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James Sebra

Thanks, Scott, and good morning, everyone. Beginning with our third quarter performance update, net income available to common shareholders was $12.4 million, up from $3.9 million in the third quarter of 2023. Core FFO was $66.8 million and $0.29 per share, both just below a year ago due to our asset sales which were completed in connection with our portfolio optimization and deleveraging strategy.
As a result of the asset sales and deleveraging, we're also happy to report that our net debt to adjusted EBITDA is now 6.3 times, down from 7 times a year ago. And we remain on track to be at the 6 times net debt to adjust the EBITDA by year end.
IRTs same store NOI growth in the third quarter was 2.2% driven by revenue growth of 2.5%. This growth was led by a 1.2% increase in our average monthly rental rates to $1,566 per month and a 90 basis point increase in average occupancy to 95.4%, both as compared to Q3 of 2023.
On the operating expense side, IRT's same store operating expenses increased to 2.8% during the quarter. This increase was primarily due to higher personnel costs and higher repairs and maintenance and utilities costs, all driven by continued inflationary pressures.
These increases in some controllable operating expenses were offset by year over year declines in real estate taxes and property insurance in Q3, reflecting the notable progress we've made in these areas. As noted last quarter, we renewed our main property insurance policy in May and saw a 10% reduction in our premiums without changing our deductibles or coverage.
For real estate taxes, assessed values have come in lower than we anticipated in states like Texas, which is 7% lower; Florida, which is 13% lower; and Indiana, which is 11% lower and all those states reassess annually.
The remaining portion of our expenses for property management and G&A are all trending consistent with our prior guidance. On our balance sheet, as of September 30, our liquidity position was $722 million and was comprised of $18 million of unrestricted cash, $308 million available on our line of credit, $150 million available under our private placement bonds and $246 million available under our forward equity agreements.
During Q3, we completed an inaugural private placement and issued $150 million of unsecured notes. The proceeds from these notes will be used to fully repay all of our 2025 debt maturities. These unsecured notes have a weighted average life of 8.5 years and a weighted average coupon of 5.4%.
As Scott mentioned earlier, we are also happy to report that we received a BBB flat investment grade credit rating from S&P yesterday. For some time now, we've indicated our efforts to achieve this rating and are excited to deliver on our promise to our shareholders and employees.
This rating will open a new capital source for IRT, the public bond markets and will reduce the effective cost of all outstanding bank borrowings by approximately 20 basis points or [$1.5 million] annually.
In connection with our capital recycling program, we sold a legacy steadfast asset in Birmingham in July for a gross sales price of $70.8 million with an economic cap rate of 5.8%. We used the proceeds from the sale to acquire a property in Tampa in August for $82 million at an economic cap rate of 5.9%.
We are also under contract on three properties in Charlotte, Orlando and Columbus. The aggregate purchase price of these three properties is approximately $184 million with a blended year one economic cap rate of 5.7%, and a stabilized blended economic cap rate of 6% as two of these communities are new development and currently approximately 87% occupied. We expect to close on these transactions in the fourth quarter using approximately 35% leverage and the rest coming from our outstanding forward equity agreements.
With respect to our full year 2024 outlook, we are making some minor adjustments to our guidance based on our performance through Q3 and expectations as we close out this year. In particular, we are increasing the midpoint of our full year core FFO per share by [1p] per share. The guidance update for our operating metrics are as follows.
We now expect full year same store revenue growth of between 3% and 3.2% which reduces the midpoint by 5 basis points compared to our prior guidance. This is due to the lower blended rental rate growth we've experienced year-to-date as we focus on supporting occupancy this year.
For the fourth quarter of 2024, the midpoint of our revised same store revenue guidance reflects an average occupancy of 95.6% and a blended rental rate growth of 50 basis points. While we are continuing to see pressure on some categories of controllable operating expenses, that pressure is being offset by further positive outcomes on real estate taxes and insurance expense.
Our revised guidance for the full year 2024 total operating expense growth remains at 3% at the midpoint. The midpoint of our same store property NOI growth for 2024 remains at 3.2% and is on top of the 5.7% increase that IRT achieved last year.
Regarding other updates to our full year outlook, we are increasing our guidance for acquisition volume and now expect a range of $264 million to $268 million for the year. This reflects not only the one property in Tampa we acquired in the third quarter, but also our plans to close on the properties mentioned earlier that are currently under contract in Charlotte, Orlando and Columbus. Our disposition volume guidance remains broadly unchanged.
Lastly, we do not provide guidance on income from our unconsolidated joint ventures, but we wanted to highlight that the 20% annual preferred return that we received related to the [croki] joint venture will be recorded in Q4 and will provide approximately $3 million of benefit to core FFO in 2024.
Scott. That's it. Back to you.

Scott Schaeffer

Thanks, Jim. Our performance in the third quarter gives us a great foundation to continue driving growth across the business and to achieve our 2024 guidance.
In the fourth quarter and into next year, we will remain focused on solidifying our position in attractive markets, driving high occupancy and rental rate growth, executing our value-add renovations and our capital recycling strategy and delivering shareholder value by returning capital to our shareholders and further strengthening our balance sheet.
I would like to close my remarks by thanking the IRT team for their hard work and dedication that made these strong results possible. They continue to remain focused on driving forward our strategic initiatives and delivering value for our residents and shareholders.
We remain confident in our ability to achieve a solid performance throughout the rest of 2024 and beyond. We thank you for joining us today and we look forward to speaking with many of you at Nareit's REITworld conference in the coming weeks.
Operator, you can now open the call for questions.

Question and Answer Session

Operator

(Operator Instructions)
Brad Heffern, RBC Capital Markets.

Brad Heffern

So obviously, you firmed up the use of proceeds for a lot of the equity deal at this point. I'm curious just at the current cost of capital and the opportunity set that you see right now. Are you interested in re-uping and pursuing more acquisitions in 2025? Or was there something unique about the opportunities that you were seeing when you did that deal?

Scott Schaeffer

Nothing unique other than we felt that there were good assets and markets where we wanted to expand that could be bought at cap rates that were accretive relative to our cost the capital and that's why we set out to raise the capital.
We didn't have anything under contract at the time, but we're quickly able to put together a pipeline and identify these three communities again that we think will be additive to the portfolio and got them under contract and they're working through due diligence now, and we expect them all to close in the fourth quarter.

Brad Heffern

Okay. But it's the opportunities that more broad than this or was this just like three unique deals that fit in?

Scott Schaeffer

There's opportunities out there and we're seeing a lot of them where we want to be judicious on our use of capital and make sure that everything that we do is accretive to both an NAV and an earnings point of view. So we're being patient and we'll transact when it makes sense, but there are transactions out there today.

Brad Heffern

Okay. Got it. The September renewal spreads are the highest of the year, but the newly spread is the lowest. It does seem like you have confidence in that renewal rate continuing to be above 5% through November. But how do you feel about the ability to maintain that spread of close to 10% between new and renewal?

Scott Schaeffer

We're seeing that also for December in the renewal rate, even a little bit higher in December. Now it's early and we only have, I think 40% of our December renewals. We have about 40% of expiring leases have renewed in December and that will end up in the low-50s. So there are a good chunk of the December renewals are already in and they're, as I said, they're in the high 5% to 6%. So we feel good about it.

Operator

Austin Wurschmidt, KeyBanc Capital Markets.

Austin Wurschmidt

Just wanted to hit on if we didn't ask this -- if somebody didn't ask this already. But last quarter, you had estimated the earning around 90 basis points, expectation is, obviously for the latter half have shifted a bit. Can you just share what the updated thoughts are of where you expect the earn-in to shake out heading into next year?

James Sebra

Yeah. Based on where we are today and what we think will continue to happen as Scott just mentioned for November and December, we think the earn-in for next year will be approximately 50 basis points.

Austin Wurschmidt

Thanks for that. And then, just with respect to the operating strategy, where would you guys like to grow occupancy to and I guess to the extent conditions do improve on the ground? At what point does it really make sense for you to switch back to pushing rate again?

Scott Schaeffer

We're, basically there, Austin. I'm happy at 95.5% to 96% occupancy. That's where we are. So our strategy going forward will be to maintain that and to have then a more balanced approach to rent growth going forward.

Austin Wurschmidt

And just last one for me, I guess, based on what you see from a supply perspective in front of you, when do you think you could start to see new lease rate growth turn positive?

James Sebra

Yeah. I mean, I think the supply growth that I think we all wisely believe based on the data that's (inaudible) matrix for 2025 will be significantly lower than 2024. So I think you're going to start seeing that new lease trade out improve quite rapidly throughout the beginning part of 2025. I don't know, Janice, if you want to add anything else, but I think generally speaking, we're quite bullish on the ability for that supply to benefit the new lease growth going forward.

Janice Richards

Absolutely. We're seeing signs of that already within the asking rent starting to creep up. So we're looking for that flow of new supply to diminish and we're ready to take advantage of it.

Operator

Eric Wolfe, Citi.

Eric Wolfe

Hey, thanks. Looking at your sequential same store revenue increase, it was 1.2% this quarter. It looks like 70 bps of that was from increased rate. Occupancy was I think flattish quarter of a quarter. So I was just curious what's driving the other 50 bps of that improvement sequentially?

James Sebra

Yeah. It's both a bad debt expense and other income growth.

Eric Wolfe

Got it. Okay. So I guess that leads me to the next question which is, I know it's still early, but if you have any thoughts on some of those items for next year because I guess at least for bad debt, you're probably ending a little bit over 1.5% on bad debt that creates a little bit of embedded growth.
I'm just curious if there's other income growth or anything else that you could talk about that we should be thinking about for next year in terms of your same store revenue.

James Sebra

Yeah. I mean, I think we're not ready to give guidance obviously for next year just yet. I would say that largely speaking, sure, we're working on continuing to move bad debt lower. We're looking at additional kind of amenity offerings to increase other income growth. All those great things.
I would say the market rent growth is one that I'm waiting for someone to ask that question, the co-stars and the matrix of the world kind of show market rent growth in the kind of the 3% to 3.5% range. So that's probably the only bit of data point that we would say that's out there because everybody can download that information and get it.
But I would say that's probably one of the bigger building blocks for our revenue growth for next year. And as Scott mentioned, with a more stable occupancy, we're going to be able to have a more balanced approach to rate growth.

Operator

John Kim, BMO capital markets.

John Kim

Good morning. So your renewals were strong and rebounded well so far this quarter. The new lease rates probably were below expectations bringing down the total. Were there any markets that surprised you as far as new lease rates coming in lower than expected?
And how does that compare versus, Jim, you just mentioned market forecasts of 3% to 3.5%? I mean, do you think there will be a lingering impact of supply on the lease rates going forward?

Janice Richards

Sure. I'll take that one. So I don't believe we saw any negative impact. I think we didn't see as much lift as we were hoping for on the new lease rates based on the seasonality and a little bit of a layover from leasing season into October in which we were able to push through that additional supply and see that boost in occupancy, which allows for us now to be poised for the pricing power moving forward.
Again, on supply, the majority of our supply adds in Q1 in most of our markets. And we're pretty confident with the continued pricing power through next year in order to get in and around what the market is anticipating.

John Kim

Okay. And then can I just ask on your recent acquisitions, you mentioned a 6% stabilized. How long does it take to get there? What's the going in yield? And are these -- as far as these assets, are they new developments recently completed or are they potential for value-add? If you can just provide some characteristics on them?

Scott Schaeffer

Sure. So two of the three are new construction delivered in early 2024. The one in Charlotte and the one in Orlando. They're both in finishing their lease up and those are the ones that are about [85%] occupied and will be stable in the first quarter of 2025 -- 87% occupancy, excuse me. The third is a smaller asset adjacent to one of our existing communities in Columbus, Ohio, that's a bit older and will be applying for our value-add strategy.

John Kim

The yield seems a little bit higher than what we heard in the market.

Scott Schaeffer

Well, I think -- one, I think, having capital available and moving quickly and knowing the market so that you can shorten the due diligence time is all a benefit and gets you a better execution.
And also, there is always a small benefit. At least, we've always been able to achieve a small benefit when you're willing to take some lease up risk. So when we put these under contract, they were in the lower 80% occupied that continues to grow. But we're seeing that we get a better price because we're taking that little bit of risk. And again, it's not really a risk for us per se because we know the markets and we understand the assets.

Operator

Omotayo Okusanya, Deutsche Bank.

Omotayo Okusanya

Hi. Good morning, everyone. A couple of quick ones for me. First of all, how should we think about potential new development starts? Again, you have improved liquidity. It sounds like you have better cost of capital, congrats on the on the S&P investment grade rating. But are you at the point now where you can actually start a new project or does it is cost of a building still prohibitively high relative to rent?

Scott Schaeffer

This is Scott. It's still not something that we are looking to do. Again, we completed the two ground up construction development deals that we inherited from Steadfast in the merger. But as we continue to look to delever the balance sheet, we like buying stable -- very, very close to stable performing assets and I am not ready to add development risk to our balance sheet at this time.

Omotayo Okusanya

That's helpful. And then if you could talk about insurance a little bit again. It's good year for you guys in regards to insurance. But there's one thought to kind of think about next year and it's hopefully it's not too early to start thinking about next year. Just given everything we've seen with hurricanes and the payouts, all the insurance companies have to make. Is there a risk that they kind of ratchet up premiums in 2025?

James Sebra

Great question. We've gotten this a few different times and obviously the insurers are going to use all these severe weather events as a reason for rates to increase. I would say that over the past few years as premiums have increased, insurers have come back to the marketplace.
So therefore, the competitive edge that you have as a purchase of reassurance is beginning to kind of flow back. Obviously, it's still way too early to tell for next year our renewal is not until mid May. We do have a blanket policy, and we have not had any losses this year that we've put on to our insurers, which will really help us in that kind of negotiation, knock on wood. But we're quite happy with where we sit today and you know, obviously next year is still a bit of a question mark, but we think we'll have a good negotiating like next year.

Omotayo Okusanya

Okay, one more, f you don't mind. The preferred investment that's going to be recorded in 4Q. Could you just -- you say it's going to be a $0.01 impact or a $0.03 impact? I wasn't sure if I heard that correctly.

James Sebra

Yeah. It's $3 million. It's about a $1.5 benefit to core FFO per share.

Operator

Ann Chan, Green Street.

Ann Chan

Hey, good morning. Could you share what you're seeing in terms of concessions from competitors for markets you previously noted with higher supply competition. Atlanta, Raleigh, Nashville, et cetera and how that's been trending in recent months?

Janice Richards

Absolutely. So as we've noted, we've got the high supply that were challenging in Raleigh, Atlanta, Dallas and Nashville. We've seen a little bit of an ebb in Dallas, which makes us hopeful next year's growth could be close to or in line with what [Coastr and Yard] are anticipating.
Atlanta is pretty much stay consistent, especially in our submarket with concessions. We've had the ability to pull back in some areas. We still are very targeted with our concessions. We review them and adjust them accordingly on a weekly basis based on how we can optimize net effective rents.
And so, we've not seen much change. We're hoping to see a little bit more change in November, December as we see the supply start to ebb. Deliveries (technical difficulty) sorry, deliveries again, start to subside more in Q1. And so, that's when we're going to start to see the concessions really start to pull back.

Ann Chan

Thank you. And specifically, for Atlanta, being one of your largest markets, could you share what you're seeing on the ground there operationally and update on the eviction progress in recent months in subsequent to the third quarter.

Janice Richards

Yeah. So although Atlanta still relatively challenging, we've seen a bit of an upswing. On our blended for Q3, we're at a negative 1.1% for October, we're a positive 1.3% on the rent side. So that is definitely going in the right direction for us.
Occupancy year over year, we've had a 2.4% increase which we will then be able to maintain. And so based in month over month, we were able to get another 50 basis points in growth there.
So Atlanta is definitely on the upswing comparatively, but we will still see challenges with bad debt. On the court side, we're still seeing a bit of delay, not as much as we saw maybe coming into '24. And we're hopeful that will subside even more in '25 as the courts start to catch up and we start to utilize all different aspects in order to minimize that bad debt.

Operator

Linda Tsai, Jefferies.

Linda Tsai

Hi, thank you. A follow up on insurance. Do you see institutional owners taking on higher deductibles to help offset the impact of higher insurance costs? Do you think this is a growing trend?

James Sebra

I don't know if it's a growing trend. I have said that -- as we've said in the past when we did our renewal back in May, we didn't change our deductible. We did not take that higher deductible. Obviously, you're always willing to look at taking a higher deductible and if it saves you that much, if not or in premium dollars.
We have heard some people are doing that as a way of managing their premium. But I don't have any real kind of clear anecdote as to what percentage of how much they're doing, but we haven't to be clear.

Operator

That concludes the question-and-answer session. I would like to turn the call back over to Mr. Scott Schaeffer.

Scott Schaeffer

Thank you all for joining us this morning. Again, we look forward to seeing some of you in Las Vegas at the Nareit conference and otherwise we will speak to you next quarter. Have a good day.

Operator

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.