest rate volatility and strategically capitalized on opportunities for growth, both externally and organically.
Building on our strong record
We witnessed four consecutive quarters of double-digit Net Operating Income (NOI) growth and consistent NOI margin expansion. Out debt profile has improved significantly – while financing costs were elevated during the year, we are in a fortified position going into 2024. We ended the year with occupancy reaching the optimal level at 97% and annual Funds from Operations (FFO) hitting $80.6 million, our highest yet. These strong results have enabled us to increase our distribution by 5% in 2023, continuing our track record of achieving a distribution growth of 5% or more for the twelfth consecutive year.
We continued to deliver on our disciplined acquisition strategy, completing two strategic acquisitions in collaboration with our joint venture partners. One of these acquisitions marks our second office conversion project, following the success of The Slayte, which has achieved lease-up rate of 90% in February 2024. We are thrilled about this new project and the positive impact it will bring to our communities.
Deepening our sustainability commitments
We continued to push forward with our sustainability commitments, focusing not only on enhancing our own performance metrics, but also to work towards a more responsible, sustainable, and inclusive future for both our company and the broader industry.
We provided climate training to our entire team, the management, and all members of our Board of Trustees, to further enhance collective climate understanding and commitment throughout our organization.
We established our ISO 50001-aligned Energy Management System, which will function as a roadmap and guide us towards optimized energy use, enhanced operational efficiency, and reduce our greenhouse gas emissions in the process.
In collaboration with external advisors, we have integrated climate considerations into our acquisitions and capital expenditure models, with these enhancements set to shape our strategic decision making in 2024 and forward.
We made important strides in green building certifications. We are thrilled to report that now, over 70% of our suites are certified under the Certified Rental Building Program. This achievement not only reinforces our dedication to environmental responsibility, but also underscores the efficiency of our building operations.
Building upon a legacy of 23 years, the Mike McCann Charity Golf Tournament remains a cornerstone of our commitment to our communities. In 2023, we raised an astounding $1.7 million, a record high in total donations. We are currently in the process of giving the proceeds to support numerous local charities within the communities we serve.
Starting a new chapter with our refreshed brand identity
Committed to serving the ever-evolving nature of our communities across our growing geographic footprint, we set out on a new chapter of our growth story by unveiling our refreshed brand identity.
This change is the culmination of years of purposeful planning and hard work, after gaining insights by listening to our residents and team members about what truly set us apart. Our updated logo and brand message – love it here™, encapsulates the essence of our identity, where our top priority is always on serving not just our external customers, but also our internal customers – our team of almost 500 members.
We have fostered a culture of excellence throughout our entire organization and our diverse team. This culture, along with our people, will continue to be our most sustainable, competitive advantage.
Looking back on 2023, I take pride in our collective achievements, as we reinforced the solid foundation that we’ve built and successfully navigated through a year of volatility and challenges.
Looking ahead, my conviction for our industry and our company has never been stronger. With a balanced strategy, the right people and resources in place, we’re confident in our ability to continue to grow and deliver value for all our stakeholders.
I would like to thank everyone who supported us throughout this year – to our team members, all of whom are paramount to the success of InterRent; to our residents, for entrusting us with the privilege of providing their homes; to our Board, for providing invaluable guidance; and to our unitholders, for sharing and supporting our vision.
I look forward to the year ahead and am excited about what we can achieve together.
Brad Cutsey
President and CEO