What happened

Independence Realty Trust (NYSE:IRT), a real estate investment trust that specializes in apartment properties, saw its stock plunge by nearly 10% on Wednesday, Sept. 6, after making two major announcements.

First, the company announced its intention to acquire nine more multifamily properties with 2,353 apartment units for $228.1 million. Second, in order to help fund the acquisition, Independence Realty also announced that it planned a 12.5 million share offering of common stock.

The outside of a four story apartment building.

Image Source: Getty Images. (Note: Image does not necessarily depict one of Independence Realty's properties.)

So what

After the acquisition, Independence Realty Trust will own 55 apartment communities with a total of 15,165 apartments. The acquisition will add to the company's presence in several of its core markets, and the acquired properties are 95% occupied.

In addition, the company says that it has already identified "value-add projects" across the nine communities that should allow it to deliver strong returns on the investment.

Now what

The news sounds like a good long-term catalyst, but it seems to be giving investors jitters. There could be fear that the new offering will be dilutive, or that the company will end up taking on too much debt to fund the transaction. Even if the underwriters of the offering exercise their option to buy an additional 1.875 million shares, the stock offering would only raise about $134.7 million, based on the company's share price as of this writing. This leaves another $93.4 million that would need to be financed through other means.

Regardless of the reason for the drop, it feels like temporary weakness and not a long-term problem. In addition, it's worth pointing out that Independence Realty Trust's dividend now translates to a 7.7% yield with the new lower share price, which could make the stock a bargain for income-seekers with a long time horizon.