Thank you for joining us to review Independence Realty Trust Second Quarter 2021 Financial Results and Recent Merger Announcement. On the call with me today are Scott Schafer, our Chief Executive Officer Jim Sebra, our Chief Financial Officer and Farrell Ender, our President. Today's call is being webcast on our website at www.irtliving.com. Please note that given today's announcement, there will be no Q and A session following management's remarks on this call. There will be a replay of the call available via webcast on our Investor Relations website and telephonically.
Before I turn the call over to Scott, I'd like to remind everyone that there may be forward looking statements made on this call. These forward looking statements reflect IRT's current views with respect to future events, financial performance and the recently announced merger. Actual results could differ substantially and materially from what IRT has projected, and there can be no assurance that IRT will consummate the merger within the expected time frame or at all. Such statements are made in good faith pursuant the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to IRT's press releases, supplemental information and filings with the SEC for factors that could affect the accuracy of our expectations or cause our future results to differ materially from those expectations.
Participants may disclose non GAAP financial measures during this call. A copy of IRT's earnings press release and supplemental information containing financial information, Other statistical information and a reconciliation of non GAAP financial measures to the most direct comparable GAAP financial measure is attached to IRT's current report on the Form 8 ks available at IRT's website under Investor Relations. IRT's other SEC filings are also available through this link. IRT does not undertake to update forward looking statements on this call or with respect to matters described herein, except as may be required by law. With that, it's my pleasure to turn the call over to Scott Schafer.
Thank you, Lauren. First, let me thank all of you for joining us on short notice to participate in today's call. We're excited to Share with you the announcement of our proposed merger with Steadfast Apartment REIT, which joins together 2 very similar high quality portfolios with complementary geographic footprints in the highly desirable Sunbelt region of the United States. On a pro form a basis, the combined company will Apartment communities with over 38,000 units across 16 states. Upon completion of the proposed merger, we will have a combined equity market capitalization of approximately $4,000,000,000 and a total enterprise value of approximately $7,000,000,000 It's important to highlight that this transaction will be immediately accretive to core FFO per share by approximately 11%.
Before I go into greater detail on this transaction, including deal rationale and expected benefits, we would first like to touch upon our second quarter results and why we remain incredibly optimistic about the future of IRT. Strong momentum continues year to date as we Our proven portfolio of assets in non gateway markets. In particular, our presence in the Sun Belt is a driving force behind our performance As this region continues to experience a notable lift from favorable population and employment growth trends, with more than half of twenty twenty one now behind us and good momentum going into the second half of this year, we remain highly encouraged and are meaningfully increasing our earnings guidance for 2021 Without taking into account any impact of the pending merger with steadfast, Jim will cover this later on today's call. I'd now like to highlight some key points from the 2nd quarter. Our same store NOI increased 9.6 percent and our core FFO improved to 22.7% compared to a year ago.
Our same store average occupancy increased to 96.1%, a 300 basis point increase on a year over year basis. Our lease over lease rental rate growth in the 2nd quarter was 7.3%. We collected 98.4 percent of Q1 2021 rents. And with favorable demand trends continuing, we are seeing strong results so far in July. Our total portfolio average occupancy is 96.1 percent, a 230 basis point improvement compared to July of last year.
We have collected almost 96% of July rents, which is consistent with collections at this point in prior months. And given our high occupancy in the second quarter, we continue to drive rent growth, averaging 6.7% per lease assigned so far in the Q3 on a blended basis. I'm also excited to announce that we've closed on our 1st joint venture transaction on a community under development in Richmond, Virginia, and we expect to close on our 2nd joint venture within 30 days. And I would now like to turn the call over to Farrell for an operational update, followed by Jim with the financial update, and then I'll return to provide more details on our merger announcement.
Thanks, Scott. We're incredibly pleased with our results. In the Q2, our same store occupancy grew 300 basis points to 96.1 percent from 93.1 percent a year ago. This has continued in July with total portfolio average occupancy at 96.1%, up 230 basis points year over year. On a lease over lease basis for the same store portfolio, new lease rates increased 11.4% and renewals were up 3.7% during the 2nd quarter, yielding the combined lease over lease rental rate increase of 7.3%.
Strong trends continue in the 3rd quarter to date With new leases having increased 17.5 percent led by our value add communities, while renewed leases are up 4.6% with a blended lease over lease rental rate increase of 6.7% for our same store portfolio. We continue to see strong resident retention with the 2nd quarter retention rate of 54.8 percent consistent with the Q2 of 2021 and this rate has improved to 64.1% in July, up from 59.1 percent a year ago. To give you an update on our value add program, we completed renovations on 2 28 units in the second quarter. The renovation program at 6 of our communities is nearing completion as we have renovated 85% or more of the units. Since the inception of our value add program in January 2018 through the end of the second quarter, we have completed renovations on 4,089 units, achieving a weighted average return on investment of 19.3 percent on interior renovation costs.
Lastly, we The economics of these incremental initiatives, which are in addition to our current 21 communities, is consistent with our current ROI run rate of 15 20%. The redevelopment of these units will not start until next year, but we plan to share further details later this year as we finalize our plans. With regard to capital recycling, we acquired 2 new constructed communities in the Q2. On May 18, we added Solace City Park in Charlotte to our portfolio, A 272 unit community for a purchase price of $66,500,000 Charlotte is a market we have targeted for expansion given its favorable population and job growth dynamics. And on June 8, we acquired Scion Craig Ranch for $73,400,000 a 322 unit community, which expanded our footprint in Dallas.
These 2 new additions to our portfolio have already reached 95% occupancy, which is well ahead of our underwritten lease up schedule confirming strong resin demand in these markets. As Scott mentioned, we closed on a joint venture on June 8 in Richmond, Virginia to develop a 402 unit community with a joint venture partner. This property is expected to take 18 months to complete with IRT investing a total of $60,000,000 and having the right to purchase the community upon completion. Lastly, we expect to close on the sale of King's Landing, Our only mixed use property located in St. Louis later this week with a projected gain on disposition of $11,500,000 The economic cap rate on this disposition is expected to be 4.5%.
I'd now like to turn the call over to Jim.
Thanks, Farrell, and good afternoon, everyone. Beginning with our Q2 performance update, net income available to common shareholders was 3,400,000 of $800,000 in the Q2 of 2020. During the Q2, core FFO grew to $20,200,000 up 22.7 from $16,400,000 in Q2 2020. Core VFO per share during Q2 was 0 point 2 zero dollars 17.6% higher than the Q2 of last year at 0 point 1 $7 per share. Turning to our same store property operating results.
NOI growth in the 2nd quarter was 9.6%, driven by revenue growth of 8.5%. This growth was led by 300 basis points of higher occupancy and a 3.9% increase in average rental rates. While this NOI growth includes value add communities, we did see NOI growth of 4.6% that are in the same store non value add communities. This growth was primarily driven by 2 10 basis points of incremental occupancy during the quarter as compared to last year. To date, we have collected 98.4 percent of our 2nd quarter billings.
Consistent with last year, we evaluated amounts for collectibility and recorded a reserve for bad debt for those amounts we deem as uncollectible. As of today, including collections At the quarter end, we maintained a bad debt reserve of $1,100,000 associated with the $1,500,000 of gross receivables. As a result, we have a net receivable balance of $400,000 and believe that these receivables will be collected in the near term. From an earnings perspective, our bad debt expense, which is a deduction when arriving at revenue, was 1% in the 2nd quarter. On the property operating expense side, same store operating expenses grew 6.8% in the 2nd quarter, primarily driven by repairs and maintenance That were significantly higher than last year as work was delayed in Q2 2020 due to COVID.
This timing issue also affects Advertising and other expenses as we actively reduced costs when COVID first occurred and reinstated various activities once the pandemic's impact was known. You also noticed that the increase in real estate taxes was relatively low at only 80 basis points in Q2 and 3.9% year to date. We received initial assessments on several properties, including our properties in Memphis, where we were expecting large increases due to their 4 year reassessment cycle. These assessments came in lower than we expected and we've updated our accruals for taxes and our full year guidance as a result. Turning to our balance sheet.
As of June 30, our liquidity position was $238,100,000 We had approximately $8,000,000 of unrestricted cash and $230,000,000 of additional capacity through our unsecured credit facility. At quarter end, we closed out Our forward sale agreements on 2,900,000 common shares to fund a portion of the equity required on our 2 acquisitions this quarter. As of quarter end, we have no outstanding forward sale agreements on our common shares. On the dividend, IoT's Board of Directors declared a quarterly dollars of AFFO during Q2 2021. With respect to our outlook, we are increasing our 2021 guidance based on our 2nd quarter result and favorable view of our portfolio performance for the remainder of the year without taking into account any impact of the pending merger with Steadfast.
Our revised guidance for 2021 EPS is a range of 0 point For 2021, we now expect NOI at our same store communities to increase by 7% at the midpoint compared to our prior guidance of 4 point of 0.25% at the midpoint. This updated guidance reflects expected same store revenue growth of between 5.25% 6% given higher average occupancy rates, rental rates that have been increasing more than expected and bad debt expense that has been trending lower than expected. Moving on to expenses. We are now guiding to an increase in total same store operating expenses during 2021 of 3.5% at the midpoint of our range, down from our previously guided 4.875%. This reduction is driven by lower non controllable operating expenses primarily due to lower real estate taxes as previously mentioned.
We now expect total non controllable operating expenses to increase 4.5% at the midpoint, down from between $40,000,000 $100,000,000 and an acquisition volume between $100,000,000 $200,000,000 for full year 2021. Lastly, this guidance does not assume any impact from our proposed merger with Steadfast, including any planned dispositions following completion of the merger, as we expect the closing of the merger to occur late in Q4. Now, I'll turn the call back to Scott. Scott? Thanks, Jim.
Now I'd like to further discuss IRT's announcement to merge with steadfast. We are excited to share this news with you and believe that this is a natural combination of highly complementary portfolios, which will allow IRT and Steadfast to together strengthen our presence in the multifamily sector, particularly in the Sunbelt markets where we see substantial room for growth. First, I would like to share with you some details on the transaction. This will be an all stock merger transaction where steadfast stockholders will receive 0.905 shares of IRT stock for each steadfast share. IRT will retain its corporate name and ticker symbol and our executive management team will be joined by Ella Naland from steadfast as IRT's Chief Operating Officer.
Ella is an experienced multifamily executive and we look forward to adding her experience to our management team. The combined entity is expected to have an The closing will be in the Q4 of 2021 pending IRT and steadfast stockholder approval. And we expect the transaction to be immediately accretive to key earnings metrics, realizing approximately 11% core FFO accretion with additional earnings enhancement potential. We see notable near term benefits associated with this merger of as well as significant long term strategic opportunities through this partnership. We've posted an investor presentation on our website and would encourage everyone to review it in detail.
In the meantime, let me provide some core reasons for this transaction. The merger of IRT and Steadfast will join together 2 high quality portfolios with geographic footprints in the highly desirable Sunbelt region of the United States. On a pro form a basis, the combined company will own a portfolio of 131 apartment communities with over 38,000 units across 16 states. We will increase our exposure to core markets including Atlanta and Dallas and diversify our presence by entering attractive new markets such as Denver and Nashville. The merger is also expected to increase our portfolio's breadth among Class B communities that continue to demonstrate strong resident demand throughout all points of economic and real estate cycles.
The combined company will have a pipeline of approximately 20,000 units available in excess of 17% since the program began and we believe we can continue to achieve these returns across the combined company's value add pipeline. We expect to realize approximately $28,000,000 in annual synergies. This includes $20,000,000 in general, administrative and property management savings and $8,000,000 in operational synergies. Once integrated, best practices from both companies will create a stronger and more competitive operating platform. We expect to realize the full integration over the 12 month period following the closing of the merger.
We believe that our increased scale will deliver value across the combined portfolio. We will be well positioned to increase cash flow at the property level due to economies of scale, including enhanced pricing with strategic partners and vendors. Greater scale will also support IRT's ongoing efforts to retain top talent, increase brand recognition in the multifamily industry, realize greater operating efficiencies and more effectively compete for acquisition and development opportunities as we look to expand. Now let's discuss leverage. Initially upon closing, our leverage will increase as a result of this transaction as we assume the existing debt on the steadfast communities.
However, we expect to quickly delever, First from proceeds from the announced equity offering and second from non core asset sales, which we are currently targeting at approximately $340,000,000 our previously guided midterm target of 7.5 times net debt to EBITDA is now expected to be achieved during 2023. Please keep in mind that we factored all of these deleveraging efforts into our accretion map and feel very comfortable with the identified 11% approximate annual accretion to core FFO. In closing, it is evident that we have multiple reasons to be excited about our future. These include our strong presence in attractive markets, particularly in the Sunbelt region, further enhancement in our value added investment programs and our plans for expansion through our proposed merger. We are excited to partner with Steadfast and welcome their team.
The strategic merger has been unanimously approved by the Board of Directors of IRD and Steadfast and we look forward to receiving the support and approval from our stockholders. Together, we are ready to embrace the opportunity to strengthen and expand our high quality portfolio where we see high growth potential and to deliver long term value for our stakeholders.